Obama to Bankrupt Country by Raising Minimum Wage

President Obama called for raising the minimum wage to $9/hr. Please tell me how many people will be fired if that happens? How many businesses will have to shut down? How many part time workers, will have their hours cut?

Please understand something: Obama is selling you pie in the sky. We’re adults. We know that a company has to pay, not just the worker’s salary, but his taxes, his state and local taxes, any benefits, unemployment fund, etc etc etc. Raising the minimum wage IN A RECESSION will only be bad. VERY BAD. for the already down economy.

You are not supposed to feed a family of 3 on a minimum wage job. Yes, people do it, but who’s fault is that? For every minimum wage job out there are 2 brain-dead jobs that pay better. Minimum wage means you have NO skill. It isn’t for someone that does immense calculations. If they wanted to pay more, the position would require more.

I guarantee you if the minimum wage is raised, people will get fired. And I mean, A LOT OF PEOPLE.

For those who have been following my blog, you already know from my macroeconomics posts, the minimum wage is a destructive tool that is used for racism and destroys productivity. It bankrupts business, raises labor costs and forces owners to fire the worst workers from his business. You can tolerate a bad worker at a lower wage. You cannot tolerate a bad worker at a higher wage.

Maybe Standardized Tests Really are Racist Against Black People

Standardized Tests Really are Racist Against Black People

In the 1970s there was a very big todo about standardized tests being racist against Black people. When I heard about the debate, when I was old enough to even take a standardized test and made aware of the debate, I didn’t see how the test could be racist, because there was nothing on the test, in my view, that even hinted at racism. However, I am now about to take the CFA, chartered financial analyst, exam. While this exam is not racist, I just had an epiphany.

Reading an Alien Language

What I couldn’t comprehend before, I now comprehend. There was an episode of “Good Times” that I saw on rerun, of course. In the episode, the youngest son of the family, who was always portrayed as a Black militant, all 4 feet ant 10 yrs old of him, had a monologue about how standardized tests were racist. The mother, playing the straight man to his schtick was the devil’s advocate and asked him to explain how the tests were racist. He said, “for instance: the quests asks ‘if jane and george go to the diner for lunch, and jane won’t sit next to suzy and suzy won’t sit next to harold and harold will only sit next to jane, who is sitting next to whom'”. Now the mother asks, what’s wrong with that question. So he answers, “Black people don’t even go to diners so they don’t know what a diner is, and these names are white and Black people have never heard of them, and Black people don’t go out for lunch. It’s racist.” Of course they play the laugh track to laugh at the monologue.

But, they were trying to hint at a very real problem.

Where do I come in? So I am taking the CFA exam. There is nothing wrong with the exam, nor the study guides the institute actually sends you. The problem is that nearly all study groups online are with people from India. On its face, that’s mostly not a problem, since they do speak English. The problem comes when they reference me to use their study material. you see, the CFA is a very big deal in India. So they have many professors that have study material of their own.

Here is where the problem comes in. While trying to listen to the Indian study material, it struck me like a ton of bricks. I don’t understand 50% of what the guy is even saying. The units and names and references are to things I cannot even imagine what they mean. This is where the epiphany about the standardized tests came in. I suddenly realized what “Good Times” was trying to say.

It’s not that the test was racist, it is that in the hands of a Black person, the test is literally like trying to read an alien language, with no point of reference of how to even begin. In the debate, they rewrote entire standardized tests in pure Black colloquial terms, and with references that Black people would understand and every Black person that took those exam scored much higher.

To give you an example of how reading or listening to my indian study guides, the professor will say something like this: “the conditional probability of when India ****, ** *****, ***** at 36% and **, ****, **** at 50%, give us the probability of **** *** and **** ***.

I literally cannot tell what he is saying. And, as the lecture goes on, he gets more and more obscure with his references.

Here’s another example that may show you what I mean. “When in Accra I had the best fufu. The best fufu is only found in the bush. When in the bush you sit and watch the fufu being made. The Tri make the best fufu.” Now, unless you’ve been to Africa, that probably should make no sense to you. So here are the definitions of the words I just used.

• fufu = a pounded root that is pounded into a plastic like dough that you eat raw
• Accra = a city in Ghana Africa
• bush = the interior of a country away from the coast, which has nothing to do with bushes. It just simply means you are really far in the countryside.
• Tri = a major tribe in West Africa

Even if you are fairly intelligent, without these references and definitions that sentence should have been terribly hard for you to understand. This is how I feel while studying Indian study guides and this is probably how inner city Black kids felt when taking the standardized tests. They were literally reading what would be alien language to them.

It is ironic that the Mexican immigrants come here and everyone bends over backwards to get over the language barrier for them. However, for Blacks there was never such effort. Don’t get me wrong, ebonics is not Black language, seeing as the very word and concept wasn’t even invented by Blacks. I am referring to a social and cultural barrier that is hard to understand unless you are Black yourself.

