Saturday, June 2, 2012

Icebergs Shred Our Starboard!

If living within your means is austerity, then I guess we will have to have austerity, at some point.  What is happening now is living within ones means, subtracting out payments to the bankers for their errors, is getting more and more austere, downright spartan.

The longer we wait, the bigger the debt we build up,  the less options for getting out we have.

When the most creative people know the Soviets have crossed the city limits, they tend to party.  The biggest problem on a sinking warship is defending the liquor cabinet.  When all hope is lost, party on!

Get away from a sinking ship, because it will pull you under long enough to drown you.  The scene in Titanic where the fellow strove to be standing on the last rail to enter the water (and thus most downdraft had expired) is plausible in itself, but try getting there.  Much easier to grab a bunch of things that float and get off and away.

There is no better lifeboat than self-employment.  It will float.

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End Minimum Wage Now!

There are two ways the state acts: solving problems that do not exist; and small problem, huge solution.  We have a huge solution to the tiny problem of unemployment.  The Federal reserve system has maximum employment as one of its mandates.  

Unemployment is aggravated by government policy.  Misallocation and malinvestment of investment based on opaque signal to noise ratio leaves businesses adrift and failing, diminishing the demand side. This is the small problem.  The much larger problem is minimum wage

Unemployment is voluntary.  In the West it is harder to make your own work but not impossible.  Anyone who is not working has weighed the options and decided not to work.

One of the aggravating causes of unemployment is minimum wage laws. A free market means people are free to contract.  With minimum wage laws, this is just not so.

The idea behind minimum wage laws is to avoid worker exploitation.  The catechism of the Catholic Church speaks to justice in wages.  Something the catechism fails to mention: anyone and everyone can earn a living wage through self-employment.  Indeed, people becoming self-employed is so popular, yet anathema to the social planners, that “independent contractor” is a status the IRS strictly controls and works hard to discourage.  Church teaching implies, and state planners yearn, that all will work for someone else.  But independent contractors earn more for themselves and cost a company less than an employee. By forcing people to be employees, the result is people yield less income to be less productive.

Not everyone needs a living wage.  There are students, pensioners, and the desperate, the starter over who would be delighted to work... clearing the market of these creates economic activity, which allows more to work more productively and eventually earn that living wage.

In order to be exploited, one has to be employed.  Unemployment is an even worse kind of exploitation, since the condition is largely the result of the actions of state planners, and perpetual unemployment among the masses means perpetual employment for those tasked with addressing the problem with policy.  Tweak on.

Get rid of all wage laws and let wages fall to clear the market.   Once employed, people begin to agitate... more people producing requires more and better managers.  It becomes an upward spiral.  There is also labor trouble.  This is good.

We are not getting out of this problem until costs fall, prices fall, wages fall.  The game plan for the powers that be is to rid debt through hyperinflation.  It is light now with food medicine, education and gas prices rising.  profits are being mulcted to fund the powers that be.  The big debt is unfunded pension liability, and when the retiree is collecting $10,000 a month finds a loaf of bread is $10,000, then the problem will be solved. (To whom will the retiree complain?)  On the other hand, as prices drop, pensioners will sue if anyone tries to cut the $10,000 per month when bread drops to ten cents a loaf.  When you are the problem, and you only take, not give, what do you think will happen? 


When running a company with longshoreman labor, the business agents often tried to tweak me by asserting the workers were not our employees, we were privileged to have union people as supplier of labor. I could not agree more.  They were part of a free association that provided labor to companies.  We were quite profitable with union labor.

Employer abuse is checked by labor action.  There are no employees to abuse unless they are first hired.  Once hired, they can and do start trouble.  People say there are unions therefore there are problems.  This is prima facie nonsense. There are problems, therefore the are unions.

Labor laws require management and labor meet and confer...  not meet and agree.  At any such meeting, there is no such thing as outrageous union demand, only outrageous management concessions.  Management is always in charge.  Management that complains about unions is in the measure of that complaint.

This has been stopped by labor laws in usa, which is a terrible thing, because when you match labor and regulation you end up with the unions bought off by the state, and now they are weak and ineffectual.  USA needs a free union movement to reinvigorate our economy.


Here is a classic on politics and economy by a longshoreman.


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Friday, June 1, 2012

Protecting Market Players from Regulation

When shortselling, an investor borrows shares of a stock in a company he believes is is poorly run and will suffer.  Once borrowed at say $10 a share, he sells them, at great risk, because at some point tin the future he has to return the borrowed stock at whatever the future price may be.

If he is wrong and the company is well run, the market will bet against the shortseller and buy up extra stock raising the price.  This new price is higher than the shortseller received when he sold the stock a while back.  The shortseller is obliged to pay this higher price, resulting in a  loss for his erroneous calculations.

If the shortseller is right, and the company is poorly run, and he paid $10 for the stock a while back, and now the stock is $2, the shortseller buys at $2 and returns the stock he borrowed from its original owner, and the difference between the $10 he sold it for and the $2 he rebought it at is $8 profit.

Now when Christopher Cox, as chairmen of the SEC, outlawed shortselling on 799 stocks at the eve of the financial crisis in 2008, he outlawed both sides.  No one could borrow stock to sell, although at that point no one wanted to, on those stocks anyway.  What also happened was people with short positions could not buy stocks at the new low correct price, and realize their profits.  So what the regulators did was protect the malfeasant banks from the market.  Far from being unregulated, the regulators not only gave the banks a pass on criminal activities, because the activities might be criminal, but not against regulation, Christopher Cox also protected malfeasant banks from the market itself.

In so doing Cox, on behalf of the banks, repudiated the contractual obligations of the banks to market players, that is to sell their stock to market players.  Of course insiders who desired to acquire the stock at these low prices and ride it up during the bailout boost, they could. And did.  Just people who were right were going to be punished.

Not only did the regulators assure that the banks were exempt from law and market forces, the billions of income that would have been earned by those who were right was never earned, and therefore never taxed.  Yet, where did the bailout dollars come from?  Your taxes, just from other things getting taxed.

