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Joined Nov 11, 2007
31,929 Blog Posts
Fukishima Update
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Comments »Ukraine Moves to Quit Nuclear Non-Proliferation Treaty, Now Under IMF Knee-Breakers
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Comments »More Moves Being Made on the De Facto Repeal of the Second Amendment
“It’s no secret that President Obama and the would-be global governors at the United Nations are anxious to disarm the American people. Now they’re looking to hire some help in getting it done.
From the UN’s Programme of Action and Arms Trade Treaty, to his own executive orders, Obama is pursuing every available avenue toward de facto repeal of the Second Amendment and the God-given right to keep and bear arms that it protects.
Over the next few weeks, though, the UN is looking to add personnel to its gun grabbing gestapo. In a job advertisement open until July 26, the UN is looking for a “Disarmament, Demobilization and Reintegration Officer.”
What will this bureaucrat’s bailiwick be? Here’s a summary of the job description as posted by the UN:
Act as a Focal Point for DDR [Disarmament, Demobilization and Reintegration] components for 2-3 missions, responsible for planning, support to implementation and evaluation;
Advise, develop and review (as appropriate) initial DDR functional strategy and concept of operations for further development into a full programme by the DDR component and the National DDR Commission;
Provide Headquarters support in planning the civilian and military logistics support for DDR;
Continually review DDR programme strategy and implementation through relevant documents, reports and code cables;
Conduct field missions to assess implementation of established DDR programmes;
Identify potential problems and issues to be addressed and suggest remedies to DDR units in the field; and
Liaise with others (UN, regional organizations [sic] and Member States) providing DDR training.
As if the list of tasks assigned to the disarmament specialist isn’t enough to fire up patriots who own firearms and refuse to have them seized by the UN or the Obama administration, the UN wants to base this office in New York City!
It is more than a little incompatible that a country that places such a high value on gun ownership that it enshrined it in its Bill of Rights participates in an organization that has such disdain and disregard for those rights that it is opening a disarmament office in that country.
Lest anyone think that there’s nothing to fear from this agent of disarmament, consider the definitions of disarmament, demobilization, and reintegration provided by the UN on an information page linked to the job opening announcement:
Disarmament is the collection, documentation, control and disposal of small arms, ammunition, explosives and light and heavy weapons from combatants and often from the civilian population.
Demobilization is the formal and controlled discharge of active combatants from armed forces and groups, including a phase of “reinsertion” which provides short-term assistance to ex-combatants.
Reintegration is the process by which ex-combatants acquire civilian status and gain sustainable employment and income. It is a political, social and economic process with an open time-frame, primarily taking place in communities at the local level.
The objective of the DDR process is to contribute to security and stability in post-conflict environments so that recovery and development can begin. DDR helps create an enabling environment for political and peace processes by dealing with security problem that arises when ex-combatants are trying to adjust to normal life, during the vital transition period from conflict to peace and development.
Notably, the UN ……”
Comments »Documentary: Capitalism Is The Crisis
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The Four Horsemen of the Geopolitical Apocalypse
“Ian Bremmer, NYU professor and head of the geopolitical consulting powerhouse Eurasia Group, consults at the highest levels with both governments and companies because he brings to the table robust geopolitical analysis and a compelling thesis: that we are witnessing “the creative destruction of the old geopolitical order.” We live, as his last book told us, in a “G-0” world. In today’s Outside the Box, Ian spells out what that creative destruction means in terms of events on the ground today. As Ian notes, the most prominent feature of the international landscape this year has been the expansion of geopolitical conflict. That expansion is gaining momentum, he says, creating larger-scale crises and sharpening market volatility.
Hold on to the reins now as Ian take us for a ride with the “Four Horsemen of the Geopolitical Apocalypse.” (For more information about the Eurasia Group or to contact Ian Bremmer, please email Kim Tran at [email protected].)
We’ll follow up Ian’s piece with an excellent short analysis of the Iraq situation from a Middle East expert at a large hedge fund I correspond with. Pretty straightforward take on the situation with regard to ISIS. This quagmire has real implications for the world oil supply. (It appears that the Sunni rebel forces are now in complete control of the key Baiji Refinery, which produces a third of Iraq’s output.)
