John Kerry Meet Donald Sterling

The next time Secretary of State John Kerry chooses to describe Israel as heading towards an apartheid state he would do well to closely examine the reaction of world Jewry to L.A. Clippers owner Donald Sterling’s bigoted remarks about African Americans. There is probably no other People on earth, living in or out of Israel, more sensitive to bigotry, bias, religious persecution and hate speech than Jews.

IgnoranceSadly, the Secretary’s comment was founded in either 1) ignorance of historical fact or 2) his own apparent bias about Israel, its people and its government. I hope it is the former, although in a position of such gravitas requiring heightened diplomatic skills neither is acceptable nor excusable.

Arab Israeli’s make up approximately 20% of the population. Historically, Arabs living within Israel since 1949 have enjoyed more freedoms than Arabs living in any Arab speaking country. Since 1949, Israel has seen 70 Arab Israeli’s elected to the Knesset (with 13 serving currently). Arabs serve in the Supreme Court, the Cabinet, the Israeli Defense Forces, the Israeli police, as emergency medical service providers, doctors, businessmen, entertainers, television personalities and in a multitude of positions within every aspect of civil society.  In 2004, Former Prime Minister Ariel Sharon ordered that every public company have at least one Arab Israeli on its Board of Directors.

Does this seriously lead anyone other than Secretary Kerry (or Arab extremists seeking the annihilation of the State of Israel) to conclude that an apartheid Israeli nation is a foregone conclusion? I think not.

Personally, I stand with former United States Ambassador to the United Nations, John Bolton, who today said that “children are running our foreign policy” and with Senator Ted Cruz (R-TX) who yesterday called for the resignation of Secretary Kerry.

Ignorance is only bliss when it does no harm.

Carole

Divide and Conquer

“Divide and conquer” is a strategy as old as time for a reason. It works. The more you can disperse an opponents forces the weaker you make him. Of course, the converse is equally true…”united we stand.” So it should come as no surprise that entrenched power, wherever it is found, seeks to turn any opposition against itself with the intention being to distract and disperse.

DividedEnter the Cliven Bundy story.

Initially Bundy, the Nevada rancher standing up to the Bureau of Land Management and thereby the Federal Government, was viewed as a modern day David against a modern day Goliath. Others saw him as a Patriot and rushed to his side to stand with him. However, as it became known that Mr. Bundy had violated the law on his way to taking a legitimate stand on States’ rights (by not paying his grazing fees) and further that he seemed to speak with bigotry about African Americans, the tide quickly turned against him. His less than stellar behavior quickly eclipsed the larger legitimate issue of Federal Government overreach via land grabbing.

The mainstream, not-so-mainstream media and the population in general have been quick to be seduced by getting lost in the “he’s a good guy” no “he’s a bad guy” debate. Divide and conquer at work.

Our Federal Government is out of control and is incompetent and/or frighteningly ill intentioned as evidenced by its mismanagement of the economy, its overreach of federal powers, its foreign policy, and its redistribution of wealth efforts through Obamacare. However, if we allow ourselves to focus on the all to human Cliven Bundy, who has his strengths as well as his failings (as well all do) then we will be distracted from the larger issue… which is exactly where the powers that be want us.

United we stand or divided we fall. Each of us must choose. Focusing on common ground rather than our differences  serves us better now and is certainly true about what we will be able to accomplish in the future.

Carole

The Big Con

I just finished reading ” The Big Con”  about how confidence men use to go around the country and con people out of their money.The time frame of the story takes place between 1880 trough 1930 and delves into the lives  of a legion of smooth-talking and quick thinking criminals who traveled America taking people’s money. As the years progressed they grew more skilled at devising ruses more intricate than the last…including staging scenes with props, sets, scripted dialogue. the big con

The book is written by a linguist that captures the phrases and the terminology of the day, so at times it can be seen hard to follow but the stories are brilliant and the schemes quite elaborate and detailed. There were a few points in the book that I found fascinating such as what makes a good mark ( a good victim to be swindled)?