All the regulators swear up and down they never saw the downturn coming.  But they were savvy enough on what was happening as to outlaw the one thing that would the punish the malfeasant.  The regulators move was precise in timing, scope and sequence.  Pretty good for people who really had no idea.

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Blame The Jews - Part II

Following up on an earlier post, there is a theme in Jewish history, in which a Jew makes a prediction of great things ahead for a given person.   Joseph did this from a prison cell for a Pharaoh, and it was not the last time it happened in history.

We tend to think of Joseph as a hero, but not according to the Bible.  Joseph is the only one of his siblings that is not a patriarch of Israel.  And excellent review of Genesis is The Beginning of Wisdom, by Leon Katz. This Joseph acculturated as a Egyptian, and bad things happened. Christians should let a Jew take them through the Bible, at least once.

Aesop followed Joseph in telling a good story and moving on up.   Aesop was a consultant to kings around 600 BC, and some Jews will claim that Aesop is Greek for Joseph.  A dead giveaway of his heritage is one story clearly attributed to him, The Frogs That Asked For a King, is a replay of 1 Samuel 8, a story unique to Judaism but not to humanity.

We do know that Joseph was amazed by his Son, and we can imagine at some point he said to Jesus, "Kiddo, I bet you'd be a great king..."

Another Joseph is Josephus, a Jewish commander who went over the Romans and predicted the Roman general Vespasian would become Emperor.  Good call.  Although Jerusalem was levelled, Josephus lived happily ever after, as a Roman.

There must be some stories out of Islam along these lines, but I have not heard.

In the early 1700s Joseph Oppenheimer predicted Karl Alexander would make Duke of Stuttgart, essentially a king, which he did, and Joseph rose to the top with him.  He too went native, but he lost his life for his deeds. His story is gripping, and various movies and books have been made of him.

Benjamin d'Israeli is famous for having predicted Parnell would become Prime Minister, with d'Israeli along for the ride, but the young Parnell went down in scandal, and d'Israeli had converted to Christianity, so I guess that doesn't count.

When Nixon slinked off to New York to become just a lawyer after getting trounced in an election for governor of California in 1962, young lawyer Leonard Garment (finally, a Lenny!) listened to the sad Nixon tell his tale and bluntly told Nixon "you'll be president."  Garment was the only person who thought so.  When Nixon became president, Garment was everywhere that mattered.

David Geffen has the most awesome rolodex known to man and has backed just about every major music talent since the 1960s, from Cher to Kurt Cobain, and became a billionaire in the process. He told an astonished young Obama that he would be president.  And so he is.

Following up on my earlier post of blaming Jews for problems, we might see a way in which Jews gain influence.  They simply follow St. Paul in saying nice things to people, to build them up.  That kind of thing may pay off, but it is not evil.  Now as far as I recall, no Jew ever told me I'd become president, or anything for that matter...  the closest anyone has ever come to that came in an email I received...

Dear null,
You were recently selected as a candidate for publication in the prestigious Top 100 Leaders of 2012 Magazine. ...... it is a pleasure to welcome you and to share and celebrate your many personal, professional and academic achievements.

Respectfully,

Ashley Siddons
Executive Director 

Did you notice to whom it is addressed, how they addressed me?    Sheeesh!  (No, Siddons is Welsh.)  In any event I have never heard of 2012 Magazine and have no idea how I and 99 others would lead it.

I am not bitter.

But more seriously, there is a fellow named Bill Kristol who hitched his cart to Dan Quayle, which should tell you all you need to know.  But as Pat Buchanan tells it, this fellow is crowing over the NeoCon's program of beating congresspeople into submission.  Two problems...  elected officials are a notoriously venal and stupid group of people.  When you abuse them, they become very bitter.  And stupid people can really be cruel when they get the chance for some payback.

The NeoCons strongest genuine support in USA comes from hard-right Christians who expressly hope and pray for the deaths of 2/3rds of the Jews,  immediately, in our lifetimes.  These people expect to be rewarded for their support.

If you do not really have power, you are just a front for people wielding it, it can be very dangerous to get close to power and make enemies of stupid people, to provoke them.  That is a constant theme in all of the stories above.

The orthodox Jews and Christians have the right idea... steer clear of public life. Both the Bible and history warn us.  We have no business there.

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Price Points

How do you set the price of your item, as a wholesaler?  The question must also take into account the price your customers will set, as well.  You will not (although recently by US law you are able) dictate the price at which your customers sell the item.  You will consider industry “price points” and design to those.

And it is necessary to constantly repeat “you never compete on price.”  If anyone ever objects to price, they mean “your design is wrong.”  Any objection to price must be met with a change in design.

Setting a price is a back-and-forth process.  You experience a problem, think up a solution, test it in stores with retailer feedback by plan A or B, more fully inform the idea from that exchange, work with designers to come up with specs, find the best place in the world to have it made, get a sample, cost out the sample, and then, set your price.

This price setting is a balancing act which can only occur when you have the samples and costs and retailers are looking at the item.  There are two elements to balance, costs and price points.

You know your costs, and having developed the item you know where you can make your item more or less costly, if need be.

Chapter five of the book has some fundamentals on setting prices in relation to costings.  After reading the book and as you begin to execute the plans, there are further considerations, in light of reading Chris Anderson and his book “Free” which provokes thought.

Consider the Apple iPad. The ipad is a device that connects you to the internet.  The value of the internet is only lowering the cost and widening access to communication and research.  There is no other benefit to the internet (although that benefit is awesome.) Now consider the iPad. The “value” is not the ipad, it is the access to the cost of research and communication that the ipad actualizes.  The value shows up in the savings in using the ipad.  Apple is moving into business and industry massively and microsoft is watching dumbfounded, with no response available.

The value of a Boeing jet is not the $300 million per, it is the sale of seats for 25 years.

What Jobs figured out long ago was at $400 the ipad is free...  the iphone is free...  it’s what people are saving by buying it that drives the market.

A crew from Canon showed up at Apple circa 1984 with a presentation on the laser printer.  These guys were ready for 3 days of presentation, numbers, etc... and they started by printing out a page from a word processing document, it looked perfectly type set, not dot matrix.  Jobs looked at it, and turned ot the manager in charge and said “Buy it.  Everyone will want this.” And left.  The price didnt matter, it would fall in time, no matter where it started.  Kinkos bought 100,000 of them becuase they could charge 10 cents a page for a 5 cent cost at the volumes they ran.

