Acquitted Conduct Sentencing

This story was interesting.

Suppose you are charged with a crime. There won't be just one item on the indictment. There will be 10-20 or more charges.

The jury may reach a "compromise verdict". They will acquit you of the more serious charges, but vote guilty on a lesser charge.

However, judges have the discretion to ignore sentencing guidelines! The judge will consider crimes for which you were charged, but acquitted, when imposing a sentence. The judge can even consider conduct not formally on the indictment.

For example, suppose you are accused of A and B. For A, the sentence is 20 years. For B, the sentence is 2 years. Suppose the jury convicts for B but acquits for A. The judge can still impose a sentence of 20 years!

Suppose I were charged of a crime and convicted. The judge could say "FSK questions the legitimacy of the State. Therefore, I'm imposing a harsher sentence than what the guidelines suggest."

Judges lie to juries about their nullification power. Sentencing information is withheld from juries. This leads to "justice" instead of justice.

Who Owns Your Garbage?

I saw an amusing incident, walking home from work. A man was rummaging through the trash. A homeowner was shooing him away.

The State has no legitimate ownership claim to any property. That makes the garbage unowned.

The trash was in a bag. The man would have ripped the bag, to take the cans he wanted.

The homeowner has a right to say "I don't want someone rummaging through my garbage!" That means the garbage doesn't become unowned until the garbage man collects it. Until then, the homeowner can refuse to allow people to take it.

I also thought the homeowner was being silly. I was thinking "What is he going to do? Is he going to stand there all night? The guy is going to take your trash as soon as you go inside."

Also, calling the police would have been pointless. If your job is "picking through trash", then the threat of arrest isn't that severe. Police don't profit from kidnapping poor people for minor transgressions.

That was an interesting example of the failure of the State. The homeowner didn't want someone stealing his trash. The homeowner had no recourse, other than stand outside all day.

"Tax The Rich" Fallacy

State comedians like to say "Let's tax the rich more!" They're missing an important point. The whole point of the State is to enable insiders to steal.

Most insiders are negative taxpayers. The value of State subsidies is more than the value of any tax they pay. If someone is an insider and a negative taxpayer, there's no point raising their tax rate. If someone is negative taxpayer, the fact that they pay taxes is an illusion.

Who decides how much a CEO gets paid?

CEO: How much should I get paid?
Board of Directors: How much do you want to get paid?

There is no free market for CEOs and for CEO pay. It's a game that insiders play with each other.

In a really free market, if a CEO were overpaid, then competitors would compete and offer a cheaper price or better product. In the present, large corporations have a monopoly/oligopoly. If the CEO is overpaid, the cost is passed on to customers as higher prices. There are State barriers to competition.

A CEO is not chosen via a free market process. A CEO is good at playing political parasite games. Most CEOs could not build a successful business themselves in a really free market. They are chosen to lead a business that already has a State-backed monopoly.

Even "heroes" like Mark Zuckerberg and Steve Jobs earned their position by using parasite skills to manipulate others. They probably wouldn't have been able to build a successful business without the State.

If the CEO's tax rates are raised, then he can just raise his salary to compensate. He's a negative taxpayer.

Besides, most CEOs get paid via option grants and equity grants. Those are taxed *MUCH* more favorably than ordinary income. Also, insiders use trusts to dodge taxes.

"Tax the rich!" hurts successful small business owners. They are net taxpayers. Via income taxes, a small business subsidizes his larger corporate competitors. Via estate taxes, the small business owner is forced to sell to a larger corporation when he dies.

"Tax the rich!" is an evil fnord. Most insiders are negative taxpayers. Higher taxes hurt successful small business owners and professionals. Productive workers actually pay the higher tax rate. If someone is an insider and a negative taxpayer, it's a farce to pretend to raise their taxes.

There's an important fallacy. Some people make money via political connections. Others make money by producing something useful. The former is evil, and the latter is good. Most slaves can't make the distinction. Laws aimed to hurt abusive insiders wind up hurting productive workers.

