From Parabola Magazine
An interview with Karen Armstrong
http://www.parabola.org/magazine/current_excerpt.php4
Parabola: Can you describe the Axial Age and the light it might shed on the difference between thinking and knowing?
Karen Armstrong: You were supposed to get underneath thinking. In India in particular, the concern was that thinking as well as feeling were not what constituted the deepest self of the human being, that it was something other. This didn't mean that they weren't interested in being intelligent and rigorous and analytical, but the goal was to go beyond thought. People in the Axial Age were reaching out for an ultimate realityÑand it could be called Brahman or God or nirvana or the Tao--that couldn't be encapsulated in human thought and language.
P: Why can't it be encapsulated?
KA: Because human beings experience transcendence. We have ideas and experiences that go beyond our conceptual grasp.
P: Does rational thought blind people to the elusive aspects of our experience?
KA: No. We need rational thought. Plato described the two different ways of approaching truth as mythos and logos. Mythos is a more silent, intuitive way of looking at reality and logos is more of a scientific, discursive, logical way, and we need both. We've always needed logistic thought, if only to sharpen an arrow correctly.
P: But we need mythos as well.
KA: Yes. When a child dies, we want a scientific explanation but that's not all we need. We need some kind of different kind of thinking that helps us deal with the turbulence of our inner world at such a time. Myth is an early form of psychology. There are all these stories about gods going down into the underworld to slaughter demons. We all have to learn how to negotiate our unconscious worlds. We have to go into the labyrinth of our own selves and fight our own monsters.
We've always been aware that there are two ways of approaching truth, one through reason and science and the other through an intuitive knowing. The word mythos comes from the Greek word which means to close the mouth or close the eyes. Mystery and mysticism come from the same root. So they are associated with a sense of darkness, with going into a realm where you don't see very clearly, where things are more obscure and will remain obscure.
It is also a realm of silence rather than wordy thought. We approach this kind of knowing in art. At the end of a great symphony or when you've listened to a great poem there's often nothing to say. You're being pushed beyond rational thoughts and distinctions into a silent intuitive space.
P: What is the proper role of thought in religious search?
KA: Well, thinking can only take you so far. Action, behavior, especially compassionate behavior, is more important than thinking. By constantly exercising compassion, the golden rule, you enter a different state of consciousness. This rather than thinking will get you to enlightenment.
P: It's amazing that all the religious movements came to that same conclusion. But can it be that simple?
KA: Yes. The Buddha said compassion can bring you the release of the mind. This is a synonym in the early Buddhist scriptures for the ultimate enlightenment of nirvana. The New Testament is full of the same wisdom. Charity and loving kindness bring you into the presence of God, not thinking things. In the Western Christian world we've come to place too much emphasis on thinking certain beliefs.
What the sages in the Axial Age were discovering was second-order thinking, where you watch the mind thinking. Socrates for example could make you realize that you don't know what you think you know. He demonstrated that thought can do a whole lot of things but that it always finishes with unknowing. Socrates could take a person through a series of questions until he realizes that he hasn't a clue what, say, courage is, even though he's been on the battlefield. Often the people who came to Socrates--as far as we can tell from Plato's accountsÑthought they knew their minds. After ten minutes with Socrates they realized they didn't know anything. In the Axial Age people were testing the limits of what thought can do. It can take us a long way but we keep bumping up against an unknowing. Socrates said that is where you really begin your quest, when you realize you know nothing.
P: You're talking about a very fertile kind of not knowing, not just obliviousness, not just stone ignorance.
KA: Yes, and it's a humbling thing. Instead of being full of ourselves, we begin to realize that the world is deeply mysterious and elusive. We realize that we haven't got the tight grasp on reality that we think.
P: In The Great Transformation and in all your writing you make a distinction between belief and this more fertile state.
KA: We've made a fetish of belief in the Western Christian world, so that we call religious people "believers," as though accepting certain doctrines is the main thing they do. But this is very eccentric.
P: And dangerous, as you've pointed out in your writings, about the way fundamentalism leads to violence.
KA: And dangerous. As the Taoists said way back in the Axial Age, to expect certainty from religion is immature and unrealistic. It was a sign of an undeveloped spirituality, a childish viewpoint. There is no certainty. The Taoists found a great freedom in not being certain about things. They didn't have to pompously declaim facts and doctrines and truths. Keats spoke of "negative capability," when the mind is capable of resting in doubts and uncertainty without any irritable straining after facts and reason. It's quite a trick of the mind to allow yourself to be in that fertile state of unknowing, to just let yourself stay in the darkness.
P: We're in a frightening place in world history. Your predictions about religious war have come true, and our whole environment is in a perilous shape. From your study of the origin of the great religious traditions, what really matters?
KA: The exercise of compassion is what matters in our world. The Dalai Lama says "my religion is kindness." Confucious said "religion is altruism"Ñdethroning yourself from the center of your world and putting another there. Now this requires intelligent thought. You really have to think and practice the golden rule about what the other person really wants rather than what you think he ought to want. When we speak to people we should behave as Buddha or Socrates did. Address them where they really are and not where we think they should be. We have to put ourselves in the place of another, and we have to be able to do this globally.
P: This state of compassion, of engagement, does take thinking.
KA: It does. It takes constant, flexible intelligence. Each case will be different so principles are really not the point. You have to be flexible to respond to each situation that arises, especially in a time where everything is changing so fast.
We have to investigate. We have to find out more about the world. I've had some extraordinary conversations with highly educated Americans who have asked me where the Palestinians have come from, as if they marauded in off the desert. I've had to explain Palestine. There is so much ignorance.
All the great sages have said that we must see things as they really are. Don't bury your head in the sand and say that environmental catastrophe isn't going to happen, for example. In the Axial Age, the prophets of Israel called those positive thinkers who thought that Jerusalem was not going to fall because God was with them "false prophets." You cannot achieve enlightenment that way. It takes information gathering and that does not mean being content with the little scraps of sound bytes that are handed out by politicians or Fox News.
P: Often, in our culture, people treat yoga and meditation like a kind of spa treatment. Our practice of the precepts doesn't keep pace with our practice of various techniques.
KA: Absolutely. I saw a place in Toronto called the yoga lounge, next to a nail parlor. You could do a little yoga or meditation and hop in to have your nails done. This is not what yoga is. In the Axial Age, it was based on a five-point moral program. At the top of the list was ahimsa or nonviolence. This did not only mean that you couldn't kill or maim somebody but that you weren't to say a cross word or make an impatient gesture or swat an insect. Until your guru was satisfied that this was second nature to you, you couldn't begin to sit in the yogic position. What religious knowledge was about was not just thinking but behaving. Living a self-effacing, nonviolent life style was just as important as your mastery of sacred texts.
P: In your book you describe an evolution from external blood sacrifice to internal sacrifice--and in the case of Buddhism, to sacrifice of the concept of self. Yet when I think of living this way, completely open, defenseless, radically honest, it's as if certain primal emotions come alive. The ego doesn't want to be sacrificed, to be killed.
KA: Yes, but when you've mastered this way of life you start to experience incredible joy because you're training yourself to go beyond the frightened ego, who often needs to destroy other people and bolster itself up. If you let that go, a lot of your fear goes down.
We are programmed to defend ourselves, but if we take ourselves out of that mind state, if we start divesting ourselves of ego, we enter a different state of consciousness.
P: What came through your book is the emergence of another way of thinking--with conscience. You cover huge swaths of history in detail. Yet, there's a beautiful base note of compassion. It comes through as the last word, the ultimate religious act.
KA: The point is that there was no collusion. This is the conclusion reached by these spiritual geniuses who worked as hard at finding a cure for the spiritual ills of society as we are working to find a cure for cancer. This is the conclusion they came to. Not because it sounded nice but because they found it worked. The Buddha always said, "Test my teaching against your experience." They found that if you did live in this way you experience an enhancement of being. The Chinese Confucians spoke of human heartedness, of becoming more humane.
P: Axial sages thought the heart and mind should work as one.
KA: Yes.
P: So what happened? How did these wonderful insights of the Axial Age harden into rigid principles and hierarchy?
KA: Well of course not many people actually want to be transformed. They don't want to lose themselves. Most people expect from religion a little moral uplift once a week.
P: We live in the place and the age when religion has become another consumer item or service.
KA: Yes, it is a commodity. People say wouldn't it be great if there was another Buddha. But I'm not sure such a great sage could manage today. The media and the exposure could easily destroy them, encouraging narcissism, for example.
P: How do we find our way out of this trap of spiritual materialism? Can we think our way out?
KA: Basically, I don't think we need any great figure to come along. We know what to do. The golden rule, that's all it is. All the traditions teach the same. Instead of waiting for some lead, just go on, just start practicing. And perhaps start demanding it from our politicians and religious leaders, too.
P: That is a radical suggestion.
KA: But everybody knows about the golden rule or compassion. "I may have faith that moves mountains," says St. Paul. "But if I lack charity it's worth nothing at all." And then there's imagination, which is the ability to think yourself into the position of another.
P: We tend to minimize imagination, as if it has to do with fantasy, distraction.
KA: I think it is the religious faculty. The religious imagination is endlessly trying to envisage the eternally absent God, that which always eludes us. I think it's the moral faculty too, because you have to use it to think yourself into the position of the other.
P: What you're saying is extraordinary because there is such a strong tendency to go on facts, to stick to life as it is, and yet we really can't.
KA: We can't because this is part of the way our minds go. We keep bumping up against mystery. There's great enlightenment to be had by accepting that, and if everybody did it the world would be a much better place.
Friday, August 04, 2006
Thursday, August 03, 2006
The economy's next time down has begun
The bills for the housing bubble and all the debt that's been run up in the last few years are coming due. That means pain for stocks, for homeowners and for consumers with too much debt.
By Bill Fleckenstein
At a speech presented to the precious-metals conference in May 2004, I introduced the concept of "The Next Time Down" -- a bearish process that has begun to unfold, some two years later, in the financial markets and economy. (Obviously, I was early, as usual.) This week, I would like to give readers an update as to where I think we are in the process. First, though, a quick synopsis, which comes directly from my speech:
"The 'use-your-house-as-an-ATM-to-live-beyond-your-means' stimulus is finished, thanks to the recent de-leveraging/crackup in the bond market. The refi game and the bull market in housing it created postponed the consequences of the largest stock market bubble in history. Though the Fed and the rest of the government succeeded in postponing the fallout from the massive misallocation of capital that took place in the mania, they have also succeeded in compounding and exacerbating those consequences. Even more leverage was created in the system, as we attempted to speculate our way to prosperity.
"In short, the excesses from the bubble have not been cleared away, but they will be, along with the recent excesses from the refi bubble … These developments will tend to be self-reinforcing, and especially damaging, if and when housing prices join the decline."
Exhaustion: built into a bubble
The Federal Reserve precipitated, aided, abetted and cheered the largest (by dollar volume) stock mania in the history of the world. That mania exhausted itself in 2000. The exhaustion was not caused by the Fed tightening, contrary to what many folks believe, any more than the 1929 market break (and ensuing Great Depression) was caused by Fed tightening.
Manias end in exhaustion, though there are always coincident events surrounding the end of the move that get blamed for the decline. In both 2000 and 1929, higher interest rates were present, but they were not the cause. The preceding bubble was the cause of both the subsequent exhaustion and the ensuing bust.
Stock-splits out, split-levels
In an attempt to avoid the consequences of the late-1990s stock mania, the Fed managed (after 13 rate cuts and several tax cuts) to precipitate a bubble in housing. That bubble, in my opinion, is a far more dangerous problem than the stock mania was, because of all the leverage involved -- and the damage that will eventually inflict on the financial system, in addition to consumers whose overspending ways will be throttled back as the housing mania unwinds.
The next time down has been slow in developing, due to the fact that the housing bubble lasted longer than I would have expected (bubbles always last longer than anyone expects). And that is mostly due to the incredible abdication of responsibility on the part of all manner of lenders. That the public was gullible enough and willing to take on the debt is somewhat surprising (given that many people were burned by the preceding stock mania), but it wasn't shocking.
As I noted in two previous columns ("Straight talk on what the Fed has wrought" and "It's RIP for the housing boom"), the housing mania peaked a year ago. Mortgage applications have declined since then, transactions have stalled out and inventories of new and existing homes have grown. Last week's release of May existing-home sales showed that inventories climbed to 6.5 months. To put that into perspective:
In the spring of 2003, when the economy was near the lows, existing homes for sale stood at five months' worth of inventory.
In the middle of 2000 (not exactly a weak period), the number was about 4.2 months.
Thus, we are on the verge of a big down-leg in housing prices.
Overview of an aftermath
The next time down will be a time where people will be squeezed financially, because their main asset, i.e., their homes, will be declining in value. Meanwhile, their loan will be rising as a percentage of the value of that house and, in many cases, may ultimately pass 100%.
Jobs will be difficult to come by, as they have been for many, and that's a lingering residue of our prior stock mania and our general lack of competitiveness (productivity protestations to the contrary). It will indeed be a very ugly period, as the economy shrinks and people scramble to figure out how best to service their enormous debt loads. This will play havoc with the dollar, and I believe the "vaporization" of the dollar will be part-and-parcel of the next-time-down scenario.
When unmasked at last
Meanwhile, the Fed will become thoroughly discredited at some point. It will ultimately be seen as the culprit that created the conditions for the bubbles (the cause of the next time down). And, more importantly, the Fed will be seen as impotent to do anything about it. The Fed will cut rates, which really won't be effective, though it will put tremendous pressure on the dollar. Of course, the Fed won't care about dollar weakness until it's a problem, in the form of funding the Treasury market.
So, in the environment that I envision:
Stocks will decline dramatically in value.
The dollar will see serious weakness.
Foreign currencies (as lame as they are) will do well.
Precious metals will do the best, because they are currencies beholden to no central bank and without liabilities.
We are now only starting the process with metals, and metals (as well as foreign currencies) have done well before the point in time where I've felt they would provide debasement insurance. And, when we are in the period that I see us eventually entering, metals will go up, even as stocks go down. Likewise, metal stocks will rise, even as stocks generically decline.
En route to the zero-correlation zone
None of that has been the case thus far, because just the opposite of what I expect to happen has happened. By that I mean: The Fed has managed to maintain its credibility.
Currently, everyone is afraid of the Fed, which causes all asset classes to trade off together. Thus, there is no discrimination among them (creating casual correlations that will turn out to have been ephemeral). As you can see from what I've said, I expect quite a good deal of discrimination prospectively.
By Bill Fleckenstein
At a speech presented to the precious-metals conference in May 2004, I introduced the concept of "The Next Time Down" -- a bearish process that has begun to unfold, some two years later, in the financial markets and economy. (Obviously, I was early, as usual.) This week, I would like to give readers an update as to where I think we are in the process. First, though, a quick synopsis, which comes directly from my speech:
"The 'use-your-house-as-an-ATM-to-live-beyond-your-means' stimulus is finished, thanks to the recent de-leveraging/crackup in the bond market. The refi game and the bull market in housing it created postponed the consequences of the largest stock market bubble in history. Though the Fed and the rest of the government succeeded in postponing the fallout from the massive misallocation of capital that took place in the mania, they have also succeeded in compounding and exacerbating those consequences. Even more leverage was created in the system, as we attempted to speculate our way to prosperity.
"In short, the excesses from the bubble have not been cleared away, but they will be, along with the recent excesses from the refi bubble … These developments will tend to be self-reinforcing, and especially damaging, if and when housing prices join the decline."
Exhaustion: built into a bubble
The Federal Reserve precipitated, aided, abetted and cheered the largest (by dollar volume) stock mania in the history of the world. That mania exhausted itself in 2000. The exhaustion was not caused by the Fed tightening, contrary to what many folks believe, any more than the 1929 market break (and ensuing Great Depression) was caused by Fed tightening.
Manias end in exhaustion, though there are always coincident events surrounding the end of the move that get blamed for the decline. In both 2000 and 1929, higher interest rates were present, but they were not the cause. The preceding bubble was the cause of both the subsequent exhaustion and the ensuing bust.
Stock-splits out, split-levels
In an attempt to avoid the consequences of the late-1990s stock mania, the Fed managed (after 13 rate cuts and several tax cuts) to precipitate a bubble in housing. That bubble, in my opinion, is a far more dangerous problem than the stock mania was, because of all the leverage involved -- and the damage that will eventually inflict on the financial system, in addition to consumers whose overspending ways will be throttled back as the housing mania unwinds.
