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1. You can’t fool Mother Nature: If you’re a man who feels more tired than you used to, if you’re experiencing a waning interest in sex and if your muscles seem to be disappearing, you may have declining testosterone levels. That is a normal fact of life for men as they age.
But many men are fighting back by convincing their doctors to prescribe testosterone therapy. And that may be a very bad idea.
A National Cancer Institute study published on Jan. 29 reiterates results from an earlier study that taking testosterone tempts a heart attack. More than 55,000 men were studied for 90 days before receiving a prescription for testosterone therapy and for 90 days afterward. Their increased risk of heart attack — specifically, a myocardial infarction — went up by 36% overall. For men over 65 years of age, that risk doubled.
In other words, a man over 65 taking testosterone is more than 70% more likely to have a heart attack within 90 days of starting treatment than a similar person who does not get the therapy. That’s a scary number.
The study was published in PLOS ONE, a peer-reviewed international online journal of science. A study of men in the Veterans Affairs health care system published in November showed a 30% increase for risk of stroke, heart attack and death among those taking testosterone therapy. About 3% of men in the United States 40 and older receive testosterone therapy.
2. So if the Earth isn’t flat, what is? A new digital sky survey from the Sloan Foundation has measured the distances between galaxies within 1% of error. The Baryon Oscillation Spectroscopic Survey used the Apache Point Observatory in southeast New Mexico.
By bringing distances down to such a fine degree of accuracy, astronomers can make other calculations and deductions about the universe.
One that immediately popped out is a near certainty that the universe is extraordinarily flat. And that has implications: It suggests the universe is also very long — infinitely long, actually, extending forever in time and space.
3. Coffee Watch, Part 1: (Starting this month and then every month until we want to pull our hair out, we’ll drop in on the maddeningly contradictory world of coffee research.) This month, coffee is good for you. Compared with someone who doesn’t drink any coffee, a person who drinks six cups of coffee a day is 33% less likely to contract Type 2 diabetes. And the kicker is it doesn’t matter if it’s decaf. So says a study in the February issue of Diabetes Care. Twenty-eight studies involving more than a million participants were reviewed.
The results were the same for both sexes, and significant results were obtained by people drinking only one cup of coffee a day. Chances of getting Type 2 diabetes drinking only one cup a day are reduced 9%.
Further studies are necessary to know why coffee has this effect, say the authors. But one of the researchers, Dr. Frank B. Hu, at Harvard’s Public Health School, conjectured it might have something to do with chlorogenic acid, a phenolic compound in coffee that reduces sugar absorption in the blood and reduces the body’s sensitivity to insulin.
Nonetheless, the authors warn that a bad diet and lack of exercise are still likely to cause Type 2 diabetes no matter how much coffee you drink. And while we’re on the subject, another new study from McGill University shows that if your partner/spouse has Type 2 diabetes, you’re 26% more likely to get it.
4. The 2015 Honda Fit, completely redesigned and re-engineered, was introduced a couple of weeks ago at the Detroit Auto Show. Hidden among its many new tech features, like back seats that fold into the floor, was a delightful present — an inexpensive built-in navigation system.
With the purchase of a $60 app, Honda allows smartphones to feed maps and GPS software like Google Maps directly into the car’s center screen.
Passengers can pinch and sweep on the screen just as they can on the smartphone, and it even links to Siri voice commands on iPhones. Anyone who has used Honda’s ridiculously expensive built-in nav system, which I find cumbersome and cranky and not intuitive, should shout for joy.
Why buy a $1,500 built-in navigation system when you could download the HondaLink app for $60, and upgrade your phone and GPS system all at the same time?
5. Earth to Jade Rabbit — You Overslept! China recently marked a national first when it successfully launched and landed its first lunar probe called Yutu, which means Jade Rabbit. The landing on Dec. 14 was the first time something from Earth had soft landed on the moon since 1976. The solar-powered rover couldn’t roam during the moon’s two-week night and needed to be put into hibernation mode before temperatures dropped to minus 290 degrees F. Apparently, something went wrong with attempts to hibernate the rover, and mission controllers feared the worst — that it was permanently frozen in place. Jon Stewart devoted an entire show to the rover’s plight.
While initial attempts to revive the rover failed, in the full dawn of a new moon day, with temperatures headed up and sunlight reaching the rover’s solar panels, controllers reported that Jade Rabbit had finally awoken.
However, it still suffers a “mechanical control abnormality,” according to the Chinese space agency. Hopefully, that won’t affect its ability to roam, because the scientific experiments aboard could add significant new knowledge about our neighbor, not to mention its survey of what’s worth mining up there. Moon race for precious metals, anyone?
6. A Good Asteroid? There are more than a million asteroids between Mars and Jupiter and hundreds of thousands that are big enough for Earthlings to worry about if one breaks out of orbit, as they tend to do, and heads toward us. At least 200 of the asteroids in this belt are the size of the asteroid that collided with Earth and caused a great extinction 66 million years ago, wiping out 75% of all the species on Earth, including the dinosaurs.
Vesta, second only to Ceres as the largest asteroid in the belt between Mars and Jupiter, has recently been photographed by the NASA spacecraft Dawn. The craft will arrive at Ceres in a year.
A big asteroid is usually not a good asteroid because it could collide with another asteroid, be thrown into a new orbit and eventually head our way.
Ceres is the largest asteroid in the belt between Mars and Jupiter. It is big enough, at 600 miles across, to be thought of as a dwarf planet, like Pluto.
It is not in an orbit that threatens Earth at the moment and we have a new reason to be interested in it. Analysis of data from a European infrared observatory called Herschel shows that Ceres is spewing water vapor into space. That means water on Ceres, lots of it. Because it’s cold on Ceres, most of the water there is likely to be ice and most of that below the surface. Nonetheless, temperatures at Ceres’ equator can be warm enough to melt ice.
