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The Weekly Oil & Gas Follies - Forbes

Peak Oil - Google - 50 min 53 sec ago


The Weekly Oil & Gas Follies
The radical anti-fracking advocates at the Post Carbon Institute took over leadership on the whole “Peak Oil” argument a few years ago. Since doing so, they have turned what was at one time a somewhat misguided and short-sighted mathematical endeavor ...

The Market Ticker - Actually Fixing Our Economy

The Market Ticker - 4 hours 44 min ago

For roughly seven years I've written on economics, social issues and the markets.  In several areas of the economy and markets have I put forward what I believe would be an improvement in what we have now, whether it be in the area of health care, education, monetary theory and practice or energy.

Leverage, for example, featured all of these areas of the economy in quite-significant detail.  But in the time since its publication, along with the time before that I and a few others have spent writing on these matters, little has changed and in fact one can easily argue that economic matters have gotten much worse for the average American.


I want to advance a "unifying theory" if you will that underlies all of these ills.  I've talked about it a bit in the last year but I believe we must bring it front-and-center in our economic debates both among our associates and in the political sphere.

It is simply this: We must stop and reverse the financialization of all areas of our economy.

What am I speaking of in this regard?  The increasing acceptance by us in being sold a payment instead of a price.

You may not have noticed it but virtually everything nowdays is sold this way.  And unlike the various perverse games that are played in Washington DC to screw you in one form or another this one is completely under your control; no President, Senator or Representative can force you, at gunpoint, to acquiesce.

Consider the common situation with cell phones that I wrote about in Leverage: You walk into a cell phone store to get a new phone and are told it's "ninety-nine dollar!"  No, that's not the price.  The price is in fact $99 down and about $40 a month imputed for two years; that $600 phone in fact costs about $1,059!  The rest was extracted from you because you allowed yourself to be sold a payment ($100 a month for cell service) instead of a price.

If you bought a price instead you would have paid $500 for the phone and then $50 (or less!) for the service.  Indeed, you can do that now -- it's called Straight Talk over at your local WalMart.  There is no subsidy on the phone and the price is $45 per month for unlimited talk, text and 2Gb of data -- about half of what Verizon or AT&T want for the same thing.  Oh, did I mention that you're actually running on their networks anyway?  Yeah, that too.

So by refusing to allow the cell phone store to financialize your service and phone you pocket about $25/month when all is said and done.  That's $300 a year with which you can buy an (inexpensive) vacation or just a few nights at your local bar.  $25/month doesn't sound like much but for many people it's about half of their monthly water bill, and that's nothing to sneeze at -- especially if you're tight on money.

Let's look at another example: College educations.  You're sold a payment when you start playing the loan game.  "Yes, you awesome and unique high school senior snowflake (and you fine parents of said snowflake!) all you need to do is sign right here and when you finish your education, of course at the top of the class with straight As, you'll land a great job earning $65,000 a year and will pay a mere $500 a month to cover this grand educational experience, complete with a fabulous student center, indoor pool, tennis courts and, of course, sushi every night."

Uh huh.  What they forgot to tell you is that in order to do this you will have borrowed $45,000, or over $10,000 a year.  Your parents will have raided their retirement funds for another $50,000 -- money that, over that same ten years, will be the difference between them eating cat food down the road and being reasonably comfortable.  Your so-called "education" in fact will cost approximately $100,000, or six times what it cost just 30 years ago, dramatically outstripping inflation.

The real bad news is that this "affordability" presumes you succeed, and even if you do you're still in trouble.  Why?  Because $65,000 a year is a gross income of $5,417 per month.  The problem is that most lenders will not allow your total debt service to exceed 36% of your gross income and even that is unsafe.  That 36% means that all debt service must not be more than $1,950 monthly -- that's housing, car payment and the student loan.  Your student loan will chew up better than one quarter of that right up front and if you have a $500 car payment on top of it you're now down to under $1,000 a month for all mandatory housing spending including principal, interest, property taxes and hazard insurance.

How much house does that buy?  Let's look -- at 5% interest and a 30 year fixed loan assuming your hazard insurance is under $500 a year (achievable in most parts of the country) you can finance $177,705 worth of house.

That looks doable in many parts of the country, until you realize something else -- the places where you can land that $65,000 a year job have no chance of having hazard insurance and property taxes both payable with that $500.  Indeed it is not uncommon for the property tax on that $170,000 house to be $3-4,000 a year in metro areas that support your $65,000 salary!

Now run the numbers starting with your same $5,400 in gross income, allowing $1,950 for all debts and subtracting off $750 for the student loan and property tax on the house, plus another $500 for the car payment.  You now have $700 a month with which to buy the house, and by the way that only buys a $130,000 house.

How many of those are in that major metro area and aren't crack houses?  Uh, yeah.

Now you know why you are sold a payment on that education instead of a price; it allows the glib-talking salesman (commonly called a High School counselor or admissions "adviser") to not bother telling you about all the math you ought to do before agreeing to these terms.  It also evades a discussion about what happens to those numbers and your economic life if you don't finish in four years but instead take five (adding 25% to the cost) or worse, you leave without finishing at all but still have the debt.

Without financializing the cost and preventing you from declaring bankruptcy and walking away you would never accept this and no lender in his right mind would give you the money either.

Now let's look at cars.  The other day I wrote about the utter insanity of the average new car costing $32,000.  How did that happen?  Simple -- you're sold a payment instead of a price.  If you walk into a car dealer and tell them you can "afford" $300 a month they will do everything in their power to find a vehicle they can sell you that will "cost" $300 a month.  However, the way they get there won't matter to you because you just told them how much you'll spend monthly, without regard to how much the vehicle actually costs!

By going down this road you virtually assure yourself of getting screwed out of thousands of dollars and what's worse is that you drive the demand curve for those higher prices northward which hurts everyone else irrespective of whether they came into the dealership intending to do the same thing or not.

Of course houses are the worst offenders in this regard.  That's how we wound up with the housing bubble -- financialization.  And it's how we'll get screwed again and again until we stop it, because as soon as you allow this sort of manipulation to take place in something as essential as housing (or transportation) you are going to get reamed by it no matter whether you participate or not

No, you don't "win" by participating while others "lose."  You all lose because you overpay.

Let me expound on that a bit.  When we allow financialization to take place the means by which you overpay seems complex or even ethereal but it really isn't.  The banksters and other people in the transaction have a huge database of outcomes to look at for statistical purposes.  That is, they know what the odds are of your defaulting on a given loan and since they have millions of examples they have an enormous amount of information in this regard.  You, on the other hand, have none of that information and what's worse is that even if you did it wouldn't help you much because you don't know where you fall on the curve.

It is human nature to believe in our own exceptionalism.  However the fact is that experiences on an individual basis tend to fall on a statistical bell curve; some bad, the median being the most-likely, and some good.  The goal of financialization is to allocate almost all of the benefit from a given basket of transactions across that bell curve to everyone except you.