The next time down has been slow in developing, due to the fact that the housing bubble lasted longer than I would have expected (bubbles always last longer than anyone expects). And that is mostly due to the incredible abdication of responsibility on the part of all manner of lenders. That the public was gullible enough and willing to take on the debt is somewhat surprising (given that many people were burned by the preceding stock mania), but it wasn't shocking.
As I noted in two previous columns ("Straight talk on what the Fed has wrought" and "It's RIP for the housing boom"), the housing mania peaked a year ago. Mortgage applications have declined since then, transactions have stalled out and inventories of new and existing homes have grown. Last week's release of May existing-home sales showed that inventories climbed to 6.5 months. To put that into perspective:
In the spring of 2003, when the economy was near the lows, existing homes for sale stood at five months' worth of inventory.
In the middle of 2000 (not exactly a weak period), the number was about 4.2 months.
Thus, we are on the verge of a big down-leg in housing prices.
Overview of an aftermath
The next time down will be a time where people will be squeezed financially, because their main asset, i.e., their homes, will be declining in value. Meanwhile, their loan will be rising as a percentage of the value of that house and, in many cases, may ultimately pass 100%.
Jobs will be difficult to come by, as they have been for many, and that's a lingering residue of our prior stock mania and our general lack of competitiveness (productivity protestations to the contrary). It will indeed be a very ugly period, as the economy shrinks and people scramble to figure out how best to service their enormous debt loads. This will play havoc with the dollar, and I believe the "vaporization" of the dollar will be part-and-parcel of the next-time-down scenario.
When unmasked at last
Meanwhile, the Fed will become thoroughly discredited at some point. It will ultimately be seen as the culprit that created the conditions for the bubbles (the cause of the next time down). And, more importantly, the Fed will be seen as impotent to do anything about it. The Fed will cut rates, which really won't be effective, though it will put tremendous pressure on the dollar. Of course, the Fed won't care about dollar weakness until it's a problem, in the form of funding the Treasury market.
So, in the environment that I envision:
Stocks will decline dramatically in value.
The dollar will see serious weakness.
Foreign currencies (as lame as they are) will do well.
Precious metals will do the best, because they are currencies beholden to no central bank and without liabilities.
We are now only starting the process with metals, and metals (as well as foreign currencies) have done well before the point in time where I've felt they would provide debasement insurance. And, when we are in the period that I see us eventually entering, metals will go up, even as stocks go down. Likewise, metal stocks will rise, even as stocks generically decline.
En route to the zero-correlation zone
None of that has been the case thus far, because just the opposite of what I expect to happen has happened. By that I mean: The Fed has managed to maintain its credibility.
Currently, everyone is afraid of the Fed, which causes all asset classes to trade off together. Thus, there is no discrimination among them (creating casual correlations that will turn out to have been ephemeral). As you can see from what I've said, I expect quite a good deal of discrimination prospectively.
Tuesday, July 25, 2006
The theocrats thrive
Cynthia Tucker - Universal Press Syndicate
07.24.06 - Religious extremists have powerful political allies Last week, Ralph Reed, once the golden boy of hard-core religious conservatives, was defeated in Georgia's Republican primary for lieutenant governor, his first attempt at elective office. Because he rose to prominence as the cherubic face of the Christian Coalition, his political remains have been autopsied by pundits nationwide, some of whom are speculating that the cause of death was the more general demise of America's theocrats.
But they're wrong. Reed lost because his hypocrisy on the issue of gambling became too glaring for his ultraconservative constituents to ignore. While he was recruited by disgraced lobbyist Jack Abramoff to work against gambling initiatives in Alabama, the project was largely funded by the Mississippi Band of Choctaws, which wanted to protect its casinos from competition.
His defeat, however, by no means suggests a loss of power for a small group of vocal activists who wish to force all Americans to live according to their benighted religious views. They still have an extraordinary ally in the Oval Office. A day after Reed's loss, President Bush vetoed a bill supporting federal funding for a broadened program of embryonic stem cell research. The president used his first veto in six years in office to strike down a proposal supported by nearly 70 percent of the country, including many conservatives who oppose abortion.
The president's veto means that federal funding will not be available to support research on embryos left over from fertilization procedures, even if parents are willing to donate them for that purpose. Hundreds of thousands of such embryos are stored in fertility clinics around the country; the vast majority of them will eventually be discarded as medical waste. (Apparently, the discarding of those embryos doesn't bother the president nearly as much as using them to find cures for Parkinson's and Alzheimer's would.)
The theocrats thrive. Though they represent only a fraction of the country's voters -- indeed, a minority of GOP voters -- they are a powerful force in GOP politics, especially in the Deep South. Desperate for their support in his anticipated bid for the presidency, Sen. John McCain, R-Ariz., has kissed the ring -- metaphorically -- of an icon among the theocrats, Jerry Falwell; in May, McCain gave a speech at Falwell's Liberty University. Six years ago, McCain had rightly pegged Falwell and Pat Robertson as "agents of intolerance."
Though they have not yet succeeded in remaking the federal courts in their own image (that could still happen), this small group of extremists has enjoyed significant victories over the last six years. Even as U.S. diplomats and public officials battle the notion that this country is at war with Islam, right-wing fundamentalists in uniform intend to turn the armed forces into a haven for proselytizing. Last year, congressional hearings were held after students at the Air Force Academy complained about overt religious discrimination; the Air Force issued regulations emphasizing "tolerance" and religious freedom.
But Focus on the Family, headed by Christianist James Dobson, quietly lobbied the Air Force to weaken its regulations. Officers are once again free to pressure cadets about their religious beliefs.
The theocrats have also intimidated scientists, stalled over-the-counter sales of an emergency contraceptive called Plan B, and used their political connections to get federal funds for their so-called pregnancy resource centers, where they wrongly inform pregnant women that abortions are linked to breast cancer and infertility. Several family planning experts say that same group of rigid ultraconservatives is now working to limit access to contraceptives.
They "are increasingly trying to portray contraceptives as ineffective and trying to redefine some of the most popular and effective methods as abortion -- such as birth control pills and emergency contraception," said Cynthia Dailard, senior public policy analyst for the Alan Guttmacher Institute, which advocates family planning.
If these Christianists were genuinely interested in curbing abortions, they'd support the use of contraceptives. But their goal is to turn back the clock, to bring back the days when women had no control over reproduction. Like right-wing Muslims, they rage against modernity itself.
Don't be fooled by Reed's defeat. The extremists are still winning.
(c) 2006, The Atlanta Journal-Constitution
URL: http://www.workingforchange.com/article.cfm?itemid=21132
07.24.06 - Religious extremists have powerful political allies Last week, Ralph Reed, once the golden boy of hard-core religious conservatives, was defeated in Georgia's Republican primary for lieutenant governor, his first attempt at elective office. Because he rose to prominence as the cherubic face of the Christian Coalition, his political remains have been autopsied by pundits nationwide, some of whom are speculating that the cause of death was the more general demise of America's theocrats.
But they're wrong. Reed lost because his hypocrisy on the issue of gambling became too glaring for his ultraconservative constituents to ignore. While he was recruited by disgraced lobbyist Jack Abramoff to work against gambling initiatives in Alabama, the project was largely funded by the Mississippi Band of Choctaws, which wanted to protect its casinos from competition.
His defeat, however, by no means suggests a loss of power for a small group of vocal activists who wish to force all Americans to live according to their benighted religious views. They still have an extraordinary ally in the Oval Office. A day after Reed's loss, President Bush vetoed a bill supporting federal funding for a broadened program of embryonic stem cell research. The president used his first veto in six years in office to strike down a proposal supported by nearly 70 percent of the country, including many conservatives who oppose abortion.
The president's veto means that federal funding will not be available to support research on embryos left over from fertilization procedures, even if parents are willing to donate them for that purpose. Hundreds of thousands of such embryos are stored in fertility clinics around the country; the vast majority of them will eventually be discarded as medical waste. (Apparently, the discarding of those embryos doesn't bother the president nearly as much as using them to find cures for Parkinson's and Alzheimer's would.)
The theocrats thrive. Though they represent only a fraction of the country's voters -- indeed, a minority of GOP voters -- they are a powerful force in GOP politics, especially in the Deep South. Desperate for their support in his anticipated bid for the presidency, Sen. John McCain, R-Ariz., has kissed the ring -- metaphorically -- of an icon among the theocrats, Jerry Falwell; in May, McCain gave a speech at Falwell's Liberty University. Six years ago, McCain had rightly pegged Falwell and Pat Robertson as "agents of intolerance."
Though they have not yet succeeded in remaking the federal courts in their own image (that could still happen), this small group of extremists has enjoyed significant victories over the last six years. Even as U.S. diplomats and public officials battle the notion that this country is at war with Islam, right-wing fundamentalists in uniform intend to turn the armed forces into a haven for proselytizing. Last year, congressional hearings were held after students at the Air Force Academy complained about overt religious discrimination; the Air Force issued regulations emphasizing "tolerance" and religious freedom.
But Focus on the Family, headed by Christianist James Dobson, quietly lobbied the Air Force to weaken its regulations. Officers are once again free to pressure cadets about their religious beliefs.
The theocrats have also intimidated scientists, stalled over-the-counter sales of an emergency contraceptive called Plan B, and used their political connections to get federal funds for their so-called pregnancy resource centers, where they wrongly inform pregnant women that abortions are linked to breast cancer and infertility. Several family planning experts say that same group of rigid ultraconservatives is now working to limit access to contraceptives.
They "are increasingly trying to portray contraceptives as ineffective and trying to redefine some of the most popular and effective methods as abortion -- such as birth control pills and emergency contraception," said Cynthia Dailard, senior public policy analyst for the Alan Guttmacher Institute, which advocates family planning.
If these Christianists were genuinely interested in curbing abortions, they'd support the use of contraceptives. But their goal is to turn back the clock, to bring back the days when women had no control over reproduction. Like right-wing Muslims, they rage against modernity itself.
Don't be fooled by Reed's defeat. The extremists are still winning.
(c) 2006, The Atlanta Journal-Constitution
URL: http://www.workingforchange.com/article.cfm?itemid=21132
Enough of the D.C. Dems
Enough of the D.C. Dems
By Molly Ivins
March 2006 Issue
Mah fellow progressives, now is the time for all good men and women to come to the aid of the party. I don’t know about you, but I have had it with the D.C. Democrats, had it with the DLC Democrats, had it with every calculating, equivocating, triangulating, straddling, hair-splitting son of a bitch up there, and that includes Hillary Rodham Clinton.
I will not be supporting Senator Clinton because: a) she has no clear stand on the war and b) Terri Schiavo and flag-burning are not issues where you reach out to the other side and try to split the difference. You want to talk about lowering abortion rates through cooperation on sex education and contraception, fine, but don’t jack with stuff that is pure rightwing firewater.
I can’t see a damn soul in D.C. except Russ Feingold who is even worth considering for President. The rest of them seem to me so poisonously in hock to this system of legalized bribery they can’t even see straight.
Look at their reaction to this Abramoff scandal. They’re talking about “a lobby reform package.” We don’t need a lobby reform package, you dimwits, we need full public financing of campaigns, and every single one of you who spends half your time whoring after special interest contributions knows it. The Abramoff scandal is a once in a lifetime gift—a perfect lesson on what’s wrong with the system being laid out for people to see. Run with it, don’t mess around with little patches, and fix the system.
As usual, the Democrats have forty good issues on their side and want to run on thirty-nine of them. Here are three they should stick to:
1) Iraq is making terrorism worse; it’s a breeding ground. We need to extricate ourselves as soon as possible. We are not helping the Iraqis by staying.
2) Full public financing of campaigns so as to drive the moneylenders from the halls of Washington.
3) Single-payer health insurance.
Every Democrat I talk to is appalled at the sheer gutlessness and spinelessness of the Democratic performance. The party is still cringing at the thought of being called, ooh-ooh, “unpatriotic” by a bunch of rightwingers.
Take “unpatriotic” and shove it. How dare they do this to our country? “Unpatriotic”? These people have ruined the American military! Not to mention the economy, the middle class, and our reputation in the world. Everything they touch turns to dirt, including Medicare prescription drugs and hurricane relief.
This is not a time for a candidate who will offend no one; it is time for a candidate who takes clear stands and kicks ass.
Who are these idiots talking about Warner of Virginia? Being anodyne is not sufficient qualification for being President. And if there’s nobody in Washington and we can’t find a Democratic governor, let’s run Bill Moyers, or Oprah, or some university president with ethics and charisma.
What happens now is not up to the has-beens in Washington who run this party. It is up to us. So let’s get off our butts and start building a progressive movement that can block the nomination of Hillary Clinton or any other candidate who supposedly has “all the money sewed up.”
I am tired of having the party nomination decided before the first primary vote is cast, tired of having the party beholden to the same old Establishment money.
We can raise our own money on the Internet, and we know it. Howard Dean raised $42 million, largely on the web, with a late start when he was running for President, and that ain’t chicken feed. If we double it, it gives us the lock on the nomination. So let’s go find a good candidate early and organize the shit out of our side.
Molly Ivins writes in this space every month. Her latest book is “Who Let the Dogs In?”
By Molly Ivins
March 2006 Issue
Mah fellow progressives, now is the time for all good men and women to come to the aid of the party. I don’t know about you, but I have had it with the D.C. Democrats, had it with the DLC Democrats, had it with every calculating, equivocating, triangulating, straddling, hair-splitting son of a bitch up there, and that includes Hillary Rodham Clinton.
I will not be supporting Senator Clinton because: a) she has no clear stand on the war and b) Terri Schiavo and flag-burning are not issues where you reach out to the other side and try to split the difference. You want to talk about lowering abortion rates through cooperation on sex education and contraception, fine, but don’t jack with stuff that is pure rightwing firewater.
I can’t see a damn soul in D.C. except Russ Feingold who is even worth considering for President. The rest of them seem to me so poisonously in hock to this system of legalized bribery they can’t even see straight.
Look at their reaction to this Abramoff scandal. They’re talking about “a lobby reform package.” We don’t need a lobby reform package, you dimwits, we need full public financing of campaigns, and every single one of you who spends half your time whoring after special interest contributions knows it. The Abramoff scandal is a once in a lifetime gift—a perfect lesson on what’s wrong with the system being laid out for people to see. Run with it, don’t mess around with little patches, and fix the system.
As usual, the Democrats have forty good issues on their side and want to run on thirty-nine of them. Here are three they should stick to:
1) Iraq is making terrorism worse; it’s a breeding ground. We need to extricate ourselves as soon as possible. We are not helping the Iraqis by staying.
2) Full public financing of campaigns so as to drive the moneylenders from the halls of Washington.
3) Single-payer health insurance.
Every Democrat I talk to is appalled at the sheer gutlessness and spinelessness of the Democratic performance. The party is still cringing at the thought of being called, ooh-ooh, “unpatriotic” by a bunch of rightwingers.
Take “unpatriotic” and shove it. How dare they do this to our country? “Unpatriotic”? These people have ruined the American military! Not to mention the economy, the middle class, and our reputation in the world. Everything they touch turns to dirt, including Medicare prescription drugs and hurricane relief.
This is not a time for a candidate who will offend no one; it is time for a candidate who takes clear stands and kicks ass.
Who are these idiots talking about Warner of Virginia? Being anodyne is not sufficient qualification for being President. And if there’s nobody in Washington and we can’t find a Democratic governor, let’s run Bill Moyers, or Oprah, or some university president with ethics and charisma.
What happens now is not up to the has-beens in Washington who run this party. It is up to us. So let’s get off our butts and start building a progressive movement that can block the nomination of Hillary Clinton or any other candidate who supposedly has “all the money sewed up.”
I am tired of having the party nomination decided before the first primary vote is cast, tired of having the party beholden to the same old Establishment money.
We can raise our own money on the Internet, and we know it. Howard Dean raised $42 million, largely on the web, with a late start when he was running for President, and that ain’t chicken feed. If we double it, it gives us the lock on the nomination. So let’s go find a good candidate early and organize the shit out of our side.
Molly Ivins writes in this space every month. Her latest book is “Who Let the Dogs In?”
Wednesday, July 19, 2006
Religion and Philosophies That Kill
Humans continue to prove be the most damaging creation to our world.