Why do we care? Because where there’s water, there can be life. And because an exciting NASA probe called Dawn, launched way back in 2007, is headed there right now and will arrive at Ceres in one year — March 2015.
Icy planetoids like Jupiter’s moon Europa and Saturn’s moon Enceladus, and now Ceres, could become filling stations of hydrogen and oxygen for future astronauts. They could use solar energy to break down ice into its components for rocket fuel.
7. Blame it on your credit card company: Suppose I told you that not one of those 40 million Target customers should have had their credit cards hacked? Credit cards everywhere else on the planet have encryption chips in them that scramble your data as soon as a shop inserts your card into a reader. And they have had these chips for years.
EMV “smartcard” tech (a joint effort of Europay, MasterCard and Visa) was invented in the ’90s and released during the ’00s in most developed countries. Recent theft may push issuers to finally offer smartcards in the U.S.
Even Canadians have them. Credit cards elsewhere are called smartcards. Which makes our cards… stupid? I finally got tired of not being able to use my American credit cards easily in other parts of the world, so I ordered a chip-based smartcard from Diners Club, which is owned by the Bank of Montreal. The cards can be used anywhere that retailers accept MasterCard.
That’s all for now!
Ed. Note: The next generation of exciting new technology is coming online all the time. And for in-the-know investors, that translates to huge profits. Stephen Petranek has made it his mission to be one of those investors… and to help educate other investors on how to play the trends accordingly. He’s also a regular fixture in the FREE Tomorrow in Review email edition, which you can sign up for, right here.
Recently, I testified before the House Oversight committee on the “risk corridors” in the (Obamacare) exchanges. Republicans claim that this is a device to bail out the insurance companies. Democrats, in the unusual position of defending the insurance companies, actually claimed that the government was going to make a “profit” because of it.
I was in the uncomfortable position of not agreeing completely with either side.
The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance-company risk.
Risk adjustment, a permanent feature of the exchange, redistributes money among the participating insurers, depending on the health status of the enrollees. That is, plans with healthier enrollees are “taxed” and plans with sicker enrollees are “subsidized.” Reinsurance allows insurers to hedge against the possibility of enrolling a very high-cost patient. This program lasts for only three years, and the funds come from an assessment on all non-grandfathered health insurance sold in the country.
These two programs are both deficit neutral, in the sense that outflows equal inflows. See the explanations by Greg Scandlen and John R. Graham and the summary chart below.
The third vehicle is the risk corridor, which basically redistributes funds from profitable insurers to unprofitable ones. Unlike the first two vehicles, however, this adjustment is not revenue neutral. If the entire market turns out to be unprofitable, the federal government steps in to subsidize some of the losses.
In fact, there is potentially an unlimited taxpayer liability here — at least for the next three years.
By the way, did you know that there is a similar risk corridor in the Medicare Part D program — one that was never sunset? And because insurers are overall profitable in that market, the federal government actually is making an annual profit from the Part D risk corridor. In essence, seniors are overpaying for drugs and the federal government is pocketing the overpayments. (We’ll save this scandal for another day.)
(click to enlarge)
Source: Kaiser Family Foundation
Insurers in the exchanges are subsidized for their losses in the following way. If medical costs for a plan are in excess of 103% of its target costs, the plan will receive a subsidy equal to 50% of its losses between 103-108% of target. For costs above 108% of target, the plan’s subsidy will recoup 80% of the losses. The converse is that the insurers are taxed on their unexpected gains. Further, the tax thresholds are the mirror image of the subsidy thresholds. So there is a 50% tax on the gains for plans with costs below 103% and 108% of target costs, etc. (See the chart below.)
(click to enlarge)
Source: American Academy of Actuaries fact sheet
There are a number of reasons why the individual market could become a sicker, more costly pool for insurers. To the degree that happens, they must raise their premiums. But higher premiums discourage the healthy and the marginally sick from buying. As more of those decline coverage, the premium must be raised again. We could get a “death spiral,” in which the premiums go so high no one can afford then. Or, the premiums can be kept low by a steady stream of subsidies from the taxpayers.
Here is one problem: the federal (Obamacare) risk pools will soon close their doors and send their enrollees to the state exchanges. This is the program that allows people who were “uninsurable” to purchase insurance for the same premium healthy people pay. All of the state risk pools are planning to do the same.
These risk pools were spending billions of dollars subsidizing insurance for high cost patients. Now those subsidies will have to be implicitly borne by the private sector plans through higher premiums charged to everyone else.
To make matters worse, cities and towns across the country with unfunded health care commitments are readying to dump their retirees on the exchanges, nationalizing the costs. Since retirees are above-average age, they have above-average expected costs. The city of Detroit, for example, is planning to unload the costs of 10,000 retirees on the Michigan exchange. Many private employers face the same temptation.
Then there are the “job-lock” employees — people who are working only to get health insurance because they are uninsurable in the individual market. Under Obamacare, their incentive will be to quit their jobs and head to the exchange.
To add to this burden, the Obama administration has decided hospitals, AIDS clinics, and other providers will be able to enroll uninsured patients in the exchange and pay premiums for them in order to get private insurance to pay the bills.
Bottom line: a lot of high-cost patients are about to enroll through the exchanges, causing overall costs for participating plans to be much higher.
After one month, there are signs that insurers got their pricing significantly wrong. Because it is so hard to enroll in the Obamacare exchanges, only the most persistent (that is, those who expect the highest medical claims) spent hours navigating the website to sign up.
