The Federal Reserve really is a tight little circle.
The Federal Reserve Bank of San Francisco said that Richard Blum, chairman and founder of San Francisco private equity firm Blum Capital Partners, joined the bank’s economic advisory council for a three-year term.
Blum, who is the husband of Sen. Dianne Feinstein, founded Blum Capital in 1975. Blum is also co-chairman-Asia of TPG Capital and co-founder of Newbridge Capital, now part of TPG Capital. TPG, formerly known as Texas Pacific Group, is one of the nation’s largest private equity firms.
Wednesday, March 31, 2010
The Government to Private Sector Revolving Door IS...
...spinning quite nicely in D.C..
According to Gary Weiss, the inspector general's report on the SEC contains this:
Ira Stoll writes that those attending a recent FDIC meeting included Allen Puwalski, who went from the FDIC to working for John Paulson; John Douglas, who went from the FDIC to a partner position at Davis Polk, where he’s “counseling Citigroup with respect to FDIC matters”; John C. Murphy, who went from the FDIC to a partner position at Cleary Gottlieb; and Kevin Stein, who went from the FDIC to FBR Capital Markets.
All this comes via Felix Salmon, who then notes:
According to Gary Weiss, the inspector general's report on the SEC contains this:
The official who supervised the Allied probe got a special “thank you” from Allied. This person (his name is blanked out in the report) left the SEC a year later to work for the company, apparently as a registered lobbyist. The exact position he got is unclear in the report, but we do know that the SEC ethics office had no problem with that. Apparently the SEC’s conflict-of-interest rules can be summed up as a cheery “okie dokie!”
Ira Stoll writes that those attending a recent FDIC meeting included Allen Puwalski, who went from the FDIC to working for John Paulson; John Douglas, who went from the FDIC to a partner position at Davis Polk, where he’s “counseling Citigroup with respect to FDIC matters”; John C. Murphy, who went from the FDIC to a partner position at Cleary Gottlieb; and Kevin Stein, who went from the FDIC to FBR Capital Markets.
All this comes via Felix Salmon, who then notes:
If even Barney Frank’s staffers can’t resist the appeal of the revolving door, there’s really no hope that Frank or anybody else will be able to put an end to the practice.Amazingly, while Salmon recognizes all the conflicts this revolving door activity causes, he fails to mention (realize?) that it is the power centers created by legislation that give these revolving door operators such a power center to influence. Eliminate the power centers, which are all up to no good, and most of these guys would be driving taxis.
Is the iPad a Laptop Killer?
by Walter Mossberg
For the past week or so, I have been testing a sleek, light, silver-and-black tablet computer called an iPad. After spending hours and hours with it, I believe this beautiful new touch-screen device from Apple has the potential to change portable computing profoundly, and to challenge the primacy of the laptop. It could even help, eventually, to propel the finger-driven, multitouch user interface ahead of the mouse-driven interface that has prevailed for decades.
But first, it will have to prove that it really can replace the laptop or netbook for enough common tasks, enough of the time, to make it a viable alternative. And that may not be easy, because previous tablet computers have failed to catch on in the mass market, and the iPad lacks some of the features—such as a physical keyboard, a Webcam, USB ports and multitasking—that most laptop or netbook users have come to expect.
If people see the iPad mainly as an extra device to carry around, it will likely have limited appeal. If, however, they see it as a way to replace heavier, bulkier computers much of the time—for Web surfing, email, social-networking, video- and photo-viewing, gaming, music and even some light content creation—it could be a game changer the way Apple's iPhone has been.
The iPad is much more than an e-book or digital periodical reader, though it does those tasks brilliantly, better in my view than the Amazon Kindle. And it's far more than just a big iPhone, even though it uses the same easy-to-master interface, and Apple says it runs nearly all of the 150,000 apps that work on the iPhone.
It's qualitatively different, a whole new type of computer that, through a simple interface, can run more-sophisticated, PC-like software than a phone does, and whose large screen allows much more functionality when compared with a phone's. But, because the iPad is a new type of computer, you have to feel it, to use it, to fully understand it and decide if it is for you, or whether, say, a netbook might do better.
So I've been using my test iPad heavily day and night, instead of my trusty laptops most of the time. As I got deeper into it, I found the iPad a pleasure to use, and had less and less interest in cracking open my heavier ThinkPad or MacBook. I probably used the laptops about 20% as often as normal, reserving them mainly for writing or editing longer documents, or viewing Web videos in Adobe's Flash technology, which the iPad doesn't support, despite its wide popularity online.
Read the rest here.
For the past week or so, I have been testing a sleek, light, silver-and-black tablet computer called an iPad. After spending hours and hours with it, I believe this beautiful new touch-screen device from Apple has the potential to change portable computing profoundly, and to challenge the primacy of the laptop. It could even help, eventually, to propel the finger-driven, multitouch user interface ahead of the mouse-driven interface that has prevailed for decades.
But first, it will have to prove that it really can replace the laptop or netbook for enough common tasks, enough of the time, to make it a viable alternative. And that may not be easy, because previous tablet computers have failed to catch on in the mass market, and the iPad lacks some of the features—such as a physical keyboard, a Webcam, USB ports and multitasking—that most laptop or netbook users have come to expect.
If people see the iPad mainly as an extra device to carry around, it will likely have limited appeal. If, however, they see it as a way to replace heavier, bulkier computers much of the time—for Web surfing, email, social-networking, video- and photo-viewing, gaming, music and even some light content creation—it could be a game changer the way Apple's iPhone has been.
The iPad is much more than an e-book or digital periodical reader, though it does those tasks brilliantly, better in my view than the Amazon Kindle. And it's far more than just a big iPhone, even though it uses the same easy-to-master interface, and Apple says it runs nearly all of the 150,000 apps that work on the iPhone.
It's qualitatively different, a whole new type of computer that, through a simple interface, can run more-sophisticated, PC-like software than a phone does, and whose large screen allows much more functionality when compared with a phone's. But, because the iPad is a new type of computer, you have to feel it, to use it, to fully understand it and decide if it is for you, or whether, say, a netbook might do better.
So I've been using my test iPad heavily day and night, instead of my trusty laptops most of the time. As I got deeper into it, I found the iPad a pleasure to use, and had less and less interest in cracking open my heavier ThinkPad or MacBook. I probably used the laptops about 20% as often as normal, reserving them mainly for writing or editing longer documents, or viewing Web videos in Adobe's Flash technology, which the iPad doesn't support, despite its wide popularity online.
Read the rest here.
The One Thing You Can Count On From Government Is Failure...
...Even when they are spying on us.
About half of the more than 4,000 security cameras installed along New York City's subways are not working, reports AP.
The problem of missing video came to light after two men were stabbed to death on the subway — and there was no camera installed in the station to catch an image of the killer. Darnell Morel and Ricardo Williams, both 24, were killed in a fight that started around 5 a.m.
About half of the more than 4,000 security cameras installed along New York City's subways are not working, reports AP.
The problem of missing video came to light after two men were stabbed to death on the subway — and there was no camera installed in the station to catch an image of the killer. Darnell Morel and Ricardo Williams, both 24, were killed in a fight that started around 5 a.m.
Power Seeking Naked Aggression in Kentucky
Trailing by double digits, Rand Paul's opponent in the race for the Kentucky Republican senate nomination, Trey Grayson, is clearly desperate. In a new television spot he attempts to link Paul to Rev. Jeremiah Wright.
W. James Antle, III at The American Spectator has a fair comment on the Grayson attack.
Meanwhile, the BIG question has to be, "Is this attack being funded by the, supposed libertarian, billionaire Koch brothers?" Lew Rockwell seems to think so.
If it is, I think we need to move them from the libertarian camp to the oligarch camp. They may be using libertarianism, when it is convienient, as a fig leaf to hide their naked aggression for power, but funding Grayson over Paul tells us that power seeking is their real game.
W. James Antle, III at The American Spectator has a fair comment on the Grayson attack.
Meanwhile, the BIG question has to be, "Is this attack being funded by the, supposed libertarian, billionaire Koch brothers?" Lew Rockwell seems to think so.
If it is, I think we need to move them from the libertarian camp to the oligarch camp. They may be using libertarianism, when it is convienient, as a fig leaf to hide their naked aggression for power, but funding Grayson over Paul tells us that power seeking is their real game.
Chamber of Commerce to Spend Big Bucks Against ObamaCare Supporters
The U.S. Chamber of Commerce will spend $50 million to defeat candidates who backed health reform, reports MarketWatch.
The key here: Will they take a free market stance, or their own version of GvtCare?
The key here: Will they take a free market stance, or their own version of GvtCare?
Moody’s Downgrades Five Greek Banks
Moody’s has downgraded the deposit and debt ratings of five Greek banks, citing “a weakening in the banks’ stand-alone financial strength and anticipated additional pressures stemming from the country’s challenging economic prospects in the foreseeable future.”
The banks are: National Bank of Greece (to A2 from A1), EFG Eurobank Ergasias SA (to A3/Prime-2 from A2/Prime-1), Alpha Bank AE (to A3/Prime-2 from A2/Prime-1), and Piraeus Bank (to Baa1/Prime-2 from A2/Prime-1) and Emporiki Bank of Greece SA (to A3/Prime-2 from A2/Prime-1). The outlook on all five banks’ ratings remains negative.
Moody's added:
The banks are: National Bank of Greece (to A2 from A1), EFG Eurobank Ergasias SA (to A3/Prime-2 from A2/Prime-1), Alpha Bank AE (to A3/Prime-2 from A2/Prime-1), and Piraeus Bank (to Baa1/Prime-2 from A2/Prime-1) and Emporiki Bank of Greece SA (to A3/Prime-2 from A2/Prime-1). The outlook on all five banks’ ratings remains negative.
Moody's added:
Although additional measures taken to address fiscal imbalances at the national level may have a positive impact over the longer term, Greece’s fiscal challenges will weigh negatively on economic growth over the short to medium term.
File Under Curious
French President Nicolas Sarkozy was in Washington D.C. yesterday.
I happened to be passing by the Willard InterContinental Hotel where he was staying, as he was leaving to meet with President Obama. Many VIPs stay at the Willard, and often you will see an extended canopy over the sidewalk when it is a heavyweight, so you rarely get to see them.
As I passed by I noticed the Secret Service and the motorcycles that were ready for a motorcade, but there was no extended canopy, so I figured it was some second rate VIP.
Much to my surprise, it was for Sarkozy. He stepped out of the hotel and from the sidewalk actually stopped for a second and waved to the few people, mostly tourists, who stood by waiting to see who would come out of the hotel.
So the questions are: Does the Secret Service not consider Sarkozy in much danger, relative to other leaders? Thus, no canopy. Do they not care? Was there no canopy for Sarkozy based on some kind of "openness with the people" policy that Sarkozy has?
I happened to be passing by the Willard InterContinental Hotel where he was staying, as he was leaving to meet with President Obama. Many VIPs stay at the Willard, and often you will see an extended canopy over the sidewalk when it is a heavyweight, so you rarely get to see them.
As I passed by I noticed the Secret Service and the motorcycles that were ready for a motorcade, but there was no extended canopy, so I figured it was some second rate VIP.
Much to my surprise, it was for Sarkozy. He stepped out of the hotel and from the sidewalk actually stopped for a second and waved to the few people, mostly tourists, who stood by waiting to see who would come out of the hotel.
So the questions are: Does the Secret Service not consider Sarkozy in much danger, relative to other leaders? Thus, no canopy. Do they not care? Was there no canopy for Sarkozy based on some kind of "openness with the people" policy that Sarkozy has?
Paulson Adviser Warns of Shifting Bubble
Former UCLA Anderson Forecast economist Chris Thornberg, founder of Beacon Economics and who sits on the advisory board of the John Paulson hedge funds, has come out with a forecast that is significantly in line with our own forecasts here at EPJ.
WSJ provides details of a new Beacon Economics report:
As for the equity market strength, we concur that it appears to be an anomaly, and do not believe it can be sustained.
Beacon sees to possibilities from here:
WSJ provides details of a new Beacon Economics report:
The firm’s stance is that the $787 billion federal stimulus package and the Federal Reserve’s near-zero interest rates have propped up the economy but will prove unsustainable and are actually exacerbating some of the imbalances that led to the recession. “The nation seems to be trading in its private bubble for a public one, swapping one set of unsustainable economic drivers for another,” the report said...This is pretty much in lockstep with our analysis that the "recovery" has been a manipulated recovery, and given the Fed's near zero money growth (M2), the capital structure as it currently exists can not be supporetd by the current level of savings.
The gist is this: The stimulus and other such measures have prevented a shedding of debts that needs to happen before the economy can return to sustainable growth. The saving rate has grown from its record lows, but has been propped up by tax cuts that have exacerbated the mountain of debt at all levels of government. Property values have fallen, but accounting changes have prevented banks from acknowledging a lot of underwater loans. Even the roaring stock market is artificial, in the firm’s view.
“The rally in the equity markets seems to be occurring despite the fact that overall asset prices still seem too high given our long-run potential for growth. And the bounce in the asset markets overlooks the fact that overall the national deleveraging that needs to occur to shed off record levels of debt has yet to really get underway,” the report said.
As for the equity market strength, we concur that it appears to be an anomaly, and do not believe it can be sustained.
Beacon sees to possibilities from here:
“The best-case scenario is that the Federal Reserve and the Obama administration manage to draw down the public bubble slowly, a possibility that private bubbles typically don’t share,” the report says.In our view, it's down to the latter. Soft landings are always tough, and as far as EPJ is concerned we are much too far down the road for anything other than a second dip--led on the downside by the stock market.