Corruption Bubble

Some people are wondering where the next bubble will be. The USA has a pretty severe corruption bubble. It's much easier to profit from stealing via the State, rather than actually producing something useful.

The Federal Reserve is still heavily inflating. The Fed Funds Rate is 0.25% while true inflation is 20%-30% or more.

This will lead to another bubble. Where will the next bubble be? Another bubble is guaranteed. You may not be sure until after it pops. Are current silver prices a bubble? Are they a sign of high inflation? You can't be sure.

The USA is definitely experiencing a corruption bubble. That's a key indication of the end of an empire. It's easier to make money via State abuse, rather than by producing something useful.

Instead of making a useful product, you file a patent lawsuit. Instead of making a better product, you get a bailout. Instead of improving efficiency, you lobby for laws that hurt smaller competitors.

Negative interest rates send a false signal. With negative interest rates, an investment that destroys capital can be profitable.

Suppose that corporate bond rates are 5%, while true inflation is 30%. Suppose a CEO is considering building a factory has an expected nominal return of 15%. Therefore, the CEO will borrow at 5% and build the factory, making a profit of 10% (15% - 5%). However, the factory project destroyed capital at a rate of 15%. (30% - 15%)

Negative real interest rates created the illusion that building the factory was a good idea. It's the "seen vs. unseen" fallacy. The CEO got a factory. The rest of society experienced inflation greater than the real value of the factory. Building the factory, the CEO claimed resources that would have been more efficiently allocated elsewhere.

Real interest rates are negative 20%, negative 30%, or even lower. This means that many corporate capital projects actually destroy value. Negative interest rates cause a capital-destroying project to be profitable.

Even worse, negative interest rates lead to bubbles and busts.

The USA is experiencing a severe corruption bubble. It's easier to make money lobbying the State for favors, than by producing something useful. Once corruption crosses a certain threshold, corruption squeezes out useful work.

Increasing corruption is a positive feedback cycle that leads to complete economic collapse. Insiders can't really fix they problem. Insiders are using the State to line their pockets. They won't give up their perks. There are fake reforms, like healthcare "reform" and financial "reform". Meaningful reform cannot occur, because insiders profiting from corruption will always block real reform.

Who Cares About Obama's Birth Certificate?

President Obama released his "long form" birth certificate. (I was amused by the guy who said "Hey! This was photoshopped!" That would be a clever trick. Intentionally release a photoshopped birth certificate, so people can keep discussing the issue.)

The "birther" controversy is a distraction from more serious issues. The mainstream media talked about the birth certificate, instead of Bernanke's press conference and record gold/silver prices. I was amused that silver and gold spiked up immediately after Bernanke's press conference.

People say "President Obama was not born in the USA. Therefore, his authority is not legitimate." It's the right conclusion for the wrong reasons. No President's authority is legitimate. All taxation is theft. Via its monopolistic power, government is one huge criminal conspiracy.

Obama is not some random person who became President. His parents had impressive political connections, but they weren't publicly prominent. Many high-ranking State insiders don't want public scrutiny.

By hyping the "birther" issue, it distracts from other valid criticisms. The mainstream media implies "Anyone who criticizes the President is racist!"

NBC is heavily promoting Trump, because he has a TV show on NBC. The other networks follow. Donald Trump is probably one of the few candidates Obama could beat in the general election. It pays for President Obama to hype Donald Trump, because he wants all his critics to look that foolish.

Why does the mainstream media keep touting the "birther" issue? It's a distraction from other issues. By hyping easily-refutable criticism of the President, that hides valid criticism.

David Sokol, Warren Buffett, And Insider Trading

This story is interesting. David Sokol was one of the people being groomed to succeed Warren Buffett as CEO of Berkshire Hathaway. He was forced to resign in an insider trading scandal.

David Sokol bought a lot of shares of Lubirzol for his personal account. Then, he advised Warren Buffett to buyout Lubrizol, and Warren Buffett followed his advice. David Sokol made approximately $3M off his Lubrizol trade.

