The Untouchables

Watch The Untouchables on PBS. See more from FRONTLINE.

Why has no one gone to jail over the last financial crisis? Simple. Politicians from both parties are in bed with the mortgage lenders trying to juice up home ownership in the country to help more constituents achieve the American Dream, and proving intentional fraud is a high hurdle to clear when people are at least in theory following dumbed-down government lending standards and everyone knows the government will backstop the majority of their losses. As someone once said, capitalism without bankruptcy is like religion without hell. Where are the people with integrity? Most likely they quit these institutions before the implosion.

US Shale Gas Boom Now Visible from Space

Nassim Taleb Talks Antifragile, Libertarianism, and Capitalism's Genius for Failure

Taleb's new book is Antifragile: Things that Gain with Disorder, which argues that in order to create robust institutions we must allow them to build resilience through adversity. The essence of capitalism, he argues, is encouraging failure, not rewarding success.

Reason's Nick Gillespie sat down with Taleb for a wide-ranging discussion about why debt leads to fragility (5:16); the importance of "skin in the game" to a properly functioning financial system (10:45); why large banks should be nationalized (21:47); why technology won't rule the future (24:20); the value of studying the classics (26:09); his intellectual adversaries (33:30); why removing things is often the best way to solve problems (36:50); his intellectual influences (39:10); why capitalism is more about disincentives than incentives (43:10); why large, centralized states are prone to fail (44:50); his libertarianism (47:30); and why he'll never take writing advice from "some academic at Cambridge who sold 2,200 copies" (51:49).

A Day Made of Glass 2

Daniel Hannan Destroys the Occupy Wall Street Movement

My hero....... and notice he did this without notes or a teleprompter.

Calling BS on Hillary's Bengazi Testimony

I'm not going to spend a lot of time analyzing Hillary's self-serving testimony in front of the Senate yesterday. I will say the inadequate security at Bengazi had nothing to do with inadequate funding at the State Department. The State Department fritters away tens of millions, even hundreds of millions of dollars on foolish projects and should have used that money instead for enhanced embassy security in the worlds most dangerous places (hint, the Middle East (especially Libya and Egypt), and any predominantly Muslim country with a strong militant element). It is inexcusable and nothing less than incompetence for a Secretary of State to lack the situational awareness to recognize that extra security measures are required in those counties that are hostile toward the US, and especially on 9/11 of all days in the year following the take down of Osama bin Laden. How someone with their finger on the pulse of world opinion could have failed to see this coming is beyond me.

Moonwalk

Filmed from a distance of over a mile by Mikey Schaefer. Cathedral Peak, Yosemite National Park, July 12, 2011.

Quote of the Day: Cicero

Do not blame Caesar, blame the people of Rome who have so enthusiastically acclaimed and adored him and rejoiced in their loss of freedom and danced in his path and given him triumphal processions. Blame the people who hail him when he speaks in the Forum of the new wonderful good society which shall now be Rome’s, interpreted to mean more money, more ease, more security, and more living fatly at the expense of the industrious.

~ Cicero

More Socialism Jokes

Q: What is Socialism?
A: It's the painful transition from capitalism to capitalism

Q: What exactly constitutes a developed socialist society?
A: The triumph of ideology over common sense.

Q: How does supply and demand work in socialism?
A: You buy what is available and persuade yourself you need it.

Q: What is the difference between socialism and capitalism?
A: Capitalism makes social mistakes while socialism makes capital mistakes.

Q: Is it true that Adam and Eve were the first socialists?
A: Perhaps. Adam and Eve dressed very humbly, had a modest desire for food, and didn't dwell in their own home. But above all, they believed they lived in paradise.

Q: Will there be any theft after we reach the communist stage of development?
A: Yes, but only if there is anything left to be stolen after socialism.

Q: Is it possible for democratic socialism to start up in such a well-developed country as the USA?
A: Yes, it's possible, but, why?

Q: Is there a difference between a "representative republic" and a "popular democracy?"
A: Yes, it's the same difference between a jacket and a straitjacket.