The downside? “The worst-case scenario is that the bubble pops rapidly, putting the economy squarely back into another recession — the double dip."
Kissinger Still Plotting
Henry Kissinger, 87, is apparently continuing to use his access to help those who will write him the big check.
Kissinger helped secure a meeting for mining giant Rio Tinto officials with Wang Qishan, a Politburo member and former banker who handles many of China's international financial affairs, reports the Sydney Morning Herald.
Rio Tinto's official's reached out to Kissinger after Rio employees were put on trial in China on bribery charges. Kissinger, I'm sure, will figure out a way to make future bribes look more official.
Kissinger helped secure a meeting for mining giant Rio Tinto officials with Wang Qishan, a Politburo member and former banker who handles many of China's international financial affairs, reports the Sydney Morning Herald.
Rio Tinto's official's reached out to Kissinger after Rio employees were put on trial in China on bribery charges. Kissinger, I'm sure, will figure out a way to make future bribes look more official.
ADP Report Shows Further Employment Declines
Nonfarm private employment decreased 23,000 from February to March on a seasonally adjusted basis, according to the ADP National Employment Report®. The estimated change of employment from January 2010 to February 2010 was revised down slightly, from a decline of 20,000 to a decline of 24,000.
Friday's employment figure from the BLS should be stronger, since it will reflect the beginning of hiring of census workers.
Friday's employment figure from the BLS should be stronger, since it will reflect the beginning of hiring of census workers.
The Politically Motivated, Envious SEC
When they aren't obsessed with porn, the SEC spends its time emailing each other pics of the high profile they are harassing. NyPo has the bizarre details:
And, of course, they don't go anywhere near investigating real insider trading.
What's most curious is that the SEC is holding back on releasing even more Cuban related documents. Here's NyPo again:
In a federal court filing submitted yesterday in Dallas, Cuban's attorneys blasted the Wall Street watchdog's staff for passing around unflattering photos of their client and making snarky comments about him in the period leading up to their failed 2008 insider-trading case against him.During this time it should be noted that Harry Markopolos was desperately trying to investigate Bernie Madoff, which the didn't. Instead, one of their agents married his niece.
One of the photos shows Cuban smiling coyly as he cradles a pile of money. It was a promotional picture used for a 2004 reality series called "The Benefactor" in which Cuban gives someone $1 million.
Two more pictures show the owner of the NBA's Dallas Mavericks basketball team screaming at what are presumably Mavericks' games. Another photo comes with a caption referencing Cuban paying $40 million for a Gulfstream V jet in 1999, an act that landed him in the Guinness Book of Records for the world's largest e-commerce transaction.
"Now I feel fully informed," said one SEC official who received the montage in an e-mail. "The picture with the money is particularly helpful and certainly speaks a 1,000 words (if not more)."
"Charming," said then-SEC enforcement director Linda Thomsen.
A source said the photos were e-mailed to make certain officials including Thomsen aware of Cuban's prominence
And, of course, they don't go anywhere near investigating real insider trading.
What's most curious is that the SEC is holding back on releasing even more Cuban related documents. Here's NyPo again:
Cuban's lawyers attached these e-mails in a motion to prod the SEC into releasing more evidence to show it had it in for Cuban. The billionaire is asking the court to force the SEC to turn over even more documentation related to the dismissed case against him. Cuban is accusing the agency of wrongfully and maliciously going after him and is demanding that the agency pay his legal fees as compensation.What are they hiding?
In December, a federal judge agreed to let Cuban's team conduct discovery to support their case, but the recent filing shows they aren't satisfied with what they got.
Despite requests and extensions from the court, the SEC produced "a mere 199 documents, many of which had already been produced by Mr. Cuban earlier in the litigation," Cuban's lawyers said in their latest filing.
Geithner Courts the Steelworker Vote
On Wednesday morning, Treasury Secretary Geithner will travel to Pittsburgh to tour an Allegheny Technologies Incorporated steel plant and meet with workers and management "to discuss the critical role that innovation and new technology plays in maintaining the competitiveness of the U.S. manufacturing sector."
Following the tour of the ATI plant, Secretary Geithner will visit the United Steelworkers (USW) headquarters to meet privately with labor and business leaders to discuss the state of the economy and "the importance of America’s manufacturing sector."
He will also hold a media availability at the conclusion of his trip.
In the evening, Secretary Geithner will return to Washington, D.C.
Tuesday, March 30, 2010
Fed's Fisher: Federal Reserve Won't Buy Treasury Securities to Dampen Climbing Interest Hikes
Dallas Federal Reserve Bank President Richard Fisher gave a noteworthy speech Tuesday evening at the University of Arizona in Tucson.
He said that record federal borrowing is putting upward pressure on longer term interest rates, but doubted the Fed would ever buy Treasury securities to hold down those rates. That's a big statement. As to whether the Fed will actually do as Fisher suggests and not respond to climbing rates, we may learn much sooner than most expect. Weak demand at Treasury auctions is pushing rates higher, right now.
Fisher has clearly thought about the subject. At one point he said:
If Fisher is serious, and other Fed members are in sync with his thinking, then we are about to witness one of the largest spikes in interest rates in history. You have a capital structure that is short money because of the Fed's current tight money policy and you have the Treasury throwing debt onto the market at record rates. On the demand side, you have the Social Security Trust Fund moving from a net-buyer to a net-seller, and you have China as an unenthusiastic buyer, if they even are net-buyers. This is a combination that signals much higher rates from every possible direction.
Of course, if the Fed holds the line on money printing it will be one of the few times in history that a central bank has not bailed out a country.
Bottom line, interest rates are headed much higher, even if the Fed attempts to dampen the rate hikes. However, if Fisher is doing more than just talking smack and the Fed does not intervene, we are talking huge spikes in rates. Indeed, 50 basis point moves, or more, week after week can't be ruled out.
He said that record federal borrowing is putting upward pressure on longer term interest rates, but doubted the Fed would ever buy Treasury securities to hold down those rates. That's a big statement. As to whether the Fed will actually do as Fisher suggests and not respond to climbing rates, we may learn much sooner than most expect. Weak demand at Treasury auctions is pushing rates higher, right now.
Fisher has clearly thought about the subject. At one point he said:
What if the insatiable borrowing of the Treasury leads to upward pressure on rates? Would the Fed then step in and buy a bundle of Treasuries just to hold rates down?These words are as close as you will hear a Fed member utter Clint Eastwood type, "Make my day" words.
I think not. For, should we do so, we would only become an accomplice to the fiscal incontinence of Congress.
We would be perceived as 'monetizing the debt,' a trap that inevitably leads to hyperinflation and economic destruction.We would lose all the hard-earned credibility we have gained by our conduct in the crisis if we came to be viewed by markets as a handmaiden of spendthrift political forces.
If Fisher is serious, and other Fed members are in sync with his thinking, then we are about to witness one of the largest spikes in interest rates in history. You have a capital structure that is short money because of the Fed's current tight money policy and you have the Treasury throwing debt onto the market at record rates. On the demand side, you have the Social Security Trust Fund moving from a net-buyer to a net-seller, and you have China as an unenthusiastic buyer, if they even are net-buyers. This is a combination that signals much higher rates from every possible direction.
Of course, if the Fed holds the line on money printing it will be one of the few times in history that a central bank has not bailed out a country.
Bottom line, interest rates are headed much higher, even if the Fed attempts to dampen the rate hikes. However, if Fisher is doing more than just talking smack and the Fed does not intervene, we are talking huge spikes in rates. Indeed, 50 basis point moves, or more, week after week can't be ruled out.
Bad Economics Hits the Big Screen
I have never been a big fan of the book, Freakonomics, so news that there is now a Freakonomics documentary film didn't exactly cause me to react with the kind of excitement that you could detect on a Richter scale.
Co-author Stephen Dubner announces the film at the Freakonomics blog.
Judging from Dubner's comments it appears the film focuses considerable time on what I view as some of the books weakest points.
Co-author Stephen Dubner announces the film at the Freakonomics blog.
Judging from Dubner's comments it appears the film focuses considerable time on what I view as some of the books weakest points.
A Hint of Racisim from the President?
Paul Krugman says, "No." But, I wonder, given that our President is one to give out subtle messages.
Remember the middle finger near the eye when he talked about Hillary Clinton, during the primary?
The Israelis were upset when the White House released a picture of the President while talking to Israeli Prime Minister Binyamin Netanyahu.
In the photo, President Obama has his feet propped up on a desk inside the Oval Office, and a number of Israeli newscasters called the posture insulting, since in many Arab countries, it is considered an insult to show someone the sole of your shoe.
It wasn't given much coverage, but in an Administration that attempts to increase government spending in every nook and cranny, the Administration did announce that "...cotton storage would no longer be financed by the federal government." I guess you can give him that one.
But now we have a tax of 10% on tanning salons as part of the healthcare bill. The tax will be one of the first to go into effect. Tanning salons will be required to collect the tax starting in July. Further, it's one of the few services that has a specifically designated tax.
Interesting.
Remember the middle finger near the eye when he talked about Hillary Clinton, during the primary?
The Israelis were upset when the White House released a picture of the President while talking to Israeli Prime Minister Binyamin Netanyahu.
In the photo, President Obama has his feet propped up on a desk inside the Oval Office, and a number of Israeli newscasters called the posture insulting, since in many Arab countries, it is considered an insult to show someone the sole of your shoe.
But now we have a tax of 10% on tanning salons as part of the healthcare bill. The tax will be one of the first to go into effect. Tanning salons will be required to collect the tax starting in July. Further, it's one of the few services that has a specifically designated tax.
Interesting.
Welcome to the person who searched for...
"i made a death threat am i going to jail,"
and somehow ended up at EPJ.
and somehow ended up at EPJ.
LLoyd Blankfein Check Your Retirement Benefits; The Latest Embarassment for Goldman
How bad has Goldman Sachs screwed up its PR effort, while raping America, under the helm of Lloyd Blankfein?
According to WaPo, the Obama Administration turned aside an offer from Goldman Sachs to take on the assignment of selling, commission FREE, CitiGroup stock. The Administration feared giving the job to Goldman after it has been targeted by lawmakers,the media and the man on the street, for its role in raping America during the financial crisis, would have no upside.
If Goldman stock breaks below 100, Blankfein is history.
According to WaPo, the Obama Administration turned aside an offer from Goldman Sachs to take on the assignment of selling, commission FREE, CitiGroup stock. The Administration feared giving the job to Goldman after it has been targeted by lawmakers,the media and the man on the street, for its role in raping America during the financial crisis, would have no upside.
If Goldman stock breaks below 100, Blankfein is history.
Alert: Volcker Speaks Today
Former Federal Reserve chairman and President Obama's current favorite economic adviser, Paul Volcker, delivers a speech today on financial regulatory reform at the Peterson Institute for International Economics
Alert: March Employment Numbers Expected to be Up
For the month of March, for the first time since December 2007, the employment numbers are likely to expand, when the numbers are reported by the Bureau of Labor Statistics.
In truth the economy and labor picture are pretty stagnant. It's government machinations that are putting lipstick on the pig. First, the infamous BLS birth/death index fudge factor will likely add over 100,000 to the employmnet number. Second, the government temporary hiring of one million census workers is going to really start kicking in.
Bottom line: This isn't even fake implants for the economy. It's a lift up bra that leaves you where you started once the census taking is over.
In truth the economy and labor picture are pretty stagnant. It's government machinations that are putting lipstick on the pig. First, the infamous BLS birth/death index fudge factor will likely add over 100,000 to the employmnet number. Second, the government temporary hiring of one million census workers is going to really start kicking in.
Bottom line: This isn't even fake implants for the economy. It's a lift up bra that leaves you where you started once the census taking is over.
Abbie Hoffman and Jerry Rubin as Heroes
In emails, and a couple of post comments, I am catching some flack for the Abbie Hoffman and Jerry Rubin clips I am running here at EPJ.
No, I have not turned Marxist. Here's how and why the clips ended up here.
Last week, I commented on Tyler Cowen's view that an alliance between libertarians and liberals was about to bloom.
I didn't exactly see things Tyler's way. I wrote:
Then an EPJ reader pointed out to me that there were clips of Hoffman and Rubin on youtube. I decided to post a couple so that other readers could get a sense for the kind of characters these two guys were.
Now, in my original post on Cowen, I mentioned that the one place an alliance with the left made sense was on anti-war. That's why in my posting of the Rubin clip, I wrote:
I have no idea whether they would be anti the current wars, or not. But, I can tell you that Hoffman and Rubin wouldn't protest wars the way it is done now. First, they wouldn't attempt to be destroying things the way left wing-anarchist protesters do now. But more important I can't imagine them filling out forms for protest permits.
It would be more like them to announce to the press that they wouldn't be protesting at a political convention but merely checking to see if convention delegates had the proper "permits to screw the people" before unblocking a road to the convention.
As for designated wired in "protest pens." Not a chance with Rubin and Hoffman. I could see them under the cover of darkness sneaking donkeys into the protest pens at a Democratic convention, but you would never see Rubin or Hoffman quietly protesting from inside a pen.
The current anti-war movement has nothing close to these two. If they protested the Afghan, Iraq, Pakistan etc incursions, people would know. As for them being Marxist, I think they were sincerely anti-war, but from there they were hustlers that would say and do anything to gain attention to themselves to make money.