According to an Health and Human Services report, of those who selected plans from October through December, only one quarter are between the ages of 18 and 34, while one third are between 55 and 64; 55% are between the ages of 45 and 54. Priority Health, a Michigan insurer, reported that the average age of new applicants is 51, versus 41 in the previous individual market.
It certainly looks like the adventure will be very expensive. By 2015, the insurers will likely ask the federal government for risk corridor subsidies. The administration has no flexibility in this regard. It would be a mistake to blame the insurance industry, however. It would be unreasonable to expect them to lose money on Obamacare.
In its original analysis, the Congressional Budget Office (CBO) assumed that the risk corridors would be budget neutral (as noted on pages 10 and 39 of this analysis). More recently, the CBO estimates that the risk corridors could generate a 10 year profit for the federal government of $8 billion — based on the experience of the Part D program. At the hearing, the Democrats seized on this estimate to argue that the risk corridors aren’t going to cost taxpayers a dime.
Another witness, Washington and Lee Law School professor Tim Jost, argued that the existence of the risk corridors lowered risk and therefore premiums in the exchange. Lower premiums, in turn, mean less spending on the tax credits that subsidize insurance in the exchanges. But see also the rebuttal testimony by former Bush administration official Doug Badger.
However, the CBO’s estimates were not based on any recent data on who is enrolling. It seems most improbable based on what we know so far that the corridors are going to prove profitable for taxpayers.
The Republicans are calling the risk corridors a potential bailout of the insurance companies. However, the industry problems are not problems of their own choosing. And it appears things could get worse because of additional extra-legal decisions of the Obama administration, including the most recent potential decision to delay insurance cancellations for another three years.
Extending the Obamacare exemption could forestall a new wave of policy cancellations just before the 2014 midterm elections. But, like other politically motivated delays and exemptions, such a move could undermine the exchange’s fragile finances.
Aetna said Thursday that it expects to lose money on Obamacare exchange plans. Earlier in the week Humana (HUM) blamed the president’s 11th-hour “keep your plan” switch for making its exchange plan enrollment older than expected.
Americans who pay less under their old plans than via Obamacare presumably are in better health, while the exchanges get the older, sicker patients who will save money. An older, sicker risk pool will mean higher costs for insurers.
Wharton school health economist Mark Pauly and his colleagues have studied the individual market in great detail and discovered that despite so much negative rhetoric in the public policy arena this is a market that worked and worked reasonably well. Despite President Obama’s repeated reference to insurance plans that cancel your coverage after you get sick, this practice has been illegal for almost 20 years and in most states it was illegal long before that.
And despite repeated references to people denied coverage because of a pre-existing condition, estimates are that only 1% of the population has this problem persistently. (Remember: only 107,000 people enrolled in the federal government’s pre-existing condition risk pool — out of a population of more than 300 million people!) At most, Pauly puts the pre-existing condition problem at 4% of the population.
So we started with a market that was working and working well for 96-99% of those who entered it and we have completely destroyed that market — ostensibly to help the few people for whom it did not work. We suspect that after the next election members of both parties will want a major return to normalcy. How can that work?
There is a principle that must never be violated. An insurance pool should never be allowed to dump its high cost patients on another pool.
Suppose an individual has been paying premiums to insurer A for many years; then he gets sick and transfers to insurer B. Is it fair to let A put all those premium checks in the bank and force B to pay all the medical bills? Of course not. But even more important, if we do that we will create all of the perverse incentives discussed above — plus many more we might have added had time permitted.
The alternative is something we call “health status insurance.” In the above example, the individual would continue paying the same premium to B that he paid to A, and B would pay an additional amount to bring the total premium up to a level that equaled the expected cost of the individual’s medical care.
Compare this idea to the Medicare Advantage market. Enrollees all pay the same premiums, but when a senior enters an MA plan, Medicare makes an additional payment to make the total amount paid reflect the true expected cost the senior brings to the plan. Because of this system, MA plans do not run away from the sick. In fact, there are special needs plans that specialize in attracting enrollees with high costs (about $60,000 per person on average).
Risk adjustment in Medicare does not work perfectly, however, and because the government runs the procedure, political pressures often interfere. So we recommend risk adjustment within the market rather than by an external government bureau. On this approach, insurer A and insurer B would have to agree among themselves on an appropriate transfer price. Only if they could not agree would the problem be left to an insurance commissioner to resolve.
Ed. Note: The Affordable Care Act is already hurting thousands of Americans. Americans this law was supposed to help. Ugh… The good news is, you don’t have to be one of them. Sign up for the FREE Laissez Faire Today email edition, right here, to discover how you can “opt-out” of Obamacare.
This article originally appeared here on the Independent Institute website.
Article posted Laissez Faire Today
Tear up your scratchers — there’s a much more profitable lottery you could play right now.
Here’s a hint: you can’t buy tickets for this lotto at your local minimart. To cash in on this ridiculous gamble, you have to open a brokerage account…
I’m talking about the biotech lottery. This game has dominated the market so far this year. On any given day, you can easily find a biotech stock that has jumped 20% or more. Sometimes, these gains even sneak into triple digits.
To understand the power of this rally, look no further than the Biotech iShares ETF (NASDAQ:IBB). This ETF has even dominated the red-hot NASDAQ, tripling its performance over the past four months.
However, the big bull run in biotechs looks like it could be nearing exhaustion.
IBB fell more than 2.6% yesterday as traders began to sell some of the stronger momentum names. And just last Friday, IBB dropped nearly 3%, marking the index’s first significant pullback in weeks.
Momentum indicators and strong downside volume are flashing warning signals here. I suspect a retreat to at least $240 for IBB in the coming weeks.
