Thursday, February 27, 2014

CRONY CAPITALISM AND HYPOCRISY -- BUFFETT



WARREN BUFFETT AGAIN --and Harry Reid's profound lack of integrity..again

I have written about Warren Buffett several times. His avoidance of taxes with his myriad foundations and contributions to others (Gates e.g.) while pushing for others to pay more is well-known, but few will acknowledge it. Even less care. His reputation as the premier investor protects him. So does his affiliation with politicians -- Democrats, especially President Obama.

I wonder how many are aware of his purchase of a huge bloc of Bank of America stock using pressure from the Obama administration to "convince" BofA's chairman to sell the bloc. There's more, but does anyone care? Crony capitalism!

There is more but it would seem that not many care. On a day when Senate Majority Leader, Harry Reid is publicly calling conservatives "liars," disgust causes me to write. Reid is also characterizing the conservative Koch brothers as the leading financial contributors in politics with total disregard for the lack of truth in this charge. They, in fact, are ranked 59 where leading Democratic contributors rank at the top.

The article below is short and not dramatic at all, but it says a lot to those who understand the essence of it. Crony capitalism!

Buffett's Hypocrisy Exposed Yet Again

All you need to know about the New Normal breed of crony capitalism and unbridled hypocrisy is once again best exemplified by the following quote by Charlie Munger - the lifetime business partner of crony capitalist par excellence Warren Buffett - from May 2013, in which he said;


 "I think it is very stupid to allow a system to evolve where half of the trading is a bunch of short term people trying to get information one millionth of a nanosecond ahead of somebody else. It's legalized front-running. I think it is basically evil and I don't think it should have ever been allowed to reach the size that it did. Why should all of us pay a little group of people to engage in legalized front-running of our orders?" 

Noble words Charlie. 

What Munger, however, did not disclose is that as part of the Berkshire Hathaway-owned Business Wire news service, the company was enabling just this "basically evil" frontrunning, by allowing some, those who could afford the hefty fee of course, to make Munger and Buffett even richer and to subscribe to BW's HFT direct news access which gave them a few millisecond headstart and in the process frontrun everyone else.

Tuesday, February 25, 2014

THE USA'S ECONOMY IS ENERGY BASED, FINANCIALLY CONTROLLED


Whilst I don't agree with every point in this piece below, it is true that America's economy is energy based. However, the financial industry does control our economy. They can drive price of energy up and down almost at will. For example, part of the economic collapse of 2007-8 was "manipulation' of oil prices - by Goldman Sachs especially. On one side of the trading house they were promoting that oil would hit as high as $200/b. On the short side of the house they were predicting a drop to $75/b. We would have had a "normal recession" from oil pricing without the collapse of the mortgage industry, which can be said to have "covered up" the oil price recession. Some will disagree with this, but it is real. 
This article is from Eric Horne, a respected friend and trader. I consider Eric most learned in energy and the economy.

Our Economy Is An Energy System, Not A Monetary System   


Investors should understand that debt is actually a future call on energy. When you owe money, you've already spent e. nergy forward. In other words our economy is an energy system, not a monetary system.

Economists around the world have got it all wrong by focusing on money as the key driver of economies.

Instead, money is the language rather than the substance of the real economy. The real economy is a surplus energy equation, not a monetary one, and economic growth as well as the increase in population since 1750 has resulted from the harnessing of ever-greater quantities of energy.

In fact, modern society and economies began when agriculture created surplus energy. Before agriculture, in the hunter-gatherer era, there was an energy balance where the energy which people derived from food was largely equivalent to the energy that they expended in finding the food.

Agriculture changed that equation. It allowed for the creation of surplus energy. In essence, three people could be supported by the labor of two people, allowing one person to engage in non-subsistence activities. This person could make better agricultural tools, build bridges for better infrastructure and so on. In economic parlance, this person didn’t have to concentrate on products for immediate consumption but rather the creation of capital goods. The surplus energy equation allowed for that.