A friend of mine who knew Hoffman in the years before he died was told by Hoffman that he made tons of money during the anti-war protests.There's a book, Young Men With Unlimited Capital, written long ago by the creators of the original Woodstock Festival, it supports the fact that Hoffman was hustling as a protester to make money.In the book, they detail how Hoffman approached them for money to provide "security". He told them that if he wasn't allowed to provide security that someone might end up putting LSD in the water supply. They paid.
And it shouldn't be forgotten that Jerry Rubin ended up being an investment banker. He also ran a very successful "business networking" event in New York City.
After Steve Rubell was busted for tax evasion and Studio 54 was closed down. Rubin rented the place for his weekly business networking events. It was a very clever move. The place was huge but he filled it every week. Anyone between the age of 20 and 40 in NYC wanted to be at the event. Who wouldn't want to get into the once famous Studio 54? Rubin somehow packed the place with thousands and at the same time gave off the impression that it was "exclusive." You needed a printed invitation to get in. In actuality, the event was more a meat market for men to meet women and vice versa then a true business networking event, but that was all part of Rubin's clever spin to get NYC women in, who would never show up for a meat market event.
Bottom line: These guys were marketing geniuses, who knew that if you were going to protest a war, you were not going to do it by following the rules of the man, and respecting the man.
If these guys were around to protest the current wars, we would know there was an anti-war movement.
I repeat, becasue of them, the anti-war movement was on the front page everyday and the Vietnam war came to an end much sooner. They saved many lives.
No, I have not turned Marxist. Here's how and why the clips ended up here.
Last week, I commented on Tyler Cowen's view that an alliance between libertarians and liberals was about to bloom.
I didn't exactly see things Tyler's way. I wrote:
I am really, really baffled by this. I just don't see "agreement on many issues".And then I got to thinking about the Vietnam war protesters and a private "conspiracy theory"/curiosity I noticed some time ago. That the two top Vietnam war protesters were dead, at very early ages, just before the current wars heated up. Were they knocked off by the government? I have no idea? It's a curiosity. I posted on the curiosity and the blog post gained legs. It will definitely be in the Top Ten for the week. Maybe at #1.
Liberals (in the modern day sense) appear to be full-time interventionists when it comes to the economy. Does Tyler think they are going to be for less regulation in the financial sector? Does Tyler really think they are going to take a pro-free trade stance that will damage their union support? Are they going to suddenly come out against hikes in minimum wages?
The only place it ever made sense to align with the left was on wars and privacy, but now that they have their man in the White House, with a few exceptions, they remain noticeably silent on our overseas adventures and on privacy encroachments.
Then an EPJ reader pointed out to me that there were clips of Hoffman and Rubin on youtube. I decided to post a couple so that other readers could get a sense for the kind of characters these two guys were.
Now, in my original post on Cowen, I mentioned that the one place an alliance with the left made sense was on anti-war. That's why in my posting of the Rubin clip, I wrote:
They don't make anti-war protesters like this anymore. Substitute Afghanistan and Iraq for Vietnam and you may know why he was accidentally hit by a car before the current wars heated up.Listen to the Rubin clip again. He knew why war was wrong. Further his antics and those of Hoffman kept the anti-war movement on the front pages. Those two guys, like them or not, saved a lot of lives.
I have no idea whether they would be anti the current wars, or not. But, I can tell you that Hoffman and Rubin wouldn't protest wars the way it is done now. First, they wouldn't attempt to be destroying things the way left wing-anarchist protesters do now. But more important I can't imagine them filling out forms for protest permits.
It would be more like them to announce to the press that they wouldn't be protesting at a political convention but merely checking to see if convention delegates had the proper "permits to screw the people" before unblocking a road to the convention.
As for designated wired in "protest pens." Not a chance with Rubin and Hoffman. I could see them under the cover of darkness sneaking donkeys into the protest pens at a Democratic convention, but you would never see Rubin or Hoffman quietly protesting from inside a pen.
The current anti-war movement has nothing close to these two. If they protested the Afghan, Iraq, Pakistan etc incursions, people would know. As for them being Marxist, I think they were sincerely anti-war, but from there they were hustlers that would say and do anything to gain attention to themselves to make money.
A friend of mine who knew Hoffman in the years before he died was told by Hoffman that he made tons of money during the anti-war protests.There's a book, Young Men With Unlimited Capital, written long ago by the creators of the original Woodstock Festival, it supports the fact that Hoffman was hustling as a protester to make money.In the book, they detail how Hoffman approached them for money to provide "security". He told them that if he wasn't allowed to provide security that someone might end up putting LSD in the water supply. They paid.
And it shouldn't be forgotten that Jerry Rubin ended up being an investment banker. He also ran a very successful "business networking" event in New York City.
After Steve Rubell was busted for tax evasion and Studio 54 was closed down. Rubin rented the place for his weekly business networking events. It was a very clever move. The place was huge but he filled it every week. Anyone between the age of 20 and 40 in NYC wanted to be at the event. Who wouldn't want to get into the once famous Studio 54? Rubin somehow packed the place with thousands and at the same time gave off the impression that it was "exclusive." You needed a printed invitation to get in. In actuality, the event was more a meat market for men to meet women and vice versa then a true business networking event, but that was all part of Rubin's clever spin to get NYC women in, who would never show up for a meat market event.
Bottom line: These guys were marketing geniuses, who knew that if you were going to protest a war, you were not going to do it by following the rules of the man, and respecting the man.
If these guys were around to protest the current wars, we would know there was an anti-war movement.
I repeat, becasue of them, the anti-war movement was on the front page everyday and the Vietnam war came to an end much sooner. They saved many lives.
Charlie Rangel Has a Problem: Michel Faulkner
By Mark J. Fitzgibbons
What better message to send to Washington than to defeat an old bull like Charlie Rangel?
Rangel is one of the principal symbols of the tolerance Washington has for corrupt insider politics. He is Chairman-in-school-detention of the House Ways and Means Committee, pending efforts of Democrats to avoid the most devastating midterm election defeat in history.
Because he usually doesn't have a serious challenger, Rangel is able to funnel in the neighborhood of a half-million dollars every election cycle to the Democratic Congressional Campaign Committee (DCCC). Such political largesse protects corruption. Nancy Pelosi and her fellow Democrats dole out committee chairs to, and overlook the offenses of, big-money lieutenants like Rangel.
Last week at the Susan B. Anthony List dinner, I sat with Reverend Michel Faulkner, the career non-politician announced as the Republican challenger to Charlie Rangel. That made a special night all the more special...
Meeting him for the first time just that evening, my first impression of Rev. Faulkner is that he conveys his message in conversation rather than slogans, which struck me as refreshing. There was no "I plan to introduce this bill," and certainly no rehearsed lines. The closest he came was, "The people in my district want jobs, not programs," but he said even that with the conversational sincerity of a friend or neighbor, not a candidate meeting someone for the first time.
He told me about himself. He's a pastor, and he founded a nonprofit called the Institute for Leadership. He works with the poor and the homeless. He fosters leadership within his community. He is -- dare I say it? -- a community organizer, but one who believes in and practices the free market and the Gospel.
Later in the conversation, he said something that made me a sure supporter of his run. Politicians -- Republicans, nonetheless -- who recognized his outstanding work in the community, offered him government money for his nonprofit. Rev. Faulkner declined taking taxpayer money. He has wisdom, for he knows that he who pays the fiddler calls the tune.
Read the full article here.
What better message to send to Washington than to defeat an old bull like Charlie Rangel?
Rangel is one of the principal symbols of the tolerance Washington has for corrupt insider politics. He is Chairman-in-school-detention of the House Ways and Means Committee, pending efforts of Democrats to avoid the most devastating midterm election defeat in history.
Because he usually doesn't have a serious challenger, Rangel is able to funnel in the neighborhood of a half-million dollars every election cycle to the Democratic Congressional Campaign Committee (DCCC). Such political largesse protects corruption. Nancy Pelosi and her fellow Democrats dole out committee chairs to, and overlook the offenses of, big-money lieutenants like Rangel.
Last week at the Susan B. Anthony List dinner, I sat with Reverend Michel Faulkner, the career non-politician announced as the Republican challenger to Charlie Rangel. That made a special night all the more special...
Meeting him for the first time just that evening, my first impression of Rev. Faulkner is that he conveys his message in conversation rather than slogans, which struck me as refreshing. There was no "I plan to introduce this bill," and certainly no rehearsed lines. The closest he came was, "The people in my district want jobs, not programs," but he said even that with the conversational sincerity of a friend or neighbor, not a candidate meeting someone for the first time.
He told me about himself. He's a pastor, and he founded a nonprofit called the Institute for Leadership. He works with the poor and the homeless. He fosters leadership within his community. He is -- dare I say it? -- a community organizer, but one who believes in and practices the free market and the Gospel.
Later in the conversation, he said something that made me a sure supporter of his run. Politicians -- Republicans, nonetheless -- who recognized his outstanding work in the community, offered him government money for his nonprofit. Rev. Faulkner declined taking taxpayer money. He has wisdom, for he knows that he who pays the fiddler calls the tune.
Read the full article here.
Soros Wants to Takeover Baltimore (With a little help from Google)
George Soros is making a move on Baltimore.
Soros has pumped $70 million into Baltimore through his Open Society Institute front group organization. Now he's wants Google to wire the city for him.
From a statement OSI released yesterday:
Soros has pumped $70 million into Baltimore through his Open Society Institute front group organization. Now he's wants Google to wire the city for him.
From a statement OSI released yesterday:
"Google should consider Baltimore for this trial for the same reasons that I selected Baltimore for my philanthropic investment, and as the site of the only field office of the Open Society Institute in the United States," said George Soros. "Baltimore has strong community institutions but still many people who suffer from being disconnected from important resources. The city and its residents would benefit dramatically from enhanced communications infrastructure. An investment in Baltimore is sure to yield positive returns both for Google and for the city."
Should We Break Up the Big Banks?
Jeffrey Rogers Hummel sends along a link to his post on the next focus of the Obama interventionists, the financial sector. Hummel makes some much needed observations to put things into perspective. Here's a tatse:
Now that Congress and the Obama Administration have succeeded in making U.S. health care even worse than it was before--which result, when it becomes evident over the next few years, will simply become an excuse for still more counter-productive, government intervention--they will no doubt set their sights on "reforming" the financial system. One idea that has appealed even to some market advocates is breaking up the big banks. Doing so would allegedly undermine "too big too fail" both directly and indirectly, by reducing the political clout of large institutions.The full commentary is here.
So I was intrigued to notice that the most recent, 2010 edition of Frederic S. Mishkin's standard money and banking text, The Economics of Money, Banking & Financial Markets, observes that, despite the increased consolidation of the U.S. banking industry over the last twenty-five years, it still remains the least concentrated in the developed world.
Monday, March 29, 2010
Tuesday's a Full Day for Geithner
On Tuesday morning, Treasury Secretary Geithner will attend the President’s Economic Daily Briefing at the White House.
In the afternoon, Secretary Geithner will attend a working lunch hosted by French Finance Minister Christine Lagarde at the French Ambassador’s residence.
Jerry Rubin on Phil Donahue
The insane Jerry Rubin. They don't make anti-war protesters like this anymore. Substitute Afghanistan and Iraq for Vietnam and you may know why he was accidentally hit by a car before the current wars heated up.
So What Happens After You Leave the Plunge Protection Team?
Philippa Malmgren was Special Assistant to the President for Economic Policy on the National Economic Council. She was also a member of the President's Working Group on Financial Markets, aka, the Plunge Protection Team.
What happens when you leave such a position?
You become president of a boutique research and advisory firm, Canonbury Group. This is where you consult with the people you just regulated. Canonbury's clients include:
* Barclays Capital
* CLSA
* UBS Warburg
* UBS Warburg Private Bank
* Deutsche Bank
* Dresdner Kleinwort Wasserstein
* Commonwealth Bank of Australia
* Colonial First State
* Westpac Banking Corporation
* Bank of Ireland
* MFS
* Pimco
* Bank of America
* Alliance Capital Management Corporation
* Goldman Sachs Asset Management
* ABN AMRO Asset Management
* Investec
* T & D Daido Asset Management
* Instinet Global Services
* Nippon Asset Management
* Nissay Asset Management
* Dai-Ichi Life Asset Management
* Daido Life
* Partners Asset Management
* Bank of America
* JP Morgan Chase
* JP Chase Asset Management
* Van Eck Global
* Milestone Merchant Partners
* Bank Julius Baer
* Sumitomo Life International
* Chuo Mitsui Trust and Banking
* Toyo Trust and Banking
* NASDAQ Europe
* ABN AMRO
* Moore Capital
* Wellington
* Central Banks in many countries
* Caxton
* Merriil Lynch Investment Managers
* Mellon Bank
* Investec
* Pequot
* Alliance Capital
* SAC
* Fidelity
* Bank of Ireland
* Fortress
* Citigroup
* Batterymarch Financial Management, Inc.
* Arience Capital
* Bayerische Hypo-und Vereinsbank AG
* Bourne Park Capital
* Brevan Howard
* Deutsche Bank Asset Management
* Gartmore
* Morley Investment Management
* BNP Paribas
* Bussan Asset Management Co., Ltd.
* Black Arrow Capital Management, LLC
* Eaton Vance Management Investment Managers
* Duncan Lawrie Limited
* EFG Eurofinancière d'Investissements
* Broadstone Capital Group Limited
* Bussan Asset Management Co., Ltd.
