Mikhail Khodorkovsky

This story is interesting. Mikhail Khodorkovsky was one of the wealthiest people in Russia. He was the CEO of the State oil monopoly.

He decided to challenge Putin for leadership of Russia. He was charged with a crime and convicted.

Were the criminal charges punishment, for challenging Putin?

Some of my coworkers are from the Soviet Union. They are much more interested in this story. This story hasn't received much coverage in the USA.

First, the CEO of Russia's oil corporation isn't a real free market enterprise. The Soviet Union oil business was "privatized", which means a handful of insiders still control it. You don't get to be the CEO of a State monopoly unless you're a shady character.

However, "white collar crime" laws are so vague that practically anyone can be convicted. It's even worse in Russia than in the USA.

Why isn't this story publicized more in the USA? I guess that the Soviet Union and Russia are problems that were "solved". Admitting there's corruption now would make it seem like the cold war was a waste.

In the USA, people also are jailed for political reasons. That isn't highly publicized. Robert Kahre, Irwin Shiff, and others were jailed for criticizing the IRS. A pro-State troll says "They were convicted in court. Therefore they're criminals." Any jailed nonviolent offender is a political prisoner. Almost every high-profile critic of the IRS winds up in jail.

Mikhail Khodorkovsky's trial was "fair" in the same sense that "tax protester" trials in the USA are fair. You aren't going to get a fair trial in a State court, especially a politically-motivated prosecution. That occurs both in Russia and in the USA.

Blizzard in NYC

There was a blizzard in NYC. It was more than a foot of snow.

Three days later, they still haven't cleared the roads. Some buses and subway lines aren't operating.

"Clean up after a blizzard" is something government should do well. It's labor intensive and doesn't require any creativity. The snowplows are garbage trucks with a plow attached, driven by sanitation workers already employed by the government.

As usual, the problem is that government has a monopoly. You can't say "You did a lousy job! You're fired!" A lot of people are angry, but nothing will change.

State bureaucrats can claim "It was a lot of snow! This was hard!" It really was a lot of snow, but this is unacceptable. It's already been three days. They have a monopoly, so there's no comparison.

State bureaucrats have no positive obligation to help you. If they do a lousy job with snow removal, that's just too bad.

When I lived in Chicago, they always cleaned up the snow fast. The saying was "There once was a big snowstorm and the government did a lousy job. People were so angry that they couldn't fix the next election. People in Chicago will tolerate all sorts of corruption, but failing to clean up after a blizzard crosses the line." Chicago gets more snow than NYC. They were noticeably better at removing it.

Somewhat predictably, the mainstream media is defending the State. The spin is "Careless drivers who got their cars stuck are to blame. They blocked the plows." Who has a monopoly for helping stuck cars? Another excuse is "It's a lot of snow! We don't have the resources to plow every street!" Downtown Manhattan was well-plowed, but low-income residential areas were not plowed.

In a really free market, people would contract snow removal services directly. In a really free market, if you do a bad job, you lose customers. Pro-State trolls say "The State is needed to deal with emergencies!" When there really is a need, the State does a lousy job, and then State comedians make excuses.

In the present, people in low-income areas get the scraps of State services. They should be able to contract snow removal services directly, and not be forced at gunpoint to pay for lousy State services.

Newark was also unprepared. However, Newark's mayor was active on Twitter. If people used Twitter to ask him for help, he dispatched a crew to help or went himself. It was a good publicity stunt.

The NYC government did a lousy job cleaning up after this blizzard. They have a monopoly. Other causes are blamed, but the real problem is that, with a monopoly, there isn't much incentive to do a good job. Government bureaucrats do not have a positive obligation to help you or protect you. When they fail, you can't fire them and hire replacements. In an election, the leader figureheads are replaced, but most bureaucrats keep their jobs.

Tax Cut Fallacy

There was a big controversy over "extending the Bush tax cuts". It wasn't really a tax cut. After adjusting for inflation, tax rates are higher than when the law was passed in 2000.

Tax brackets are either not indexed for inflation, or indexed via the CPI. The CPI understates true inflation. Due to inflation, everyone is pushed into a higher tax bracket every year.

Consider an example. Suppose the tax schedule is 20% on the first $50k of income, and 50% on income over $50k. Suppose your income is $50k. You owe $10k in taxes, a taxation rate of 20%.

Suppose there is 50% inflation, and your income keeps pace with inflation. Your income is now $75k. You owe $10k on the first $50k and $12.5k on the next $25k. You now pay a total of $22.5k, a taxation rate of 30%.

When you add 10 years of inflation, current taxation rates are *MUCH* higher now compared to 2000. Nominal tax rates are the same. Inflation plus progressive taxation means there's a tax hike every year, even if Congress does nothing.

When Congress first passed the tax cut law in 2000, they only made it last 10 years. That meant in "budget deficit projections", they went back to the old rates. They knew that in 2010, there would be a debate over extending the cuts. Now, Congressmen get to be the good guys, cutting taxes again. If you adjust for inflation properly, current tax rates are still higher than when the "tax cut" was first passed.

There is a progressive taxation schedule plus high inflation. That leads to a tax hike every year, even if nominal rates stay the same. By improperly indexing for inflation, Congress periodically passes a "tax cut law", while simultaneously raising taxes.

Restoring the 2000 tax rate schedule is actually a tax hike, when you consider inflation. The correct answer to the tax debate is "All taxation is theft." Politicians distract this issue, by debating who pays what. No matter what the taxation rate, most insiders are net negative taxpayers. Insiders receive more in government subsidies than the taxes they pay.

For example, suppose Lloyd Blankfein has income of $100M and pays $50M in taxes. He isn't a swell guy who paid $50M in taxes. The reality is that he stole $50M via State violence. Besides, most insiders use trusts and other tricks to lower their taxation rate.

When politicians cut taxes, they seem like good guys, but they're just stealing less. The mainstream media debates a tax hike/cut of a couple percent. They never mention "All taxation is theft".

Healthcare For 9/11 Responders

In the Senate, the Republicans were blocking all other laws, until the "tax bill" was passed. One of the laws they blocked would have provided healthcare for police and fireman who worked at the World Trade Center attack/cleanup. Many of them are sick now, due inhaling smoke/aesbestos/other.

Jon Stewart was ridiculing the Republicans for blocking the law. Normally, the Republicans tout 9/11 at every opportunity, accusing the Democrats of being "soft on terrorism".

The total cost of the 9/11 healthcare law was approximately $7.4B. If you divide by 300M people, that comes to less the $30 per person.

There should be a way for me to pay my $30 share, without paying for all the other stupid and wasteful things that government does. If I could pay just that $30, I'd probably do it. In the present, I already pay a crushing tax burden, so I'm not donating extra.

This illustrates a common politician trick. They bundle several different things together, so that enough Congressmen will vote for it. In this case, the Republicans were blocking all other laws until they got what they wanted.

In January, the Republicans will have more seats in the Senate and a majority in the House. The incentive is for them to stall, because they'll have much more power in January. For the Democrats, this might be their last chance to pass laws they want.

The "9/11 responders healthcare law" is an excellent example of State abuse. There's no way to pay for the few useful things government does, without paying for all the waste and fraud.

Net Neutrality Again

The FCC made another "net neutrality" ruling. It isn't clear if they are legally allowed to do it.

"Net neutrality" is a confusing issue. You might say "It's the phone company's private property. They may do as they please with their property."

The fallacy is that the phone/cable companies have an explicit State-backed monopoly. It's illegal for me to lay wires and start my own ISP. It's illegal for me to put up towers and start selling wireless Internet. The phone corporations were given the monopoly right to use certain frequencies, for free. More precisely, large phone corporations borrowed money from banks/government and bought frequency rights from the government. It was a State-subsidized purchase; their frequency ownership claim is not legitimate.

In a really free market, no net neutrality law would be needed. Any ISP that started acting like jerks would lose customers. In the present, there's a State-backed monopoly/oligopoly; competition is illegal.

Where I live, if I want landline Internet service, my only choices are Verizon or Time-Warner. If I want wireless Internet, it's a small handful of choices. (The smaller vendors have deals to use spare capacity on the bigger networks.)

Consider a regular telephone. If I have a Verizon phone and you have an AT&T phone, I can call you and it works. AT&T doesn't say "This call is from a Verizon customer. I'l make him wait before putting the call through." That is enforced by law. If there was a really free market, they would take each others' calls voluntarily.

For the Internet, phone and cable corporations want to violate net neutrality. They might sign a deal with Microsoft, so that Bing is fast and Google is slow. With a monopoly/oligopoly, customers would be SOL.

It would become effectively illegal to start a new website, unless you bribed the ISPs. Right now, I can buy hosting cheap and get a fast website. If the phone/cable corporations have their way, that might cease.

Right now, it's effectively illegal for me to start a new TV channel. I'd have to arrange a deal with the cable companies, who don't want new competition. If the phone/cable corporations have their way, you'd have to pay each of them a bribe whenever you start a new website.

When I buy Internet access, I'm paying for X usage per month. I should be allowed to use that bandwidth however I please. The phone/cable corporations want to double-bill. Customers pay for service and websites pay for service. Websites that don't sign a deal with each phone/cable corporation would be SOL. Only a large corporation would have the resources to do that. Right now, a website vendor only purchases service from their ISP, just like users. The various ISPs agree to carry each other's traffic, and it evens out.

