The Ostrich Head

Police sting operation in UK uncovers a multi-generational decades' long crime syndicate involving goldfish

    Following several months of investigation and a sting operation involving a 14 year old boy as a "honey trap", Manchester police nabbed Joan Higgins and her son Mark for distributing "goldfish" to children.

    The Daily Bear has since found out that by "goldfish" they really do mean goldfish.

    Further investigation found that the 14 year old boy had been sent in to the Higgins' pet shop by police to see if they were indeed flagrantly flaunting the 2006 law banning pet sales to children under 16.  What's worse, they have been breaking this 4 year old law in the same shop for the past 28 years!  About time they were brought to justice I say.

    We applaud the Manchester police for clamping down on crime in what, until goldfishgate, had been a relatively safe neighbourhood for both children and goldfish.  This crime has far exceeded the original Danish goldfishgate.

    And clearly, the UK child labour laws that set the minimum working age at 16 need not apply in such an important case. 

    Not being able to afford a decent lawyer, the mother and son syndicate pleaded guilty to the crime -- yup, this ain't no unimportant civil case like drunk driving my friend -- and the judge sentenced the mother-son animal peddling gang to 1,000 pounds each.  They were very lucky there, because the maximum penalty is actually 20,000 pounds which would be more appropriate for, say, selling 20 goldfish to a 14 year old.

 Do you want YOUR goldfish in HIS bowl?

    In addition -- to monitor these criminals' movements and keep the neighbourhood safe -- Joan "Goldfish" Higgins was also placed under curfew and ordered to wear an electronic tag for two months.

    Iain Veitch, head of public protection at Trafford Council, made it clear that such blatant breaches of criminal law simply wouldn't be tolerated on his watch.  Ever:

"Let this conviction send out a message that we will not tolerate those who cause unnecessary suffering to animals. The council... will not hesitate to use our statutory powers."

    I couldn't have put it better myself. 

    Being a whingeing pom, the 66 year old convicted felon complained about the curfew and not being able to baby-sit her great-granddaughter for two months.  But seriously, who really wants convicted felons near children anyway?  Especially when they can't even be trusted with goldfish.

 

Cheers,

 

Peter.

    

Sinopec knew about the Daimler bribes

    In a shocking new development, China Petroleum and Chemical Corp (or Sinopec; NYSE:SNP) admitted that it had known about the Daimler Bribes since 2004 when its own employees took bribes from the corrupt German company.

    Apparently, Daimler has paid TENS of MILLIONS of DOLLARS in bribes over the past ten years in 22 countries.  I'm shocked I tell you.  Shocked!  And in clean, pure, honest China to boot… shame on Daimler.

 

    To change the subject completely, we should congratulate Chinese National Petroleum Corp for its successful foray into Kazakhstan oil assets. 

    The company beat out all other potential buyers in 2003 to secure, for $150 million, a 25% stake in Aktobe MunaiGas.  And unlike Daimler, these honest businessmen didn't pay bribes.  It also reflects good investing, given that Aktobe made $244 million profit that year!

    Oh, and congratulations on the president's son-in-law and former public servant, Timur Kulibayev, for making $165 million on the deal from his initial $49 investment.  One could argue that this is actually a Chinese government organization paying a $165 million bribe on a single deal, as opposed to Daimler's tens of millions over more than ten years.  But that would be splitting hairs, not to mention pissing off a government sitting on $2.4 trillion in foreign currency reserves!

 

This Daily Bear is not for distribution in China.

 

Cheers,

 

Peter.

I was wrong about the bank bailouts

    Ok, before you start saying, "Peter, you were wrong about just about everything," let me explain…

    In 2008 an 2009 I was rather critical of governments around the world bailing out banks because they simply don't create wealth.  Sure, I like to be able to get cash out of the ATM in Bangkok from my account in Australia.  But getting donged $23.16 for a $300 cash withdrawal?  Come on.

    But the point was that banks that lose billions and trillions of dollars simply don't deserve to exist.  Let the bastards die, I say.  But despite my strongly worded message, over 700 banks got bailed out.