* Cardinal Asset Management Citic Capital
* Colchester Global Investors Limited
* DLIBJ Asset Management Co., Ltd.
* DWS Investment GmbH
* Gartmore Investment Management
* Fullerton Fund Management Company Ltd
* GSIC
* Credit Suisse First Boston
* Electrolux
* Caterpillar
* Dow Chemical
* Daiwa Securities SMBC Co. Ltd.
* Carret and Company LLC
* J.P. Morgan Investment Management Inc
* National Bank of Dubai
* Zenkyoren
* Viking Global Investors LP
* UFJ Bank Limited
* Toyota Motor Corporation
* The Sumitomo Trust
* Skandia
* Societe Generale
* SONY
* Sharp Corporation
* Soros Fund Management LLC
* Standard Chartered Bank
* Principal Global Investors
* Pacific Asset Management
* Nordea Investment Management
* Morgan Stanley & Co.,
* Macquarie Bank Limited
* Hang Seng Investment Management Limited
* DWS Investment GmbH
* Putnam Investment Management
* Prudential Securities Incorporated
* Miller and Tabak
* RAB Capital Limited
* Schroder Investment Management
* Sovereign Asset Management Limited
* CQS
* Porter, Felleman Inc.
* Itochu
* Tara Capital
* International Fund Investment
* State of Victoria (Australia)
How valuable are their services? Who really knows. Bear Stearns and Lehman were clients. Things didn't work out well for those two. But it does seem like everyone wants to send this very small shop a check, including Goldman Sachs, JP Morgan, Morgan Stanley and the Soros Funds.
Malmgren has also co-founded, with a former Goldman Sachs partner, Principlais Asset Management. According to the Wealth Bulletin, the firm looks for thematic investment ideas based on "government policy decisions."
What happens when you leave such a position?
You become president of a boutique research and advisory firm, Canonbury Group. This is where you consult with the people you just regulated. Canonbury's clients include:
* Barclays Capital
* CLSA
* UBS Warburg
* UBS Warburg Private Bank
* Deutsche Bank
* Dresdner Kleinwort Wasserstein
* Commonwealth Bank of Australia
* Colonial First State
* Westpac Banking Corporation
* Bank of Ireland
* MFS
* Pimco
* Bank of America
* Alliance Capital Management Corporation
* Goldman Sachs Asset Management
* ABN AMRO Asset Management
* Investec
* T & D Daido Asset Management
* Instinet Global Services
* Nippon Asset Management
* Nissay Asset Management
* Dai-Ichi Life Asset Management
* Daido Life
* Partners Asset Management
* Bank of America
* JP Morgan Chase
* JP Chase Asset Management
* Van Eck Global
* Milestone Merchant Partners
* Bank Julius Baer
* Sumitomo Life International
* Chuo Mitsui Trust and Banking
* Toyo Trust and Banking
* NASDAQ Europe
* ABN AMRO
* Moore Capital
* Wellington
* Central Banks in many countries
* Caxton
* Merriil Lynch Investment Managers
* Mellon Bank
* Investec
* Pequot
* Alliance Capital
* SAC
* Fidelity
* Bank of Ireland
* Fortress
* Citigroup
* Batterymarch Financial Management, Inc.
* Arience Capital
* Bayerische Hypo-und Vereinsbank AG
* Bourne Park Capital
* Brevan Howard
* Deutsche Bank Asset Management
* Gartmore
* Morley Investment Management
* BNP Paribas
* Bussan Asset Management Co., Ltd.
* Black Arrow Capital Management, LLC
* Eaton Vance Management Investment Managers
* Duncan Lawrie Limited
* EFG Eurofinancière d'Investissements
* Broadstone Capital Group Limited
* Bussan Asset Management Co., Ltd.
* Cardinal Asset Management Citic Capital
* Colchester Global Investors Limited
* DLIBJ Asset Management Co., Ltd.
* DWS Investment GmbH
* Gartmore Investment Management
* Fullerton Fund Management Company Ltd
* GSIC
* Credit Suisse First Boston
* Electrolux
* Caterpillar
* Dow Chemical
* Daiwa Securities SMBC Co. Ltd.
* Carret and Company LLC
* J.P. Morgan Investment Management Inc
* National Bank of Dubai
* Zenkyoren
* Viking Global Investors LP
* UFJ Bank Limited
* Toyota Motor Corporation
* The Sumitomo Trust
* Skandia
* Societe Generale
* SONY
* Sharp Corporation
* Soros Fund Management LLC
* Standard Chartered Bank
* Principal Global Investors
* Pacific Asset Management
* Nordea Investment Management
* Morgan Stanley & Co.,
* Macquarie Bank Limited
* Hang Seng Investment Management Limited
* DWS Investment GmbH
* Putnam Investment Management
* Prudential Securities Incorporated
* Miller and Tabak
* RAB Capital Limited
* Schroder Investment Management
* Sovereign Asset Management Limited
* CQS
* Porter, Felleman Inc.
* Itochu
* Tara Capital
* International Fund Investment
* State of Victoria (Australia)
How valuable are their services? Who really knows. Bear Stearns and Lehman were clients. Things didn't work out well for those two. But it does seem like everyone wants to send this very small shop a check, including Goldman Sachs, JP Morgan, Morgan Stanley and the Soros Funds.
Malmgren has also co-founded, with a former Goldman Sachs partner, Principlais Asset Management. According to the Wealth Bulletin, the firm looks for thematic investment ideas based on "government policy decisions."
Peter Schiff as a Closer
A friend of mine recently told me that he was on a radio show to promote his book, at the end of the show the host butchered the title of the book so bad that there was no chance anyone would find his book on Amazon or at a bookstore.
I immediately responded, "Peter Schiff wouldn't have let that happen, end of show or not, he would have immediately corrected the host." Then I directed him to an interview that Robert Ringer conducted with Schiff. It was a long interview and Ringer and Schiff seemed to get along great, but by the end of the show Ringer had failed to mention Schiff's book. Ringer started to rap up the show and Schiff piped right in, something like, "Don't forget to mention my book."
It was the right thing to do. Schiff was on the show to promote his name and his book, and so when it became clear that Ringer was going to forget to mention the book, Shiff did so without hesitation.
I also recall a Judge Napolitano show where Schiff was a guest. It was another case where he spoke up and without hesitation asked for listeners to send him money if they wanted him to enter the senatorial race that he is now in.
Schiff is one of the best I have seen at closing. He knows why he is doing something and is confident when he asks for whatever he wants. It is a simple thing, yet it is very difficult to do for many. It is difficult for some salesman, and it is difficult for many others who need to ask for something.They can't close.
I have come across talented people from time to time who don't have the confidence in themselves that they should. When you are good at what you do, you shouldn't hesitate to ask for what you have want, with confidence and without hesitation. I tell these people about Schiff and tell them to go listen to the end of the Ringer interview. And I tell them about the Judge Napolitano spot. And then I tell them that there are probably other youtube videos of Schiff closing. I tell them to study those spots where Schiff never hesitates to ask for what he wants. Schiff is the penultimate closer, I tell them. And I tell them that's the way they should close.
I immediately responded, "Peter Schiff wouldn't have let that happen, end of show or not, he would have immediately corrected the host." Then I directed him to an interview that Robert Ringer conducted with Schiff. It was a long interview and Ringer and Schiff seemed to get along great, but by the end of the show Ringer had failed to mention Schiff's book. Ringer started to rap up the show and Schiff piped right in, something like, "Don't forget to mention my book."
It was the right thing to do. Schiff was on the show to promote his name and his book, and so when it became clear that Ringer was going to forget to mention the book, Shiff did so without hesitation.
I also recall a Judge Napolitano show where Schiff was a guest. It was another case where he spoke up and without hesitation asked for listeners to send him money if they wanted him to enter the senatorial race that he is now in.
Schiff is one of the best I have seen at closing. He knows why he is doing something and is confident when he asks for whatever he wants. It is a simple thing, yet it is very difficult to do for many. It is difficult for some salesman, and it is difficult for many others who need to ask for something.They can't close.
I have come across talented people from time to time who don't have the confidence in themselves that they should. When you are good at what you do, you shouldn't hesitate to ask for what you have want, with confidence and without hesitation. I tell these people about Schiff and tell them to go listen to the end of the Ringer interview. And I tell them about the Judge Napolitano spot. And then I tell them that there are probably other youtube videos of Schiff closing. I tell them to study those spots where Schiff never hesitates to ask for what he wants. Schiff is the penultimate closer, I tell them. And I tell them that's the way they should close.
Geithner Headed to Steel Country
The Treasury announced today that Secretary Tim Geithner will travel to Pittsburgh on Wednesday to tour an Allegheny Technologies Incorporated steel plant and meet with workers and management "to discuss the critical role that innovation and new technology plays in maintaining the competitiveness of the U.S. manufacturing sector". Following the tour of the ATI plant, Secretary Geithner will visit the United Steelworkers headquarters to meet privately "with labor and business leaders to discuss the state of the economy and the importance of America’s manufacturing sector."
WHAT: ATI plant tour and meetings with company executives and workers
WHERE: Allegheny Ludlum Washington Plate
500 Green Street
Washington, PA
WHO: Treasury Secretary Tim Geithner
United Steelworkers President Leo Gerard
CEO of Allegheny Technologies Patrick Hassey
WHAT: ATI plant tour and meetings with company executives and workers
WHERE: Allegheny Ludlum Washington Plate
500 Green Street
Washington, PA
Goldman's PR Problem May Cost Blankfein His Job
Goldman's idiotic PR approach, while it rapes America, has even caught the eye of FOXnews. They write:
Lloyd Blankfein may, or may not, be aware of who is gunning for him, but rest assured the plotting continues. I will be very surprised if he survives the year.
The decision announced earlier Monday that the Treasury Department has chosen Morgan Stanley to advise it on unloading its massive stake in Citigroup -- the largest stock offering in history and one of the most high-profile investment banking assignments in years -- has given credence to the opinion of some senior executives inside the firm that Goldman's image problems will impact its client related business. These executives worried that prospective investment-banking clients concerned about their association with the firm will simply hire other players rather than face the fallout of working with Goldman.While the firm continues to deny it, there are indications that a coup attempt is in the making. This news story at FOX was just another plant to keep the story boiling internally and to judge reactions to the story, to see who else might be recruited for the coup attempt.
Lloyd Blankfein may, or may not, be aware of who is gunning for him, but rest assured the plotting continues. I will be very surprised if he survives the year.
In Profile: Mikhail Prokhorov
by Stephanie Baker
Mikhail Prokhorov steps off his Gulfstream V into the swirling snow and subzero temperatures of Krasnoyarsk, Siberia, where he’s come to visit his gold mine. Though it’s almost midnight, Prokhorov has no interest in retiring to his hotel room. Instead, he’s whisked away in a police-escorted Mercedes to the local gym, where he puts in two hours running on a treadmill and lifting weights, Bloomberg Markets reports in its May issue.
Even in the depths of Siberia, Prokhorov’s mind wanders thousands of miles away to Brooklyn, New York, where he plans to install his new trophy asset: the New Jersey Nets basketball team. Prokhorov, Russia’s second-richest man, according to Moscow’s Finans magazine, was little known in the U.S. until last year, when he agreed to pay $200 million for an 80 percent stake in the Nets and a 45 percent share in their new Brooklyn arena. He’s not bothered that the Nets were one of the worst teams in the history of professional basketball in the 2010 season, with a record of 8-63 on March 25.
“There is only one way to go: up,” says Prokhorov, 44, in the Krasnoyarsk gym, as he bench-presses 50 kilograms (110 pounds) in baggy sweatpants and a gray Nets T-shirt. “I like to find cheap assets with problems. It gives me power.”
Prokhorov, who’s more than 2 meters (6 feet 7 inches) tall, stands out among Russian billionaires for more than just his height. While other moguls gorged on debt in acquisitive binges that left them on the brink of state takeovers, Prokhorov feasted on their remains, growing richer by investing in gold and aluminum even as the Russian economy shrank 8 percent in 2009.
‘Musical Chairs’
“Prokhorov was in a game of musical chairs, and when the music stopped, he was sitting down,” says Christopher Granville, managing editor of London-based Trusted Sources UK Ltd., an emerging-markets research firm.
Armed with cash, Prokhorov is now expanding beyond his gold and metals holdings into areas such as debt restructuring and hybrid cars and is looking for partners outside Russia for new investments.
The U.S., which so far has been relatively untouched by Russia’s new class of billionaires, is an important part of Prokhorov’s global strategy. And the Nets purchase is about more than basketball.
“It’s about opening up other business opportunities in the U.S.,” Prokhorov says, sipping tea at 2 a.m. at his hotel in Krasnoyarsk. “If I want to do something else, people won’t say, ‘Who’s that?’ They’ll say, ‘That’s the owner of the Nets.’”
An Owner Who Dunks
Prokhorov will be the first owner of a National Basketball Association team from outside North America, at a time when there’s very little foreign ownership in U.S. sports.
Other Russian businessmen have invaded English soccer. Billionaire Roman Abramovich has plowed almost 700 million pounds ($1.1 billion) into the Chelsea Football Club and changed the game by bidding up salaries of star players.
“I’ll be the first NBA owner who can dunk,” says Prokhorov, who played basketball in high school. (Basketball legend Michael Jordan, who is part of a group that in March got NBA approval to pay $275 million for the Charlotte Bobcats, would dispute that claim.)
The Russian entrepreneur installed a basketball hoop down the hall from his Moscow office where he sometimes practices his jump shot.