If you’re looking to limit your risk, you should consider cashing out your biotech gains and avoiding this sector as it becomes more volatile. Remember, these furious rallies are usually met with equally powerful selling. Don’t wait for the breakdown to take your gains. If you do, you might be too late…
P.S. By the way, in my free Rude Awakening email edition, I gave readers a chance to learn about an incredible opportunity to begin betting against IBB. And that’s an example of just one small bonus Rude Awakening readers are treated to. Every single trading day, they’re also clued in to the most important trends I’m currently following, 5 numbers to watch throughout the day and at least 3 chances to discover real, actionable profit opportunities. Bottom line: If you’re not reading The Rude Awakening, you’re missing out on some serious info. Sign up for FREE, right here, and never miss another issue.
The first in a 3-part series of teleseminars on economic transformation by Marco Vangelisti.
Enter Vladimir Putin. He is the popularly elected president of Russia who has designs on reconstituting the old Soviet Union. Putin is also an ex-KGB agent; he is a torturer, a murderer, a tyrant and a monster. He often has lamented the demise of the former Soviet Union.
All true. Let's not forget that Bush and Obama have both tortured (by the definition commonly used), both have murdered (including knowingly shooting un-involved civilians with follow-up shots after alleged terrorists were hit) and more. Putin hardly has a monopoly on this sort of behavior. As for being a tyrant turning the IRS on political opponents was part and parcel of Nixon's impeachment.
Of course Nixon was a Republican....
Ukraine was a part of that union until the evil empire dissolved in 1991. It was the most economically productive part of that union. Today it enjoys a mostly free market and is highly entrepreneurial, though partly a welfare state. Roughly two-thirds of Ukraine identifies with Europe and one-third with Russia.
True as well, but let us not forget what faction wants which outcome. The two-thirds are primarily the welfare state element. Our good Judge conveniently omits that from his dissertation, and one has to wonder why given that the data is available in pictorial form.
Putin’s invasion is profoundly unlawful, as it constitutes the introduction of military troops into a sovereign territory without governmental invitation or consent, and the absence of identifying insignia puts this invasion outside the protections of the Geneva Conventions and the rules of war. Hence the Russian troops are legally fair game for Ukrainian troops and civilian militias.
True that as well, particularly that being outside of the rules of war means that being summarily shot-on-sight is within the correct means of response for either Ukrainian troops or, for that matter, ordinary civilians. But, as the Judge notes...
As well, don’t expect the Russians to leave. Most residents of Crimea are Russian speaking and actually welcome their invaders (again, you cannot make this up).
Are you an invader if you're invited, insignia or no? Hmmmmm. That might decrease the number of people who want to shoot (legally permitted under the rules of war) materially.... in fact, it might reduce that number to zero. Perhaps that's why there hasn't been any shooting -- other than a group of snipers in the original uprising, and there's plenty of open questions as to exactly who those people were.
Then of course there's the backdrop. As the Judge notes we've got quite a history here, and so does Ukraine. I specifically note that they were "invited" to give up their nukes. They did so, and, well, how's that working out for their government now? I suspect they'd really like to have a few of those 5,000 they used to possess back as it would provide quite the deterrent value for them, eh?
There might be some people in Iran paying attention to that little chain of events too, I suspect....
Along side this, of course, the Judge also notes our little "adventures" in both Iraq and Egypt where we openly fomented revolution and our President called for "regime change" as a public matter. What many seem to forget is that both had governments that we had almost single-handedly installed years previous. Did we have the right to do that in the first place -- or to foment the later actions?
Neither of those little adventures have worked out so well for us, and they certainly put the United States in a rather awkward position trying to lecture the Russians about intervention in other lands.
There's another problem too that's not being discussed much -- what actually set off this little mess.
Were we involved and did we agitate for it? Probably. There seems to be at least some reasonably-solid evidence for that. But I suspect that much of the problem in Ukraine was really about corruption, "Robin-Hood" style theft and similar outrageous acts by their government. You have seen the ridiculous palatial spread that Yanukovich had all to himself, yes? How'd that happen, might I ask?
And no, that doesn't tend to support Pootie's point of view in this matter, does it?
But take a close look at the industrious people in some parts of the country and those who are welfare basket cases in others. Look at the distribution of same. Now contemplate why one should pay for the other and whether one was being effectively forced to do so. At what point does stealing for both the "elites" and the leaches reach the point where a group of producing people coalesce and say "No!"
More to the point are they not fully within their rights to do exactly that?
Is that the underlying problem?
Maybe. It certainly can't be dismissed quite as easily as claiming that "western" interests were responsible, can it? Take those two last points together and you have quite the mess, and most of it looks rather home-grown to me.
Let's ask this inconvenient question: How do you incite a people to revolution if they like their government?
Now look at our history right here in the US. Have we ever done something like that here at home?
Why yes we did.
What did you learn about the Civil War in school? Did it include the fact that slavery was already on its way out economically due to mechanization (specifically, the invention of the mechanical tractor and its attachments) and within a decade or so would have disappeared all on its own purely for economic reasons? Did your education include the fact that there were tariff and impost changes passed in the years leading up to the Civil War, championed by the north's Representatives and Senators, that effectively forced the agricultural southern states to grossly subsidize the northern ones?
Specifically there was a tariff aimed directly at foreign manufactured goods in Europe that were made from southern agricultural products, effectively boosting the price of everything the southern states imported by 50%! The northern states didn't import those things at all and thus didn't care. South Carolina responded by passing a state law declaring that tariff null and void -- President Jackson, with Congress clucking away, responded to that law by sending warships into Charleston harbor. That was 30 years prior to the Civil War so perhaps I should forgive you if you nodded off in that part of your education on US History.