Profits are just another business expense, according to Drucker...  and Jobs has figured out the customer thinks in terms of what he can have for free... and at $400, and iPad is free compared to the value...

Joe Girard, "America's #1 Salesman"  (sheeesh!)  made two important points

1. You're in business when your product (service) is more important to them than their money...  (I'd add and their orders cover your supplier's minimum)

2.  What can they have that no other customer can have?

The iPad has both, it's free and it is unique to each buyer...

There is a market for iPad at $5000 each, more at $2500, even more at $400... and likely far more at $50.

The $400 price point is just where diminishing returns, or just aerodynamic drag, takes over and it is "there, and no farther."

For an educational toy priced at $20 retail, ain't the $20 that matters, it is the kid will learn with the toy.  The popular price points are another element to design around, like clamshell packaging, but not a imperative.  It may be that you can spend $10,000 redesigning the thing down to a $15 price point and get nothing extra in sales volume.  So why bother?  You are not helping anybody.

So price is one of those things like instinctive shooting with a yew bow, where at any given time dozens of elements are in play, and since it is not a target bow you size everything up at the moment and let fly.  The yew bowman has six arrows before the first arrow lands.  The crossbowman with this power and aim advantage, is taking a few arrows while he reloads.  I don't know if the analogy is working so I'll say from my observation and experience, it is all very sloppy, holistic continual judgment, with lots of tries, and the cost of the next 5% above 90% being as much as the first 90%,  but each arrow let fly informs the next.
S as you consider costs, and industry standard price points and  your product ask yourself  “why is your product free?” or “how is your product free?”  as in te customers mind that the price does not matter.

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Thursday, May 31, 2012

Open Sourced Revolution


On May 31, 2012, at 5:13 PM, EB wrote:
Hi John,

So if you open source a product you can infringe on patents and not get sued? I understand open source as an innovation basis, but why did you choose it as a legal platform? How would it help prevent you from being sued by patent trolls?

***It won’t, anyone can sue anyone for anything...  but assuming once you have a legitimate patent, and you open source it, then you are somewhat protected.  But you noticed an important feature of the US IPR laws, in that the IPR bring chaos to a system that was once settled and peaceful.  Law is supposed to bring order, but IPR does the opposite.  Patent trolls like Nathan Myhrvold, Microsoft Billionaire make billions more, and employ armies of attorneys, to exploit the weaknesses of the system.  People like Myhrvold greenmail profitable firms.  In the case of an open sourced IPR, at whom would Myhrvold and his minions aim? ***


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I am Shocked, Shocked!

WASHINGTON, May 30, 2012 /PRNewswire-USNewswire/ -- Surrounded by more than 150 small and medium-sized business owners and other invited guests from across the country, President Obama today signed the Export-Import Bank Reauthorization Act of 2012 into law. Ex-Im Bank Chairman Fred P. Hochberg joined the President at the White House for the signing ceremony.

and the payoffs begin immediately...

WASHINGTON, May 30, 2012 /PRNewswire via COMTEX/ -- FirmGreen Inc., a small renewable-energy company based in Newport Beach, Calif., and other U.S. green-technology suppliers are benefiting from a $48.6 million loan from the Export-Import Bank of the United States (Ex-Im Bank) supporting exports of equipment and services for the development of the Novo Gramacho biogas project in Brazil.

Yay!  More Solyndra.  Since there was absolutely no fallout from Solyndra, and this beast has been lavishly refunded, let's do it again, harder.. harder!  Brazil is where Obama will get his post-president payoffs, like Reagan got his from Japan.

Who picked up the tab for 150 welfare queens from around the country to attend the signing?

There is no logical limit to the state in capitalism.  There is no mechanism for limiting the state in the USA.  The state has introduced chaos, our only hope is to escape to anarchy.  Self-employment is the vehicle out.

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Ferguson & Deregulation


Someone named Charles Ferguson won an Academy Award for a documentary on the Wall Street 2008 Crisis.  I heard him on Left Wing radio in which he said 1. Although there is overwhelming evidence of fraud, no one has been prosecuted.  2. Deregulation is the culprit.  And, 3, the Occupy movement is the beginning of hope for change.



He goes on to lay blame on Obama, in spite of the fact this all happened on Bush's watch, because in USA you blame the black guy, and by USA racial purity laws Obama is black, if not an American.



In the interview a clip was played of Obama stating that although what happened in the 2008 crisis (before Obama) was immoral, wrong, etc... no laws were violated.  Ferguson commented that Obama was wrong, and further, Ferguson could not believe Obama did not know what was going on was criminal.


Let me demonstrate Obama is right. And further, that there was no "deregulation," and how the Wall Street Crimes can proceed apace without breaking any rules.  Let me show you a fountainhead example, and then comment afterwards.

In 1983 by Robert Morris Associates, a USA banking industry association disseminated a moneymaking idea in a manual for a seminar entitled “Lending Our Credit Instead of Our Money.”   In brief, the seminar made widely known an opportunity available in an esoteric part of banking.  To wit:

A. Standby letters of credit have no reserve requirement to match exposure. There is no theoretical limit to which a bank can extend credit.  There is a limit to lending money, but not to lending credit. 

B. Letters of credit are off balance-sheet exposure.  They need only be footnoted. If footnoted, one is not afoul of the regulators, no matter what is being footnoted.

C. Letters of credit obligations may produce securities that may be traded on secondary markets.  The ratings agencies found such securities ratable investment grade. 

D. The problem of mismatched maturities might arise from these securities.  The solution is “bigger is better.”

E. Exposure to letter of credit risk is an internal prudential matter, not an external regulatory matter.

F. The seminar mentions the PennCentral and Chrysler credit crises and government bailouts.

There you have it, the DNA of every banking crisis since 1983.  Mexican bailout, that is Reagan’s $8 billion 1982 bailout, not Clinton’s $40 billion 1995 replay.  Note the successive financial crises contain the A-F elements above: S&L crisis 1985 and on,  October 1987 crash, 1992 Exchange rate crisis, 1997 asian monetary crisis, 1998 LTCM crisis, Dotcom 2000 crash, 2008 subprime crash.  Much has been written on all of these, with commentators all noting some degree of mystery. Each successive crisis got bigger and wider.