Prokhorov agreed to buy the Nets from New York real estate developer Bruce Ratner, along with a stake in the new arena that Ratner is building as part of a $4.9 billion, 22-acre (9- hectare) office-and-apartment complex.
Six-Year Delay
Ratner’s own plan to move the Nets to Brooklyn -- home to about 330,000 immigrants from the former Soviet Union -- had been held up for six years because of legal battles with local residents opposed to the new development.
Prokhorov plans to revive the team with new talent. Some of the best players in the NBA, including Chris Bosh of the Toronto Raptors, LeBron James of the Cleveland Cavaliers and Dwyane Wade of the Miami Heat, will become free agents during the next two years, he says.
The Russian metals magnate has the cash to assemble his own dream team. He got some of it after a run-in with French police in January 2007, when he was detained at the ski resort of Courchevel on suspicion of pimping. He was released without charge after four days -- he denies any impropriety -- and he returned to Russia to find himself joined in battle with his then-business partner, billionaire Vladimir Potanin.
$7 Billion Windfall
Prokhorov says that after the events in Courchevel, Potanin urged him to sell his 25 percent stake in Russia’s biggest mining company, Moscow-based OAO GMK Norilsk Nickel. Instead of selling to Potanin, Prokhorov sold out to yet another billionaire, Oleg Deripaska, in April 2008 for a promised $7 billion in cash and a 14 percent stake in Deripaska’s United Co. Rusal, the world’s largest aluminum producer.
It looked like Prokhorov had called the top of the market. In the eight months after he sold his stake, Norilsk shares sank 71 percent. Using his holding company, Onexim Group, he then spent late 2008 and 2009 snapping up distressed assets while fellow Russian businessmen struggled under truckloads of debt. He bought half of Renaissance Capital, one of Russia’s largest investment banks, for $500 million in September 2008.
He also increased his stake in OAO Polyus Gold, Russia’s largest gold producer, before the price of the metal soared more than 50 percent from November 2008 through the end of 2009 as investors worldwide bought it as a safe haven. Prokhorov now owns about 40 percent of Polyus with other investors, a stake valued at $3.7 billion.
Riding the Boom
Like other oil and mining tycoons, Prokhorov rode the Russian boom. From 1999 through most of 2008, Russia was giddy on worldwide demand for its oil, gas and minerals. In 2008, the economy surged 7 percent as investors piled in. When oil plunged to $34 a barrel in December 2008 from $145 that July, the Russian economy sank along with it. For the first time in a decade, the government ran a budget deficit.
Some Russian business moguls were caught out when the Micex Index plunged 67.5 percent in 2008. Deripaska was forced to restructure debt after the value of the shares he had pledged as collateral against loans collapsed. Alexander Lebedev’s National Reserve Corp. faced margin calls from lender Deutsche Bank AG in October 2008 on a loan guaranteed by shares in airline OAO Aeroflot, which had plunged in value.
Having cashed out before the crisis, Prokhorov was well positioned when commodity prices recovered in mid-2009, helping to trigger a 125 percent gain that year in the Micex. Finans magazine’s February 2010 rich list put Prokhorov’s assets at $17.8 billion, second after steel magnate Vladimir Lisin, who’s worth $18.8 billion.
Resource Dependent
“Prokhorov’s story is one of Russia’s fundamental dependence on natural resources,” says David Woodruff, senior lecturer at the London School of Economics and Political Science. “He made his fortune like everyone else, from prices set on international commodity markets.”
Prokhorov increased his stake in Rusal last year in a complex restructuring deal with Deripaska, who owed him $2.8 billion from his 2008 purchase of Norilsk shares. After Rusal’s January initial share offering in Hong Kong, Prokhorov now owns 17 percent of the aluminum giant and pocketed $440 million in cash. Rusal shares had sunk 18.61 percent since the IPO as of March 26.
“I don’t care about the IPO because I can wait and sit on this company,” Prokhorov says, swinging his long legs over the arm of a white leather seat on his jet en route to Krasnoyarsk. “In the next three to four years, the value of the company will double for sure. It’s inevitable that commodities will go up.”
Calculated Risks
Friends say that while there was some luck in Prokhorov’s emergence at the top of Russia’s business pyramid, most of his success comes from hours of mapping out his long-term investment strategy. “He calculates his risks 10 times before he invests,” says Alexander Khloponin, a former business partner and ex-governor of the Krasnoyarsk region, where most of Polyus’s gold mines are located.
Read the rest here.
Mikhail Prokhorov steps off his Gulfstream V into the swirling snow and subzero temperatures of Krasnoyarsk, Siberia, where he’s come to visit his gold mine. Though it’s almost midnight, Prokhorov has no interest in retiring to his hotel room. Instead, he’s whisked away in a police-escorted Mercedes to the local gym, where he puts in two hours running on a treadmill and lifting weights, Bloomberg Markets reports in its May issue.
Even in the depths of Siberia, Prokhorov’s mind wanders thousands of miles away to Brooklyn, New York, where he plans to install his new trophy asset: the New Jersey Nets basketball team. Prokhorov, Russia’s second-richest man, according to Moscow’s Finans magazine, was little known in the U.S. until last year, when he agreed to pay $200 million for an 80 percent stake in the Nets and a 45 percent share in their new Brooklyn arena. He’s not bothered that the Nets were one of the worst teams in the history of professional basketball in the 2010 season, with a record of 8-63 on March 25.
“There is only one way to go: up,” says Prokhorov, 44, in the Krasnoyarsk gym, as he bench-presses 50 kilograms (110 pounds) in baggy sweatpants and a gray Nets T-shirt. “I like to find cheap assets with problems. It gives me power.”
Prokhorov, who’s more than 2 meters (6 feet 7 inches) tall, stands out among Russian billionaires for more than just his height. While other moguls gorged on debt in acquisitive binges that left them on the brink of state takeovers, Prokhorov feasted on their remains, growing richer by investing in gold and aluminum even as the Russian economy shrank 8 percent in 2009.
‘Musical Chairs’
“Prokhorov was in a game of musical chairs, and when the music stopped, he was sitting down,” says Christopher Granville, managing editor of London-based Trusted Sources UK Ltd., an emerging-markets research firm.
Armed with cash, Prokhorov is now expanding beyond his gold and metals holdings into areas such as debt restructuring and hybrid cars and is looking for partners outside Russia for new investments.
The U.S., which so far has been relatively untouched by Russia’s new class of billionaires, is an important part of Prokhorov’s global strategy. And the Nets purchase is about more than basketball.
“It’s about opening up other business opportunities in the U.S.,” Prokhorov says, sipping tea at 2 a.m. at his hotel in Krasnoyarsk. “If I want to do something else, people won’t say, ‘Who’s that?’ They’ll say, ‘That’s the owner of the Nets.’”
An Owner Who Dunks
Prokhorov will be the first owner of a National Basketball Association team from outside North America, at a time when there’s very little foreign ownership in U.S. sports.
Other Russian businessmen have invaded English soccer. Billionaire Roman Abramovich has plowed almost 700 million pounds ($1.1 billion) into the Chelsea Football Club and changed the game by bidding up salaries of star players.
“I’ll be the first NBA owner who can dunk,” says Prokhorov, who played basketball in high school. (Basketball legend Michael Jordan, who is part of a group that in March got NBA approval to pay $275 million for the Charlotte Bobcats, would dispute that claim.)
The Russian entrepreneur installed a basketball hoop down the hall from his Moscow office where he sometimes practices his jump shot.
Prokhorov agreed to buy the Nets from New York real estate developer Bruce Ratner, along with a stake in the new arena that Ratner is building as part of a $4.9 billion, 22-acre (9- hectare) office-and-apartment complex.
Six-Year Delay
Ratner’s own plan to move the Nets to Brooklyn -- home to about 330,000 immigrants from the former Soviet Union -- had been held up for six years because of legal battles with local residents opposed to the new development.
Prokhorov plans to revive the team with new talent. Some of the best players in the NBA, including Chris Bosh of the Toronto Raptors, LeBron James of the Cleveland Cavaliers and Dwyane Wade of the Miami Heat, will become free agents during the next two years, he says.
The Russian metals magnate has the cash to assemble his own dream team. He got some of it after a run-in with French police in January 2007, when he was detained at the ski resort of Courchevel on suspicion of pimping. He was released without charge after four days -- he denies any impropriety -- and he returned to Russia to find himself joined in battle with his then-business partner, billionaire Vladimir Potanin.
$7 Billion Windfall
Prokhorov says that after the events in Courchevel, Potanin urged him to sell his 25 percent stake in Russia’s biggest mining company, Moscow-based OAO GMK Norilsk Nickel. Instead of selling to Potanin, Prokhorov sold out to yet another billionaire, Oleg Deripaska, in April 2008 for a promised $7 billion in cash and a 14 percent stake in Deripaska’s United Co. Rusal, the world’s largest aluminum producer.
It looked like Prokhorov had called the top of the market. In the eight months after he sold his stake, Norilsk shares sank 71 percent. Using his holding company, Onexim Group, he then spent late 2008 and 2009 snapping up distressed assets while fellow Russian businessmen struggled under truckloads of debt. He bought half of Renaissance Capital, one of Russia’s largest investment banks, for $500 million in September 2008.
He also increased his stake in OAO Polyus Gold, Russia’s largest gold producer, before the price of the metal soared more than 50 percent from November 2008 through the end of 2009 as investors worldwide bought it as a safe haven. Prokhorov now owns about 40 percent of Polyus with other investors, a stake valued at $3.7 billion.
Riding the Boom
Like other oil and mining tycoons, Prokhorov rode the Russian boom. From 1999 through most of 2008, Russia was giddy on worldwide demand for its oil, gas and minerals. In 2008, the economy surged 7 percent as investors piled in. When oil plunged to $34 a barrel in December 2008 from $145 that July, the Russian economy sank along with it. For the first time in a decade, the government ran a budget deficit.
Some Russian business moguls were caught out when the Micex Index plunged 67.5 percent in 2008. Deripaska was forced to restructure debt after the value of the shares he had pledged as collateral against loans collapsed. Alexander Lebedev’s National Reserve Corp. faced margin calls from lender Deutsche Bank AG in October 2008 on a loan guaranteed by shares in airline OAO Aeroflot, which had plunged in value.
Having cashed out before the crisis, Prokhorov was well positioned when commodity prices recovered in mid-2009, helping to trigger a 125 percent gain that year in the Micex. Finans magazine’s February 2010 rich list put Prokhorov’s assets at $17.8 billion, second after steel magnate Vladimir Lisin, who’s worth $18.8 billion.
Resource Dependent
“Prokhorov’s story is one of Russia’s fundamental dependence on natural resources,” says David Woodruff, senior lecturer at the London School of Economics and Political Science. “He made his fortune like everyone else, from prices set on international commodity markets.”
Prokhorov increased his stake in Rusal last year in a complex restructuring deal with Deripaska, who owed him $2.8 billion from his 2008 purchase of Norilsk shares. After Rusal’s January initial share offering in Hong Kong, Prokhorov now owns 17 percent of the aluminum giant and pocketed $440 million in cash. Rusal shares had sunk 18.61 percent since the IPO as of March 26.
“I don’t care about the IPO because I can wait and sit on this company,” Prokhorov says, swinging his long legs over the arm of a white leather seat on his jet en route to Krasnoyarsk. “In the next three to four years, the value of the company will double for sure. It’s inevitable that commodities will go up.”
Calculated Risks
Friends say that while there was some luck in Prokhorov’s emergence at the top of Russia’s business pyramid, most of his success comes from hours of mapping out his long-term investment strategy. “He calculates his risks 10 times before he invests,” says Alexander Khloponin, a former business partner and ex-governor of the Krasnoyarsk region, where most of Polyus’s gold mines are located.
Read the rest here.
EPJ Gold Report: The Canadian Maple Leaf Gold Coin – The Purest of All Gold Bullion Coins
Produced entirely from Canadian gold sources, the Canadian Maple Leaf is made of 24 karat gold. Unlike American Eagles or South African Krugerrands which are 91.67% (or 22 karat) pure gold with the remainder coming from copper or silver to form a more durable alloy, Maple Leaf gold Canadian coins are 99.99% pure. They are said to be the purest gold bullion coins in the world.
The Canadian Maple Leaf Gold Coin is available in the following denominations: 1 Troy Ounce, 1/2 Troy Ounce, 1/4 Troy Ounce, 1/10 Troy Ounce, 1/20 Troy Ounce. There is also a series of Canadian Silver Maple Leaf coins, also 99.99% pure silver bullion.
The Canadian Maple Leaf Gold Coin is available in the following denominations: 1 Troy Ounce, 1/2 Troy Ounce, 1/4 Troy Ounce, 1/10 Troy Ounce, 1/20 Troy Ounce. There is also a series of Canadian Silver Maple Leaf coins, also 99.99% pure silver bullion.
Nullification: How to Resist Federal Tyranny in the 21st Century
Tom Woods' new book is scheduled for release on June 29. Pre-order here.
Don't Forget...
...the second quarter of the year is almost over. It's time to order The EPJ Quarterly Review of the Economy.
In the upcoming issue, I have two very important articles. The first, Where's the Stock Market Crash and the Second Leg of the Recession?, where I go into detail on the variuos forces currently acting on the economy and stock market.
In the second article, Why the Yield Curve is Flashing a False Positive, I detail why those expecting an upturn in the economy because of the current positive yield curve are missing a key factor.
Plus there is plenty more. Click here for the details.