These situations are never as simple as they seem, are they?
Of course here, now and today we appear to be creating a whole class of people (cough-Pelosi-cough-Boehner-cough-Reid-cough-Obama-cough!) ourselves that believe stealing from one person to give to another is just fine, and, if some of it gets siphoned off for themselves or their "friends and family" that's all to the good too. Yes, it's far less extreme than what we've seen over in the Ukraine, but isn't that really just a matter of degree rather than the offense itself? Oh, and just out of curiosity, what does our Congressional approval rating look like again?
Speaking of such degrees, the alleged Crimean Parliament that "voted" to "affiliate" with Russia..... that wouldn't be the same Parliament that was stormed by troops in black masks with no insignia, yes? Gee, is that vote rather akin to those held in fabulously free nations like North Korea?
So yeah, if you ask me, Putin is a jackass and Crimea looks an invasion. But in a land of 545 jackasses in Washington DC, never mind what we have seen thus far with Yanukovich, exactly how hypocritical are we willing to be when we have steadfastly done exactly what we're complaining about for decades, never mind our own internal Robin Hood games right here at home that continue to this day.
It would be fabulous if we had the moral high ground here, as if we did we could easily make a clean argument and stand tall.
But we don't -- and that's our fault.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
Did we have the right to lay forth those words and then enforce them 235 years ago? Our so-called "Constitutional Lawyer cum President" seems to think not if his little speech yesterday is any indication. But if not then he's illegitimate as a President as unless our exercise of that right was and remains valid we have no right to be an independent nation and thus he has no right to be a President.
If so then please explain why any subset of the Ukrainian people do not likewise have the very same right that forms the basis of Obama's claim on the Presidency -- assuming, of course, that they really are asserting that right on their own, independently.
I'll be waiting for your explanation; this ought to be fun to watch.
After all, we did declare that right to be unalienable. And that, my friends means you can't sign it away in a treaty or Constitution nor can it be taken from you. It can be respected or disrespected (and of course there may be severe consequences if you try to assert it in the face of disrespect) but an unalienable right remains yours irrespective of the passage of time or pretty pieces of paper, whether agreed to voluntarily or not.
Did we mean what we said or were those mere words?
How, in short, can we defend our Constitution and the means by which it came about, along with the legitimacy of our own government while at the same time claiming that others do not have similar or even identical rights to form or reform their government by the very process we used?
Now there's something to think about.
Wendell Berry wrote about and practiced “sustainable agriculture” long before the term was widely used.
La lezione di Rob Hopkins, il guru delle Transition Towns
Il movimento delle Transition Towns è un fenomeno piuttosto recente, un tentativo di generare processi di riorganizzazione profonda dell'economia e degli stili di vita come risposta alla drammatica convergenza di situazioni di crisi che caratterizzano ...
Gold is wonderful in many ways, but gold miners are another story. They are not durable nor are they particularly rare. “Solidity” and “soundness” are about the last words anyone would apply to a business engaged in the mining of gold.
Miners like to bury perfectly good cash in the ground. They tend to issue lots of shares to stay afloat and struggle to make a decent return on what they invest. If you’ll allow me a bit of slang, they suck. (Except when the stock prices go up — then nobody cares about this stuff.) Yet I found a seeming exception. A business that is self-funding and non-dilutive. (No issuing shares to pay the bills!) A self-described “industrialized-type gold company with a low-risk business model.” [Italics added] Say what? Low-risk? Gold company?
It’s true. Now, it cheats a little. It doesn’t do much mining itself. Instead, it processes the ore for other miners in the region. Let’s take a look.
Dynacor Gold (DNG:tsx) proudly claims its ore-processing division, in Peru, “generates steady cash flow and profits while reducing risk.” If a picture is worth a thousand words, then it may be best to show you the ore processing steps graphically. Take a look at this chart:
The processing strategy is at the core of Dynacor’s engine. It has led to massive outperformance of Dynacor’s stock price over its junior gold mining peers. Over the last five years, the stock is up 400%, while the GDXJ — a decent proxy for junior gold stocks — has been more than cut in half. Really, it’s unbelievable.
Take a look below to get a look at the last two years, which have been extraordinarily difficult for gold miners. Dynacor’s shares have more than doubled.
As I say, at the heart of Dynacor is a decent business processing ore. It leads to steadily rising cash flow per share, as the nearby chart shows. The trailing four quarters cash flow is 29 cents per share. The stock is C$1.66 per share as I write. So you are paying less than 6 times cash flow to own it. And the company has credible plans to expand its ore-processing capacity. It’s a growth story as well as a value play.
So Dynacor has a good gold business, a rare thing, but it can’t resist the itch to bury some otherwise perfectly good cash underground.
Dynacor has a drilling campaign underway at a copper and gold property, Tumipampa.
Management dedicates many slides in a recent presentation on this high-grade gold property. It seems to be in a good location in Peru, surrounded by six senior miners. (Dynacor has been in Peru for 20 years, and I don’t regard this as a risk that would keep me away.) The drill results look great (as they often do), and production should start in 2016.
There is nothing special about this project in my mind. There are dozens of stories of great gold projects. Very few ever really pan out as great investments. Most of the time, there are cost overruns and delays and disappointments. That doesn’t prevent the geologist crowd from getting excited over drill core samples.
The best I can say for Tumipampa is that at least it is self-funding. Dynacor doesn’t have to sell stock or borrow money to do what they’re doing. Nonetheless, I wish they had stuck to the ore processing and paid a dividend with the excess cash. The pursuit of Tumipampa seems a needless risk and turns me off the stock.
