Category: History – Various Lands

How I Cracked the Alpha Code – BONUS POST

[Please note: The word “Featured” on the left side above was NOT inserted by this blogger, but apparently was inserted by WordPress, and it cannot be removed. NO post in this blog is sponsored.]

“The new guys were preoccupied with being reelected, the demands of which were not well served by ridiculous fantasies like fiscal discipline.”

American politics? Rogers was actually referring to the money managers of the euro in the early 2000’s. He was cautiously optimistic about the euro when it was first launched. Oh, well.

The Bonus Book of the Week is “How I Cracked the Alpha Code” by Jim Rogers, published in 2013. This was a partially autobiographical, extended essay that gave tips on how to gauge economic prosperity and prospects in different places. At all times, Rogers is on the lookout everywhere for investment opportunities. He made his (take this job and shove it) money and retired from investment banking at 37 years old.

Born in 1942, Rogers and his wife and young children tried living in Shanghai and Hong Kong (where there was horrible air pollution) beginning in 2005, before deciding to move to Singapore from New York City.

Singapore requires no security at public events, so it is safe for children. He claimed that the education and healthcare systems are excellent. It has entitlement programs in those areas and in home ownership that are roughly equivalent to health savings accounts and 529 plans in the U.S. with contribution-matching through employers, but administered by the government. The public schools require parents to volunteer to help in various capacities. Medical treatment is a great value compared to that in the U.S. No surprise there. It also has the equivalent of America’s E-ZPass system on toll roads and for parking, too.

However, Rogers merely listed the positive aspects of Singaporeans’ lifestyle. He listed no negatives, except for potential, general economic threats that could affect any nation. Another glaring omission of inconvenient information was cryptocurrencies. But he did reveal his basic philosophy: one’s real worth is what one would be worth if one lost all of his or her money. And let financial entities fail so as to encourage creative destruction. Do not bail them out.

Rogers listed some of the kinds of policies and practices that bring a country down economically: wars, litigation, and incompetent leadership. This blogger would add one more: excessive deregulation. He gave tips on what a nation should do to try to reverse its serious financial position: reform the tax system so as to encourage savings and investment, not consumption; “change the education system” and reform healthcare and litigation.

Read the book to learn more cherry-picked information that bolstered the author’s too brief, too pat pronouncements.

The Death of Money / Dealings – BONUS POST

The first Bonus Book of the Week is “The Death of Money, The Coming Collapse of the International Monetary System” by James Rickards, published in 2014. This was an all-over-the-map hodgepodge of generalizations on global financial trends, economic theory and what the author claimed was the devastation those trends could lead to, as of the book’s writing.

Prior to 9/11, the CIA possessed no expertise in the nefarious goings-on in the securities industry that could presage the occurrence of a terrorist attack. America’s law enforcement and security agencies had plenty of data, but inter-agency rivalry inhibited information-sharing and creativity– that would have allowed them to “connect the dots” in getting more specific information.

Prior to 9/11, American intelligence did detect irregular trading patterns in the stocks of the two airlines whose planes were targeted in the attacks. A tiny percentage of those trades were illegal because they were made by insiders– by the terrorists who knew those airlines’ share prices would soon plummet; the remaining percentage of anomalous trading was done by those who noticed the unusual activity (but not the reason for it) and jumped on the bandwagon.

After the attacks, threat-detection software was created for monitoring not just stock trading, but also currency and precious metals trading. The author wrote that a recently trendy means for bringing down an enemy-nation is: doing serious economic and financial harm rather than physical harm. Assaults on a nation’s technology and infrastructure such as the money-handling parts of cyberspace, aviation, dams and utilities, instead of targeting a country’s military and weapons or people of a specific ethnic group, is becoming the new normal.

The author remarked that China’s institutions are actually at risk for attacks, because the country’s government, economically, owns a large chunk of the means of production and arguably, labor; not to mention, capital. Wealthy Chinese business owners and executives have a co-dependent relationship with (corrupt) government officials. Besides, there are: “cross ownership, family ties, front companies, and straw man stockholders.”

The author warned the reader that a global financial crisis is likely in the offing due to prevailing circumstances in the economic heavy hitters of the world (like, the United States and China); among those circumstances: misallocation of investment funds; employers’ power to minimize benefits and compensation; red ink and the ever-widening, (allegedly alarming) gap between rich and poor. Financial panic is correlated with social unrest. That can lead to revolution.