Regulators attended closely to every one of these debacles.  The manual notes that the activities are regulated by the State of New York, the FDIC, the Federal Reserve, and the Comptroller of the Currency.    The three federal agencies were familiar enough with standby letters of credit to issue regulations specifically on those.  Indeed, a FED governor wrote a article for the manual endorsing the practice, with caution. It is in the very manual that explained how to lend credit, instead of money, off balance sheet, with no reserve. In 2008, as in 2012, Every single one of those regulators, and more are still in position.  We have more regulations, not less.  There was never, at any time, deregulation.  There may have been changes in regulations, but never deregulation.  And do note, at no point did any change in regulation address any element of the practices which originated in the 1983 seminar, and spread wildly thereafter.

Now the image of sober regulators, concerned about the investor and the economy, looking over documents with  view to spotting wrongdoing is as distorted as the idea of Secret Service Agents protecting a Kennedy.  Regulators are as much about booze and broads and partay as are secret service agents and GSA officials.  SEC regulators are especially fond of internet porn.

Now clam down and think for a minute.  If there was ever deregulation, how come there are still regulators?  If we had no regulations, why would there be regulators? Deregulation would mean no regulators.  If you want the powers that be to stop viewing you personally with contempt, you must use words as though you understand what they mean.  Never use the word deregulation in relation to the financial crisis, because there was never deregulation.  Your use of the word confirms to the powers that be that they have nothing to worry about, because you still have no idea what you are talking about.

Why has this not been prosecuted?  Well, first, it must be understood.  Second, no regulations were violated.  And in the turf wars that make up the time spent in government service, it is a rare prosecutor will wade in where no regulator has pointed. There is fraud in relation to contractual obligations and property rights, but not malfeasance in regulation.

O! It gets better.  Banks that behaved in a manner consistent with sound practice, such as Beal Bank, were investigated by the regulators, for refusing to join in on the malfeasance.  Beal bought a failed bank from the FDIC in 2002 (2002!) and discovered it was loaded up on FDIC originated bad loans (pump and dump), and sued the FDIC and won.  So regulators never saw it coming, although they themselves were doing it, and got caught by a banker. I am not making this up.  Be careful when you challenge malfeasance on the part of the state, they come after you.

But, as I pointed out in the essay on Coase, property rights have been abrogated by the Coase Theorem, in which there is no right or wrong, there is just two parties sorting things out.

Legendary shortseller James Chanos is notoriously circumspect, but I did hear someone say (maybe him) his tactic was to study corporate financial statement footnotes.  In light of the practices this seminar outlines, might one make billions with this insight?  A bank with wild exposure revealed in a footnote might be a target for shortselling.  And perhaps even more lucrative for the shortseller, who is the party who is depending on a given banks credit yet unaware of its ephemerality?  Chanos nailed Enron and several other companies long before the regulators had a clue.

What we see is a market actor spots market shenanigans, not the regulators.  A market actor metes out condign punishment.  It was market actors who nailed Bernie Madoff immediately, and regulators who gave Madoff a clean bill of health for a decade.  And then only after the market exposed him to the general public.

It was market actors who spotted the banks mischief and were positioned to set the markets straight by shortselling the financial stocks.  It was Christopher Cox as the head of the SEC that outlawed shorting 799 financial stocks, assuring the bankers were exempt from the consequences of their actions, not only in law, but in economics 101.  The reason we have this problem going on is because regulators have protected the banks from the rule of law.  Anyone who uses the terms 'deregulation" is simply a shill for the bankers, sending people looking in the wrong direction.

Ferguson is a life member of the CFR, a dotcom centimillionaire, clever fellow, bestseller writer and Academy Award winner.  Do you think it is a coincidence that a fellow with those insider credits is ahem, misrepresenting the fact and further blaming the black guy?    Ferguson's academy award, books and advice to join the occupy movement tells the powers that be that they need not concern themselves in the slightest with the economic conditions in the USA.

By the way, what is the score now on Google search?

Blame Bush   3.5 million hits

Blame Obama  55 million hits

Bush's went down?!  And he was in office eight years vs Obama's four?  Obama deserves this because he knew going in what the score was.  I'll believe we have a president  in which race does not matter but ideas do, and we can trust to do the right thing, when we get a man who is authentic and was born in USA, like Louis Farakhan.

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Wednesday, May 30, 2012

Free Market Justice


The market does not address every human concern, only the exchange of goods and services.  The economy encompasses more than the market, and there are some human dimensions that are neither economic nor market.   Building a house is a economic event, selling it is a market event.  If it burns down, it is an economic event, but not a market event.  And then far more important, is the feelings of the person whose house burned down, and that psychological dimension is neither market nor economic.

Love is neither market nor economic, but charity is an economic event, in which the market plays no role.  There are certain human needs the market has nothing to offer, such as companionship, or is enhanced by economic actors, and not market actors, such as hospitals, schools, bridges, etc.

An economic event which supports a free market, but is not a market-provisioned aspect to life, is justice.  If we can only have a free market in anarchy, how can we have justice in anarchy?    To get this right we must define anarchy correctly, and that is no + king, or no state in modern terms.  And to reiterate, to have no state does not mean no government.  Anarchists love government.  It's just the state we do not need.  With this in mind, let's look at a big justice problems, the larger issue of the larger criminal conspiracy, and combatting large scale criminality.

Probably the largest criminal enterprise (outside of banking) in USA is the illegal drug business.  Now any narc will tell you the business is fed by welfare payments, and drug activity is greatest at the time the funds are dispersed by the state (as are Walmart sales).  The money is then laundered and generates state and federal taxes and the illicit gains go to fund off-record activities of spooks, who use it largely for terrorism.   It is a symbiotic system, the progressives get their “programs” and the fascists get their terrorism.  Good state government is about working together.