  • Con men exploited the desire of wealthy people to get something for nothing and their willingness to break the rules to do so. Con men exploited the honesty of people. Con men went at great lengths actually have the victims prove how honest they were. The con men knew two things about human nature. First, if you have to tell everybody you are honest–you’re probably not that honest. Secondly, once the mark went out of his way to prove how honest he was, the con men knew the mark would act consistent with that belief and thus be more easily controlled.

“Every saint has a past and every sinner a future.” It is a paradox. Truly honest and introspective people really understand how hard it is to be honest and know  how weak they are. By understanding that inherent weakness, only then can they be honest. It is our nature to truly believe that we are good and honest people but the fact is the con men knew otherwise; they understood this little paradox and exploited people’s delusion of themselves for gain.

Since some of the tricks and schemes were so elaborate and the amount swindled quite large, payoffs and bribery were par for the course. Bankers, police, government officials, real estate agents all had to be paid off. If the mark complained too loudly about the amount lost, all of the players mentioned had to play the part to soothe the marks concerns that all was being done to find these men and bring them to justice.

Even though the book’s stories take place 100 years ago, it is painful to see that all of our institutions were already corrupted even back then. Sadly, it is no different today. A few years ago, bankers walked with millions as they saw their firms collapse and the equity holders were wiped out. To date, no major player in the financial debacle has seen any time in prison (Bernie Madoff was not a banker but ran a Ponzi scheme).  As you can see, the institutions entrusted to protect their citizens had already been corrupted.

As the saying goes the more things change the more they stay the same.

Steve Clark

Rethinking Attention Deficit Disorder (A.D.D)

I’ve had an “aha” moment. This isn’t a conspiracy theory although it may read like one. Oftentimes, a new and innovative way of looking at the status quo, that calls into question an established view or pattern, can be misinterpreted as conspiratorial. Let’s not go there. Keep an open mind as you read on and you may have an “aha” moment of your own.

ADDIn his latest book “Focus” Daniel Goleman states:

“Survival in the wild, some neuroscientists argue, may have depended at crucial moments on a rapidly shifting attention and swift action, without hesitation to think what to do. What we now diagnose as Attention Deficit Disorder (A.D.D.) may reflect a natural variation in focusing styles that had an advantage in evolution–and so continue to be dispersed in our gene pool.”

Goleman’s words gave me that “aha” moment.

We are living in a time when political, economic and social systems are breaking down all around us. Its certainly reasonable to posit that all the resulting chaos raises a “warning/danger” response in the primal area of our brains.  Accordingly, we are hard wired to respond to threats to our well being and/or our very existence exactly as Goleman and his neuroscientsists observed… “with rapidly shifting attention and swift action, without hesitation to think what to do.” Also known as A.D.D.

Here’s where you’ll have to suspend your tendency to conclude conspiracy.

Approximately 7.5% of school aged children in the United States have been diagnosed with A.D.D.  Unmedicated, they are also (to use Darwin’s phrase) the “fittest” for this phase of conscious evolution we must now navigate. I suddenly understood why the “powers that be” want to medicate A.D.D.  A narrowly focused population that cannot think expansively, change focus rapidly, or multitask with ease is more readily controlled that one that can.  These A.D.D. individuals are the seers and the innovators of our day. It is they who will be the ones to usher in new ways of doing things in this age of breakdowns

If you have A.D.D., or know someone who does, perhaps you might want to pay more attention to the wanderings of that rapid mind….and less attention to what “the experts” say about medicating those minds.

All of our futures may depend on it.