    It was only this weekend that I had my epiphany.  Banks NEEDED to be bailed out.

    As I was sitting in the corporate box of a bailed out bank at the Hong Kong Sevens, I realized that if it weren't for the generosity of governments (ok, tax payers, but they didn't really have a choice) I'd actually have to pay for a ticket.  And it would be in the public stands slumming it with tax payers.  Yeeaaach.

    I'd also be missing the free food, wine and beer offered by this generous bailed out bank to clients, of which I'm not one, but that's not quite the point is it?  The point is, if it hadn't been bailed out, I would even have to pay for my own beer and wine!

    I discussed this problem of paying for my own beer when I don’t have a corporate box available with my banker friend and asked him how he manages to survive financially, living in a country with far higher beer prices than Thailand.  His answer: "I can't remember when I last paid for a beer.  I always expense them."  For those of you who haven't been in banking before, that means, "I took a client out, or claimed it did, and put it down as client entertainment.  The bank will reimburse me the full amount, no tax payable."

    Thank god for that.  I mean, you can't have bankers paying for their own beers.  Heck, that would cost up to $30,000 a year, or 10% of his salary. 

    And I'd be missing out on my corporate box at the Sevens.

    Thank god for bailouts!

 

 

Cheers,

 

Peter.

Daimler pays the US Department of Justice $millions to turn a blind eye to all the bribes it's paid to governments to turn a blind eye.

    Bribery isn't what immediately comes to mind when you think about the German engineering industry.  Indeed, Germany is one of the most uptight and anally retentive countries when it comes to bribing its own government officials.

    But just scratch the surface and you'll more than likely be offered a bribe to unscratch the surface and turn away.  At least that was the case just ten years ago.

    Until 1990, it wasn't just accepted business practice and perfectly legal for German companies to bribe foreign officials, governments, and state owned enterprises -- the bribes were actually tax deductable under the German tax code!  Now that's how you turn world-class engineering into world-class business!!

    But changing a few laws and deleting a clause in the tax code doesn't seem to have changed the culture of German companies.  Siemens paid a billion euros in quasi-fines to US and German authorities in 2008, Ferrostaal is under investigation, and now Daimler, the maker of Mercedes Benz, just settled a suit with the US justice department.

    It's not the fact of the matter, though it's the way they went about it.

    The US Department of Justice alleged that Daimler engaged for years in an elaborate bribery scheme in 22 countries.  And certainly, until at least 1990, this would be pretty easy to prove with Daimler's own income tax reports.

    A look at the report shows that Daimler wasn't ever actually charged with paying bribes.  Rather, it was charged with "conspiracy to commit bribery". 

    So, now that Daimler has been charged… all it has to do is either plead guilty or fight it.

    But there's a bit of a risk involved.  If Daimler fights it, it may lose (given that the prosecutors have tax invoices for the bribes) and have to pay the fines anyway, and be banned from bidding on EU government projects because of the strict "debarment" policy on companies that have paid bribes.  And if Daimler pleads guilty, it will be barred from bidding on public projects because… etc.

    So, Daimler is in a huge mess right?  Unless... it can bribe its way out of it.

    Sure enough, the US Justice Department isn't above taking a few kick-backs.  So instead of a lower fine for admitting to being guilty, Daimler agreed to pay out a whopping $185 million for the Justice Department's silence.  Sure enough, the Justice Department agreed to call it a "deferred prosecution agreement" under which the case is deferred until the statute of limitations expires in return for $185 million.  Cash.

    Not that this is really bribery.  I mean, it's not like a government giving special treatment to a company for paying it a bunch of money or anything.  That WOULD be bribery.

 

    Cheers,

    Peter.

So when is inflation going to hit the US?

    Just about every man and his dog has been asking when price inflation will begin in the US, where monetary inflation at the M0 and M1 levels are soaring, and even M2 is still growing.

You'll note that even at the broadest M3 level, money supply didn't begin contracting (have negative growth) until late last year -- when M1 growth accelerated again.