Back in Dallas, it’s a little hard to focus on geopolitical events when seemingly all the news is about ongoing domestic crises. But the outrageous IRS loss of emails doesn’t really affect our portfolios all that much. What happens in Iraq or with China does. There’s just not the emotional impact.
One domestic humanitarian crisis that is brewing just south of me is the massive influx of very young children across the US-Mexican border. When this was first brought to my attention a few weeks ago, I must admit that I questioned the credibility of the source. We have had young children walking across the Texas border for decades but always in rather small numbers. The first source I read said that 40,000 had already come over this year. I just found that to be non-credible, but then with a little reasonable research it not only became believable but could be a bit low – it looks as many as 90,000 children will cross the border this year.
What in the name of the Wide Wide World of Sports is going on? First of all, how do you cover up something of this magnitude until it is a true crisis? When the administration and other authorities clearly knew about it last year? (The evidence is irrefutable. They knew.)
I am the father of five adopted children. In an earlier phase of my life, I was somewhat involved with Child Protective Services here in Texas. It was an emotionally difficult and heartrending experience. (One of my children came out of that system and three from outside of the United States). I have no idea how you care for 90,000 children who don’t speak the language and have no connection to their new locale. Forget the dollar cost, which could run into the tens of billions over time. These are children, and they are on our doorstep and our watch. You simply can’t ignore them and say, “They are not supposed to be here, so it’s not our responsibility.” They are children. Someone, and that means here in the US, is going to have to figure out how to take care of them, even if it is only to learn why they try to come and figure out where to send them back to. And frankly, trying to to send them back is going to be a logistical and legal nightmare, not to mention psychologically traumatic to the children.
Maybe someone thought that waiting until there was a crisis to let this information slip out (and we found out about it because of photos posted anonymously of children packed together in holding cells) would create momentum for immigration reform. And they may be right. But I’m not certain it’s going to result in the type of immigration reform they were hoping to get.
I have to admit that I’ve been rather tolerant of illegal immigrants over the course of my life. There are a dozen or so key issues that I think this country should focus on, but I’ve just never gotten that worked up about illegal immigration. The simple fact is that everyone here in the US is either an immigrant or descended from immigrants. It may be, too, that I’ve hired a few undocumented workers here and there in my life. As an economist, I know that we should be trying to figure out how to get more capable immigrants here, not less. What you want are educated young people who are motivated to create and work, not children as young as four or five years old who are going to need housing, education, adult supervision, healthcare, and most of all a loving environment where they can grow up.
It is one thing for undocumented workers to come across the border looking for jobs or for families to come across together. It is a completely different matter when tens of thousands of preteen children come across the border without parents or supervision. They didn’t get across 1500 miles of desert without significant support and a great deal of planning. This couldn’t be happening without the awareness of authorities in Mexico and the Central American countries from which these children come, and if this is truly a surprise to Homeland Security, then there is a significant failure somewhere in the system.
And if it was not a surprise? That begs a whole different series of questions.
This is a major humanitarian crisis, and it is not in the Middle East or Africa. It is on our border, and we need to figure out what to do about it NOW!
I don’t care whether you think we need to build a 20-foot-high wall across the southern border of the United States or give amnesty to anyone who wants to come in (or both), something has to be done with these children. It is a staggering problem of enormous logistical proportions, and we have a simple human responsibility to take care of those who cannot take care of themselves.
And on that note I will go ahead and hit the send button, and let’s focus on the critical geopolitical events happening around the globe. Iraq is a disaster. Ukraine is a crisis. What’s happening in the China Sea is troubling. It just seems to come at you from everywhere. Even on a beautiful summer day.
Your stunned by the magnitude of it all at analyst,
John Mauldin, Editor
Outside the Box[email protected]
(From Ian Bremmer)
dear john,
we’re halfway through 2014, and the single most notable feature of the international landscape has been the expansion of geopolitical conflict. why should we care? what’s the impact; what does it mean for the global economy? how should we think about geopolitics?
my thoughts on the topic, looking at the four key geopolitical pieces “in play”–in eurasia, the middle east, asia, and the transatlantic.