When I went down south to attend college, it took me a month to understand everyone. Mind you, I was at college, so we are not talking about unintelligent people. They literally spoke a foreign language, from my perspective. After about a week of asking people to repeat themselves, I gave up. Slowly but surely, after a month had passed, I began to understand everyone. I would literally walk around and if someone spoke to me I would apologize and tell them I could not understand them. As hard as I found it to understand them speaking, I cannot imagine the difficulty they had when they had to take national tests.

And, if you think I am exaggerating because it was just one college campus, it is not the case. When I went to visit family around the country, they were all struck by how differently I spoke. One of my uncle’s was certain that I would change after staying him for a few months. He was quite surprised that I did not, which he mentioned as I was leaving. He was sure I was faking, and that I would come around and let the joke end.

What Exactly is Fracking and Is it Bad

If you listen to Democrats and environmentalists this method of drilling for oil and natural gas, called fracturing is the 2nd coming of the beast. There is a lot of talk about how terrible it is for the environment, how they put toxic chemicals in the ground, how it pollutes the water table, how it is very near the surface and kills livestock and small children.

Well, I wouldn’t want you to be completely ignorant on the subject, because you will be called to vote on this very issue soon or in the very near future.

None of the propaganda against fracking is true. Nearly every point is the exact opposite of the truth. Finally, because of fracking natural gas is now cheaper than ever.

Course Correction: DOW Falls, Crude Oil Falls, Copper Falls

DOW Falls, Crude Oil Falls, Copper Falls

Department of Defense Prepares for Half a Billion in Spending Cuts

WASHINGTON, Feb. 21, 2013 – Deep, across-the-board spending cuts scheduled to take effect March 1 would cause chaos for the Defense Department, Deputy Defense Secretary Ashton B. Carter said in a televised interview yesterday.

Carter told Judy Woodruff on “PBS Newshour” that the department will do what it can to minimize disruptions should the cuts kick in, but it can do only so much.

“We don’t have a lot of flexibility, and we don’t have a lot of time in that regard,” Carter said.

A “sequestration” mechanism in budget law requires DOD to cut $46 billion in spending from March 1 until the Sept. 30 end of the fiscal year unless Congress comes up with an alternative that would stop sequestration from triggering. This comes on top of $487 billion in defense spending reductions already programmed over 10 years, and Pentagon officials have noted that operating under continuing resolutions in the absence of a fiscal year budget complicates matters.

Defense Secretary Leon E. Panetta notified Congress yesterday that the department is preparing to place almost all of its 800,000 civilian employees on unpaid furlough for one day a week through the rest of the fiscal year. These are not faceless bureaucrats who simply shuffle paper, Carter said.

“They repair our ships. They maintain our aircraft,” Carter said. “That’s who these people are, and 44 percent of them are veterans. It’s a terrible thing to have to deprive them of some of their income.”

If sequestration triggers, operations and maintenance — the primary funding that ensures readiness — will be particularly affected. The department will ensure units deploying to Afghanistan will receive the training needed to succeed. But this will rob other units readying for other missions, Carter said.

“That’s just a mathematical fact of doing sequester,” he added. “This is very damaging to national security.”

In planning for sequestration, the Navy already has postponed sending an aircraft carrier to the Persian Gulf to join one already there, to ensure there will be enough ready carriers to dispatch to other critical areas if required.

“In everything we do, we’re really trying to keep on protecting the country and delivering the defense under these circumstances,” Carter said.

By Jim Garamone
American Forces Press Service

Charities Left Out in the cold in Cash for Clunkers Deal

Cash for Clunkers What is it?

I’ve mentioned before that the stock market it is a zero sum gain, I win at your expense, not a win win situation. In the cash for clunkers program the government is footing the bill for $2 billion. Now when I say the government is footing the bill, I mean US. But the cars that qualify for the trade in program are perfectly running cars; can’t be too old; can’t have bad emissions; can’t have great emissions; have to be paid off.

Now I thought on its face that those criteria were just awful. Why would a rational thinking American turn in a car and burden themselves with more debt? This is why were are in this mess to begin with. This is insanity. This makes me mad.

Not only does the cash for clunkers program make me mad, but now I’ve found out that these idiots fell for it hook line and sinker and the program is an “overwhelming success”. Idiocy is running rampant in America. They should have an intelligence quotient for people to call themselves American.

Now I am totally ballistic. I am so fuming mad I could spit.

BUT WAIT …

THERE’S MORE …

Enter the Charities

In the stimulus package, that Barrack Obama signed into being, you’ll see how in that bill, charitable donation tax write offs were lowered. I don’t know how a peace loving, hippie acting, granola eating, president could completely shaft charities like that.

Regardless of what some idiots who stick their heads in the sand say, charities do benefit heavily due to people wanting a tax write off.

As if that weren’t enough, let’s take a look at the Cash for Clunker stimulus package, i.e. car industry bailout.

