Trojans, TSA, and 414-0

Who doesn't hate the TSA?  They don't make us safer, they shoot us with radiation, and they are a huge money pit for the government.  This FBI agent agrees with us.

An Ex-FBI Man Chops to Pieces the TSA
Here are key excerpts from Steve Moore's analysis of the TSA:

The Transportation Security Administration (TSA) was formed to ensure America’s freedom to travel. Instead, they have made air travel the most difficult means of mass transit in the United States, at the same time failing to make air travel any more secure.

TSA has never, (and I invite them to prove me wrong), foiled a terrorist plot or stopped an attack on an airliner. Ever. They crow about weapons found and insinuate that this means they stopped terrorism. They claim that they can’t comment due to “national security” implications. In fact, if they had foiled a plot, criminal charges would have to be filed. Ever hear of terrorism charges being filed because of something found during a TSA screening? No, because it’s never happened. Trust me, if TSA had ever foiled a terrorist plot, they would buy full-page ads in every newspaper in the United States to prove their importance and increase their budget.

I have a unique position from which to make these statements. For 25 years, as many of readers know, I was an FBI Special Agent, and for many of those years, I was a counter-terrorism specialist. I ran the Los Angeles Joint Terrorism Task Force (JTTF) Al Qaeda squad. I ran the JTTF’s Extra-territorial squad, which responded to terrorism against the United States or its interests throughout the world. I have investigated Al Qaeda cell operations in the United States, Pakistan, Indonesia, the Philippines, and Thailand, just to name a few. The FBI and the CIA provides the lion’s share of actionable intelligence on threats to the Department of Homeland Security (DHS) (the mother organization of TSA), so that they can tailor security screening to the actual threat.

I am, as I have said before, a political conservative, a law and order kind of guy and I get misty when the national anthem is played at a football game and jets fly over in salute. If anything, I am pre-disposed to support the United States government...

The entire TSA paradigm is flawed. It requires an impossibility for it to succeed. For the TSA model to work, every single possible means of causing danger to an aircraft or its passengers must be eliminated. This is an impossibility. While passengers are being frisked and digitally strip-searched a few dozen yards away, cooks and dish washers at the local concourse “Chili’s” are using and cleaning butcher knives.

While bomb-sniffing dogs are run past luggage, the beach at the departure end of LAX is largely unpatrolled, and anybody with a shoulder launched missile (you know the ones they regularly shoot down U.S. helicopters with in Afghanistan) could take out any plane of their choice. I am reticent to discuss anything further that would give anybody ideas. However, these two have had wide dissemination in the media but are by NO means the biggest threats...

I sometimes ruminate while standing in line waiting to take off my shoes, remove my belt, laptop, iPad, etc., etc., about the improvised weapons I saw in prisons and how hard they were to find. It’s fascinating what weapons prisoners can make out of plastic forks, newspapers and toothbrushes. Ask any prison guard if an inmate can make a weapon out of an everyday item, and how long it would take them. Approximately 99% of what the average traveler carries on a plane would be considered contraband in a maximum security prison, due to the fact that it can easily be converted into a weapon. Toothbrushes, Popsicle sticks, pens, pencils, anything with wire (iPod headset), any metal object which can be sharpened, etc., etc. is a potential weapon. Carried to its logical end, TSA policy would have to require passengers to travel naked or handcuffed. (Handcuffing is the required procedure for U.S. Marshalls transporting prisoners in government aircraft.)

TSA’s de facto policy to this point has been to react to the latest thing tried by a terrorist, which is invariably something that Al Qaeda identified as a technique not addressed by current screening. While this narrows Al Qaeda’s options, their list of attack ideas remains long and they are imaginative. Therefore, if TSA continues to react to each and every new thing tried, three things are certain:

1. Nothing Al Qaeda tries will be caught the first time because it was designed around gaps in TSA security.
2. It is impossible to eliminate all gaps in airline security.
3. Airline security screening based on eliminating every vulnerability will therefore fail because it is impossible. But it will by necessity become increasingly onerous and invasive on the travelers...