geopolitics
i’ve written for several years about the root causes of the geopolitical instability the world is presently experiencing. a new, g-zero world where the united states is less interested in providing global leadership and nobody else is willing or able to step into that role. that primary leadership vacuum is set against a context of competing foreign policy priorities from increasingly powerful emerging markets (with very different political and economic systems) and a germany-led europe; challenges to the international system from a revisionist russia in decline; and difficulties in coordination from a proliferation of relevant state and non-state actors even when interests are aligned. all of this has stirred tensions in the aftermath of the financial crisis: instability across the middle east after a stillborn arab spring; a three-year syrian civil war; a failed russia “reset”; rising conflict between china and japan; fraying american alliances with countries like brazil, germany, and saudi arabia.
and yet geopolitical concerns haven’t particularly changed our views on global markets. each conflict has been small and self-contained (or the spillover wasn’t perceived to matter much). geopolitics has been troubling on the margins but not worth more than a fret.
that’s about to change. though perceived as discrete events, the rise of these geopolitical tensions are all directly linked to the creative destruction of the old geopolitical order. it’s a process that’s gaining momentum, creating in turn larger-scale crises and broader market volatility. we’ve now reached the point where near- to mid-term outcomes of several geopolitical conflicts could become major drivers of the global economy. that’s true of russia/ukraine, iraq, the east and south china seas and us/europe. in each, the status quo is unsustainable (though for very different reasons). and so, as it were, the four horsemen of the geopolitical apocalypse.
Russia/IUkraine….”
Comments »The Most Overbought Stocks in the S&P 500
“Even though we are witnessing all-time highs on the S&P 500 , there are a few stocks that are extremely overbought, in particular, five names, three on the NYSE and two on the Nasdaq. While the index itself may not need to be sold at this point, knowing which individual issues are overbought can help an investor know when to reallocate some cash.
In order, the following names are the most overbought…..”
Comments »ACLU Report: War Comes Home
“As the number of troop-heavy foreign interventions decreases, the warcraft and weaponry used in battle are now being deployed in neighborhoods as members and machines of law enforcement become increasingly indistinguishable from those of the military.
This is the situation as revealed in a new report published by the American Civil Liberties Union (ACLU) entitled “War Comes Home: The Excessive Militarization of American Policing.”
“A SWAT team blew a hole in my 2 year-old son” is perhaps the best example of a headline announcing the horrific impact this conversion can have when left unchecked.
As reported by The New American, a toddler is in a medically induced coma after a Cornelia, Georgia, SWAT team tossed a flash-bang grenade into his crib during the execution of a “no-knock” warrant.
Bounkham Phonesavanh is 19 months old and was asleep in his crib when police broke down the front door in the early morning hours on May 28 and threw the grenade into the front room. His mother, father, and three sisters were in the room as well.
Earlier this week, the baby’s mother, Alecia Phonesavanh, described the ordeal in detail, including the relevant account of the near fatal blurring of the line between soldier and cop:
Flashbang grenades were created for soldiers to use during battle. When they explode, the noise is so loud and the flash is so bright that anyone close by is temporarily blinded and deafened. It’s been three weeks since the flashbang exploded next to my sleeping baby, and he’s still covered in burns.
The ACLU provides a brief history of the creation and transformation of SWAT:
SWAT [Special Weapons And Tactics] teams were created in the late 1960s as “quasi-militaristic” squads capable of addressing serious and violent situations that presented imminent threats such as riots, barricade and hostage scenarios, and active shooter or sniper situations. The first SWAT team, at the Los Angeles Police Department, was developed in the wake of a series of emergency situations in which local police felt unable to respond as swiftly or as effectively as was necessary. SWAT teams have since expanded in number, and are used with greater frequency and, increasingly, for purposes for which they were not originally intended — overwhelmingly to serve search warrants in drug investigations.
In the case of Bounkham Phonesavanh, SWAT team members executed the no-knock warrant after receiving a tip from an informant that he had bought methamphetamine from a man named Wanis Thometheva earlier that day. Precisely the perversion of the power documented in the ACLU report.
“War Comes Home” observes 818 SWAT operations from July 2010 to October 2013. These operations were carried out by more than 20 law enforcement agencies in 11 states.
The 96-page report reveals that the increasingly militaristic police — forces equipped, trained, and often outfitted by the Pentagon — are behaving with a belligerence more at home on the battlefield in the face of an armed enemy than in neighborhoods while performing routine duties once accomplished with little more than a squad car and a badge……”
Comments »The EU Sinks Its Claws Into Ukraine, Georgia, & Moldova
“BRUSSELS—The European Union and three of Russia’s neighbors signed sweeping trade-and-political agreements Friday, pushing the bloc’s influence eastward but potentially provoking fresh tensions with Moscow.