The cars being turned in for vouchers are the cars that previously would have been the exact cars donated for a tax deduction. Car donations were left completely out of the entire cash for clunkers program, even though both the Congress and Senate were told of the problem months and months before.

Apparently, charities are not a big enough lobbying group. [ I guess they didn’t “donate” $1 million like Goldman Sachs did… ooops did i say that ]

And, Obama is gloating over the plan, and hoping it will get renewed. So once again, this president is shafting them.

I just don’t get it.

I say donate your car. If you really need a new car so badly, you can get dealer incentives to buy upwards of $4,500 anyway. Give your old car over because I’m not liking to foot your stupid bill in this $2 billion car bailout, because that’s all it is anyway.

Don’t misunderstand me, I am not a desocialistacrat nor a repukeblican. Both are the same thing.

This American Lifestyle: Why Are We in This Mess

Why are You in Debt?

Peter Schiff comes on to CNBC and they all have a good laugh at him. Of course Peter Schiff has a 1 minute 30 second spot to deliver his message of doom and gloom, competing with the idiot host who wants to give you the “THE RECESSION IS OVER, THE RECESSION IS OVER,” mantra they always spew.

Let me explain why we are in this situation, since I [and you] have all the time in the world.

Preparing You for a Life of Debt

Let’s start with you and I’ll get to your parents in a second and tie it all in. Your first taste of true economic freedom is clamped down and you’re straddled with debt immediately. How? College! You take out massive loans, not secured by anything other than your I.O.U. You are then strapped with this debt fresh out of college. You must secure a job immediately to start paying it back.

But, wait! These college loans afford you a lifestyle change unlike, what you would have had, had you paid for college yourself. I’m not talking rich people. I’m talking average middle-class America, paying for college with their own money. “Well, no one would go to college,” you might say. Not true, and this is where Peter Schiff, Ron Paul and the Austrian Economic School of thought come into play. If everyone in America stopped taking college loans, or begging for government grants, college tuition would plummet and we all could afford it. Colleges would have to compete with each other, to offer an affordable price to gain student dollars. Colleges right now are not run like businesses, the are run like governments, wasteful. Colleges rely on the fact that the government is going to continually bailout the students. They no more reign in spending than the city or state or federal government does. If they have waste, they just raise tuition to pay for it. What do they care?

Conditioning You for Debt

The point is, you are now conditioned to accept massive debt, to afford you a certain lifestyle. This is where your parents come in. Instead of them saving, I’m talking on a massive scale, and paying for college out of their pocket, they do stuff like take out home equity loans. It has become to common place,that banks now advertise for it. “Take out a home equity loan for your kid’s college tuition.” 80 years ago, that would have been unthinkable. People would have called you mad. So, immediately, your parents first financial lesson to you is, go in debt to afford you a certain lifestyle. Nice lesson dad.

This lesson is repeated over and over. People were relying on the equity in their home, with the notion that housing prices would continually climb, so they could borrow on it. Now, Barrack Obama and Ben Bernanke, is trying to continue this farce by propping up housing prices. They are fighting the recession with every ounce of strength they have. And, believe me, they have an entire treasury to do it. They have the sheep, that is the American public to give away their money, and no one asks a question.

“More than three-quarters (77 percent) of Americans with pre-college age kids, however, have saved less than $20,000 for their children’s college expenses; 62 percent have saved less than $10,000, and 43 percent have saved less than $5,000. Twelve percent have saved nothing at all.”

Your house is not worth $125,000.00. I’m sorry to be the one to tell you this. Go back and see what your house would be worth in 1970, and maybe then you’ll have an accurate picture.

What people are failing to understand is, housing prices are predicated upon the scarcity of housing. Unfortunately, there was a housing boom in construction. There is an over abundance of housing. So your house is worth far less now, than when you first bought it. There are parts of the country with entire huge condo buildings sitting empty. I don’t have the numbers, but I guarantee there are at least 10% of empty real estate in every city. That means your housing price, should be lowered.

So this notion of borrow on equity… You have no equity. You have nothing. You were being propped up by the government the entire time. Why do you think you can deduct the depreciation of the value of your house annually? The government knew the real story.

So we have a failing economy, lowered housing prices, what’s next? Unsecured debt! Besides all the lending done on real estate, people still took up debt that was unsecured, like college. The lenders knowingly were doing this, but we were still borrowing. No one forced us to sign on the dotted line.

We just had the FBI raid TBW based on fraud. Stories like that should show you. I guarantee the FBI could probably raid every bank in the land for nefarious lending practices.

No one wants to swallow the pill. I bet you’re sitting here muttering, “I don’t want to lose my equity”, “I don’t want the value of my house to go down.” Or, you might be a banker saying, “I don’t want my clients defaulting on their loans.” So everyone is hoping Obama will bail them out, prop up this farce of an economy and keep it, business as usual.