The enormous increase in wealth we've seen worldwide over the last 150 years has deteriorated and will eventually stop. There will be no more growth until we enter the next energy paradigm because cheap energy fuels growth. From a mathematical point of view, you cannot increase growth based on monetary measures, you must also have increasing amounts of cheap energy. Energy consumption per capita is going down, and that means real wealth is also going down. All the debt we've accumulated is simply a noose around the neck of society.

Without cheap energy availability our economy will fail!

Deflation is winning the battle over inflation. Excessive debt has to be deleveraged and in that deleveraging process, asset values will plummet. For central banks working under a fractional reserve system, deflation is a ticking time bomb.

The real economy is energy and the days of surplus energy are coming to an end, so too is economic growth.

The economy, as we have known it for more than two centuries, will soon cease to be viable unless we find another source of cheap, probably renewable energy.

- The real economy is a surplus energy equation, or the harnessing of ever-greater quantities of energy.

- That equation has deteriorated to such an extent that one can now declare the era of cheap energy over.

- If the economy is energy and cheap energy is gone, future economic growth will be greatly inhibited or cease.

- Consequently, higher energy and agricultural prices can be expected in the long-term.

We are at a very important tipping point where surplus energy  becomes much harder to come by and much more expensive   We’re coming up against resource constraints that will inhibit economic growth for the foreseeable future.

Friday, February 21, 2014

UAW SEEKS NEW VOTE AT VW-CHATTANOOGA

 

Who could have been surprised that the UAW would seek a new vote at VW-Chattanooga? And, they have a good chance to reverse the recent vote to reject unionizing. Expect to see Obama weigh in and you can expect union malpractice. But it is not likely to be reported accurately. Those in denial of what unions are today won't understand, and won't want to, what many of us have learned the hard way -- that unions have become big business themselves working not for the benefit of their members but fund raisers (employee dues)  for political purpose.  

 

UAW Asks Labor Board to Weigh New Vote at Tennessee VW Plant

The United Auto Workers asked the National Labor Relations Board to consider holding a new union election at a Tennessee Volkswagen plant where workers last week rejected the union’s representation. The union is contending Republican lawmakers and others interfered with the vote.
The NLRB will review the UAW’s objections, a board spokesman said. The UAW claimed U.S. Sen. Bob Corker (R., Tenn.) and Gov. Bill Haslam interfered with the vote. A spokeswoman for Mr. Haslam had no immediate comment. A spokeswoman for Mr. Corker didn't immediately respond to calls or emails.

UNIONS AND DEMOCRATS -- UAW AND VW


UNIONS USE MEMBERS TO FUND DEMOCRATS

For a long time many people have known that no longer is the principal purpose of unions to work for their members. Rather, they've morphed from protectors of the rights of employees to using their member's dues to fund political candidates. Virtually all funding goes to Democrats. Such funding is now their purpose, their mission. Democrats depend heavily on them, hence they are heavily favored by, and get protection from, Democrats. They are a major part of the Democrat machine – very important. I believe most people know this now but few openly recognize the fact and fewer will discuss it. I've never found one Democrat who would admit their dependence on unions. When they advocate for unions, they always do so under the guise of employee's rights. Disingenuous and delusional!

The recent UAW attempt to unionize Volkswagen in Chattanooga clearly demonstrated the fact that unionizing the plant was more important to the union than to employees. Every single report I read or heard stated “how important it was to the UAW.” Pro-union people had help. Those who opposed got no help, so it was reported. There can be no doubt among thinking and knowledgeable people that the NLRB would be biased toward the UAW. We who have experience operating plants with unions have long known of the NLRB bias. Also, we know that management is always at a disadvantage – always!
I must assume it is more biased today than in earlier times since the board has been more heavily “stacked” with left-leaning members. So it is and will remain so.

Recent reports are that union heads are in Houston plotting more plans to increase memberships. NOTE that they aren't saying that workers are encouraging, or demanding, their presence. No, it's noted again as being so important to the union.