However, you may think differently about gold exploration risks. In a different light, one might look at Tumipampa as potential big upside if it becomes a decent mine in 2016. Dynacor has just 38.6 million shares outstanding. And it’s not a serial issuer of stock. Therefore, any success is likely to have a large effect on the share price.
Besides all that, give management credit for the track record so far. Dynacor is an interesting story and a unique gold stock. It’s actually been a very good investment for a long time.
Better, in fact, than the much admired gold metal itself.
P.S. Bottom line: Mining is tough; so discovering a good company like Dynacor in a relatively bad market sector makes the reward that much sweeter. And there are plenty of great opportunities just like this, if you know where to look. To get better insight on a wealth of great investment opportunities — specifically in the resource and energy spaces — sign up for the FREE Daily Resource Hunter, right here. Each issue is packed full of insightful commentary on these markets, and gives readers at least 3 chances to gain access to life-changing investment opportunities. Don’t wait. Sign up for FREE, right here.
Article posted on Daily Resource Hunter
Total nonfarm payroll employment increased by 175,000 in February, and the unemployment rate was little changed at 6.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services and in wholesale trade but declined in information.
That's an uptick on the rate, although they claim "little changed." The knee-jerk reaction was a massive move down in the 10 year bond futures (spiking the TNX up to 2.67%) and a fairly-serious move in the Yen/Dollar cross. The latter is a bit curious, as the change against the Euro was far more-muted. This, of course, correlated with a spike higher in equity futures.
So let's look at the household survey.
Note that the delta was flat this month on an annualized basis. Despite all the screaming there's no change there -- at all. Yes, the monthly numbers are up (blue line) but the change annualized is not.
Further, population-adjusted we are still losing ground. Not a lot, but movement is backward, not forward.
Finally, the chart that matters (again) is the unemployment rate .vs. the participation rate. Participation ticked up slightly -- but remains essentially pinned where it has been since 2009. The "formal" unemployment rate ticked up slightly.
What's a bit more-troublesome is that hours worked were down a tenth for all workers and two tenths for non-supervisory. The counter-balance was that average hourly earnings were up but among production workers weekly earnings decreased by about a buck-ten.
That has been (and will be) blamed on the weather -- we'll see about that in March.
Diplomatic efforts are underway to diffuse tensions between Russia and the West following the overthrow of Ukrainian President Yanukovych. Should tensions escalate, one risk is the disruption of gas supplies from Russia to Europe via the Ukraine.
A Community Supported Agriculture project is based on direct person-to-person contact and trust, with no intermediaries or hierarchy.
•Wells That Fizzle Are a ‘Potential Show Stopper’ for the Shale Boom •The View from Europe: America’s Shale Boom Looks More Like a Blip •BP carves off US shale gas operations into separate unit •Shale, the Last Oil and Gas Train: Interview with Arthur Berman •Court Upholds Imposing Fracking Ban in Colorado City •Los Angeles Moves Towards Ratifying Fracking Ban, but Is Federal Regulation Possible? •Brakes put on UK shale gas revolution •Fracking health risks must be established now, before the industry grows
Paul Kingsnorth wrote recently of the floods that have hit the UK, arguing that they represent the beginning of "a gradual, messy, winding-down of everything we once believed we were entitled to".
Resource scarcity, competition to dominate Eurasian energy corridors, are behind Russian militarism and US interference.
"I am not sure what it is you are doing but it seems like a lot of fun. Can I join in?" This was the message I send to the Edible Deventer group in the Netherlands after reading yet another article about their local initiatives: household garden courses, creation of an edible, decentralized carbon sink forest by the free distribution of hundreds of nut trees, picnics in the park and the creation of ‘façade mini gardens’ (even in the shopping centre!) were some of them. What appealed to me especially was the clever combination they made of doing practical stuff with in the back of their minds the need of mitigation for climate change.
Greening the city, making it edible at the same time and getting people from several neigbourhoods directly involved, was a golden formula, it seemed to me. It had taken me at least a year to write this email to the Edible Deventer group. My project as an international consultant just finished and I wanted to get more involved with my local community. The answer to my e-mail, almost two years ago now, was more than welcoming. Apparently someone put me on a mailing list and in no time my in-box was flooded with messages. It was slightly overwhelming but one of the ‘Edible girls’ assured me to just pick-out ‘whatever makes you happy’ and ignore the rest.
The first activity I attended was a gathering about Urban Farming where the Edible Deventer group would make an appearance. A bit anxious, as it would be the first time to meet my counterparts, I entered the meeting room. Wow. The room was packed with local farmers, shopkeepers, politicians, consumers, activists, policy makers and ...the Edible Deventer group.
Apparently the local political party, who had organized the meeting, had looked all over the place for people involved in urban farming, before they realized that Transition Town was already ‘doing it’ right around the corner. For me, I was amazed that there where all these people thinking about the same things as I did. And I didn’t have a clue! So this was what my towns(wo)men were up to when I was away!
The next ‘step’ was the Transition training that I attended soon after. I started to read The Transition Handbook and found out what the Transition movement was all about. Oh dear, this wasn’t just about fun and inspiring activities, this was heavy stuff! I did try to get away from it, "do we really have to talk about climate change and peak oil? Can’t we just stick to the fun stuff?" But really there is no turning back once you get into it.
I did like the way the training was set up though and how the trainers (Tara and Paul) guided us through the process and I did meet a lot of new and inspiring people. The Transition process can be frightening and lonely, sometimes. I was so lucky to have found a group that already existed, with like minded people to share thoughts, ideas, initiatives and yes to also have a lot of fun. I was also so lucky to be able to take on the next step last year: with a group of people from TT Deventer to create and form the ‘Groene Golf’ (Green Wave), a centre for practical sustainability and local resilience.