No One Wants to Swallow the Bitter Medicine

This is what Peter Schiff, Ron Paul, and the Austrian Economic School of thought is talking about. Everyone is sitting quivering in their living room, hoping they won’t have to be the ones to pay for all this excess. And, when I say excess, I mean all the loans.

Imagine for an instance, that you had no debt, at all. Imagine the only expenses you had were your power bill. *GASP* I bet for some of you, that is nearly impossible to imagine. This is what the recession needs to cure. This is where this recession needs to go. Not, bailing everyone out. Not, propping up housing prices.

If we could go back in time, I would be for Obama saying,

“Today I’m wiping out all the toxic real estate assets. I am wiping out all current housing loans. I am declaring a banking holiday.”

Housing prices would have plummeted, but no one would care, would they? If your house was paid for, but only worth $10,000 would you care? However, no toxic assets were removed from the system, not a single one. And, you are still in debt.

Japan Comes Out With the First Mass Produced Electric Car

Nissan Leaf All Electric Car

The Nissan Leaf is a medium-size hatchback that comfortably seats five adults. It has a top speed of 90 mph and a range of over 100 miles.

The zero-emission car is powered by Lithium Ion batteries – such as used by cellphones and laptops. Using a direct-current quick charger, the battery pack can be recharged up to 80 percent in less than 30 minutes. Charging at home with 220-volt AC will take less than 8 hours.

Deliveries to retail customers began in the United States and Japan in December 2010, followed by various European countries and Canada in 2011, and as of February 2013, is available in 17 European countries, Australia and other international markets. The Leaf is the world’s best selling highway-capable all-electric car ever, and reached the 50,000 global sales milestone in February 2013.

As of December 2012, the top-selling markets are Japan, with about 21,000 units; the United States, with 19,512 units; and the European market, with almost 7,000 units delivered. Sales in Europe are led by Norway with 2,841 units and the UK with 1,334 Leafs sold through December 2012.

The Leaf uses an 80 kW (110 hp) and 280 N·m (210 ft·lb) front-mounted synchronous electric motor driving the front axle, powered by a 24 kilowatt-hours (86 MJ) lithium ion battery pack rated to deliver up to 90 kilowatts (120 hp) power.

The pack contains air-cooled, stacked laminated battery cells with lithium manganate cathodes.The battery and control module together weigh 300 kilograms (660 lb) and the specific energy of the cells is 140 W·h/kg. Each battery pack costs Nissan an estimated US$18,000 (as of May 2010).The 2011/12 model Leaf has a top speed of over 150 km/h (93 mph) Unofficially, 0 to 60 mph(0 to 97 km/h) performance has been tested at 9.9 seconds.

The United States Environmental Protection Agency official range is 117 kilometres (73 mi), much less than the 160 kilometres (100 mi) promised by Nissan. The Federal Trade Commission, which is supposed to label all alternative-fuel vehicles, disagrees with the EPA rating, and considers that the correct range is between 96 to 110 miles (154 to 180 km). Although the FTC does not conduct its own tests as EPA does, it relies on a standard set by SAE International and the results reported by automakers. The Leaf has a range of 175 km (109 mi) on the New European Driving Cycle.

Based on third-party test drives carried out in the US, reviewers have found that the range available from a single charge can vary up to 40% in real-world situations; reports vary from about 100 kilometres (62 mi) to almost 222 kilometres (138 mi) depending on driving style, load, traffic conditions, weather (i.e. wind, atmospheric density), and accessory use. Nissan tested the Leaf under several scenarios to estimate real-world range figures, and obtained a worst case scenario of 76 kilometres (47 mi) and a best case scenario of 222 kilometres (138 mi). The following table summarizes the results under each scenario tested using EPA’s L4 test cycle and presents EPA rating as a reference

In the last 12 months Europe registered significant growth of the CHAdeMO quick charging infrastructure. The number of these chargers which allow batteries to be recharged from empty to 80% battery capacity in around 30 minutes has rocketed from 158 to 601 in the last 12 months. The plans already in place are to more than double by the end of this year the number of installed quick charging installations. These units are being installed at strategic locations such as shopping center car parks or highway service stations, allowing the 50,000 Nissan LEAF owners to push the electric vehicle revolution even further.

The Nissan LEAF was the first mass produced EV winning the European, World and Japanese car of the year 2011. More than 50,000 units have been sold globally since its introduction in December 2010, making Nissan LEAF the world’s most selling electric vehicle. The AC motor develops 80 kW of power and 280 Nm of torque, enough for a maximum speed of 145 km/h. The electric motor is powered by a Nissan-developed laminated lithium-ion battery with an output of more than 90 kW. Recharging from empty to 100% takes eight hours with a normal charger and just 30 minutes from empty to 80% using a quick charger in optimal conditions. Nissan LEAF has been awarded five stars in the tough Euro NCAP tests, making it one of the safest cars on the road. Nissan LEAF comes fully equipped with air conditioning, satellite navigation, rear-view parking camera. European production of the Nissan LEAF will start at Sunderland in 2013.