The magnitude and accelerating frequency of financial bailouts of the last twenty-five years just shows how fragile the economic systems of the world are. In the United States, excessive deregulation fueled out-of-control greed, etc., etc., etc. In Europe, the group of nations that agreed to adopt one currency (the euro) thought the other nations would help mitigate their own economic problems, when in reality– they were putting all their eggs in one basket. In effect, they had to get permission from the others to make significant changes to their economic policies; they were forced into unhealthy co-dependent relationships.

Read the book to get the lowdown on: all the different groups of nations which were trying to diminish the U.S. dollar’s hegemony (hint: BRICS, BELL, GIIPS, SCO, GCC) at the book’s writing; the United States’ economic system explained for laypeople (via a Venn diagram, along with how the author defined “money” and “death”– both buried in the middle of the book); and everything you ever wanted to know about the value of gold, among other factors in the American dollar’s declining power in the world.

The second Bonus Book of the Week is “Dealings, A Political and Financial Life” by Felix Rohatyn, published in 2010. This bragfest described the life of the typical alpha male who rode a fabulous career in the securities industry, starting in the 1950’s.

The aforementioned first Bonus Book described the trends indicative of a dire future global financial situation. Many such untoward events have already occurred in the last couple of centuries (!), and keep happening. Every time, the seeds of financial disaster are sown decades prior to when it hits the fan.

The selective memory and cherry-picking of data of participants and victims (not to mention propagandists!) cause readers to perceive that those kinds of events are unprecedented, or are becoming more frequent. Excuse the cliche, THERE IS NOTHING NEW UNDER THE SUN (For more info, see this blog’s posts: Serpent on the Rock, A Fighting Chance, Since Yesterday, Why I Left Goldman Sachs, The Zeroes and Dot Bomb).

Rohatyn described a few major stressful economic near-disasters that he was asked to help remedy. One situation was early 1970’s Wall Street, which was a house of cards about to collapse. Another was the near-bankruptcy of New York City in the mid-1970’s.

The late 1950’s saw the city becoming a bloated, bureaucratic civil-service gravy train, due to the increasing power of unions. The costs of generous contracts (along with other sociological factors) was eroding the city’s tax base. Local politicians stayed in power by staying friendly with the unions. One hand washed the other.

At the dawn of the 1970’s, the city needed more and more short-term loans from banks. Creative accounting allowed the debt explosion to continue. The city got subsidies from the state and federal governments, but only at the end of its fiscal year, so its deficit ballooned annually before then. The city got generous borrowing terms because it was in the state’s and fed’s best interest (excuse the pun) to deregulate the lending banks, as they were political patrons, too. Eventually, push came to shove.

In June 1975, Rohatyn was appointed to a bipartisan (truly bipartisan!) committee to help New York State governor Hugh Carey draft a bailout plan for the city, three weeks before the date on which the city would be forced into bankruptcy. Fortunately, Carey possessed the right temperament for saving the world.

Read the book to learn more about how the author helped impose some adult supervision in various, serious economic episodes in his career, and more about his career itself.

Uranium

The Book of the Week is “Uranium, War, Energy, and the Rock That Shaped the World” by Tom Zoellner, published in 2009.

Now, as is well known, one element crucial for making an atomic bomb via the least difficult method, is uranium. It is radioactive– carcinogenic to humans. Without human intervention, an entire sample of it takes billions of years (yes, really, depending on the isotope) to break down into one substance after another, including thirteen heavy metals; ultimately lead.

In the early 1940’s, “The United States military moved quickly to squelch all news of radioactivity. There were worries in the Pentagon that the bomb would be compared to German mustard gas in WWI or other types of wartime atrocities.” Radiation sickness and cancer killed an estimated thirty thousand people in addition to the seventy thousand who perished instantly by the atomic bomb at Hiroshima in August 1945.

In the late 1940’s, radium– an element that helps make a nuclear weapon– was found to be harmful to humans. The (federal) Atomic Energy Commission gave regulatory responsibilities of health and safety to state agencies in Colorado, Arizona and Utah, making the excuse that private mining businesses were outside its jurisdiction. Of course, the states were understaffed and underfunded in regulating radium.