David Sokol bought Lubrizol shares, driving up the price. This caused Berkshire Hathaway to pay a higher price for Lubrizol. David Sokol indirectly robbed Berkshire Hathway shareholders.

In effect, David Sokol had a free implied option, on his Lubrizol trade. If Berkshire Hathway bought Lubrizol, he would make a nice profit. If Berkshire Hathaway didn't buy Lubrizol, David Sokol had concluded it was a good investment anyway.

David Sokol knew that Berkshire Hathaway was considering to buy Lubrizol. His job was researching corporations to buy!

"Insider trading" is a crime that cannot occur in a really free market. In a really free market, there's no limited liability corporations. Without the State limited liability perk, it'd be too risky to buy 100 shares of a large corporation; you'd be assuming liability for all potential losses. Without limited liability, there's no stock market and no insider trading.

Some people argue that insider trading should be legal. The insider is doing the rest of the market a favor. The insider moves actual market prices to more accurately reflect the fair price. For example, an insider with favorable information buys, increasing the price, moving market prices closer to the fair price.

Insider trading is illegal, because it makes corruption too obvious. If a CEO gives himself 1M shares in a grant, maybe he's a brilliant leader who deserves it. If a CEO pays $20M on a consulting contract for his friends, you can't prove it was wasted. When a CEO sells shares just before he releases bad news, that's corruption that's obvious to anyone.

There are many ways that a CEO can rob shareholders. This is the Principal-Agent Problem. The CEO acts like the full owner. The CEO isn't the actual owner. The CEO has control, which means he can act like the owner. With control but not ownership, the CEO will always be tempted to line his pockets at the expense of shareholders.

With insider trading, insiders are abusing their power in a flagrantly-obvious manner. There are plenty of other was for insiders to steal from shareholders. This temptation will always exist, due to the Principal-Agent problem.

State thugs declare "Insider trading is illegal!" They treat the symptoms but not the cause. The cause is the Principal-Agent Problem, due to the distinction between ownership and control. Insider trading is a symptom of the Principal-Agent Problem.

Also, the State forces people to invest in the stock market. In a money market account, you get robbed via inflation. Gold and silver are heavily regulated. It's hard to invest in gold and silver. There are many taxes and regulations. Warehouse receipt banking is illegal. By banning and heavily regulating alternatives, the slaves are forced into the stock market, where insiders can rob them. I saw a cynical quote, "Warren Buffett advises people to invest in the stock market, because he can easily fleece stock market investors."

In a really free market, people would be reluctant to buy minority ownership in a business. In the present, the stock market doesn't outperform true inflation (gold/silver).

For another example, the Mets' owners are trying to sell a minority ownership in the team. They are having a hard time finding a buyer. Only a fool would buy minority ownership. There are too many ways the majority owner can rob you.

Assuming current stock market laws are valid, both David Sokol and Warren Buffett broke securities laws. Warren Buffett has cultlike status. He's a big promoter of fake free markets. He advises people to invest in State paper rather than gold or silver. Warren Buffett is politically untouchable. If Warren Buffett were charged with a crime, that would be a huge blow to the public image of the stock market scam.

David Sokol obviously broke insider trading laws. He bought Lubrizol shares while he had inside information, that Berkshire Hathaway might buyout Lubrizol.

If David Sokol is charged with a crime, then Warren Buffett must also be charged with a crime. As David Sokol's boss, Warren Buffett has a responsibility to supervise his subordinates.

At every stock market job I had, my employer demanded a copy of my brokerage statements. This is "Compliance 101". It's an obvious law that everyone should know. You get a copy of employee brokerage statements, and actually read them.

For example, my current employer has a list of stocks I'm not allowed to trade. By looking at my employer's records, I could theoretically gain an unfair advantage. I have access to insider information, from my employer's computer records. The compliance department should read my brokerage statements, and see if I was exploiting inside information.