We have the capacity to create ideas that justify anything, from cannibalizing each other, to invent with our talent systems of mass destruction that can kill hundreds of thousands in one blip as the atomic bombs of Hiroshima and Nagasaki.
The destruction experience continues with innovative procedures. The quality of the killing and the quantity of the killing now has taken philosophical and religious trends. Who kill for what and how is done, do we mass murder or use sophisticated guns or laser guided missiles or fission bomb or we dump depleted uranium in hundreds of thousand shells as done in Iraq.
We continue to walk away from one of our most untapped talents: human to human dialogue, mutual education and respect for our social agreements.
The latest killings are taking the name of religion to a point of questioning those lauded gods.
If your god justifies your killing shouldn’t you change gods, otherwise there is no much you can add to our race, our planet, our development, even your religion. If your religion puts a higher laud in you as dead than puts laud in you alive, well, please do it alone and do not leave a mess behind.
Religious leaders, town leaders all the way up to national leaders are becoming co-conspirators to killings by doing no much or by doing too much in promoting or avoiding their own tenets or respect for human live and using all means to save all lives.
When religion and political leaders promote killing of each other for some well rhetorical argument, we need a serious new way to grow in our learning as species and clearly top to bottom new leaders.
We have the capacity to create ideas that justify anything, from cannibalizing each other, to invent with our talent systems of mass destruction that can kill hundreds of thousands in one blip as the atomic bombs of Hiroshima and Nagasaki.
The destruction experience continues with innovative procedures. The quality of the killing and the quantity of the killing now has taken philosophical and religious trends. Who kill for what and how is done, do we mass murder or use sophisticated guns or laser guided missiles or fission bomb or we dump depleted uranium in hundreds of thousand shells as done in Iraq.
We continue to walk away from one of our most untapped talents: human to human dialogue, mutual education and respect for our social agreements.
The latest killings are taking the name of religion to a point of questioning those lauded gods.
If your god justifies your killing shouldn’t you change gods, otherwise there is no much you can add to our race, our planet, our development, even your religion. If your religion puts a higher laud in you as dead than puts laud in you alive, well, please do it alone and do not leave a mess behind.
Religious leaders, town leaders all the way up to national leaders are becoming co-conspirators to killings by doing no much or by doing too much in promoting or avoiding their own tenets or respect for human live and using all means to save all lives.
When religion and political leaders promote killing of each other for some well rhetorical argument, we need a serious new way to grow in our learning as species and clearly top to bottom new leaders.
Sunday, July 16, 2006
BUILDING FOUNDATIONS FOR REAL DEMOCRACY AND FREEDOM
BUILDING FOUNDATIONS FOR REAL DEMOCRACY AND FREEDOM
Riane Eisler
www.partnershipway.org
Millions of us are working for a more equitable, caring, peaceful, truly democratic and free society. Today, these goals are seriously threatened, both in the United States and worldwide. We are at a historic juncture when we are challenged to go deeper. Now is the time to reassess and expand the progressive agenda, starting with core principles and methods. It is a time to assess what has been missing and formulate long-range strategies.
A central lesson from history is that regressive leaders who rely on fear and force recognize the foundational importance of family and other intimate relations in the establishment of social values and political and economic structures. The reason for their intensive focus on these relations is that the construction of family and other intimate relations directly influences what people consider normal and moral in all relations – public as well as private. Family relations affect how people think and act. They affect how people vote and govern, and whether the policies they support are just and genuinely democratic, or violent and oppressive.
Yet if we look at progressive politics and media, progressives have basically ceded values for family and other intimate relations to the regressive fundamentalist bloc. If you pick up The American Prospect, The Nation, and other progressive journals, other than an occasional mention of hot-button issues such as abortion and homosexual marriage, you don’t read about developing and mainstreaming progressive family policies and practices. Relinquishing the definition of “family values” to the regresssives has been, and will continue to be, disastrous.
Regressives have successfully pushed our culture back by insisting on a male dominated, hierarchical structure of family. U.S. fundamentalists stress the “headship” of the father in the family, with women and children subordinate to the will of the father. Whether Khomeini in Iran, Hitler in Germany, the Taliban in Afghanistan, or some fundamentalists in the United States, dictatorial leaders always give top priority to “getting women back into their traditional place” in a “traditional family” – a code phrase for a punitive, authoritarian family where women are subordinate and economically dependent, and children learn their parents’ (usually father’s) will is law. These early lessons then translate into dominator political and social structures, because people often vote in ways that unconsciously replicate their early family experiences.
Slogans like "traditional values" have often marketed a family where fathers make the rules and harshly punish disobedience – the kind of family that prepares people to defer to "strong" leaders who brook no dissent and use force to impose their will. These slogans have masked a family "morality" suited to undemocratic, rigidly male-dominated, chronically violent cultures.
We can, and must, offer a progressive partnership family agenda to counter the regressive “family values” agenda. We are forming a coalition of progressives from all sectors, religious and secular, to articulate the family values and policies appropriate for truly democratic families and societies. Our purpose is to develop clear goals, a think tank to articulate family as a progressive value, guidelines for public policies, and social marketing strategies that can reach people’s hearts and minds.
Principles
Historically, the political and economic top of the domination pyramid has continued to rebuild itself because we haven’t changed its foundations. A pro-family, pro-child, partnership political agenda is essential for long-term structural change. People first learn respect for human rights or to accept human rights violations as normal in the foundational human relations: the relations between the female and male halves of humanity and between them and their daughters and sons.
A progressive family pro-family agenda is not about left vs. right or liberal vs. conservative. It’s about constructing and strengthening the psychological and cultural foundations for a less violent, more equitable world. It’s about how we organize our society for the benefit of all.
A progressive family agenda is informed by the principles at the core of both religion and humanism: principles that support caring and equity. It is not about discarding religion. It’s about building on the partnership elements of religion that support compassion, justice, and nonviolence, while rejecting those that justify domination, violence, and injustice – starting with our primary relations. This is no simple undertaking because the “traditional” family values that are being promoted by regressives have been so effectively marketed, beguiling people with “Christian” agendas that actually violate Christian teachings.
The task at hand for progressives is to invite responsible policy makers, leaders, the media, and the general public to look with fresh eyes at the meaning of the term “family,” “ values, ” and “morality,” to redefine these terms in ways based on partnership, mutual respect, and caring rather than domination, top-down control, and coercion.
Analysis
Family relations are microcosms of social relations. In a top-down, authoritarian family that relies on fear and force, children often learn to be denial about their parents’ behavior since they depend on them for survival: for food, shelter, and protection from strangers. This makes it easy to later be in denial about "strong" leaders who abuse power, and to identify with them instead – particularly in times of actual or perceived external danger such as ours.
Family relations based on domination and submission also teach important lessons about violence. When children experience violence, or observe violence against their mothers, they learn it’s acceptable to use force to impose one’s will on others.
Not everyone from families based on domination and submission fits these patterns – but many people do if they don’t gain access to more egalitarian relationship models. Studies show, for example, that men from authoritarian, abusive families tend to vote for “strong-man” leaders. Also, they tend to support punitive rather than caring social policies.
To build cultures of justice, safety, and democracy, we need families where women and men are equal partners, where children learn to act responsibly because adverse consequences follow from irresponsible behavior, where they learn to help and persuade rather than hurt and coerce, where they’re encouraged to think for themselves.
Toward a Progressive Family Values Agenda
We are here offering some initial guidelines for a progressive agenda on family relations based on a common principle: the transformation from domination to partnership as the model for personal, social, economic, and political relations.
This agenda has three goals:
To help develop and disseminate progressive values that promote intimate relations based on partnership – mutual respect, accountability, and caring.
To show how the current definition of “traditional family values” is based on a selective reading of scriptures that supports a system of top-down rankings of domination ultimately backed up by fear and force.
To show why a more just, democratic, and peaceful world requires a reframing of ethics for family relations.
A progressive pro-family, pro-child, pro-democracy political agenda will:
Focus on the rights of children to have a fair opportunity to grow-up healthy and thrive, including the right to shelter, nutrition and health care, freedom from violence, and a clean environment.
Promote equality between women and men.
Support all families, whether children are parented by a man and woman, a single parent, or two parents of the same sex.
Promote an economic vision where the drive for productivity does not overshadow the value of having parents spend time with their children.
Support parents with policies such as a living wage, paid parental leave, high quality childcare, and preschool education for all children.
Protect reproductive freedom and show that the only way to prevent abortions is to provide family planning and sex education, as do other nations with much lower abortion rates.
Provide education for healthy, nonviolent family relations and parenting for both boys and girls, as offered by Nordic nations, which have much lower crime rates, prosperous economies, longer life spans, and regularly rate at the top of the U.N. Human Development Reports.
Promote real educational reform through small classrooms and small schools where every child has individual support and attention.
Take a stand against corporate practices that harm children – from toxic dumps and other forms of environmental pollution to marketing unhealthy food and drinks – and recognize that we must address global warming and other environmental problems that threaten our children’s future.
Make ratification of United Nations conventions to protect women and children a top priority.
Take a strong stand against intimate violence – the violence against women and children in families and other intimate relations that is a mainspring for learning to use violence to impose one’s will on others.
Family Violence as a Key Moral Issue
Rather than focusing on current notions of what form constitutes a moral family, a progressive political platform should focus on what kinds of family behavior is moral and try to effect change in those traditions that are unjust and violent.
We must focus attention on the global pandemic of violence against women and children that a U.N. report called the most ubiquitous violation of human rights worldwide (UNICEF study, 1997).
We must educate policy makers about the link between intimate violence and national and international violence.
As a long-term strategy for changing reliance on force to “solve” problems worldwide foreign aid should focus on changing traditions of family violence.
Consider these statistics: Each year 40 million children under the age of 15 are victims of family abuse or neglect serious enough to require medical attention (U.N. We the Children: Meeting the Promises of the World Summit for Children 2001). A woman is battered, usually by her intimate partner, every 15 seconds in the United States. (U. N. Study on the Status of Women, 2000). In China and India, millions of baby girls are killed or abandoned by their parents. “Honor” killings by other family members result in the death of thousands of women in Middle Eastern and South Asian countries (Ending Violence Against Women: Human Rights in Action, 2003). 20 percent of women and 5-10 percent of men have suffered sexual abuse as children (World Report on Violence and Health, 2002, WHO). Each year, an estimated 2 million girls undergo some form of female genital mutilation (U.N. The World’s Women 2000: Trends and Statistics). Child abuse alone costs the United States economy $94 billion a year (Violence Creates Huge Economic Cost for Countries, WHO Report, 2004).
Intimate violence and national and international violence are as tightly bound together as the fingers of a clenched fist. If we’re serious about a more peaceful world, vigorously addressing intimate violence must be a top priority for both secular and religious leaders. This is the purpose of the Spiritual Alliance to Stop Intimate Violence (SAIV) co-founded by human rights activist and author Riane Eisler and Nobel Peace Laureate Betty Williams (For more information, please see www.saiv.net ).
A Call to Action
How can we expect people raised in authoritarian families where men are ranked over women, and children learn that any questioning of authority will be severely punished, to vote for leaders whose policies promote relations of mutual respect, responsibility, democracy, and nonviolence? How can we build societies respecting human rights when millions of people grow up in families that routinely violate human rights?
Let’s make ending family violence and other forms of intimate violence a top religious and secular issue that speaks to the heart of all people who care about children and families.
Let’s bring together both secular and religious groups already working for policies that support families where mutual respect and accountability, rather than inequality and rote conformity to orders for fear of harsh punishment, are modeled.
Let’s work with religious groups towards supporting real spirituality: compassion, empathy, and non-violence.
Let’s reach out to the people who are finding community and spirituality in religious institutions that preach fundamentalist ideas by helping them focus on these basic moral issues – and let’s show that this is essential to build foundations for the less violent, more equitable, safer future everyone wants.
Forming a coalition of progressive politicians, organizations, foundations, and businesses to support a long-range family values agenda to counter regression and move our culture and political system forward is the essential next step for progressives. We invite leaders from all sectors – secular and religious – to flesh out this agenda. The next step will be to enlist the best social marketing, word-smithing, and PR talent to implement a strategy that reaches peoples’ hearts and minds.
This is what people can – and will – respond to if we are clear and passionate in our message with standards and stories that inspire and transform beliefs, behaviors, and policies. Then we can resume the movement toward realizing the American dream of democracy, freedom, and justice for all.
****
Riane Eisler is best known for her international bestseller The Chalice and The Blade, as well as the award-winning Sacred Pleasure, Tomorrow’s Children, and The Power of Partnership. She is co-founder of the Spiritual Alliance to Stop Intimate Violence (www.saiv.net ), and president of the Center for Partnership Studies www.partnershipway.org .
Top
Friday, July 14, 2006
Lessons from the Un-Gore of Mexico
Gregg Palast does not dissapoint with its articles. This article is worth its content in pure gold.
A lesson on democracy from Mexico might be a little too much to swallow but it is real and true.
Lessons from the Un-Gore of MexicoJuly 14, 2006
By Greg Palast
[Watch "Florida con Salsa," Palast's 15-minute investigative report from Mexico City for Democracy Now!]
The Exit polls said he won, but the "official" tally took his victory away. His supporters found they were scrubbed off voter rolls. Violence and intimidation kept even more of his voters away from the polls. Hundreds of thousands of ballots supposedly showed no choice for president -- like ballots with hanging chads.
And the officials in charge of this suspect election refused to re-count those votes in public. Everyone knew full well a fair count would certainly change the outcome.
You've heard this story before: Gore 2000. Kerry 2004.
But Lopez Obrador 2006 is made out of very different stuff than the scarecrow candidates who, oddly, call themselves "Democrats."
For six years now, I've had this crazy fantasy in my head. In it, an election is stolen and the guy who's declared the loser stands up in front of the White House and says three magic words: "Count the votes."
This past Saturday, my dream came true. Unfortunately, it was in Spanish -- but I'll take what I can get. There was Andreas Manuel Lopez Obrador, presidential challenger, standing in the "Zocalo" -- the square in front of Mexico's White House, telling the ruling clique inside, "Count the votes!"
Most important, his simple demand was echoed by half a million pissed-off, activated voters chanting with him, "Vota por vota!" -- vote by vote.
And you know what? I think they are going to have to listen. I suspect that the rulers of Mexico, a vicious, puffed-up, arrogant elite, may well have to count those votes. But, for that to happen, someone had to ask them to do it -- in no uncertain terms.
Traveling the USA, I'm asked again and again 'Why don't Democrats stand up when their elections are stolen?'
The answer: for the same reason jellyfish don't stand up... they're invertebrates.
I'm beginning to find that answer a bit too glib (though darn funny). Because it's not about electoral cojones; it's about a devotion to democracy deep in the bone. Yet weirdly, candidates that call themselves "Democrats" seem kind of, well, indifferent to democracy.
Why? Elections are the radical tool of the working class -- the great leveler of the powerless against the too-powerful. But the candidates themselves, both Republican and Democrat, tend to come from the privileged and pampered class. Votes are just the surfboards on which their ambitions ride.
Right now in Mexico's capitol, nearly a million ballots sit in tied bundles uncounted. That's four times the "official" margin of victory of the ruling party over Lopez Obrador. Supposedly, they're "votos nulos" -- null votes, unreadable. But, not surprisingly, when a few packets were opened, the majority of these supposedly unreadable votes were Lopez Obrador's.
If you think that's a Mexican game, think again. Because that's exactly what happened in Florida and Ohio.
In Florida, 179,855 ballots supposedly showed no vote for President. A closer look by the US Civil Rights Commission statisticians showed that 54% of those Florida "votos nulos" were cast by African-Americans. Did Black folk forget to vote for President, couldn't make up their minds or, as one TV network implied, were too dumb to figure out the ballot? Not at all. Machines can't count some ballots. But people can. For example, several voters wrote in, "Al Gore," which the machines rejected as his name was already printed on the ballot. The write-in could fool a machine but a human has no problem figuring out that voter's intent.
The National Opinion Research Center at the University of Chicago reviewed all 179,855 "uncountable" votes and found the majority attempted to choose Gore. And they would have been counted -- but Florida's Secretary of State, Katherine Harris, ordered a halt.
So Bush was elected not by counting the votes but by preventing their count. And he was reelected the same way in 2004 when a quarter million votes were nullified in Ohio.