December 11, 2010, the absolute first consumer-ready example of the world’s first mass-market, globally distributed, and relatively affordable 100% electric car was delivered into the hands of its first customer at a Nissan dealership outside of San Francisco, California. Given the relative obscurity, misunderstanding, and, sometimes, outright hostility that electric vehicles have lived under for much of the last 100 years, there are a great many who never thought this day would come.

In what Nissan representatives call a “democratic” process—one which they seem to be altogether proud of—the gentleman to whom the absolute first Nissan LEAF was delivered is not an A-List celebrity (or even a B-, C- or D-Lister). Rather he is a quite normal tech industry employee from Redwood City, California, who just by the luck of the draw, happened to be the first person to get his LEAF order in when the opportunity opened up in August 2010.

And so, just by the luck of the draw, there are several things about the first LEAF customer, Olivier Chalouhi, that break some of the common misconceptions electric cars have often been associated with. Saying, “I think that there’s too much attention on me” and that Nissan deserves most of the credit for this day, Chalouhi showed quite a bit of modesty on a day when he was the center of attention of much of the automotive world media.

As for whether or not Chalouhi considered buying a Chevy Volt as well, he was quick to say it wasn’t even on his radar. He specifically chose to buy a Nissan LEAF over a Chevy Volt for several reasons: one, he was put off by the fact that Chevy dealers were given the ability to charge whatever price they wanted for the Volt, raising the price of an already expensive vehicle by as much as $20,000 or more; two, he felt the Volt was “really expensive” to begin with and out of the reach of the average customer that wanted to outright own the vehicle and not lease it; and, three, the Volt is not a “pure” electric model.

I knew japan would be the first to come out with the mass market EV. The have no oil in their country and loads of technology. It was only a matter of time. Even their government assists them with R&D.

• 160 kilometers [100 miles]
• seats 5 adults
• 140 kilometers [90 mph]
• lithium ion batteries
• 8 hour recharge on high voltage
• connected to nissan IT center for entertainment and data
• mobile phone remote control of car features

People Who Say Protectionism is Bad Are Idiots and Here’s Why

People Who Say Protectionism is Bad Are Idiots

I find it interesting that people who call themselves Libertarian, Democrat, and Republican all jump on the “protectionism is bad” bandwagon. They wail and moan how it harms the american “consumer” with rising prices, if they are not allowed free trade.

BUT HOLD ON A SECOND, you can’t start a company in China without 51% ownership by a Chinese firm. You can’t sell goods in china without huge 40%-60% tariffs on all imported goods.

This notion of protectionism is a complete and utter lie. China has been doing this for 60 years. In fact, they are so bad, they even subsidize exports. That means, the cheap Chinese crap you buy, isn’t actually cheap, they use Chinese tax payer money to lower the prices. Then, when you see it on the shelf, it is twice as cheap as a US made piece of plastic trash, because the US doesn’t put tariffs on it. So instead of an American made plastic cup, you now can only find a Chinese made plastic cup. And, some idiot on the news says, OH ITS A MIRACLE, CHINESE PLASTIC CUPS ARE CHEAPER THAN AMERICAN PLASTIC CUPS, THE AMERICAN CONSUMER WINS.

No no no no no! Stop! Their government is lowering the prices of all Chinese exports to make sure the local plastic crap is more expensive.

The Chinese economy is not THAT far off of the American economy. They are not a 3rd world nation.

You’ve been had, bamboozled, hoodwinked, RUN AMUCK. These idiots crying about protectionism have no clue what they are talking about. We don’t need “free trade”, we need equal trade. Any country that has economic policies in place for American goods, the US should have an exact mirror of those policies. PROBLEM SOLVED.

GM Chevy Volt: Too LIttle Too Late Tuesday

GM Chevy Volt

If you’re a regular reader of mine, you know that I have a passion for America completely renouncing gas powered cars. Not because I’m a strong environmentalist, although it doesn’t hurt, but so that we are completely separated from the tyranny of the oil tycoons. As such, I do tend to pay attention to the stats on these cars that are entering the market.

I Declare Shenanigans on GM

They have attempted to make a showing by having a prototype in each and every auto show out there. But really, they are simply trying to pull publicity stunts to make the “joe six pack” forget they have received nearly 1 trillion in bail outs thus far. I mean who are they kidding?

The latest stunt is the: GM nabs 230 MPG rating from the EPA. However, the EPA has released “a new methodology for determining a draft fuel economy standard for extended-range EVs like the Volt,” and it’s that murky measurement system that has blessed Chevy’s wonder child with a triple digit MPG rating.

