Obama Stimulus Made Economic Crisis Worse

September 26, 2010

Bernanke dares to disagree and says the FED and the government acted and save the world from ‘global meltdown’.

Bloomberg

U.S. President Barack Obama and his administration weakened the country’s economy by seeking to foster growth instead of paying down the federal debt, said Nassim Nicholas Taleb, author of “The Black Swan.”

Nassim Nicholas Taleb

“Obama did exactly the opposite of what should have been done,” Taleb said yesterday in Montreal in a speech as part of Canada’s Salon Speakers series. “He surrounded himself with people who exacerbated the problem. You have a person who has cancer and instead of removing the cancer, you give him tranquilizers. When you give tranquilizers to a cancer patient, they feel better but the cancer gets worse.”

Today, Taleb said, “total debt is higher than it was in 2008 and unemployment is worse.”

Obama this month proposed a package of $180 billion in business tax breaks and infrastructure outlays to boost spending and job growth. That would come on top of the $814 billion stimulus measure enacted last year. The U.S. government’s total outstanding debt is about $13.5 trillion, according to U.S. Treasury Department figures.

Obama, 49, inherited what the National Bureau of Economic Research said this week was the deepest U.S. recession since the Great Depression. Even after the stimulus measure and other government actions, the U.S. unemployment rate is 9.6 percent.

Governments globally need to cut debt and avoid bailing out struggling companies because that’s the only way they can shield their economies from the negative consequences of erroneous budget forecasts, Taleb said.

Errant Forecasts

“Today there is a dependency on people who have never been able to forecast anything,” Taleb said. “What kind of system is insulated from forecasting errors? A system where debts are low and companies are allowed to die young when they are fragile. Companies always end up dying one day anyway.”

Taleb, a native of Lebanon who gave his speech in French to an audience of Quebec business people, said Canada’s fiscal situation makes the country a safer investment than its southern neighbor.

Canada has the lowest ratio of net debt to gross domestic product among the Group of Seven industrialized countries and will keep that distinction until at least 2014, the country’s finance department said in March. Canada’s ratio, 24 percent in 2007, will rise to about 30 percent by 2014. The U.S. ratio, now above 40 percent, will top 80 percent in four years, the department said, citing IMF data.

“I am bullish on Canada,” he told the audience. “I prefer Canada to the U.S. or even Europe.”

Mortgage Interest

Canada’s economy also benefits from the fact that homeowners, unlike their U.S. neighbors, can’t take mortgage interest as a tax deduction, Taleb said. That removes the incentive to take on too much debt, he said.

“The first thing to do if you want to solve the mortgage problem in the U.S. is to stop making these interest payments deductible,” he said. “Has someone dared to talk about this in Washington? No, because the U.S. homebuilders’ lobby is hyperactive and doesn’t want people to talk about this.”

Taleb also criticized banks and securities firms, saying they don’t adequately warn clients of the risks they run when they invest their retirement savings in the stock market.

‘Have Fun’

“People should use financial markets to have fun, but not as a depository of value,” Taleb said. “Investors have been deceived. People were told that markets go up regularly, but if you look at the last 10 years that’s not been the case. The risks are always greater than what people are told.”

Asked by an audience member if returns such as those posted by Berkshire Hathaway Inc. Chief Executive Officer Warren Buffett — who amassed the world’s third-biggest personal fortune through decades of stock picks and takeovers — are the product of luck or talent, Taleb said both played a part.

If given a choice between investing with Buffett and billionaire investor George Soros, Taleb also said he would probably pick the latter.

“I am not saying Buffett isn’t as good as Soros,” he said. “I am saying that the probability Soros’s returns come from randomness is much smaller because he did almost everything: he bought currencies, he sold currencies, he did arbitrages. He made a lot more decisions. Buffett followed a strategy to buy companies that had a certain earnings profile, and it worked for him. There is a lot more luck involved in this strategy.”

Soros gained fame in the 1990s when he reportedly made $1 billion correctly betting against the British pound.

Taleb’s 2007 best-seller, “The Black Swan: The Impact of the Highly Improbable,” argues that history is littered with rare, high-impact events. The black-swan theory stems from the ancient misconception that all swans were white.

A former trader, Taleb teaches risk engineering at New York University and advises Universa Investments LP, a Santa Monica, California-based fund that bets on extreme market moves.

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Welcome to Poor America. 43 Million and counting

September 16, 2010

History repeats itself as corporate colonialism claims another nation-state.  The United States is a prisoner on its knees waiting to be shot on the head.

Washington Post

One in seven Americans is living in poverty, the highest number in the half-century that the government has kept such statistics, the Census Bureau announced Thursday.

