Archive for February, 2011


After I quoted Karl, I have to quote Mish now really…



” If governments could easily create jobs they would. Look no further than the US for proof. Only private enterprise can create jobs, at least lasting ones.

Governments can only take wealth from one place and distribute it elsewhere, by taxation, by force, or by the hidden tax of inflation that comes from printing money.

When the stimulus ends, so do the jobs, except the bureaucratic ones, where massive pension problems and needless bureaucrats remain. ”

~ Mike “Mish” Shedlock



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Edited and redacted article from Karl Denninger-The Market Ticker.



On honesty, in Schools, Governments, and Enterprises

Posted 2011-02-27 12:07
Karl Denninger


I had an interesting conversation Friday evening with the representative from my district board.  In my opinion, she has an attitude problem – as does the School. Underlying the entire issue is dishonesty. It is in fact pervasive in both the private and public sectors.

It’s unacceptable throughout society, but especially when it comes to our children’s education.

The problem is that a school official attempted to enlist me as a parent in supporting conduct under false pretense. That’s what I believe happened here, and it is why I refuse to let this issue go.

When the original call took place I questioned the validity of [a] rule.  That’s a policy disagreement and had it ended there that would be that.  But it didn’t.  Upon reaching an impasse on its reasonableness, [a] claim of representative process was put forward as a means of attempting to salvage what was, at that time, a blown negotiation.

The reason for this, and my continued persistence in this matter is simple: The lesson that was taught that day is that it is acceptable to attempt to rescue a failed negotiation by distorting the truth or worse.

Let’s boil it down to one simple sentence: The School attempted to teach my daughter that it is acceptable to cheat whenever you are about to lose a debate on the merits of an issue.

The school destroyed their credibility with their actions.  Is it incompetence or laziness?  It doesn’t matter, really.

This destruction of credibility is unfortunate but it is pervasive.  A few examples from our society at large will illustrate the point.

We were told during the financial crisis that various actions were taken with the best interests of the taxpayers and shareholders in mind.  We have discovered that in fact this is a clear violation of securities law in that an 8-K is required to be filed on all material definitive agreements.  That is, at the highest levels of our government and banking system – intentional deception and manipulation took place.

Citibank’s former Chief Underwriter testified before the FCIC under oath that by 2007 eighty percent of their loan volume did not meet the standards they were publishing.  Citibank was one of the largest home loan lenders in the United States at the time, processing hundreds of billions of dollars of lending transactions and making billions of dollars through this deception.  Number of indictments as a result of these events?  Zero.

Major banks have admitted to filing over 150,000 affidavits in which personal knowledge was claimed of the facts contained within them. But the affidavits were not read by the person signing them.

Obviously you cannot have factual knowledge of what is contained in a document you have not read. That’s perjury, and in most states it’s a felony.  Number of indictments issued?  Zero.

In Washington State there is a bill pending, SB 5275, which has buried in the text of the bill the following:

7 (a) A declaration by the beneficiary (bank) made under penalty of perjury stating that the beneficiary (bank) is the actual holder of the promissory note or other obligation secured by the deed of trust shall be sufficient proof as required under this subsection.

What’s the significance of this section?  Simple: No proof need be offered that the bank actually holds the note or obligation.  A simple declaration that they are in possession is sufficient.  If you’re in possession of something as simple as a piece of paper, why would not present the actual paper to the court? There’s only one reason to “declare” rather than “prove” – you don’t have it.

This bill before the Washington State Legislature explicitly permits the filing of perjured documents.  One can only assume that lying about having the loan document will be prosecuted just as often as lying about reading the papers one submits to the court.  That is, never.

Pfizer was caught twice committing a felony through off-label marketing of drugs.     They were fined about 1% of their market cap for the second offense – and that’s all.  No time in prison.  Oh, and it gets better – the individual who was Pfizer’s general counsel and then CEO at the time of these offenses?  He was elected by The Fed to the NY Federal Reserve

Britain’s Climate Lab was hacked into and their data and software (which they had refused to release in response to Official Information Requests) became available to the public.

I and thousands of other skilled computer programmers examined the software and documentation in detail.  We discovered that the original, unfiltered and unaltered data was destroyed and thus we cannot replicate any of the original filtering studies.  We also found when we examined the software, that there are intentional “fudge factors” inserted into the calculations for the express purpose of making the desired conclusions show up – and that when those “adjustments” are removed and the calculations run again, the alleged warming that has been reported didn’t really take place.

A trillion-dollar industry in the trading of carbon credits (which has now been scuttled in the United States) was being established, and you were going to have that trillion dollars stolen from you predicated on an international and intentional scientific scam.

Oh yeah, and while we’re on that subject our local schools have not yet bothered to tell the students they were “teaching” about Global Warming that these facts have been uncovered and that they (in their adult life) were going to be robbed by this scam.  In fact, our educators were (perhaps unintentionally, perhaps not) complicit in trying to enlist our kids in supporting this!