A place to meet people, inspire, create, dream and experience. A place where only recently we hosted this year’s national Transition conference and the LAUNCH training. If we let climate change go out of hand, Deventer will be on the new shore line of the Dutch lowlands. In my experience, working for a truly sustainable future can be fun and very rewarding when taking it on together. We’ve only just begun.
Find out more about Transition Deventer here.
We live in a society where it is impossible to live a functional lifestyle and not consume products made from petro-chemicals every single day...
Transition Network is seeking four new Trustees to help the organisation to continue to grow and develop. Everything you need to know about that process can be found here. Over the next few weeks we'll be asking former and current Trustees for their thoughts and experiences. We start today with Delivery Director Sarah McAdam. We started by asking her what is a Trustee? What are they for and what do they do?
Secondly, this isn't all just about what a new Trustee can bring to Transition Network, it's also about what the Trustee will get from taking such an active role too. So what, we wondered, might a new Trustee expect to gain from the experience?
And lastly, what are the qualities and skills that Transition Network is seeking in any new Trustees?
Coming soon: We talk to outgoing Trustee William Lana about how his period as a Trustee was for him.
So is this what the mess in Ukraine is all about?
The new anti-Russian government is moving to privatize the nation’s energy sector. Well, at least that’s according to the pro-Russian Interfax-Ukraine news agency.
It quoted the new prime minister, Arseniy Yatsenyuk, at a meeting with business leaders on Monday: “I’ll tell you about the idea of privatization of the energy sector at transparent auctions: Chornomornaftogaz and other companies, which are part of Naftogaz Ukrainy,” the national gas and oil company.
We find no other account of this meeting. But it has the ring of truth, at least…
Mr. Yatsenyuk was Washington’s handpicked choice for prime minister in the new Ukrainian government.
We know this from the recording of the now-infamous F-bomb phone call between Assistant Secretary of State Victoria Nuland and the U.S. ambassador to Ukraine. “I think Yats is the guy who’s got the economic experience, the governing experience,” said Ms. Nuland.
Now… We take a back seat to no one when it comes to privatizing government functions that can be handled better by the private sector. But we’re fairly sure that in the sale of Naftogaz’s assets, the beneficiaries will be Ukraine’s pro-Western oligarchs. Hey, it’s their turn after the pro-Russian oligarchs used Naftogaz to buy Russian gas at artificially low prices and pocketed the difference.
“The [previous] government was rotten to the core… but most governments of Ukraine will be rotten to the core,” says George Friedman of the private intel firm Stratfor, “partly because there is no tradition of respect for the law, and because of the way property was privatized [when Ukraine became independent].”
The sale will surely be good news as well for anyone reckless enough to buy Ukrainian government bonds — European banks hold more than $23 billion in outstanding loans. Heck, the proceeds might even total the $35 billion Ukraine says it needs to avoid a default. Win-win!
Ed. Note: This brand of unique commentary is just the kind of analysis you can expect each day in The Daily Reckoning – including several opportunities to learn how to safeguard your wealth no matter what happens. If you’re not getting it, you’re only getting half the story. Sign up for FREE, right here, to ensure that never happens again.
[This essay was excerpted from Harry Browne's book How I Found Freedom in an Unfree World. Although first published in 1973, the themes and lessons he espouses are as relevant today as they were when he first wrote about them. Mr. Browne was a pioneer of the financial newsletter industry, and he churned out actionable solutions for people who wanted to escape the effects of government on their finances and lives. We're proud to share a few of his thoughts, below.]
The Rights Trap is the belief that your rights will make you free.
It’s not hard to fall into this trap and become preoccupied with your rights as a way of getting what you want. You’ve probably heard since childhood that you have certain rights — to life, liberty, property, the freedom to pursue your happiness.
In addition, it’s easy to feel that someone owes you certain things in a relationship — such as respect, honesty, or fair play.
Unfortunately, rights exist only in theory. In practice, they don’t accomplish much — no matter how much people may discuss them.
By implication, a right to something means that someone else must provide that something, whether or not he wants to. A right to your property, for instance, means that you should be allowed to keep your property — even if others want to take it. A right to a job means that someone must provide a job for you even if he prefers not to.
Rights are invoked only when there’s a conflict of interest. Otherwise, there’s no need for them.
One reason it’s so easy to walk into the Rights Trap is that it sometimes seems to be the only way to deal with a conflict. But that’s only one of three methods of handling such situations. You can:
- Rely upon your rights to get you what you want.
- Find a way to make it in the other person’s self-interest to provide what you want.
- Find a way of getting what you want without his being involved.
In my experience, I’ve been involved in many situations in which the second or the third method has worked for me. But I’ve never found a situation in which the first method has been useful.
We’ve seen that an individual acts in ways he believes will provide the most happiness for himself, based upon his own knowledge of the alternatives available.
He’ll do what you want him to do only when he thinks that’s the best alternative for him. If he thinks there are better alternatives for him, he won’t do what you want.
It’s as simple as that.
The Rights Trap is the belief that your rights can get you what you want.
Let’s see how the alternatives apply to various matters in which rights are often invoked.
It’s popularly assumed that you have a right to your life. Unfortunately however, if someone kills you, your right is of little value. The police may investigate, may even find the killer, may even take him to court and convict him, may even execute him.
But none of that will change the fact that you’re dead.
Obviously, it’s more effective to see to it that no one has both the intention and the opportunity to kill you.
Another right that’s often discussed is your right to your property. But once again, what use is that right if your property is stolen? Stolen property is rarely recovered by the police and returned intact to its owner.
Whether or not you have a right, you still have to protect your property or risk losing it. It’s more effective to make it difficult for a thief to steal it — so that it will be in his self-interest to go elsewhere.