Q: What should I do if I'm at a bar and some stranger sits down beside me and starts sighing heavily?
A: Tell him to cool it with the anti-socialist propaganda.

Q: Will we win in a war against America?
A: There will always be someone left to prove to us that we have actually won.

Q: Are there any measures in the new five year plan to improve the food of the people?
A: More cookbooks will be printed.

Q: Are there any similarities between a book of matches and the ruling party?
A: The heads of both are worthless when it's cold outside and the kids are hungry.

Q: Are there any measures in the new five year plan to improve the food of the people?
A: More cookbooks will be printed.

Q: Why is our supply of meat so irregular and unpredictable?
A: We are advancing towards communism so fast that even the cattle can't keep up anymore.

Q: After the communist party took power, my life is no longer dear. Do you know of any sure way of committing suicide?
A: Throwing yourself into the chasm between the party leaders and the people.

Q: Can an elephant be wrapped up in a newspaper?
A: Yes, if the newspaper contains the musings of Hugo Chavez.

Q: Is it true that cats are very sneaky creatures?
A: Sometimes. In bad times they try to pass themselves off as rabbit meat.

Q: At present, how can the smart Venezuelan converse with the stupid Venezuelan?
A: By calling him from Canada.

Q: Yesterday, I tried to buy some bananas. However, there was only one banana at the store and it was past its prime. How can some choose?
A: The same way you make a choice during the elections.

Q: What is the most concise definition of a learned worker?
A: One whose blood pressure is higher than his salary.

Q: Can you say anything that comes into your mind here in our country?
A: Yes, of course. Unless you are thinking those kinds of thoughts that shouldn't be said freely and publicly.

Q: Is it necessary for comrade Hugo Chavez to have so much security?
A: Hardly. Up until now, no one has tried to steal him.

Q: How can anyone know if they are talking to an aware and rational citizen or an ignorant one?
A: The rational citizen frequently checks behind him to see if anyone is there.

Q: Are there still going to be idiots under Communism?
A: No. Even those who believed in communism once upon a time will no longer be idiots.

Obama Inaugural Rewind: Rhetoric vs Reality

"And those of us who manage the public's dollars will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government."

~ Barack Obama, 2008

3D Printing and the Future of Shopping

Landscapes

A List of Lethal Items to Educate the Uninformed

But thank goodness we have the politicians to save us from ourselves.

Not So Great Moments in Apocalyptic Predictions

These not so great moments in prognostication are culled from a list prepared by David B. Mustard.

1. In 1865, Stanley Jevons (one of the most recognized 19th century economists) predicted that England would run out of coal by 1900, and that England’s factories would grind to a standstill.
2. In 1885, the US Geological Survey announced that there was “little or no chance” of oil being discovered in California.  In 1891, it said the same thing about Kansas and Texas.
3. In 1939 the US Department of the Interior said that American oil supplies would last only another 13 years.
4. 1944 federal government review predicted that by now the US would have exhausted its reserves of 21 of 41 commodities it examined. Among them were tin, nickel, zinc, lead and manganese.
5. In 1949 the Secretary of the Interior announced that the end of US oil was in sight.
6. In 1974, the US Geological Survey announced “at 1974 technology and 1974 price” the US had only a 10-year supply of natural gas.
7. In 1970, Life Magazine claimed that "By 1985, air pollution will have reduced the amount of sunlight reaching earth by one half."
8. "If present trends continue, the world will be ... eleven degrees colder by the year 2000. This is about twice what it would take to put us in an ice age." Kenneth E.F. Watt, in Earth Day, 1970.
9. From "Another Ice Age," Time Magazine, June 24, 1974., "... when metereologists take an average of temperatures around the globe they find the atmosphere has been growing gradually cooler for the past three decades. The trend shows no indication of reversing. Climatological Cassandras are becoming increasingly apprehensive, for the weather aberrations they are studying may be the harbinger of another ice age. Telltale signs are everywhere--from the unexpected persistence and thickness of pack ice int eh waters around Iceland to the southward migration of a warmth-loving creature like the armadillo from the Midwest. When Climatologist George J. Kukla of Columbia University's Lamont-Doherty Geological Observatory and his wife Helena analyzed satellite weather data fro the Northern Hemisphere, they found that the area of ice and snow cover had suddenly increased by 12% in 1971 and the increase has persisted ever since. Areas of Baffin Island in the Canadia Arctic, for example, were once totally free of any snow in summer; now they are covered year round."
10. From Christian Science Monitor, June 8, 1972,  artic specialist Bernt Balchen says a general warming trend over the North Pole is melting the polar ice cap and may produce an ice-free Arctic Ocean by the year 2000." 
11. "By the year 2000 the United Kingdom will be simply a small group of impoverished islands, inhabited by some 70 million hungry people ... If I were a gambler, I would take even money that England will not exist in the year 2000." Paul Ehrlich, Speech at British Institute For Biology, September 1971.
12. In 1968, Paul R. Ehrlich wrote The Population Bomb and declared that the battle to feed humanity had been lost and that there would be a major food shortage in the US. "In the 1970s ... hundreds of millions are going to starve to death," and by the 1980s most of the world's important resources would be depleted. He forecast that 65 million Americans would die of starvation between 1980-1989 and that by 1999, the US population would decline to 22.6 million. The problems in the US would be relatively minor compared to those in the rest of the world. (Ehrlich, Paul R. The Population Bomb. New York, Ballantine Books, 1968.)

