Wednesday, July 31, 2013

My Hat Is Off To Mark Zuckerberg-The Zimbabwe Election Miracle!

My hat is off to Mark Zuckerberg this morning. It's not because Facebook shares are skyrocketing up. It's because of what is happening in Zimbabwe. For the first time in 33 years I am seeing what appears to be a basically honest election in Zimbabwe. I am following the action on Facebook and on News 24. Will Robert Mugabe get kicked out? I hope so but can not guarantee it. I credit Facebook with this wonderful change of events. Mugabe and his thugs know that the whole world is watching them every second and they are being very careful. Morgan Tsvangarai you are a man of great courage and vision. You are on my short list of most admired people.

Dear friends imagine if Facebook had been around in the days of Hitler,Stalin, the military dictatorship in Argentina, etc. It would have been a different world with far less dead bodies.

Mark you are a revolutionary and a great visionary. If I was talking to you in person, I'm sure that you would respond with the words:"You ain't seen nothing yet!!!!"

The Mega Cities Of The World-This Is Fascinating!


Tuesday, July 30, 2013

JacksMars: Private Companies Head For Space

JacksMars: Private Companies Head For Space: July 29, 2013 7:09 pm When gravity is no obstacle By Alicia Clegg ©Mark Greenberg High hopes: The Virgin Galactic S...

Monday, July 29, 2013

Two Ballpoint Pens From 16.5 Years Ago

The small things in life should mean a lot to you. Sixteen and a half years ago I was awarded two ball point pens by the George S. May Company. These pens were given to me by my boss at the time, Steven Sanchez, for excellent sales performance. Despite all of my good work, I cleared less than $400 every two weeks. I rode a bicycle (that I still have hanging in my garage). I had no medical insurance. I could not even afford to rent a room on this salary. I lived in a homeless shelter. In the end the taxpayers and charities of Santa Clara County, California were subsidizing this company so that it could pay exploitation wages to its workers. Walmart knows this story well. This is how they prosper.
On the other hand that miserable exploitation job gave me pride and hope in life. It also matches with that old saying: "Once you have a job you can always get another one."
I carry these pens with me every day to remind me of how far that I had come in life. It gives me humility. 
After George S. May Company I was very lucky to get a job with an incredible man who owned a trading company in Holland. He gave me some profound words of wisdom as follows: "Jack I could lose it all tomorrow." I never forget those words. Everyday I'm thankful for what I have and humble. Many people down at the bottom are never fortunate enough to pull themselves up. The millions of poor people,even in a rich country like the US, are living proof of this.

Sunday, July 28, 2013

Race to Mars Part 1

Kaiser Permanente's Robert Pearl, MD, Launches Blog at | Kaiser Permanente News Center

Kaiser Permanente's Robert Pearl, MD, Launches Blog at | Kaiser Permanente News Center:

'via Blog this'

On Being A Problem Solver

If you asked me to describe myself in a short phrase, it could be as follows: "A problem solver." I love to take things that are not working right and fix them. I did a lot of that work yesterday. Elena became concerned about the fees on her 401(K) from her place of employment. I did a careful analysis. Much to my pleasant surprise, most of the funds in her account charged zero fees. I did find three funds with poor performance and high fees. I moved her out of these funds. Then I looked at a problem from the electric company PG&E. Our monthly bill literally had gone up 50% or more. This was quite concerning considering the fact that we had spent a lot of money during the recent remodel to make the house more energy efficient. I looked at consumption and billing. Consumption of electricity and gas had dropped. We are now on an energy averaging monthly bill. The increase was due to an accounting matter and not increased consumption. Monday I will go back to a pay as you go monthly bill.

Saturday, July 27, 2013

The Co-Creator Of The Simpsons Is Terminally Ill With Colon Cancer

The animated television series The Simpsons has been part of my life for almost 25 years. It's cute. It's original. It appeals to people of all ages and political ideologies. It has an incredible audience all over the world. It also never loses its appeal and popularity. I got the sad news that one of its co-creators, Mat Groening, who is 58 years of age was diagnosed with terminal colon cancer and has 3 months to 6 months left to live. Matt is a man of incredible achievements in life including 9 Emmy awards. He graduated from Stanford and now lives in Malibu. Sadly Colon cancer is curable if detected in time. A colonoscopy might have saved his life.
Matt has decided to donate the bulk of his substantial fortune to charity and this is very touching. He is animal lover. So animals will be well provided for in his will.
My dear friends with all of his talent,money and power, his life is being unfairly taken away from him. None of us knows how much time we have left. We should treasure every day on earth.