Nevertheless, the radium rush became a government-directed priority because it was a matter of national security. By the 1960’s, the greed was petering out, and Navajo country (in northern Arizona, and small regions of Utah and New Mexico) was a cancer cluster comprised of an eyesore of about thirteen hundred abandoned mines laid waste with radon gas. That was one aspect of the nuclear age. Another was that building fallout-shelters became trendy. The Kennedy family built one at their estate in Palm Beach, Florida.

In the mid-1950’s the “Atoms For Peace” program begun by president Dwight Eisenhower supplied nuclear reactors to Bangladesh, Algeria, Colombia, Jamaica, Ghana, Peru, Syria, Pakistan, Turkey, and Belgian Congo for the purpose of deterring the said countries’ enemies from using nuclear weapons against them.

In 1988, the United States supplied Iran with a five megawatt research reactor; China supplied uranium ore, and South Africa, a block of uranium and some plutonium. The Pakistani A.Q. Khan was hired as a scientific consultant.

Since 1993, the Atomic Energy Commission was supposed to have recorded incidents in which different forms of uranium (raw ore, yellowcake, hexafluoride, metal oxide, ceramic pellets, and fuel rod assemblies) have gone missing. Incident reportage works on the honor system. Unsurprisingly, the system hasn’t worked because the substance has a very complex, global black-market. Even so, the biggest hurdle to building a nuclear weapon is obtaining uranium in its highly enriched form. Then one must employ people with weapons-design and explosives expertise. Hiding the project (which in part, can be accomplished via a lead sleeve on the finished product– that would fool a radiation detector) might pose additional difficulties. It would cost a total of a few million (U.S.) dollars besides.

In the single-digit 2000’s, the author personally visited the country of Niger to see a uranium town for himself; a life-threatening trip. For, bandits or terrorists (likely of the Tuareg tribe who believe uranium mining has fostered inequality that adversely affects them economically, tribally and health-wise) appeared in front of his bus en route (a not uncommon occurrence). The bus driver was wise to the situation and drove away from the scene to a rural village with electricity, thanks to a nearby French power plant. The two main exports of Niger are uranium and onions. But the nation is still largely agricultural.

Read the book to learn much more about uranium in connection with: its sourcing in Australia, U.S. strategic interests in Soviet Georgia, Yemen’s goals, a Sierra Club legal fight, Vancouver’s ill-gotten gains, etc.

Second Chance

The Book of the Week is “Second Chance, Three Presidents and the Crisis of American Superpower” by Zbigniew Brzezinski, published in 2007.

“American policy has divided its friends while uniting its foes, fear has been exploited to mobilize public support for policy, and strategic impatience and self-ostracism have narrowed United States diplomatic options.”

The author wrote the above about the George W. Bush administration. Yes, really. The author critiqued the presidencies of George H.W. Bush (Bush 41), Bill Clinton and George W. Bush (Bush 43) in terms of the natures of their administrations, and how they could have mitigated or even warded off the worsening political turmoil in America.

Bush 41 failed to follow through on American-foreign-policy vision and plans to foster international cooperation among Russia, China and other developing nations after he chased Iraq out of Kuwait in early 1991. He didn’t get to do so in a second term because he neglected problems at home.

During the Clinton administration, the media declared that America was trying to cultivate new enemies (maybe it was), one after another– Libya, Iraq, Iran, China, etc., while Clinton appeared to negotiate agreements such as the ones between Israel and the PLO, that actually turned out to be worthless pieces of paper. Unsurprisingly.

Other treaties that have been violated time and again, are those regarding nuclear non-proliferation. Various countries have continued to test nuclear weapons through the years, including France, China, India, Pakistan and North Korea. This has resulted in:

  • contaminating the earth, sea and air, and harming people;
  • teasing the other treaty-signers into giving the violators financial aid;
  • imposing ineffective financial punishment; and/or
  • pushing them to ally with their neighbors.

The Clinton years saw a two-faced policy with Russia. The president gave Soviet leader Boris Yeltsin generous financial and economic aid, but contrarily, by 1998, American Ivy-League economist Jeffrey Sachs had bankrupted Russia by persuading Yeltsin to execute his “shock-capitalism” tactics. Compounding of the corruption ensued with the intervention of the International Monetary Fund, which extended “loans” to Russia to bail it out. Capital flight from investors in the United States ensued. Unsurprisingly.