Last year the Okaloosa County School District attempted to dishonestly plunder the public with a proposal for a one cent sales tax surcharge, the alleged purpose was to repair roofs, replace refrigeration equipment in the schools and similar uses.  Sounds good, right?

Well, no.  Every piece of capital equipment has a known and expected lifetime.  It therefore is expected to break at some point in the future when it is installed.  Honest budgeting requires that you create an impound account in which you deposit funds over the useful life of that item so you can repair or replace it when it wears out.

The school district did not do this.  They instead either raided that capital account and blew the money elsewhere, or never set it aside in the first place.  Then having done so they whined to the taxpayer and asked that we give them the same money again that they stole the first time for other purposes.

What likely happened in previous years is that the board’s budget committee attempted to use “tricky accounting” and expectations of permanent exponential growth (a claim that is mathematically impossible) to cover for the lack of an impound account.  Bluntly, they ran a budget predicated on a Ponzi Scheme and it blew up in their face, as all such schemes eventually do.  When the lack of a proper impound account for these depreciating assets was discovered the members of the budget committee responsible should have been indicted, tried and imprisoned for their malfeasance and willful mismanagement of the taxpayer’s funds!

Several of the School Board members have served for a long enough that they should have been held personally to account for these actions and/or their failure to blow the whistle on the lack of proper reserves.  They were not and did not.

At least the taxpayers refused to reward the district’s blatant mismanagement and dishonest budgetary practice – they said “NO!”

Let’s face the facts: Our entire society has degenerated into one of theft, lies, deceptions and dishonest dealing.

I believe Ms. Tibbetts, Superintendent of Okaloosa County Schools, has thus far refused to deal with the underlying issue of honest and fair dealing even though it was on parade right under her nose for the simple reason that our entire society has become one gigantic fraud.

I should not be surprised.

But I am outraged.

In particular I am outraged that our school system would ever impart to a student (through any means) that it is acceptable to twist the truth in an attempt to get what you want. That road leads straight to Hell and it is a damn short trip.

Our nation can only recover from this pernicious and outrageous series of scams and lies when we refuse to tolerate it.

Our corporate culture has grown to make ripping people off part and parcel of the daily bailiwick – losing years ago the drive to succeed predicated only on honest acts and fair dealing.

In a world where stealing, lying, deceiving and outright fraud must be expected from everyone and anyone you come in contact with, from the Janitor in the hallway to the School Board to the CEO of major pharmaceutical manufacturers; what is someone to do?

We cannot obtain justice through the law, because the prosecutors are in on the scams and won’t bring charges.  Our Treasury, which supposedly regulates the banks, was actively conspiring to evade securities laws while the banks were intentionally writing bad loans throughout the nation.

A small group of people are indicted (properly) for lying about loans but the biggest financial institutions in the United States admit under oath to doing the same thing and robbing the people, directly and indirectly, of trillions of dollars and not one indictment is issued.

We, the people, have only two choices: We either descend into absolute anarchy where the only rules are “don’t get caught” and “destroy the evidence so they can’t prove it”, where nobody’s word can be accepted,

or we stand up and say “NO MORE DAMN IT!”

I’m sure it would have been easier to find some white-collar way to steal my way to wealth, power and influence, but I couldn’t live with myself if I did it and I damn sure am not going to allow a government school to instruct my daughter that this is acceptable and even expected conduct.

We must take this country back one person at a time.  We must impose a fair conduct standard one government employee or private company CEO at a time.  We must say “No.”  We must demand honesty and accountability.  We must not accept anything less than formal apologies for the small transgressions, firings for the moderate or repeated ones and prosecutions for those that rise to grand larceny – and there are plenty of them in all three categories.

If we cannot obtain this through petition and conversation we must do so through direct action.  We must eject any and all liars, scammers and frauds and all who cover for them from our political scene.

To those who we cannot remove immediately by political process or who have no political process associated with them at all, we must refuse to deal with them.  To cut their hair.  To sell them gasoline or groceries.  To sit in the pew in Church with them.  To shake their hand.  To do their taxes.  To represent them in a court of law.  To fix their broken leg, treat their diabetes or crown their broken tooth.  To sell them Internet service.  To print their T-shirt run.  To buy their Girl Scout cookies.  To look at them and say “Hello” on the street.

When these people call us and ask for our financial or political support, we must refuse.

When they call us, we must look at their claims as if they’re liars and cheats – because so long as those same people are holding offices who have in the past lied and cheated, or allowed those who report to them to do so, that’s the standard they set for themselves.

We must choose as a society.

We must choose between good and evil.

Between honesty and lies.

Between fair dealing and scams.

For the good of our children and our nation we must make the right choices – not the easy ones.