Thursday, July 25, 2013

Some Good Advice From Stratfor

My friends Stratfor is a private intelligence agency. I am a low-level subscriber (Some corporate CEOs and world leaders pay up to $100.000 per year for their superb services.) I tell friends that I get a better intelligence briefing each morning than President Obama gets. For example last year we had to go with a family member to Tijuana, Mexico. Elena as quite worried about dangers from drug cartel activities there. I contacted Stratfor and did research on Tijuana. It is under the jurisdiction of the Sinalola cartel. This cartel tries to keep a low profile and rarely resorts to violence. With this information in hand we took a trip to Tijuana. It was an enjoyable day. The only hassle we had was with US immigration coming back to the US. Stratfor has a simple recommendation for all travelers. Always carry a small flashlight with you. This could be a life saver if you have problems on an aircraft or a power failure in a hotel room in some foreign country (Not as unusual as you would think.)

Jack's South America: China's Growing Interest In The Latin American Ene...

Jack's South America: China's Growing Interest In The Latin American Ene...: China's Expanding Involvement in the Latin American Energy Sector Analysis JULY 25, 2013 | 0549    Print    Text Size...

Wednesday, July 24, 2013

Jack's South America: A Great Little Novel About The Dirty War in Argent...

Jack's South America: A Great Little Novel About The Dirty War in Argent...: I am a survivor of two military governments-Peru and Brasil during the 1970's. Peru's military government was benign with more inti...

The Facebook Revolution And Africa

I first got interested in Zimbabwe when I was a student at Tulane University. My first wife and I befriended a man from Zimbabwe named Mutizwa Chirunga who was also a Tulane student. When his son was born, we were the only Europeans invited to the christening ceremony. In 1981 I went to Zimbabwe and spent some days there. In 1984 I became friends with a man named Brian Lawrence when I lived in Perth, West Australia. He was from Zimbabwe. In 1999 I became friends with a dear and special lady from Zimbabwe named Mandy Findlater. In 2004 I opened a retirement account at Imara SP Reid in Johannesburg. It is a company owned by people from Zimbabwe and an excellent investment firm. In 2006 Elena and I were talked into investing in the Zimbabwe share market. Our holdings were worth literally billions of Zimbabwe dollars for a while. (I always kid Elena that it was the only time in her life when she was a billionaire.) I have closely followed the political turmoil there. Each time an election took place there was violence and intimidation on a grand scale to insure that Robert Mugabe stayed in power. In this particular election the opponent, Morgan Tsvangarai, has made great use of Facebook. This seems to have made Mugabe's people more cautious. I have heard no reports of violence or outright intimidation. Instead it appears that Mugabe has resorted to handing out money and other kinder tactics to win votes. To me this is proof of how effective Facebook is to bring transparency to elections and other events. Mark Zuckerbeg you have created a social revolution in ways you may have never imagined!

The Detroit Bankruptcy Will Have Huge After Shocks

July 23, 2013 7:33 pm

Detroit aftershocks will be staggering

Leaders across the country cannot continue as they have, says Meredith Whitney
The Detroit skyline©Bloomberg
As jarring as the reality may be to accept,Detroit’s decision last week to declare bankruptcy should not be regarded as a one-off in the US municipal market – which is what the bond-peddlers are now telling their clients. The aftershocks of the largest municipal bankruptcy in US history will be staggering, and Detroit will set important precedents.
Municipal bankruptcies have historically been rare for a number of reasons – including the states’ determination to preserve their credit ratings, their access to cheap funding and the stigma of bankruptcy. But, these days, things are very different in the world of municipal finance.