The deals with Ukraine, Georgia and Moldova, which lower trade barriers and promote democratic reforms, were years in the making but faced doubts recently as Moscow stepped up its opposition. Russia, which annexed Ukraine’s Crimea region in March, has said it might retaliate against the three countries by curtailing trade ties.
But EU leaders want to show they won’t let a newly aggressive Russia deter them from welcoming countries into the European orbit. Many nations on Russia’s periphery have become more eager to align with the EU as a way to protect themselves against potential Russian threats.
The leaders of Ukraine, Georgia and Moldova said Friday that the agreements are a pivotal step in aligning their countries permanently with Europe. Ukrainian President Petro Poroshenko stressed the rapid changes engulfing his country in recent months, including street protests and the previous government’s ouster, that led to this moment.
“What a great day—maybe the most important day for my country after independence day,” Mr. Poroshenko said as the heads of all 28 EU countries looked on. “It shows how dramatically things can change in a short time, if the will of the people is strong enough.”
But leaders of both sides warned of challenges ahead. EU officials stressed that the three countries must keep up their reforms. Mr. Poroshenko said the EU must stand by Ukraine as it goes through a tough transition in the face of Russian displeasure…..”
Comments »ISIS & WWIII: Some Hidden History and One Man’s View
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Comments »Read A Mother Fuckin’ Book
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Comments »Spain Creates a Levy on Bank Deposits
State of the Union: Amare-reeka (sic) May Go Balkan Style for The Ends
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Comments »Everyday People Being Labled to Sway Your Opinion
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Comments »The House Speaker Plans a Lawsuit Against Obama for Abuse of Power
“House Speaker John Boehner (shown) announced on Wednesday that he would be filing suit against President Obama over his abuse of executive power. Boehner indicates that he had been mulling over the decision recently but that his concerns over Obama’s refusal to comply with constitutional limitations has helped him to decide in favor of a suit.
“The Constitution makes it clear that a president’s job is to faithfully execute the laws. In my view, the president has not faithfully executed the laws,” the Ohio Republican said on Wednesday. “When there are conflicts like this between the legislative branch and the administrative branch, it’s … our responsibility to stand up for this institution.”
Boehner’s announcement is not a complete shock, as Republicans have been vocal about their frustration with the president’s abuse of executive powers, particularly in his second term.
Fox News reports, “Republicans have voiced frustration with Obama’s second-term ‘pen and phone’ strategy of pursuing policy changes without Congress — particularly environmental rules via the Environmental Protection Agency.”
In March, the House of Representatives passed a bill that would speed up potential lawsuits against the president, but the Senate refused to take up the bill.
According to Boehner’s spokesman Michael Steel, the Senate’s failure has forced the House to pursue alternative options. “The president has a clear record of ignoring the American people’s elected representatives and exceeding his constitutional authority, which has dangerous implications for both our system of government and our economy,” Steel said in a statement.
And though Boehner’s announcement follows on the heels of various threats to launch impeachment proceedings against the president, he assures that the lawsuit is not about impeachment, but about ensuring that the president adheres to constitutional authority.
“This is not about impeachment — it’s about him faithfully executing the laws of this county,” Boehner said. “My view is the president has not faithfully executed the laws. What we have seen clearly over the last five years is an effort to erode the power of the Legislative Branch.” Boehner added that it is not simply that Obama ignores the law, but that he virtually “brags about” doing so.
President Obama had said that 2014 would be a “year of action,” and he has spent much of it issuing executive orders on things such as minimum wage, federal pay discrimination, and newly announced regulations from the Environmental Protection Agency on carbon admissions. The president has also taken administrative action to delay parts of the Affordable Care Act.
Boehner has not yet filed the lawsuit, but said on Wednesday that he plans to do so….”