In the upcoming issue, I have two very important articles. The first, Where's the Stock Market Crash and the Second Leg of the Recession?, where I go into detail on the variuos forces currently acting on the economy and stock market.
In the second article, Why the Yield Curve is Flashing a False Positive, I detail why those expecting an upturn in the economy because of the current positive yield curve are missing a key factor.
Plus there is plenty more. Click here for the details.
Iris Mack Speaking Demand Goes Global
Oh, this is going to be a fun summer for Larry Summers, the demand for Iris Mack has gone beyond the U.S. and is now global.
On May 11th she is a guest speaker in a University of Zurich finance class.
On May 19th she speaks in at the Center for Quantitative Finance program. The Center that was founded by Paul Wilmott.
On May 11th she is a guest speaker in a University of Zurich finance class.
On May 19th she speaks in at the Center for Quantitative Finance program. The Center that was founded by Paul Wilmott.
The Science of Understanding Women
Lew Rockwell links to an interesting story today written by a male writer who bitches about having to buy round after round of drinks for women.
Although I tend to buy drinks for women I am talking to at a bar, I really can't sympathise with this guy. Yeah, most women can be difficult if you let them get away with it, but the trick is to understand how their minds are wired. Once you have that figured out, problems go away pretty quickly.
What the writer needs to do is read Richard Feynman. Although Feynman is hailed as a genius physicist, I think his greatest discoveries were on how women think. He claimed he could go into a strip club and instead of giving the girls money, he could get them to buy him a sandwich after the club closed. I believe him. Read his writings, including, but not limited to, the letters he wrote to women and the letters written back. It's all there, sometimes a bit hidden, but it's all there. The man was, indeed, a genius.
Although I tend to buy drinks for women I am talking to at a bar, I really can't sympathise with this guy. Yeah, most women can be difficult if you let them get away with it, but the trick is to understand how their minds are wired. Once you have that figured out, problems go away pretty quickly.
What the writer needs to do is read Richard Feynman. Although Feynman is hailed as a genius physicist, I think his greatest discoveries were on how women think. He claimed he could go into a strip club and instead of giving the girls money, he could get them to buy him a sandwich after the club closed. I believe him. Read his writings, including, but not limited to, the letters he wrote to women and the letters written back. It's all there, sometimes a bit hidden, but it's all there. The man was, indeed, a genius.
Are More People Sneaking Into the White House?
A whole lot of people President Obama claims to hardly know, or with whom he has supposedly disasociated with, are visiting the White House quite often. Anthony Martin reports at the Washington Examiner:
As for Ayers, there is very strong evidence that he ghost wrote, Dreams from My Father, for Obama.
Okay, so they are not sneaking in. Which leads us to the BIG question, what else is Obama lying to us about?
Major news is breaking concerning the White House visitors list. The log shows that several unsavory characters, at least 2 of whom Obama denied knowing personally, have been regular visitors at the White House.Wright is the former pastor of Barack Obama. Obama gave a speech titled "A More Perfect Union", in which he sought to place Wright's comments in a historical and sociological context. In the speech, Obama again denounced Wright's remarks, but did not disown him. The controversy was renewed in late April when Wright made a series of media appearances, including an interview on Bill Moyers Journal, a speech at the NAACP and a speech at the National Press Club. After the last of these, Obama spoke more forcefully against his former pastor, saying that he was "outraged" and "saddened" by his behavior, and in May he resigned his membership in the church.
The most eyebrow-raising of these visitors is none other than domestic terrorist William Ayers, who, along with his wife, Bernadine Dohrn, established and ran the subversive Weather Underground in the 1960s and 70s, which bombed federal buildings...
Controversy ensued in the Obama campaign of 2008 when stories surfaced that Ayers and his wife were personal friends of the Obamas. Obama vehemently denied it on several occasions, claiming that he knew of Ayers only because of his work and his writings, but that since Ayers was significantly older than he, it was unlikely that he would have opportunity to become friends with him.
Obama went further to say that as far as he knew Ayers was just "somebody who lived in the neighborhood."...
Back to the visitors list at the White House. None other than domestic terrorist William Ayers has been a guest on at least 3 separate occasions....
Other regular guests include Reverend Jeremiah 'G-D Amerikkka' Wright,
As for Ayers, there is very strong evidence that he ghost wrote, Dreams from My Father, for Obama.
Okay, so they are not sneaking in. Which leads us to the BIG question, what else is Obama lying to us about?
National Healthcare in Great Britain
For those who think national healthcare is working wonderfully in Great Britain, an interesting series of tweets from Tim Harford:
How many times is it reasonable to expect the phone to ring before the NHS answers? 50 times? I gave up after 100...
...Royal Free Hospital in Hampstead. NHS site says it's one of the very best. May be true - so I hope my experience isn't representative!...
Am currently working on a piece about how NHS waiting lists are measured. Alas I have become part of my own article - never good...
Geithner's Phony Breakfast
Today is Women in Finance day at the Treasury. Secretary Geithner and Treasurer Rios will host a private breakfast for several attendees of the Women in Finance Symposium. As I pointed out earlier, it's all about government employees, women in government captured media and, of course, women from Goldman Sachs, Morgan Stanley and Citi Bank.
Where are the Janet Tavakoli, Lila Rajiva, Iris Mack, Meredith Whitney and Karen De Coster types at this breakfast, who are actually earning an honest buck in finance?
Where are the Janet Tavakoli, Lila Rajiva, Iris Mack, Meredith Whitney and Karen De Coster types at this breakfast, who are actually earning an honest buck in finance?
Sunday, March 28, 2010
What Obamacare Is Going to Look Like
In an article on the collapse of Detroit, Gary North has some fascinating comments on what he thinks ObamaCare will look like. He writes:
But, I think North is an optimist. It could be much worse.
Here is a pessimistic "adjustment" to North's expectations:
As far as I can tell the current administration thinks in terms of egalitarianism and interventions. As medical prices climb, price controls will be instituted, and if not now, in the very near future ALL doctors will be required to accept ObamCare insurance and the price controls with it. They will even be forced to accept patients, they otherwise might choose to turn down
Money alone won't work to get better care. It will require connections and money, but even with money and connections the "superior" care will be second rate compared to quality care today.
Any new medical treatments will be influenced by lobbyists, not by real medical demands. What pharmecutical companies come up with will be pushed on the people. Diagnosis will be based on psuedo-disease and threats. Think the H1N1 vaccine. It will become difficult for the average person to determine what is an important duagnosis and what is a lobbyist inspired diagnosis.
Eventually, students coming out of medical schools will be brainwashed in psuedo diagnosis and treatments. Then life expectancy will really collapse. That's the pessimistic forecast.
Bottom line: How long you will live will be dependent on how ObamaCare evolves and how fast. But top medical care, for the population as a whole, will peak out in the U.S. within the next two years. From there, it is down hill. None of us knows how fast down hill.
Obamacare will lead to an expansion of these forms of medicine:If this is what ObamaCare turns out to be, we can thank our lucky stars. It will still lower the life expectancy in the country, but it will be a much slower decline. Innovation will be suffocated, so forget about new treatments. But if you are allowed to still pay cash for medical services at the "concierge level," then there is hope for when major medical treatments are required.
1. Concierge
2. Wal-Mart
3. ER
4. HMO
5. Mexican
CONCIERGE. The rich and very rich hire their own physicians. They pay top dollar. The physicians do not take third-party payments, either from the government or insurance companies. They are independent practitioners. They make house calls. The houses they call on are very large.
For the upper middle class, there are fee-for-service physicians. They take no third-party payments. They do not make house calls.
WAL-MART. These are the walk-in clinics. They are price competitive. They treat minor ailments. They sell services on a one-time basis. They take credit cards. They may or may not cater to the Medicare crowd. They are assembly-line clinics. There are no major surgeries or other high-cost, high-risk services.
ER. Large hospital emergency rooms are mandated by law. The poor get treated there. In a life-and-death emergency, they work. People who would otherwise die in a couple of hours are saved. For walk-in patients, the ERs ration by time. Patients demonstrate their patience.
HMO. This style of medicine is efficient. It cuts costs by cutting services and cutting time. You see the physician on duty. You may not have seen him before. His job is to get you in and out as fast as possible. Time is monitored by the company. Computers make this easy.
MEXICAN. This is off-shore medicine. In Canada, when you can't get treated for months or years, you come to the United States and pay. This will not be possible for Canadians much longer, except for rich ones. Mexico will serve upper middle-class Americans as the USA has served Canadians.
It is possible to get very good surgical care in Asia and Latin America. You have to know who the good practitioners are. Asian hospitals sell for 25% the same level of services. There is less regulation there. Plane fares are cheap. A stay in a hotel is cheap.
There will be entrepreneurs who set up Websites off-shore that direct Americans to practitioners abroad. The Web allows this sort of advertising.
Physicians who practice alone or in small limited liability corporations will find that they cannot compete under the new payment system. Assembly-line medicine will replace the traditional doctor-patient relationship.
TRAPPED
Most physicians are trapped. They cannot sell their practices. The price of practices has been dropping.
Foreign-trained physicians who can pass the U.S. tests are coming to America. They are competitive.
Technical Services that can be digitized are being outsourced to India and other Asian nations.
Young American physicians begin with a lot of debt. They need income fast. They will be hired by the HMOs and clinics. They will not reach the salary level of this generation of physicians. They will be upper-middle-class income-earners.
There will be specialists, of course. Plastic surgeons who specialize in making rich women better looking will not be part of the new system. They will be able to do well. But for the typical practitioner, his career options have been dramatically restricted by the new law.
I think most physicians will stick it out until they retire at age 67. They owe money. They need the income. The law's most restrictive provisions will not kick in until 2014. They will adjust...
You had better decide which kind of medical care you can live with. Then you had better locate a practitioner soon. This is especially true if you want a fee-for-service physician. People with money will go to them. They are already hard to find. They charge more. It's not easy to become a patient. They are booked up...
If you have an existing physician, do what you can to become an above-average patient.
You had better start getting into shape. You can no longer afford to be vulnerable to the diseases and afflictions of a flabby lifestyle. ObamaCare has changed the risk-reward ratio. Risk has just gone up. It will continue to go up.
There will be no roll-back of this law. It is going to be enforced for as long as the U.S. government has money.
That may not be as long as Obama thinks.
But, I think North is an optimist. It could be much worse.
Here is a pessimistic "adjustment" to North's expectations:
As far as I can tell the current administration thinks in terms of egalitarianism and interventions. As medical prices climb, price controls will be instituted, and if not now, in the very near future ALL doctors will be required to accept ObamCare insurance and the price controls with it. They will even be forced to accept patients, they otherwise might choose to turn down
Money alone won't work to get better care. It will require connections and money, but even with money and connections the "superior" care will be second rate compared to quality care today.
Any new medical treatments will be influenced by lobbyists, not by real medical demands. What pharmecutical companies come up with will be pushed on the people. Diagnosis will be based on psuedo-disease and threats. Think the H1N1 vaccine. It will become difficult for the average person to determine what is an important duagnosis and what is a lobbyist inspired diagnosis.
Eventually, students coming out of medical schools will be brainwashed in psuedo diagnosis and treatments. Then life expectancy will really collapse. That's the pessimistic forecast.
Bottom line: How long you will live will be dependent on how ObamaCare evolves and how fast. But top medical care, for the population as a whole, will peak out in the U.S. within the next two years. From there, it is down hill. None of us knows how fast down hill.
M2 Money Supply Growth Collapses
The information that it imparts explains why the dollar has been so strong against the euro and most other currencies. It explains the weakness in gold. And, I believe it signals an eminent crash in the U.S. stock market--which will lead to the second leg of the double dip recession.
How does the chart signal all this? Simple supply and demand. There are fewer dollars entering the system. Fewer dollars changes the supply structure that existed when the Fed was aggressively printing.
Specifically, fewer dollars means that its price will go up in terms of most other currencies and gold. There will also be fewer dollars to support the current structure of the stock market.
Here are specifics:
The M2 growth rate on an annual basis fell in the week ending March 15 to 0.85%, the lowest money growth rate since May 1995.
In each of the last 10 weeks, M2 growth has been below 2.5%.
Mark Perry details a lot of these specifics at his blog. His focus, though, is on the lack of price inflation that will exist because of this collapsing growth. He is correct, but I think he is missing the much bigger picture of the impact this will have on foreign currencies vis a vis the dollar, the impact on gold, and most important the stock market and overall economy.
In other words, all hell is about to break loose, again. And few are ready.
Why Greg Mankiw Will Never Make a Major Accurate Economic Forecast
Harvard Prof. Greg Mankiw has a particularly absurd column in NYT this week. He doesn't understand business cycle theory, so anyone that did forecast the downturn, according to him was just lucky:
Specifically, in 2004, New York Federal Reserve economists Jonathan McCarthy and Richard W. Peach wrote a paper Are Home Prices the Next Bubble? Their answer was decidedly, "No".
I issued a reply to their paper, at that time writing under a pen name because of other business commitments:
Apparently, McCarthy and Peach thought my reply was funny and included this quote from me in their power point presentation, when they went around the country declaring there was no housing bubble. Under the headline Opposing View, they would flash this quote from me:
These calls, despite what Mankiw thinks can be made quite regularly.
Here at EPJ, in August of 2008, just before all hell broke loose, I could not have been more clear that the crashing housing bubble was going to turn into much more:
1. He operates out of a flawed Keynesian perspective, which means there are few macro-structure failures that he will detect. But this in itself shouldn't prevent him from making the obvious forecasts. Nouriel Roubini is a Keynesian, but he watches the data close enough to make many accurate forecasts. Paul Krugman, who is clueless as far as theory (see here) is actually decent as far as knowing where the economy is.