At the root of the problem is the incentive system that elected officials used to face. For decades, across the US, local leaders ran up tabs for future taxpayers; they promised pensions and other benefits for public employees that have strong legal protection. That has been a great source of patronage for elected officials: they can promise all sorts of future perks to loyal supporters (state and local workers) with very little accountability on the delivery of those promises.
Today, we are left with the legacies of this waste. The bill for promises past is now so large for some cities and towns that it is crowding out money for the most basic of services – in the case of Detroit, it could not even afford to run its traffic lights. Across many American cities, cuts to basic social services have already been so deep that they have made the communities unpleasant places.
This is, in part, because of a strange legal position. Over the past decade, US states’ finances have run deficits in more years than they have not. But, of the 50 states, 49 are constitutionally required to balance their budgets; quick cuts to social services were largely used to bridge the gaps. This meant delays in infrastructure projects, delays in basic maintenance of roads, bridges, and schools, cuts to school and higher education.
This type of cut is allowed by state constitutions. But, under the same laws, cuts to pension and benefit costs or debt service payments are often not permitted. In other words, education and public safety tend not to be safeguarded by constitutions but pensions and repayments on municipal bonds are. So, over the past several years, basic social services have steadily eroded, and in most cases home values have declined, crime rates have soared and education has suffered.
Rotten public services take a toll on home values and business investment alike. After all, what makes one neighbourhood worth more than another is the perceived value advantage of its schools, safety, public parks and libraries. Cuts in services happen even when taxes go up; the combination acts to drive out businesses and other taxpayers from the area. This sets off the negative feedback loop from hell.
So leaders across the country cannot continue as they have. They must choose sides because there is simply not enough money to go around. Will they side with taxpayers, unions or the municipal bondholders? If they back residents, money will be directed to underfunded public services at the expense of pensions and bondholders. If they side with the unions, social services will continue to be cut and the risk to bondholders will increase considerably. If they side with bondholders, social services and pensions are at risk.
Up to this point, it has taken either an incredibly daring elected official to stand up for taxpayers or, in the case of Detroit, an appointed official (read “unelected”) whose mandate has been the “emergency management” of the city. After decades of near-third-world conditions in the richest country in the world, the city finally stood up and said enough was enough. Officials could raise taxes further and cut social services deeper but leaders are finding these once “go-to” measures to be counterproductive. They are destructive to the very sustainability of the city.
Since the credit crisis, taxpayers have paid most dearly in terms of reduced social services while paying the same or often higher tax bills. Increasingly, unions are being asked to make concessions on pensions and benefits. And – now – bondholders, who up until last week thought they would be protected in almost any scenario, are being forced to make a contribution to the fiscal problem. Elected officials, for the first time in a very long time, are siding with residents. This is a new precedent that boils down to the straightforward reality of the survival and sustainability of a town or city.
There are five more towns like Detroit in Michigan alone. There are many more municipalities across the country in similar positions. Detroit’s decision last week paves the way for other elected or non-elected officials to make decisions to save their cities and towns, decisions that probably involve politically unpopular actions that may secure their long-term viability.
The writer is author of ‘Fate of the States’
Copyright The Financial Times Limited 2013. You may share using our article tools.
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  1. Reportbeachcomber | July 24 12:55pm | Permalink
    As often the case, the comments are more insightful than the article. And regarding Ms Whitney's prescience, contrarian economists have been foretelling this for years.
    It seems that the system (like most political systems) is corrupt, ineffectual and inefficient - to see it in graphic full colour, watch the TV series Brotherhood.
  2. ReportRiskMan81 | July 24 12:53pm | Permalink
    Technical point: you mean "bad feedback loop" not "negative feedback loop". In a negative feedback loop, a change reverses itself so as to restore the original equilibrium. In a positvie feedback loop, a change amplifies so that there is a runaway process (which can be good or bad, depending on what it is).
  3. ReportSelf Deployed | July 24 11:09am | Permalink
    Detroit is done. Stick a fork in it. Time to level most buildings and sell the rust metal to scrap.
  4. ReportDallas01 | July 24 10:54am | Permalink
    Progressive leadership and policies since 1961.
  5. Reportfortius68 | July 24 10:35am | Permalink
    Crime rates are down. Read the recent issue of the Economist. Stop being such an alarmist. All we need to do is cut pension benefits in Chapter 11, get rid of excess fat and the ctiy can rebuild from a clean slate ...GM did this, why not Detroit? The fat cat city workers have had it good for too long like the unionized GM workers did....they just need to scale back and allow for more efficient allocation of capital.
  6. ReportFT reader No. 215441 | July 24 10:27am | Permalink
    I'm Ron Burgundy?,

    precisely. Even a broken clock shows the correct time twice a day
  7. ReportNobby | July 24 10:12am | Permalink
    There are two enormously important points to be learnt from Detroit.