Sit down and think about this folks.  You buy a car to get to work, the grocery store and similar.  That is, to transport you and your effects from place "A" to place "B" and back again.  That has utility value to your life and if you analyze it sufficiently you can actually put a financial number on that value in dollars, with the alternative being either public transportation or the use of human muscle power (by either walking or riding a bicycle.)  That utility value varies widely; for someone who lives in a big city with a good public transportation system it may actually be negative when all costs such as city stickers and parking are taken into account, but for most of us there is positive utility value present.

Financialization is all about analyzing that value across the entire base of cars sold and then allocating all except a tiny little bit of that value to the people selling both the cars and the money.  

Note that without financialization the car dealer has much less information about the value to you of a given vehicle sale, and he has less capability to capture that value to you.  If you have wondered why a dealer in a big city often prices cars lower than a rural dealer you might think it's mostly about the number of cars sold.  Not entirely so -- it's also about utility; the person in the country can't realistically choose to walk or ride the bus!

But when you financialize the car transaction now the entire nation gets averaged on that bell curve and the amount extracted from you and transferred to them goes up.  Not only do they have vastly more data to integrate and thus the supplier's information becomes more-superior but in addition there is another party involved in the transaction -- the lender -- and he insists on getting paid for his work as well.  

Left to its own devices this will ratchet prices higher until all but the last dollar of utility value is extracted from you on average and winds up in the dealer's, the manufacturer's and the bank's pocket.  Anyone who is left of the peak of the bell will see negative value in the transaction, while those who see positive value will see much less of it.  This is simply due to information asymmetry but the blame is yours because you allowed it to happen.

The same thing has occurred with education.  Why can't you spin pizzas on weekends and in the summer and pay your way through college without any loans at all?  You could do that 30 years ago -- it wasn't particularly difficult either.  You had to work full-time in the summer and perhaps do the first two years at a community college, but it penciled out -- even if you didn't live at home.  Today that's impossible; you'd have to work 120 hour weeks in the summer and 40+ during the school year, and you probably still can't hit the numbers without borrowing.  

Has Calculus changed in the last 30 years?  Has chemistry?  Has pretty-much anything else?  No.  What has changed is that the financialization has allowed colleges and lenders to collude in analyzing the outcome data and then ratcheting up the price so that only those on the right side of the bell curve get any financial benefit at all from attending; those on the left get hosed and those on the right get a fraction of the benefit they should.  

The college, however, along with the car manufacturer and dealer, don't care because their goal is to maximize their profits and so long as half plus one of the people participating get some benefit there will be those they can sell their scheme to.

The Real Estate business is likewise polluted with this crap for the same reason.  Whether you will benefit in the long run doesn't matter any more.  All that matters is whether there is a marginal amount of economic benefit that can be siphoned off and whether those on the right side of the curve will keep a single dollar.  So long as they do and you keep playing the game continues and prices are ratcheted up with nearly all of the benefit going to someone else.

Here's the point though folks -- we can stop it.

You, I, everyone else.

We stop it by refusing financialization.







Especially things like cars and educations along with consumer consumables like cellphones.  In other words, reduce to the maximum extent the ability of others to use their superior information and aggregation of data against you.

And before you pipe up and say "But if I do that I'm screwing myself!" consider that for most of us our desires and influence extend beyond our own person.  Most of us have or want to have children during our lives.  By participating in this scheme whether we win or lose personally we are screwing our kids because the economic impact of this scheme falls worst on those who follow us.

I will argue that while there are sociopaths among us, and many of them, most of the population doesn't want to financially screw their own children for their personal aggrandizement.  The problem is that most people don't understand how signing that FAFSA, buying a $35,000 car on an 8 year payment schedule, going along with Obamacare or playing the "real estate" game hoses their kids -- and grandkids.

But it does; if you doubt it find and defend a competing explanation for why it is that in the 1970s and early 80s you could spin pizzas and work in the summer to go to college, paying the entire nut to do so, and yet today the cost has risen at six times that of the minimum wage making that course of action impossible.

That is, in the 1970s and early 80s anyone who could pass the classes and had the desire to go to school sufficient to work in the summer and on weekends could do so without taking on debt.  That meant that whether you came out ahead (e.g. you finished and got that good job) or not you were financially ruined by attending; the worst case was that you failed and lost your investment you had previously earned spinning the pizzas.

Today we impoverish a large percentage of those who attempt to attend college -- on purpose.  It's our (we being those who have tolerated this crap for the last 30 years) fault and if we don't educate the younger people in this country and demand it stop it will continue to be our fault.

You can no longer claim ignorance folks.

Now the question is whether you will continue to willingly participate.

Categories: Economics

The Market Ticker - On The Vigil of Easter

The Market Ticker - 20 April 2014 - 1:03am

Today is Easter Vigil; for Christians of all stripes it has meaning in the theological calendar as the day between Christ's death on the cross and his resurrection.  For everyone else it's just a normal Saturday.

Usually what you see from me are missives related to economics or the political landscape around the world.  This is a bit different -- it's about commodities, one in particular.

That commodity is time.

Time is the one commodity you cannot buy more of, no matter how hard you work or how much money you have.  It is a commodity that you begin life with an unknown amount in your possession, and like the sand in an hourglass it slowly slips away.  Unfortunately the top of your hourglass is covered in black paint; only the last small bit of the glass before the pinch-point is transparent.  You must therefore divine exactly how much sand you began with and your alleged knowledge is usually predicated on nothing more than personal hubris.

Most people will believe they have a great deal of sand remaining in their teens, twenties, thirties and beyond.  Many of them will be right.  But with each passing decade a larger percentage of the population discovers that their optimism was misplaced as they see the top of their personal pile descend into the clear area of the hourglass, realizing that their time is about to run out.

When I was a young man, like most young men, I believed I was Superman in some form or fashion.  I could not die, absent undertaking some bold and spectacularly-stupid stunt.  This of course was a false belief but most boys and young men share it to some degree or another.  Death was abstract and while I had relatives that met the reaper during those years I was simply unprepared to deal with it -- so I didn't.

As the years have passed more people that I know have had their sand run out; several long before, in my view, it should have.  But my view doesn't matter as I wasn't in charge of filling those hourglasses originally.  That right belongs to the man upstairs, and despite anyone being able to ask "Why?" it is only through a rather extreme showing of arrogance that I, or anyone else, could claim the right to an answer.

Today marks a time of the year in which renewal is promised; the renewal of spring, in which longer and warmer days brings the renewal of agriculture, without which we would fall into famine and many would perish. The world around us blooms in color, promising fruits and growth in the months ahead.  

But for those of us already here today and tomorrow should bring reflection and perhaps self-examination as to whether the time we spend irrevocably, and which we cannot recover and repurpose, should be put toward something better suited to the nature of that which we are expending.