Carole

ObamaCare A Success

Last week the Obama administration claimed that Obama Care was now  a success and had signed up 8 million people. I claim he is going to regret he made that statement the same way George Bush lived to regret his “mission accomplished” speech in the 1st year of the Iraq war. ObamaCare

 

 

 

 

First if Obamacara is the law of the land and every citizen is suppose to have health insurance in a country with over 330 million people, 8 million people is only 2% of the entire population. Secondly the law states you have to buy it and if you don’t you will be fined, again 8 million people seems like an awfully low number and a lot of people would rather be fined then sign up. Finally, due to the problems on the web site, the government is not telling you if the 8 million people that signed up actually paid for the insurance. This would be the equivalent of going to an online store adding an item to your cart but then not checking out and paying for the item. If an online public company reported that number to the press, they would probably be sued for misrepresentation.

One of my friends actually posted the 8 million signups on his Facebook page as a sign that Obama had done a good job and that the program was now a success. When I pointed out the obvious problems with his statements he accused me of being a Republican. The reality is that my party affiliation should have nothing to do on whether a statement is true or not, facts are facts. My friend wanted to believe the political fantasy for whatever reason.

Clearly my fried was a Democrat and wanted to believe the president but when facts state otherwise, he should have been able to see the truth. We as humans like to label ourselves and put ourselves  into categories and then that label becomes our identity and any assault on that identity becomes an assault on our selves. Men are especially prone to this as their profession becomes how they define themselves: banker, salesman, doctor but when men lose their jobs, many time their identity gets lost as well.

My point was not to attack my friend because he was a Democrat but rather to point out the flaws in the president’s statement. If my friend had a bigger identity of who he was he wouldn’t have felt slighted by my statements.

 

Steve Clark

 

The War on Small Business

One of my favorite TV personalities is John Stossel who has a show on Fox that highlights current consumer issues with his libertarian bent. He usually takes a look at a current issue and then breaks down how that issue is being handled by the free market and how the government is handling that issue through its regulatory arm.

In his previous life as a reporter for ABC, John Stossel would go around looking at how business owners would try to take advantage of the little guy and then do a report on the damage being wrought by this business. His main aim was to heighten a concern in the hopes that the politicians would take note and create a new law to stop this type of abuse. He has since repented of his ways, and he understands the damage he wrought by continually asking the government for new laws. He know believes that the free market will eventually regulate these endeavors and for the most part government intervention is not needed.

Small Business Owner

 

 

 

 

 

For example, one of the many cries during the financial crisis that occurred in 2008 was that the financial crisis took place was because there was not enough regulations in the financial industry. The media critics and the pundits all declared that our financial institutions had gotten so large they were deemed “Too Big To Fail” and because of that, these institutions had to be bailed out or else the whole economy would have collapsed. Subsequently, many banks were taken over, shut down and merged (Bear Stearns, Lehman Brothers, Wachovia, etc.) The result of these closings has made the existing banks bigger than ever. In addition, the banks have had to deal with a tremendous amount of new regulations. Believe it or not, the existing banks like these new regulations because they know that the smaller banks don’t have the time or the money to comply with these new laws and are then forced to get out of the business. Which in turn, has made the largest banks bigger than they were before the crisis.

The ideal situation would have been to break up all the bigger financial institutions and then lessened the regulatory burdens so that smaller institutions could have gotten into the business. It would have been a good way to disperse risk as money would have moved out of some of the major money centers and into smaller regional banks- which would have reduced some of the concentration of wealth. Instead, what we have now are super huge banks and now they really are “too big to fail”.

Maybe that was the intention of the government all along to concentrate the wealth and power in a few hands. It is easier for the government to monitor and regulate a handful of institutions than a smorgasbord of banks dispersed throughout the country. I believe the following is happening not only in banking but in all industries- the move to burden the small operator so much that they are forced to merge or sell to bigger companies or close shop altogether. In my opinion, the federal government is engaged in a deliberate scheme to force consolidation in the business sector so that it only has a handful of companies to monitor and regulate, rather than deal with the millions of small , tough minded entrepreneurs. The big business heavy regulated economy is how Europe and socialist states are run and it is the direction we are heading.