    Last year I correctly predicted that price inflation will hit the US hard as a result of the massive currency creation by the Federal Reserve.  Of course I was correct in my prediction, but may have been slightly off in my timing.  But what's a couple of years in the greater scheme of things?

    I saw that February inflation was running at a healthy annualized 2.1%, thanks mainly to higher oil prices.  Excluding oil and food (which the Fed likes to do to show that there really isn't much inflation) prices rose at an annualized rate of just 1.3%.  This would have been closer to zero if it hadn't been for the 14% rise in the price of used cars.  We can thank the idiotic Cash for Clunkers program for that boondoggle. 

    However, if the economy really has bottomed and is in recovery, one would expect inflation numbers to start climbing.  Especially with Ben Bernanke at the helm.

    BUT.  There are two huge deflationary forces that still haven't worked their way through the system. 

1. Housing

    Since last August, the price of shelter (rent, house purchases, hotels, etc) has been falling in the US each month.  In February it was down 0.4% from a year ago and there's simply no end in sight for this one. 

    Housing sales are still falling, hitting the lowest level in February since records began in 1963.  And I'm not talking about value.  That's the total number of houses being sold in the month -- and back in 1963 the US had a population of 189,241,798, or less than 2/3rds of what there is today.

    And the overhang -- unsold inventory -- has climbed back over 9 months' worth at around 3 million homes. 

 

2. Trade prices

    The basket of consumer goods (ex- food and energy) includes a bunch of imported goods.  Actually, apart from cars, just about everything in the basket is imported because nothing is actually produced in the US anymore except for Google ads and America's largest export item: US dollars.

    But back to consumer goods...

    The world's largest trade sourcing company, Li & Fung, last week announced that for 2009, export prices fell a whopping 9%.  That's for goods sourced in Asia and exported to the US, Europe, and other high income countries.

    This whopping 9% drop resulted from changing the sourcing base from higher cost centres such as southern China to low cost places such as Bangladesh.  In fact, they're sourcing from Bangladesh rose 20% last year.  This is a great time to convert your USD into Bangladeshi taka!

    Li and Fong expanded its margin by just 1.3%, which means the other 7.7% was passed on to importers.

    And while Li and Fong said that they've recently been paying slightly higher prices (Chinese companies have been mandating 11% pay rises to get workers to come back), these higher prices aren't being reflected in US import prices.  Indeed, February non-energy import prices fell 0.3% in February compared to the previous month.

    As a result, it looks like reported CPI on the basket of consumer goods will be pretty stable for the rest of this year.  And with unemployment hovering at around 20% there isn't much chance of the price of services rising much -- except Obamacare of course.

    

   

    So, what's this mean then?

    Basically, our mate Helicopter Ben Bernanke, the Head of the Joint Chiefs of Doller Devaluation, will be able to continue to point to the low inflation numbers and scream, "We gotta fight deflation."

    The fact that deflation is a good thing -- it increases the value of your savings and your salary -- is completely irrelevant because banks don't like it.  And let's face it, banks run the US.

 

    So, over the next year, the Fed will be maintaining low interest rates and will be looking for more ways to create inflation.  Perhaps buy some more toxic debt or another bundle of US treasuries.

    With CPI numbers virtually guaranteed to be low and commercial banks buying treasuries by the trillion, there's really no chance of interest rates rising at either end of the curve.

    Worse, while the US dollar SHOULD be losing value against the US dollar index, have a look at the weightings:

·        Euro (EUR), 57.6%  (falling apart as Greece heads to bankruptcy, Portugal downgraded by Fitch last week from AA to AA-)

·        Japanese yen (JPY), 13.6% (already just an AA rated government -- same as Portugal was -- with debt to GDP ratio approaching 200%, second highest after Zimbabwe)

·        Pound sterling (GBP), 11.9% (in a worse situation than the US)

·        Canadian dollar (CAD), 9.1% (a much better managed currency, but hardly a weighting to speak of)

·        Swedish krona (SEK), 4.2% (a socialist government like the US, except it socializes profits as well as losses, and much better off without those crappy Saabs)

·        Swiss franc (CHF), 3.6% (where my money will be going when the dollar becomes toilet paper).