Categories: Economics

The Market Ticker - Cars And Stupidity

The Market Ticker - 19 April 2014 - 12:35pm

This sort of thing makes my blood boil, and not for the reasons you may think:

If you think cars are getting too expensive, you may be right. A new report shows that the average price of a new vehicle is out of reach for people in medium-income households in all but one of the 25 largest metro areas in the U.S.

The report by Interest.com shows that Washington, D.C. is the only American metropolitan area in which a family earning the city's median income can afford the average price of a new vehicle, which was $32,086 in 2013, according to Kelley Blue Book. That price equates to a monthly payment of $633, assuming the buyers put 20 percent down, financed for 48 months and principal, interest and insurance did not exceed ten percent of the household's gross income.

$32,000 for an average new vehicle is utterly nuts.

Flat-out, stark raving nuts.

First off, virtually nobody puts 20% down on cars any more; almost everyone I have heard from or about is buying them with 100% financing -- which is stupid all on its own, because if you don't take GAP insurance and wreck it you're totally screwed.  If you do take GAP insurance then you're paying for yet another service and your monthly cost goes up even higher.

Second, there is this claim that the car should be "no more" than 10% of household gross income.  What are you smoking over there?  We are talking about two-income households, right?  So now we're also talking about two cars, right, or is the second person walking to work?  20% of household gross tied up in vehicle payments and insurance?  

Are you stark raving mad?

To put some percentages on this that actually matter my "reasonably safe" financial leverage limit for most people stands at 28% maximum for all fixed housing-related expenses, which means principal, interest, hazard insurance, any mandatory association or coop fees and property tax (or rent + tenant insurance.)  The maximum safe leverage limit for all fixed obligations (including housing and transportation) is 36%.  That means that you can afford one vehicle that has a carrying cost of 8% of your gross assuming no other debt of any sort, such as credit cards or student loans, if you are up against the 28% maximum on housing expenses.  By the way note that taking on that 8% obligation means you are locked into not taking any more debt until either your income rises or you pay off the note -- it is not just a "qualify and then do what you want" ratio.

But this, by the way, this is not what you'll be sold at any dealer.  If you actually run to my limits (36% maximum gross income obligation against housing and transportation) you will find that your household is pretty damn tight on money.  Not desperately so, but moderately.  That means you won't be buying fancy vacations nor will you end the month with a bunch of extra cash allowing you to go out on shopping sprees and spend it.  Instead you will be coming to the end of the month juggling a few things -- that night in the bar will burn your last disposable $50 but you'll still manage to hit the match on your 401k at work -- barely.

If you go the limits "recommended" by the "finance guys" you will instead be eating Mac-N-Cheese on a fairly regular basis or you will start doing really bad, destructive things -- like carrying a credit card balance from month to month, having zero in cash reserves and, when the inevitable bad thing happens that requires you to spend a few hundred dollars without prior warning or planning you will be screwed.

I am not surprised though.  What did surprise me, as I recently shopped for a new car (and ultimately bought one as I wrote about here a few weeks ago) was how utterly outrageous vehicle prices had gotten over the last few years in comparison to what you actually got for your money.

Why, one might ask?

That's pretty simple -- the financialization of vehicles has advanced to the point that we no longer do "traditional" car loans from a bank or credit union, or paying cash, as our primary means of purchase. This has taken what should have been a dramatic and continuing technology improvement process that reduces price and led to everyone along the way, from manufacturers to banks to dealers scalping all of the value add from that process for themselves, increasing prices so that all but the last ten cents of that value goes to them and only a tiny bit comes to you.

This is exactly what has happened in both education and health care -- and what happened in housing as well.

This pattern is self-destructive for the economy as a whole but it will not stop until something breaks the financialization model -- and there is no indication we're going to see that from the car industry or the finance industry any time soon.

Can you fight back against it?  Yes and no.  Unfortunately this same trend causes used prices to rise too, so there is only some defense available by buying a quality used vehicle instead of a new one.  But what you can do is stop playing "I need a Lexus" and start showing the car dealers the back of your head on a regular basis.

I don't think that's going to happen, however, which makes this a problem that we're going to have to deal with for some time to come -- right up until it blows up in all of our faces in aggregate, just as college loans and medical spending are destined to.

Categories: Economics

6 Reasons You’ll Love Being a Late-Stage Investor

The Daily Reckoning - 19 April 2014 - 8:03am

A few years ago, a buddy of mine named Charlie invested in Uber.

People thought he was nuts:

Investing in a car service? Dealing with municipal and licensing regulations?

To most folks, it seemed like a high-risk dud.

Then – because, sometimes, it just happens – Uber became a “hot” private start-up worth billions.

Charlie isn’t looking so nutty anymore:

He just sold $10,000 worth of his shares in a private transaction…

For $4 million.

But that’s not the amazing part.

The amazing part is that the buyer of his shares is thrilled

The buyer thinks those shares will soon be worth a whole lot more than $4 million.

Today we’re going to show you why the buyer’s strategy might be smart…

And why you might be smart to follow the same strategy.

Charlie is the textbook definition of an early-stage investor.

He takes chances on high-risk investments, knowing that, most of the time, his bets won’t pay off. But when they work, the returns can be staggering.

400x return on his Uber shares? Not too shabby.

The buyer who paid $4 million has a different investment approach…

He’s a later-stage investor.

He finds companies that have proven themselves – private companies that already have millions of paying customers and millions in revenue – and places big bets on them in anticipation of an IPO or major acquisition.

Maybe he’s shooting for a 3x or 5x or 10x return. Sure, he won’t get 400x – but who’s complaining about a 5x return?

Unfortunately, it’s no small feat getting access to these late-stage deals. Because these deals are in such high demand (and because the valuations are usually so high), only very large venture capital or private equity funds can access them.

Until now.

SharesPost is an online platform for buying and selling shares of private companies. They’ve been around since 2009, and have a partnership with the Nasdaq. They’re legit.

Now they’re in the midst of launching something completely new: the SharesPost 100 Fund, a portfolio of later-stage private companies.

They’ll be investing in companies like Uber, Pinterest, Airbnb and Spotify. Many high-growth sectors will be represented – from software and healthcare to energy and consumer internet.

Here are six reasons why you want to look at this fund, right now:

1. Access - Getting access to private shares like Uber and Spotify – fast-growth companies backed by top venture capitalists – is tough. SharesPost has access because they’ve been working with these companies for years.

2. Less Risk - Compared to early-stage start-ups, the companies in the SharesPost100 tend to be lower risk – they’ve already proven, for example, that their technology works, or that people are willing to pay for their product.

3. Diversification - One of the key rules of early-stage investing is diversification. SharesPost’s fund structure gives you access to many of the most promising pre-IPO companies.

4. Less Time To Exit - An early-stage company generally takes 5 or 10 years to “exit” via IPO or M&A and return money to its investors – if it gets an exit at all. The companies that SharesPost will invest in are probably closer to 2 or 3 years from an exit – which might mean a quicker return on capital.