Bush 43 wrongly imposed “might makes right” on Iraq and Afghanistan, thinking democracy would magically assert itself in those war-torn countries. But– the author wrote– democracy requires the following laborious steps:

  • A government must respect the political and economic human rights of its citizens;
  • A government must impose rule of law to achieve and maintain a state of civility among its people, more or less;
  • The structures of power must write and abide by legal and Constitutional rules on which they must agree, more or less; and
  • There must be free and fair elections, which leads to a system whose leaders see the value of compromise and accommodation– rather than a winner-take-all stubbornness.

In his first term, Bush 43 and his sidekick Dick Cheney exploited the world for the purpose of acquiring raw power, and fun and profit at the expense of his own countrymen and America’s good relationships with its allies. In his second term, the president showed a “… basic lack of interest in peacekeeping, global poverty or ecology.” Middle Eastern countries destabilized by the Iraq War were driven into the arms of China as a financial partner, because– although China’s people are oppressed, China’s government isn’t embattled– it’s stable.

Read the book to learn of the author’s recommendations on the steps America should take to mend fences in the world, and of the strengths, weaknesses, opportunities and threats that have arisen via the natures of the administrations of the aforementioned three presidents.

Close Encounters

“… the network executives he would be contacting were apt to regard him as a headline-seeking troublemaker who could not be trusted to behave with dignity and discretion.”

The above was written about Mike Wallace in the early 1960’s.

The Book of the Week is “Close Encounters, Mike Wallace’s Own Story” by Mike Wallace & Gary Paul Gates, published in 1984.

Born in 1918, Wallace grew up in Brookline, Massachusetts. As have countless others on the idiot box before and since, he made a career of sitting in judgment of others, so of course, it was impossible for him not to be a hypocrite. Like the folks whom he caught behaving dishonestly, he and his employer-broadcasters had their share of legal kerfuffles.

In spring 1957, Wallace hosted a hard-hitting live TV-interview show called “The Mike Wallace Interview” on ABC. Organized-crime figure Mickey Cohen– a guest on the show– slandered the then-chief of police of Los Angeles, saying he was corrupt. The chief sued ABC. As a result, during the show’s airing, the court required that an attorney hold up cue cards indicating when Wallace’s questions were becoming too controversial. Wallace commented, “Like a baby with its bib and a dog with its leash, I was judged to be in need of a legal teleprompter.”

At the end of 1957, as a result of one of Wallace’s countless minor TV-journalism scandals– involving the Kennedy family– the funding source of his show changed to the Ford Foundation. The show got a new name, “Survival and Freedom” and a more educational format. Unsurprisingly, it became boring.

In the autumn of 1962, Wallace decided to give up lucrative jobs: a) hosting entertainment-oriented radio and TV broadcasts that reported on trivial slice-of-life minutiae, b) hosting game shows, and c) acting in cigarette ads; in order to narrowly focus on serious TV journalism.

Wallace spent two months in Vietnam in spring 1967. He and a colleague ended up broadcasting a “60 Minutes” story in 1972 that was radically different from the one everyone else was narrating. Wallace said, “I responded by telling him [the colleague] what I thought of ‘knee-jerk, bleeding heart liberals’ who allow themselves to be taken in by a trendy media blitz.” With an open mind, they followed where the evidence led in connection with over-decorated Lieutenant Colonel Anthony Herbert.

Another aspect of serious TV journalism that Wallace claimed to espouse, in addition to doing the hard work of collecting evidence through best-efforts / due diligence research, was primary sources: “… an eyewitness account– ‘I was there, and here’s what happened’– is more reliable than a version that has gone through two hundred years of rewrites.”

Wallace’s method of doing said research involved a “Candid Camera” type set-up, a prelude to the hidden-camera reality shows of the early 2000’s. But– his major goal was to catch people committing crimes, rather than evoke laughter at their naivety.

The situation had to be a “national disgrace” to air on “60 Minutes.” One segment in early 1976 showed how easy it was for residents of the state of Maryland, to obtain false identity documents in order to commit financial crimes.

Other stories broadcast up until the book’s writing involved Medicaid kickbacks, corruption in health-, building-, and fire-department inspections, tax evasion in cash-oriented businesses, a shady California health resort, a California diploma mill, and an anti-poverty program in Los Angeles. Also, an entrepreneur offered classes to teach business executives how to answer questions asked by the likes of Mike Wallace.

Read the book to learn plenty of additional details on all of the above.