Unions As Investment Advisors

There is anxiety about pension funds in the United States. A 2011 study by the Congressional Research Service pegged the combined liabilities faced by state and local pension funds at over $3 trillion.

One fund, CalPER (California Public Employees’ Retirement System), manages $230 billion. The fund now calculates that it is underfunded by $80 billion. The management arrives at this number by assuming they will make 7.5% on their investments. Joe Nation, a public finance expert at Stanford University, estimated that CalPERS’s long-term pension debt is a $170 billion if CalPERS achieves an average annual investment return of 6.2 percent in years to come. If the return is just 4.5 percent annually – a rate close to what more conservative private pensions often shoot for – the fund’s long-term liability rises to $290 billion. CalPER ranks in the bottom 1% of all pension fund managers. In the bull market of the last year, CalPERS made a 1% return to June 2012.

Just imagine how unions make investment decisions.

This is bad stuff. And the taxpayers will be on the hook to make up the shortfalls.

Here is a simple but interesting graph showing what happens to assets at different returns.

Redheads and Empire

The Ottoman Empire was founded by Osman in 1299 and it was ruled for ten successive generations by capable and often brilliant leaders, culminating in the reign of Suleiman the Magnificent (1494-1566), who led the Empire to its cultural and geographic zenith. He built Topkapi, captured Belgrade and Budapest and completed the conquest of the Balkans. He besieged Vienna, the keystone of central Europe, and except for a quirk in the weather would have taken it.  He was well on his way to solidifying the Ottomans as the rising historic star in Europe.

All that changed when he met the redhead.

He was given a red-haired Russian girl named Ghowrem, who came to be known as Roxelana, as part of his share of a slave-gathering raid into what is now Poland. She must have really been something. He was so taken by her he rejected his hundreds of other harem girls and spent his time with her exclusively. Then he did the unheard of. He married her.

She was soon known as "The Witch." She had a son, Selim II, and she poisoned Suleiman against his favorite, the brilliant and able Mustafa, to the advancement of her son. Mustafa was clearly the man to succeed the throne but she had Suleiman kill him. Suleiman actually watched as it was done. Selim became the new leader of the Empire and its new genetic father. A drunk and a coward, he brought dissolution to the Empire, personally and genetically. He started the tradition of killing every male in reach that looked to be a competent rival. This negative selective pattern reaped incompetent rewards. The behavior continued into the 20th Century when the Ottoman Empire fell apart in World War One, leaving the rest of the world with the aimless Middle East.

There is a great difference between phenotype and genotype.

Confirmational Creativity

 "...the uncomfortable question of whether a book can arrive at the larger truths if the bricks on which it is built won't stand up to time."--Alan Wolfe

This is a kind comment on "The Feminine Mystique" by Betty Freidan, a seminal writing on feminism. The book contains some remarkable ideas that are similar to creationism in their simple and proud ignorance. Just one notion is that gender differences in behavior are culturally created; that is, we learn to be masculine or feminine and, in a neutral environment, both genders would be pretty much the same. One might wonder why farmers teach their bulls to be so unmanageable but high flying thinking does not bother with the mundane. Equality is at stake here. Since legal or spiritual equality is unsatisfactory, sameness must be achieved by other means.

Honest errors are wonderful because they can be changed and improved with education and a good heart. This kind of thinking is unsettling because its conclusions are clearly predetermined and, as such, are immune to correction. The end-point must be reached by any means possible.

And strangely, those that pursue this type of distortion take themselves much more seriously than did, for example, the creators of Piltdown Man or Cardiff Man.

Do Complex Questions Have Simple Answers?

Is it men, by that I mean males? Is it guns? Is it the lack of guns? If it is madness how does one explain McVeigh?

We are an inquiring species and not humble. We believe in our own ability to theorize and make sense out of the unknown. We even try to make sense of the senseless.

I doubt if we will have any insight here, how one decides to plot against strangers, attack children. But we are complex beings with a complex history. Are we a technological people with some outliers in Africa and the Middle East? Are we a primitive people with some outliers in North America and Europe? Are we thinking beings with an emotional overlay, an emotional beast with a thinking overlay? Are we an urban people? Hunter gatherers? Agrarians?

Are we trapped in our freedom now that we have gone beyond God and morality, as Niechiez thought? If that is so, how do we explain the religious bomber?