5. Liquidity - For the most part, shares of early-stage companies are highly illiquid: your money is tied up until the company exits. But SharesPost is set up as an “interval” fund – that means there are defined periods when investors can redeem a percentage of their shares for cash, and there’s no waiting around for an exit in order to get your money back.

6. Solid Management - The manager of the fund has more than 15 years of private investing experience. He previously managed $1.5 billion of venture capital investments.

Despite the benefits, there are substantial risks, too.

A fast-growing start-up – even one that IPOs – doesn’t always turn out to be a good investment for its later-stage investors. Zynga and Groupon, for example, IPO’d, but the price of their stock tumbled before some investors could sell their shares.

Other potential risks include liquidity – yes, this is an “interval” fund, but there are no guarantees there will be ample liquidity for all.

Intrigued? Here are a few details:

  • Minimum Investment: $2,500
  • Up to $500 million being offered
  • Repurchase offers for liquidity will take place quarterly
  • Fees include “Advisory fee” of 1.90%, and an upfront fee between 0% and 5.75% depending upon the amount invested

Happy Investing!

Best Regards,

Matthew Milner
for The Daily Reckoning

Ed. Note: When investing in startups, there’s no guarantees. Even as a later-stage investor, you’re still exposed to a substantial amount of risk if an IPO doesn’t perform well or there are liquidity problems. But there are great strategies to mitigate these risks, as Matthew points out above. And as a frequent contributor to the Tomorrow in Review email edition, Matthew shows readers some of the most lucrative ways to benefit from the private equity market, with substantially less risk. Sign up for the Tomorrow in Review email edition, right here, to find out what you’re missing.

This article originally appeared here at Crowdability.com

Categories: Economics

How to Predict an Economic Collapse

The Daily Reckoning - 19 April 2014 - 6:05am

Well, I think you have to look at it in the context of how it all got started and you look back at the financial crisis of 2008, and the Austrian School would say that was inevitable. We may not have been prescient in picking the exact top or when it was gonna happen. Certain Austrian economists did do a good job of selecting.

And I talk about some of those people. The Austrian School, Mises and Hayek for example, predicted the 1929 crash and the Great Depression, and got quite a bit of notoriety as a result of that. And in 2008, a number of economists like Peter Shiff, who uses Austrian economics, or Harry Veryser, who has written a book recently – he’s an economist at the University of Detroit Mercy, who used some Austrian tools on the interest rates and money supply figures to figure out when the top was being reached – recognized that the government, the Federal Reserve in particular, but also the federal government encouraging excessive home ownership created an elixir, a combination that was – it blew up on us, to create this artificial boom, followed by collapse. So the Keynesians and the Monetarists, the standard neoclassical model was inject liquidity.

You have this collapse. Inject liquidity. Keep it from turning into a Great Depression. And they were successful in doing that, but it’s been a very slow recovery, and the – most of the new money that’s being created – see the Ludwig von Mises always said who gets the money first? You have this new money coming in, the easy money; where is it going?

And it appears it’s going into the stock market, and it’s creating this artificial boom in the recovery, and it’s largely going into the stock markets, gone into treasuries. It’s gone into gold and silver to some extent, although the last couple of years haven’t been very good on gold, but there has been a renewed interest in gold at these lower prices. So the Austrians are looking at that, saying this is an artificial bubble. You can play that bubble. I’ve been fully invested. But at some point, this market is going to top out and probably when interest rates rise sharply, this should be a critical factor as interest rates is something the Austrian School really looks at very closely.

We look at the money supply, which is what the Chicago School does. They have a fairly simple system. But the Austrian School has a little more sophisticated system, and we would argue, yes, it’s artificial; we’ve been playing that market, but at some point, we’ve got to use our stop orders. We’ve got to protect our profits, and we have to recognize that there could be another crash, another bear market sometime down in the future. I’m not predicting it any time right away. Yes, we’ve had a five-year recovery in the market. But until interest rates really spike, I just don’t think you’re going to see an end to it.

Categories: Economics

Why Heartbleed Will Change the Internet as You Know It

The Daily Reckoning - 19 April 2014 - 4:52am

If you have watched the news or been online since last Monday, you might have heard something about the latest Internet threat to your privacy and online security — the Heartbleed bug.

The Heartbleed bug is a vulnerability in one of the principal tools used to encrypt sensitive information stored on Web servers. Information like usernames, passwords, and financial information like credit card numbers or bank accounts. The tool under attack, OpenSSL, is used by over two-thirds of all Web servers today to protect sensitive information on the Web.

As its name suggests, OpenSSL is an open source implementation of the “Secure Sockets Layer” cryptographic protocol. This “authenticates” the source of information and provides a means for determining whether a communication is from a trustworthy source.

The OpenSSL protocol uses cryptographic “keys” that represent a sort of shared secret between communicating parties. The keys establish who the parties are before the exchange of information begins. They are the basis of the “certificates” we all rely upon to know that we are actually communicating with Google or Facebook or our bank.

Changing your usernames and passwords could address the main security issues. But it doesn’t address the bigger problem.

Heartbleed takes its name from the OpenSSL “heartbeat extension.” This extension monitors the connection between servers and your computer to determine whether the communication taking place is “live.” It also fulfills the trustworthiness criteria specified in the identification process.

Heartbleed is a glitch in the heartbeat code that allows memory on a device to be read by another device. That memory could potentially contain sensitive information. Since the information is not protected, hackers can read it and harvest information like usernames and passwords.

But that’s not the worst part. It was discovered later in the week that the Heartbleed bug can be used to create fake websites that mimic trusted websites you might use. It thereby could cause unsuspecting Web surfers to disclose sensitive information like user names and passwords as they log into a fake website.

Imagine logging into Google or Facebook. Everything appears as it always does at login, with the site thereafter performing as expected. It’s only later you discover that your privacy and security have been compromised.

The reason this is possible, as discovered by two ethical hackers separately, is that the Heartbleed bug not only allows the interception of user information in memory as noted above, but it also allows a server’s certificates to be copied and, thereafter, applied to mimic sites.

Changing your usernames and passwords could address the main security issues. But it doesn’t address the bigger problem, that being the fundamental breach of trustworthy communications on the Internet.

If the certificates of source aren’t trustworthy, how can anyone know their communications are going where they intend them to go?

Unfortunately, the simplest solution has potentially the gravest of consequences. Especially in our convenience-driven world of Internet communication. All websites on the Internet would need to change the existing certificates with new ones.

This already occurs on a fairly limited basis as website administrators discover their certificates have been compromised. In fact, your Internet browser contains software that checks to make sure the website you’re using has a secure and up-to-date security certificate. If a page’s certificate is on a list of invalidated certificates, your browser will warn you before it connects you to the page.