You can't have half-regulation. If phone/cable corporations want to repeal the "network neutrality" requirement, then they should also repeal the law that makes competition illegal. Phone/cable companies want competition to be illegal, while simultaneously having the freedom to offer lousy service.

The important point of the "network neutrality" debate is that competition is illegal. It's illegal for me to lay cable and start a new ISP. It's illegal for me to start a new cellular ISP business. The phone/cable corporation executives already receive massive State subsidies. They want more.

Most mainstream discussion of "network neutrality" doesn't mention that the ISPs have a State-backed monopoly. Competition is illegal. Customers would be SOL, if they decided to stop supporting network neutrality.

In a really free market, a "network neutrality" law is not needed. There is not a free market for selling Internet service. A small handful of providers were given the monopoly right to sell. The "network neutrality" law compensates for a non-free market. In a really free market, any ISP that didn't support network neutrality would lose customers. In the present, that wouldn't happen, because the ISPs have a monopoly.

Million Dollar Money Drop

"Million Dollar Money Drop" was a disappointment. They made a lot of common mistakes. I like good game shows. Lousy game shows are offensive.

One mistake is "Edit the show so it fits in an hour." Suppose it's 9:58. You know that the players get that question wrong, because there isn't enough time to play another question. Suppose it's 9:50. You know that the players get the question right, because there's time for another question. Really, they should "wrap" the episodes. An unfinished game carries over to the next show.

If they always edit the show to fit in an hour, that ruins it, when there's only a few minutes left. "Who Wants To Be A Millionaire?" wraps games. The first season of "Deal or no Deal" wrapped games, but later versions didn't.

Another mistake is "too much talking and not enough game". They play less than 7 questions per hour. That's way too slow. Most modern game shows have too much dead time. Do you really need to tease the contestants on *EVERY* question with a slow reveal? I'd like to see a show that's mostly focused on the game.

Another mistake is "player vs. house" and not "player vs. player". Most "classic" game shows featured mostly "player vs. player" competition, with "player vs. house" only occurring in the bonus game. I'd like to see more player vs. player competition.

Another mistake is "The grand prize must always be $1 million." In 1999, "Who Wants To Be A Millionaire?" had a grand prize of $1M. Since then, it seems mandatory for every show to have a grand prize of $1M. If you adjust for inflation, $1M in 2010 is a lot less than $1M in 1999.

I'd much rather see a good game, than have a $1M grand prize. For example, they could have played "The $100k Money Drop" and made the show move 4x faster. That would have been a better show. There's no point having a $1M grand prize if the game is boring.

I wonder if they adjust the difficulty of the questions, based on how well you're doing? Do they give you easy questions if you already lost most of your money? Do they give a hard question if you still have a lot of money left?

"Million Dollar Money Drop" is mediocre execution of a decent idea. They shouldn't always edit the game to fit in an hour. They should move the game faster. I'd rather see a good game, than a $1M grand prize.

"Million Dollar Money Drop" illustrates a defect in State media programming. Everyone's trying to copy "Who Wants To Be A Millionaire?" I'd rather see something really original, than a clone of an already-successful show. If you're a clueless media executive, a clone of an already-successful show is less risky than doing something original. Nobody gets fired for copying. If you try something original and it flops, then you do risk being fired. Therefore, every executive is copying past successes rather than trying something original.

FSK Asks - Yahoo Contributor Network

Yahoo purchased Associated Content. It was rebranded as Yahoo Contributor Network. Has anyone tried this?

Yahoo Contributor Network solicits articles, and pays authors. It seems to be pay-per-post. They give you a title and you write a post on the subject. The articles are reviewed, and published. You get a fee of a couple dollars per article, more if you are popular.

Thay also pay on an eCPM basis per pageview. I'm making $0.50 per thousand pageviews via AdBrite. Yahoo Contributor Network pays an eCPM of $1.00-$1.50 or more. I get 10k pageviews/month here, which would make me mid-tier by their standards.

If you give Yahoo a nonexclusive license, you get paid less. If you give Yahoo an exclusive license, you get paid more. If I wanted a decent rate, I'd be barred from republishing it here.

For example, if the post subject was "Bush Tax Cuts", I could write about "All taxation is theft." However, the posts are reviewed by an editor. I might not make the cut. I saw people complaining that their articles were unfairly rejected or that they were unfairly banned.

The payout threshold is $100. They could pull a Google AdSense, and ban me just before I earn $100.

My most popular posts are economics-related. One of the categories is "Business and Finance". I might do well there. It depends. If Yahoo's editors are pro-State trolls, it's pointless. If the editors are more openminded, it could work out.

There didn't seem to be an option for "automatically upload the RSS feed from my blog". They want me to write content specifically for them.

There's another negative bit. All payouts are done via PayPal. I'd have to open a PayPal account. My parents would probably veto that. They're deathly afraid of Internet banking. I know I shouldn't let that stop me, but an argument with them isn't worth it.

One rule of PayPal is "*NEVER* use your regular checking account for PayPal." There are too many horror stories of people having their checking account frozen or stolen by PayPal. If you do use PayPal, open an account at a different bank, and only use that account for PayPal. Keep only the minimum balance.

Yahoo Contributor Network seems like a decent experiment. I'd have to write posts specifically for them. I'd have to open a PayPal account in order to use it. My parents would probably object for a stupid reason. It isn't worth the hassle.

However, I'm going to be unemployed. I doubt I'd even earn minimum wage. Right now, my effective blogging income is approximately $0.10/hr.

Has anyone tried Yahoo Contributor Network? Do you think it's a worthwhile experiment? One of the categories is "Business and Finance", which I should be good at. However, if Yahoo's editors are pro-State trolls, then it's a waste of time. Also, I'm disturbed that, in order to earn a decent rate, I have to give Yahoo an exclusive publishing license.

Underemployment Benefits Extension

On my next to last day of work, I got a 3 month contract extension!

I had already sent out some resumes and scheduled some interviews! I guess I should keep the interviews, and take that day off.

I don't normally look for a job while already employed, unless I expect to be fired. It's a huge time sink. It's frustrating dealing with clueless headhunters and hiring managers.

I'll keep the interviews I already scheduled. I'll wait 3 months before sending out resumes again.

Paul Krugman Endorses Ron Paul

Paul Krugman wrote an article trashing Ron Paul. A lot of people were angry and offended.

Actually, this is progress! Which do you prefer:

1. The mainstream media completely ignores Ron Paul.
2. The mainstream media talks about how Ron Paul is such a pathetic fool.

(2) is much better than (1). Paul Krugman can't go any further than that. What do you expect Paul Krugman to say? "Ron Paul is right. My career is a fraud. I'm a mindless brainwashed zombie." He isn't going to do that.

It's obvious that Paul Krugman is a shill for the State. You don't win a Nobel Communism Prize unless you're a skilled pro-State troll. Paul Krugman's job is to make fancy lies that justify State violence and State control of the economy.

I already mentioned that it's wrong to define yourself relative to Paul Krugman. If you feel obligated to refute every stupid thing he says, then it's a huge waste of time. It's loss-oriented thinking, to read and refute every shill for the State. I know that Paul Krugman is pro-State trolling. I don't read him. I'm not surprised when he says stupid things. I'm annoyed that other people get so angry, when he spreads his lies. I get tired reading all these articles explaining why Paul Krugman is wrong. If you're reading a blog that explains why Paul Krugman is wrong, then you already know that the mainstream media is full of lies.

Paul Krugman wrote an article trashing Ron Paul. This is progress! Normally, the mainstream media censors an idea by not mentioning it at all. Now, the mainstream media spends time refuting Ron Paul. That might cause some slaves to research Ron Paul. There are some Congressmen and insiders, other than Ron Paul, who are criticizing the Federal Reserve.

Ron Paul still is a shill for the State. He's spouting the standard Libertarian lie "We need a government violence monopoly. We should keep it small." The problem is that, no matter what checks and balances you have, government has a violence monopoly. With a violence monopoly, insiders will seek to consolidate and expand their power. Once you have a government violence monopoly, it degenerates to the current mess. When an empire is collapsing, stealing via government becomes more profitable than working. Historically, governments collapse when insiders make stealing more profitable than working.

Ron Paul is pro-State trolling when he says "We should have a government violence monopoly. We should keep it small." The correct answer is "All taxation is theft. Government is one huge extortion racket. A government violence monopoly is immoral." Ron Paul helps distract (L)libertarians from anarchism. Ron Paul is a shill for the State. However, he is one of the few politicians who criticizes the Federal Reserve and IRS. Those are two key components of State evil. Currently, Ron Paul is the most freedom-oriented viewpoint allowed in the mainstream media.

Even though Ron Paul will retire soon, there still will be some freedom-minded Congressmen. The difference is the Internet, rather than Ron Paul himself. However, Wikileaks might be a "false flag op", designed to provide an excuse for crushing freedom of expression on the Internet. Statists probably won't succeed, but they might try.

When Paul Krugman spends time trashing Ron Paul, that is a type of endorsement. That's much better than completely ignoring his viewpoint.

The "Tax Cut Law" Actually Raised Taxes!