For those completely ignorant of EV stats, you don’t measure the car in MPG anyway. That just goes to show you what underhanded shenanigans these guys are playing. An EV is measured in: range; speed; charge speed. The volt isn’t an EV at all. It’s a plug in hybrid. And for that, it’s 2 steps backwards in the race for oil independence.

Now for the stats:

Don’t Be Scammed by Obama’s Health Care Plan

The Obama Health Care Plan

The core of Obama’s Health Care “Reform” Act is based on whether or not you’re covered by insurance for health care. In fact today, people consider it a forgone conclusion that health care = insurance. You ever get into a dick waving contest with a bunch of your yuppie friends over health care, as a sign of how well your company treats your or negotiates? “What kinda health care does your company offer?” “What deductions do you have to pay out of your paycheck?” “Does your company insurance cover everything?” “My company’s health care insurance is so good, my daughter got a boob job from it.”

In fact the media, using it’s normal scare tactic, has completely couched all of its coverage of the bill in terms of health care = insurance. There’s not even a logical argument that goes before it. They completely make us assume that, that’s the only way to get health care in America.

What does that mean? It means, they assume you’re too stupid to realize insurance isn’t necessary for good health care. In fact they assume it so much, that they make it a forgone conclusion. They print stories like:

“For the staggering 46 million Americans lacking health care coverage, the uninsured will have the opportunity to select a plan from a menu of private and public options –similar to the way members of Congress choose their coverage.”

Wait, you mean to tell me that 46 million people don’t have health INSURANCE, not, health care. The two are not mutually exclusive.

Obviously the person winning in this entire debate is: INSURANCE COMPANIES. They bought “the Clintons”. Obviously, since they repeatedly tried to push it through congress. Now they have Obama in their back pocket.

You don’t need insurance to have health care. The only thing you need for health care is money. I’m sure many of you are shaking your head right about now.

“millions of Americans go bankrupt due to health care costs”

More media scare tactics. Let’s go over the history of insurance briefly so everyone isn’t rattling in the dark.

The History of Insurance in America

The first insurance to arrive in America was for housing. It was fire insurance, seeing as houses were built entirely of wood. Let me point out a little point of business and government commingling, at this early stage, 1752 to be exact. The insurance company, in order to maximize profits, wouldn’t insure houses that were too close to each other. Building contractors built houses as close to each other as possible, so they could put as many houses as they could on their properties. So really this is a head to head battle between the insurer and the builders. Who won? The insurers. They got Ben Franklin to back them. So much so, that the states adopted “building codes”, to avoid “fire hazards.

During the industrial revolution, you saw an explosion in insurance products: life and business insurance. Many ponzi schemes popped up. Companies, couldn’t even cover premiums were taking from new policy holders to pay off old ones.

The scandals were so GREAT that finally the government put its foot down, in 1935. It created social security. Awww you thought social security was to help the poor starving citizens didn’t you, all this time. You fool. They saw an easy way to grow government almost times 20 with one piece of legislation and everyone rushed at the idea. And, by grow government, I mean taxes skyrocketing 20 times worth.

“oh but they didn’t raise taxes during the great depression.” Idiot, they went off the gold standard and inflated the dollar beyond belief. Inflation is a tax. Repeat after me: INFLATION IS A TAX. You have no say so in inflation do you? No you don’t.

By creating social security, the government essentially robbed a major portion of insurance products right out from under insurance companies.

What is Insurance?

Insurance comes in 2 forms: catastrophic unforeseeable event or a foreseeable event that must occur. The first type is like your fire insurance. It is unlikely to happen, but in the event that it does, you’re covered. The second type is like your life insurance, because you will definitely die.

Do you see health insurance fitting either of those two? I mean the modern version of health insurance. Let me take you back one year to the “financial crisis.” What did everyone say the cause was? Cheap money, readily available, that everyone spent like a drunken sailor.

Ok if you have an air of cheap money, that’s readily available, that everyone spends like a drunken sailor, that must = bubble. Right? Of course. That by definition is a bubble.

Take a look at health care insurance right now. Your company gives you the “opportunity” to buy into the policy, and what’s the first thing you and your doctor do? You and your entire family go get check ups, dental cleanings, glasses refitted. Any little thing you rush to the doctor and put it on your insurance bill. The insurance company is happy to serve you.

“What could be wrong with that?”

By creating health insurance that is geared towards every day use, the insurance companies and the medical industry got together in a room and agreed upon how much to charge YOU, or “on your behalf”. Fog clearing yet? So instead of a check up being $5, the check up is now $100.00. OMG WHY? Because now the insurance company can charge you, or your company, through the nose. The medical community doesn’t raise the price one cent without first consulting the insurance companies. So now the people without insurance have to pay $100 for a check up, because that’s how much the rate is.

What does that have to do with Obama? Social Security… guess what, sat in a room with the medical community and agreed upon how much to charge YOU, or “on your behalf.” By so doing, the politician gets kudos from voters thinking he’s so great. When in fact he just jacked up the price 20 times. And, now he doesn’t raise taxes he… say it with me… raises inflation, which is… a tax.