But currently, the list is very short. And it doesn’t take too much time for your browser to make sure the website you’re trying to access is secure. But imagine that list growing tenfold, or a thousandfold. Millions of entries from every Internet vendor who might have been affected by the bug would have to add their certificates to the list.

The amount of time it takes for your browser to certify the website is secure would skyrocket. And it could drive Internet traffic to a halt.

According to Paul Mutton, a security consultant at the Web services company Netcraft, checking a site’s identity would take vastly longer. “If a certificate authority has to revoke 10,000 certificates, that entry will have 10,000 certificates on it,” Mutton said. “And if browsers have to download that… we’re talking hundreds of megabytes.”

It’s roughly the equivalent of downloading 30 minutes worth of standard-definition video just to view a single Web page.

So what can you do?

If you’re already a subscriber of the Laissez Faire Letter, then you probably already know about LastPass. It’s a service that generates secure passwords and gives you the ability to store them online. And don’t worry, they make it a point not to log your account’s password in their records. So only you have access to your information.

Over the last week, LastPass has taken what appear to be the appropriate steps to protect their users from the Heartbleed bug and the dangers of certificate mimicry on their site. The advice they give is pretty straightforward. Change your usernames and passwords. But more importantly, adopt a strategy to regularly change them.

There will likely be significant fallout from the Heartbleed bug in the weeks to come. Especially as the ramifications of the security breach become more apparent and understood. And of course, you still have to worry about the hacker community, which is always trying to find ways to exploit and compromise the “fixes” that are put in place.

We’ll keep an eye on things and keep you up-to-date. Stay tuned.


Mike Leahy
for The Daily Reckoning

Ed. Note: As Mike points out above, subscribers to the Laissez Faire Letter, already have access to an exclusive free report on LastPass. But there are actually plenty of programs that can disguise your Internet signature and hide your personal information from anyone who might be looking for it. And you can learn more about a few of them, by signing up for the FREE Laissez Faire Today email edition, right here.

Article posted on Laissez Faire Today

Categories: Economics

When You're Lost In the Rain In Juarez.... - Vermont Public Radio

Transition Towns in the media - 19 April 2014 - 2:21am

When You're Lost In the Rain In Juarez....
Vermont Public Radio
The 5th annual “ MAD PIE HOEDOWN,” a fundraising event for Transition Town Montpelier region's “Villagebuilding Convergence,” will be happening at the Plainfield Community Center on Sat. April 26th at 7:30 p.m. The event will include a contradance ...

Categories: TT news

Big Opportunity in the “Baby Bakken” Oil Field

The Daily Reckoning - 19 April 2014 - 1:00am

Last week on a trip to Denver, I got a firsthand look at one simple fact: America is an energy juggernaut.

Today, I want to share some insight and give you a front-row seat to America’s next big shale play.

Let’s get to it…

In the past 10 years, the U.S. has turned the ship around, quite literally.

We’ve gone from a country that was expecting to import massive amounts of oil and gas — to a country that’s sitting on massive supplies of oil and gas, right under our own soil. There’s real wealth flowing from the ground.

Today, I want to share what looks to be the next hot spot in this evolving story — and potentially our chance to profit!

But first, let’s get one thing right out in the open…

Some folks are hesitant to believe America’s energy comeback. They think America’s oil boom is a flash in the pan. But these naysayers are going to miss an enormous opportunity right here in our own backyard.

With each passing day, major news sources keep producing stupendous resource estimates.

In fact, there are two stats that you should consider…

  1. In 2015, the U.S. is set to be the world’s leading crude oil producer, surpassing Russia and Saudi Arabia. No. 1… in the world. This is a prediction your editor Byron King made in his “Remade in America” presentation… and it’s coming true sooner than we could have imagined!
  2. By 2019, according to the Energy Information Administration, the U.S. will surpass its 1970s crude oil production peak. We’re going to be producing more oil than EVER here in the U.S.

Longtime readers know that I could not be more excited about this.

Indeed, next time you fill up your gas tank at the local station, don’t think about Saudi Arabia, Nigeria or Russia. Instead, think about Texas, North Dakota, Oklahoma, Louisiana and even Colorado!

These are the oil plays that are making a difference today… and will continue to do so for decades. It’s an amazing turnaround story here in the U.S.

America is set to be the world’s leading crude producer.

I’ve talked to big drillers, little drillers, service companies, rig owners… The consensus is the same…. This isn’t a flash in the pan. It’s a decades-long opportunity for America… and investors!

As America’s “second oil boom” gains even more steam, the service companies will continue to profit.

The big names — Halliburton (NYSE: HAL), Baker Hughes (NYSE: BHI) and Schlumberger (NYSE: SLB) — will all continue to do well. But then again, those names have been in the portfolio for a while, and while they’ll continue to spin cash, they’re not likely to see the biggest run-up from here.

In the service sector, there are smaller companies, too — in field services, water pumping, well maintenance. A lot of the small firms (in the right places) will do well too. I’ve been on-site with some of these players. Drill rigs are spinning, companies are hiring, morale is high — they’ve got blue skies ahead.

The oil producers in today’s shale market could do even better than the service names, though.

A lot of the American companies I follow are showing massive production increases. They’re also sporting fantastic “well pad economics” — meaning the cost of the well is a mere fraction of its lifetime value.

If you’re betting on the “right horse” in the race to produce America’s shale energy, you’ve got a great chance to multiply your money. And it should come as no surprise that when it comes to the U.S. shale race, it all comes back to location, location, location…

OK, so in the U.S., we’re seeing a huge energy renaissance. There’s oil and gas flowing from all sorts of unlikely places.

North Dakota, for instance, has the massive Bakken Shale oil field. It’s been under development for years now, and produces over 1 million barrels of oil per day. Add it all up and North Dakota accounts for one out of every 10 barrels of oil the U.S. produces — that’s amazing!

Texas is also booming. The Eagle Ford formation in South Texas popped up out of nowhere. Starting in 2007 with essentially no production, today it’s producing nearly 1.4 million barrels per day.

Again, these formations came out of nowhere! And now look at them!

Shale fields in West Texas — a prolific oil area in the 1970s — are also coming to life. The Permian Basin in West Texas is also booming with newfound shale production.

This stuff is happening all around us. And it’s all a matter of where to look for the next big find.

A little over a week ago, I was out west, looking at what could be the next big deposit here in the U.S….

It’s in Colorado, of all places.

Source: OilIndependents.org

Heh, Remember those beer commercials that said, “Tap the Rockies”? Well, we’re not far from that idea, but we’re talking about bubbling black crude oil.

The field I’m looking at now, east of Denver, is called the Wattenberg field. It’s part of the Niobrara shale play. It’s an up-and-coming shale zone that’s not on most folks’ radar.

That’s a shame!

I’ve dubbed this area the “baby Bakken” — because within the next few years, we could see an increase in crude production similar to what we saw in North Dakota. By some estimates, Colorado could soon be the third-largest oil-producing state in the U.S.