 Further, the one drug that is most effective in separating a person from his personality is crack cocaine, a drug that someone had to purposefully develop.  Who did so and why, at whose direction can be known.  But to even ask the question is to be called a conspiracy theorist, which is one of many inquiry-killing epithets.

So let’s look at an unspeakably awful crime, in fact a conspiracy, and in which the facts are not in dispute. Not a conspiracy theory, but a conspiracy in fact.  One case is the Tuskegee experiments.

There is no dispute that from 1932 to 1972 the United States government ran medical experiments on Americans of African ancestry in which the United States Public health Service and the Center for Disease Control studied the effects of syphilis untreated.  They did this by duping citizens who trusted the government into believing they were being treated for syphilis. 

Never mind that the world already knew, by thousands of years of experience, what happens when syphilis is untreated.  The progress of untreated syphilis was well known.  Never mind that we already had a cure. The scientists and doctors went ahead, these victims were denied the help needed. Help others were ready, willing and able to offer. 

This went on into the 1970s. Beyond the civil rights movement.  Beyond the Great Society initiative. Beyond Dr. King’s assassination. Into the Watergate scandal. Never did conscience rise to the level of concern. This was just pure evil, visited on a trusting populace.

How evil?  When WWII broke out, 250 of the men tried to volunteer to fight for the country they loved.  When the army found out they had syphilis, which was news to the men,  it rejected them until they could take the cure.  The Public Health Service policy was these men would not get a cure.  Science was paramount.  

Many of the people acting in managing the program were Americans of African ancestry, who went on to high government positions.  It is always true that people are willing to sell their own down the river, Americans of African ancestry selling Americans of African ancestry, Irish selling Irish, Jews selling Jews.

Although most Americans were unaware of the program, thousands of Americans were aware, and did nothing.  Doctors, nurses, statisticians, researchers and so on were quite aware of what was going on.  Journal articles were written, and the information was spread worldwide.  Some people objected, but they were either ignored or found their careers stymied. The Japanese and Germans learned from USA about conducting medical experiments on people without their consent, and they embraced and extended the practice in the wars that occurred after the USA introduced the practice.

The Tuskegee experiments ended only in the state shakeup that followed the disgrace of Richard Nixon, in the 1970s.  Eventually, some checks were cut, survivors paid off, and end of story, move on, nothing to see here.  Bill Clinton apologized, what more do you want?  But no one went to jail, or for that matter, executed.

Although by any standard the practice was criminal, no one was ever convicted of a crime.  Therefore, the practice continued in other ways and other places. Medical experiments on uninformed patients continue to this day, no doubt.  It is still legal to do so. The practice of running medical experiments on USA citizens without their consent is still allowed by law.  When you visit a doctor in USA, you have no assurance whether or not he has selected you for a secret medical experiment. 

Along these lines at every doctor visit since they were young teens my daughters have been urged to accept Gardasil injections.  I’ve read the science and so have my daughters.  The injections make no scientific sense.  Never mind it was developed for another disease, never tested on young teens, and the developer paid by Merck has expressed serious reservations. Dr. Diane Harper, lead developer of Gardasil says, “Please push for full disclosure in consent forms so that parents and potential vaccinated persons can weigh the benefits and risks of the HPV vaccination from their own perspective.”  Women selling women down the river.

If the drug companies do this in the open, I wonder what they are doing secretly, under USA law?

As a practical matter, the Tuskegee experiments were so long and so large, prosecuting the criminal actions of all of the participants would probably take the resources of the entire federal criminal justice system for a very long time.

To whom can we turn?  Obviously not the state.  Not lawyers, they work for the government.  Not academia, they are govt controlled.  Not religion, they depend on the state for money and for their tax exempt status.  They agreed to stay away form politics.  Who, labor?  Bought and paid for by the state.  Medicine?  Never happen.  Who?  Absolutely no one.  We are on our own.

Just as the state criminal justice system keeps alive the murderer and rapist, so it does the scientist fiend, not only by protecting, but by supporting the fiends.  How can we possibly combat such institutional evil? There is apparently no internal mechanism to check state evil, and no external mechanism either.  What to do?

When South Africa liberated itself from apartheid, it had such a backlog of unspeakable crimes to deal with, it had no means to deal with the magnitude of the participation and the enormity of the crimes  There was a brief and shining moment of transition when there was anarchy in South Africa.  Taking a page from Jesus’ playbook, South Africa set up truth commissions: you will not be prosecuted for anything you admit to.  As to all of the past crimes, the answer was to be forgiveness, upon confession.

Of course, being a human endeavor, it was a controversial process, especially for those who wanted revenge.  Not everyone was granted the immunity, but the process largely worked, and its application more universally is indicated.

Although South Africa struggles, it is progressing.  Neighboring Zimbabwe (formerly Rhodesia) had no such truth commissions, and it descends into chaos under the excess state interventions of Robert Mugabe and his crew.

Immunity from prosecution is a common practice in criminal investigations in USA, so this is nothing new, but it is used to get a bigger fish, or a false conviction, but not to get to the truth.

In USA we have instituted a series of truth commissions or sorts in the past, and on one controversy in particular, the Kennedy Assassination, there have been two major and several minor truth commissions, the Warren Commission and the 1979 House Select Committee on Assassinations,  Both generated more questions than answers.  What is missing is the blanket immunity from prosecution that will give people a reason to talk.

What we could institute in USA is not “truth commissions” of a half dozen people looking over documents and then announcing “Kennedy was killed by a lone nut”, or “911 was the work of two dozen Saudis”, and at Tuskegee, “mistakes were made, time to move on...”  or “it’s for the children...” but a system in which independent trained forensic scientists and historians take sworn affidavits, subject testimony and evidence to forensic science,  and weave them together into a complete story of what happened.  A library is established in which all evidence is stored with analysis and reports, available to professional and amateur alike.  Even the Vatican “secret” library is open to its enemies. All of the evidence and analysis is woven together into an entire picture of who what where when and the perpetrators can answer the most important question,  why? Why a Tuskegee?  The why is the imponderable, what the rest of us do not know, cannot even surmise. If we get the actual perpetrators to answer why, then we know what the rest of us are dealing with. 