To be fair, my warnings about the housing bubble, and those of Roubini and Krugman, were not that difficult to make. When you are making no money down mortgages with exploding interest payments that problems were going to hit the fan should have been obvious to any economist who understood the word default. You just needed the courage of your convictions to say the obvious, which brings me to Mankiw's other great flaw.
2. He has a wimpy personality. If he even detected a structural flaw in the economy, he doesn't have the balls to stand out and say so clearly. He simply is afraid that it will somehow damage his reputation and ruin his chances at a cabinet post the next time a Republican administration rolls in to power. How could he possibly have warned of the dangers, if he even saw them, under the Bush administration. The major forecasts always come when you stand against the crowd, and you have to be bold and stand against political powers. Even Krugman gets this. (Notice: Krugman is "advising" the Obama administration fron the outside.) I really don't think Mankiw has it in him. He'd rather cast it off as luck when someone does make an accurate forecast, even though the real reason is that they don't suffer from the flaws that Mankiw does.
Greg, baby, it's not about luck. It's about having good theory on your side (Or at least good data, in the case of Krugman and Roubini) and the balls to say loud and clear what you see developing.
Perhaps the best place to start is to acknowledge what we cannot do. If recent events have taught economists and policy makers anything, it is the need for humility.When I pointed out the flaws in the 2004 Federal Reserve analysis about the housing bubble, I don't think luck had anything to do with it. My analysis was simply solid. I invite Prof. Mankiw to explain why this analysis was luck versus better analysis than that of the Fed.
One thing we cannot do very well is forecast the economy. The recent crisis and recession caught most economists flat-footed. This is nothing new. We have never been good at foretelling the future, but when the news is favorable, others forgive our lack of prescience.
Some critics say the Federal Reserve should have foreseen the bursting of the housing bubble and its financial aftershocks. A few of them, having made the correct call themselves, are enjoying new found celebrity.
Yet at any time, there are many forecasters with a large range of views. After the fact, a few will turn out to be right, and many wrong. Policy makers at the Fed don’t know in advance who will be the lucky few.
Specifically, in 2004, New York Federal Reserve economists Jonathan McCarthy and Richard W. Peach wrote a paper Are Home Prices the Next Bubble? Their answer was decidedly, "No".
I issued a reply to their paper, at that time writing under a pen name because of other business commitments:
...the record climb in housing prices is, indeed, a bubble... the Federal Reserve study fails to consider past declining interest rates as a cause of the bubble. The faulty conclusions reached by Federal Reserve economists Jonathan McCarthy and Richard W. Peach may make many potential new home buyers comfortable about a purchase, when, in fact, we are very near the top of a housing market that will experience substantial declines in prices...
They reach the conclusion that because of ....[the] "fundamental factor" of low nominal interest rates, higher housing prices are justified.
But does this mean real estate prices will not drop? Our answer is decidedly no. Indeed, McCarthy-Peach report that "since 1995, real home prices have increased about 36 percent, roughly double the increase of previous home price booms in the late 1970's and late 1980''s." We view this increase as largely the result of the Federal Reserve's lowering of interest rates and the pumping of liquidity into the banking system, thus producing the byproduct of higher housing prices. But by incorporating falling nominal interest rates as a "fundamental factor" that can not be a cause of a bubble, McCarthy-Peach have literally defined the cause of the current bubble from being taken into consideration....
Further, the current structure of many mortgage loans whereby no money down is acceptable and/or adjustable rate mortgages are popular, sets up the possibility that many may walk away from current mortgage commitments down the road as interest rates begin to climb. Indeed, as ARM's rates become more and more burdensome and as housing prices begin to decline, walk away situations are likely to become quite prevalent, thus adding even more downward pressure to the housing market.
It is our conclusion, by defining nominal interest rates as a fundamental factor and not as the Fed induced causal factor of the real estate boom, and by completely ignoring the structural features of current mortgage loans, McCarthy and Peach have blinded themselves to the real estate bubble that does exist. They have set themselves up for perhaps making the worst economic prediction since Irving Fisher declared in 1929, just prior to the stock market crash, that "stocks prices have reached what looks to be a permanently high plateau."
Apparently, McCarthy and Peach thought my reply was funny and included this quote from me in their power point presentation, when they went around the country declaring there was no housing bubble. Under the headline Opposing View, they would flash this quote from me:
The faulty analysis by Federal Reserve economists McCarthy and Peach may go down in financial history as the greatest forecasting error since Irving Fisher declared in 1929, just prior to the stock market crash, that stocks prices looked to be at a permanently high plateau.Last I heard, they aren't using that power point presentation anymore.
These calls, despite what Mankiw thinks can be made quite regularly.
Here at EPJ, in August of 2008, just before all hell broke loose, I could not have been more clear that the crashing housing bubble was going to turn into much more:
Only a much lower interest rate would reverse the current situation, or perhaps non-sterilized loans and purchases of bank collateral provided by those using the Term Auction Facility. If this isn't done soon then the economy and stock market will worsen by leaps and bounds, including a major eye opening stock market crash.Pre-internet I also called the 1987 stock market crash. I called the bull run in gold from the bottom. I called the current weakness in gold. I called the strength in the dollar. The list goes on. I consider this record the result of my understanding economic theory and financial markets. I always have a logical explanation for my forecasts. It is not luck. Just because Mankiw can't do it, doesn't mean it can't be done based on analysis. In fact, I have a pretty good idea why he will never make a major accurate forecast.
1. He operates out of a flawed Keynesian perspective, which means there are few macro-structure failures that he will detect. But this in itself shouldn't prevent him from making the obvious forecasts. Nouriel Roubini is a Keynesian, but he watches the data close enough to make many accurate forecasts. Paul Krugman, who is clueless as far as theory (see here) is actually decent as far as knowing where the economy is.
To be fair, my warnings about the housing bubble, and those of Roubini and Krugman, were not that difficult to make. When you are making no money down mortgages with exploding interest payments that problems were going to hit the fan should have been obvious to any economist who understood the word default. You just needed the courage of your convictions to say the obvious, which brings me to Mankiw's other great flaw.
2. He has a wimpy personality. If he even detected a structural flaw in the economy, he doesn't have the balls to stand out and say so clearly. He simply is afraid that it will somehow damage his reputation and ruin his chances at a cabinet post the next time a Republican administration rolls in to power. How could he possibly have warned of the dangers, if he even saw them, under the Bush administration. The major forecasts always come when you stand against the crowd, and you have to be bold and stand against political powers. Even Krugman gets this. (Notice: Krugman is "advising" the Obama administration fron the outside.) I really don't think Mankiw has it in him. He'd rather cast it off as luck when someone does make an accurate forecast, even though the real reason is that they don't suffer from the flaws that Mankiw does.
Greg, baby, it's not about luck. It's about having good theory on your side (Or at least good data, in the case of Krugman and Roubini) and the balls to say loud and clear what you see developing.
"Why Larry Summers is an Idiot"
It's going to be a hot summer for President Obama's top economic adviser, Larry Summers, in more ways than one.
Charlie Gasparino reported last week that:
Summers' whispers to Wall Street are likely his attempt at positioning his departure as his own doing.
Any way you look at it,though, it is likeky only to get worse for Summers in the months ahead. The woman, Iris Mack, that was fired at Harvard after she warned Summers in an email about dangerous derivatives trading going on with Harvard endowment money, has signed on with a powerhouse speakers bureau. World Class Speakers and Entertainers is now representing her.
If you look at the list of topics that Mack will be speaking on for WCSE, half of them are coded versions of the same topic, "Why Larry Summers is an idiot.":
Charlie Gasparino reported last week that:
Larry Summers, who heads the White House’s National Economic Council, has been described as unhappy in his job, and is suggesting in conversations that he may leave the administration by the end of the year, according to Wall Street executives who deal directly with key members of President Obama’s economic team.What Gasparino has probably been picking up is Summers reading the writing on the wall that the President is likely to throw him overboard after the mid-term elections.
Summers' whispers to Wall Street are likely his attempt at positioning his departure as his own doing.
Any way you look at it,though, it is likeky only to get worse for Summers in the months ahead. The woman, Iris Mack, that was fired at Harvard after she warned Summers in an email about dangerous derivatives trading going on with Harvard endowment money, has signed on with a powerhouse speakers bureau. World Class Speakers and Entertainers is now representing her.
If you look at the list of topics that Mack will be speaking on for WCSE, half of them are coded versions of the same topic, "Why Larry Summers is an idiot.":
Dr. Iris Mack - summarizing her experiences in the derivatives marketsIf nothing else, this should help Larry stay awake this summer.
Ex-employee says she warned Harvard Management Company of risky moves
A Woman Silenced
Where Have You Gone Mississippi Business Tax Receipts?
M. Siegel emails:
I was visiting the Mississippi Tax Commission last week where I had an opportunity to speak with one of the Deputies in charge of handling receipts. I was told the most recent quarterly estimated business tax receipts have fallen to next to nothing. Businesses over-estimated corporate, business and franchise taxes based on last year's performance, but due to poor business conditions this year, most now owe nothing for current quarter..
The deputies have been directed to check the Commission's P.O. box on Saturdays in an attempt to accelerate revenue and rush deposits to the bank on Monday morning. But there has been 'nothing' in the PO box. "Nothing" was the exact word that was used. Almost one full quarter's expected receipts have failed to appear.
While I was there the State Legislature was in extended session to effect the next round of budget cuts, which have now exceeded the cuts the Governor is allowed to make without approval of the Legislature.
The only bright spot is that receipts from the Tunica-area casinos has finally stopped falling for the most recent month.
I was visiting the Mississippi Tax Commission last week where I had an opportunity to speak with one of the Deputies in charge of handling receipts. I was told the most recent quarterly estimated business tax receipts have fallen to next to nothing. Businesses over-estimated corporate, business and franchise taxes based on last year's performance, but due to poor business conditions this year, most now owe nothing for current quarter..
The deputies have been directed to check the Commission's P.O. box on Saturdays in an attempt to accelerate revenue and rush deposits to the bank on Monday morning. But there has been 'nothing' in the PO box. "Nothing" was the exact word that was used. Almost one full quarter's expected receipts have failed to appear.
While I was there the State Legislature was in extended session to effect the next round of budget cuts, which have now exceeded the cuts the Governor is allowed to make without approval of the Legislature.
The only bright spot is that receipts from the Tunica-area casinos has finally stopped falling for the most recent month.
Top Ten
Below are the Top Ten most viewed EPJ posts for the week ending Saturday March 27, 2010:
#1 Shock: Inside the Healthcare Bill (37th week in the Top Ten)
#2 On the Multiple Death Threats I Have Received
#3 Fire at New York City CFTC Offices Forces Temporary Relocation (2nd week on list)
#4 Shock: Inside the Healthcare Bill, Part 2
#5 How ObamaCare Will End Up with Bernie Madoff Types in Charge of Your Diagnosis and Treatment
#6 Health Care Law a Signal of US Empire Decline
#6 16 Ongoing Porn Investigations of SEC Employees
#7 Roubini Warns On U.S./China ‘Collision Course’
#8 Shia LaBeouf Caught Up In Rumors He Is Touting a Possibly Edgy Stock
#9 Obama Healthcare Step One: Killing Off the Old, Then They Are Going After Quadriplegics (July 2009 post returns to the Top Ten)
#10 Fed President: The Great Bust Wiped Out $7 Trillion in Housing Value and Housing Is Turning Down Again
#1 Shock: Inside the Healthcare Bill (37th week in the Top Ten)
#2 On the Multiple Death Threats I Have Received
#3 Fire at New York City CFTC Offices Forces Temporary Relocation (2nd week on list)
#4 Shock: Inside the Healthcare Bill, Part 2
#5 How ObamaCare Will End Up with Bernie Madoff Types in Charge of Your Diagnosis and Treatment
#6 Health Care Law a Signal of US Empire Decline
#6 16 Ongoing Porn Investigations of SEC Employees
#7 Roubini Warns On U.S./China ‘Collision Course’
#8 Shia LaBeouf Caught Up In Rumors He Is Touting a Possibly Edgy Stock
#9 Obama Healthcare Step One: Killing Off the Old, Then They Are Going After Quadriplegics (July 2009 post returns to the Top Ten)
#10 Fed President: The Great Bust Wiped Out $7 Trillion in Housing Value and Housing Is Turning Down Again
CFTC Whistle-blower & Wife Injured By Hit And Run Driver
Commodity Futures Trading Commission whistle-blower, Andrew Maguire, who testified at Thursday’s CFTC hearing on Metals Futures trading, was injured the next day, along with his wife. They were struck by a hit-and-run driver in the London area.
The couple was admitted to a hospital overnight and released the next day. They are expected to make a full recovery, said GATA’s contact CFTC member Adrian Douglas.
Lila Rajiva has much more here.
The couple was admitted to a hospital overnight and released the next day. They are expected to make a full recovery, said GATA’s contact CFTC member Adrian Douglas.
Lila Rajiva has much more here.
Obama's New Housing Program Is a Huge Gift to Banks
Dean Baker does a great job of explaining what it will do. And, while Baker does imply that the Administration may have been a bit naive in structuring the program this way, I doubt it. Further, you can be sure that Lloyd Blankfein and Jamie Dimon understand exactly what this structure means. Here's Baker:
In every mortgage book ever written, first mortgages are paid off in full before second mortgage holders see a penny. In this structure, the firsts are written down to the benefit of the seconds. One has to ask, "What prompted the bankers to go out and buy these seconds at pennies on the dollar, in the first place, that will now rocket in value?"