To say that little-known companies are going to profit from this is an understatement.

It’s a huge story. All developing in our own backyard.

Keep your boots muddy,

Matt Insley
for The Daily Reckoning

P.S. America’s Second Oil Boom is staring us in the face. Don’t miss out on all our future plays – sign up for a free subscription to Daily Resource Hunter by clicking here.

Article posted on Daily Resource Hunter

Categories: Economics

The Market Ticker - Adolf, Is That Your Ghost?

The Market Ticker - 19 April 2014 - 12:15am

Oh oh....

Jews in the eastern Ukrainian city of Donetsk where pro-Russian militants have taken over government buildings were told they have to "register" with the Ukrainians who are trying to make the city become part of Russia, according to Ukrainian and Israeli media.

Jews emerging from a synagogue say they were handed leaflets that ordered the city's Jews to provide a list of property they own and pay a registration fee "or else have their citizenship revoked, face deportation and see their assets confiscated," reported Ynet News, Israel's largest news website.


You might want to pretend that stuff like this doesn't happen in the world any more. The sad fact is that it appears that it does, and now the difficulty is determining whether this is some sort of hoax or whether it is in fact part of the so-called "separatist" people who are trying to take over part of eastern Ukraine.

If the latter then some very difficult decisions need to be made, particularly in light of what Putin has used as justification for what amounts to an invasion of Crimea.

That would make the situation, on balance, a bit dicey folks......

Categories: Economics

Landscapes Transform With the Arrival of the Colorado River

Energy Bulletin - 18 April 2014 - 10:00pm

The Colorado River returns to the delta - in photos.

Categories: Peak oil news

Policies for Shareable Cities 2: Transportation

Energy Bulletin - 18 April 2014 - 8:28pm

After last week’s introduction, we’re proud to present the first in-depth chapter of Shareable’s invaluable Policies for Sharing Cities Report.

Categories: Peak oil news

The Art of Hosting – Leadership is Possible from Everywhere

Energy Bulletin - 18 April 2014 - 8:00pm

“The art of hosting is an approach to group leadership [which] creates spaces for us to be learning together… co-creating, teaching each other, offering our gifts.”

Categories: Peak oil news

Is This The End Of China’s Coal Boom?

Energy Bulletin - 18 April 2014 - 7:30pm

“The End Of China’s Coal Boom,” is a new, must-read chart-filled report from Greenpeace.

Categories: Peak oil news

The Age of Diminishing Returns

Energy Bulletin - 18 April 2014 - 7:15pm

A Q&A with Ugo Bardi, author of Extracted: How the Quest for Mineral Wealth is Plundering the Planet

Categories: Peak oil news

WEB EXCLUSIVE: Many activities in Valley to celebrate Earth Week - Comox Vallety Record

Transition Towns in the media - 18 April 2014 - 11:04am

WEB EXCLUSIVE: Many activities in Valley to celebrate Earth Week
Comox Vallety Record
Earth Week Coordinator, Annie Andrews regularly updates the Earth Week calendar on the Transition Town Comox Valley website http://transitiontowncv.org/earthday, for anyone wanting to keep up with the full roster of events. The website includes Earth ...

and more »
Categories: TT news

The Real Reason the US Media Hates Vladimir Putin

The Daily Reckoning - 18 April 2014 - 8:52am

With few exceptions, the Western media and most strategists have been very unfair in their comments about Vladimir Putin and his response to the Ukrainian demonstrations. According to Stephen F. Cohen, professor emeritus of Russian studies and politics at New York University and Princeton (he is also the author of Soviet Fates and Lost Alternatives: From Stalinism to the New Cold War), there has been a “tsunami of shamefully unprofessional and politically inflammatory articles in leading newspapers and magazines” which portray Putin in a very negative light and fail to take into account some larger things happening in the region. Here&Now Public Radio’s Robin Young recently interviewed Stephen Cohen, who opined:

…for nearly a decade, the American media has so demonized Putin that we’ve lost sight of him, and we’ve obscured the possibilities that are there and that he’s offered to enhance, through some kind of steady, calm cooperation, American national security.…

I can’t remember any Soviet communist leader being so personally villainized[;] that is[,] we wrote bad things about Krushchev, about Brezhnev, about Andropov, but we disliked them because they represented an evil system. We didn’t say [they] themselves were thugs, murderers, assassins, which are words that we attach to Putin.…

The American media coverage of Ukraine is wrong and inflammatory from beginning to end. The media refers to The Ukraine and The Ukrainian people striving for Western democracy and capitalism. That’s false. Everybody knows that at a minimum, there are two Ukraines. One part of it, mostly in the west, wants to attach to Europe. The other part of it in the east, and partly in the south, wants to remain close to Russia….

And this is caused by ethnicity, language, religion, politics, culture. So now we come to the second thing: Who precipitated this crisis? People say Putin did it, or the Ukrainian president, democratically elected, by the way, Yanukovych. But I say no. Why did the European Union tell the democratically elected president of such a profoundly divided country, two Ukraines, in November, that he must decide either/or, you’re either with Europe, or you’re with Russia?

That’s a provocation, and that’s where this began. And here’s what’s not reported. At that moment, in November and December, what was Putin’s reply? He said hey, guys, why does Ukraine have to decide? Why can’t the European Union and Russia help Ukraine out of its terrible economic crisis? And the answer was, in Washington and in Brussels, no way. Ukraine must decide.

Cohen referred to the leaked conversation between the top State Department official Victoria Nuland and the US ambassador in Kiev, in which she dismissed the EU with the F-word, as further proof that the US wants a new anti-Russian Ukrainian government and is prepared to participate in a coup to achieve that end:

Stop and think how that story was covered in the American media. The first lead was oh my gosh, she said F the EU. The second lead was who leaked this story? Oh, it must’ve been the Russians. Look at those horrible Russians. But that wasn’t the story. The story is what the top State Department official said to the American ambassador in Kiev.

And what she said is you and I are empowered to form a new Ukrainian government. And they’re actually discussing who should be in this government. And the new government is going to get rid of the democratically elected president of Ukraine, Viktor Yanukovych.

Now we may hate Yanukovych. He may be a rat of the first magnitude. But in plain language, they were plotting a coup d’etat against a democratically elected president. And we know that in countries with fragile democratic traditions, when you overthrow an elected president, you are setting back democracy maybe decades [emphasis added].

When asked why, for nearly a decade, the American media has so demonised Putin, Cohen responded:

We in America have had three successive presidents who were by and large failures as foreign policy presidents. Nobody’s going to write a history of Clinton and say he was a great foreign policy president. Bush’s war in Iraq has tainted his foreign policy reputation forever. And Obama is not admired as a foreign policy president, whatever you think of him. Putin on the other hand has been an exceedingly successful national leader of Russia in foreign policy for 13 years. Mitt Romney said the other day in the Washington Post, that when it comes to representing a nation’s interest in international affairs, Putin has been a better president than Obama. OK, that’s politics, but it’s a plausible thesis. And you sense sometimes that Putin’s success has brought upon him this kind of vilification by the American media in particular. Now that’s a thesis. I don’t know. But we ought to think about it.