Grouch: Bottom line, is that time has proven the "experts" are far from expert in almost anything.  Whether it be predicting the direction of stock market, or the impending doom of the human race, the experts have a dismal track record and people must guard against making rash and impetuous decisions (politicians specialize in this) based on expert opinion and conjecture.

Markets in Everything: The Batmobile Sells for a cool $4.2M

Acts of Civil Disobedience

The phrase molon labe (Ancient Greek μολὼν λαβέ molṑn labé; reconstructed Ancient Greek pronunciation [molɔːn labé]; Modern Greek pronunciation [moˈlon laˈve]) means "Come and take them". It is a classical expression of defiance reportedly spoken by King Leonidas I in response to the Persian army's demand that the Spartans surrender their weapons at the Battle of Thermopylae (many of you may have seen the movie The 300).

Instead, the Spartans held Thermopylae for three days and, although they were ultimately annihilated, they inflicted serious damage upon the Persian army, and most importantly delayed its progress to Athens, providing sufficient time for the city's evacuation to the island of Salamis. Thermopylae served as a moral victory and inspired the troops at the Battle of Salamis and the Battle of Plataea.

Some words of wisdom on the 2nd Amendment from Walter Williams:

Citizens Against Senseless Violence: This Website is Proudly Gun Free

Yes, this website is proudly gun-free, but it only exists in virtual reality. Back in the real world, the Grouch's humble abode is definitely not a gun free zone and there won't be any signs posted in the windows or the yard announcing anything to the world.

In the video, Project Veritas punks the Do-Gooders and exposes their (do I have to say it) hypocrisy.

Quote of the Day: Barry Ritholtz

1. ETFs are eating everything.

The revenge of John Bogle continues apace. As investors figure out that they are not good at stock-picking or managing trades, they have also learned that most professionals are not much better. Paying high mutual fund expenses to a manager who underperforms a benchmark makes little sense. This realization has led to the rise of inexpensive exchange-traded funds and indices.

This “ETFication” has obvious advantages: low costs, transparency, one-click decision-making. ETFs are accessible through the stock market for easier execution, with no minimum investment required. Even bond giant Pimco recognized this trend and created an ETF version of Bill Gross’s flagship vehicle, the Total Return Fund. Pimco actually charged more for the ETF than its mutual fund to prevent an exodus of investors from the world’s largest bond fund. This will eventually shift.

~ Barry Ritholtz, from 10 trends to watch in finance for 2013

A Mind is a Terrible Thing to Waste

Deep thinking is not a desirable trait in this Kardashian society.  It can lead to all kinds of existential anxieties that produce undesirable side-effects such as art, literature, innovation, entrepreneurship and heaven-forbid--- more philosophy books.