The ancient Greeks believed the relationship between the Polis and the citizen was not a natural, inherent relationship. They thought it had to be taught. Are we allowing shards to develop in the culture where individuals grow untaught about their responsibility to the polis, the whole? Does our obsession with freedom force us to refuse such teaching?

Or have we slipped the civilizing leash. Have we outrun our moral and civilizing supply lines.

The Benefits of the Government Franchise

The 860 MW Crystal River nuclear plant in Florida, owned by Progress Energy, has not operated since 2009 when an effort to upgrade the plant's steam turbines cracked the reactor's containment building. For some reason, Duke Energy decided to buy Progress Energy, but found that it would cost $3 billion and 8 years to fix it. At that price they could build more than 3,000 megawatts of new, gas-fired electricity generation. Consequently, Duke Energy has decided to close Crystal River permanently.

The costs of closing Crystal River will be huge--$4 billion is one estimate--and include plant decommissioning expense as well as the cost of buying power to replace the electricity not generated by the nuke. Even though the plant has not been producing power for nearly 4 years and never will again, the captive ratepayers in Florida are likely to pay most of the bill.

Those that will suffer are not the businessmen who made the mistake or the shareholders who elected them; it will be the electric users locked in to an energy monopoly.

Cab Thoughts 3/2/13

The Communists have been the dominant influence in the Progressive Party…. If it had not been for the Communists, there would have been no Progressive Party--I.F. Stone

On the eve of the Second World War, the U.S. had the 16th largest army in the world, right behind Portugal.

From Christine Hertzog at GreenBiz.com: "Renewables are going to permeate the grid, and current technologies used in many natural-gas powered generation facilities are not designed for the start/stop operations needed to firm the amounts of intermittent renewable power envisioned in some energy plans. Therefore, we will need to figure out how to modulate load versus demand with other technologies, including storage and consumption management. Berberich also noted the need for a new grid business model, in which the volumetric billing structure must change." Note "consumption management." Just imagine what the bureaucrats are thinking.

The social climate in S.A. might influence the Pistorius killing: Independent researchers have compiled accurate statistics demonstrating convincingly that murders among White farm owners occur at a rate of 97 per 100,000 per year, compared to 31 per 100,000 per year in the entire South African population, making the murder rate of White SA farmers one of the highest murder rates in the world. The South African Government for the last 18 years has adopted a policy of deliberate government abolition and disarmament of rural Commandos run by farmers themselves for their own self-defense. The policy has resulted in a four-fold increase in the murder rate of Afrikaner commercial farmers. This policy is aimed at forced displacement through terror. It advances the goals of the South African Communist Party’s New Democratic Revolution (NPR), which aims at nationalization of all private farmland, mines, and industry in South Africa. Disarmament, coupled with Government removal of security structures to protect the White victim group, follows public dehumanization of the victims, and facilitates their forced displacement and gradual genocide. (This is from a web site named, believe it or not, Genocide Watch.)

Golden Oldie: http://steeleydock.blogspot.com/2011/11/compartments-and-psychological.html

"...I thought about all of your pain and perseverance, your unique family situations, school environments, health issues, homelessness, identity struggles." A religious figure? Obama? Another politician? No, Lady Gaga after her hip surgery.

Knacker (British term):

1. A person who buys worn-out or old livestock and slaughters them to sell the meat or hides.

2. A person who buys discarded structures and dismantles them to sell the materials. (online dictionary)

In the light of the recent horse-meat scandal in Europe this term is being used by economists to describe the mixing of good and bad debt in European bonds.

Silver investors acquired 27.1% of all silver demanded in 2011, compared to only 10.2% in 2006. In just five short years not only did investment demand grow by nearly 170%, but it also grew so quickly that investors were able to displace the rapid decline in photographic, jewelry, and silverware demand. So, in a declining business market, silver prices were maintained by investors. That sounds like the definition of a bubble.

For those worried that regulations will push down coal use and, consequently, rail usage, petroleum is much more expensive to ship by pipe than rail. And slower. It takes a minimum of 8 days for a barrel of oil from Alberta to pipeline its way down to Cushing but is a two day trip by rail. Petroleum will be a good replacement as cargo for rail. Summary? Never bet against Buffett. This also has relevance to the Keystone Pipeline debate.The weight of the crude and relative transit time of pipe vs rail is never discussed. The debate is always environmental, vague and worried, rather than hard and cold economics which weigh against the Keystone.