Last year was the third consecutive year that the poverty rate climbed, in part because of the recession, rising from 13.2 percent in 2008 to 14.3 percent, or 43.6 million people, last year.

Asians were the only ethnic group whose poverty rate did not change substantially; every other race and Hispanics experienced increases in poverty rates.

In addition, 51 million Americans were uninsured, as the number of people with health insurance dropped from 255 million to less than 254 million — the first decrease since the government started keeping track in 1987. The number would have been worse because 6.5 million fewer people got insurance through their jobs, but it was offset by a leap in government-backed health insurance. More than 30 percent of Americans now get coverage from the government.

“Given all the unemployment we saw, it’s the government safety net that’s keeping people above the poverty line,” Douglas Besharov, a University of Maryland public policy professor and former scholar at the American Enterprise Institute, told the Associated Press.

The grim statistics reflect the depth of the recession that began almost three years ago and could have an impact on midterm elections less than two months away.

“These numbers should be a wake-up call,” said Peter Edelman, a Georgetown University professor and co-director of the Georgetown Center on Poverty, Inequality and Public Policy. “These are deeply disturbing numbers.”

At organizations where the unemployed come to get help finding a job or seek food, the numbers were no surprise.

“In the decade I’ve been doing this work, this is a low point,” said Jason Perkins-Cohen, executive director of the Job Opportunities Task Force in Baltimore. “We’re getting a real feeling of desperation. For sheer numbers, it’s a new, unhappy world.”

At the nonprofit Action Though Service in Prince William County late Thursday morning, the shelves of the agency’s pantry were starting to empty, as the line for help snaked out the door with a few dozen people seeking assistance.

Prince William resident Carol Williams said she has come to the shelter once a month since January, when she was laid off from her job at United Medical Center due to budget woes.

“I worked since I was 15, and, now, for the first time I don’t have a job and I can’t feed my family,” said Williams, 55. “I have a degree; doesn’t matter. The jobs aren’t there.”

Williams said she has been applying for dozens of jobs a week and had about 20 interviews since January. “I think people are scared to hire someone who is not working,” she said, adding there also is just a lot more competition because of the high unemployment rate.

A single mother, Williams has five mouths to feed — children and grandchildren– ranging in age from 17 months to 28. Williams said she was able to raise three sons on her own, but she now turns to the food pantry at ACTS and her father and friends for help.

“We had no bread, no nothing last Friday because the pantry was closed,” she said. “Luckily a friend helped me or we would have had no food for the weekend.”

Advocates said they’re seeing a lot more people like Williams.

“We have definitely seen many more individuals who are very well-educated, with high degrees, where it’s the first time to ever be in a situation to ever have to ask for help for food or shelter,” said Vickie Koth, executive director of Good Shepherd Alliance in Loudoun County.

Koth recalls one family of four in particular, where both parents were highly educated — the mother was a lawyer, and the father was a mortgage broker. “They were in the business of buying and selling homes, and they had three foreclosures within the same span of time and were homeless for the first time.

“We’re full all the time and we turn people away every day, and that’s always been true. But the types of people that call have changed,” Koth said. “Time after time I’ve heard individuals say, ‘I’ve given to shelters, I’ve volunteered at food pantries. I’ve never thought I’d be here myself.’ “

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Death is “Reasonable” to Save Society

August 24, 2010 2 Comments

Jurriaan Maessen

In a 1995 article written by Gretchen Daily and Ecoscience co-author Paul R. Ehrlich, the authors put forward the proposition that physicians should no longer concentrate on improving the health of their individual patients, or treat occurring infections in order to save the patients life, but rather look to the well-being of society as a whole. In doing so, say Daily and Ehrlich, “a small net increase in deaths” is “a reasonable price to pay”. Here’s the quote in its entirety (page 25):

“Physicians by instinct and training focus on the health of individuals; they must learn to pay more attention to the health of whole societies and to deal with the difficult conflicts of interest that often arise between the two. One physician, Jeffrey Fisher (1994), recommends that physicians be required to take periodic recertification exams in which they are tested on antibiotic knowledge. If antibiotics had been used more judiciously over the past few decades, there doubtless would have been more deaths from bacterial infections misdiagnosed as viral, and fewer deaths from allergic reactions to antibiotics. But a small net increase in deaths would probably have been a reasonable price to pay to avoid the present situation, which portends a return to the pre-antibiotic era and much higher death rates.”

The fact that humans reproduce, Daily and Ehrlich argue, means diseases

The Main Stream Media has helped push the idea that it is fine to kill oneself to save the planet, or to let the elderly die for the sake of Society.

have an opportunity to thrive and wreak havoc amongst them. This is the snake biting its own tail. Less humans means less diseases. The logic is infallible. The same argument can of course be applied to car accidents, plane crashes and other calamities, sure to occur with those darned humans roaming about. In order to reduce the possibility of diseases occurring, the authors list some proposals, including:

“1. Redoubling efforts to halt the growth of the human population and eventually reduce it (Daily et al., 1994). This is a very basic step, because overpopulation makes substantial, diverse contributions to the degradation of the epidemiological environment, in addition to degrading other aspects of Earth’s carrying capacity (Daily and Ehrlich, 1992).”