This article by Ron Paul on lewrockwell.com was interesting. The "tax cut compromise" law had $850B of income tax cuts, and $60B of spending increases. The $60B mostly went to extended unemployment benefits.

This law actually raised taxes! Do you see how?

SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE

Suppose that income taxes are cut by $850B, with no spending cuts. The "income tax" is decreased by $850B. At the same time, the "inflation tax" is increased by $850B! The total taxes collected by the government are unchanged. It's one type of tax exchanged for another.

Inflation also bails out the banksters. If there's 10% inflation, that pushes up housing prices. The collateral backing loans increases in value. Suppose you had a $500k defaulted mortgage on a $400k home. If there's 10% inflation, then that home is now worth $440k. The bank's loss was cut from $100k to $60k. If there's enough inflation, then the foreclosed home can be sold for almost the full value of the mortgage. The foreclosure process takes 1-2+ years. That gives inflation time to work its bailout magic. Once the house enters foreclosure, the homeowner can't start repaying the mortgage again, if inflation makes the home worth more than the mortgage.

The law also included $60B more spending. That spending isn't free. It's paid via inflation. If there's an "unemployment benefits extension", that's logically equivalent to "higher taxes for everyone who has a job".

Suppose the President went on TV and said "Every American gets a 2% pay cut every month. Every American loses 2% of their savings every month." There would be rioting. Via inflation, that's exactly what happens. State comedians go on TV and lie and say "Inflation is low!"

The "tax cut compromise" law had $850B of income tax cuts and $60B of new spending. There's no free lunch. This is offset by a $910B increase in the "inflation tax". Nobody in the mainstream media mentioned this aspect of the law, not even Ron Paul.

Financial Market Casino

A lot of people say "The financial markets are one big casino." That analogy is incomplete. It's more accurate to say "The financial markets are a rigged casino."

If you go to a casino and play craps and bet intelligently, the casino's advantage is 1% or less. The casino doesn't need to cheat. The odds of the game are stacked in their favor. Without cheating, and if the bet size is small compared to the casino's bankroll, then the casino is statistically guaranteed to win. They might have bad days, but they're mathematically guaranteed to win.

The banksters aren't content with 1%. They cheat.

The casino cheats. Certain privileged players are allowed to win, giving the illusion that it's fair. Having some winners helps convince the suckers it's fair.

Suppose you're playing bankster poker. You get a royal flush. The dealer says "You lose. J8752 beats a royal flush." A slave would say "I'm sorry for my mistake. Thanks for correcting me!"

It isn't just a rigged casino. Once in a while, the government gives favored players free money. They stack up their government-gift chips and say "Look at what a smart gambler I am!" The government doesn't disclose how many free chips each player gets. Even the cheaters don't know how much their fellow cheaters got.

Once in awhile, one of the less influential cheaters is exposed and arrested. The other cheaters say "This proves that all cheaters get caught! We aren't cheaters. We would have been caught if we were cheating!"

Even though the game is hopelessly rigged, sometimes an honest and intelligent person wins. The cheaters say "How did that guy win? He must be cheating without our permission!" That person is convicted and jailed.

"The financial markets are a casino." is an unfair analogy. Most casinos are content to win their 1% advantage, and don't otherwise cheat. The financial markets are a rigged casino. Certain favored players get free chips from the government. They also cheat and win.

No Phone For You!

It turns out I wasn't eligible for a phone upgrade. Only my mother's line was eligible (she never upgraded).

Actually, I didn't like either the Blackberry or Motorola Android. The envTouch had a nicer keyboard than both of them. The lack of arrow keys was disturbing.

Mark Cuban And The BCS

Mark Cuban offered to bankroll a college football playoff. It was a cheap publicity stunt for him. He won't accomplish anything.

If he did it as a publicity stunt, good for him.

If he seriously accepted colleges to accept his offer, he's an idiot.

Why would colleges share the playoff revenue with him? If colleges needed to raise $1B to finance a playoff, they could easily get that money from ESPN or another network.

In a for-profit business, if you double your revenue, the CEO doubles his salary. It's either salary-cash or salary-options.

Colleges are technically non-profit. Suppose each university made an extra $5M/yr by adopting a playoff. Could the college president double his salary? No, he can't. Students would say "Why am I paying $50k/yr in tuition, just so the president can make $5M/yr."

Colleges are technically non-profit. There's a political limit to how much the college president and athletic director may pay themselves. They're already at that limit.

That's the advantage of the BCS/bowl system. The college president appoints his idiot brother-in-law to be on the bowl committee. Those bowl committee directors get paid a lot of money, but they only actually work a few days a year.

There's no point having the playoff money go to the colleges. The college president can't use that many to pay himself a higher salary. The bowl system maximizes the college president's profit. He can appoint his friends to be on the bowl committee.

If there was a unified playoff system, then there would be fewer people on the committee. The college presidents wouldn't be able to steal as much.

That's the whole obstacle preventing a college football playoff. Colleges are technically non-profit. There's no incentive to maximize revenue. The current system is perversely optimal, because it maximizes the amount the college presidents may steal.

Even if the college presidents did want to reform the system, they'd do it themselves. They wouldn't share the profits with Mark Cuban. They don't need his money or support.

Did Sam Alosi Cheat?

According to NFL rules, on a punting play, only two players on the kicking team are allowed downfield before the kick. These players are the "gunners".

The return team typically assigns two players to block each gunner. If the gunner runs out of bounds, he is still allowed to later make a tackle.

This leads to a problem. Some players intentionally run out of bounds, so they can avoid the blockers.

Sam Alosi instructed the Jets players to stand right by the field. This prevents the gunner from running too far out of bounds. Allegedly, other teams do the exact same thing.

Miami's gunner was running too far out of bounds. Sam Alosi then intentionally tripped him.

Was Sam Alosi cheating? Was it self-defense? The Miami player was cheating. He was intentionally running out of bounds, to avoid a blocker.

This is a defect in the NFL rules. A player is allowed to intentionally run out of bounds, and then later make a tackle. The NFL should strictly enforce "You can't intentionally run out of bounds." The NFL probably should restrict the blockers. For example, they could use a rule similar to a pass play. Maybe the defenders should only be allowed to block the gunner once within 5 yards, until the receiver touches the ball or the ball hits the ground. Maybe the defenders should only be allowed to block the gunner once within 20 yards, and then may block him more once he's further downfield.

Sam Alosi is not solely responsible for the tripping incident. The Miami player was cheating; he was intentionally running out of bounds to dodge blockers. There's a defect in the NFL rules. The gunners are encouraged to run out of bounds to dodge tacklers. The blockers are given too much discretion to block the gunner aggressively. Allegedly, other teams use the "players line up by the sideline" trick. Sam Alosi is not solely to blame for this incident. The NFL is partially at fault, because they allow players to run out of bounds on punting plays.

Hindenburg Omen

I've seen a lot of discussion of the "Hindenburg Omen". It's complete nonsense.

The Hindenburg Omen says "If X happens, then there's a crash." The fallacy is that there have only been a few severe crashes. Using "Da Vinci Code" style reasoning, you may see patterns that aren't there. Correlation doesn't imply causation.

If pattern X was a lousy predictor, nobody would mention it. If X happened to work in the past, then people tout it heavily. That's no guarantee that X will be a predictor in the future. There's selection bias.

If you do a historic back-test, there's bias. In 2004, a 20 year historic back-test would have concluded "Housing prices always rise." A historic back-test does not include "The US dollar collapses in hyperinflation." Hyperinflation seems practically guaranteed in 15-20 years. A historic back-test misses "black swan" events.

The Federal Reserve is inflating desperately, to bail out the banksters. They will push up the stock market and create the illusion of economic growth. Suppose there's 30% true inflation, 3% CPI, and the stock market goes up 15%. State comedians say "Hooray for the stock market!", while the stock market underperforms true inflation.

I predict that the stock market, measured in FRNs, will rise. High inflation will push up the stock market eventually. The stock market, measured in gold, will continue to crash. Over the past 10 years, the S&P 500, quoted in gold, has declined by nearly 1% per month! That trend is accelerating.

The Hindenburg Omen is nonsense. State comedians are promoting it to scare people. Over the past 10 years, gold has been a *MUCH* better investment than stocks. It's a severe discrepancy that State comedians/communists ignore. I predict that gold/silver will continue to be a much better investment than the stock market.

When comedians say "The Hindenburg Omen is a good stock market predictor.", they're using sampling bias. It isn't valid reasoning.

FSK Asks - New Cell Phone, Android or Blackberry?

I got a "special offer" from Verizon. Even though my contract hasn't expired, I may get a new phone before December 24. I'm going to the Verizon store on Sunday with my sister to get a new phone.

I'm still undecided between getting an Android or a Blackberry. My sister wants Android, so it'll probably be Android. It's "buy one get one free", so I save $100-$200 if I get the same phone as her. We're on the "family share" plan.

My LG envTouch is a POS. I was considering calling Verizon and asking for an early upgrade. It's a moot point now. It seems they made that offer to all customers, and not just LG envTouch users. If you didn't upgrade within the last 6 months, you're eligible, according to the mail flyer.

I'd have to upgrade from the $10/month data package to the $30/month data package. I'd have to get a new 2 year contract, a 1.3 year extension. I've been whining about my current phone, so of course I'm getting a new phone.

