Disclaimer

The information contained in this communication is provided for informational purposes only and has been obtained or derived from sources believed to be reliable. No representation or warranty is being made, express or implied, as to the accuracy or completeness of such information, nor is it recommended that such information serve as the basis of any investment decision. This report contains forward-looking statements that are subject to change. Forward-looking statements involve inherent risks and uncertainties, and the predictions, forecasts, projections and other outcomes described herein may not occur. A number of important factors could cause results to differ materially from the views and opinions expressed herein and there are no guarantees of return. This material is not an offer to sell or a solicitation to purchase securities of any kind. Before making an investment of any kind, readers should carefully consider their financial position and risk tolerance to determine if such investment is appropriate. Mr. Jurgensmeyer may allocate assets to positions described herein and reserves the right to enter, modify or exit any such positions without notice.

Thursday, March 29, 2012

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.

No comments:

Post a Comment