 

    In all, the only thing that's clear is that the Fed still has PLENTY of room for more monetary inflation without leading to CPI inflation.  Watch those printing presses crank up. 

    You'll know when he gets tired of printing money, because this chart will have normalized:

    That will take another few $trillion of crisp fresh notes.

    Meanwhile I've been loading up on silver and gold.

    Cheers,

    Peter.

 

A quick look at Climate Change, global warming, actual science

...and threats to the Consensus that Climate Change is real and that carbon dioxide is creating global warming

 

Because without Consensus, scientific conclusions could be subject to public scrutiny.

 

While Al Gore isn't quite ready to turn in his Nobel Prize for Global Warming, there has been a recent major setback:

 

              The earth has cooled down.

 

Ok, so it's now "Climate Change" but the data still shows the earth is warming up and is at its hottest since the Jurassic era right?  Um... this chart doesn't seem to agree with that...

This isn't some prank chart from the coal lobby.  This is the ACTUAL chart form the IPCC's 1990 report.  Clearly, this didn't make the headlines.  So they reinterpreted the data to create this one 11 years later:

 

So, the same data shows that the earth is now much warmer than it was when Vikings settled Greenland.  So why aren't crops growing on Greenland now?  Because it's still too bloody cold.

You may wonder how they got this chart.  Here's an example of the data they used from northern Siberia covering the last 4,000 years:

 

There isn't much of a trend other than the fact that the magnitude of temperature swings seems to have declined in the past 100 years -- obviously not good headline material for climate change. 

So, what to do? 

Well, like any good scientist, you'll get data from hundreds of different sources, correlate it, manipulate it, magnify it, selectively include it, and -- if you have half a brain -- cover your tracks.

Here's a good example of data collected from tree rings.  The guys who made the chart for the IPCC's 2001 report clearly had PhDs in bullshit and are probably being scouted for the Department of Labor's Bureau of Statistics:

 
 

Obviously, the suggestion that the earth is cooling even with all that "greenhouse gas" being emitted isn't very useful.  So from mid century the tree ring data was thrown out and actual measured data was used instead.

Funnily enough, the temperatures measured by thermometers actually rose over the past 50 years.  The fact that 92% of these thermometers  in the US and 41% worldwide are located at airports --  where traffic is up over 5,000% and surrounding areas built up -- was conveniently ignored.

Ok... so that's for temperature... and "Six degrees could change the earth."  What claptrap.  Then there's a few other goodies that found their way into the IPCC's report:

·        The glaciers in the Himalayas will melt by 2035,     

·        40% of the Amazon rainforest will be destroyed in the next 30 years,

·        With the oceans rising at 1990 rates, Tuvulu will sink beneath the ocean within 50 years,

·        The frequency of storms over the past 30 years has increased dramatically.

·        The average ocean temperature is rising

Here's a lesson on how to create these dramatic statements from real facts, with deletions in red and insertions in blue:

·        The glaciers in the Himalayas will melt by 20350, according to a hiking magazine

·        40% of the Amazon rainforest will be destroyed in the next 30 years by loggers, according to the World Wildlife Fund.

·        With the oceans rising at 1990 rates, Tuvulu would will sink beneath the ocean within 50 years, but at today's slowing rates it will probably take centuries.

·        The frequency of storms over the past 30 years has decreased, but reporting on them has increased dramatically.

·        A five year study of ocean temperatures has shown that the average ocean temperature is cooling rather than rising

 

Ok.  So that sorts out the headline grabbing stuff that gets the report onto Fox News.  Now, the more important thing is creating a carbon trading industry and selling the idea that CO2 is bad. 

The very basis of any decent carbon trading industry is the idea that CO2 is like uranium or mercury -- it stays resident and dangerous for decades. 

A quick search of the database showed that 35 previous studies had incorrectly found that the maximum time CO2 resides in the atmosphere is less than 15 years, with the average just 8 years.