Later, I will write a comprehensive treatise on unions but, for now, I'll present a comment that has been prevalent among those of us who've experienced unions, especially the UAW. “UAW members have long eaten their young.” It's true. They've killed companies, destroyed jobs, and been in the forefront of destroying Detroit and a few other cities. If the UAW get a foothold in the southern industry, they will destroy it as well. I have voiced that for many years. They've been delayed at Chattanooga, but they will continue.....and I'd expect with help from government.







Thursday, February 20, 2014

OBAMA'S 2015 BUDGET --- ONLY FOR DEMOCRATS AND THEIR VOTES

FROM THE WALL STREET JOURNAL 02/20/2014

 

Editors note:

Government of the people, by the people and for the people is no longer for ALL the people. It's now for the 50% of people, who elect and support Democrats, who aren't traditional Democrats by any means. They are Wilsonian Progressives, many even more radical than Wilson intended. But, who's responsible? The people. Voters who vote reflexively for the "D" and those who don't take the time or use the energy necessary to counter them. A sad sign of our times that, by all indicators, will continue unchanged. 

 

 U.S. Budget Expected to Offer Democrat-Supported Proposals

President Barack Obama's 2015 budget will not include policies in his previous budgets that have been favored by Republicans, a White House official said, including a change in the Consumer Price Index that would affect Social Security. Instead, Mr. Obama's budget will present proposals supported by his own Democratic Party, such as tax increases aimed at the high-income earners, setting up an election-year battle over fiscal priorities.
The president's decision to abandon Republican proposals, such as the so-called chained CPI that has been part of bipartisan talks over the last three years, makes clear the White House does not expect budget negotiations with Republicans to bear any fruit this year. His budget, due out early next month, is set to be more of a political document in an election year.
See More Coverage »

Wednesday, February 12, 2014

NEW ORLEANS FORMER MAYOR FINALLY CONVICTED OF BRIBERY

 

From The Wall Street Journal today

 

Former New Orleans Mayor Ray Nagin Convicted on Bribery Charges

Former Mayor Ray Nagin was convicted of bribery and related charges, capping a widespread federal investigation into public corruption in the aftermath of Hurricane Katrina.
A jury found Mr. Nagin guilty on 20 of 21 counts, making him the city’s first mayor to be convicted of corruption charges. Seven city contractors and officials have been convicted or pleaded guilty to related crimes.
The case grew out of a probe of city contractors and Mr. Nagin’s administration that began shortly after the 2005 hurricane caused billions of dollars in damage and left 80% of the city under water. Mr. Nagin’s case wasn’t directly tied to Katrina funding, but the massive rebuilding effort served as a backdrop as prosecutors detailed alleged kickbacks to Mr. Nagin from vendors and other associates. 

I find this interesting, strange and unsurprising, all wrapped up in a  single emotion -- DISGUST.

Why disgust? It was clear at the time of Katrina's damage and the New Orleans rebuilding effort that management of New Orleans was woefully inadequate.....utterly inept, in fact. It was clear that Mayor Ray Nagin was a principal in this ineptitude and Governor Kathleen Blanco was highly ineffective as well, being said by some to be "afraid of her own shadow." I'm not sure how that description developed, but it was inexplicable, and remains so, that she failed so miserably.

However, the media-led animosity toward President George W. Bush (dubbed by many as the "Bush Derangement syndrome") took all of the focus off the principals in the inept performance in protecting the people and In the rebuilding of New Orleans. Even now, until the verdict on Nagin today, the media and pundits put more blame on Bush than others.

It's another 'sign of our times." Political bias is far too much of a controlling factor in our lives today and it worsens day-by-day. We shouldn't discount blatant ignorance and incompetence though.