TSA screening, as it is now, is so predictable and known that Al Qaeda can know with absolute certainty what they can and cannot get through screening. That is valuable intelligence for them. In a word, TSA is predictable. This increases Al Qaeda’s chances of success...

******************************************************************************

This has nothing to do with anything.  I was just really surprised about how many condoms Trojan makes.

Trojan is the most popular condom brand in the U.S. It claims over 70 percent of all drug store condom purchases — that's four times the market share of industry number two Durex.
So how does a massive condom maker like Trojan churn out more than one million condoms every day and ship them all around the world?
The condoms are manufactured by parent Church & Dwight, which produces dozens of varieties under the Trojan name — from Magnum to Ecstasy.

******************************************************************************

HAHAHA!  They really have your back Obama.  Or you budget is completely ridiculous...

President Obama's budget was defeated 414-0 in the House late Wednesday, in a vote Republicans arranged to try to embarrass him and shelve his plan for the rest of the year.

The vote came as the House worked its way through its own fiscal year 2013 budget proposal, written by Budget Committee Chairman Paul D. Ryan. Republicans wrote an amendment that contained Mr. Obama's budget and offered it on the floor, daring Democrats to back the plan, which calls for major tax increases and yet still adds trillions of dollars to the deficit over the next decade.

"It’s not a charade. It’s not a gimmick — unless what the president sent us is the same," said Rep. Mick Mulvaney, a freshman Republican from South Carolina who sponsored Mr. Obama's proposal for purposes of the debate. "I would encourage the Democrats to embrace this landmark Democrat document and support it. Personally, I will be voting against it."

But no Democrats accepted the challenge.

They have their own alternative they wrote, which closely tracks the president's deficit numbers, though it changes the details of his plan. That plan will receive a vote on Thursday, as will Mr. Ryan's proposal.

Senate Democrats have said they will not bring a budget to the floor this year, though Republicans in the chamber have talked about trying to at least force a vote on Mr. Obama's plan there as well.

Last year, when they forced a vote on his 2012 budget, it was defeated 97-0.

******************************************************************************

I think Peter Schiff knows what he's talking about.  If you haven't read any of his books, you should.  He's been right on about everything that is happening lately.

By:  Peter Schiff
Tuesday, March 20, 2012
This article was revised on March 23, 2012.

Earlier this month, the Department of Labor reported that 227,000 new jobs were added to the economy in February, marking the third consecutive month of positive jobs growth. Many observers have taken the news as evidence that the recovery is underway in earnest, helping send the S&P 500 index to the highest level in nearly five years. However, the very same day, the Commerce Department reported that after surging for much of the last year, the U.S. trade deficit increased to $52.6 billion for January - the largest monthly trade gap since October 2008. This second data point should dampen enthusiasm for the first.

From 2005 through mid-2008, those monthly figures almost always topped $50 or $60 billion, setting a monthly record of $67.3 billion in August 2006. But when the housing and credit markets imploded, attention was focused elsewhere. At that time, I was one of the few economists to raise a red flag about the dangers of growing trade deficits. In any event, the faltering economy took a huge bite out of imports, pushing the trade deficit down 45% in 2009. Even those people who were still paying attention to trade assumed that the problem was solving itself.

However, after reaching a monthly low of $35.7 billion in May of 2009, the trade deficit began to grow again, expanding 31% in 2010 and 12% in 2011.  While the $52.6 billion deficit in January is still about 10% below the monthly average seen in 2006-2008, if GDP continues to nominally expand, as many assume it will, we may soon find ourselves in the exact same place in terms of trade that we were before the financial crisis began. That's not a good place to be.

If the jobs that we have created over the last few years had been productive, our trade deficit would now be shrinking, not growing. But the opposite is happening. These jobs are being created by the expenditure of borrowed money, and are not helping to forge a newer, more competitive economy. In the years before the real estate crash, our economy created millions of jobs in construction, mortgage finance, and real estate sales. But as soon as the bubble burst, those jobs disappeared. Today's jobs are similarly being built as a consequence of another bubble, this time in government debt. And, likewise, when this bubble bursts they too will vanish.