    Firstly, the actuarial accounting for pension solvency is a complete joke. Local governments are given far too much leeway in investment return assumptions (8% pa for a bond fund, hello?) and mortality profiles, which have allowed solvency problems to remain under the surface. The bizarre part is the hidden problem has also resulted in fund managers investing in far too risky investments, such as private equity, structured credits and other deals that were nothing more than a "Hail Mary".

    Interestingly, the old actuarial method was abandoned for corporate schemes around a decade ago, when US accounting standards started to move towards an international standard. The big problem is that making the shift will send shock waves through the Muni markets as people wake up to the real size of the problem.

    The second part is that if you raise taxes and cut spending on the young, people will leave and take their Dollars elsewhere, communities will die and the city will become nothing more than an insolvent nursing home. If you are cutting school classes, closing schools in order to pay pensions to school administrators that retired at 55 on a $200k pension, then your city is going to die a slow, miserable death.
  8. ReportI'm Ron Burgundy? | July 24 9:56am | Permalink
    Well if you keep saying it, you'll be right eventually I suppose...
  9. ReportAdamFforde | July 24 9:39am | Permalink
    Add it all up and what does that suggest for the price of US government debt, federally?
  10. ReportNautilus | July 24 9:11am | Permalink
    "Motor City's burning".
  11. ReportMario Varquez | July 24 8:56am | Permalink
    Hail to Meredith.
  12. Reportduvinrouge | July 24 8:38am | Permalink
    Symptomatic of the crisis of neo-liberalism.

    Workers have suffered from the onslaught of neo-liberalism for the last 40 years.
    It started before Thatcher & Reagan, but their policies of attacking unions, privatising & ending capital controls broke the back of social democracy.

    With China opening up, finance capital was only too happy to take advantage of cheaper production costs & to deindustrialise the West. The buying up of US T-Bills by the Chinese & the Arabs in particular has enabled the West to live on credit & prolong US imperialism.

    All on this has its origins in the over-issue of US $'s in the post-war period, culminating in the decoupling from gold in 1971 & the beginnings of fiat money & the growth of finance capital as financialisation took off. It was this material basis that underlies the neo-liberal political ideology.

    But the West can't live on debt forever. When the crisis struck in 2008 Western governments had to bail-out finance capital. How? Largely by buying back the debt they themselves sold to the banks. Private sector debt has been deleveraged & public sector debt has more than replaced it. Total debt in the developed countries has actually increased since 2008.

    It is now evident that all the government & other bad debts bought by central banks cannot be sold back to them without another credit crunch, financial panic & recession. Even the threat of a slow-down in QE sends tremours through the money markets.

    QE can't continue forever otherwise the world's currrencies will be debased. Commoditiy inflation caused by QE can cause revolutions, as we have seen in the Arab world.

    Try as they may to avoid a depression, it will have to come eventually. This is the only way a crisis of overproduction can be resolved. By postponing it with ever increasing amounts of debt the scale of the adjustment (depression) only increases.

    It is admittedly hard to calculate, but it could be that world GDP may reduce by 50% as a result of the necessary deleveraging. Capitalism may not survive that.
  13. ReportHopeSprings | July 24 5:59am | Permalink
    This story has an inevitability about it as well as being universal - politicians bribe the electorate by promising things that will damage the electorate of the future. And damage almost everyone for the future. But does there exist a durable within the current democratic set-up? If anyone would work out such a solution, that would be a pretty good legacy
  14. ReportJ_R | July 24 5:36am | Permalink
    Good article but states are not involved. In the US states can not take bankruptcy anymore than an EZ member can. Besides Michigan there are a lot of municipalities in California in trouble as well. Also there are several states in trouble including California and unlike Greece and the EZ/EU/IMF its unlikely that the US Government will be able to bail them out.
  15. ReportAngry Pig | July 24 3:46am | Permalink
    remember my broker pushing munis, good yield with low risk,
    sub-prime debt was once AAA, alas . . . . . . .
    much of the 1st world is like drunken doped out zombies.
  16. ReportEvad1ne | July 24 3:13am | Permalink
    Meredith Whitney made the mistake in 2009 of tying an economic prediction to a date. It cost her credibility, in spite of the fact her call might just have been too early.