Another proposal reads as follows:

“7. Instituting worldwide campaigns to emphasize limiting the number of sexual partners, and to increase the use of condoms and spermicides. Such changes would both lower the incidence of STDs and encourage the evolution of reduced virulence in them (Ewald, 1994). Special attention should be paid to methods that can be adopted by women (e.g., Rosenberg and Gollub, 1992; Rosenberg et al., 1992, 1993), which would tie in neatly to related methods of improving the epidemiological environment by limiting human population growth (Ehrlich et al., 1995).

From Ehrlich we switch gears to John P. Holdren, who authored (also with Paul Ehrlich) an article called “The Meaning of Sustainability: Biogeophysical Aspects” in the World Bank document Defining and Measuring Sustainability. In the article, the diabolical duo propose a stark reduction in the percentage of humans on earth:

“No form of material growth (including population growth) other than asymptotic growth, is sustainable; Many of the practices inadequately supporting today’s population of 5.5 billion people are sustainable; and at the sustainability limit, there will be a trade-off between population and energy-matter throughput per person, hence, ultimately, between economic activity per person and well-being per person.”

“This”, Holdren and Ehrlich continue, “is enough to say quite a lot about what needs to be faced up to eventually (a world of zero net physical growth), what should be done now (change unsustainable practices, reduce excessive material consumption, slow down population growth),and what the penalty will be for postponing attention to population limitation (lower well-being per person.”

The most gruesome and interesting part of their elucidation is buried in the notes (page 15). In speaking about all kinds of intolerable “harms” that counteract sustainability, Holdren and Ehrlich are willing to make an exception for pollution, if it will cut some time of the average life expectancy:

“Harm that would qualify as tolerable, in this context, could not be cumulative, else continuing additions to it would necessarily add up to unsustainable damage eventually. Thus, for example, a form and level of pollution that subtract a month from the life expectancy of the average member of the human population, or that reduce the net primary productivity of forests on the planet by 1 percent, might be deemed tolerable in exchange for very large benefits and would certainly be sustainable as long as the loss of life expectancy or reduction in productivity did not grow with time. Two of us have coined the term “maximum sustainable abuse” in the course of grappling with such ideas (Daily and Ehrlich 1992).”

In the horrible euphemistic way these proposals disguised as “possibilities” are usually being presented lies hidden a horrible truth. These head-hunters of the scientific dictatorship are not simply powerless psychopaths exchanging abstract ideas. They are powerful sociopaths rather, occupying key positions within the marble halls of academia and government. In the final equation, they are after you and your children.

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Costa Ricans Massively against U.S. Military Invasion

August 16, 2010 1 Comment

By Luis R. Miranda
The Real Agenda
August 16, 2010

In the latest survey released by a Costa Rican polling firm, it is confirmed that most of Costa Rica does not welcome on arrival and permanence of U.S. troops in their country. In recent weeks, the Congress of Costa Rica agreed to allow the arrival of military ships, planes and thousands of American marines to ‘aid’ in the war against narcotics trafficking in the Americas, which is largely driven by the U.S. and Colombia.

In the survey, whose partial results were published in a local newspaper, Costa Ricans expressed unfavorable views of the U.S. occupation. Of all respondents, 32 percent believe that the occupation is detrimental. The newspaper did not explain why, or if polled respondents were questioned as to why their opinion was such. Meanwhile, another 38 percent of respondents expressed concern that the arrival and permanence of Americans violates Costa Rican sovereignty.

Overall, 70 percent of ‘Ticos’ demonstrated their dissatisfaction with the arrival and permanence of foreign troops until December 2010. But it is the 38 percent number that sounds the bell, more than any other number. The reason is that more than one third of Costa Ricans are aware that the U.S. invasion is a violation of their sovereignty, a position that until a few weeks ago was unknown. Thus, the 57 per cent who welcomes the country’s militarization pales in comparison to the 70 percent who disapproves -32 percent who see as harmful the arrival of the Americans and the 38 percent who disapprove due to the violation of sovereignty.