Sunday, February 9, 2014

CLIMATE CHANGE -- Questioning The Mantra

                          
                   More On Ignoring The "Scientific Method"
                                            By Michael J. Brown
Michael Brown is a retired Army Officr who holds an MBA from The College of William and Mary. He published the piece below in The Virginia Gazette as a follow-up to Steve Kauffman's op-ed published in the same paper and posted on this blog on February 7. As with Mr. Kauffman's published piece, I had nothing to do with their decision to write and publish, but found both to be so objective and accurate as to be compelling to post on this blog. I am honored to know both individuals as thinking people who seek truth and avoid the herd-think that dominates the "climate change" issue today. 
Accurate scientific results and conclusions are not arrived at by "consensus" of a group of scientists. Rather, correct scientific results are derived from use of "The Scientific Method" that assures opinion, bias and dishonesty are excluded from the final results and decisions. Today's climate change doctrine (mantra) is antithetical to this principle with politics being a major component of the claimed condition. Computer modeling, the substitute for "the method" and testing, does not exclude these unscientific inputs. In fact, it can be argued quite legitimately that they dominate the claims today.

Michael Brown's letter:

Steven Kauffman’s thoughtful essay, “Questioning Climate Change,” in the Wednesday Virginia Gazette discusses climate scientists applying climate research data to computer modeling.  It is significant that advocates of man-caused climate change are unable to use the proven “scientific method” traditionally required of serious scientists for their conclusions and consensus.


Computer modeling is a useful tool for all kinds of hypothesizing.  Fundamentally, the validity of a computer model (however well its algorithms are constructed) declines with increasing imprecision when the computer model’s variable sets (the dependent and independent components of the computer model) are limited, incomplete, and/or not fully understood in their causes and effects to Earth’s complex climate system.


The more incomplete a climate model’s real world components, the more skewed the model’s output in terms of reliability.  The more limited and general the components contained in the model, the less scientifically useful the model’s results.  Thus, it is the height of hubris to declare climate modeling results with respect to man-caused climate change to be a scientific certainty.


Earth’s climate is eternally in a state of change – change which is certainly not fully understood even today.  Climate scientists are forced to use only the slimmest lists of potentially significant climate variables for their models because that is all the data they have.  Such thin gruel is insufficient basis for the economically damaging prescriptions currently being advocated by some in today’s political arena.


A changing Earth’s climate has always been with us and always will.  The degree of human effect on our climate is considerably less certain.


Michael J. Brown

Friday, February 7, 2014

CLIMATE CHANGE -- POLITICIANS CO-OPT SCIENCE AND SCIENTISTS


More on Climate Change
By Steve Kauffman

OK. Let's think about Climate Change.  The Weather Channel website had an article that started off with the following: "The scientific agreement that climate change is happening, and that it's caused by human activity, is significant and growing, according to a new study published Thursday. 

"The research, the most comprehensive analysis of climate research to date, finds that 97.1% of the studies published between 1991 to 2011 [presumably by scientists] that expressed a position on man-made climate change agreed that it was happening, and that it was due to human activity." 

Another place says that an overwhelming number of scientists form a consensus that Climate Change is caused by human activity. Remember that. "Scientists form a consensus." 

What is a scientist and what is a consensus? A scientist is one who is "a person learned in science and especially natural science: a scientific investigator." Consensus is defined as: "a general agreement about something: an idea or opinion that is shared by all the people in a group." Well, what's an opinion? "a belief, judgment, or way of thinking about something : what someone thinks about a particular thing." Ah! We have a bunch of educated believers, scientists, who agree that something is true. 

Real scientists use something called "The Scientific Method." That is: "principles and procedures for the systematic pursuit of knowledge involving the recognition and formulation of a problem, the collection of data through observation and experiment, and the formulation and testing of hypotheses." 

So, the way these "hypotheses," "an idea or theory that is not proven, but that leads to further study or discussion" are proven to be true is by "testing."

Now, you have to understand that these unproven "theories" about human activity causing atmospheric temperatures to go up are based on computer models designed to predict the future. Models require that the modeler make a number of assumptions. There is a well known definition of the word "assume." “Assuming something “makes an ass out of you and me.” 