Comments »Gazprom is Considering All Contracts in Yuan or Rubles
“A little over a month ago, when Russia announced the much anticipated “Holy Grail” energy deal with China, some were disappointed that despite this symbolic agreement meant to break the petrodollar’s stranglehold on the rest of the world, neither Russia nor China announced payment terms to be in anything but dollars. In doing so they admitted that while both nations are eager to move away from a US Dollar reserve currency, neither is yet able to provide an alternative. This changed rather dramatically overnight when in a little noticed statement, Gazprom’s CFO Andrey Kruglov uttered the magic words (via Bloomberg):
- GAZPROM READY TO SETTLE CHINA CONTRACTS IN YUAN OR RUBLES: CFO
In other words just as the US may or may not be preparing to export crude – a step which would weaken the dollar’s reserve status as traditional US oil trading partners will need to find other import customers who pay in non-USD currencies – the world’s two other superpowers are preparing to respond. And once the bilateral trade in Rubles or Renminbi is established, the rest of the energy world will piggyback.
But wait, there’s more. Because only now does Gazprom appear to be unveiling all those “tangents” that were expected to hit the tape in May. Among Kruglov’s other revelations were that Gazprom is in talks on a Hong Kong listing and is weighing the issuance of Yuan bonds. Gazprom is also considering selling bonds in Singapore dollars, the CFO said at briefing in Moscow. Wait, you mean that by alienating and embargoing Russia from western (USD, EUR-denominated) funding markets, it has pushed the country to turn to its pivoting partner, China and thus further cementing the framework for the next Eurasian strategic alliance?
Unpossible
But wait, there’s still more….”
Comments »Dark Cesspool: Will We Ever Clean Up Walls Street ?
“Barclays Plc (BARC) was so bent on lifting its private trading venue to the upper ranks of Wall Street dark pools that it lied to customers and masked the role of high-frequency traders, according to New York’s attorney general.
Barclays falsified marketing materials to hide how much high-frequency traders were buying and selling, according to acomplaint filed today by Eric Schneiderman. Barclays runs one of Wall Street’s largest dark pools, a private trading venue where investors can trade stocks mostly anonymously.
Schneiderman has taken a leading role in seeking to reform how equities trade in the $23 trillion U.S. stock market, examining whether exchanges and dark pools give unfair perks to high-frequency traders. His suit against Barclays says clients such as institutional investors were the losers, led to believe they were safe from predators on a trading venue where aggressive trading strategies were in fact encouraged….”
Comments »Islamic Caliphate is Born, World War III has BEGUN!
“Insanity is coming at US in huge waves. This week really saw a lot of new tea leaves presented to those working through the puzzle of the MAN MADE disaster. We are indeed living in interesting times, and I believe they will be studied and written about for decades and centuries into the future. I also believe this time period offers the greatest opportunity’s in history if played from an applied Austrian economic perspective, and a good handle on history. They are one and the same actually. So let’s look at some of the vignettes we covered this week:
- An Islamic Caliphate has been born, World War III has BEGUN!
- Central Banks Lifeboating themselves
- Highest Market Cap for US bank since 2001?
- The Dollar and the DODO bird
- Friday night info dump
- UNRELIABLE SUPPLY
- SILVER coiled and ready to LAUNCH?
- Federal Reserve FOLLIES
- Political correctness that short circuits an invaluable gathering of EXPERIENCE
An Islamic Caliphate has been born, World War III has BEGUN!
Lightly covered by the Mainstream News, a new and vicious ISLAMIC caliphate has been born and World War III has commenced. The Middle East will be irreparably changed in the near future or should I say engulfed in FLAMES. The spineless leaders of the developed world have allowed order to be DESTROYED rather than place the proper emphasis on peace through strength. Now we will pay the price of the breach for their fiduciary duties. Teddy Roosevelt in 1907 said: “walk softly and carry a big stick”, sadly those wise words have been lost and forgotten. Relearning this will be extremely difficult as humpty dumpty has fallen, and putting him back together again may be an impossible task. Global and regional leadership is dead in the developed world: where are the Reagans, Churchill’s and Thatcher’s of the world for this generation. The bold leaders NOW with visions for the future reside in the Chinas, Russias, Singapores and al Qaedas of the world.
“If history teaches anything, it teaches that simple-minded appeasement or wishful thinking about our adversaries is folly. It means the betrayal of our past, the squandering of our freedom.”
– President Ronald Reagan, 1983
The Caliphate calls itself ISIS (the Islamic States of Iraq and Syria) and is a ruthless Al Qaeda political force. Numerous reports of beheadings, mass executions and random killings to foster TERROR in the eyes of their opponents are occurring and it is working. If you are a Christian or Shiite Muslim, the sentence is immediate death upon discovery or capture. Thousands have already been executed already and posted on the internet. A small army of less than 10,000 men has faced and beaten forces 10 times their size.