Although the majority of Costa Ricans disapprove the arrival of the Americans, for the reasons mentioned above, 57 percent approval makes it clear that there is considerable support. The reason for the support, although not explained in the publication, can be easily be connected to the insecurity that the ‘Ticos’ experience daily in their neighborhoods and cities. The insecurity has been allowed to grow freely for several decades by many governments that believed the fallacy that Costa Rica was the Switzerland of Central America and that nothing would change that. Years later, the underworld, the drug lords, both locals and from abroad, gained control of the streets in the country. Drug cartels now control large areas in southern, northern and the Caribbean regions. The failure of a bureaucracy that purposely let crime grow out of control, now presents the militarization as a solution with the arrival of 7,000 troops, warships and military aircraft and helicopters, which is seen as an exageration and a threat to the sovereignty of Costa Rica. But this is not new. It is the well known modus operandi and Hegelian practice of problem, reaction, solution.

In fact, the cooperation agreement between Costa Rica and the United States did not improve at all the drug trafficking situation in the country. During the execution of this agreement, more and more drugs continue moving through Costa Rican land and waters to their northern destinations of Mexico and the United States. In South America, the treaty known as Plan Colombia did not resul in anything positive, either. Millions of dollars of U.S. taxpayers are ‘invested’ in a war regarded as a failure because it has failed to accomplish its only goal: ending the drug trade in South, Central and North America, where the largest consumer market of cocaine, crack, heroin and other drugs -made in clandestine laboratories with mixtures of pharmaceutical ingredients- is located.

In response to growing drug trafficking, the U.S. pursued a policy of ‘cooperation’ that includes the invasion of sovereign territories to supposedly stop the flow of drugs across the continent, but neither the navy nor the army, -under the guidance of the Southern Command (SOUTHCOM )- scattered across the continent have achieved that goal. People have to wonder why.

The results so far provided by the pollster UNIMER, not only reveal the overwhelming opposition of the people in Costa Rica to the occupation, but also the fatigue of the ‘Ticos’ to the ‘business as usual’ policy of their government. Although the new president arrived with great fanfare, as they all arrive, she was not able to recognize the lack of leadership from the previous governments and project a clear plan on what to do about insecurity in the country. Mrs. Chinchilla preferred to extend the policy of accepting gifts and even sacrifice the sovereignty of Costa Rica to participate in a drug war that has proved a complete failure due to the fact it is driven by corruption and not by a desire to end the drug trafficking scheme.

Another conclusion that emerges from the survey is that 57 percent of ‘Ticos’ who support military intervention ignore the failure of the current war on drugs, which is largely responsible for the bankruptcy of the United States. The policy of occupation emptied the coffers of the government, which in itself did not even have any money. Similarly, history shows that countries who sacrifice freedom and sovereignty in exchange for ‘security’, end up losing both. What this 57 percent should demand is a clear policy against crime, not the acceptance of royalties. Although the democratic system is a hedious one, as it subjects large amounts of citizens to the wishes of others, hopefully in the case of Costa Rica the voice of the majority, -which this time seems to be wiser than before- will be heard louder than ever, to wake up the minority from their sleep in the arms of ignorance.

Related Articles:

Costa Rica Occupied by U.S. Military *UPDATE*

Costa Rica Occupied: Congress Surrenders Sovereignty to U.S. Army

HSBC, Wachovia, Bank of America Launder Mexican Drug Money

Mossad in South America

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America Is ‘Bankrupt Mickey Mouse Economy’

August 11, 2010

By Patrick Allen

America is a “Mickey Mouse economy” that is technically bankrupt, according to Jochen Wermuth, the Chief Investment Officer (CIO) and managing partner at Wermuth Asset Management.

“America today looks like Russia in 1998. Consumers, companies and the government are all highly indebted. America as a result is a bankrupt Mickey Mouse economy,” Wermuth told CNBC.

The comments followed news that the Fed was extending its quantitative easing program following what the Federal Open Market Committee (FOMC) described as a fall in the pace of growth in output and employment.

The Fed has spent the past three years on a route of aggressive rate cuts and purchases of trillions in various securities but it is running out of measures it can take, Pimco’s co-CEO Mohamed El-Erian told CNBC.

Wermuth is a fund manager heavily invested in Russia and says if the same International Monetary Fund (IMF) team that managed the financial crisis in the former super power in 1998 now turned up at the US Treasury, they would withdraw support for current US policy immediately.

“The big evil for the IMF in Russia in 1998 was the prospect of the central bank funding government debt. The Fed is now even buying mortgage-backed securities,” he noted.

“Even before the (Troubled Asset Relief Program) and the expansion of the Fed’s balance sheet, total US public and private debt as a percentage of GDP in the US stood at 290 percent, that figure is now far higher,” Wermuth added.

“US credit risk is huge and America has two options, either default or let the currency depreciate substantially against currencies such as the yuan and the rouble,” he explained.

“Last night’s news from the Fed simply creates the right conditions for dollar weakness and a reduction in US liabilities to foreign investors and governments,” Wermuth said.

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