My sister and mother want to stick with Verizon, so I'm definitely staying with Verizon. I really would like a Nokia Maemo/Meego phone, but those aren't available on Verizon.

Even if I do get an Android phone, what kind of Android should I get? LG is out. What are the other choices?

Here's what I want from a phone:

1. Write blog drafts on the subway and upload them to my PC and then to Blogger.
2. Use it as a phone.

Every Android model should be able to do that.

I'm also considering Blackberry. I probably won't get a Blackberry. My sister wants Android and I'm undecided between Android and Blackberry.

The main Android choices, based on the offer, are Sansung Continuum Galaxy ($200), Motorola Droid Pro ($180), or Motorola Droid X ($200). I'm not getting another LG phone. The Blackberry choices are the Curve 9330 ($50) or the bold 9650 ($100). It seems that only the Droid Pro and Blackberries have a real keyboard. The virtual keyboard seems like a bad idea because I plan on doing a lot of typing.

What kind of phone do you think I should get? Android or Blackberry? I'm definitely upgrading this Sunday.

Unemployed Again!

I was working as a contractor/consultant at a large financial institution. My pimp/headunter told me that my contract is expiring. They did give me 2 weeks' notice, rather than "security immediately escorts you out". My contract ends just before Christmas.

My pimp said "The money in the budget was used up." They don't have to give a reason for firing me. He said they might hire me back next year. I shouldn't wait. I'm starting to send out resumes. Unless I have a specific restart date, the value of that offer is $0.

My project manager didn't even know I was getting fired, until I told him. He seems eager to keep me, because I'm getting a lot done. However, he's probably SOL. I was doing almost all his work for him.

I was doing fine at work. Even after taking time off for my panic attack, I was able to function normally. They didn't seem to mind that I missed a week and a half due to illness.

My parents assume, by default, that I did something wrong. That's an unhealthy attitude. I thought I was doing well. They don't have to give a reason for firing me. Maybe the headhunter is telling the truth, when he says "That's the way the budget worked out." However, they could have converted me to a full-time employee, but didn't.

With high emotional awareness, that works against you. Almost every hiring committee has a psychopath. The psychopath would be eager to not hire me, because I can tell he's a psychopath. The psychopath can tell that I can see through him.

I thought I was doing well. It's actually irrelevant. They have an explicit State-backed monopoly.

It makes no difference if they hire great people or unskilled pathetic losers. The project I was QAing is a total trainwreck. I can identify the "I'm covering up failure." tone of voice in the developers. I submit a bug report and they deny it's a problem or deny they're responsible for it. It's an excellent example of corporate CYA, rather than getting the job done. I don't have write permission on the server, so I can't create my own test cases.

Anyway, it makes no difference. They have a monopoly. They don't need to hire competent people. I'm back to the usual headhunter grind.

How Much Did TARP Really Cost?

Every time I see State comedians tell this joke, I get offended. They say "TARP was profitable for the taxpayers. Hooray for the State!" The banksters profited from TARP, nobody else.

According to this page, TARP's cost was $25B. That's still misleading. You have to account for the "time value" of money.

State comedians say "TARP paid out $n and collected $m. m>n. Therefore, TARP was profitable." Or, they say "m is only slightly less than n. Therefore, TARP wasn't that much of a ripoff."

The fallacy is that you should look at returns and not absolute gain. If you spend $700B and collect $770B two years later, your actual return is 5%. That's a pathetic return compared to gold or silver. If you spend $700B and collect $675B two years later, that's pathetic compared to true inflation.

Suppose a business is in really bad shape. They can't raise money from any private investors. They beg/lobby/bribe/threaten the government and get a bailout "investment". By definition, that investment is on worse terms than what any private investor would get. Even if it turned out well, the investment was still a bailout/gift.

I get very offended when State comedians proclaim "Taxpayers made a profit off TARP!" or "TARP didn't cost much!" They are looking at nominal gain and not rate of return. Compared to a real investment, TARP returns were pathetic, even if there was a nominal gain.

It's amusing how State parasites give evil things nice-sounding names. "TARP" makes it sound beneficial, like covering a baseball field when it rains. "TARP" means "Troubled Asset Relief Program". Why don't they call it the "Financial Underwriting Contingency Kitty"? That would be a more accurate name. Fancy names like "TARP" and "quantitative easing" hide the fact that they're printing new money and giving it to the banksters.

TARP was a huge ripoff. I'm offended when State comedians say "It wasn't that bad."

Should You Boycott Amazon.com Over Wikileaks?

There was an amusing debate on lewrockwell.com. Under pressure from the State, Amazon.com kicked Wikileaks off its servers. (Amazon.com lets people rent space on its servers. That's "Amazon Web Services".)

Some people are calling for a boycott of Amazon.com, in protest. Lewrockwell.com makes money off "Amazon affiliate links". They're advocating to not boycott Amazon.com. (If you put a link to Amazon.com on your website, and people click the link and later buy, then you get a commission.)

Someone pointed out "There are more people who would boycott Amazon.com for *NOT* kicking Wikileaks off their servers, than there are people who would boycott for censoring Wikileaks."

Amazon.com executives have an obligation to their shareholders. If they took a moral stand they might lose their business. It isn't worth antagonizing State terrorists. Amazon.com wouldn't be accused of "Hosting Wikileaks on their servers." State terrorists would find some other excuse. The laws are so vague that anyone could be accused of breaking them.

Suppose you boycott Amazon.com and buy from X instead, paying the same price or slightly more. The amount of taxes on the transaction is approximately the same. The State makes the same revenue, whether you buy from Amazon.com or from another State-licensed business. (Amazon.com has been helping people avoid sales taxes on transactions, exploiting a legal technicality.)

If you really want to hurt State parasites, you have to work off the books. If you work as an agorist, assuming a 50% income taxation rate, you're denying the State a huge chunk of your labor, even if you later buy from a State-licensed business.

Even better, as the agorist economy gets more sophisticated, there will be alternatives to Amazon.com. Now, you probably incur a financial loss or inconvenience if you boycott Amazon.com. An agorist store would have lower prices and higher quality, because they're bypassing all State taxes and regulations. If you work as an agorist and purchase goods from other agorists, then you're really hurting the State.

If you decide to boycott Amazon.com over Wikileaks, you aren't accomplishing much. As long as you work on-the-books as a wage slave, the State is stealing your labor. As long as you buy from a State-licensed business, State parasites get a cut of the transaction.

Cliff Lee And The Time Value Of Money

Cliff Lee is negotiating a new contract. One negotiating issue is "Does he get 6 years or 7 years?".

When you consider inflation, $20M seven years from now is worth a *LOT* less than $20M right now.

Assuming 10% inflation, 0.9^7 = 0.48. With 10% inflation, the 7th year of the contract is worth less than half current money.

Assuming 20% inflation, 0.8^7 = 0.21. With 20% inflation, the 7th year of the contract is worth approximately one fifth the value of current money.

Assuming 30% inflation, 0.7^7 = 0.082. With 30% inflation, the 7th year of the contract is wroth less than one tenth the value of current money.

If you look at the price of gold, silver, or other commodities, true inflation is 20%-30% or more.

Instead of accepting a 7th year on the contract, Cliff Lee could ask for a higher salary and fewer years. If he invested the difference in gold or silver, a shorter contract with higher salary per year is worth more than a longer contract.

Cliff Lee and his agent aren't considering true inflation, when they wrangle for a 7th year. The club's owners are almost definitely considering inflation. (However, many businesses aren't seeing their income rise with true inflation. As the economy collapses in hyperinflation, businesses will see their income rise slower than true inflation. Still, a professional baseball team has a State-backed monopoly. They get to borrow at preferred rates of only a couple percent. They get the government to build them a stadium, paid with tax-exempt bonds and subsidized by other taxes.)

When you account for true inflation, a long-term fixed-salary contract is worth less than it seems. Really, you should use a "gold clause". If you're going to get paid $15M seven years for now, you should instead ask for whatever 1000 ounces of gold is worth in seven years.

When the President and Congress defaulted on the gold standard, the declared that gold clauses were illegal. If someone included a gold clause in a contract and instead paid the FRN-equivalent, you could not sue them for breach of contract.

I tried looking up the law. It wasn't clear if "gold clauses" were re-legalized, after gold ownership was declared legal again. I don't know of any actor or celebrity who included a "gold clause" in a long-term contract. You could ask for a gold clause in a contract, but you may not be able to later sue for breach of contract.

Another interesting point is what happened to A-Rod. He had "deferred salary". When the Rangers declared bankruptcy, he lost a lot of that money. If you sign a long-term contract with the team, you are an unsecured creditor, if the team later declares bankruptcy.

When you consider true inflation, the 7th year of a long-term contract is worth a *LOT* less than it seems.

What Is The President's Lawmaking Role?

The President struck a "tax cut" deal with Republicans. Democrats in the House refused to pass the President's deal.

Due to the Senate's filibuster rule, Republican Senators get to veto any law or spending bill. With 41 Republican Senators, they can block any law via filibuster, if they all vote the same way. That means the Democrats must compromise with Republicans, if they want to pass any laws. The Democrats could impose the "nuclear option" and change the filibuster rule via a majority vote. Starting in January, Republicans are going to have a majority in the House, giving them veto over any laws or spending without filibuster tricks.