Throughout much of the last decade, I had continuously warned that the growing trade deficit was an unmistakable sign that the U.S. was on an unsustainable path. To me, monthly gaps of $60 billion simply meant that Americans were going deeper into debt (to the tune of $2,400 per year, per citizen) in order to buy products that we were no longer productive enough to make ourselves. I pointed out that America had become an economic juggernaut in the 19th and 20th centuries on the back of our enormous trade surpluses, which allowed for growing wealth, a stronger currency, and greater economic power abroad. This is exactly what China is doing today. Deficits reverse these benefits. (To learn how China is spending its surplus, see my latest newsletter.)

My critics almost universally dismissed these concerns, typically saying that our trade deficits resulted from our economic strength and that they were a natural consequence of our status at the top of the global food chain. I pointed out that even highly developed, technologically advanced economies still need to pay for their imports with exports of equal value. Instead, all that we have been exporting is debt and inflation.

The financial crisis initiated a painful, but needed, process whereby Americans spent less on imported products while manufacturing more products to send abroad. But the countless government fiscal and monetary stimuli stopped this healing process dead in its tracks. Government borrowing and spending redirected capital back into the unproductive portions of our economy. Health care, education, government, and retail have all expanded in the last few years. But manufacturing has not grown at the pace needed to solve the trade problem. In short, these jobs are creating more consumers and less producers, they are making us poorer rather than richer.        

Job creation at home has been like vegetation sprouting along the banks of rivers of stimulus. These artificial channels may help temporarily, but they prevent trees from taking root where they are needed most. Our economy has yet to restructure itself in a healthy manner. The recession should have forced us to address the problem of persistent and enormous trade deficits. We have utterly failed to do this. So while the job numbers look good for now, the pattern is ultimately unsustainable. 

The last time the monthly trade deficit was north of $50 billion, the official unemployment rate was under 6% and our labor force was considerably larger. Should this artificial recovery actually return millions of unemployed workers to service-sector employment, our monthly trade deficits could go much higher – perhaps eclipsing the previous records of 2006. It is possible that the annual deficits could top the $1 trillion mark, thereby joining the federal budget deficit in 13-digit territory.

Also, last week, we got news that our fourth quarter current account deficit widened 15% to just over $124 billion. The $500 billion of annual red ink is actually reduced by a $50 billion surplus in investment income (resulting primarily from foreign holdings of low-yielding US Treasuries and mortgage-backed securities – however, when interest rates eventually rise, this surplus will quickly turn into a huge deficit). At anything close to a historic average in employment and interest rates, today's structural imbalances could produce annual current account deficits well north of $1 trillion. As higher interest rates would also swell the federal budget deficit, it is worth asking ourselves how long the world will be willing to finance our multi-trillion dollar deficits?

Back in the late 1980s, when annual trade and budget deficits were but a small fraction of today's levels, the markets were rightly concerned about America's ability to sustain its twin deficits. This anxiety helped lead to the stock market crash of 1987. But with the boom of the '90s, all talk of trade deficits was dropped. Though I spoke out about the danger of having consumption chronically outstripping our productivity, the general feeling of prosperity meant my warnings fell on deaf ears – even as the deficit figures hit all-time record highs. This was a major factor in the economic implosion of 2008. However, even when the imbalance had reared its head, mainstream economics predicted that the economic contraction would slow consumption sufficiently to significantly close the gap. Once again, I took to the airwaves warning that if the government tried to solve the crisis by encouraging consumption instead of production, the trade gap would only get worse – causing a greater crisis in the near future.

******************************************************************************

I thought I would finish with something funny.  YES, there will be a sequel to Anchorman.  Welcome back Ron Burgundy.

Headline Readers

I was glad to see that Obamacare is getting ripped by the Supreme Court.  Thank goodness some people realize that it's unconstitutional to force you to buy healthcare.

Stansberry Editor had a great piece yesterday.  It's a little long but I think it's important for any investor.