Iran and its efforts to develop nuclear weapons seems to be an overriding concern in the West. Are they more of a problem than the Pakastanis who have demonstrated their hostility to the West and are armed to the teeth?

The French term, "Jacobin," has become a complex term. The Jacobins are an order of Dominican friars that have practiced in Paris since the 1300s. During the French Revolution, Parisian radicals quartered themselves in the Jacobin convent of Saint Jacques in 1789, and now Jacobin can refer to revolutionaries or extremists of any kind.

The West has spent $2.3 trillion on foreign aid over the last five decades.

Who was..Henry Wallace?

"Lincoln" is not a documentary. Nor is it a McCarthy mixture of fact and fiction. It is most definately not an Oliver Stone entrepreneural docudrama. "Lincoln" is a two hour film taken from two pages of "Team of Rivals." And some of it is not factual.
Steven Spielberg said, that to explore the unknown is "a betrayal of the job of the historian” But it is the job of the filmmaker to use creative “imagination” to recover what is lost to memory. Unavoidably, even at its very best, “this resurrection is a fantasy ... a dream.” As Spielberg neatly put it, “one of the jobs of art is to go to the impossible places that history must avoid.” "I think we still don't understand, sadly, although historians have been telling us this for a generation - that slavery really was a cause of the war. However, Lincoln did start the war to save the Union; he did not start the war originally to free the slaves. But that became a purpose for him when he realized that he could no longer move forward without a true understanding of liberty and union. He ran in 1864 for re-election on the slogan 'Liberty and Union,' and so it becomes the second purpose of the Civil War."

Distinguishing the great efforts of Spielberg and McCarthy from the crass, stupid, sensational and capitalistic efforts of Stone and Moore will be with us forever.

Marilyn Monroe was baptized by Aimée Semple McPherson, analyzed by Anna Freud, befriended by Carl Sandburg and Edith Sitwell, romanced by Jack and Bobby Kennedy, painted by Willem de Kooning, taught acting by Michael Chekhov and Lee Strasberg, photographed by Richard Avedon, Cecil Beaton, and Henri Cartier-Bresson. She managed to work with some of the greatest directors in movie history: twice with John Huston, Billy Wilder, and Howard Hawks, and once each with George Cukor, Joseph Mankiewicz, and Laurence Olivier. Where there's smoke...?

To “Judaize,” to use a word Paul coined, meant to be a prisoner of this world, to believe in the visible rather than the invisible, the superficial appearance rather than the true meaning, law rather than love. More than a theological error, Judaism was an error in perception and cognition, a fundamentally wrong way of being in the world. (A guy has written a book saying that the western world defines itself in opposition to this idea, whether Jews are present or not.)

From a review of the book and TV series by Oliver Stone and Peter Kuznick called Untold History of the United States: "This book is less a work of history than a skewed political document, restating and updating a view of the world that the independent radical Dwight Macdonald once likened to a fog, “caused by the warm winds of the liberal Gulf Stream coming in contact with the Soviet glacier”—but now more than twenty years after the dissolution of the Soviet empire." (From the "New York Review of Books," no less.) Interestingly the authors admit that this is really not "untold" but rather has become “the dominant narrative among university-based historians.” The real problem, they say, is that this revisionism has yet to penetrate the public schools, the mainstream media, and “those parts of America that cling to the notion of American exceptionalism.”

So this biased, slanted and political compilation has already become college gospel but, so far, has not successfully penetrated grade school and high school?


Most of India's population lives in the more than half million small villages that dot the countryside,  closely connected to the other members of their jati. Jati means caste, a kinship group larger than a family, but smaller and less self-sustaining than a tribe. There are thousands of jatis in modern India, tight-knit groups preserving ancient customs and traditions, and they should not be confused with India's ancient class or varna system of warriors, landowners and untouchables.

Kim Jong Un and Rodman tells us a lot about politics, celebrities and diplomacy.

AAAAaaannnnnddddd.....a graph:

Underwriting South Korean Business

From the Washington Post:


"The Energy Department gave $150 million in economic recovery act funds to a battery company, LG Chem Michigan, which has yet to manufacture cells used in any vehicles sold to the public and whose workers passed time watching movies, playing board, card and video games or volunteering for animal shelters and community groups."

Those are the conclusions of a report released Wednesday morning by Energy Department Inspector General Gregory H. Friedman, who said that the grant to a subsidiary of South Korean giant LG “had not been managed effectively.” "

We are really sharing now.