You see, these theories, these ideas, have never been "tested" over and over to prove they are true. But these "scientists" are staking their reputations on their "hypotheses" being true. So, these scientists are just assuming their assumptions are true. 

Well, I'd like to mention another group of highly educated people who have another, totally unrelated, hypothesis, an opinion, that has never been proven, but that is believed to be true, that is, taken on "faith," by billions of people. The highly educated group are theologians, priests, ministers, imams and gurus and the opinion or hypothesis they believe and teach is the basis for all religions. That hypothesis is that there is an omnipotent God who created the universe and everything in it. So far, none of those billions of people who believe this hypothesis to be true, like me, have been shown proof that this hypothesis is true. We just believe it.

So, Climate Change is a new, the latest, religion. It is based on, among other things, the Gospel according to AlGore. You have to believe in it, take it on faith. And he has a lot of apostles (read "scientists") preaching his new religion. These unproven theories, this new religion, is even allowed to be taught as fact to kids in public schools.

Now, it is a fact that real scientific evidence, proven evidence, shows that over the last 450,000 years five periods of significant global warming have occurred followed by five ice ages. During those warm periods the increase in concentration of carbon dioxide in the atmosphere followed the temperature rise. When the temperature and carbon dioxide peaked, an ICE AGE followed. So, please remember that a "consensus" of a large bunch of scientists that carbon dioxide generated from burning fossil fuel is causing Climate Change proves nothing! If they really believed and could prove that carbon dioxide and methane had an influence on climate, instead of worrying about Global Warming, they might be telling us all to move South to stay warm to avoid the next Ice Age.

These real facts don’t stop the current, overly enthusiastic (look that up) EPA from embarking on issuing job killing, economy ruining regulations restricting the use of coal and other fossil fuels based on this UNPROVEN hypothesis, this unproven theory that the atmosphere is getting warmer because of burning fossil fuel. Even more asinine, why not put out a regulation requiring bovines to stop emitting methane flatulence. Methane is alleged to have ten times the effect of carbon dioxide on climate change and there are a lot of bovines in the world. (Look up bovine. The word does not just apply to four legged critters.)

God help the United States of America. Is it possible the 535 people in the Congress could understand this issue and put a stop to this travesty? Anybody taking bets?

Steve Kauffman is a retired executive who has posted here before and whose work I respect. His focus on the “Scientific Method” here is compelling in any scientific work but is all but absent in the climate change “science.” Computer models dictate results, not testing and verifying a la the “method.”

Monday, February 3, 2014

ABORTION AND MIKE HUCKABEE -- KRAUTHAMMER



CHARLES KRAUTHAMMER ON HUCKABEE AND ABORTION
As I read The Daily Press, A Tribune Newspaper, this morning, I thought I was reading my own op-ed on Huckabee and abortion, both of which I've railed about. Often! Then I looked at the byline and had to face reality.....Krauthammer.

Charles has the exact same take, as I've railed about, on Huckabee's misguided statements at CPAC on contraceptives and the Democrats' belief that government needs to protect women against their own libido. As I ask often, how many ways can Republicans present themselves poorly and use the wrong language. Words and how they are used are utterly important....critical. Huckabee is a good man, might even be a good candidate for president. However, if he is going to present himself as he did in this instant, don't even try.

Charles also spoke to the insane way that Republicans have fought the abortion issue for 40 years -- ignoring the public consensus on early term abortion and Quixotically fighting late term, even infanticide, where there isn't public consensus and they could find a winning position. Some even lump the "morning after" pill into that. Begging to lose!! And they do, for all of us. And, the nation loses.

Now, I wonder if Krauthammer is reading my "stuff," especially after I called him out (by e-mail) on using the government statistics on debt-to-GDP of 70% instead of the factual number of 107+%....soon to be higher. Or, maybe he was a fly on the wall at CARMA a couple if weeks ago when I spoke of the "stupidity of Republican strategies"...or the absence of strategies.