For the life of me, I (Dan Ferris) often can't fathom how people believe the headlines they read are true. And worse, believing they're true, then going into the stock market and committing new capital based on what they say.

Working off yesterday's news that Federal Reserve Chairman Ben Bernanke made opaque reference to being willing to renew his quantitative easing (QE) efforts (read: print more money)… the Financial Times website this morning proclaimed: "Stocks stable on more hopes for Fed QE."

People hear a few comments that indicate the Federal Reserve might print more money than they previously thought it would print… and decide to go buy stocks? It's as though American corporations suddenly have more value because the Federal Reserve might print up more dollars with which to buy their wares… and their shares. But when the Fed prints more money, it doesn't increase your capacity for Coca-Cola or McDonald's cheeseburgers, does it? No. So why bid their shares up?

Remember… the Fed kept rates low, inflating the stock market bubble of the late 1990s. Then, the stock market tanked in 2000-2002, so the Fed lowered rates again… bringing about the housing bubble. That resulted in the biggest economic/financial disaster since the Great Depression. Now, rates are lower than ever… And both stocks and bonds have enjoyed a huge rally.

 In Chapter 8 of his landmark investing book, The Intelligent Investor, Ben Graham described "Mr. Market." Graham, the father of value investing, said that when you venture into the stock market, you should imagine you're business partners with a manic depressive. The poor fellow, Mr. Market, comes into work every day and, based on his mood, offers to buy out your stake or sell his. When he's depressed, he'll sell you his half of the business at a rock-bottom price. When he's riding high, no price is too great for your share of the business.

 Were Graham alive today, he'd certainly note Mr. Market's latest obsession – bonds. According to market researchers at the Investment Company Institute, investors took $2.57 billion out of equity mutual funds during the week ended March 14… and put $9.1 billion into bond mutual funds. Clearly, Mr. Market hates stocks and loves bonds.

Like most popular investments, bonds are a lousy place to put new money right now… especially the higher-quality issues. The benchmark 10-year Treasury bond yields just 3.3% these days. Once you account for taxes and 3% inflation, your real rate of return is negative. Your investment is losing value. Inflation will do a number on triple-A corporate bonds, too. Credit-ratings agency Moody's forecasts the yield on triple-A corporate bonds in March will be 3.92%. (It's a forecast because March isn't over yet.) That's about 60 basis points (0.6 percentage points) over Treasurys. Moody's predicts this'll sink to 3.78% in April.

I've heard it said that $1 of income is $1 of income, and the source doesn't matter. But I don't see it that way…

Consider that $1 of bond income this year will buy you $1 worth of stuff this year. But next year, after 3% inflation, that same $1 will only buy you $0.97 worth of stuff.

That'll keep happening every year you own that bond. After 10 years, your $1 of income will buy you about $0.74 worth of stuff. The bond market is supposed to be the smart money. But that doesn't seem very smart to me.

 Now consider $1 of dividend income from a World Dominating Dividend Grower (WDDG) stock. WDDG stocks are the shares of the best businesses in the world. And these companies raise their dividends every year like clockwork for decades on end. The WDDG stocks recommended in my 12% Letter newsletter raised dividends at an average rate of about 11.5% over the past year. Last year, they paid you $1 of income… This year, they paid you $1.115 of income. After 3% inflation, that's worth about $1.08. After 10 years of 11.5% dividend growth and 3% inflation, the value of the WDDG income will more than double.

So you can wind up with $1 that's worth $0.74 after 10 years, or you can wind up with an income stream that's worth $2 in today's money.

******************************************************************************

I will call this the Krieger Section for today.

This is a great article with some striking analysis on the auto market.  2008 is going to look like a picnic.
Quote:  “The answer is just what you expected. A phenomenal amount of debt peddled to people without the means or intent to ever repay the debt by the usual suspects: Ally Financial, Capital One, Wells Fargo, JP Morgan and Bank of America. These fine upstanding institutions control 25% of the auto loan market. They doled out $24 billion of new car loans in the 4th quarter of 2011, with an outpouring of loans to those downtrodden subprime borrowers and an extension in the average loan length beyond 6 years. Subprime borrowers now account for 45% of all auto loans. As a refresher, subprime borrowers generally have little or no assets, have a history of late payments or defaulting on obligations, and have low incomes. No worries there. When has making hundreds of billions in subprime loans ever caused a problem before. Ally Financial CEO Michael Carpenter had this to say about the market:” “We have seen crazy, irrational competition in the subprime end of the marketplace, which is one reason why more banks are targeting the lower end of the market.”