Obviously, more work was needed.

The IPCC commissioned a new study which broke new ground in terms of the scope, the expense, and the manipulation of data.  Suddenly, CO2 doesn't get recycled every 8 years.  It now takes 100 years.  Holy climate change Batman!  Call up the FDA and get it classified as a Level 3 Health Hazard. 

 
 

WARNING: if you do come into contact with this level 3 health hazard through, say, breathing, here's what you should do (copied and pasted from the New Jersey Department of Health carbon dioxide factsheet:

Eye contact: Immediately flush with large amounts of water for at least 15 minutes, lifting upper and lower lids.  Remove contact lenses, if worn, while flushing.  Seek medical attention.

Skin Contact: Quicly remove contaminated clothing.  Immediately wash contaminated skin with large amounts of water. 

Inhalation: Remove the person from exposure.  Begin rescue breathing (using universal precautions) if breathing has stopped and CPR if heart action has stopped.  Transfer promptly to a medical facility.

Incidentally, carbon monoxide -- which actually IS a hazardous and dangerous gas -- only gets a 2.3 on the health hazard rankings!

 

So, now we have "climate change", shocking facts being caused by climate change, huge amounts of CO2 being emitted, and an expensive study showing that the Level 3 Hazardous Gas remains in the atmosphere for 100 years.  Damn we're doing well.  All we need now is to prove that the increase in atmospheric CO2 is what's actually causing global warming as measured by all those overheated thermometers at airports.  This sounds difficult to prove, but there's actually a pretty simple methodology to apply here:

Call it a greenhouse gas.  And GREENHOUSE GASES CAUSE GLOBAL WARMING.  Repeat it enough times and you'll begin to think that greenhouse gases cause global warming.  Go on.  Give it a try.  It's hugely scientific (this was so successful that the US government did the same thing for 9/11 and Iraq).

Of course, we could try to reduce emissions of the three main greenhouse gases:

·        Nitrogen

·        Oxygen

·        Water vapour

But I suppose we have to start with what's possible.

All that's needed now is for the governments of the world to set up Departments of Climate Change!

Only joking.  No government's THAT ridiculous.  Nor wasteful.

 

Cheers,

 

Peter.

 

 

 

  
  
 

AIG lawsuits: The scammed trying to scam the scammers

    When the financial crisis hit the markets mid last year, a medium-sized ponzi scheme unravelled and Bernie Madoff was sentenced to 150 years prison for his $50 billion scam.

    At the same time a significantly larger ponzi scheme at AIG unravelled as well -- to the tune of around $5 trillion, or 100 Madoffs -- with the result that the CEO got a harsh talking to and a severe reprimand.  Any more, he was told, and his job would be on the line.

    Well damn, if you add up ALL the criminals that have ever been arrested and charged for robbery, the total that they've stolen won't come close to $5 trillion -- that much physical cash doesn't actually exist.

    Still, after ripping off investors, ripping off clients, and conniving with the US government to then rip off tax payers, it's only fair that AIG gets targeted by a few lawyers who are too old to chase ambulances any more.

    So, here's what's happening in the Land of the Free, the Bastion of Liberty, and the Traincrash of Litigation.

    Lawyers representing Robert Horowitz filed case against AIG for not paying up for losses resulting from the Madoff scandal.

    Hmm… Let's read the text of the insurance cover:

This contract for home and contents insurance between Robert Horowitz and American International Group is…

    It's home and contents insurance for Chrissake! 

    And their lawyers reckon it covers losses on the trust fund that they invested with Bernie Madoff!

    Usually, I'd just laugh at cases like this and say, "Only in the USA."  But on this occasion, I really do hope these guys win the law suits.  AIG committed suicide, was resuscitated, killed, and resuscitated again… with the same idiotic management. 

Hopefully (though I'm not all that hopeful), the government will learn that either you let the company go, take the management out the back and shoot them all, or give the whole mess to some other insurance company to run.  Preferably as an insurance company rather than a hedge fund.

    Good luck the scammers -- all of 'em!