Fog clearing yet?

Now instead of just social security, Obama wants an state sponsored program to bring insurance to everyone. Awww, that Obama is such a nice guy. But, wait, if there are 46 million Americans who don’t have insurance, could it be that 46 million Americans die every year? BINGO! No, they don’t. They do their own thing and negotiate prices with their doctor / dentists. And, their dentist / doctor negotiates prices with them. HOW DARE THEY?

Ve haf to put a shtop to zis, zis instant.

Welcome to the Obama health care plan. Under the Obama plan, these rogue doctors and dentists would be forced to stop this negotiating. All the lost sheep would be brought into the fold.

Oh did a light bulb go off just now?

“You mean to tell me doctors / dentists can negotiate prices?” Yes, if the government were not involved in any form of health care, the market would dictate prices for every procedure. If you only purchased health care for catastrophic events, your insurance premiums would be drastically reduced and heal care would be affordable for everyone. The so called expensive procedures wouldn’t be out of reach for everyone.

This bill is an insurance scam. It is the greatest ponzi scheme ever invented by mankind. Please go ask your doctor if there was a time, long ago, that patients could come into the office and negotiate medical prices. If he’s honest with you, he’ll tell you it is true.

Two Working Parents Are Not Necessary: The Epiphany of Women

The Epiphany of Women

A lot of women are finally waking up to the idea that they do not have to work. It was assumed that if a man can go out and win bread for the family, that if the wife also went out and got a job, the family would be twice as wealthy and successful. However, women are finally waking up to the reality that, that is not only not the case, but it is not even necessary.

Doing the Math

Thirty years ago, couples sat down and wives came up with the bright idea that, in order for the young couple to get ahead and not be stuck living in a shoebox for 15 years, that the wife could go get a job and bring in twice the paycheck to the family, than just the husband working. Without any other influences, this makes mathematical perfect sense.

However, this goes to complete shreds when the young couple becomes pregnant. Not just the expense of hiring a midwife to give birth to a child, but the wife immediately stops working. That stops her paycheck for however long that lasts. But then, other expenses pile on and the wife has to sit down with the husband and rethink the math of her getting a job.

• a second car
• second car upkeep
• second car gas

How to Really Study the Cash Flow Statement

Cash Flow Statement

The cash flow statement provides information:

• about a company’s cash receipts and cash payments during an accounting period
• about a company’s operating, investing and financing activities
• about the impact of accrual accounting events on cash flows
• to assess the firm’s liquidity, solvency and financial flexibility

An analyst can use the the statement of cash flow to determine whether:

• regular operations generate enough cash to sustain business
• enough cash is generated to pay off existing debts
• firm is likely to need additional financing
• unexpected obligations can be met
• firm can take advantage of new business opportunities as they arise

Real Life Economics: Do You Need to Keep Upgrading Your Computer

Do You Need to Keep Upgrading Your Computer

I got into a rather heated 5 vs 1 debate about the issue of are console [gaming systems] better than the PC. The chief argument proposed against me, the PC champion, was that in order to play brand new games you have to constantly upgrade your PC, vs a console you do not.

A couple of things hit me immediately when confronted by this argument:

1. the person assumed that anyone that plays video games, always has to buy new video games

2. the person consumed PC equipment constantly, i.e. once a new system came in, they threw out the old PC system

This struck me as not only wasteful, but rather consumeristic.

I stopped arguing with the people but, I write this hear to show you a proof against consoles and against constant PC consumption.

What is a video game for? A video game is one source of entertainment. It is like music, movies, tv shows, books, etc. It is just a source of entertainment. The generation coming up now, and the one that grew up in the first decade of this century are indoctrinated with rampant consumerism, that you must constantly buy new things.

How to Spot a Polly Peck or Bernie Madoff: What is a Balance Sheet

How to Spot a Polly Peck or Bernie Madoff

CFO flees to Romania to his beach house, where he will live the rest of his days in exile. Clearly he is guilty of fleecing thousands of shareholders of money. The shareholders clamor for the government to arrest him for fraud. CNBC reports that he is guilty. MSNBC and Bloomberg report that he is guilty. A small financial analyst takes a retrospective look at the evidence and concludes that the CFO is not, in fact, guilty of anything. In fact, according to the small financial analyst, the CFO did nothing wrong whatsoever.

How can the two be right? Or, can they both be right? No, they can’t, and the answer is the balance sheet.

When people lose money, it is often the case that they want to blame others. What is well known, though, is that in order to offer stock, a company must do so to “sophisticated” investors, i.e. people who know better and do their homework. Long story short, if someone loses money, ultimately the investor is to blame, for not doing his homework. These people that want to blame others for their own faults get heard though. The government tries to rush in and save the day. Ultimately the government gets it wrong, because … that’s what the government does best.