Technically, the President only has one lawmaking decision. He can sign a law or veto it. That's it. That's all the President gets to do.

The President can exercise discretion regarding enforcement of a law. The President can use his pardon power to stop people from being prosecuted for breaking a law. The President can try to persuade Congressmen to do what he wants. However, the President doesn't get to write laws. He can only sign or veto.

President Obama is missing the point. The President does not write laws. The President only gets to decide whether to sign or veto a law passed by Congress. If you take a literal reading of the Constitution, "sign or veto" is the only lawmaking decision the President may make.

Value At Risk (VaR)

In my wage slave financial programmer job, I spend a lot of time making VaR calculations (VaR means "Value At Risk").

VaR is an easy-to-calculate risk measure that provides an illusion of risk management, while being completely meaningless. Almost everyone in the financial industry uses VaR.

For liquid securities, like stocks, VaR is defined and calculated via a historic back-test. For example, VaR usually is the 99th percentile loss, over a year historic period, assuming it takes 1 day to liquidate the position. In that case, you would look at 1 year of historic price data, ~250 trading days. The 99th percentile would be the average of the 3rd and 4th largest loss. This makes VaR very easy to calculate.

Almost everyone in the financial industry uses VaR. Do you see the fallacy?

SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE
SPOILER SPACE

VaR is the 99th percentile loss. However, that remaining 1% can be pretty bad!

Suppose your trading system makes $1M 99.1% of the time, and loses $1T 0.9% of the time. The VaR risk is zero. VaR explicitly encourages large banks to abuse their "too big to fail" status, by ignoring the small chance of a huge loss.

Due to the "fat tails" problem, that remaining 1% will occur more often than your model predicts. For example, a 10 year historic back-test of housing prices would not have predicted the crash. In that 10 year period, housing prices always went up.

Further, "a big bank failed today" automatically is going to be a day in the 1% tail. The VaR distribution is based on a "typical" day. If you actually need it, you're already in the 1% tail.

VaR is easy to calculate. It provides the illusion of risk management, while actually doing nothing. Almost everyone in the financial industry uses VaR. Therefore, the risk manager keeps his job if he also uses VaR. VaR underestimates "tail risk". VaR explicitly encourages banks to abuse their "too big to fail" status. A small chance of a huge loss won't be included in a VaR calculation. The "fat tails problem" means that extreme big losses occur more often than your model predicts. A historic back-test probably won't include the extreme event that happens in the next crash.

Will Ron Paul Get The Monetary Policy Subcommittee Chair?

In January, the Republicans will be a majority in the House. Every committee chairman switches from being a Democrat to a Republican.

There's a subcommittee that oversees Federal Reserve monetary policy. Normally, that subcommittee deals with trivial things like commemorative coin designs. They don't grill Ben Bernanke much. Ron Paul is the most senior Republican on that subcommittee. He is scheduled to become chairman.

The Republicans could use a parliamentary trick to cheat Ron Paul. They could move a more senior Republican to that subcommittee and make him chairman. They could shuffle subcommittee responsibilities. They could deviate from tradition and nominate someone else to become subcommittee chairman. Normally, the most senior (longest-serving) Congressman on a committee gets to be chairman.

Being a Congressman is a lot like World of Warcraft. Your influence is based on how long you're a Congressman. In World of Warcraft, your character's power is based on how long you've been playing. A Congressman's influence is based on "time in Congress" and not his actual ability.

It seems that Ron Paul will get that subcommittee chair. It would be amusing, to see him grilling Ben Bernanke. Normally, when Ron Paul interrogates Ben Bernanke in committee meetings, CNBC cuts to a commercial.

I'm noticing a lot more anti-Federal Reserve opinions. It's on many blogs. It's even showing up on more mainstream websites. Some Congressmen other than Ron Paul are criticizing the Federal Reserve.

I'll review the anti-Federal Reserve arguments. The Federal Reserve is one big price-fixing cartel. By keeping interest rates artificially low compared to true inflation, the Federal Reserve subsidizes banks and large corporations. Via the Compound Interest Paradox, everyone is enslaved under a crushing debt burden. Inflation steals from productive workers, giving the profits to the banksters and other insiders. Inflation benefits insiders who print and spend the brand-new money. The Federal Reserve's operations aren't free. Everyone else pays the cost via inflation.

I've never seen the mainstream media criticize the Federal Reserve as accurately as I have. A detailed criticism of the Federal Reserve is more subversive than anything Wikileaks will ever publish.

It seems that Ron Paul will get the Federal Reserve subcommittee chair. I'm noticing more anti-Federal Reserve sentiment. The full truth still isn't published in the mainstream media.

Mohamed Osman Mohamud

This story is interesting. The FBI arrested Mohamed Osman Mohamud in Oregon for a bombing plot.

His defense is "The FBI tricked me!" Undercover agents prodded him and provided him with a fake bomb.

This is an important issue. When do the police cross the line from preventing crime to encouraging crime and entrapment? Would he have tried a bomb plot, if he were not encouraged by the FBI?

By "catching" a terrorist, the State police justify their own huge budgets.

Did the FBI trap the defendant? On the other hand, he was dumb enough to fall for it. For example, an undercover policeman probably could not convince me to try something violent.

The police have a monopoly. It doesn't make much difference if they do a great job or have a lot of waste. Even if this investigation/entrapment/arrest was wrong, it doesn't make much difference. The police point this out as evidence "We're doing a great job! Be grateful the State is there to protect you!"

Was Mohamed Osman Mohamud a prospective terrorist that the FBI caught? Was he a fool trapped by the police? On the one hand, the police were too aggressive. On the other hand, he was dumb enough to fall for it.

This is one defect in the current criminal justice system. The FBI has no options to "help" Mohamed Osman Mohamud other than throwing him in jail. It would be nice if there were a way to prevent crime without jailing him. That would be the advantage of compensation-based justice instead of punishment-based justice.

Technically, he didn't injure anyone. It would be nice if there was a less severe way to prevent crime, other than jailing him for the rest of his life.

Eurodollar Futures Options With Zero/Negative Strikes!

I saw something bizarre. Other financial websites/blogs haven't mentioned this. There are some Eurodollar futures options with a zero/negative strike! More than two zero strike options have volume and open interest! (They are December and January and March 100 strike Eurodollar call options.) The other zero/negative strikes have a price quoted, but no open interest.

My employer's computers only process strikes with volume, rather than all strikes. That's a bug. If someone trades a strike for the first time, then the intraday calculations would be wrong. There's probably also a fencepost error when new options/futures/bonds are listed. The zero strike caused the program to crash. If the strike is zero/negative, then you're taking the log of a zero/negative number when you apply the Black-Scholes formula.

A Eurodollar future is a bet on what 3-month LIBOR will be in the future. LIBOR is the London dollar borrowing rate. That leads to the term "Eurodollar". However, 3 month LIBOR yield should closely track the 3 month Treasury yield. If they differed much, then some bankster would borrow in the USA and lend in London, or vice versa.

The "settlement price" is the interest rate. A price of 99 corresponds to an interest rate of 1%. A price of 98 corresponds to an interest rate of 2%. 100 corresponds to 0%. 101 corresponds to -1%. (Bond prices move the opposite sign as interest rates.) The future is cash-settled, because there's no actual underlying bond. It's based on a hypothetical 3 month bond yielding LIBOR.

One Eurodollar future corresponds to a hypothetical $1M investment. A change of 1% corresponds to $1M * 1% * 1/4 = $2500. (The 1/4 comes from "3 month" LIBOR. It's 3 months of interest on $1M at the settlement rate. There's a slight rounding error, but that's the settlement formula.)

The Eurodollar future is cash-settled based on the formula at expiration. It's based on 3 month LIBOR on settlement day. Prior to settlement, it's priced "mark-to-market" based on the futures trading price.

You can also buy Eurodollar futures options. It's an option that settles to a future when exercised. The strike is the interest rate. 99=1%, 100=0%, 101=-1%.

There was a Eurodollar futures option with a strike of 100 (0%) and nonzero volume, crashing my employer's software. If you look on the CME page (direct links to the CME website don't always work, so you may have to navigate), you can see strikes of 100 or more listed. Notice that the December 100 strike call has an "open interest" of 471. The January 100 strike call has an "open interest" of 200. The March 100 strike call has an "open interest" of 2, 801. The March 100 strike put has an "open interest" of 1 contract. Someone actually bought those calls! ("100 strike call" means "0% strike call". The option would be in-the-money only if the 3-month LIBOR rate drops below 0% on settlement day.)

How can LIBOR go below 0%? The Federal Reserve keeps the Fed Funds Rate near zero, *AND* banks get interest on reserves. If the Fed Funds Rate is 0.1% and banks get 0.25% on reserves, then LIBOR could be -0.15%. The banksters are explicitly borrowing and then lending for a guaranteed riskless profit. Only the largest banks get to make this trade, the "primary dealers". It's a stealth bank bailout.

"Primary dealers" are the biggest banks. They get the perk of borrowing directly from the Federal Reserve. A "primary dealer" might borrow directly from the Federal Reserve at 0.1%, but smaller banks might have to borrow at 0.3% on the secondary Fed Funds Rate market. With 0.25% interest on reserves, the primary dealers are getting a huge bailout that smaller banks don't get. That's a big State-granted perk for the "primary dealers". They get to borrow more cheaply than everyone else.