Old Soviet Poster

Citizens! Hand over your weapons -- An Old Soviet Poster from the Early Days of the Revolution.

4 Pinocchios for the 2012 PolitiFact Lie of the Year

Some may recall that PolitiFact (boy, there's an oxymoron if I ever saw one) named Mitt Romney's add claiming that Barack Obama "sold Chrysler to Italians who are going to build Jeeps in China" at the cost of American jobs as the lie of the year for 2012.

Well, lo and behold, on 1/13/2013 Reuters reports that "Italian carmaker Fiat and its U.S. unit Chrysler are set to sign a new agreement with Guangzhou Automobile Group Co to produce the Jeep vehicle for the Chinese market, Il Corriere della Sera said on Sunday. In an unsourced article, the Corriere said the head of Fiat and Chrysler Sergio Marchionne could announce the agreement at the Detroit auto show, which kicks off on Monday. Under the agreement, off-road vehicles under the Jeep brand will be produced at GAC's Canton factory, the paper said."

So now who is lying and who is telling the truth? This revelation surely won't change the outcome of any elections, but it goes to show there are few "facts" when it comes to politics, and the "fact checkers" are more driven by political ideology than the pursuit of the truth. Keep that in mind the next time any organization claims to "fact check" anything.

The Robo Snowplow

The Economist's Best Places to be Born in 2013

Click to enlarge. The US continues to slip in these type of rankings.

The rankings from 1988 below:

The Economist Nails It

Grouch: Slow growth, ever increasing government spending, and high national debt.... we are there.

38 Studios: Curt Schilling's Crony Capitalism Debacle

The 2012 bankruptcy of Rhode Island-based video-game developer 38 Studios isn't just a sad tale of a start-up tech company falling victim to the vagaries of a rough economy. It is a completely predictable story of crony capitalism, featuring star-struck legislators and the hubris of a larger-than-life athlete completely unprepared to compete in business.

Grouch: Does this not sound similar to some of the green energy scams perpetraiting on the taxpayer by Obama bundlers and their friends in DC?

I, Tomato

The Morning Star Company, which handles 40 percent of California's processed tomato crop, is the largest tomato processing company in the world. That's impressive, but the most unique thing about Morning Star is that it has no managers. Instead, Morning Star embraces an approach they call "self-management."

The Austrailian Haboob

Quote of the Day: James M. Buchanan

The inverse relationship between quantity demanded and price is the core proposition in economic science, which embodies the presupposition that human choice behavior is sufficiently rational to allow predictions to be made. Just as no physicist would claim that “water runs uphill,” no self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimal scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores.

~ James M. Buchanan, writing in the Wall Street Journal on April 25, 1996

The Dookie Dance

Time to be juvenile......

Cartoon of the Day: Avalanche

The Platinum Trillion-Dollar Coin Trick Explained

The following email was sent to Jimmy Pethokoukis from Philip N. Diehl, the 25th director of the U.S. Mint and publish on his blog on the AEI site.

I am the former US Mint director who in 1996, with Rep. Mike Castle (R-Del.), wrote the law authorizing production of the platinum coin you wrote about on December 5th. I can provide background on the legislative intent of the bill, but I write now to clarify confusion related to how the law might be used in the context of the debt limit.

Contrary to some media reports, minting a trillion dollar platinum coin would not raise the debt limit. Rather, it would add a trillion dollars to the general fund of the treasury without requiring additional borrowing, effectively delaying the date when the debt limit is reached.

The law enables this course by authorizing Treasury to produce the coin in whatever denominations the Secretary chooses. When we passed this law in 1996, it was with full knowledge that it was unprecedented in the history of US coinage. Congress had always specified coin denominations by law.

The accounting treatment of the platinum coin is identical to all other coins. When the Mint ships a coin from its vaults to those of the Fed, it books as profit (or “seigniorage”) an amount equal to the difference between the coin’s face value and its cost of production. This amount is subsequently transferred to the general fund of the treasury where it is available to finance government operations in the same way that tax revenue does. When the Fed returns the coin to the Mint due to damage or wear, the accounting treatment is reversed and the coin is melted. Thus, seigniorage “earned” from the coin is like an interest-free loan over the life of the coin.