But why fixate on Florida and Ohio? Here's a nasty little fact about voting in the Land of the Free not reported in your newspapers: 3,600,380 ballots were cast in the November 2004 presidential election that were never counted. In 2000, the uncounted ballots totaled just under two million.
And where were the Democrats? In 2004, behind the huge jump in uncounted votes was a mass challenge campaign aimed at poor, Black and Hispanic voters by the Republican Party -- pushing these voters, mostly Democrats, to "provisional ballots." They could have been counted, if someone had fought for it. Hundreds of lawyers were on stand-by but the head of the biggest legal team told me in confidence -- and in frustration -- that the Kerry campaign told them to stand down.
Recently, Al Gore was asked if the election of 2000 was stolen. "There may come a time when I speak on that, but it's not now," said the beta dog. (I suspect that if Al Gore were found bleeding in an alley, he'd answer the question, Who shot you? with "There may come a time when I speak on that...").
Lopez Obrador is of a different breed. At the rally last Saturday in Mexico City, he played video and audio tapes of the evidence of fraud on a screen eighty feet tall. Imagine if Gore had projected the "scrub sheets" of purged Black voters on a ten-story-high screen in front of the White House.
Lopez Obrador put political force behind his legal demands by calling on voters from every state in Mexico to march to the capital. Two million are expected to arrive this Sunday. The result: the word among the political classes is that the election may be annulled. Even the conservative Financial Times has warned Mexico's elite not to "fool itself" by ignoring the demand for a full vote count.
North-of-the-Border Democrats just don't get it. The Republican Party is pushing "provisional" ballots, pushing voter ID requirements, compiling secret challenge lists, scrubbing voter registries and selling us vote-nullifying ballot boxes: they get it completely. The GOP knows the key to their electoral domination is not in winning over their opponents' votes, but in not counting them.
The un-Gore of Mexico City has a lesson for the Blue-party gringos. Either the Democrats demand that all votes count, or the Democrats will count for nothing.
**********
Greg Palast is the author of the New York Times bestseller, "ARMED MADHOUSE: Who's Afraid of Osama Wolf?, China Floats Bush Sinks, the Scheme to Steal '08, No Child's Behind Left and other Dispatches from the Front Lines of the Class War." Go to www.GregPalast.com.
Palast's report, "Florida con Salsa? Vote Fraud in Mexico" was filmed and produced by Rick Rowley and Jacquie Soohen (Big Noise Films). Matt Pascarella, in Mexico, contributed to this investigation.
A lesson on democracy from Mexico might be a little too much to swallow but it is real and true.
Lessons from the Un-Gore of MexicoJuly 14, 2006
By Greg Palast
[Watch "Florida con Salsa," Palast's 15-minute investigative report from Mexico City for Democracy Now!]
The Exit polls said he won, but the "official" tally took his victory away. His supporters found they were scrubbed off voter rolls. Violence and intimidation kept even more of his voters away from the polls. Hundreds of thousands of ballots supposedly showed no choice for president -- like ballots with hanging chads.
And the officials in charge of this suspect election refused to re-count those votes in public. Everyone knew full well a fair count would certainly change the outcome.
You've heard this story before: Gore 2000. Kerry 2004.
But Lopez Obrador 2006 is made out of very different stuff than the scarecrow candidates who, oddly, call themselves "Democrats."
For six years now, I've had this crazy fantasy in my head. In it, an election is stolen and the guy who's declared the loser stands up in front of the White House and says three magic words: "Count the votes."
This past Saturday, my dream came true. Unfortunately, it was in Spanish -- but I'll take what I can get. There was Andreas Manuel Lopez Obrador, presidential challenger, standing in the "Zocalo" -- the square in front of Mexico's White House, telling the ruling clique inside, "Count the votes!"
Most important, his simple demand was echoed by half a million pissed-off, activated voters chanting with him, "Vota por vota!" -- vote by vote.
And you know what? I think they are going to have to listen. I suspect that the rulers of Mexico, a vicious, puffed-up, arrogant elite, may well have to count those votes. But, for that to happen, someone had to ask them to do it -- in no uncertain terms.
Traveling the USA, I'm asked again and again 'Why don't Democrats stand up when their elections are stolen?'
The answer: for the same reason jellyfish don't stand up... they're invertebrates.
I'm beginning to find that answer a bit too glib (though darn funny). Because it's not about electoral cojones; it's about a devotion to democracy deep in the bone. Yet weirdly, candidates that call themselves "Democrats" seem kind of, well, indifferent to democracy.
Why? Elections are the radical tool of the working class -- the great leveler of the powerless against the too-powerful. But the candidates themselves, both Republican and Democrat, tend to come from the privileged and pampered class. Votes are just the surfboards on which their ambitions ride.
Right now in Mexico's capitol, nearly a million ballots sit in tied bundles uncounted. That's four times the "official" margin of victory of the ruling party over Lopez Obrador. Supposedly, they're "votos nulos" -- null votes, unreadable. But, not surprisingly, when a few packets were opened, the majority of these supposedly unreadable votes were Lopez Obrador's.
If you think that's a Mexican game, think again. Because that's exactly what happened in Florida and Ohio.
In Florida, 179,855 ballots supposedly showed no vote for President. A closer look by the US Civil Rights Commission statisticians showed that 54% of those Florida "votos nulos" were cast by African-Americans. Did Black folk forget to vote for President, couldn't make up their minds or, as one TV network implied, were too dumb to figure out the ballot? Not at all. Machines can't count some ballots. But people can. For example, several voters wrote in, "Al Gore," which the machines rejected as his name was already printed on the ballot. The write-in could fool a machine but a human has no problem figuring out that voter's intent.
The National Opinion Research Center at the University of Chicago reviewed all 179,855 "uncountable" votes and found the majority attempted to choose Gore. And they would have been counted -- but Florida's Secretary of State, Katherine Harris, ordered a halt.
So Bush was elected not by counting the votes but by preventing their count. And he was reelected the same way in 2004 when a quarter million votes were nullified in Ohio.
But why fixate on Florida and Ohio? Here's a nasty little fact about voting in the Land of the Free not reported in your newspapers: 3,600,380 ballots were cast in the November 2004 presidential election that were never counted. In 2000, the uncounted ballots totaled just under two million.
And where were the Democrats? In 2004, behind the huge jump in uncounted votes was a mass challenge campaign aimed at poor, Black and Hispanic voters by the Republican Party -- pushing these voters, mostly Democrats, to "provisional ballots." They could have been counted, if someone had fought for it. Hundreds of lawyers were on stand-by but the head of the biggest legal team told me in confidence -- and in frustration -- that the Kerry campaign told them to stand down.
Recently, Al Gore was asked if the election of 2000 was stolen. "There may come a time when I speak on that, but it's not now," said the beta dog. (I suspect that if Al Gore were found bleeding in an alley, he'd answer the question, Who shot you? with "There may come a time when I speak on that...").
Lopez Obrador is of a different breed. At the rally last Saturday in Mexico City, he played video and audio tapes of the evidence of fraud on a screen eighty feet tall. Imagine if Gore had projected the "scrub sheets" of purged Black voters on a ten-story-high screen in front of the White House.
Lopez Obrador put political force behind his legal demands by calling on voters from every state in Mexico to march to the capital. Two million are expected to arrive this Sunday. The result: the word among the political classes is that the election may be annulled. Even the conservative Financial Times has warned Mexico's elite not to "fool itself" by ignoring the demand for a full vote count.
North-of-the-Border Democrats just don't get it. The Republican Party is pushing "provisional" ballots, pushing voter ID requirements, compiling secret challenge lists, scrubbing voter registries and selling us vote-nullifying ballot boxes: they get it completely. The GOP knows the key to their electoral domination is not in winning over their opponents' votes, but in not counting them.
The un-Gore of Mexico City has a lesson for the Blue-party gringos. Either the Democrats demand that all votes count, or the Democrats will count for nothing.
**********
Greg Palast is the author of the New York Times bestseller, "ARMED MADHOUSE: Who's Afraid of Osama Wolf?, China Floats Bush Sinks, the Scheme to Steal '08, No Child's Behind Left and other Dispatches from the Front Lines of the Class War." Go to www.GregPalast.com.
Palast's report, "Florida con Salsa? Vote Fraud in Mexico" was filmed and produced by Rick Rowley and Jacquie Soohen (Big Noise Films). Matt Pascarella, in Mexico, contributed to this investigation.
Thursday, June 15, 2006
Held Hostage While Been Fiscally Responsible
One of the first things one learns after receiving pay check as employee or business owner is that it has a finite number on the amount to be enjoy it. Usually, this amount is smaller than one hopes, thus we smartly learn to plan around this number, consequently the birth of our fiscally conservative and responsible behavior.
Now, 49% of Americans are imprudently using credit above their capacity to repay it in a prudent manner, and institutions with the alliance of lawmakers –republicans and democrats alike- enact laws allowing the debtor to increase their debt and guarantee the lender their risk.
Is that a fiscally conservative idea or is a risky liberal idea.
The funny thing if that hose driven by political demagoguery fail in the camp of so called fiscal conservatives, while the latest research on personal debt holders claims that 82% of those in default of personal debts call themselves conservatives. My first reaction was wow hypocrites, followed by “wow” liberalization of capital is been taken by the horns by imprudent conservatives thus lefties must be very smart prudent in fiscal matters.
I think the last statement is been proven correct by the present Washington crowd, from the largest deficit in the history of the country to the largest expenditures and indirect taxation ever and increase of federal imbalances.
So it is time for fiscal responsible folks to start to teach Washington a couple of lessons on fiscal responsibility and start to demand lower direct and indirect taxes.
The first thing is comes to mind is communication taxes. All taxes that arrive in your phone bill should be abolished. The government should take responsibility for people’s safety from the federal budget by supporting a national 911 service.
Next month read your phone bill, sum the amounts you pay in taxes for those services, let’s act and repel all communication taxes.
The second immediate tax to abolish should be all related to travel as for airport and airline taxes or gasoline taxes. In today’s world traveling as communicating is not a luxury it is a necessity, thus taxes are to be repeal in those activities, all the allocations should be planned from the general budgets from the states of federal government.
If you add the costs of those two taxes you are getting tripled taxed in those items by around 140%.
Some might oppose cutting taxes for some reason or another, the facts sustain that transportation and communication taxes should be totally eliminated. If you think like I do, call your elected officials, write a letter to the editor, let your opinion be known to others and we might be able to start to repeal some of those taxes that affect most of working Americans.
Now, 49% of Americans are imprudently using credit above their capacity to repay it in a prudent manner, and institutions with the alliance of lawmakers –republicans and democrats alike- enact laws allowing the debtor to increase their debt and guarantee the lender their risk.
Is that a fiscally conservative idea or is a risky liberal idea.
The funny thing if that hose driven by political demagoguery fail in the camp of so called fiscal conservatives, while the latest research on personal debt holders claims that 82% of those in default of personal debts call themselves conservatives. My first reaction was wow hypocrites, followed by “wow” liberalization of capital is been taken by the horns by imprudent conservatives thus lefties must be very smart prudent in fiscal matters.
I think the last statement is been proven correct by the present Washington crowd, from the largest deficit in the history of the country to the largest expenditures and indirect taxation ever and increase of federal imbalances.
So it is time for fiscal responsible folks to start to teach Washington a couple of lessons on fiscal responsibility and start to demand lower direct and indirect taxes.
The first thing is comes to mind is communication taxes. All taxes that arrive in your phone bill should be abolished. The government should take responsibility for people’s safety from the federal budget by supporting a national 911 service.
Next month read your phone bill, sum the amounts you pay in taxes for those services, let’s act and repel all communication taxes.
The second immediate tax to abolish should be all related to travel as for airport and airline taxes or gasoline taxes. In today’s world traveling as communicating is not a luxury it is a necessity, thus taxes are to be repeal in those activities, all the allocations should be planned from the general budgets from the states of federal government.
If you add the costs of those two taxes you are getting tripled taxed in those items by around 140%.
Some might oppose cutting taxes for some reason or another, the facts sustain that transportation and communication taxes should be totally eliminated. If you think like I do, call your elected officials, write a letter to the editor, let your opinion be known to others and we might be able to start to repeal some of those taxes that affect most of working Americans.
Legal Rape While Banning Abortion
The States of Alabama, Colorado, Iowa, Kansas, Montana, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Texas, Utah, have successfully enacted laws to ban de facto abortion rights in their states, and they consider themselves supra-religious states, and holders of some superior moral credo.
At the same time, these same states have common law marriages that allow the marriage of under age kids, in which the only requirement is cohabitation--the parties lived together and legal polygamy.
While the pray to the Lord, they let their kids get legally raped.
Although the definition may vary from state to state, the common features of a common law marriage are:
• Cohabitation--the parties lived together without age requirement.
• Consent--the parties intended to hold themselves out as husband and wife.
• Holding out--the parties "held themselves out" to the world as husband and wife (i.e. The parties spoke of each other as "my husband" or "my wife").
• Neither party was married to someone else.
This is the utmost hypocritical stance from the political power in those states.
At the same time these states are the most radical is the abolition of human rights.
Here is one of those cases in which, ignorance and hypocrisy are allied to build fallacies based on hate.
These states as the Colorado case resolved by the court today are prime examples of humanity degradation and faling into regression: http://www.breitbart.com/news/2006/06/15/D8I8Q3CO0.html
The leaders in those states must be held accountable. Specially, those so called holders of family values, it will be not far fetched calling them promoters of under age rape.
A disgraceful state of affairs.
If that is what conservatism is all about, then we have a serious case for strictly repudiating those ideas and support the protection of minors. Protecting free speech with forward modern ideas and human rights are for sale in exchange for demagogery and radicalism.
The leaders of the country, Republicans and Democrats alike, have fail human rights, and they continue engage in policy enactments that curtail freedom and promote regressive acts towards all of us.
At the same time, these same states have common law marriages that allow the marriage of under age kids, in which the only requirement is cohabitation--the parties lived together and legal polygamy.
While the pray to the Lord, they let their kids get legally raped.
Although the definition may vary from state to state, the common features of a common law marriage are:
• Cohabitation--the parties lived together without age requirement.
• Consent--the parties intended to hold themselves out as husband and wife.
• Holding out--the parties "held themselves out" to the world as husband and wife (i.e. The parties spoke of each other as "my husband" or "my wife").
• Neither party was married to someone else.
This is the utmost hypocritical stance from the political power in those states.
At the same time these states are the most radical is the abolition of human rights.
Here is one of those cases in which, ignorance and hypocrisy are allied to build fallacies based on hate.
These states as the Colorado case resolved by the court today are prime examples of humanity degradation and faling into regression: http://www.breitbart.com/news/2006/06/15/D8I8Q3CO0.html
The leaders in those states must be held accountable. Specially, those so called holders of family values, it will be not far fetched calling them promoters of under age rape.
A disgraceful state of affairs.
If that is what conservatism is all about, then we have a serious case for strictly repudiating those ideas and support the protection of minors. Protecting free speech with forward modern ideas and human rights are for sale in exchange for demagogery and radicalism.
The leaders of the country, Republicans and Democrats alike, have fail human rights, and they continue engage in policy enactments that curtail freedom and promote regressive acts towards all of us.
Wednesday, June 14, 2006
Why the Rich Get Richer
How to Profit From a Cooling Real Estate Market
by Robert Kiyosaki
Utility Links
Printable ViewEmail this PageTuesday, June 13, 2006
All over the U.S. there are stories of a rise in real estate foreclosures. Many people who took those exotic mortgages -- borrowing 125% of home value or choosing adjustable-rate mortgages -- are struggling to make their payments, and some aren't making it.
Also, a glut of new property supply, especially condominiums, is coming on line. A friend of mine, a very seasoned real estate investor, says in San Diego County, once one of the hottest real estate markets in the country, thousands of new condominiums are getting ready to come to market -- just as the market softens. He estimates that over 12,000 new units are coming on line, and the market, at the best of times, can only absorb about 1,000 condominiums a year. If he's correct, that means 12 years of supply will be ready for market in the next year.
As interest rates rise and the number of eager new buyers begins to diminish, adding supply to an already bad real estate market for sellers may mean a very good market for buyers and for property investors.
Hungry Alligators
The people who are in the most trouble are flippers -- people who aim to buy low and sell high within a short space of time. Many were buying condominiums off the plans, which means the projects were yet to be built, in the hopes that when the homes were completed, they would sell for a tidy profit. The trouble is many of these flippers, lured into the market by stories of people making a huge killing earlier with a similar strategy, are now the ones to be slaughtered. Now, they either lose their deposit or have to cough up the money for the purchase in the hopes there's a greater fool than they were somewhere out there real estate.