So how could a small time financial analyst get what massive media outlets and huge governmental agencies miss? The balance sheet!

The financial analyst simply takes a look at the balance sheet and sees that the CFO was doing nothing to “fleece” investors. More than likely, it was the government that was to blame for the loss, if anyone needs to be blamed.

Scenario:

• Global Dynamics has a subsidiary in Greece
• they lend the Greek subsidiary $1M @ 5% interest

How Seemingly Profitable Companies Go Bankrupt and How to Spot Them

How to Spot Companies in Trouble

You see on CNBC and MSNBC and Bloomberg all the time, the CFO or CEO come on and say, “my company is enjoying a 20% profit with a 25% margin.” You as the viewer think to yourself, well that looks fantastic. Three months later the reporter informs everyone that the company is in bankruptcy court. You think to yourself, well that escalated quickly.

You see, a CEO can publicly say that his company made a profit. You take the sales minus the cost of goods and you get profits. Did the CEO lie? No! In the most simple terms, he is absolutely correct. But, here’s the rub. Costs of goods does not mean the cost of running the business. Cost of goods does not include the cash flow. Without going back over the cash flow statement, I’d like to show how the profit the CEO is talking about is not the “profit”.

• Sales – cost of goods = gross profit ( this is what the CEO is talking about on TV)
• gross margin = gross profit / sales ( this is the margin he quotes )
• operating profit=operating cost – gross profit ( now you get into how much it costs to operate the business on a day to day basis )
• ebitda d= depreciation (physical assets, like a company van) a=amortization (intellectual assets, like a brand name)
• operating margin=operating profit / sales ( this gives a good indicator of where some costs can be cut and how badly the company is operating )
• pbit / ebit = profit before interest and tax / earning before itnerest and tax ( this figure gives us an indicator of how badly taxes and interest are hitting us )
• profit before tax (pbt) = interest – operating profit ( if the company has loans, this gives us the exact amount needed to pay the interest )

Financial Education: Operating Cash Flow

Operating Cash Flow

In accounting, a measure of the amount of cash generated by a company’s normal business operations. Operating cash flow is important because it indicates whether a company is able to generate sufficient positive cash flow to maintain and grow its operations, or whether it may require external financing. OCF is calculated by adjusting net income for items such as depreciation, changes to accounts receivable and changes in inventory.

Financial analysts sometimes prefer to look at cash flow metrics because it strips away certain accounting effects and is thought to provide a clearer picture of the current reality of the business operations. For example, booking a large sale provides a big boost to revenue, but if the company is having a hard time collecting the cash, then it is not a true economic benefit to the company. On the other hand, a company may be highly profitable on a cash flow basis, but may not have a low net income if it has a lot of fixed assets and uses accelerated depreciation calculations. – Investopedia

Song of the Dragonborn Dovahkin Lyrics Skyrim + English Translation

Song of the Dragonborn

Dovahkiin, Dovahkiin, naal ok zin los vahriin,

Wah dein vokul mahfaeraak ahst vaal!

Ahrk fin norok paal graan fod nust hon zindro zaan,

Dovahkiin, fah hin kogaan mu draal!

Financial Education: the Cash Flow Statement

The Cash Flow Statement

A cash flow statement shows a company’s cash inflows and outflows and the overall change in its cash balance during an accounting period.

One of the quarterly financial reports any publicly traded company is required to disclose to the SEC and the public. The document provides aggregate data regarding all cash inflows a company receives from both its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given quarter. – Investopedia

Because public companies tend to use accrual accounting, the income statements they release each quarter may not necessarily reflect changes in their cash positions. For example, if a company lands a major contract, this contract would be recognized as revenue (and therefore income), but the company may not yet actually receive the cash from the contract until a later date. While the company may be earning a profit in the eyes of accountants (and paying income taxes on it), the company may, during the quarter, actually end up with less cash than when it started the quarter. Even profitable companies can fail to adequately manage their cash flow, which is why the cash flow statement is important: it helps investors see if a company is having trouble with cash. – Investopedia

The cash flow statement is separated into three sections: operating activities, investment activities and financing activities. The statement shows cash outflows in parentheses to designate a negative number. Each section’s net cash flow, or total cash flow, is shown at the bottom of the section. Positive net cash flow from a section means a business generated more cash than it spent on that section’s activities. Negative net cash flow means the business spent more than it generated on those specific activities. – Bryan Keythman

As you can see, if a company has a negative ending cash flow the company might be in trouble. The true beauty of knowing how to read a cash flow statement, is that a company CANNOT flub the numbers or “interpret” the data. It’s straight numbers and arithmetic. The other quarterly statements can be “interpreted” and manipulated to put a good light on the company’s quarterly endeavors.

Homework

If you work for a publicly traded company, go online, if you can, and try to find their quarterly cash flow statement. It might shed light on whether the company is actually healthy or not.

Go Away I’m Studying for the CFA