There were many Eurodollar futures call options that traded for a strike of 0%. That's very interesting. I didn't see any other financial blog highlight that. The Federal Reserve has lowered nominal interest rates below 0%. Remember that "real interest rates" equal "nominal interest rate" minus "true inflation". Nominal interest rates are close to 0% or even negative. Real interest rates are -20% or lower. That's a huge State subsidy to insiders. Everyone else pays the cost via inflation.

What Happened To Ireland's Independence?

The "Ireland debt crisis" is an interesting example of State corruption and financial corruption.

Since when did Ireland become a nation of wimps? The IRA (Irish Republican Army) fought the UK for independence for decades. Now, a handful of banksters have enslaved Ireland, via debt and fiat money. Nobody is complaining much.

Interestingly, the banksters who own the Irish national debt are probably British, although the exact identity isn't revealed.

That's the advantage of debt enslavement compared with a military conquest. Debt enslavement is presumed legitimate. "The national debt is sacred and must be repaid!" is one of the best economic lies of all time. Most "national debt" is owned by insiders. They will always profitably lobby to prevent a national debt default. If you own $10B+ of government debt, it's very easy to lobby against default.

The banksters borrow at the Fed Funds Rate (or ECB central bank rate) and buy government debt. It's practically risk-free profit. The banksters borrow from the government and lend to the government, taking a cut. They don't have a legitimate debt ownership claim. The banksters don't legitimately own the national debt, because their debt purchase is State-subsidized.

That's ironic. Almost every country has a huge "national debt". The big question is "To whom is this debt owed?" The "national debt" is mostly owned by the banksters. They borrow from the central bank at cheap rates and buy the national debt, earning a practically riskless profit.

Not counting debt payments, Ireland has a positive balance of trade. Irish exports > Irish imports. How did Ireland get into economic trouble?

1. Ireland is a member of the EU and Euro.
2. The ECB (Euro central bank) kept interest rates artificially low a few years ago, just like the Federal Reserve kept interest rates low in the USA around 2001-2004.
3. This caused a housing bubble in Ireland, exactly the same as in the USA.
4. The banksters made a ton of money during the housing bubble.
5. The Irish housing bubble burst.
6. The Irish banks are bankrupt.
7. The Irish banks are "too big to fail".
8. The Irish government bailed out the Irish banks. More technically, they bailed out the other banks who lent the Irish banks money.
9. Now the Irish government is broke.
10. The other EU members are demanding tax hikes in Ireland, in exchange for a bailout.
    

The US government is issuer for the dollar. They can always print more bonds to roll over the debt. They can always create more Federal Reserve Notes and finance more debt. The US government still has monetary sovereignty, although they did partially delegate that power to the Federal Reserve.

Ireland is a member of the Euro and EU. They gave up control of their money. That's functionally equivalent to ceding sovereignty. Ireland can't just print new money/bonds like the US government can. Ireland's government doesn't control its own money.

By joining the EU, Ireland gave up its hard-earned freedom.

Ireland has relatively low tax rates compared to the rest of the EU. That's one reason they're economically successful. The tax hikes will decrease Ireland's economic advantage.

Why don't the Irish people say "We aren't the ones who caused the housing bubble. We fought the UK for freedom, just to be debt-enslaved by some British banksters? We're not paying! We're defaulting!"

Ireland is an excellent example of the bankster scam. The banksters speculate. They make huge profits during the boom. The get bailed out during the bust. The government has huge debt for the bailout. They must raise taxes and cut spending, to pay off the national debt.

The Compound Interest Paradox guarantees that everyone is enslaved under a crushing debt burden. That leads to the current perverse situation. Every government is almost broke due to crushing "national debt". To whom is this debt owed? The banksters own the national debt.

The banksters borrow from the government and lend to the government, via central bank borrowing and purchasing government debt. The slaves pay higher taxes so that the banksters can earn huge salaries without doing any useful work. "Interest on the national debt" is the #1 expense for most governments.

These are two of the top economic lies of all time. They are "too big to fail" and "The national debt is sacred and must be repaid." When a big bank is bailed out, that's a stealth bailout of that bank's creditors, which is usually an even bigger bank.

The "national debt" is an excuse for higher taxes, higher inflation, and "austerity measures". Why can't a country say "We're defaulting!"? If you lend money to someone who can't afford to pay, you deserve to lose your investment.

Why can't Ireland drop out of the EU and default?

It's very ironic. After fighting for decades for freedom, Ireland is now enslaved by British banksters, and everyone presumes it's legitimate.

"Best of FSK" - November 2010

"The Communist Manifesto's Successful Implementation in the USA" was cited on FaceBook. Because of the way FaceBook works (and other php-based sites), I don't know who was citing my blog. Reviewing that post, if you read the Communist Manifesto, the USA is a nearly perfect implementation of Communism.

So far, Seroquel seems to be working well for me. I'm very sensitive to negative side-effects and I'm not noticing any. On the other drugs I've tried, I wasn't able to do anything. With Seroquel, I'm able to do all my normal stuff. I seem to need more sleep, but I'm able to work normally.

Bizarrely, I'm not color blind anymore! I can verify by playing certain computer games. For example, I used to struggle on level 7-1 of Q*Bert (arcade version - MAME), because I couldn't make out the colors. I don't have that problem anymore. That supports my theory "Seroquel is a missing vitamin."

I can still see The Matrix. It's very disturbing. Someone less-unplugged than me who took Seroquel would be horrified/shocked by seeing The Matrix. Basically, everyone is a little crazy. It's somewhat stressful riding the subway, when you can see how everyone else is crazy. I'll make a more detailed post.

If it were somehow possible to get rid of the psychopaths in high-ranking government positions, things should get better without complete collapse. I still wonder if I gave Chuck Schumer's bodyguards and assistants a lesson in The Matrix. I'm not holding my breath waiting. Anarchism/agorism is still the correct answer. However, it would be nice if some non-psychopath government insiders are working on the psychopath problem.

In November 2010, my most popular posts by Absolute Unique Pageviews were:

1. Did the USA Declare Bankruptcy? (379)
2. The Communist Manifesto's Successful Implementation in the USA (374)
3. The Hunt Brothers' Silver Corner (286)
4. Who's the Richest Man in the World? (250)
5. The Federal Reserve Caused the Great Depression (239)
6. BMI/ASCAP/SESAC Legal Extortion Scam (236)
7. Ruby on Rails Sucks! (177)
8. The Monetizing the Debt Scam (161)
9. The Compound Interest Paradox (140)
10. Real GDP is Decreasing, 1990-2008 (121)
11. Satanic Death Hospitals (108)
12. Premium Text Messaging Fraud - 91097 and 654654 (102)
13. Real GDP Is Crashing, 2000-2009 (100)
14. Agorist Philosophy Overview (97)
15. The Gold Lease Rate is Negative! (95)
16. Calculating Vega and other Greeks in Black-Scholes (92)
17. The Gold and Silver Taxation Scam (86)
18. Worldwide Hyperinflation Race (86)
19. StackOverflow Sucks! (84)
20. TSA - Who Benefits? (82)
21. Real GDP is Decreasing, 1990-2007 (81)
22. Statist Witnesses (72)
23. Quantitative Easing 2 (70)
24. The Fluoride Conspiracy Theory (64)
25. I CAN SEE THE MATRIX! (64)
26. The Tone Of The Matrix Has Changed (61)
27. Subliminal Advertising on The Daily Show (59)
28. Dollar Carry Trade (58)
29. How Influential Is Jon Stewart? (58)
30. The USA Has A Severe Psychopath Problem (57)
31. Does Michael J. Fox Have Tardive Dyskinesia? (55)
32. The Five Levels of the Economy (52)
33. The Compound Interest Paradox - a Simpler Explanation (51)
34. Righthaven vs. Charles Johnson (RadGeek) (50)
35. The Black-Scholes Formula is Wrong! - Part 1/12 - Overview and Background (49)
36. Are the GLD and SLV ETFs a Fraud? (49)
37. Are College Athletes Exploited? (47)
38. Is It Worth Hoarding Nickels? (47)
39. How Well Does GLD Track Gold? (46)
40. FSK Attitude Change (46)
41. The Food Safety Modernization Act (45)
42. Why Does Jon Stewart Use A Laugh Track? (43)
43. Verizon LG enV Touch, Bitpim, and Open Source (42)
44. Does Seroquel Cure Color Blindness? (42)
45. The Nymphomaniac Pattern (41)
46. Athletes vs. Doctors, Which is Overpaid? (40)
47. Is Seroquel A Vitamin? (39)
48. The Black-Scholes Formula is Wrong! - Part 2/12 - Axioms (38)

If you only count posts published in November 2010, the most popular were:

1. TSA - Who Benefits? (82)
2. Statist Witnesses (72)
3. I CAN SEE THE MATRIX! (64)
4. The Tone Of The Matrix Has Changed (61)
5. Subliminal Advertising on The Daily Show (59)
6. Dollar Carry Trade (58)
7. How Influential Is Jon Stewart? (58)
8. The USA Has A Severe Psychopath Problem (57)
9. FSK Attitude Change (46)
10. Why Does Jon Stewart Use A Laugh Track? (43)
11. Does Seroquel Cure Color Blindness? (42)
12. Is Seroquel A Vitamin? (39)
13. Beware The Supermarket! (37)
14. Waiting for Stupidman (30)

Cell Phone Driver Update

I finally figured out how to get my LG envTouch driver to work. Bizarrely, this works:

1. unplug DSL modem
2. reinstall driver
3. plug in phone

That's worked every time I've tried it. I have to reinstall the driver every few days to keep it working.