If you recall, the same thing happened around the year 2000 as amateurs jumped into the stock market, buying up tech stocks or any IPO with a dot-com after the company name.
In the coming months, I predict we'll see an increase in people dumping real estate they can't afford. They'll be forced to sell because they'll be eaten alive by a phenomenon known as negative cash flow. Investment properties that you have to feed money to every month are fondly known as alligators -- if you can't afford to feed the property every month, it eats you.
I know of one so-called real estate investor (and I prefer to call people like him speculators rather than investors) who has three homes he thought he could flip for a profit -- but he priced them too high. Now, $7,500 comes out of his pocket every month to feed the negative-cash-flow alligators. The problem is, he and his wife don't earn that much a month. Their three alligators are literally eating them out of house and home, consuming the profits they made from other flips -- and their savings.
To add more pain to the misery, they still have to pay the capital-gain taxes they made from their previous successful flips. They're toast. The alligators are eating them alive. They can't afford to feed them, and they can't afford to sell them because the prices they paid for these alligators are more than they're worth today. And this is only one story -- out of who knows how many. Over the next couple of years, keep your eyes open for some great bargains.
It's Time for the Pros
Some people say we're now entering a bad real estate market. I disagree. I think we're entering a great market. A bad one is when amateur investors become real estate experts and they bid up prices. They make housing expensive for homeowners, often adding little to no value to the property. They simply muddy the waters and make a valuable investment, a home, expensive.
Now, I must admit, I sometimes do buy to flip, so I can't be too critical. Yet it's the amateurs who come late to the party -- and who eventually donate their money back to the professionals. What I'm saying is: Now is the time to turn pro. Now is not the time to be an amateur. It's the amateurs who jump in when the market is hot. It's the professional who comes in when it's cooling down. Get the message?
When the red-hot bull market of real estate was beginning to overheat, you didn't have time to make considered decisions. Sellers were receiving multiple, over-asking-price offers. In a bull market, you had to be quick, have money, and be a little foolish. Now that the market is cooling down, sellers are a little bit more humble. You have more time and can do your due diligence carefully. You can negotiate better terms and make a better deal, especially if the seller has his leg inside an alligator's jaws.
Bad News That's Good
But don't be in too much of a hurry. I think we still have some bad news yet to come -- and I believe it may come from the bond market. I suspect that many of our foreign investors who have been buying our debt may be becoming more cautious about investing in American assets, especially U.S. bonds. Many foreign bankers may be having doubts about the U.S. government paying the interest on our debt. In other words, many investors will be moving increasingly out of their cash into tangible assets such as gold, silver, and other metals. Again, this is only a suspicion. We should know more by September of this year.
If investors stop buying U.S. government debt, who knows what might happen? The U.S. may need to raise interest rates even higher, which will drive home values down even further. So be patient, keep looking at real estate, but keep your hand on your wallet (unless of course you find a seller with a really mean alligator eating him alive).
A year ago, I sent out a warning to investors, especially flippers, to cash out quickly. I received a lot of irate e-mails from people who thought I was turning on them. They thought I was spreading bad news. Little did they know that by forecasting a real estate downturn, I was spreading good news -- good news for real investors and bad news for amateur alligator wrestlers.
by Robert Kiyosaki
Utility Links
Printable ViewEmail this PageTuesday, June 13, 2006
All over the U.S. there are stories of a rise in real estate foreclosures. Many people who took those exotic mortgages -- borrowing 125% of home value or choosing adjustable-rate mortgages -- are struggling to make their payments, and some aren't making it.
Also, a glut of new property supply, especially condominiums, is coming on line. A friend of mine, a very seasoned real estate investor, says in San Diego County, once one of the hottest real estate markets in the country, thousands of new condominiums are getting ready to come to market -- just as the market softens. He estimates that over 12,000 new units are coming on line, and the market, at the best of times, can only absorb about 1,000 condominiums a year. If he's correct, that means 12 years of supply will be ready for market in the next year.
As interest rates rise and the number of eager new buyers begins to diminish, adding supply to an already bad real estate market for sellers may mean a very good market for buyers and for property investors.
Hungry Alligators
The people who are in the most trouble are flippers -- people who aim to buy low and sell high within a short space of time. Many were buying condominiums off the plans, which means the projects were yet to be built, in the hopes that when the homes were completed, they would sell for a tidy profit. The trouble is many of these flippers, lured into the market by stories of people making a huge killing earlier with a similar strategy, are now the ones to be slaughtered. Now, they either lose their deposit or have to cough up the money for the purchase in the hopes there's a greater fool than they were somewhere out there real estate.
If you recall, the same thing happened around the year 2000 as amateurs jumped into the stock market, buying up tech stocks or any IPO with a dot-com after the company name.
In the coming months, I predict we'll see an increase in people dumping real estate they can't afford. They'll be forced to sell because they'll be eaten alive by a phenomenon known as negative cash flow. Investment properties that you have to feed money to every month are fondly known as alligators -- if you can't afford to feed the property every month, it eats you.
I know of one so-called real estate investor (and I prefer to call people like him speculators rather than investors) who has three homes he thought he could flip for a profit -- but he priced them too high. Now, $7,500 comes out of his pocket every month to feed the negative-cash-flow alligators. The problem is, he and his wife don't earn that much a month. Their three alligators are literally eating them out of house and home, consuming the profits they made from other flips -- and their savings.
To add more pain to the misery, they still have to pay the capital-gain taxes they made from their previous successful flips. They're toast. The alligators are eating them alive. They can't afford to feed them, and they can't afford to sell them because the prices they paid for these alligators are more than they're worth today. And this is only one story -- out of who knows how many. Over the next couple of years, keep your eyes open for some great bargains.
It's Time for the Pros
Some people say we're now entering a bad real estate market. I disagree. I think we're entering a great market. A bad one is when amateur investors become real estate experts and they bid up prices. They make housing expensive for homeowners, often adding little to no value to the property. They simply muddy the waters and make a valuable investment, a home, expensive.
Now, I must admit, I sometimes do buy to flip, so I can't be too critical. Yet it's the amateurs who come late to the party -- and who eventually donate their money back to the professionals. What I'm saying is: Now is the time to turn pro. Now is not the time to be an amateur. It's the amateurs who jump in when the market is hot. It's the professional who comes in when it's cooling down. Get the message?
When the red-hot bull market of real estate was beginning to overheat, you didn't have time to make considered decisions. Sellers were receiving multiple, over-asking-price offers. In a bull market, you had to be quick, have money, and be a little foolish. Now that the market is cooling down, sellers are a little bit more humble. You have more time and can do your due diligence carefully. You can negotiate better terms and make a better deal, especially if the seller has his leg inside an alligator's jaws.
Bad News That's Good
But don't be in too much of a hurry. I think we still have some bad news yet to come -- and I believe it may come from the bond market. I suspect that many of our foreign investors who have been buying our debt may be becoming more cautious about investing in American assets, especially U.S. bonds. Many foreign bankers may be having doubts about the U.S. government paying the interest on our debt. In other words, many investors will be moving increasingly out of their cash into tangible assets such as gold, silver, and other metals. Again, this is only a suspicion. We should know more by September of this year.
If investors stop buying U.S. government debt, who knows what might happen? The U.S. may need to raise interest rates even higher, which will drive home values down even further. So be patient, keep looking at real estate, but keep your hand on your wallet (unless of course you find a seller with a really mean alligator eating him alive).
A year ago, I sent out a warning to investors, especially flippers, to cash out quickly. I received a lot of irate e-mails from people who thought I was turning on them. They thought I was spreading bad news. Little did they know that by forecasting a real estate downturn, I was spreading good news -- good news for real investors and bad news for amateur alligator wrestlers.
Tuesday, June 06, 2006
Distracter in Chief
Spinning Phony Crises to Avoid Real Ones
By Eugene Robinson
Tuesday, June 6, 2006; A15
What uncharted realm lies beyond brazen cynicism? A wasteland of utter shamelessness, perhaps? A vast Sahara of desperation, where principle goes to die? Someday George W. Bush and the Republican right will be able to tell us all about this barren terra incognita, assuming they ever find their way home.
The Decider's decision to whip up a phony crisis over same-sex marriage -- Values under attack! Run for your lives! -- is such a transparent ploy that even conservatives are scratching their heads, wondering if this is the best Karl Rove could come up with. Bush might as well open his next presidential address by giving himself a new title: The Distracter.
Let's check in on what's happening in the real world:
Iraq has become a charnel house for the victims of escalating sectarian slaughter. On Saturday, a car bomb killed 28 people in Shiite-dominated Basra, and hours later gunmen killed nine Sunni worshipers in a mosque. On Sunday, on a road near Baghdad, assassins pulled travelers out of their minivans, sorted them by faith, killed nearly two dozen Shiites and let the Sunnis go. Yesterday, men wearing police uniforms grabbed at least 56 people from bus stations and travel agencies in Baghdad and took them away -- no one knows why, no one knows where.
Prime Minister Nouri al-Maliki's new government remains toothless and ineffectual, despite his pledge to end the sectarian violence. On Sunday, he failed yet again to reach agreement on who will run the only two ministries that matter -- the ones in charge of the army and the police. The butcher Abu Musab al-Zarqawi, the most prominent figure in the armed Sunni insurgency and the most hunted man in Iraq, remains at large and periodically manages to issue messages inspiring his followers to continue their jihad. (Just like his hero, Osama bin Laden.) Yet the president spent his weekend radio address pushing "a constitutional amendment that defines marriage in the United States as the union of a man and woman."
Immigration, the last artificial crisis, at least is a genuine issue. But the president and his allies did such a job of rabble-rousing that the best outcome, at this point, is probably for Congress to deadlock and end up doing nothing. The National Guard is headed for the frontier, apparently under orders not to do much of anything. Immigrants are still marching north, employers are still hiring them and self-appointed sentries are still patrolling the border, where something really bad is bound to happen sooner or later.
Yet the issue of "profound importance" the president urgently wants to highlight is "protecting the institution of marriage."
The diplomatic maneuvering over Iran's nuclear program, which looks like the next crisis, is at a critical point. Defiant words from Iranian leaders on Sunday rattled the world's financial markets yesterday and sent oil prices soaring -- threatening even the modest relief most analysts had predicted from $3-a-gallon prices at the gas pump. Just in time for summer vacation.
The president, however, would rather we all reflect on the fact that "marriage is the most enduring and important human institution." Not satisfied that he had gotten his message across in his Saturday radio address, Bush gave another speech in support of a marriage amendment yesterday.
It's almost surreal. For one thing, the president has no role in amending the Constitution. Proposed amendments must be passed in both the House and Senate by two-thirds majorities, and then they must win approval from the legislatures of three-fourths of the states. The president doesn't have to sign it. He doesn't even have to read it.
People who are close to the president are always telling us what an essentially decent man he is, without a bigoted bone in his body. But that doesn't square with all this demagoguery in support of a measure whose only effect would be to write discrimination against gay men and lesbians into the United States Constitution.
Bigotry, pure and simple.
But of course the president knows that there's essentially no chance an amendment to ban gay marriage will make it out of the Senate -- that in fact it might not even get out of the House. All he can possibly accomplish is to energize activists on the religious right, who otherwise might be tempted to sit out the November midterm elections.
It's risky to raise expectations you have no intention of fulfilling, but maybe enough of the Republican base can be fooled by this charade to make a difference in the fall.
Meanwhile it keeps us from talking about things that are real, and that really matter.
By Eugene Robinson
Tuesday, June 6, 2006; A15
What uncharted realm lies beyond brazen cynicism? A wasteland of utter shamelessness, perhaps? A vast Sahara of desperation, where principle goes to die? Someday George W. Bush and the Republican right will be able to tell us all about this barren terra incognita, assuming they ever find their way home.
The Decider's decision to whip up a phony crisis over same-sex marriage -- Values under attack! Run for your lives! -- is such a transparent ploy that even conservatives are scratching their heads, wondering if this is the best Karl Rove could come up with. Bush might as well open his next presidential address by giving himself a new title: The Distracter.
Let's check in on what's happening in the real world:
Iraq has become a charnel house for the victims of escalating sectarian slaughter. On Saturday, a car bomb killed 28 people in Shiite-dominated Basra, and hours later gunmen killed nine Sunni worshipers in a mosque. On Sunday, on a road near Baghdad, assassins pulled travelers out of their minivans, sorted them by faith, killed nearly two dozen Shiites and let the Sunnis go. Yesterday, men wearing police uniforms grabbed at least 56 people from bus stations and travel agencies in Baghdad and took them away -- no one knows why, no one knows where.
Prime Minister Nouri al-Maliki's new government remains toothless and ineffectual, despite his pledge to end the sectarian violence. On Sunday, he failed yet again to reach agreement on who will run the only two ministries that matter -- the ones in charge of the army and the police. The butcher Abu Musab al-Zarqawi, the most prominent figure in the armed Sunni insurgency and the most hunted man in Iraq, remains at large and periodically manages to issue messages inspiring his followers to continue their jihad. (Just like his hero, Osama bin Laden.) Yet the president spent his weekend radio address pushing "a constitutional amendment that defines marriage in the United States as the union of a man and woman."
Immigration, the last artificial crisis, at least is a genuine issue. But the president and his allies did such a job of rabble-rousing that the best outcome, at this point, is probably for Congress to deadlock and end up doing nothing. The National Guard is headed for the frontier, apparently under orders not to do much of anything. Immigrants are still marching north, employers are still hiring them and self-appointed sentries are still patrolling the border, where something really bad is bound to happen sooner or later.
Yet the issue of "profound importance" the president urgently wants to highlight is "protecting the institution of marriage."
The diplomatic maneuvering over Iran's nuclear program, which looks like the next crisis, is at a critical point. Defiant words from Iranian leaders on Sunday rattled the world's financial markets yesterday and sent oil prices soaring -- threatening even the modest relief most analysts had predicted from $3-a-gallon prices at the gas pump. Just in time for summer vacation.
The president, however, would rather we all reflect on the fact that "marriage is the most enduring and important human institution." Not satisfied that he had gotten his message across in his Saturday radio address, Bush gave another speech in support of a marriage amendment yesterday.
It's almost surreal. For one thing, the president has no role in amending the Constitution. Proposed amendments must be passed in both the House and Senate by two-thirds majorities, and then they must win approval from the legislatures of three-fourths of the states. The president doesn't have to sign it. He doesn't even have to read it.
People who are close to the president are always telling us what an essentially decent man he is, without a bigoted bone in his body. But that doesn't square with all this demagoguery in support of a measure whose only effect would be to write discrimination against gay men and lesbians into the United States Constitution.
Bigotry, pure and simple.
But of course the president knows that there's essentially no chance an amendment to ban gay marriage will make it out of the Senate -- that in fact it might not even get out of the House. All he can possibly accomplish is to energize activists on the religious right, who otherwise might be tempted to sit out the November midterm elections.
It's risky to raise expectations you have no intention of fulfilling, but maybe enough of the Republican base can be fooled by this charade to make a difference in the fall.
Meanwhile it keeps us from talking about things that are real, and that really matter.
Sunday, May 28, 2006
Walking With a Manual to Live a Life
I had conversation with a good friend about his struggle with his two kids.
He made a comment containing something we encounter very often, that is, the lack of obvious guidance in front of life situations.
I find this most acute among those entering adulthood.
After turning 18 it does seem it is time for moaning things of the past and few have a clear path to life and there is not book of "errors and bull-eyes."
I find that after we enter adulthood, there is not much follow-up guidance that relates to people as a part of an evolving society.
We have develop a behavior to be accepted inside one box and individualistic, as if self-drawning is an acceptable behavior.
Most of the education we follow is to ensure is all in one box. Although, the possibilities are there to make this box larger and fuller.
Most information available to us does not portrays these activities as virtues of human interaction.
We are losing the capacity to be responsible to others in the context of group and we are directed to learn in one direction, the ego driven way.
The home alone way of learning. While we continue in this direction we are losing capacity to evolve as humans. We are losing the ability to participate in society in an active way, we have become passive elements in a non-contextual society.
More than 90 per cent of all interaction and decisions of our activities in society are controlled and framed by social rules dictated from policies of interested parties with the only motif been self-promoting.