“I spend two hours per day on the road and have plenty of time to observe my surroundings. I drive through the Mantua section of West Philadelphia every day. The average household income in this neighborhood is $16,000. The average home value is $25,000. The true unemployment rate exceeds 40%. At least 20% of the properties are vacant and the neighborhood resembles Baghdad. Last week, I counted six brand new vehicles with registration tags in their back windows in a one block radius of this neighborhood. Every block has newer model Ford Expeditions, GMC Sierras, BMWs, Acuras, Cadillacs, and Mercedes sprinkled among the squalor. Someone is loaning these people the money to buy these $40,000 vehicles or approving them for leases. This neighborhood puts the SUB in subprime. No financial firm worth spit would make a six year $35,000 auto loan to someone in this neighborhood unless they were instructed to do so by the Federal government or were guaranteed that the future loss would be borne by someone else – YOU.”

Full article here…

*******

I reiterate my call from 2009.  The Onion is still a short.

No joke: NYC Dept. of Education is banning words
Posted on March 27, 2012 by Doug Gibson
As my friend Robert Becker mentioned, this seems like it came from The Onion, but it’s no joke. The New York City Department of Education is asking teachers to ban words from tests for students in schools. One banned word is dinosaur, ostensibly because it might offend creationists. (Read) Read another story here.

As legal scholar Jonathan Turley points out, creationists actually believe in dinosaurs. (Read) Maybe NYC educators need some remedial studies? Here is a list of the 50 “offensive words,” which I got from Turley’s blog. It’ll blow your mind. According to the New York Post, educators claim the list of banned words is needed because they “could evoke unpleasant emotions in the students.” … Like birthday, because it offends Jehova Witnesses, and terrorism because it scares students. This is The Onion turned into real life! I thought school was designed to prepare students to grow and learn. Here’s the list:

Abuse (physical, sexual, emotional, or psychological)
Alcohol (beer and liquor), tobacco, or drugs
Birthday celebrations (and birthdays)
Bodily functions
Cancer (and other diseases)
Catastrophes/disasters (tsunamis and hurricanes)
Celebrities
Children dealing with serious issues
Cigarettes (and other smoking paraphernalia)
Computers in the home (acceptable in a school or library setting)
Crime
Death and disease
Divorce
Evolution
Expensive gifts, vacations, and prizes
Gambling involving money
Halloween
Homelessness
Homes with swimming pools
Hunting
Junk food
In-depth discussions of sports that require prior knowledge
Loss of employment
Nuclear weapons
Occult topics (i.e. fortune-telling)
Parapsychology
Politics
Pornography
Poverty
Rap Music
Religion
Religious holidays and festivals (including but not limited to Christmas, Yom Kippur, and Ramadan)
Rock-and-Roll music
Running away
Sex
Slavery
Terrorism
Television and video games (excessive use)
Traumatic material (including material that may be particularly upsetting such as animal shelters)
Vermin (rats and roaches)
Violence
War and bloodshed
Weapons (guns, knives, etc.)
Witchcraft, sorcery, etc.
********

This is another reason why we need to get this clown out of the White House.  Most other countries think he is a complete joke.  What a nice little puppet.

 *****************************************************************************

 

******************************************************************************

Here is some local news about the price of energy affecting businesses.

CEO Donnie Smith On How High Gas Prices Affect Tyson Foods
By Arkansas Business Staff
3/27/2012 8:41:01 AM

It's not easy getting the attention of some CEOs, particularly one who heads a global business with 115,000 employees and $32 billion in sales.

But Donnie Smith, chief of Tyson Foods Inc. since November 2009, promptly and thoroughly responded to a series of emailed questions from Arkansas Business.