This has the distinct odor of inside bankers all over it.
The latest Obama administration initiative aimed at easing the nation's foreclosure crisis may be well-intentioned, but fails to give proper consideration to the state of the housing market. The biggest winners are likely once again to be the banks. In particular, holders of second mortgages are likely to see this program as a huge bonanza.
The program provides a substantial incentive for holders of first mortgages to reduce principal by having the Federal Housing Authority (FHA) guarantee a new loan at 97.75 percent of the current market value. In many cases this would be far more than the holder of the first mortgage would collect if the loan went through a foreclosure process. However, the payment on the second mortgage would be unaffected.
By substantially reducing the required payment on the first mortgage, the program will be creating a situation in which the second mortgage -- which would be worth little or nothing in foreclosure -- will suddenly again hold considerable value. This will be a huge windfall for second mortgage holders. It is worth noting that the major banks have vast portfolios of second mortgages.
In every mortgage book ever written, first mortgages are paid off in full before second mortgage holders see a penny. In this structure, the firsts are written down to the benefit of the seconds. One has to ask, "What prompted the bankers to go out and buy these seconds at pennies on the dollar, in the first place, that will now rocket in value?"
Advanced Conspiracy Theory: Where Are the War Protesters?
Every once and awhile, you will see a post at a blog lamenting that there aren't any war protesters around the way there were during the Vietnam War.
Part of the reason is because of the current all volunteer army in the U.S. Youth who don't want to go to war don't have to. It removes one of the big incentives to protest. You would need some serious rabble rousers to get the youth motivated. You know, like Abbie Hoffman and Jerry Rubin. Hey, what ever happen to those two?
Uh, they both died early deaths under unusual circumstances.
Hoffman died at 52 from, ahem, a drug overdose. It was ruled a suicide. Some friends of Hoffman questioned the finding.
Rubin died at the age of 56 after being, ahem, accidentally hit by a car while crossing Wilshire Blvd in Los Angeles.
Just saying.
Part of the reason is because of the current all volunteer army in the U.S. Youth who don't want to go to war don't have to. It removes one of the big incentives to protest. You would need some serious rabble rousers to get the youth motivated. You know, like Abbie Hoffman and Jerry Rubin. Hey, what ever happen to those two?
Uh, they both died early deaths under unusual circumstances.
Hoffman died at 52 from, ahem, a drug overdose. It was ruled a suicide. Some friends of Hoffman questioned the finding.
Rubin died at the age of 56 after being, ahem, accidentally hit by a car while crossing Wilshire Blvd in Los Angeles.
Just saying.
On Pelosian Musings
by Michael Labeit
The following is a delightful excerpt from Dr. Gene Callahan's book Economics for Real People:
It was with this quote that an official from the Soviet government inadvertently acknowledged the ironic but inexorable dependence of socialism upon capitalism. This dependence was discovered before Gorbachev was even born by Ludwig von Mises who, through simple deductive reasoning, demonstrated the impossibility of rational economic calculation under socialism, the fact that producers under socialism can neither compare the revenue and costs of any one production plan, nor can they compare the costs of alternative production plans. His hypothetical reasoning was as follows:
Of course her most recent gaffe came at the 2010 Legislative Conference for the National Association of Counties where Pelosi, while speaking before her audience, said the following:
Its painfully obvious why the content of a bill should be critically scrutinized by the public before its decided by the legislative and executive branches that arrests should be made of those among the citizenry who fail to comply with the bill's declarations, especially a bill that is as legally esoteric and biblical in length as the one endorsed by Ms. Pelosi. Investigating legislation ex ante allows the public to discover whether it commits the government to protecting individual rights or to violating those rights.
Laws are rules of social conduct to which conformity is coerced. Such rules of social conduct can theoretically sanction or prohibit any behaviour, therefore laws can theoretically sanction or prohibit any behaviour. If the public is a group that remains unaware, regardless if from ambivalence or from covert government scheming, of the essence of legislation, then it runs the risk of having to bear the burden of oppressive laws. All groups that remain unaware in such a way run that same risk. A bill is a set of one or more potential laws. Each potential law is potentially repressive. Ergo, it follows that each bill is potentially repressive. Moreover, if each bill is potentially repressive, then it further follows that each bill ought to be carefully inspected, since its quite evident that potentially repressive things are worth at least a gander. Self-preservation requires, among other things, the obstruction of all attempts by the government to act in ways that contravene individual rights.
However, it seems Ms. Pelosi is under the impression that public awareness of the substance of the healthcare bill ex ante is not a necessary condition for its passage, for if public awareness is desired, then surely it will come ex post, especially when compliance is enforced by the authorities. The illegality of action x will become public knowledge after its illegality is declared. This is jurisprudence in Pelosi's eyes.
On second thought, its quite obvious why Ms. Pelosi may delight in public ignorance ex ante since it aids in the passage of legislation which, upon public investigation, may be contested and eventually prohibited. The legislative process is but one instrument with which governments broaden their own authority; the orderliness, deliberateness, and democratic structure of the process together lend it a resemblence if legitimacy. Public vigilance constrains the ability of the government to grow via the legislative process.
Ironically, the "fog of the controversy" that Ms. Pelosi laments and uses, in vain, to justify the passage of the healthcare bill is caused in part by both the length and incomprehensibility of the bill, two variables which increase the risk of government coercion. A long bill adds to the risk by providing more space for the inclusion of authority-enhancing statutes. An incomprehensible bill adds to the risk by befuddling lay readers and by facilitating authority-enhancing interpretations. This isn't an argument against long bills that use long words; its an argument against suspiciously long bills studded with unnecesary legal verbiage.
No doubt, contemporary liberals would have shitted themselves if they witnessed former President Bush argue that his legislation needed to become law so that its stipulations could be known. Why is it then that when this very dangerous stupidity is exhibited by a contemporary liberal, critical reactions come not from the mainstream media but from the fringes of online and radio conservadom? *Sigh*
It must not be forgetten however that Ms. Pelosi is an elected figure, which means that any polemic against her should include at least a passing nod to her fans in the People's Republic of California who, having never ever read a decent book on economics, decided to exercise their right to vote without exercising their right to think. Appreciate it.
-Callahan, Gene. Economics for Real People: An Introduction to the Austrian School. 2nd ed. Auburn, Alabama: Ludwig von Mises Institute, 2004. http://mises.org/books/econforrealpeople.pdf">p170.
-"Pelosi: 'We Have to Pass the Bill So That You Can Find Out What Is In It'." Youtube. Web. 27 Mar 2010.
-Zoller, Martha. "Nancy Pelosi and the height of hypocrisy." The Daily Caller 11 March 2010: n. pag. Web. 27 Mar 2010.
The following is a delightful excerpt from Dr. Gene Callahan's book Economics for Real People:
Lew Rockwell told a wonderful story about Gorbachev’s press secretary. When asked about his dream for mankind, the secretary replied that he hoped to see all of the world embrace socialism, except for New Zealand. "But why not New Zealand?" a reporter wondered. "Well," the secretary responded, "we will need someone to get the prices from."
It was with this quote that an official from the Soviet government inadvertently acknowledged the ironic but inexorable dependence of socialism upon capitalism. This dependence was discovered before Gorbachev was even born by Ludwig von Mises who, through simple deductive reasoning, demonstrated the impossibility of rational economic calculation under socialism, the fact that producers under socialism can neither compare the revenue and costs of any one production plan, nor can they compare the costs of alternative production plans. His hypothetical reasoning was as follows:
If socialism exists, then one economic agent, the government, controls all non-human factors of production in perpetuity. If one economic agent controls all non-human factors of production in perpetuity, then exchanges of any non-human factors of production are impossible. If exchanges of any non-human factors of production are impossible, then market prices for any non-human factors of production cannot exist. If market prices for any non-human factors of production cannot exist, then the exact costs of production for any production plan cannot be discerned. If the exact costs of production for any production plan cannot be discerned, then rational economic calculation is impossible. Therefore, if socialism exists, then rational economic calculation is impossible.While its possible he intended to be funny, this possibility does not eliminate the fact that the secretary's humour came at the expense of the reputation of the Soviet Union. A similar kind of vocal, self-undermining thoughtlessness can be seen in Speaker Nancy Pelosi who has, among other things, been busy expanding her own personal repertoire of daft remarks. Let's take a look at what she has been up too lately.
Of course her most recent gaffe came at the 2010 Legislative Conference for the National Association of Counties where Pelosi, while speaking before her audience, said the following:
We have to pass the [healthcare] bill so that you can find out what is in it, away from the fog of the controversey.Needless to say, the asinine fatuity - to borrow from C.S. Lewis - of this statement can be understood by imagining what it would be like to apply its prescription to food. Should I take a sip of some anonymous substance someone offers in order to find out what it is? I believe that's what infants do.
Its painfully obvious why the content of a bill should be critically scrutinized by the public before its decided by the legislative and executive branches that arrests should be made of those among the citizenry who fail to comply with the bill's declarations, especially a bill that is as legally esoteric and biblical in length as the one endorsed by Ms. Pelosi. Investigating legislation ex ante allows the public to discover whether it commits the government to protecting individual rights or to violating those rights.
Laws are rules of social conduct to which conformity is coerced. Such rules of social conduct can theoretically sanction or prohibit any behaviour, therefore laws can theoretically sanction or prohibit any behaviour. If the public is a group that remains unaware, regardless if from ambivalence or from covert government scheming, of the essence of legislation, then it runs the risk of having to bear the burden of oppressive laws. All groups that remain unaware in such a way run that same risk. A bill is a set of one or more potential laws. Each potential law is potentially repressive. Ergo, it follows that each bill is potentially repressive. Moreover, if each bill is potentially repressive, then it further follows that each bill ought to be carefully inspected, since its quite evident that potentially repressive things are worth at least a gander. Self-preservation requires, among other things, the obstruction of all attempts by the government to act in ways that contravene individual rights.
However, it seems Ms. Pelosi is under the impression that public awareness of the substance of the healthcare bill ex ante is not a necessary condition for its passage, for if public awareness is desired, then surely it will come ex post, especially when compliance is enforced by the authorities. The illegality of action x will become public knowledge after its illegality is declared. This is jurisprudence in Pelosi's eyes.
On second thought, its quite obvious why Ms. Pelosi may delight in public ignorance ex ante since it aids in the passage of legislation which, upon public investigation, may be contested and eventually prohibited. The legislative process is but one instrument with which governments broaden their own authority; the orderliness, deliberateness, and democratic structure of the process together lend it a resemblence if legitimacy. Public vigilance constrains the ability of the government to grow via the legislative process.
Ironically, the "fog of the controversy" that Ms. Pelosi laments and uses, in vain, to justify the passage of the healthcare bill is caused in part by both the length and incomprehensibility of the bill, two variables which increase the risk of government coercion. A long bill adds to the risk by providing more space for the inclusion of authority-enhancing statutes. An incomprehensible bill adds to the risk by befuddling lay readers and by facilitating authority-enhancing interpretations. This isn't an argument against long bills that use long words; its an argument against suspiciously long bills studded with unnecesary legal verbiage.
No doubt, contemporary liberals would have shitted themselves if they witnessed former President Bush argue that his legislation needed to become law so that its stipulations could be known. Why is it then that when this very dangerous stupidity is exhibited by a contemporary liberal, critical reactions come not from the mainstream media but from the fringes of online and radio conservadom? *Sigh*
It must not be forgetten however that Ms. Pelosi is an elected figure, which means that any polemic against her should include at least a passing nod to her fans in the People's Republic of California who, having never ever read a decent book on economics, decided to exercise their right to vote without exercising their right to think. Appreciate it.
-Callahan, Gene. Economics for Real People: An Introduction to the Austrian School. 2nd ed. Auburn, Alabama: Ludwig von Mises Institute, 2004. http://mises.org/books/econforrealpeople.pdf">p170.
-"Pelosi: 'We Have to Pass the Bill So That You Can Find Out What Is In It'." Youtube. Web. 27 Mar 2010.
-Zoller, Martha. "Nancy Pelosi and the height of hypocrisy." The Daily Caller 11 March 2010: n. pag. Web. 27 Mar 2010.
Saturday, March 27, 2010
Palin On 42-City Bus Tour
Sarah Palin has started on a 42-city bus tour that will end up in Washington D.C. on Tax Day, April 15.
The tour was launched in Searchlight, NV, a former mining town 60 miles south of Las Vegas and the hometown of Senate Majority Leader Harry Reid, who is likely to lose his re-election bid, as a result of his major role n pushing the ObamaCare bill through the Senate.
An estimated 7,000 people showed up in Searchlight to hear Palin speak. She told those gathered that the big-government, big-debt spending spree of Reid, President Obama and House Speaker Nancy Pelosi is over.
"You're fired!" Palin said.
The tour was launched in Searchlight, NV, a former mining town 60 miles south of Las Vegas and the hometown of Senate Majority Leader Harry Reid, who is likely to lose his re-election bid, as a result of his major role n pushing the ObamaCare bill through the Senate.
An estimated 7,000 people showed up in Searchlight to hear Palin speak. She told those gathered that the big-government, big-debt spending spree of Reid, President Obama and House Speaker Nancy Pelosi is over.
"You're fired!" Palin said.
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