Soldiers are taking off their uniforms to avoid certain death that capture insures. Then, the terrorists take the discarded uniforms and use them to move freely behind enemy lines. They have now captured major IRAQI military bases and are well armed and supplied with MODERN WEAPONS. At this point, stopping them is not an option. They then retain the territory, oil fields, refineries and the funds for future JIHAD. I can promise you 10’s of thousands of jihadists are making their way there from around the world to participate in the JIHAD state. They have already looted over $450,000,000 million dollars from banks, while the oil insures ongoing income. This is not a group that wants to live peacefully with their neighbors. No, they want to consolidate long enough to develop plans for the next excursion to expand their territory, treasure and sharia law.
“The Syrians and the Iraqis have made their own beds–so why stick our noses in now? The answer is that al Qaeda, ISIS and others will not stop at Iraq and Syria. Lebanon, Jordan, Israel, Turkey, Egypt, Yemen, Saudi Arabia, the United Arab Emirates and others will be next.”
– General Jack Keane ret.
To them, it is convert to Sunni Islam or be killed as INFIDELS. For many of the terrorists that will not be enough and if they capture the US embassy (to me this is just a matter of time, just like the Viet Nam War). The carnage and death to many Americans is assured. Mercy is and will not be considered. It is part of their power over their adversaries. The power of abject FEAR!
In my opinion the greatest manmade disaster and OPPORTUNITY in history is unfolding in every corner of the world. Are you diversified or operating with EYES WIDE SHUT? Are you prepared to turn it into opportunity by properly diversifying your portfolio? Adding absolute return investments which have the potential to thrive (up and down markets) regardless of what unfolds economically or politically? This is what I do for investors; help them diversify into investments which are created to potentially thrive in the storm. For a personal FREE consultation with me CLICK HERE!
The main stream news breathlessly reports the news without telling the audience the grim conclusions that can already be made. The administration is calling for a multi ethnic reconciliation of the Sunnis, Shiites and Kurds before help is considered, placing an impossible task for the Iraqi government on the table to prevent the US from having any possibility providing assistance. This type of reconciliation takes weeks and months to accomplish… do you really think that republicans and democrats could reconcile overnight in Washington? The world knows through the experience of the last 6 years that there is no challenge or previous commitment from which America will not retreat. This administration in Washington has systematically undermined the strongmen of the Middle East and, if we ever find out the truth, maybe had a hand in overthrowing them. Did any of you think someday you would be rooting for IRAN to prevail in IRAQ? Me neither but now it is in my daily prayers as the developed world will just sit around and let us be destroyed. There is no shrinking from this moment. We must confront it or be killed by it as we shall soon see!
“Think subcontracting the job to Iran is the right call? Surely, no one wishes a Middle East managed by the ayatollahs in Tehran. Don’t care? Remember the admonition of the 9/11 Commission: “The most important failure was one of imagination.” Imagine what controlling vast areas of the Middle East will do for extremists of all stripes.”
– General Jack Keane ret.
Say what you will about Saddam Hussein, Moamar Qaddafi and Hosni Mubarak, strong men and dictators who held power in an iron and sadistic grip. But they all understood the DEADLY NATURE of FUNDAMENTALIST ISLAM and DID NOT ALLOW IT TO GAIN FOOTHOLDS in their COUNTRIES. They also controlled the thousands of years of tribal animosities in their countries, which as we can see was and is enormous. Just stopping ISIS is insufficient. They must completely be vanquished and the territory they hold liberated. Nothing less, or a regional war will widen into conflicts/attacks throughout Europe and then the world. Nothing like that will be considered by the developed world and many in the Middle East wish to see the latter happen. ISIS has been primarily funded by Saudi Arabia, Qatar, and Kuwait up to this point. Since the conflict has flared, Putin has sent arms, tanks and supplies into Ukraine in the last week. When can we expect the next move by China to be? Will they widen their grasp of the South China Sea? SOON! A weak US military and NATO will be challenged as NEVER BEFORE around the world. The socialists and leaders of the developed world are weak as kittens and spineless as worms. Mark my word, World War III has JUST BEGUN!