As this activity continues to grow, it creates apathy. Thus, participation in the social decision process is at its lowest in history.
The base for social harmony is active participation in all institutions. We need to re-build networks of people re-learn to interact with each other and make it part of the natural way of daily life. We need to learn from each other harmonically. We need to invest in each other.
In the context of democracy that is the inclusion of our time putting forward ideas. We must be active in voicing and insistence to those individuals we elect to represent us.
By looking at our life we need to find the harmonic higher interactions with ourselves and society. We cannot provide society with value if we do not educate ourselves, education is a all life process we cannot afford stop educating ourselves, for some silly reason as been adults.
The understanding of human needs must be the first step to practice social interaction and integration. We have put too much emphasis in structures such as corporations and other fictitious organizational systems. We need to explore partnerships, cooperation and other forms of value added capital interactions with solidarity as principia modus operandi.
We need to start value-added activities that enhance human relations in society in ways that break the mold and make the box bigger and better and still satisfy the need for profits.
We are getting surrounded by a poisonous dialectic approach that is dangerous to humans as a species that needs to survive in a limited/finite environment. The influence of one line sound bites has drained the possibility of dialogue and curtailed some of the most fun and enhancing qualities of dialogue as dissent and cynicism.
To make society better we need to start with the basics.
As you open your eyes you see your body and feel your body waking up, we realize we need to understand our bodies, thus we need to learn and become practitioners of body healing. This activity will enhance the life of those who practice healing. Becoming a doctor and healer in our society is one of those activities that demand the qualification of “a higher calling” but it is also an important part to make society a better place for all its members. Part of this healing must include the soul we need to re-introduce soul healing activities in our daily lives and practices. We will not be able to fulfill our social duty if we disregard the soul well being.
As we continue our day, our relation with the accepted structures of behavior become part of “laws” that allow all of us with all our differences to interact in a manner that is respectful. Thus, we must practice the art of “law” this is in the form of training and practice and in the creation of laws, this is in the form of becoming a member of the elected cadre or becoming a versed trained attorney.
As we progress in our activities we encounter the need to exchange our talents, thus, the need to understand finances. Becoming an able financier is part of the qualities we need to enhance the social environment. We must train ourselves to be able to make decisions that are sounds and profitable to our society.
As a binding practice of the above we should practice public debate and presentation, if our ideas cannot be present to the public at large we might lose our efforts to the void. Learning to be a good public speaker is a bidding ability to help society understand new ideas.
Learning logic, mathematics and philosophy are also binding abilities that will need to be practice during the rest of our lives if we want to be able to evolve.
It is said that if you enjoy what you get do and it becomes effortless you have reached satisfaction. By first exploring the above activities one must engage any activity one enjoys without limits.
Practice to the physical limits is the only way to find out satisfaction and sense of accomplishment.
From here all other activities as much important as they are they are supporting roles of the above.
We have some manuals for life all in the form of books and great authors. Being in the twenty first century, I prefer to start with authors that are still alive.
My first choice will be Riane Eisler, specially her dissertation: The Chalice and the Blade. All her books are giving us a new path, therefore groundbreaking ideas.
You can get a glimpse to her thinking at : http://www.partnershipway.org
In the subject of books, some one said that books are the main course for the brain, essays are the
Appetizers, discussions dessert and magazines/newspapers are junk food for the brain.
My second choice will be a reading of distant evolved philosophies starting with someone like Deepak Chopra. www.intentblog.com All his works have ground breaking ideas and its debates are reformatted and evolved ideas that present a very interesting alternative future.
Third will be, read mathematical logic and practice decision making. Here the amount of authors is so large that I will start by reading David Berlinski who has the capacity to present complex ideas in a fun way with ground breaking science.
There is not a book that will teach you how to live but you can make your own if you find a path to practice, practice, practice what you love to the point exhaustion, then you will be exhaling.
He made a comment containing something we encounter very often, that is, the lack of obvious guidance in front of life situations.
I find this most acute among those entering adulthood.
After turning 18 it does seem it is time for moaning things of the past and few have a clear path to life and there is not book of "errors and bull-eyes."
I find that after we enter adulthood, there is not much follow-up guidance that relates to people as a part of an evolving society.
We have develop a behavior to be accepted inside one box and individualistic, as if self-drawning is an acceptable behavior.
Most of the education we follow is to ensure is all in one box. Although, the possibilities are there to make this box larger and fuller.
Most information available to us does not portrays these activities as virtues of human interaction.
We are losing the capacity to be responsible to others in the context of group and we are directed to learn in one direction, the ego driven way.
The home alone way of learning. While we continue in this direction we are losing capacity to evolve as humans. We are losing the ability to participate in society in an active way, we have become passive elements in a non-contextual society.
More than 90 per cent of all interaction and decisions of our activities in society are controlled and framed by social rules dictated from policies of interested parties with the only motif been self-promoting.
As this activity continues to grow, it creates apathy. Thus, participation in the social decision process is at its lowest in history.
The base for social harmony is active participation in all institutions. We need to re-build networks of people re-learn to interact with each other and make it part of the natural way of daily life. We need to learn from each other harmonically. We need to invest in each other.
In the context of democracy that is the inclusion of our time putting forward ideas. We must be active in voicing and insistence to those individuals we elect to represent us.
By looking at our life we need to find the harmonic higher interactions with ourselves and society. We cannot provide society with value if we do not educate ourselves, education is a all life process we cannot afford stop educating ourselves, for some silly reason as been adults.
The understanding of human needs must be the first step to practice social interaction and integration. We have put too much emphasis in structures such as corporations and other fictitious organizational systems. We need to explore partnerships, cooperation and other forms of value added capital interactions with solidarity as principia modus operandi.
We need to start value-added activities that enhance human relations in society in ways that break the mold and make the box bigger and better and still satisfy the need for profits.
We are getting surrounded by a poisonous dialectic approach that is dangerous to humans as a species that needs to survive in a limited/finite environment. The influence of one line sound bites has drained the possibility of dialogue and curtailed some of the most fun and enhancing qualities of dialogue as dissent and cynicism.
To make society better we need to start with the basics.
As you open your eyes you see your body and feel your body waking up, we realize we need to understand our bodies, thus we need to learn and become practitioners of body healing. This activity will enhance the life of those who practice healing. Becoming a doctor and healer in our society is one of those activities that demand the qualification of “a higher calling” but it is also an important part to make society a better place for all its members. Part of this healing must include the soul we need to re-introduce soul healing activities in our daily lives and practices. We will not be able to fulfill our social duty if we disregard the soul well being.
As we continue our day, our relation with the accepted structures of behavior become part of “laws” that allow all of us with all our differences to interact in a manner that is respectful. Thus, we must practice the art of “law” this is in the form of training and practice and in the creation of laws, this is in the form of becoming a member of the elected cadre or becoming a versed trained attorney.
As we progress in our activities we encounter the need to exchange our talents, thus, the need to understand finances. Becoming an able financier is part of the qualities we need to enhance the social environment. We must train ourselves to be able to make decisions that are sounds and profitable to our society.
As a binding practice of the above we should practice public debate and presentation, if our ideas cannot be present to the public at large we might lose our efforts to the void. Learning to be a good public speaker is a bidding ability to help society understand new ideas.
Learning logic, mathematics and philosophy are also binding abilities that will need to be practice during the rest of our lives if we want to be able to evolve.
It is said that if you enjoy what you get do and it becomes effortless you have reached satisfaction. By first exploring the above activities one must engage any activity one enjoys without limits.
Practice to the physical limits is the only way to find out satisfaction and sense of accomplishment.
From here all other activities as much important as they are they are supporting roles of the above.
We have some manuals for life all in the form of books and great authors. Being in the twenty first century, I prefer to start with authors that are still alive.
My first choice will be Riane Eisler, specially her dissertation: The Chalice and the Blade. All her books are giving us a new path, therefore groundbreaking ideas.
You can get a glimpse to her thinking at : http://www.partnershipway.org
In the subject of books, some one said that books are the main course for the brain, essays are the
Appetizers, discussions dessert and magazines/newspapers are junk food for the brain.
My second choice will be a reading of distant evolved philosophies starting with someone like Deepak Chopra. www.intentblog.com All his works have ground breaking ideas and its debates are reformatted and evolved ideas that present a very interesting alternative future.
Third will be, read mathematical logic and practice decision making. Here the amount of authors is so large that I will start by reading David Berlinski who has the capacity to present complex ideas in a fun way with ground breaking science.
There is not a book that will teach you how to live but you can make your own if you find a path to practice, practice, practice what you love to the point exhaustion, then you will be exhaling.
Thursday, May 18, 2006
Best Minds
Losers: Why We Invest With Them
By Doug Wakefield with Ben Hill
One thing that didn’t change much after the 2000 to 2002 decline is the misperception that, when selecting investment managers, the most important thing to look for is how they did last quarter or last year. It’s an obsession that never seems to change much. But then again, in today’s culture, why should it change? The advantages of capitalism have, unfortunately, led us to consumerism and the belief that we can get anything, at any price, at any time. With the advent of the internet, easy credit, and the sense of entitlement our prosperity as a nation has fostered, many have come to believe that they can have it all and they can have it all, right now.
It is not my intention to debate whether this has served us well as a nation. What I do know is that this mentality does not serve the investor and, as such, must be discarded before we can attain to any lasting success. As evidence to this fact, I offer the stories of some of our investment icons in days when they may not have been so warmly embraced.
A Trip Down Memory Lane
Think back, if you will, to 1974. If we put ourselves in that era, it’s been just 3 years since the dollar was removed from the gold-exchange standard, and our national debt has already topped $474 billion. 1 The Arab Oil Embargo is in full swing and Americans are waiting in long lines for gas as prices continue to rise. Plans for busing black children to white schools in Boston, has set off a series of race riots. Under intense public and Congressional pressures, Richard Nixon has become the first President of the United States to resign.
The Dow has lost 45 percent, falling from 1051, in January of 1973, to 577, in December of 1974. Fund managers, who had been eager to buy just a few years earlier, have now taken a “batten down the hatches” approach to the markets. Consider the words of Eric T. Miller, a manager at Oppenheimer at the time.
“I wish we could say that we have strong preferences for areas that are unique right now, but we don’t, partly because we don’t think it’s time to try to be a hero… to be terribly venturesome, unless you could put me on [an] island and we were taking a three-year view.” 2
In the same vein, Howard Stein, the Chairman of Dreyfus at the time notes,
“Price-earnings ratios, historic gains in earnings, projections of earnings per share, and many other analytical devices that you and I work with seem to have little relevance of late.” 3
In the midst of all this, imagine that you’re shopping money managers. You’re excited about one in particular, because you’ve heard he’s really good, but he’s lost 23 percent in 1973 and he’s down 50 percent by 1974. Incredibly, as the losses have mounted, he’s actually getting more confident!
If we’re like most people, we’re thinking to ourselves, “If I invested $1 million with this guy at the beginning of 1973, I’d have had $500,000 left by late 1974.” We extrapolate the current trajectory. “At this rate, I’ll be broke in 2 years! I don’t care how brilliant he thinks he is; I’m going pass on this one.”
“Oh, that was Warren Buffet? Well, of course I would’ve stayed with him.” But, we didn’t know today’s story at that time. Clearly, those who stayed with him and endured the losses over those two years were handsomely rewarded.
“By early 1986, Berkshire had broken $3,000 a share. In the twenty one years that Buffet had been turning the veritable dross of a textile mill into gold, the stock had multiplied 167 times; meanwhile, the Dow had merely doubled.” 4
Now, if the only thing we learn from this story is that we need to go invest in Berkshire Hathaway shares, we miss the point. This was yesterday’s story and yesterday’s returns.
Over the last 32 years, how much of every investor’s success has come from inflating the money supply? Clearly to increase the money supply [and debt] in circulation from $474 billion, in 1974, to $10.2 trillion, by March of 2006, has influenced asset prices around the globe. Over the last two decades the Fed Funds rate has been reduced from over 20 down to 1 percent. Clearly, this story is not going to be repeated any time soon. This is the reality that all of us must accept. The circumstances that helped make this possible, do not, and could not, exist in our current economic and market environment. We would do better to ask ourselves, “What things can we learn from this story that could help us become better investors?”
In the late 1990s, the “losers” were those managers who refused to index or to benchmark their portfolios to the overall markets. In seeking to steer clear of risky stocks and sectors that had become historically overvalued, their portfolios “underperformed” the markets. It is not coincidental that, in 2000, as the markets began their steep descent, these same portfolios “outperformed” their benchmarks.
One management company, which made the “mistake” of avoiding high-risk investments, was considered by some of its institutional investors as a “loser” at the time. During the 24 months leading up to 2000, this company’s assets under management declined from $30 billion to $20 billion. Still, their unwillingness to compromise and follow the herd, in the late 90s, proved a valuable asset. By the end of 2004, their assets under management had grown to $75 billion. This story, of the cash flows in to and out of GMO, shows us that even large institutional investors tend to chase yesterday’s returns. 5
Michael Covel’s book, Trend Following: How Great Traders Make Millions in Up or Down Markets, focuses on trend following hedge fund managers. If the book title sounds a bit out of your league, let me encourage you to read it anyway. The knowledge and insights contained within would be benefit to investors at all levels of the game.
One of the managers discussed in Covel’s book is Bill Dunn, of Dunn Capital, who manages over $1 billion for investors. Since first opening in 1974, his long-term track record is enviable by any measure. However, Dunn has had several drawdowns, (temporary losses). One such drawdown lost him his largest client at the time. When asked how he deals with pressure from clients to change how he trades, Dunn responded:
“A person must be an optimist to be in this business, but I also believe it’s a cyclical phenomenon for several other reasons. In our 18 years of experience we’ve had to endure a number of long and nasty periods during which we’ve asked ourselves this same question [whether he should change his model]. In late 1981 our accounts had lost about 42% over the previous 12 months, and we and our clients were starting to wonder if we would ever see good markets again. We continued to trade our thoroughly researched system, but our largest client got cold feet and withdrew about 70% of our total equity under management. You guessed it. Our next month was up 18% and in the 36 months following their withdrawal our accounts made 430%!”
When we read about successful investment managers like Buffet, Grantham, and Dunn, we see vast differences in approach and one commonality. They were all willing to accept short-term losses. Investors who looked at these losses, or periods of underperformance (some of which lasted up to a couple of years), and decided to sell, missed out on large gains in the years that followed.
And, it’s not just individual and institutional investors who get this wrong. Again and again, even the largest brokerage houses quite often make the same mistakes. Consider the words of Barton Biggs in his new book, Hedgehogging. Biggs, who recently retired from the position of Chief Global Strategist at Morgan Stanley, spoke of the atmosphere at Morgan Stanley in the year 2000.
“Secular cycles, both in markets and sectors of the market, make a big investment management firm a very conflicting enterprise to manage if you are a businessperson, because the rational things to do to maximize short-term profitability are exactly the wrong things from both an investment and a long-term profitability point of view. For example, during 2000, even as the bubble was bursting, Morgan Stanley Investment Management, which has a business-dominated management, acted like businessmen: they heavily promoted the underwriting of technology and aggressive growth stock funds because those were the funds the salespeople could sell and that the public would buy. Management was not evil; they were doing what they thought was right. Large amounts of public money were being raised and very quickly lost. Short-term sales profits were collected at the expense of, not only the public, but the firm’s long-term credibility and profitability.”
As Biggs points out of the short-term focus at the top of a market, he also points out the short-term view at market bottoms.
“The firm erred in the other direction in the spring of 2003 when it shut down its
Asian Equity Fund, which it had invested exclusively in the Asia ex Japan markets. The fund had shrunk from $350 million 10 years earlier when the Asian Miracle was on everyone’s lips, to less than $10 million. At that level of assets, it was a clear money-losing proposition, so it was the right, short-term business decision to close it down. At the time, there didn’t seem to be any interest in Asia. I argued vociferously to keep the fund open, and maintained that, as the markets rallied, new assets would come. To no avail. No one agreed with me, and the fact that they didn’t was a buy signal.”
In April of 2006, the Asian markets of Singapore, India, and Hong Kong, are up 116 percent, 328 percent, and 94 percent (respectively) from where they were in October of 2002.