Wanting to waste as little as possible, we're sharing a couple of our questions and his responses.

AB: What effects have increased gasoline prices had on Tyson Foods?

Smith: Like everyone else, we're doing our best to manage the impact of record high gas prices and high diesel prices. At current levels, gasoline prices are pressuring disposable household income, but we have not seen an unexpected impact on our business.

We, too, are a consumer of petroleum products and like everyone else, we certainly feel the impact of higher costs. If you use Springdale as our pricing point, there's been about a 57 percent increase in the cost of diesel over the past five years. That's significant since we use fuel to transport feed to family farmers, chickens to and from the farms and finished products to our customers around the world.

AB: Is there anything new the consumer can expect from Tyson Foods, e.g., new products, new pricing, new ad campaign?

Smith: We are constantly looking for new products that help meet consumer needs. Time-starved consumers are looking for more convenience at a good value, and we're developing a variety of value-added products to meet those needs. We also plan on extending some of our successful brands into new categories.

One of the stand-out products in our Prepared Foods business is Wright Brand Bacon. We increased points of distribution by nearly 10,000 locations across the country in fiscal 2011. And given the strength of the Wright brand, we plan on extending it to other categories in the next few months.

READ MORE

******************************************************************************

10 Things You Should Never Say To Your Boss

Saying the wrong thing to your boss can really damage your career. From refusing to work with a colleague to bragging about your irreplaceability, here are 10 things you never want to say to your manager:
1. "Can you write that down for me?" When you're talking about the details of a project, writing notes to consult later is great. But you need to take them yourself, not ask your boss to do it for you.
2. "I just booked plane tickets for next month." Never book time off without clearing it with your boss. There might be a major project due that week, or she might have approved others to have that time off and therefore need you around. Check with her first before you do anything irreversible.
3. "My bad." There's nothing more frustrating than an employee who has made a mistake and doesn't seem to think it's a big deal. When you make a mistake, take responsibility for it, figure out how you're going to fix it, and make it clear that you understand its seriousness. Responses like "my bad" sound cavalier and signal that you don't take work seriously. Don't use it for anything other than the most minor mistake (like spilling something in the kitchen, which you then promptly clean up).
4. "I can't work with Joe." Refusing to work with a colleague is an unusually extreme statement and may mark you as difficult. Instead, try something like, "I find it hard to work well with Joe because of X and Y. Do you have any advice on how I can make it go more smoothly?"
5. "I don't know what you'd do without me." No one is irreplaceable, even the head of your company. Statements like this mark you as a prima donna who feels entitled to special treatment … and will make a lot of managers want to show you that you're wrong.
6. "Do this, or I quit." Whether you're asking for a raise or requesting a day off, don't threaten to quit if you don't get your way. If you don't get what you want, you can always think it over and decide to quit, but if you use it as a threat in the negotiation itself, you'll lose your manager's respect and poison the relationship.
7. "I have another offer. Can you match it?" Using another job offer as a bargaining chip to get your current employer to pay you more money may be tempting, but it often ends badly. First, you may be told to take the other offer, even if you don't really want it—and then you'll have to follow through. Second, even if your employer does match the offer, they'll now assume you're looking to leave, and you may be on the top of the lay-off list if the company needs to make cutbacks. If you want a raise, negotiate it on your own merits.
8. "What's the big deal?" Statements like this are dismissive and disrespectful. If your manager is concerned about something, you need to be concerned about it too. If you genuinely don't understand what the big deal is, say something like, "I want to understand where you're coming from so we're on the same page. Can you help me understand how you're seeing this?"
9. "I can't do X because I need to do Y." Don't say that you can't do something your manager is asking of you. Instead, if there's a conflict with another project, explain the conflict and ask your manager which is more important.
10."That's not my job." Protesting that something isn't in your job description is a good way to lose the support of your boss. Job descriptions aren't comprehensive, and most people end up doing work that doesn't fall squarely within that job description. (That's what "and other duties as assigned" means.) You want to make yourself more valuable to your employer, not less.