 Although in South Africa criminals went unpunished by the state, that is not to say they have gone unpunished.   Although immunity from prosecution is nice, to confess to murder, false imprisonment, kidnapping, theft, and so on does have a dampening effect on one’s future, and justly so.  But confession is good for the soul, and forgiveness is a healthy thing. And whether believer or not there is the nagging recollection “vengeance is mine, sayeth the Lord.”

With a truth commission the state, in getting to the truth, will not be able to prosecute anyone, but the people will know what happened and who did what.  In the degree the people shun the perpetrators is the degree the perpetrators will be punished.  In a free market capital punishment is exile.  In a free market economy a killing is adjudged by society, not by the state.

Twenty Five years ago a trio in Cowchilla, California kidnapped 26 kids in a school bus and buried the bus, demanding $5 million ransom.  The kids escaped. The kidnappers were caught and received life in prison, compliments of the taxpayers. Because of the state, the kidnappers knew their lives were not forfeit if they got caught. This is a comfort to those contemplating a crime. If we had no state, the kidnappers would spend their lives wondering when the father of one of the kidnapped kids would catch up with the kidnappers.  An enraged rancher can be a terrible nemesis to contemplate.  Especially if one has seen tools that ranchers call handy.  We can imagine the kidnappers lives being short.  Then a rancher who whacked a kidnapper would face adjudgment of the community, whatever that may be, but expect it to be pitch-perfect.

You object this sounds like Hatfield and McCoys, or Afghanistan.  That would be a false dilemma, ignoring the fact that most justice is meted out independent of the state.  State law enforcement calls free market justice “unsolved mysteries.”  The state merely claims credit for all the good that happens.

But alas, we have a problem in the case of USA.  Truth commissions work after one system fails and before the next is set.  It is only when there is no state, pre-resolution, that a truth commission can work.

A failed state, like nazi germany, is overpowered by invaders, who use the very failed politicians, absent a few suicides and executions, to rule the failed state.  The Qing used the Ming, the Mongols used the Boyars, the allies used nazis and Japanese imperial troops to rule their winnings.  After the fall of communism, KGB agent Putin became president of Russia.  This is just how it goes with states, and indeed, ordained by God it seems.  For all of his crimes, and the changes of regime in his times, King David stayed in power.  Israel suffered, and King David even got to choose from a menu of punishments how Israel would suffer for King David’s crimes.  It is ordained in 1 Samuel 8.

When one state conquers another, when one falls and the victors assume power, the last thing they want to lose is the old set of criminals.  This makes the South African transition all the more remarkable.  

In USA “the people” might set up truth commissions independent of the state, in an exercise in self-government, but we can anticipate the first people who confess to any crimes will be prosecuted by the state, since the state is not obliged to agree to any deal citizens may make among themselves.  Private citizens cannot make a promise to criminals  that the state will not prosecute the criminals if the criminals confess.  In fact one can anticipate that the powers that be would defend their prerogatives and harshly prosecute the first person who was to confess anything.  Take that, truth commission!

Look what the state does to mere whistleblowers, people who do the work prosecutors are not inclined to do.  Whistle blowers find themselves being punished by the state.  Daniel Ellsberg may be famous, but for every free Ellsberg there must be 100 army corporals who revealed state wrongdoing, rotting in solitary confinement, losing his mind, while he has not been charged with any crime.  It is now legal in USA to so treat whistleblowers. Take that, whistleblower.

It actually gets worse.  Note the US govt offered its own sort of truth commission, although in a corrupt way, with WWII human experiment perpetrators.  Those who among the defeated nations who conducted medical experiments on humans during the war were not prosecuted, as long as their shared with results with the United States authorities.  Such nazi and Japanese scientists went on to work for the US government.  They were rewarded for their crimes.  A state made powerful by war, becomes all the more corrupt.  The state actually protects malefactors from the consequences of their actions.

So we can see that we cannot control the state, but we can have justice IF the state fails.  Making the state fail is only possible through violence, and that is never a legitimate action.

So we see when the chaos of lawlessness of the state finally caves in, and we have the benefit of anarchy (an + archy = no king), we can finally approximate justice.  But we have this standoff: the state will not ever correct itself.

We cannot effect change through the political system, because the state has instituted widespread election fraud, to assure its self-preservation.  The situation may seem dire, but there is a way.  Lazlo Ladany points out in his lifelong study of communist China, the regime will change to retain power.  Himmler began ransoming Jews out of Germany in a bid to save the regime.

One nonviolent way to threaten the powers that be is through jury nullification.  Jury nullification is part of the fabric of our system to assure that the people, as represented by twelve citizens, has the final say in any dispute between an individual and the state.  Jury nullification could be applied in every instance in which the state tried to prosecute someone who had confessed at a truth commission..

People could create a website where people vow to nullify any prosecution of anyone who is in the truth commission system.  When there is a critical mass of potential jurors who vow to nullify any state conviction, then the state will have no power. When prosecutors can no longer get a conviction, the state will co-opt the system.   The state will begin to defend itself by turning on the malefactors who need prosecution.

Now people will say this is silly, there is no way this will work.  Probably true, but movements are made of impossible goals.  And life is a journey, not a destination.


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Bad Trip

I am not going to link to the story or video, because as Solzhenitsyn taught, we have a right not to know.

But what strikes me is how the news gets things so wrong, and immediately by getting definitions wrong.  In the story there is a cannibal attack attributed to "bad LSD."  This is terrible.  Some kid is going to get the idea there is such a thing as bad LSD.

It is either LSD or not.  If not, then do not call it bad LSD, call it what it is.  A nickname for LSD is Lysergic Detergent, because it cleans up the mind, and apparently this new drug is called "bath salts." Maybe a better name would be Dahmer salt.

In any case, LSD is a perfectly legitimate drug properly used.  With so much medicine outlawed in USA, people are obliged to self-medicate, which in turn leads to so many disasters.  And further, with self-medication rampant, the opportunity for mad scientists to introduce new drugs is rife.

Without these drug laws, we'd have more better cheaper faster, and plenty of doctors and pharmacists to meet the demand.  We have patient, doctor, pharmacist, and insurance companies.  Whose bright idea was it to add "cop?"