For example take a look at Obamacare. “The number of medical codes that must be used to document patients and secure payments for insurers will go from 45,000 to 160,000.”(Dan Kennedy) I would gather that the very large medical centers that have large staffs will be able to process the additional work flow at a lower costs because they can transfer the work to a greater percentage of people. The small practice will have to endure 4x the amount of work and complexity, compliance and related costs which they will not be able to pass down to their patients thus drain the compensation of the doctors and their practice. As a result of this, expect to see a wave of mergers and mega hospitals come into being. This will remove choice and retard access for people looking for medical care.

Part of the reason we have not seen the bounce back in the economy since 2008 has been the difficulties that the entrepreneur has faced and Obama’s move to consolidate the business sector. However, America has always been a resilient country and the entrepreneur has always been the backbone of this country, all we need now is a political class to empower these people and not hinder them.

Steven Clark

 

 

A Nevada Rancher and the Nazis

The “greenest” faction of the Nazi war machine was the SS.  Heinrich Himmler who headed the unit was an animal lover, a vegetarian and organic farming enthusiast. In fact, at Treblinka, the SS had beautiful picnic grounds and a zoo, while the last sight the Jews saw before entering the gas chambers was an exquisite flower garden. The SS advocated an ideology of “blood and soil” that rolled into one policy evolutionary racism, peasant agrarianism and environmentalism.

CowsSo, it is possible to be politically correct while simultaneously being inhumanely insane. Which brings me to Cliven Bundy and the Obama Administration.

Mr. Bundy is a fourth generation rancher in Nevada. He has been grazing his 500 cattle on Clark County, Nevada public lands as did his father and grandfather before him. He has paid his grazing fees to the County and the State. He has not, however, paid fees demanded by the federal government as it is his position, supported by the Governor of Nevada, that the U.S. Government and Bureau of Land Management have no authority to collect them.

The response to his refusal to pay those fees is now the theft of his private property by the Federal Government (200 cattle thus far captured and removed), armed marshals surrounding the remainder as well as he and his family, his son tasered and a dangerously escalating situation. Memories of Waco and the Branch Davidian Sect standoff come to mind. The prospects for this ending poorly increase exponentially by the day.

The regulation and legal basis by which the Federal Government is asserting its authority and claim was enacted 20 years ago protecting the desert tortoise of the region from extinction.

As an animal lover I would never want to see any animal harmed, let alone extinct. But when we reach the point where the survival of the tortoise is grounds for abrogating the U.S. Constitution and basic human rights, we are dangerously close to…if not over…the same line the SS crossed. That story ended poorly as well.

We need to understand our connectedness to one another,to all living things, and to the environment within a well-thought through balanced approach. No one aspect of that triad should prevail at the expense of the others. Every American should be appalled and vocal about what is taking place in Nevada. As German Lutheran Pastor and vocal Nazi opponent Erik Dietrich Bonhoeffer said, “Not to speak is to speak. Not to stand is to stand.”

Carole

Fast and Furious Deception

Its the Chinese “Year of the Horse.” May I suggest we also make it the American “Year of Thinking for Yourself?” If we don’t, the unending manipulation of facts and truth by the media and the politicians will destroy our Nation.

Uncle SamTwo examples:

1.  The President has suddenly decided to sign an Executive Order to equalize pay for women and men. On its face, noble. Factually, nothing more than an election year ploy. When you compare education, experience, specialized training in similar positions women are receiving parity of pay. Among young, single women with higher education, they are actually being paid greater than similarly situated males. But I repeat, its an election year.

2.  Attorney General Eric Holder, unaccountable for “Fast and Furious” in which both U.S.Border Agents died as did  Mexicans, yesterday testified before the House Oversight Committee and spoke both threateningly and disrespectfully to Congressman Louis Gohmert (R-TX). Arrogance with impunity because we have failed to demand accountability from Holder for “Fast and Furious” and other refusals by him to comply with production of documents subpoenaed of him by Congress.