So, in the case of a platinum coin, if the coin dies were manufactured ahead of time, the Mint could strike a single trillion dollar coin, ship it to the Fed, immediately book a trillion dollars and transfer that amount to the general fund. This would take a day, maybe two. The coin never has to leave the Fed’s vaults for the general fund to receive this new spending capability.

The law provides Treasury all necessary authority to pursue this course. I know this because I wrote the law and produced the nation’s first platinum coin. I’ve been through the entire process.

Unlike the tenuous case for using the 14th Amendment to circumvent congressional approval of an increase in the debt limit, the legal basis for this alternative is rock solid. Moreover, it is not a means of circumventing congressional authority over the debt limit, at all, but rather a way of delaying the date at which that limit is reached, in the same way a sudden surge of tax revenue flowing into the treasury would do. So GOP claims that the president is circumventing the law would be unfounded. Besides, the law was passed by a GOP Congress.

All the best,

Philip N. Diehl

35th Director

United States Mint

What Financial Advice Would You Give This Family?

The Jones are a typical American family living the suburbs with 2 children that they want to live the American dream. The Jones are concerned about their future..... the ability to pay for college for their children, to provide first class medical care, and to provide their kids all the good things in life. Their finances in a nutshell look like this:

Yearly Income: $124,750.00

Yearly Expenditures: $167,000.00

Total Family Debt: $821,650.00


The family debt has been accumulated through consumption, not investment or purchasing of assets like houses. What advice would you give this family? Call Dave Ramsey and go on a beans and rice diet immediately?

The Ubuntu Phone in Action

First Ubuntu phone is expected to be launched in 2014 but an Ubuntu phone OS image for Galaxy Nexus will be released in next few days. I am sure, it will be ported to a number of devices once it is out. Check out Ubuntu phone system requirements proposed by Canonical:

Entry level Ubuntu smartphone

• Processor architecture: 1Ghz Cortex A9
• Memory: 512MB - 1GB
• Flash storage: 4-8GB eMMC + SD
• Multi-touch
• No desktop convergence

High-end Ubuntu "superphone"

• Processor architecture: Quad-core A9 or Intel Atom
• Memory: Min 1GB
• Flash storage: Min 32GB eMMC + SD
• Multi-touch
• Desktop convergence (experience full Ubuntu desktop when phone is docked)

Judicial Watch's 10 Most Corrupt Politicians

Judicial Watch has published their 2012 version of the 10 most corrupt Washington politicians. To those who closely watch the machinations of DC politicians, there are no surprises on the list. This list could easily be 400 - 500 people, but here are the dis-honorees in alphabetical order:

1. Rep. Vern Buchanan (R-FL)
2. Secretary of Energy Steven Chu
3. Secretary of State Hillary Clinton and UN Ambassador Susan Rice
4. Attorney General Eric Holder
5. Rep. Jesse Jackson Jr. (D-IL)
6. Sen. Robert Menendez (D-NJ)
7. President Barack Obama
8. Sen. Harry Reid (D-NV)
9. Rep. David Rivera (R-FL)
10. Secretary of Health and Human Services Kathleen Sebelius

Dishonorable Mentions for 2012 include:

• Former Sen. John Edwards (D-NC)
• Rep. Michael Grimm (R-NY)
• Secretary of Homeland Security Janet Napolitano
• Gen. David Petraeus
• Sen. Elizabeth Warren (D-MA)
• Rep. Maxine Waters (D-CA)

These are the most corrupt of the corrupt. I'd probably quibble a bit about the order, but for those who want to delve into the reasons more deeply Judicial Watch's justifications can be found here.

Quote of the Day: Pravda

For years, the Elites of the West have cranked up the myth of Man Made Global Warming as a means first and foremost to control the lives and behaviors of their populations. Knowing full well that their produce in China and sell in the West model and its consiquent spiral downward in wages and thus standards of living, was unsustainable, the elites moved to use this new "science" to guilt trip and scare monger their populations into smaller and more conservatives forms of living. In other words, they coasted them into the poverty that the greed and treason of those said same elites was already creating in their native lands.