I want to put the discussion in the proper context, which investigative reporter and author Robert Parry calls “America’s Staggering Hypocrisy”. (Google Robert Parry’s “America’s Staggering Hypocrisy”, an excellent article about US foreign policies.)

My friend Patrick McKim, who served in the US Navy and on the Armed Services Committee for Senator Pete Wilson (R-CA) on the Seapower and Tactical Warfare Subcommittees during the Beirut bombing incident (he also attended the Naval War College’s Strategy and Policy Course, holds a Harvard MBA, has a sizeable library of military and naval biographies and actions, and knows a lot of high-placed people in the military and in politics), recently sent me a piece entitled “Excerpt from a speech delivered in 1933, by Major General Smedley Darlington Butler, USMC”.

(For readers not familiar with Butler, I should point out that he was a Major General in the US Marine Corps, the highest rank at that time. At the time of his death in 1940, he was the most decorated Marine in US history, having received 16 medals, five for heroism.) In his abovementioned speech, General Butler said of interventionism:

War is just a racket. A racket is best described, I believe, as something that is not what it seems to the majority of people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few at the expense of the masses. I believe in adequate defense at the coastline and nothing else. If a nation comes over here to fight, then we’ll fight.

The trouble with America is that when the dollar only earns 6 percent over here, then it gets restless and goes overseas to get 100 percent. Then the flag follows the dollar and the soldiers follow the flag. I wouldn’t go to war again as I have done to protect some lousy investment of the bankers.

There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. War for any other reason is simply a racket. There isn’t a trick in the racketeering bag that the military gang is blind to.

It has its “finger men” to point out enemies, its “muscle men” to destroy enemies, its “brain men” to plan war preparations, and a “Big Boss” Super-Nationalistic-Capitalism. It may seem odd for me, a military man, to adopt such a comparison. Truthfulness compels me to.

I spent thirty-three years and four months in active military service as a member of this country’s most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period, I spent most of my time being a high class muscle-man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism. I suspected I was just part of a racket at the time. Now I am sure of it.

Like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups. This is typical with everyone in the military service. I helped make Mexico, especially Tampico, safe for American oil interests in 1914.

I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909–1912 (where have I heard that name before?).

I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested. During those years, I had, as the boys in the back room would say, a swell racket. Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.


Marc Faber
for The Daily Reckoning

Ed. Note: Regardless of how you feel about Putin, there’s always more to the story than the mainstream media is willing to tell you about it. That’s why readers subscribe to the Daily Reckonig. Every issue gives you insight and analysis you won’t find anywhere else, and that includes relaying several profit opportunities in one easy to read email. Don’t let another issue pass you by. Sign up for the Daily Reckoning, for FREE, right here.

Categories: Economics

How a Toy Robot Upended the Aerospace Industry

The Daily Reckoning - 18 April 2014 - 7:31am

One Friday, in the Wired offices, these two boxes arrive. We would always get products for review and these two boxes … one was the brand new Lego Mindstorms NXT kit 2006, and the other one was a radio-controlled model airplane. I thought, “Best weekend ever, right? I’ll take these, hands off, I’ll take these, and I’ll review these.” I thought, Saturday, we’re going to build a robot, Lego robot with my kids, kids love Lego. I thought, “Robots would be cool” and Sunday we’d fly a plane. You can’t go wrong there.

So on Saturday, we dutifully got the kids there, they were so excited about it; they do love Lego. The instructions were to build a Tribot, a three-wheeled Lego robot and we took all morning to build it and then you got to program it. You drag little icons around and code flow and all that stuff. We were done around lunchtime, put it on the floor and pressed go.

This is what it did: it moved forward until it sees a wall and then it backs up. And the kids were like, “You’ve got to be kidding me. We’ve seen Transformers, we know what robots are supposed to do… and where are the lasers, why isn’t it walking? I thought it’d bring me my orange juice.”

They were super unimpressed, because it turns out it’s really hard to compete with Hollywood on robots. It’s hard to compete with computer graphics. Real robotics is hard. Whereas we’ve been set up to believe that robots can do more than it really can, so that was a bust.

And then on Sunday we went to the park to fly the plane and I flew it straight into a tree, and that was a bust as well.

I was thinking about how it could have gone better. I thought, “Well, the problem is we couldn’t build anything really cool with Lego, and the problem is it can’t fly.” What if we could build a Lego thing that will fly the plane? I bet the Lego could have flown the plane better than I could have and that would be cooler than this three-wheeled thing that bounces off walls.

I was thinking about the stuff that came in the box. There was this little plastic gyro sensors and accelerometers called tilt sensors and a compass, magnetometer sensor and Bluetooth link that you can put a GPS on. I was like, “You could really build an autopilot.”

I didn’t really know what an autopilot was but it just seemed to me that this had all the necessary elements. So I went for a run, I thought a little bit more about it, I came home, sort of Googled autopilots and understood a little bit of the basics of it.

Then I grabbed the kids together and we sat at the dining room table and we built a Lego autopilot and it worked. Kind of. It could kind of barely fly the plane.

Anyways, it turned out that it was the first Lego unmanned aerial vehicle; it’s now in the Lego museum in Bellund, Denmark. Very proud of that. The kids they have lost interest, of course and I went right down the rabbit hole.

If I can build a Lego autopilot on the dining table with my children and create a drone controlled by toys, something’s changed in this world. There’s a glitch in the matrix and that really was interesting to me. Why is that possible?

While I was Googling on autopilot, I discovered that what we created was basically classified as a cruise missile controller. Any kind of electronic system that can lead to autonomous flight is classified as a cruise missile controller and it has, as a result, it was covered by export patrol regulations. By putting on the Internet, we actually need to ascertain that anybody who built one of these had it under 24-hour closed circuit control… that there was a log in, log out book! I mean, we’re talking about Lego.

Technically, we actually got a ruling from a lawyer, we’d weaponized Lego that day on our dining table.

If me and my children can weaponize Lego, and basically create a cruise missile controller with toys, then something in this world has changed in a really interesting way.

Categories: Economics

The Market Ticker - Let's Get It Right Out Of The Way Up Front

The Market Ticker - 18 April 2014 - 7:23am

Sit down, shut up, and take responsibility for your life as the adult you are.

There.  I said it right up front.

To whom?

Sharon Gochenour.

Who is that?  The crazy chick who wrote this diatribe:

The first thing—the reason I'm writing this article, and the reason I find it almost impossible to write this article—is that I went to the Massachusetts Institute of Technology for my bachelor's, starting in September 2006 and graduating with a degree in "Art and Design" (that means architecture) in June 2010. I usually tell people who ask that I went to school in Boston. This, besides being a factual inaccuracy, adroitly captures my ambivalence about the whole experience.