Yesterday, I heard a caller on talk radio who suggested that the major network news departments are not the moneymakers for their corporate owners. The money makers are their sports and entertainment programming. Therefore, he suggested that anyone angry with media lies, manipulation and their improper relationship to the political class simply stop watching the Super Bowl, the Final Four etc. as well as entertainment programming.

There are 30 million Conservatives in the U.S. and a good amount of Libertarians, Liberals and Independents who are equally disgusted with where we are. If each of us literally stops watching those shows the financial impact will be devastating. Money talks.

Forget the horse. It’s the “Year of Thinking For Yourself.” You’re may be fed up, but you’re not powerless. It just takes thinking for yourself and a healthy dose of the courage of your convictions to act.

Carole

Downside of Better Information

I tend to focus on the intricacies of finance because it is so heavily regulated. I use to work in the bond market for many years and know firsthand the impact of bond yields and economic activity.

Bond Market

Banks use to be the hub of bond trading playing an important role in distributing and allocating risk, but as a result of the changes in 2008, namely the Volcker rule, banks play less of a role in the market. Given the destruction of the markets in 2008, banks were told that going forward banks would have to carry much less risk and have much smaller bond portfolios. The result of this is that when banks are asked to trade bonds now, they have  much less inventory to offer and when they buy bonds, then can only buy much smaller amounts now.

So larger trades that use to take place with ease, take much longer now. Pension funds and banks can now longer liquidate their positions with confidence as they once did, which one day will cause a large problem. The regulation that was supposed to keep banks from taking on too much risk has now concentrated all of that risk into the largest bond funds in the world, and these bond funds can now longer sell their bonds as they once did. Over the last 20 years there has been numerous times the bond markets have gotten spooked and have had massive sell offs (1994 pesos crisis, 1998 Asia crisis,2001 tech blowup, 2008 mortgage meltdown) and each time the crash has been worse and more pronounced.  However when the next downturn in the bond markets come ( and they always come) the banks will no longer play the essential role they use to play of distributing and placing bonds throughout the bond market.

There is another huge problem in the bond market that is killing liquidity that no one wants to talk about, and that is the way bond prices are reported. Given that bond prices are traded over the counter, there is no central exchange that records the prices of bonds. The way bond prices were historically reported, was that the banks would send prices to their clients at the end of the day. Over the years the large bond funds did not like this system and they asked the regulators to come in and force the banks to report all the bond trades to a system called “Trace”.

The result of this was that the bond market became very efficient in knowing what the price of the bonds were, in addition the size of the trades were reported as well. Given all of this information portfolio managers became very confident in knowing where all the bond prices were at a given time. Yet instead of the markets becoming more efficient, the market became less so. Banks use to buy large blocks of bonds and for assuming that risk, they expected to make a profit. But, with full price information in the market, banks are no longer willing to bid on bonds.

For example if bond x’s last price on a trade for 2 million bonds was 99, the portfolio manger would expect to sell his bonds at 99 as well. However a bank would be unlikely to buy the bonds at 99 but rather at 98.5 in that the bank would want to make money as well. The portfolio manager might be willing to sell his bonds at 98.5, but he is unable given that he has to justify to his bosses on why he sold his bonds at 98.5 when every one else was getting 99, so no trades get done.

So given the Volker and the advent of Trace, the bond market is a shell of what it use to be. The liquidity has been sapped, eventually this lack of liquidity will make the next downturn much more vicious than the last one we last experienced.

The general consensus is that more regulation and better information is the key to financial stability but in life we always have to deal with unintended consequence of decisions that are made. I would argue the consequences of these two laws/decisions are going to be bad for all of us. I would argue sometimes less control and less regulation actually help the consumer more and make things more efficient.

 

Steven Clark