It should be plain to see that at every level of investing, we are our greatest enemy. And while learning about ourselves as investors is one of the best things we can do to ensure our success, this never has been, and never will be, the primary message of industry marketing and media. As Biggs points out, there are business decisions and investment decisions, and short-term business decisions often seem to take precedence over long-term investment concerns. If we are to become successful investors, we must understand our inherent weaknesses as instinctual beings trying to ensure our (money) survival, and continuously build our resolve to avoid the comfort that can only be found in the herd.
This predicament cannot be overstated. If we invest correctly, we most often take actions opposite of the herd and usually experience temporary losses. We then have to deal with strong instincts and emotions that shout to us, “You’re wrong! Go back and do what everybody else is doing. They made money on their last statement. They must be right!” To some extent, we all experience these thoughts, and if we are to succeed, we must learn to overcome them.
So now, we turn our attention to three character traits that we must develop to increase our probability of long-term success in the game of money. I do not expect that these tenets will produce a “Eureka!” moment for us, but we should be warned: These views are easy to academically ascend to, yet nigh unto impossible to sustain when we are experiencing strong emotional or mental stress, such as the kind caused during periods of drawdowns.
To read the entire April Newsletter, you can sign up, at no cost, through our website. If you would like a copy of our research paper, Riders on the Storm: Short Selling in Contrary Winds, visit our website. This will also give you access to archives of the same monthly newsletter titled, The Investors Mind: Anticipating Trends through the Lens of History.
Sources:
http://b3308-adm.cl.uh.edu/egret/fall2004/historyviewpoint1974.html
Buffet: The Making of an American Capitalist (1995), Roger Lowenstein, page 157
Ibid, page 159
Ibid, page 275
Quarterly meeting with institutional investors, 4th quarter 2004, www.gmo.com
Trend Following: How Great Traders Make Millions in Up and Down Markets (2006), Michael W. Covel, page 39
Hedgehogging (2006), Barton Biggs, page 119 & 120
Ibid, page 120
By Doug Wakefield with Ben Hill
One thing that didn’t change much after the 2000 to 2002 decline is the misperception that, when selecting investment managers, the most important thing to look for is how they did last quarter or last year. It’s an obsession that never seems to change much. But then again, in today’s culture, why should it change? The advantages of capitalism have, unfortunately, led us to consumerism and the belief that we can get anything, at any price, at any time. With the advent of the internet, easy credit, and the sense of entitlement our prosperity as a nation has fostered, many have come to believe that they can have it all and they can have it all, right now.
It is not my intention to debate whether this has served us well as a nation. What I do know is that this mentality does not serve the investor and, as such, must be discarded before we can attain to any lasting success. As evidence to this fact, I offer the stories of some of our investment icons in days when they may not have been so warmly embraced.
A Trip Down Memory Lane
Think back, if you will, to 1974. If we put ourselves in that era, it’s been just 3 years since the dollar was removed from the gold-exchange standard, and our national debt has already topped $474 billion. 1 The Arab Oil Embargo is in full swing and Americans are waiting in long lines for gas as prices continue to rise. Plans for busing black children to white schools in Boston, has set off a series of race riots. Under intense public and Congressional pressures, Richard Nixon has become the first President of the United States to resign.
The Dow has lost 45 percent, falling from 1051, in January of 1973, to 577, in December of 1974. Fund managers, who had been eager to buy just a few years earlier, have now taken a “batten down the hatches” approach to the markets. Consider the words of Eric T. Miller, a manager at Oppenheimer at the time.
“I wish we could say that we have strong preferences for areas that are unique right now, but we don’t, partly because we don’t think it’s time to try to be a hero… to be terribly venturesome, unless you could put me on [an] island and we were taking a three-year view.” 2
In the same vein, Howard Stein, the Chairman of Dreyfus at the time notes,
“Price-earnings ratios, historic gains in earnings, projections of earnings per share, and many other analytical devices that you and I work with seem to have little relevance of late.” 3
In the midst of all this, imagine that you’re shopping money managers. You’re excited about one in particular, because you’ve heard he’s really good, but he’s lost 23 percent in 1973 and he’s down 50 percent by 1974. Incredibly, as the losses have mounted, he’s actually getting more confident!
If we’re like most people, we’re thinking to ourselves, “If I invested $1 million with this guy at the beginning of 1973, I’d have had $500,000 left by late 1974.” We extrapolate the current trajectory. “At this rate, I’ll be broke in 2 years! I don’t care how brilliant he thinks he is; I’m going pass on this one.”
“Oh, that was Warren Buffet? Well, of course I would’ve stayed with him.” But, we didn’t know today’s story at that time. Clearly, those who stayed with him and endured the losses over those two years were handsomely rewarded.
“By early 1986, Berkshire had broken $3,000 a share. In the twenty one years that Buffet had been turning the veritable dross of a textile mill into gold, the stock had multiplied 167 times; meanwhile, the Dow had merely doubled.” 4
Now, if the only thing we learn from this story is that we need to go invest in Berkshire Hathaway shares, we miss the point. This was yesterday’s story and yesterday’s returns.
Over the last 32 years, how much of every investor’s success has come from inflating the money supply? Clearly to increase the money supply [and debt] in circulation from $474 billion, in 1974, to $10.2 trillion, by March of 2006, has influenced asset prices around the globe. Over the last two decades the Fed Funds rate has been reduced from over 20 down to 1 percent. Clearly, this story is not going to be repeated any time soon. This is the reality that all of us must accept. The circumstances that helped make this possible, do not, and could not, exist in our current economic and market environment. We would do better to ask ourselves, “What things can we learn from this story that could help us become better investors?”
In the late 1990s, the “losers” were those managers who refused to index or to benchmark their portfolios to the overall markets. In seeking to steer clear of risky stocks and sectors that had become historically overvalued, their portfolios “underperformed” the markets. It is not coincidental that, in 2000, as the markets began their steep descent, these same portfolios “outperformed” their benchmarks.
One management company, which made the “mistake” of avoiding high-risk investments, was considered by some of its institutional investors as a “loser” at the time. During the 24 months leading up to 2000, this company’s assets under management declined from $30 billion to $20 billion. Still, their unwillingness to compromise and follow the herd, in the late 90s, proved a valuable asset. By the end of 2004, their assets under management had grown to $75 billion. This story, of the cash flows in to and out of GMO, shows us that even large institutional investors tend to chase yesterday’s returns. 5
Michael Covel’s book, Trend Following: How Great Traders Make Millions in Up or Down Markets, focuses on trend following hedge fund managers. If the book title sounds a bit out of your league, let me encourage you to read it anyway. The knowledge and insights contained within would be benefit to investors at all levels of the game.
One of the managers discussed in Covel’s book is Bill Dunn, of Dunn Capital, who manages over $1 billion for investors. Since first opening in 1974, his long-term track record is enviable by any measure. However, Dunn has had several drawdowns, (temporary losses). One such drawdown lost him his largest client at the time. When asked how he deals with pressure from clients to change how he trades, Dunn responded:
“A person must be an optimist to be in this business, but I also believe it’s a cyclical phenomenon for several other reasons. In our 18 years of experience we’ve had to endure a number of long and nasty periods during which we’ve asked ourselves this same question [whether he should change his model]. In late 1981 our accounts had lost about 42% over the previous 12 months, and we and our clients were starting to wonder if we would ever see good markets again. We continued to trade our thoroughly researched system, but our largest client got cold feet and withdrew about 70% of our total equity under management. You guessed it. Our next month was up 18% and in the 36 months following their withdrawal our accounts made 430%!”
When we read about successful investment managers like Buffet, Grantham, and Dunn, we see vast differences in approach and one commonality. They were all willing to accept short-term losses. Investors who looked at these losses, or periods of underperformance (some of which lasted up to a couple of years), and decided to sell, missed out on large gains in the years that followed.
And, it’s not just individual and institutional investors who get this wrong. Again and again, even the largest brokerage houses quite often make the same mistakes. Consider the words of Barton Biggs in his new book, Hedgehogging. Biggs, who recently retired from the position of Chief Global Strategist at Morgan Stanley, spoke of the atmosphere at Morgan Stanley in the year 2000.
“Secular cycles, both in markets and sectors of the market, make a big investment management firm a very conflicting enterprise to manage if you are a businessperson, because the rational things to do to maximize short-term profitability are exactly the wrong things from both an investment and a long-term profitability point of view. For example, during 2000, even as the bubble was bursting, Morgan Stanley Investment Management, which has a business-dominated management, acted like businessmen: they heavily promoted the underwriting of technology and aggressive growth stock funds because those were the funds the salespeople could sell and that the public would buy. Management was not evil; they were doing what they thought was right. Large amounts of public money were being raised and very quickly lost. Short-term sales profits were collected at the expense of, not only the public, but the firm’s long-term credibility and profitability.”
As Biggs points out of the short-term focus at the top of a market, he also points out the short-term view at market bottoms.
“The firm erred in the other direction in the spring of 2003 when it shut down its
Asian Equity Fund, which it had invested exclusively in the Asia ex Japan markets. The fund had shrunk from $350 million 10 years earlier when the Asian Miracle was on everyone’s lips, to less than $10 million. At that level of assets, it was a clear money-losing proposition, so it was the right, short-term business decision to close it down. At the time, there didn’t seem to be any interest in Asia. I argued vociferously to keep the fund open, and maintained that, as the markets rallied, new assets would come. To no avail. No one agreed with me, and the fact that they didn’t was a buy signal.”
In April of 2006, the Asian markets of Singapore, India, and Hong Kong, are up 116 percent, 328 percent, and 94 percent (respectively) from where they were in October of 2002.
It should be plain to see that at every level of investing, we are our greatest enemy. And while learning about ourselves as investors is one of the best things we can do to ensure our success, this never has been, and never will be, the primary message of industry marketing and media. As Biggs points out, there are business decisions and investment decisions, and short-term business decisions often seem to take precedence over long-term investment concerns. If we are to become successful investors, we must understand our inherent weaknesses as instinctual beings trying to ensure our (money) survival, and continuously build our resolve to avoid the comfort that can only be found in the herd.
This predicament cannot be overstated. If we invest correctly, we most often take actions opposite of the herd and usually experience temporary losses. We then have to deal with strong instincts and emotions that shout to us, “You’re wrong! Go back and do what everybody else is doing. They made money on their last statement. They must be right!” To some extent, we all experience these thoughts, and if we are to succeed, we must learn to overcome them.
So now, we turn our attention to three character traits that we must develop to increase our probability of long-term success in the game of money. I do not expect that these tenets will produce a “Eureka!” moment for us, but we should be warned: These views are easy to academically ascend to, yet nigh unto impossible to sustain when we are experiencing strong emotional or mental stress, such as the kind caused during periods of drawdowns.
To read the entire April Newsletter, you can sign up, at no cost, through our website. If you would like a copy of our research paper, Riders on the Storm: Short Selling in Contrary Winds, visit our website. This will also give you access to archives of the same monthly newsletter titled, The Investors Mind: Anticipating Trends through the Lens of History.
Sources:
http://b3308-adm.cl.uh.edu/egret/fall2004/historyviewpoint1974.html
Buffet: The Making of an American Capitalist (1995), Roger Lowenstein, page 157
Ibid, page 159
Ibid, page 275
Quarterly meeting with institutional investors, 4th quarter 2004, www.gmo.com
Trend Following: How Great Traders Make Millions in Up and Down Markets (2006), Michael W. Covel, page 39
Hedgehogging (2006), Barton Biggs, page 119 & 120
Ibid, page 120
Friday, May 12, 2006
Gaps After The Storm
Yesterday was a very turbulent day and today looks alike.
CHC was a buy. After yesterday all looks grim but is normal.
Teh MSNBC commentars and other talking heads were in unison calling for six year highs for the dow, two days after all teh front pages, the dow takes a dip and makes everybody 2% poorer.
Today might be one of those profitable days for gaps, my screen dumped 120 stocks, so today, I need to re-screen a little and I will go for the 9 and 10 risk grade only.
Long >7
9 blk<135
9 bmo<53
9 ckh<81
9 cnc<22.8
9 cpsi<41.9
10 enr<47.5
9 lxp<19.9
9 mxim<30.6
9 o <21.4
9 ori<21
9 pkg<21.4
9 pl<44.9
9 uhco<12
9 ust<41.3
9 vsta<13.1
10 wgl<27.9
Long >4
8 brcm<36
8 mchp<34
8 osk<50
8 apcc<21
CHC was a buy. After yesterday all looks grim but is normal.
Teh MSNBC commentars and other talking heads were in unison calling for six year highs for the dow, two days after all teh front pages, the dow takes a dip and makes everybody 2% poorer.
Today might be one of those profitable days for gaps, my screen dumped 120 stocks, so today, I need to re-screen a little and I will go for the 9 and 10 risk grade only.
Long >7
9 blk<135
9 bmo<53
9 ckh<81
9 cnc<22.8
9 cpsi<41.9
10 enr<47.5
9 lxp<19.9
9 mxim<30.6
9 o <21.4
9 ori<21
9 pkg<21.4
9 pl<44.9
9 uhco<12
9 ust<41.3
9 vsta<13.1
10 wgl<27.9
Long >4
8 brcm<36
8 mchp<34
8 osk<50
8 apcc<21
Thursday, May 11, 2006
More on My gaps
The amount of speculation and high risk distributed in the market by pension funds and insurance companies is creating a very dangerous situation, and it might not be far away teh day like in 2001 when England pension system was at peril becuase insurers and pension funds were invested in the stock market at levels that they should not, part of the opposition to Blair in england comes from pensioneers.
The Soros nightmare was coming back to the englishman in the form of lost retirements by gambling managers.
Due to the large size of this accounts, managing the positions is 100% done by computerize formulas with individuals calling the depth of the trades.
With this in mind you might see trickle 100 lots non-stop in the level II screens, stocks like CSCO and MSFT that are part of the favs of this crowds show the most clear pattern of what it means hedging.
The speculation is good for gaps, it creates larger entry points, and when prices are programed in computers to have reduced risk creating hedging with options/short positons that also accelerates the gap size. Sometimes as yesterday TEVA was sold at 12% dsicount to news today to buy TEVA one will have to put a buy price in the <5% range of yesterday closing for a >4% not a bad idea but the risk range is 70% reason why I shy away today.
I will suggest to read charts with technical and fundamental analysis to grasp this idea of selling in 4 to 7 % ranges.
As I said this fits me and it is not intended for anyone else.
If you want to follow it set up in any of teh financial sites around a portfolio
and paper play it.
The Soros nightmare was coming back to the englishman in the form of lost retirements by gambling managers.
Due to the large size of this accounts, managing the positions is 100% done by computerize formulas with individuals calling the depth of the trades.
With this in mind you might see trickle 100 lots non-stop in the level II screens, stocks like CSCO and MSFT that are part of the favs of this crowds show the most clear pattern of what it means hedging.
The speculation is good for gaps, it creates larger entry points, and when prices are programed in computers to have reduced risk creating hedging with options/short positons that also accelerates the gap size. Sometimes as yesterday TEVA was sold at 12% dsicount to news today to buy TEVA one will have to put a buy price in the <5% range of yesterday closing for a >4% not a bad idea but the risk range is 70% reason why I shy away today.
I will suggest to read charts with technical and fundamental analysis to grasp this idea of selling in 4 to 7 % ranges.
As I said this fits me and it is not intended for anyone else.
If you want to follow it set up in any of teh financial sites around a portfolio
and paper play it.
May 11 Gaps
Yesterday bought mxim for a 4% at <33.1
For today I have for >Seven%
risk-/symbol-/limit buy price
9 abt<39.3
8 bdx<59.4
8 chc<18.5
9 cnc<22.9
8 epl<22.4
8 erts<44.3
8 ford<4.7
8 fss<17.4
8 hni<50.1
8 msft<22
9 mxim<31.2
9 ofc<37.1
9 ori<21.1
8 osk<48.8
9 pkg<21.4
9 pl<45
8 rbnc<10.8
8 snps<20.4
9 uhco<12
9 ust<41.4
9 vsta<13.5
8 vz<31.2
For the four retracement same as yesterday except mxim that was bought.
My selling target for mxim will be >36.7 the price shows larger than average retracement for a gap-up in the =+10% range.