It's very bizarre. It's definitely some sort of driver conflict. I have no idea if I should blame Microsoft or LG.

I moved my mouse to a different USB port, and had to reinstall the driver. Something is messed up.

Silver Round Shortage?

This article by Max Keiser was interesting. Allegedly, JP Morgan Chase has a huge naked short position in silver futures. Max Keiser says "If everyone living in the USA buys one ounce of silver, and takes physical delivery, then JP Morgan Chase would be unable to cover its short position and be bankrupted." The COMEX would also be bankrupted, via a clearing default. The COMEX should not allow one bank to take a huge naked short position. However, as the Hunt Brothers learned, the banksters make the rules.

For example, the COMEX could declare "Instead of settling futures with silver, you can settle them with the FRN-equivalent value. If you wanted actual physical silver, that's just too bad for you." They have done that in the past, when there was a risk of clearing default.

The Federal Reserve's "print money" trick won't work, provided people are demanding actual physical silver. Unless we're in the final stages of hyperinflation, people will sell their silver for a high enough price. During hyperinflation, people won't sell tangible assets for fiat paper, no matter what the price.

Many silver dealers buy directly from miners. They don't bother with the COMEX, knowing it's a scam.

However, "You should buy silver, and take physical delivery, to bankrupt JP Morgan!" is invalid reasoning. You should buy silver and gold because it's the best way to protect your savings as the State collapses. The banksters will be bankrupted if people refuse to keep their savings in State paper, but that's a secondary benefit.

JP Morgan Chase is the custodian for the SLV ETF. If there's a silver default by JP Morgan and the COMEX, there's a good chance that SLV shares would also be worthless. That's the reason you take actual physical delivery, rather than buying paper or an ETF.

At the end of 2008, the "official" price of gold crashed. At the same time, dealers had no inventory. The COMEX price of gold was low, but if you wanted to buy 1 ounce rounds, nobody had any.

As the State financial system collapses, the discrepancy increases between the "official" price and the price at which you can actually buy physical.

The 2008 physical gold shortage occurred at a time of crashing "official" gold prices. Many people saw it as an opportunity to buy gold cheaply, but dealers ran out of inventory even while the "official" price was low.

Right now, many silver dealers have a shortage of 1 ounce rounds. This occurs at a time of skyrocketing silver prices. That's a contrast to the 2008 gold round shortage, which occurred at a time of crashing gold prices.

When I was in grad school, I calculated my effective hourly salary was $15/hr. If you calculate salary-per-hour in gold or silver, I'm paid much less now compared to when I was a grad student!

The FRN-denominated price of silver is skyrocketing. The gold/silver ratio has decreased from 65+ to under 50. Even though the price of silver is skyrocketing (both in terms of fiat and the gold/silver ratio), people are still buying. It is very interesting, that silver is skyrocketing and many dealers have no inventory. Is this a sign of the final hyperinflation and collapse of the dollar? Are more people realizing that fiat money and State paper investments are worthless?

One of the best ways to protest State abuse and bankster abuse is to buy gold/silver and take physical delivery. You protect yourself from theft via inflation. You make it harder for State parasites to have a stealth tax increase via inflation. If you keep your long-term savings in gold and silver, you avoid subsidizing the banksters via inflation. Gold and silver are the hardest investment for State parasites to confiscate.

Will Obama Set Another Record?

President Obama is on pace to set another dubious record. He will probably be the modern President who went the longest before pardoning someone. George Washington still has the record by a wide margin, but there weren't many/any Federal prisoners in 1789.

On Thanksigiving, President Obama made the usual PR stunt of pardoning two turkeys. Humans are not so lucky. Obama has pardoned zero people so far.

There are two types of errors in the "justice" system. There's freeing a criminal. There's wrongfully imprisoning someone. No politician wants the embarrassment of seeming "soft on crime".

That's a bold statement by the President. "There are zero people wrongfully imprisoned in the USA." That's what Obama means, when he hasn't pardoned anyone. "Failing to pardon someone who deserves it." is just as serious as pardoning someone who doesn't deserve it.

For example, Sholom Rubashkin deserves a pardon, or his sentence reduced/commuted to time served. However, a pardon would offend the people who lobbied for Rubashkin's imprisonment. A pardon would offend anti-"illegal immigration" activists. A pardon would offend large meatpackers. Rubashkin's efficient business threatened their meatpacking monopoly, so they lobbied for his arrest/raid/imprisonment.

I've mentioned before that Robert Kahre is wrongfully imprisoned. He invented a gold/silver income tax evasion scheme, exploiting the loophole that American Eagle coins have a legal tender value far less that their metal/melt value. It's economic terrorism, to jail a nonviolent tax resister.

As another example, Bradley Manning deserves a pardon, but won't get one. Did he leak "government secrets"? Did he leak evidence of criminal activity?

Typically Presidents wait until just before leaving office, to issue pardons. Everyone who's jailed has some influential group lobbying for his imprisonment. That makes a pardon politically risky.

It's ironic that Obama has pardoned more turkeys than humans. That's a bold statement. "There are zero people wrongfully imprisoned in the USA." Every jailed nonviolent offender is a political prisoner. All nonviolent offenders deserve pardons. That isn't going to happen.

Obama's "zero pardons" is just as significant a statement as any actual pardons. However, an actual pardon risks criticism. It's politically risky, to pardon someone. That's a common State parasite error. Eager to avoid explicit error A, State parasites instead do nothing.

The Presidential pardon is the last line of defense, for people wrongfully imprisoned. President Obama has pardoned zero people. That removes one of the checks and balances against abuse of State power.

Charles Rangel - Reprimand, Censure, or Wristslap

Charles Rangel is the former House chairman for the "taxation and extortion" committee. He was the subject of an ethics investigation.

The result was a "censure". A censure includes zero fine and zero other penalties. All a censure means is that the other Congressmen say "You did a naughty! Don't do it again!" A censure is considered slightly stricter than a reprimand. The main difference between a censure and a reprimand is that the defendant must be physically present when the censure is read.

The House could kick Charles Rangel out. However, that would require a 2/3 vote. "Getting kicked out of Congress" is a penalty reserved for heroes like Jim Traficant, who was jailed as a political prisoner. Congressman Traficant is one of the few Congressmen to publicly criticize the Federal Reserve.

Another penalty is that you can lose your seniority. Rangel did lose his committee chairmanship. He would have lost it now anyway, because the Republicans are going to be a majority.

Amusingly, Charles Rangel is contesting the penalty. He is arguing "I should get a reprimand and not a censure." That's silly, because the penalty for a censure is nothing.

The only time I saw Charles Rangel speak was when Jon Stewart was ridiculing him. See Charles Rangel makes me want to move to his district and run against him.

That's the real embarrassment. It isn't the silly censure penalty. Why was he reelected? The Republicans didn't put any effort into their candidate. Why didn't another Democrat challenge him in the primary?

That's one of the problems with the voting system. Incumbents get too big an advantage. Why would someone donate money/bribes to his opponent, when Rangel is a big favorite to be reelected? Even with this huge scandal, Rangel was easily reelected.

The embarrassment is not "Rangel got a censure!" The embarrassment is that he was reelected and nobody seriously challenged him.

Derek Jeter's New Contract

Derek Jeter is negotiating a new contract. The Yankees offered $15M/year for three years. That's a pay cut compared to his last contract. However, Derek Jeter is now an older player with declining skills.

The Yankees told Derek Jeter. "You're a free agent. You aren't going to get more than $15M/yr from another team." That's probably true.

A-Rod's contract totally skews the comparison. The Yankees definitely overpaid for him. He's only 3 years into his 10 year $25M/yr contract, and his performance is already substantially decreasing.

However, it's only a partially free market. There are only a handful of teams that could afford to pay $15M/yr for a shortstop, even one that's actually worth it.

What is Derek Jeter worth? These two pages do a "value over replacement player" analysis. They compare Derek Jeter's "increased win chance" compared to what someone earning the minimum salary would do. However, that's flawed. Even if the Yankees didn't have Derek Jeter, they'd still be spending $10M+/yr for a high-quality shortstop. Derek Jeter shouldn't be statistically compared to someone earning the minimum. He should be compared to the top shortstop free agent the Yankees would otherwise sign.

They Yankees risk "bidding against themselves" if they increase their offer. Why offer Derek Jeter more than $15M/yr, if no other team is going to come close to that?

Another interesting example is Cliff Lee. He's probably going to get a huge windfall. He's marketed as a "clutch postseason pitcher". Is he really that super-awesome in the postseason? Or, is it sampling error, because he only had a small handful of starts. There probably will be some "mean reversion". However, he probably has a few good years left before he's too old to pitch well.