Steve Jobs attributes some of his success with Apple Computer to his use of LSD.  Cary Grant beat nicotine addiction with it.  (Isn't it odd they outlaw a drug that helps beat addictions?)

Whatever this new drug is, it can be forensically traded back to the developer.  Maybe it is yet another CIA plot, or maybe just another Monsanto effort to eradicate world hunger.  We can know.  We just need truth commissions.

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State Economic Development Money

Every state has economic development dollars to spread around.  They are used to park people until the next political campaign.  The taxpayers of Rhode Island are on the hook for $112 million for a video game company that went bust.    Java coders who study to be roofers and roofers who study to be java coders must have something to do when they are unemployed after graduating from school.  A video game was a good idea in the minds of state planners.

But then, once on pledges allegiance to evil, it is a matter of aesthetics as to how you will suffer.  Picking up the tab for a video game company is particularly excruciating, I think.

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Tuesday, May 29, 2012

Zepol.com, Importgenius.com, PIERS, & Panjiva.com


The US government collects massive amounts of information on who is importing and exporting what, when, where, at what price, and more. The information is collected at various points by various agencies, and ends up in various databases.  Almost all of it is available, one way or another, to you.

A common desire motivating access to this information is competition.  Having all this granular information is believed to be some sort of advantage.

I agree, when it comes to what is being imported or exported, we’d like to know by HTS number, the info at what prices.  This information is for sale from the United States Department of Commerce, and free of charge from the USITC.com  I teach how to use this information competitively in my classes and in my book.  And I will gladly offer it as a .pdf for free to any who ask.  Just email me.

There are two sources of this information, one is the steamship line manifests, which is a summary of all of the bills of lading on a vessel.  Another is the customs declaration, form 7501 (along with what is gleaned on the mail and passenger declarations, if ever specified.)

Let me tell you, you ain’t getting names named from the form 7501.  Or its export version.  Not gonna happen.  But from the steamship line manifests, yes. Customs information names names, who is importing or exporting what from where, from steamship line manifests.  The information is for sale from the government, after dislodgment by a freedom of information act request, and is normally accessed through 2nd party resellers, such as PIERS, importgenius.com and Zepol.com, panjiva.com, who access it under the legal fiction that they are news media.

Before I begin, let me say again, what I always say, and is a fundamental concept to success in international trade: you should not care who happens to be your competitor’s suppliers and customers.  I’ll take this a step farther, if you are seeking information on your competitor’s suppliers or customers, you will most certainly lose.  You will certainly lose the time and effort  and money you put into discovering such trivia.  You will mostly likely lose exponentially as you pursue a business that is not yours instead of pursuing the business that is yours.

AS to the question what is YOUR business, I answer that elsewhere and in my classes.

I do recommend using international trade data, in the manner I lay out in my book and classes.  The data is from the form 7501, and does NOT name names.  The sites I am reviewing here sell information regarding specific suppliers overseas and specific importers in USA.  These sites name names, and they are reselling steamship line manifest data.

What these three offer is too much information for a start-up, and irrelevant. What NTDB info I refer to as essential to business start up is right now free of charge in any case, and that is the info I guide people through in business start up.

So why am I reviewing these sites?  Because there may be another business for you, where these people who sell government data miss an opportunity.  Also, it’s my duty to point out to the state where they can make money better than they do now, for the people.

You may believe that by knowing a competitor’s source, you may find a way to start a business.  Perhaps you believe that you can find out what an importer is paying whom for what, and then offer that importer’s customers a better deal.   You replace the importer by either being the preferred supplier to the customer with the same supplier, or with a different supplier.  Or you may have some other scenario in mind.

In competitive running, coaches drill into runners’ heads “do not look at the competition!”  If you turn your head for a split second all sorts of bad things can happen.  So it is with business start up.

No matter what your idea is as to how this data will help you, you are wrong.  Do not take my word for it, test out your idea.  Before you take the time, effort and money it takes to use these services, approach the target customer and test your hypothesis:  “If I can get the product you are buying from your present importer/supplier for (less money, better supplier, same supplier cheaper, better quality, better service, I’m a good guy... whatever) would you buy from me?”  They will tell you no, and why they will not, and why, you having made such a suggestion, they would never work with you now, or ever.  Then you will know.  Give it a try.

But there I am helping you out with different problem, so let’s get back to the point of this post. What your business ought to be I explain elsewhere.  But for now, I’ll compare importgenius.com, PIERS and and Zepol.com.  And comment on the sui generis panjiva.com.

All three will give you a free trial, so you can judge for yourself, as will panjiva.com.

PIERS is the grandaddy of the trade info systems.  They own the huge established customer base of big business, ports and so on.  They charge too much to do too much.   I reviewed PIERS here obliquely.

Importgenius I have reviewed here and here, and do not have much to add.

If I were to buy any of these services,  I would buy it from Zepol.com.  They seem to have info laid out in ways that are easiest to work with, and more comprehensive.

Update: Here is a new one, in beta, currently no charge...  http://www.tradetracing.com/

Here is how all three get their raw data.  The go to customs and pay $100 per day of information.  Customs works about 252 days per year, so the raw data from US Customs costs them $100 per working day 252 or $25,200 per year. Zepol’s website tells us they have 1300 clients paying on average (the most popular) $6000 per year.  This generates $7,800,000 on info the info they sell, rough calculation.  So the raw data is $25,200 to Uncle Sam and the gross income is $7.8 million to Zepol.  Nice!

You can buy the info from Customs at $100 per day also, or  roughly $2200 per month.  Nothing special or secret, anyone can do it.   Zepol will sell it to you, all prettified in a lite version for about $250 per month, pro version $500 per month and enterprise version $833 per month.   Either way, at those prices it is better for you to go to Zepol than US Customs.  (If you want the info, I say you are delusional if you are seeking it.)