For today I have for >Seven%
risk-/symbol-/limit buy price
9 abt<39.3
8 bdx<59.4
8 chc<18.5
9 cnc<22.9
8 epl<22.4
8 erts<44.3
8 ford<4.7
8 fss<17.4
8 hni<50.1
8 msft<22
9 mxim<31.2
9 ofc<37.1
9 ori<21.1
8 osk<48.8
9 pkg<21.4
9 pl<45
8 rbnc<10.8
8 snps<20.4
9 uhco<12
9 ust<41.4
9 vsta<13.5
8 vz<31.2
For the four retracement same as yesterday except mxim that was bought.
My selling target for mxim will be >36.7 the price shows larger than average retracement for a gap-up in the =+10% range.
Wednesday, May 10, 2006
May 10 Gaps
35 days >7%
Symbol Rank Limit Buy Price
blk 9 135.9
chc 8 18.46
cnc 9 22.85
dspg 8 24.7
epl 8 22.28
erts 8 44.2
ford 8 4.7
fss 8 17.6
hni 8 50
msft 8 22
mxim 9 32.41
osk 8 50.15
snps 8 20.79
uhco 9 12
Long 25 days >4%
Limit < than
osk 9 50.5
apcc 8 21.3
mxim 9 34
sbib 9 16.55
umpq 8 26
Yesterday one entry and exit with 7% = UHCO
Symbol Rank Limit Buy Price
blk 9 135.9
chc 8 18.46
cnc 9 22.85
dspg 8 24.7
epl 8 22.28
erts 8 44.2
ford 8 4.7
fss 8 17.6
hni 8 50
msft 8 22
mxim 9 32.41
osk 8 50.15
snps 8 20.79
uhco 9 12
Long 25 days >4%
Limit < than
osk 9 50.5
apcc 8 21.3
mxim 9 34
sbib 9 16.55
umpq 8 26
Yesterday one entry and exit with 7% = UHCO
Tuesday, May 09, 2006
Gapping the Gaps
Part One
I am going to try to share one of my favorites trading strategies, the one that has allowed me to stop sweating the small things.
I subscribe to different data services for the simple reason that each one has something that interests me a little better to screen for what I am looking to trade.
After years producing a consistent returns it is time to share some of the basic ideas.
There is high risk in any strategy nor strategies are static, they need constant changes in their algorithms and active capital management.
My main strategy after the human design is done, the output has 90% mathematical base and 10% common-sense decision-making component.
As disclosure, this is only for my own use and consumption and it is not inteded to provide any financial advice nor should be use without consulting expert advice. If you choose to do anything with the content I post here it is at your own risk.
I do not trade all year, so I will no post all year, but I will try to post as much as possible before the market opens all my possible trades for the day.
I am not greedy, so I stop trading at the moment the strategy allows me to reach the six figures, that is what I need to have fun.
I will be trading every single stock that I post here, as long as I am not vacationing or I have reach my goal!
As informational bechmark my returns are clean >27% (after tax and trading costs) in good or bad markets. Actually, the worse the market conditions are better it performs this strategy.
It is here for anyone who wants to know how I do it.
The idea of the strategy is simple:
due to news or market conditions a series of stocks react sharply to those news selling-off dramtically and then after a consolidation period those same stocks will come back above their initial trading price.
This is call a gap in pricing, thus gapping the gaps.
Some gap techniques focus in the first 30 minutes of market trading.
Other focus in one full day retracements of 1.5% to 2%.
My strategy focuses in a wider retracement band and in a larger waiting period for the retracement.
I have two series of trades that I entry "the short band trade" of 4% with up to 25 trading days and "the long trading band" with retracements of 7% or more with up to 35 trading days.
You have to follow and consistently stay in the strategy. Everytime I try to deviate from the strategy and tinker with new ideas that are off the main purpose I get nailed. Staying focus is boring but it pays big time.
All stocks I trade have consistent patterns:
1) In all cases over a period of >20 trades they produce at least 16 retracements, in other words, they have at least 80% probability of making the target price. In all cases stop-loss is a must. Retracments are best followed with an Elliott Wave software.
2) All stocks trade at a ratio of at least -10% to +10% from the initial entry. Consequently my stop-loss is 11.5% from the entry point. If you calculate the stop loss to the gains you will find out that the actual risk is less than 2% in the down side, 10% neutral returns and 88% positive trades (all including trading costs of < than $30 per round trade).
3) All selected stocks fluctuate in the upside as much as they fluctuate in the downside. Some days you might wonder if you are better off going long with the selection. I keeps me wonder many days, but I know better and I continue to stay focus. A good japanese candle charting software will put an image on what I am describing.
4) All stocks show a pattern of probability in the downsize after the set holding period of less than 5% and my average is 90% winning trades on trading days, and 95% if I see the rational to extend the holding days for a new cycle.
5) The open positions can be large, a few times when the market was in a flat pattern I hold up to 25 stocks. My average is to hold up to 7 stocks at any given time.
6)I use a discount broker, I add the trading costs and I deduct taxes after each trade to calculate the algorithm profitability. I use a scale to qualify each stock performance for a number of trades -usually 20 trades or more. The scale is 8, 9 or 10. This means the stock was profitable in the algorithm 80%, 90% or 100% in the last 20 trades. Consequently, every 3 months the stocks I follow changes.
7) The trading days pattern I follow can be as short as hours up to 35 days. Look at UHCO today5/9/06. I bougth it and sold it in three hours with 7% profit.
But that is not the norm. The norm is holding any stock for a few weeks. I resort to have a holding average day for each stock, but this is only informational. The rational is that a stock that passes the average holding days, and is trading the upside has > 90% provability to be profitable and the contrary is also true.
How I work the trades:
1) Before the market opens I screen for the daily trades and do a print out. If I have a large amount of stocks I choose those with the highest return grade -9 or above.
2) I set the the buy price and the amount of shares.
3) The amount of speculation in the market is so large that sometimes my buying price is off and far higher than the initial volatility prices, it is not the norm, I do not worry if it occurs until the stock settles after a few days.
4) Imnmeditely after I buy. I write the stop loss on my trade list book (I do not auto entry the auto stop- loss, that's just my habit) and put the selling price with the broker. If it is a short entry the sellign point will be 4% above the purchase price if it is long entry I add 7% to the purchase price.
5)The amount of weekly trades averages 2.5, so it is boring but profitable.
Let me know your comments.
I am going to try to share one of my favorites trading strategies, the one that has allowed me to stop sweating the small things.
I subscribe to different data services for the simple reason that each one has something that interests me a little better to screen for what I am looking to trade.
After years producing a consistent returns it is time to share some of the basic ideas.
There is high risk in any strategy nor strategies are static, they need constant changes in their algorithms and active capital management.
My main strategy after the human design is done, the output has 90% mathematical base and 10% common-sense decision-making component.
As disclosure, this is only for my own use and consumption and it is not inteded to provide any financial advice nor should be use without consulting expert advice. If you choose to do anything with the content I post here it is at your own risk.
I do not trade all year, so I will no post all year, but I will try to post as much as possible before the market opens all my possible trades for the day.
I am not greedy, so I stop trading at the moment the strategy allows me to reach the six figures, that is what I need to have fun.
I will be trading every single stock that I post here, as long as I am not vacationing or I have reach my goal!
As informational bechmark my returns are clean >27% (after tax and trading costs) in good or bad markets. Actually, the worse the market conditions are better it performs this strategy.
It is here for anyone who wants to know how I do it.
The idea of the strategy is simple:
due to news or market conditions a series of stocks react sharply to those news selling-off dramtically and then after a consolidation period those same stocks will come back above their initial trading price.
This is call a gap in pricing, thus gapping the gaps.
Some gap techniques focus in the first 30 minutes of market trading.
Other focus in one full day retracements of 1.5% to 2%.
My strategy focuses in a wider retracement band and in a larger waiting period for the retracement.
I have two series of trades that I entry "the short band trade" of 4% with up to 25 trading days and "the long trading band" with retracements of 7% or more with up to 35 trading days.
You have to follow and consistently stay in the strategy. Everytime I try to deviate from the strategy and tinker with new ideas that are off the main purpose I get nailed. Staying focus is boring but it pays big time.
All stocks I trade have consistent patterns:
1) In all cases over a period of >20 trades they produce at least 16 retracements, in other words, they have at least 80% probability of making the target price. In all cases stop-loss is a must. Retracments are best followed with an Elliott Wave software.
2) All stocks trade at a ratio of at least -10% to +10% from the initial entry. Consequently my stop-loss is 11.5% from the entry point. If you calculate the stop loss to the gains you will find out that the actual risk is less than 2% in the down side, 10% neutral returns and 88% positive trades (all including trading costs of < than $30 per round trade).
3) All selected stocks fluctuate in the upside as much as they fluctuate in the downside. Some days you might wonder if you are better off going long with the selection. I keeps me wonder many days, but I know better and I continue to stay focus. A good japanese candle charting software will put an image on what I am describing.
4) All stocks show a pattern of probability in the downsize after the set holding period of less than 5% and my average is 90% winning trades on trading days, and 95% if I see the rational to extend the holding days for a new cycle.
5) The open positions can be large, a few times when the market was in a flat pattern I hold up to 25 stocks. My average is to hold up to 7 stocks at any given time.
6)I use a discount broker, I add the trading costs and I deduct taxes after each trade to calculate the algorithm profitability. I use a scale to qualify each stock performance for a number of trades -usually 20 trades or more. The scale is 8, 9 or 10. This means the stock was profitable in the algorithm 80%, 90% or 100% in the last 20 trades. Consequently, every 3 months the stocks I follow changes.
7) The trading days pattern I follow can be as short as hours up to 35 days. Look at UHCO today5/9/06. I bougth it and sold it in three hours with 7% profit.
But that is not the norm. The norm is holding any stock for a few weeks. I resort to have a holding average day for each stock, but this is only informational. The rational is that a stock that passes the average holding days, and is trading the upside has > 90% provability to be profitable and the contrary is also true.
How I work the trades:
1) Before the market opens I screen for the daily trades and do a print out. If I have a large amount of stocks I choose those with the highest return grade -9 or above.
2) I set the the buy price and the amount of shares.
3) The amount of speculation in the market is so large that sometimes my buying price is off and far higher than the initial volatility prices, it is not the norm, I do not worry if it occurs until the stock settles after a few days.
4) Imnmeditely after I buy. I write the stop loss on my trade list book (I do not auto entry the auto stop- loss, that's just my habit) and put the selling price with the broker. If it is a short entry the sellign point will be 4% above the purchase price if it is long entry I add 7% to the purchase price.
5)The amount of weekly trades averages 2.5, so it is boring but profitable.
Let me know your comments.
Saturday, May 06, 2006
Tuesday, May 02, 2006
The Early Bird Makes One Million
This article by Scott Burns has the same jist of the one I wrote about the donut billionaires last year.
The main idea is compound interest over long period of times.
Consistency at anything nets great results. Genius is the compound interest of a life of hard choices.
Enjoy it.
_!_!_!_!_!_
Start on your first $1 million at age 16
It's easier than you think to become a millionaire.
The magic combo? Getting an early start saving and having the discipline not to raid the piggy bank.
May 1,2006
By Scott Burns
Here's a simple recipe to become a millionaire:
Work four summers, starting at age 16
Save the income in a Roth IRA account
Invest it in a simple, low-cost equity portfolio
Simmer slowly for 47 years
Serve ungarnished (and untaxed) at age 67This is the first recipe in my new Small Change Millionaire Cookbook, an occasional series of columns with a single purpose -- demonstrating different ways small amounts of money can be turned into a large amount of money. Just as a mere 10 calories a day of additional food can pack on a pound a year, small change can become large amounts of money. The good news is that money grows faster than fat. Calories don't have the benefit of compound annual growth.Many people fail to diet because the end goal seems so far away. So it is with saving and investing: Most people fail because it is nearly inconceivable that a few dollars a day or a well-timed gift can be turned into that magical sum.
It has such a nice sound.So let me show you how four summer jobs can become your first million.Let's suppose that you are 16 years old, in high school, and willing to work. Let's also suppose that you can clear about $2,000 over the course of a summer, if only because a doting grandparent puts money in the Roth while you take your earnings to school. If you invest in a Roth IRA, it will grow, tax-free, for as long as you have the account. All withdrawals from the account after age 59 1/2 will be tax-free.If your money is invested in common stocks and you achieve the average compound annual rate on large-capitalization U.S. stocks, 10.7%, your account will grow to $9,378 at the end of the fourth year. You will be 20 years old. Invested in the same way, with no additional savings, the account will grow to:
$25,917 by the time you are 30
$71,625 by the time you are 40
$197,943 by the time you are 50
$547,037 by the time you are 60
And $1,114,423 by the time you are 67And you will have started and finished all of your saving before turning age 21.Worth the risk Note that this plan does not require investment brilliance. It does depend on two things, an early start and tenacity. If you invested in small company stocks, whose long-term annual return clocks in at 12.5 percent annually, you could have much more money. (Try $2.4 million.) Similarly, you could diversify to reduce your risk and make your 47-year ride more comfortable. But you would do it at the expense of a somewhat lower return.The "Yes, but" crew will be happy to tell you that $1 million isn't what it used to be. I can remember people telling me this in the '60s. It is as true now as it was then. Millionaires are, well, just dreadfully common.Even so, the number of millionaires is relatively small. And being a millionaire is a better choice than being a pauper.The same crew will be happy to tell you that the future won't repeat the past, that SARS, terrorism or some other misfortune will cripple the future, or that we will be crushed by a rising China. Similarly, an actuary might tell you that you have a substantial chance of being dead by 67.Perhaps.But so what?All you've got to risk is four summers.See Scott Burns' Web site.
The main idea is compound interest over long period of times.
Consistency at anything nets great results. Genius is the compound interest of a life of hard choices.
Enjoy it.
_!_!_!_!_!_
Start on your first $1 million at age 16
It's easier than you think to become a millionaire.
The magic combo? Getting an early start saving and having the discipline not to raid the piggy bank.
May 1,2006
By Scott Burns
Here's a simple recipe to become a millionaire:
Work four summers, starting at age 16
Save the income in a Roth IRA account
Invest it in a simple, low-cost equity portfolio
Simmer slowly for 47 years
Serve ungarnished (and untaxed) at age 67This is the first recipe in my new Small Change Millionaire Cookbook, an occasional series of columns with a single purpose -- demonstrating different ways small amounts of money can be turned into a large amount of money. Just as a mere 10 calories a day of additional food can pack on a pound a year, small change can become large amounts of money. The good news is that money grows faster than fat. Calories don't have the benefit of compound annual growth.Many people fail to diet because the end goal seems so far away. So it is with saving and investing: Most people fail because it is nearly inconceivable that a few dollars a day or a well-timed gift can be turned into that magical sum.
It has such a nice sound.So let me show you how four summer jobs can become your first million.Let's suppose that you are 16 years old, in high school, and willing to work. Let's also suppose that you can clear about $2,000 over the course of a summer, if only because a doting grandparent puts money in the Roth while you take your earnings to school. If you invest in a Roth IRA, it will grow, tax-free, for as long as you have the account. All withdrawals from the account after age 59 1/2 will be tax-free.If your money is invested in common stocks and you achieve the average compound annual rate on large-capitalization U.S. stocks, 10.7%, your account will grow to $9,378 at the end of the fourth year. You will be 20 years old. Invested in the same way, with no additional savings, the account will grow to:
$25,917 by the time you are 30
$71,625 by the time you are 40
$197,943 by the time you are 50
$547,037 by the time you are 60
And $1,114,423 by the time you are 67And you will have started and finished all of your saving before turning age 21.Worth the risk Note that this plan does not require investment brilliance. It does depend on two things, an early start and tenacity. If you invested in small company stocks, whose long-term annual return clocks in at 12.5 percent annually, you could have much more money. (Try $2.4 million.) Similarly, you could diversify to reduce your risk and make your 47-year ride more comfortable. But you would do it at the expense of a somewhat lower return.The "Yes, but" crew will be happy to tell you that $1 million isn't what it used to be. I can remember people telling me this in the '60s. It is as true now as it was then. Millionaires are, well, just dreadfully common.Even so, the number of millionaires is relatively small. And being a millionaire is a better choice than being a pauper.The same crew will be happy to tell you that the future won't repeat the past, that SARS, terrorism or some other misfortune will cripple the future, or that we will be crushed by a rising China. Similarly, an actuary might tell you that you have a substantial chance of being dead by 67.Perhaps.But so what?All you've got to risk is four summers.See Scott Burns' Web site.
Subscribe to:
Posts (Atom)