Warren Buffett should have demanded that David Sokol give him a copy of brokerage statements. Warren Buffett should have actually read those statements. These are basic compliance rules. Everyone in the securities industry should know this.

If David Sokol were determined to steal, there are other loopholes he could use. For example, he could have advised a friend to buy Lubrizol, rather than buying it himself. Then, he would be guilty of insider trading, but not Warren Buffett. If David Sokol did that, he probably would not have been caught.

David Sokol is guilty of violating insider trading laws. Warren Buffett is guilty of "failure to supervise". Warren Buffett is politically untouchable. I predict that neither David Sokol nor Warren Buffett will be prosecuted. If David Sokol is prosecuted, that will make Warren Buffet look foolish.

Warren Buffett heavily hypes the State stock market. If he's obviously dishonest, then it's too obvious that the whole stock market is dishonest. Warren Buffett is politically untouchable.

This makes the prosecution of Raj Rajaratnam a sham. There are two justice systems, one for insiders and one for everyone else.

New DVR - Magnavox 515h

I bought a new DVR. It's a Magnavox 515h. I've had it for two weeks and I like it.

I didn't accept payment from Magnavox or others to write this. I probably should have, since this is a favorable review. I don't like it when blogs accept payment to write a post on a specific subject, such as pay-per-post. I don't like ads disguised as content.

The Magnavox 515h is like a Tivo, but with no subscription fees. It has a 500GB hard drive. It also has a DVD burner, supporting R-, R+, RW-, and RW+.

The hard drive can hold 600 hours at the lowest resolution (SLP). I found that the be too low quality. I switched to EP, supporting 400 hours, and that was good enough.

For certain channels, such as CNBC, there's a quality problem. I think it's Time Warner and not the DVR, but I'm not sure. It's an intermittent problem, which makes me suspect Time Warner. Perhaps this DVR doesn't properly compensate for low cable signal quality.

I don't know why anyone would pay for a Tivo subscription or cable DVR subscription. Assuming the DVR lasts a year, the Magnavox is cheaper than a Tivo. I can handle setting the cable box timer myself. A Tivo isn't worth the subscription fee.

Unfortunately, you can't buy the Magnavox 515h in Best Buy. Best Buy only offers Tivos. They probably get a cut of the Tivo subscription fee. Therefore, they prefer to sell Tivos instead of a higher quality product.

I ordered from Amazon.com. They added sales tax to the price. Since when did they start doing that?

There are other nice features, compared to a regular VCR. I set it to "auto-chapter" every half hour. That makes it easy when I record several programs at the same time. I can fast-forward or reverse a half hour at a time.

If you stop and resume playback, it remembers where you were. You can record up to 12 hours at a time, or multiple recordings totaling the full HD capacity. That's useful when recording a marathon.

You can "burn to DVD" if you want to save something. I only watch each program once.

Cable DVRs *DON'T* offer auto-skip. You can fast forward, but not skip ahead 30 seconds. They want to force people to watch commercials. The Magnavox 515h offers a skip forward and backward button. I set it to skip ahead 30 seconds and backward 15 seconds.

This makes it very easy to skip over commercials. (However, it doesn't automatically edit them out.) Commercials are nearly 1/3 of a TV show! It's much faster to skip over commercials with this DVR, compared to a regular tape VCR.

I also have a Panasonic EZ48V. That was a real POS. I bought some Memorex DVD+RW disks. They worked in the Magnavox DVD burner but not the Panasonic DVD burner.

There are other neat features. You can "pause live TV", like with a Tivo. The Magnavox "pause live TV" buffer is 6 hours, longer than a Tivo. If you're watching a show with the DVR on, you can convert the autostart recording to a regular recording on the hard drive. You can watch one show already on the hard drive while recording something else. You can watch a recording in-progress from the beginning.

I'm liking the new Magnavox 515h DVR. I like the way you can easily skip over commercials. Cable DVRs don't allow that. I like the fact that there's no subscription fees. I'm annoyed that Best Buy doesn't offer this DVR. They prefer to sell Tivos for a cut of the subscription fee.