Studying sports CBA negotiations and player negotiations is interesting. It's a non-free market. In a really free market, the top free agents could tell the owners "I'm starting my own competing team!", if they weren't getting a fair deal.

Alternatively, someone would start a new league and pay the players more. This does not occur, because it's not a free market. There are a lot of barriers to entry for starting a new sports league. Most of the "competing leagues" were formed decades ago when there was a freer market. They ended in a merger with the established league, creating a State-backed monopoly.

Quantitative Easing And Money Creation

In the latest round of "quantitative easing", the Federal Reserve will create approximately $1 trillion of new bank reserves.

How much inflation will this cause? It's actually a lot more than just $1T. The Federal Reserve creates $1T of new bank reserves. Then, by the magic power of fractional reserve banking, the financial industry creates an additional $9T.

With a 10:1 reserve ratio, for each $1 that the Federal Reserve creates, private banks create an additional $9.

Normally, when the Federal Reserve "monetizes the debt", they purchase short-term Treasury debt with newly-created money. These purchases keep short-term interest rates far lower than the fair free market interest rate.

However, the Fed Funds Rate is currently 0%-0.25%. It can't be further lowered.

Normally, the Federal Reserve buys short-term Treasury debt. However, the Federal Reserve insiders can buy whatever they want. For this round of quantitative easing, the Federal Reserve plans on buying longer-term Treasury debt.

This causes the yield curve to flatten. Instead of buying only short-term debt, the Federal Reserve is also buying longer-term debt.

There's another loophole the Federal Reserve is using. They are paying banks interest on reserves. For example, a bank could borrow from the Federal Reserve at 0.1% and then deposit those newly created reserves for 0.25%.

This also is a stealth bailout for banks. Most Treasury debt is owned by US banks. They borrow at the Fed Funds Rate and buy Treasury debt, making a practically riskless profit. Foreign central banks own Treasury debt, but they have an unleveraged long position. Foreign central banks are actually losing purchasing power, because the Treasury interest rate is far less than true inflation.

Suppose a bank bought a 10 year Treasury bond at a yield of 4%. They sell to the Federal Reserve for 3%. That's a profit of 1%*10 =10%. (The change in bond price approximately equals change in yield times duration, with opposite sign.) If the bank has 100x leverage in its Treasury debt, then the actual profit is 10% * 100 = 1000%. Banks make huge profits speculating in Treasury debt, while taking on practically no risk. That's how banks make huge profits while the rest of the economy is stuck in a recession/depression.

The banksters make a lot of money via the State. They can always profitably lobby to block reform. However, they are stealing too large a percentage of productive work, and the whole system is collapsing.

Also, insiders profit by knowing which bonds the Federal Reserve is buying. Is the Federal Reserve buying a duration of 2-year, 5-year, 7-year, 13-year, etc? If an insider knew ahead of time, they could buy that specific bond and then sell to the Federal Reserve.

Via quantitative easing, the Federal Reserve literally prints new money and gives/lends it to the banksters. Lending someone money at 0% is like giving them money, because true inflation is much higher.

Does this mean banks are profitable? Does this mean bank stocks are a good investment? No. Most of the money goes to insiders, with the shareholders getting leftovers. The banksters can steal/waste money just as fast as the Federal Reserve can give it to them. With a rigged monetary system, why not steal as much as you can? The banksters can receive a $1T government subsidy, while stealing/wasting $1.5T or more. Then, the banks would be losing money even though they're receiving a humongous government subsidy. When you're "too big to fail", why not steal/waste money just as fast as the government gives it to you?

This is the problem with the US economy. It's easier to make money via financial tricks and State bailouts, than by actually working. The Federal Reserve is one huge money laundering operation. The banksters made the details complicated, so the slaves don't understand how they're being robbed.

The Federal Reserve's quantitative easing isn't free. Everyone else pays the cost via inflation. State comedians/economists make up fancy lies for why stealing/inflation actually helps people.

FSK Asks - Boot Vista From A Flash Drive?

I've been looking into this. It isn't simple.

According to this page and this page, I need this 1GB download, "Windows Automated Installation Kit". Is that right?

What happened to "format disk, copy files over, make it bootable"? That doesn't work anymore? I need this 1GB download just to make a bootable Vista USB flash drive?

On the one hand, that's completely silly. On the other hand, that's exactly what I expect from Microsoft.

I've also looked into making a Linux bootable flash drive.

Recall my goal. I'm pretty sure my problem with my cell phone to PC transfer is a driver issue. I want to make a clean Vista install (booting from USB), with *NO* updates and *NO* drivers except for the cell phone. Then, I'll see if it works.

Annoying Cell Phone

I'm still annoyed at my LG envTouch cell phone. I'm 99.9% sure it's a Windows driver problem, that's causing my trouble with connecting to my PC.

I'm waiting until September 2011, when my contract expires, to get a new phone. This phone is such a POS. All I want from my cell phone is:

1. Compose blog drafts on the subway and transfer them to my PC.
2. Use it as a phone.

The ****ing driver won't work for the LG envTouch. It's so annoying. I tried reinstalling the driver and got an error. It did reinstall properly when I reinstalled Vista. Some "Windows Update" messed it up.

I'm going to try "boot Vista from flash drive" with a clean install (no updates) and nothing but the modem driver. If that doesn't work, I'm going to try "boot Linux from flash drive". I'm so annoyed. I'm almost definitely sure it's a driver problem.

TSA - Who Benefits?

There's been a lot of backlash against TSA airport screening recently. The mainstream media is heavily pushing a pro-TSA propaganda campaign. On the Internet, a lot of people are starting to get offended.

There's one aspect of the story not commonly debated. It's the usual "Who benefits?"

The TSA screening is corporate welfare for the insiders who manufacture the backscatter scanner machines.

Also, the TSA workers are unionized government employees. That's corporate welfare for the union bureaucrats. That's corporate welfare for the people appointed to supervise the screeners. With an airport in every state, that's a lot of pork to spread around.

There's one huge perk for the TSA, in addition to restricting traveler's freedom. It's one huge corporate welfare and pork project.

Thanksgiving Blogging Holiday

I decided to skip posting today. I made a post so that people don't think I was hospitalized.

State Anti-Anarchist Propaganda

This article on techdirt was interesting. There was a widely-circulated photo of an "anarchist" smashing windows.

However, it was a staged photo-op. The "anarchist" was surrounded by photographers! They were all removed from the photos that were actually published! Allegedly, the "anarchist" shot several takes. He tried smashing the window several times, so they could get a good photo.

That's a pretty flagrant example of the mainstream media manufacturing news. There's a lot of State propaganda against anarchists. An important State lie is "If you're against the government violence/justice monopoly, then you're in favor of random senseless violence."

When I was in school, I read about various political philosophies. I only read about the pro-State troll "property is theft" version of anarchism. I didn't learn about market anarchism until later via the Internet.

There's a lot of State propaganda against anarchists. That faked photo is a clear example.

BP Oil On Atlantic City Beaches?

I recently was in Atlantic City, NJ. I was there on a "spring tide" day (full moon) at low tide. I looked at the beach.

It was disgusting. There definitely was a lot of oil, and maybe some chemicals. Did oil from the Gulf of Mexico make it all the way to New Jersey? Was it another spill?

There definitely was a lot of oil on the beach, compared to the last time I was there.

Pointless Google Class Action Lawsuit

You probably heard about the Google class action lawsuit settlement:

Google rarely contacts Gmail users via email, but we are making an exception to let you know that we've reached a settlement in a lawsuit regarding Google Buzz (http://buzz.google.com), a service we launched within Gmail in February of this year.

Shortly after its launch, we heard from a number of people who were concerned about privacy. In addition, we were sued by a group of Buzz users and recently reached a settlement in this case.

The settlement acknowledges that we quickly changed the service to address users' concerns. In addition, Google has committed $8.5 million to an independent fund, most of which will support organizations promoting privacy education and policy on the web. We will also do more to educate people about privacy controls specific to Buzz. The more people know about privacy online, the better their online experience will be.

Just to be clear, this is not a settlement in which people who use Gmail can file to receive compensation. Everyone in the U.S. who uses Gmail is included in the settlement, unless you personally decide to opt out before December 6, 2010. The Court will consider final approval of the agreement on January 31, 2011. This email is a summary of the settlement, and more detailed information and instructions approved by the court, including instructions about how to opt out, object, or comment, are available at http://www.BuzzClassAction.com.

--------------------------------------------------------------------
This mandatory announcement was sent to all Gmail users in the United States as part of a legal settlement and was authorized by the United States District Court for the Northern District of California.

Google Inc. | 1600 Amphitheatre Parkway | Mountain View, CA 94043

When Google released Buzz, they made the default setting "share all contacts". This meant that you automatically shared all your E-Mail contacts with all of your contacts. Gmail automatically "adds to contacts" anyone you E-Mail a few times. The net effect is that every gmail user shared all their contacts with each other.

This was a huge privacy breach.

As usual, there was a class action lawsuit and settlement. The only people who made any money off the lawsuit were the lawyers.

Of course, there's no meaningful way for Google to reimburse everyone. If you set the fine to be "$100 per gmail user", that would bankrupt Google.

You can "opt out" of the settlement. There's no point hiring your own lawyer when it would be hard to prove substantial actual damages.

The State system of class action lawsuits only benefits lawyers.