Oy.  First, Sharon is upset because MIT is, well, competitive.  Guess what darling?  So is the real world.  If you don't like that then you have options.  You can flip hamburgers or spin pizzas.  You can mop floors.  You can do all sorts of things.

But what you can't do is expect world-class opportunities to be dumped in your fucking lap because the world is not your oyster!  It is, like it or not, filled with other people who are kinda interested in eating the same lunch you want to gobble down.

Now you can take the scraps or the caviar.  But to get the caviar you might have to whack other people over the head -- or stomp on their heads.  Did your parents not tell you this?  Go bitch at them if not.

Incidentally, it's perfectly fine for you to say "No!" to all of that.

But then you don't go to MIT!

Yes, I am bitter.

I am bitter that forty-eight hours of class and study per week was the official minimum expected of us, and that sixty hours of coursework was totally unremarkable.

I am bitter that when I had personal crises -- I got dumped by my freshman-year boyfriend, my family's home and business were flooded, I felt abandoned and directionless in my major -- I had so little energy left for coping that my life slipped out of control.

What the hell do you think is going to happen in the real world?

Let's say you go get a job tomorrow drawing, well, how about buildings?  You know, what you went to study?  Yes, architecture.  Let's also say you're really good at it.

You get hired to draw a building.  A very expensive building that costs millions of dollars.  It has a schedule to be built and the guys and dolls who put that together start selling the space in it.  Space that doesn't exist yet, because, well, you have to design it so they can build it.

You know, that job you have?  Yes.  You are under quite a bit of pressure to perform, yes?

Now, something bad happens.  Your Dad dies.  That's something that happens. All people die. Your father will eventually die.  Mine recently did.  It sucked.  I'm not going to tell you it didn't, because it did.  It will suck when your father dies too, if you have any sort of relationship with him at all.

There are lots of other bad things that happen to people too.  You might get married (real good, right) but then your spouse might decide to file for divorce.  They might make your divorce into a nearly 2 year hell complete with all sorts of false claims you have to defend yourself against, never mind the crazy amount of money you will spend in the process.

That's just an example, by the way.  There are dozens of others, all of them hypothetical but all of them very real risks.  We all face them every day; that's part of life.  It's not all roses darling; there are lots of thorns along the way!

If you think that studying 60 hours a week was hard, wait until something like that happens and you have to discharge your duties at a job at the same time you're dealing with a very personal and serious issue that is consuming your mind (and possibly your wallet as well!)  

Oh, and if you don't deal with it and get fired?  Now you've got more and very-pressing issues to deal with that go far beyond psychological pressure -- like buying food, shelter and the other necessities of life!

That's real life.  That's how it works.  And yeah, it sucks real bad but this is commonly called "adulthood" and whether you like it or not it's part and parcel of being an adult.

Indeed, this is arguably the defining difference between childhood and adulthood.  When you're a child these challenges are someone else's to deal with, at least the really big ones.  Sure, you still have to handle the emotional issues but you have others who are responsible for making sure the water bill is paid so you can take a shower -- and a crap, never mind having heat in the building (or a place to sleep!)  With adulthood comes the responsibility to manage these things on your own even when life really, really sucks.

What I want to see is an educational environment where there is not so much pressure, both subtle and not-so-subtle, to cut yourself loose from your support networks to go to a school like MIT. I want for students to respect their own needs for sleep, good food, and social interaction, instead of seeing those as some sort of "concession" to their weaker human natures.

Moreover -- though this would require change in the entire American system -- a strong educational environment needs to be free of the overhanging shadow of debt. Debt forces people into untenable and unproductive situations, like taking seventy hours of coursework rather than registering for another semester, or dropping activities they love rather than risking their grades over a scholarship.

Well, you got one thing right -- get the damn debt monster out of education.  You know how you do that?  You get the government out of it.  You stop treating student loans as "special" and instead treat them as unsecured credit cards as they were before the 1980s and beyond.  

Now lenders won't loan you crazy amounts of money because if you blow up they lose it instead of being able to hound you for it.

I suspect you had a basic economics class at MIT.  If you did you probably heard of this thing called "supply and demand."  It works everywhere it's allowed to.  We destroyed it in the 1970s and 80s by creating the ability to borrow money to go to school through various vehicles, all of them backed in some form by government force.  This of course created a lot of people who showed up waving money at colleges and they responded by ratcheting up the price.

Like every financialized thing we ever do the colleges and lenders got together and figured out how to take all but one dime of the value of their education out of your ass right up front.  This is why your "education" was so damned expensive and why, on balance, it's usually not worth it if you have to go for more than four years -- and often even if you can manage to get out on the original plan!



Well, guess what?  It was rainbow-chasing bullshit!

Now I understand being bitter that you were deceived.  But you should be bitter at the college, at your High School which probably pimped this path to you in exactly that fashion emotionally if not financially and you probably ought to be really pissed at your parents who probably did the same because their first and foremost job as parents is to give you the tools, emotionally and otherwise, to be able to deal with life (including detecting and calling "BS" on those who run this sort of exploitive crap) as an adult.

Students (even very smart ones!) are people, not tools needing to be ground into their proper shapes. They need to be encouraged and allowed to grow. 

You're an adult, Sharon.

Yes, you were hoodwinked.  I'll give you that without seeing your evidence, because I'm damn near sure it's true.  I've been writing about this very point for years; indeed, it's part and parcel of the book you can find advertised to the right of this article.

But there are two options available to you when this sort of realization visits you as an adult.  

One is constructive and one is destructive.

The destructive (to yourself) choice is to bitch, whine, and blame other people, while putting forward vague claims that others have a "duty" to "encourage and allow you to grow."  That's self-destructive because you are refusing to recognize the part of the scheme that you willingly participated in and, in addition, you're not altering your behavior and evaluation of others -- which played a major part in how this happened to you.

The constructive choice (for yourself and others) is to make damn sure the people responsible are held to account to the extent you were lied to or misled, take responsibility for the part of it that was your unrealistic expectations and the chasing of claims that you should have known with even a basic understanding of mathematics were impossible to achieve and do your level best to change things so those who follow you cannot be similarly hoodwinked as you were.

Your choice Sharon.

Categories: Economics

Sept. 11 researcher, peak oil believer Michael Ruppert kills himself in California - allvoices

Peak Oil - Google - 18 April 2014 - 6:56am

Sept. 11 researcher, peak oil believer Michael Ruppert kills himself in California
Michael Ruppert, author of “Crossing the Rubicon” and “Confronting Collapse,” committed suicide Sunday on a friend's property in Calistoga, Calif., the Napa Valley Register reported Wednesday. Ruppert was a well-known figure among both Sept.

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