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Essential Act

Taken from the Comments section of a Zero Hedge post.
by Papi_Al-Mahdi
on Sun, 02/27/2011 – 02:17

spot on. The true purpose is exposed. 1984~ ” The essential act of war is destruction, not neccessarily of human lives, but of human labor…. materials which might have otherwise be used to make the masses too comfortable, and hence in the long run, too intelligent. Even when the weapons of war are not actually desroyed, their manufacture is still a convenient way of expending labor power without producing anything that can be consumed…. Ultimately it is scrapped as obsolete, never having brought any material benefit to anybody.. the consequence of being at war, and therefore in danger, makes the handing-over of all power to a small caste seem the natural unavoidable condition of survival. War it will be seen, not only accomplishes the neccessary destruction but accomplishes it in a psychologically acceptable way. In Principle it would be quite simple to waste the surplus labor of the world by building temples and pyramids, by digging holes and filling them up again, or even by producing vast quanities of goods and then setting fire to them. But this would provide only the economic and not the emotional basis for a hierarchical society.”


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Taking a break from our usual scheduled program, some thoughts and words on the Christchurch earthquake.



What is the difference between an earthquake, and being carpet bombed?

Not as much as you might imagine apparently.

I had a friend from there text me, that when she walked out of her office building in the centre of the city, she could see bodies and injured people lying in the street. (very “Sixth Sense”)

She went on to say that 2/3 of the CBD was wreaked. As she and thousands of others were walking out of the centre of town, they were wading through, in places, calf high water and silt from liquification. The frontages of whole blocks of buildings were lying in the streets, they were opened up like dolls houses.

She was lucky, all her family came through unscathed, and the west of the city seems to be practically untouched.

But to the east it sounds like much of the suburbs there are practically unlivable. That’s tens of thousands of families and houses. That isn’t going to be fixed up any time soon. Particularly when the roads and Utilities are all ripped up.

I went to University in Canterbury, and still have fond memories and dear friends there. It is almost inconceivable what this means for the city and the people. Beyond doubt though, in the months and years ahead it will be almost unrecognizable from my memories of the place.


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Gene Sharp: Author of the nonviolent

revolution rulebook


Apparently someone has written the text book for how to overthrow a government through peaceful revolution. Apparently it pretty much works too.

It can be boiled down to two basic things: withdrawing the consent of the people, and undermining the pillars of support of the regime.

Simple huh!

Click on the headline above to find out the story.

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Wooing & Woe


A month or two ago, the British foreign minister William Hague was here in New Zealand glad-handing the locals. It was just a short trip, but there was a significant effort put in to charm and ingratiate. At the time a comment and question was raised by a reporter as to why he here at all, as Britain had managed to pretty comprehensively ignore us for years now.  So ‘what did they want now’, was asked of him. He came out with a smooth answer as to why we were friends and how we had a long and close history etc etc. It did all sounds a bit too pat even then. But since then, we have also had the Americans sidling up to us and making loving noises – here and here, that also included a visit from Hillary Clinton.

I’m sorry, but colour me sceptical, you only get that much love from those two when they want something. Any other time and you are so far off the map you could almost be on another planet. If you aren’t material to their interests you are ignorable. “In politics, there are no permanent friends or foes: there are only permanent interests”.

So, what is the sudden interest with New Zealand?

The UN security council apparently. I just heard about that yesterday, but it seems that our government is angling to get a seat. Quite why I can’t imagine – other than getting a bunch of smarmy schmoozers lining up trying to ingratiate themselves. I suppose there is some percentage in that. If our country is sitting at the big table, then we get some leverage to trade off something they may want for something we want. I guess that is the way of things isn’t it, call it power politics.

What I am also guessing is that we wouldn’t have had such a line up of supplicants, if our nomination and confirmation onto the council wasn’t pretty much already a done deal. In other words; Britain, the US and ourselves have already had a cosy little back room chat and decided we can play nicely together. No doubt there is also confidence that the other permanent members are also looking at us as a good team player they can live with too. I can see how that could all have its advantages for us, we get to be buddy-buddy with the big boys.

But keep in mind; when mice sleep with elephants there is always the danger of them rolling over in their sleep, you might end up getting crushed. There is always a quid-pro-quo in this game. And the start of that was a rather odd sounding speech I heard from our Prime minister last night – odd, until I thought about it some more…

He was going on about how our interests were also intimately tied up with the on-going global fight against Terrorism. Then on the same day there was another news article about how we were going to start trailing a full body scanner at our airports. Suddenly this isn’t looking so good to me at all. Suddenly this is looking like we are getting bound very tightly into America’s War-on-Terror, and their Dept of Homeland Security’s protocols and procedures. Dare one suggest – bound into their paranoia, fears, security controls and aggression. Even in America they are questioning the degree to which they have surrendered their liberties for an illusion of security provided by oppressive surveillance and regimentation. Are we to become yet another outpost of the global American empire of control and coercion.

Actually, I am not at all sure I want to be that tight a friend of the United States(or any of the rest of them).  What do we give up to be in that good with them?

Being allies means being prepared to fight alongside them, and I really don’t much like either their choice of fights, or the intelligence of their choices of how to fight them.

Being on the UN security council will entail collective responsibility and offering up our military forces to fight alongside them, where-ever they may decide it is in their interests to do so.

In a nutshell, I don’t like their ethics, and I don’t want to be in a position of being forced to support them. That could well end in tears.


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“People who don’t like their beliefs being laughed at…  shouldn’t have such funny beliefs.”


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