    The major thing to watch is, like Obama with the auto industry, how much will politicians try to vitiate the Rule of Law in favor of political expediency ?
  17. ReportPETER | July 24 3:13am | Permalink
    Thanks, very interesting article, particularly for someone outside the US. Gives some background to the issue
  18. Reportowl | July 24 1:28am | Permalink
    GM went bankrupt, the unions wised up and the world kept turning.

    Where's the beef?
  19. ReportDerek Elder | July 24 12:57am | Permalink
    Of course, this is not happening in the UK, where taxes, national and local, are not being used to top up public sector pension funds, are they?
  20. Reportcpgone | July 23 10:45pm | Permalink
    "because there is simply not enough money to go around"
    Oh come on .Just have Ben hit the print button and bail everybody out of everything. Personal responsibility? Not in America. I mean why should the banksters get all that ZIRP money alone?
    1000 year municipal bonds anyone? Cmon bond salesman. Get out of the strip clubs and start selling.
    I wish she would of named the other towns.
    Real debt of the US is 200 TRILLION . Prof. Kotlikoff,. Get on with the default already
  21. ReportMaistre | July 23 10:19pm | Permalink
    There will be some gut wrenching decisions here. Average pension to Detroit retirees, according to NYTimes, is $19k a year - not much. The corrupt liason between municipal unions and machine politics needs to be dealt with, but squeezing these poor folks seems to be the wrong group to teach the obvious lesson. How about selling the artworks in the museum there that are legal property of the city? Mooted value is $2.5bln. But we need to depend on the saner minds at the federal level not to bail out this city, because once you do, the discipline to fund pensions will disappear all across America. That is why Obama wouldn't give Schwarzenegger what Arnie wanted: a federal guarantee on California bonds, because every other state would follow suit and lose all discipline.
  22. ReportOld School Canuck | July 23 9:58pm | Permalink
    Interesting that "citizens" are not mentioned at all in this piece. Perhaps an indication that the author of this particular commentary is in thrall to the ideology of those who see governments as "the problem." I do not mean to suggest that "government" is "the solution." It is, however, worth considering the possibility that "citizenship"--and the implied principle of "responsibility," both for one's own behaviour also for the society in which one lives (and from which one generally benefits)--are ideas that are too often ignored when these issues are discussed.

    This seems particularly true of politics in the US.
  23. ReportPuddleduck | July 23 9:50pm | Permalink
    I can see how the Detroit situation is carried through in other situations. Whether pension increases and welfare increases are the only cause, or also deteriorating revenue is as well, the other side of spend/tax equation, isn't explored.
    We all know that where you can't cut expenses any further, revenue raising is how income shortages are solved.
    Revenue raising isn't even whispered as a possibility anywhere in the world, never mind the US.
    To make costs affordable, you therefore reduce spending somewhere, you thus take circulating spending money out of a state by reducing costs. Next, the profit making businesses don't have so much spent with them, as a result not so much profit, so state income revenue deteriorates further, next thing, and finally, is bust.
    This happens not only in America but is one problem in the EZ. in that debt problems in the indebted nations has not been covered by increased revenue.
    Exponentially deteriorating revenue, leads to exponentially decreasing spending, leads to riots, and in the end leads exponential deflation all the way to Zimbabwe, where because money making resources have been so destroyed, the only thing you have left is a tiny money pool, huge unemployment, and inflation as pointless as your grannies false teeth.
    I wonder when we in the UK will soon experience the point of no return as well, as GB is doing what Detroit has attempted to do, and what Greece is doing, from what I read, except only voluntarily.
    They are not different, the problem is inability, either by politicial choice or by economic choice, to not raise income by taxation to cover costs so you end up with a whirlpool of money going down the drain to a bl;ack hole somewhere.
    Shylock would have been proud of the world.
    I know the ConDems will be proud, until they recognise that their own wealth, being dependent on spending, in a fountain-up way, the opposite of trickle down.
    Fountain-Up Effect works like this. Those on the bottom, with increased benefit instead of cut benefit, that is to say the unemployed, buy socks, the shop they buy the socks from makes a profit, the shop moves into more expensive premises because of the profit, the company makes more profit, stocks go up when socks are pulled up, and also because of higher rents, the landed gentry also start to see their property folios and then land portfolios increase.
    But at the moment we have the circulating money reduction effect.
  24. ReportTR-2 | July 23 9:34pm | Permalink
    Although this is not news to any politician who has assumed office in the last thirty years, Ms Whitney called this some time ago and she was as right then as she is now.