It’s often said that everyone has a right to a job or to a “decent” standard of living. But who will gladly give up his own happiness to make that possible? If it’s in an employers self-interest to hire you, he’ll do so; if not, your right won’t get you a job.
The fact that governments claim to protect these rights is insignificant. There are still murders, thefts, and unemployed people — as well as arsons, rapes, and uneducated people who had a “right to an education.”
Whether or not there are fewer problems as a result of laws isn’t relevant. They still happen — and if they happen to you, it’s no comfort that they happen less often to others.
In the same way, your rights offer little protection against the government itself.
You can feel that the government doesn’t have a right to tax you more than a certain amount. But unfortunately, the government probably does tax you more than you think is fair.
Many people believe the Constitution should protect their rights. But has it done so?
I’ve heard it said that the Constitution is perfect but that the politicians create problems by ignoring it.
But if the Constitution can’t make the politicians respect it, of what value is it? It’s interesting to talk about, but not really useful to your freedom.
For, in practice, the Constitution is whatever the President, the Congress, and the Supreme Court choose to think it is — and that may be considerably different from what you think it is.
If a law is passed to protect your rights, it’s an uncertain, temporary safeguard at best. Laws are broken, amended, repealed, overruled, ignored, and ill-enforced.
They’re not very effective protectors…
The Rights Trap is the belief that your rights can get you what you want. You’re in the trap any time you count on anything other than an individual’s self interest to cause him to give you what you want.
You’re in the Rights Trap if you assume that an effective statement of your rights will bring you lower taxes, more personal freedom, or an end to injustice. Those objectives are realistic — but you’re much more likely to get them if you forget about your rights and utilize other tools.
You can also fall backward into the Rights Trap by letting someone else pressure you by invoking his rights. His rights are as theoretical as yours. And you will look for ways to circumvent them, just as he would. But it’s possible to be affected emotionally by his demands if you don’t recognize that they’re pointless.
It’s in your self-interest to be aware of the consequences of your actions. If you’ve made a promise, you can expect bad consequences if you break it. But you should focus your attention on those consequences, not on his concern with his rights.
In fact, this is where confusion can develop. If such things as lying, stealing, or killing would bring you bad consequences, your reasons can be confused with questions of rights.
For example, suppose you’ve decided that stealing would bring you bad consequences. If someone tells you that by not stealing you’re “recognizing property rights,” you might also react to someone’s claim of a “right to a decent living” as if the context were similar — and you might think you have a duty to satisfy that right.
The consequences to you, not someone’s conception of rights, must always be the deciding standard of your actions.
Perhaps there are times when you feel that your rights are the only weapon you have in a dispute. If so, it usually indicates that you’ve made yourself vulnerable to someone whose self-interest conflicts with yours.
It helps to remember that you are the one who put yourself in the vulnerable position. You have chosen to associate with those who cause you problems — whether they be your family, your business associates, your employer, your employees, or your friends.
If you’re not being treated as you want to be treated, it’s your vulnerability that must be changed. You could spend the rest of your life trying to educate the others, to change their natures and values, to get them to respect your rights. But you probably wouldn’t succeed.
It always makes more sense to concentrate on the direct alternatives — the things you do control. What others do is up to them, but there’s always a great deal you can do. Choose from the alternatives that require only your decision — not from among the many hopes that someone will be something other than what he is.
To rely on your rights or on your ability to change others is far less promising than to rely upon yourself.
To illustrate this, let’s suppose that I walk out to my front porch one morning, expecting to pick up my milk. But lo and behold, I find that it’s been stolen. What to do next?
I can bitterly feel that the thief had no right to steal from me. But would that get my milk back?
I could stand on the front porch and deliver an eloquent speech, cursing the disgraceful fact that there are thieves in the world. But what would that get me — aside from a few angry neighbors?
To say that there are thieves in the world is only to repeat what I’ve known all along. To say that it’s disgraceful is to say that if I were God, I’d have made the world differently. But since I’m not God, that point is irrelevant, too.
No one owes you anything; everyone you deal with will choose the best alternatives for himself.
To say that I would never steal someone’s milk is to acknowledge that I’m different from many of the people in the world and that I have my own way of trying to achieve happiness. But why should I expect someone else to use my way?
The only area of interest is that which I control. I’ve decided to risk theft by having the milk bottles left on the front porch. And I can decide to continue that risk or have the milk handled in some other way.
If I concentrate on the thief’s immorality or on my rights, I’m probably leaving myself vulnerable to another theft. But if I use what I control to make new arrangements, I can see to it that the theft isn’t repeated — and that should be my major concern.
You have so much control over your life, it would be a shame to throw it away.
But you do just that if you hope to get what you want by involving your rights or by trying to change others.
By using the control you do have, you can reduce your taxes, adopt the lifestyle you want, and establish valuable relationships that won’t bring problems. There are numerous direct alternatives available to you — many of which will be suggested as we go along.
No one owes you anything; everyone you deal with will choose the best alternatives for himself.
Try forgetting about your rights. They haven’t made you free. They didn’t bring you the good things you’ve achieved in your life. Why count on them in the future?
There are far easier ways to get what you want.
Ed. Note: Acting in your own self-interest is not a bad thing. In fact, as Harry Browne points out, it’s the only way to ensure that you’ll live the kind of life you truly desire. But that’s not to say others can’t help. On the contrary, you should utilize all the help you can get… just don’t expect anyone to do the work for you. By signing up for the FREE Daily Reckoning email edition, you can take control of your financial freedom and gain some invaluable insight in the process – including some unique chances at real, actionable investment advice. So don’t wait. Sign up for The Daily Reckoning, for FREE, right here to get started.