It has been a wild and woolly weekend as the news just keeps shocking a numb population too weary to keep up with the tea leaves: Important announcements about central banks lifeboating themselves from their own money printing, rotating HUGE parts of their reserves from INTANGIBLE financial assets to tangibles.
Central Banks Lifeboating themselves…..”
Comments »
Nobelist Merton: 401ks Face a Crisis
“Since the dark days of 2008, employers have taken some steps to fix the 401(k), the backbone of the nation’s private retirement-savings system. But Nobel laureateRobert C. Merton says that in the rush to upgrade these plans, plan sponsors and administrators have overlooked one big problem: They are managing these plans with the wrong goal in mind.
- Bloomberg News
- Merton says a crisis is coming for 401(k) investors.
“The seeds of an investment crisis have been sown,” the MIT professor of finance writes in an article in the July-August issue of Harvard Business Review, which was published Tuesday. “The only way to avoid a catastrophe is for plan participants, professionals, and regulators to shift the mind-set and metrics from asset value to income,” writes Merton, who won the Nobel Prize in Economics in 1997.
In recent years, employers have tried to improve 401(k)s by introducing features such as automatic enrollment and products including target-date funds. But in his article and in a recent interview with Encore, Merton said these moves weren’t likely to be sufficient. To fix the 401(k), he argues, employers and the financial services companies that manage these plans must get past the ongoing obsession with two things: Account balances and annual returns. These metrics, Merton says, are far less important than one other: The amount of sustainable income an employee can expect to receive in retirement.
By disclosing annual income, instead of (or in addition to) an account balance, Merton says, employers will help employees quickly and easily calculate how much of their annual salary they can expect to replace in retirement, together with Social Security. As a result, employees will be better able to take action to ensure they are on track to retire as planned.
But that’s only half the battle. In order to accurately calculate how much retirement income a participant’s 401(k) balance will purchase, the plan sponsor must assume the money will be invested in an inflation-adjusted deferred annuity or long-term U.S. Treasury bonds. These investments, Merton writes, ensure “spendable income” that’s “secure for the life” of the bond or annuity and are “the very assets that are the safest from a retirement income perspective.”
That’s not to say that 401(k) money shouldn’t be invested in stocks. In fact, Merton says, 401(k) investment managers should invest participants’ savings in a mixture of “risky assets,” including equities, and “risk-free assets,” such as long-term U.S. Treasuries and deferred annuities…..”
Comments »
The U.S. Readies Itself to Export Its First Black Gold Shipment Since the 70s
“The Obama administration cleared the way for the first exports of unrefined American oil in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling U.S. oil abroad.
In separate rulings that haven’t been announced, the Commerce Department gave Pioneer Natural Resources Co. and Enterprise Products Partners LP permission to ship a type of ultralight oil known as condensate to foreign buyers. The buyers could turn the oil into gasoline, jet fuel and diesel.
The shipments could begin as soon as August and are likely to be small, people familiar with the matter said. It isn’t clear how much oil the two companies are allowed to export under the rulings, which were issued since the start of this year. The Commerce Department’s Bureau of Industry and Security approved the moves using a process known as a private ruling.
For now, the rulings apply narrowly to the two companies, which said they sought permission to export processed condensate from south Texas’ Eagle Ford Shale formation. The government’s approval is likely to encourage similar requests from other companies, and the Commerce Department is working on industrywide guidelines that could make it even easier for companies to sell U.S. oil abroad.
In a statement Tuesday night, the Commerce Department said there has been “no change in policy on crude oil exports.”
Under rules imposed after the Arab oil embargo of the 1970s, U.S. companies can export refined fuel such as gasoline and diesel but not oil itself except in limited circumstances that require a special license. The embargo essentially excludes Canada, where U.S. oil can flow with a special permit.
Lawmakers enacted the ban after Arab countries declared an embargo on shipments to Western nations because of their support for Israel in the Yom Kippur War. The embargo caused oil prices to quadruple and led to rationing at gas stations across the U.S.
But as drilling companies tap shale formations across the U.S., so much oil is flooding out of the ground that prices for ultralight oil have fallen as much as $10 or more below the price of traditional crude. As a result, producers have lobbied aggressively to relax the export ban, saying they could get a higher price from foreign buyers than from U.S. refiners…..”
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