What better way to staunch protests at worsening economic and life conditions than to make it feel like an honourable job/duty of the people to save "Gia". At the same time, they used this "science" as a new pagan religion to further push out the Christianity they hate and despise and most of all, fear? Gia worship, the earth "mother", has been pushed in popular culture oozing out of the West for a better part of the past 1.5 decades. This is a religion replete with an army of priests, called Government Grant Scientists.

Various groups have fought back. This is including Russian hackers, who published a huge database of UK government, scientific and university emails depicting the fixing of data to sell Global Warming, er Climate Change (as if it never changed on its own). And while taking hit after hit, the beast, like Al Quida, will not die. As a matter of fact, the beast is on a steady come back, as it is quite useful during the down times recession. The US alone spends $7 billion each year on warming "studies", which is, in truth, nothing but a huge money laundering operation, as no real science is conducted and vapid alarmist reports the only product generated.

Amongst the newest claims of pending disasters, is a cry that icepacks are now melting at three times the rate of the 1990s, even though there has not been any significant warming in the past 20 years. Greenland's icepack melt off, has been linked to volcanic activity under the ice, heating it. Must be the magmamen and their SUVs. These facts, however, do not faze the Gia crowd and their Elite/Governmental backers. The fact that a super storm hit the NE US is also being played as evidence of GW. Thank God that before GW no such things ever happened. How are they to explain that Russia and Eastern Europe are projected to have the coldest winter in 20 years? Oh, but I doubt my Western readers are even aware of that.

Now, with their economies in a spiral of debt laden, non-manufacturing recession (if not out and out depression), the Elites, who sense they are loosing their grip or toe hold on key economic regions outside their home regions, are once again calling out their inquisitors of Global Warming and sending them towards the developing world.

~ Stanislav Mishin, from Global warming, the tool of the West

Grouch: Global warming has never been about science and the potential impact of rising temperatures, if it were actually true. It has been about economic justice and wealth redistribution, and nothing else.

State of the Ubuntu Nation Address

More competition for Apple, Google, Microsoft and Samsung in the mobile phone market will mean more choices for consumers and cheaper prices.

2012 Performance of the Highly Diversified ETF Portfolio

For the year 2012, our diversified sample portfolio returned 15.23%, a very respectable performance for a low cost, passive portfolio. Given the volatility and continued economic uncertainty and low-growth environments both in the US and abroad, investors should be satisfied with this level of return in a moderate risk portfolio.

Now that the Election is Over, Even 60 Minutes is Catching on to the Unintended Consequences of Obamacare

Quote of the Day: Scott Grannis

Debt becomes problematic when the money borrowed is put to unproductive use, because that leaves the borrower without the resources to repay the loan, and that will eventually disappoint the lender. Most of the money that Uncle Sam has borrowed in recent years has not been put to productive use, and that is a big problem, because the economy has not grown sufficiently to pay back the debt. The federal government has borrowed trillions of dollars in order to 1) send out checks to individuals who are retired, unemployed, disabled, and/or earning less than some arbitrary amount; 2) pay salaries to millions of bureaucrats, 3) subsidize bloated state and local governments, and 4) subsidize corporations engaged in activities (e.g., wind farms, ethanol production) that would otherwise be unprofitable. The money was essentially wasted, since it wasn’t used to create new sources of revenues with which to service the debt in the future.

The burden of our debt binge is already upon us because we have borrowed trillions of dollars to support consumption, rather than new investment. What matters in the future is how productively we spend the proceeds of future bond sales, not how we pay off the bonds we’ve already sold. We can make progress on the margin if we can reduce federal spending relative to the size of the economy, since that in turn will reduce the amount of the economy’s resources we waste. Allowing the private sector to increasingly decide how to spend the fruits of its labors will likely improve the overall productivity and strength of the economy, because the private sector is most likely smarter about how it spends its own money. We’ve got to get the government out of the way if we are to move forward.

~ Scott Grannis, from Debt musings and misconceptions