(Update 1/23/2015...  that link to customs went bad, but customs has no control over the GPO, which also tells you how to buy the info.... http://www.gpo.gov/fdsys/pkg/CFR-2009-title19-vol1/pdf/CFR-2009-title19-vol1-sec103-31.pdf   more here:  http://hbhblog.blogspot.com/2015/01/buying-names-of-importers-and-exporter.html)

By being a “publisher” selling to many people, they can sell it to you cheaper than you can get it yourself.

Now in a category by itself is Panjiva.com.  The biggest objection I can make is folks, “actionable” means lawsuit-ready.  Jeff, when you say Panjiva’s data is actionable, dude, you mean “lawsuits ahead.”    Panjiva, have someone above the level of unpaid intern proofread your websites!  Sheeesh...

And if that is my strongest criticism, then I guess that means this site is pretty good.  It is different, as afar as I can tell it is sui generis, since it is not using govt data at all.  It is repackaging first rate sources of info and selling it at I think fair prices, not that my opinion matters.  The only opinion that matters is that of their customers, and I am not one.  But check them out.




I can see how their clients, big businesses, would like this candy store of world trade insights.  But we at the small business can’t use it... we can’t afford the info, and again, it is too much info, and the wrong info.  What sources panjiva.com resells we can go to directly and get for free anyway, our tiny slice of information.  If anyone at Panjiva.com reads this, I’d say don’t go after the small biz market, you’d be wasting your investor’s money.

On the other hand, if any of my devoted readers were to act on any of the business recommendations below, I’d say see Panjiva.com first about buying and reselling your service (as I suggest below.)

Now, back to the first three, and here is the part someone has not thought through:  You already paid for this information.  It is government information.  Your taxes paid for it.  Who in USCustoms decided to sell to you what you already own?

I don’t mind people making money off data, but I do mind if I already paid for it, and I cannot have it at no further charge.  In other words, since I have paid for it already, I should not pay for access to the same raw data.  I need the information for my own business, and my students need access to it too.  Sending me off to these three resellers will not work because they charge too much to do much, and do not offer what we are looking for anyway.

What zepol, et al, offers is the prettified display and easy access.  Let them charge for that, but USCustoms should not make me buy what I already own.

So what to do?  US Customs ought to change to another revenue model.  Since the state loves intellectual property rights, it should charge a royalty to resellers of the info on behalf of the people of the United States, who already paid for the info and “own” it.  Say Customs makes the steamship line manifest raw data free online, as does the USITC for other 7501, etc, world trade data, but required, on the part of the taxpayers, to charge a royalty for those who resell the info.  Say 3% royalty.

Right now Zepol pays about $25,200 per year and grosses, calculating from the figures they offer on their website, about $7,800,000.  3% of $7,800,000 is $234,000.  Now with that gross, Zepol certainly could pay that royalty.  And customs would be bringing in ten times as much revenue from Zepol alone.  And if anyone resells without paying the royalty, let Customs raid them, not Swap Meet Louie.


As it is now, I who use the info for academic purposes and to promote trade, cannot access it at the costs customs charges.  Nor can I with the resellers. So customs is actually inhibiting trade, and hurting their “business” (and I might add, therefore, in contradiction to their mission to “protect the revenue of the United States”).  

Customs is inhibiting trade because by charging so much I cannot get access to the info with out paying too much for info from Zepol.com, Importgenius.com or PIERS.

I want wee bits of insight, like which customsbrokers are handling which commodities.  What are the common markups in a given industry.  That stuff.  It's in the extrapolated data, but the three resellers don't know it, because they do not know the source documents and trade practices as well as I do.  I could care less who else is importing what from whom for whom. 

And then, when the data is clearly wrong, such as when PIERS data reports told me there are no importers in USA bringing in wool sweaters from China, or  Briggs & Stratton (lawnmower company) has imported 734 metric tonnes of beer from China.  Say what?

So we have the strange circumstance wherein 3 companies at least are selling what nobody needs (except the delusional), no one is selling what is needed, Customs makes cost prohibitive information that people do need.

And then, there may be faster simpler ways of getting your information.  Say you see a garment with a RN number on it.   If it has one, any name on it is distributing garments they got from an OEM, and to find the name of the OEM, simply plug in the RN number here.  Bingo, you got your OEM.


There are other ways of finding other information, but that is enough for now.

So...  my recommendations...

1. US Customs needs to change its revenue model on data.  They would get more money and not inhibit new importers.

2. On a royalty basis, someone could start a business making prolly $200,000 per year paying USCustoms $6000 per year (3% royalty) prettifying reports on which customsbrokers have expertise in what fields, and what markups are running.  A nice small business.  Sell your info to panjiva.com.

3.  Somebody has to start a business that sorts out raw customs data that is clearly dead wrong (there are no importers in USA bringing in wool sweaters from China, or  Briggs & Stratton (lawnmower company) has imported 734 metric tonnes of beer from China. )    Customs or the USITC will sort it out for free if you can find someone to do it, but that is unlikely. Now this could be a side job for a government worker, could be a retired position, or this could be a job for some hot shot researcher, I don’t know.  But again, on a royalty basis, this person would just be forking over 3% of billings to USCustoms, no matter what the gross is.  Here again, sell your info to panjiva.com.

So you can wade through all of that and figure out if there is a business in there for you.

Update, someone new... http://www.eximgenius.com/

Update:  See here...

Update:


There is one orientation to business that is diametrically opposed to another: competing on price vs competing on design.

Companies that compete on price want to steal business from other businesses, so they want to learn about competitors sources and customers, so they can steal those by competing on price.  I have zero interest in helping those businesses, not because I care one way or another, only because I limit my work to those businesses competing on design.

So the info is useless to you if you compete on price.

If you compete on design, then the trade info is golden, but it is no cost from the source...

Oct 27 2015 update:

"Both organizations are ranked among the top trade data providers in the highly competitive US market and are groundbreaking innovators in database access, research and analysis technologies," McCahill says. "Together, our combined assets make us an industry powerhouse and advance our goal of being the world's largest provider of global commercial trade information." 
Fine, if you want to look back and hope to cannibalize...  I teach how to find new business.

Update: In the upper right of this page are links to opportunities to study int'l trade start-up, competing on design and finding customers, with John Spiers.   In the upper left you'll find a link to a book on the topic written by John Spiers.


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