    Cashing checks at taxpayer expense, modern politicians have been voting themselves into office via public unions not caring, along with union members, that one day there had to be a total collapse of the system. Problem is, it's happening sooner and faster than anyone expected. Happy thought for babyboomers: Nothing but IOUs coming their way; money's gone, gone, gone.

    Though there is one more solution: Throw up another bond issue and see what comes.
  25. ReportMr_sjc | July 23 9:29pm | Permalink
    If the government of the USA can't afford to guarantee the health and pension "rights" of its state employees then surely the government of the UK is in at least as bas a predicament?
  26. ReportFriesWithThat | July 23 9:24pm | Permalink
    @Ms double-barrel

    "Almost all +50,000 US communities are receiving comparable services to pre-2008."

    Where I live in Philadelphia the school system, facing a deficit of $304m, has laid off 20% of school staff this year. What an improvement to get rid of these 3,800 individuals all just bloating the municipal budget, don't you think? Fancy coming here to educate your kids? Thought not.
  27. ReportCatherine Caldwell-Long | July 23 9:14pm | Permalink
    @angus.barber Assured just launched a new monoline yesterday.
  28. Reportangus.barber | July 23 9:05pm | Permalink
    Are there any monolines left to default?
  29. ReportMozzie | July 23 8:39pm | Permalink
    Please heed the wisdom of this.
  30. ReportFederico Mauri | July 23 8:32pm | Permalink
    Bottom-line is that, like here in Italy, also in the US politicians use to exchange pensions and other benefits for votes, and they presented the check to those like me born in the 80s... How should we call this behaviour? Political Costume Globalization?
  31. ReportPAUL A MYERS | July 23 8:26pm | Permalink
    I think 90 percent of this analysis is quite good. In particular, I agree with "Detroit will set important precedents." What might some of these be?

    It seems to me eventually bankruptcy and court rulings, possibly legislation, must establish some hierarchy of priorities among different claims. For example, I would say that a voter-approved bond issue should have a higher priority than a legislatively-approved arrangement. Voter-approved contracts should have higher standing. But maybe not.

    If adjustment is going to disproportionately fall on bond holders, then future infrastructure investment is going to be constrained. That will create winners and losers among local government entities. And most of the time that is how American society works. Well-to-do local governments are going to be advantaged over less prosperous entities. But that is also true today, which is why Detroit is in bankruptcy.

    Will there be widespread municipal defaults? Most likely not. Will municipal finance enter a new era? That is almost certainly the case.
  32. ReportRGB California | July 23 8:11pm | Permalink
    Same thing will happen in many places here in California. Any Blue state really.
  33. ReportCatherine Caldwell-Long | July 23 8:06pm | Permalink
    Oh this again. I guess the FT got so much traffic from Ms. Kellaway's lunch with Ms. Whitney they thought this would be wise.

    Sadly there is no data in this piece only cherry picked anecdotes.

    Crime is declining in the US even with the fiscal distress since 2008:


    US property values, after troughing in 2011, are increasing:

    For pension reform communities have three choice: litigate, negotiate or go bankrupt. 99.99% of communities are litigating or negotiating.


    My own view is that state and local governments never got on the efficiency train and are generally bloated. A period of tight revenues allows reassessment and remaking of service provision. Almost all +50,000 US communities are receiving comparable services to pre-2008.

    As for the nations biggest muni expense, education, time will tell if learning increases or not with tighter budgets. US is not likely now to adopt something like Australia's Gonski program but many have suggested realigning spending out of higher ed to primary/secondary and vocational education. This would be done through state budgets which provides much of the funding.

    Does Detroit presage a wave of muni defaults? No -- but hopefully it will scare local and state legislatures to buckle down and do the hard work of balancing budgets (cutting expenses or raising taxes).