Saturday, July 04, 2009

Why Money is A Bad Master but A Good Servant?

In bible, Jesus says, “beware! Do not always be wishing for what you don’t have. For real life and real living are not related to how rich we are (Luke 12:15).

Supporting the same statement a person once said that money will buy the following:

Bed not sleep

Food not appetite

Books not brains

House not home

Finery not beauty

Luxuries not culture

Medicine not health

Amusement not happiness

All said, obviously, there is no sustenance without money.

We cannot live without money and so work to earn money and there is no wrong in aiming to be wealthy and for the same day after day we chase to earn more money. Money is necessary to live and grow but is it sufficient to lead a meaningful life?

Whether you are rich or poor is determined by how much money you possess. This is a materialistic gradation that money can do. But can money make you rich in heart and poor in your deeds? No, it simply cannot. Money can help you buy the world’s luxuries but money cannot control your destiny. So, one need to put a rein on one’s wants to have a control on earning. This is because if the run for money continues, then at the end you may fall flat face on the life’s race.

In the journey of life and in the pursuit of material happiness you might lose out on little and beautiful things. If you chase money there are chances that you will trample under your feet even your dearest friends and shake hands with your greatest enemies. Such is the bait of money. The bottle of the neck is always narrow and while you are in the race to earn money you will find yourself as a loner at the end of it.

So it is desirable that you earn money and control it. Save them so that you can use them when in need. Control your wants and decide on a limit, or else that mad rush will continue and soon you will find yourself a slave of time and money is reigning supreme. Don’t let money rule you instead work towards your goal and money will follow you automatically as a faithful servant.

Again there can be situation when you owe money to other people. In these cases money can be unruly and cruel as it acts as a whipping master. So, as the adage goes cut your coat according to your cloth holds true. You need to live within your limits and need not borrow money to fulfill wishes and desires. Money is important to get things done and also to carry on with life’s daily needs but it is not the ultimate thing. It should not rule you; instead you should make it follow your work and deeds.

Education in the 21st Century

The recent economic crisis has caused peoples and nations to reevaluate priorities and seek better ways to be prepared for future downturns. The foremost among these concerns is education. With the drastic rise in unemployment worldwide, leaders and academics are coming to the realization that the education systems of their nations need to be updated and reformed for a global economy. How is this to be done? The last truly great reform of education was the high school or secondary school and these came about during the height of the Industrial revolution. Laborers in skilled and unskilled positions have lost their employment without the guarantee that they can apply their skills in other sectors. A good example is American autoworkers. So what are some of the solutions that can stem this unemployment crisis? It can only be found in a revamped system for job retraining and education.

The present system of reeducation centers on community colleges and four years colleges and universities. This system is still somewhat effective but due to high costs and limited incentives only a section of a nation’s population has postsecondary degrees or training. For example only around 31% of the United States has an undergraduate degree or higher. What steps can be taken to improve this situation? One way is distance learning. With the advent of the internet more institutions of learning have been able to offer courses online. Due to reduction in resources used when offering a course via the web, the average student pays a fraction of the cost of regular tuition. This combined with government assistance can place higher education within the reach of the wider population. Another solution has been the greater cooperation between community colleges and full four year institutions. Community colleges often offer a less expensive alternative to attending a four year institution but are affected by the stigma of being lesser institutions without the prestige of more well known colleges and universities. The partnerships allow graduates of community colleges access to higher institutions of learning after completing the community college associate degrees even giving them easier admission than traditional entrants to four year institutions.

Community colleges also now offer targeted courses that focus on industries and skills that are in high demand. A good example is the three week to three month courses for health professionals. By taking a Certified Nurse Assistant course the average person with a high school diploma can go from a minimum wage income of $7 per hour to as high as $14 to $24 per hour with income increasing with job experience.

Education in the 21st century must be job market oriented providing graduates with the skills most in demand. It also must provide quick and affordable retraining programs to help workers find employment more quickly after a layoff or dismissal. If governments worldwide can achieve these goals it will lead to a more stable and viable global economy.

Billionaires Secret Meeting

Here it is almost the end of May and we are just learning about this hush, hush ultra clandestine meeting of the richest Midas’ in the world. You had to be in the Billionaire Club to get invited. In New York City, hosted at the Rockefeller University, eleven or so of the wealthiest met for a secret meeting of the minds. The conspiracy folks are already at work wondering why they met quietly with no press or outside reporters included. Must be up to no good, huh? Was a political or financial takeover concocted? Well, these folks already engineered the liberal left victories in the Congress and White House. So it could not be that.

How about money? The number one and two richest men (Gates and Buffet) and a few hedge fund and real estate moguls were there. There were also a large collection of the poorer peasants included. I mean, some of them aren’t even among the top twenty richest people in the world. Geez! Poor old Oprah comes in well below that.

Since my bank account is a few shekels below the billionaire level, I missed the meeting. So we can only guess and listen to the scanty press release to really know what they did. No flies on the wall at Rockefeller’s place. In our current economic slump, we and the charities languish. Philanthropic donations are down. This group of wealthy individuals has done their duty though and should be commended for past irrational exuberance. They have given over seventy billions of dollars in aid since 1996. Many on the list like Gates, Buffet and Soros have extended billions in aid. Buffet is donating his 36 billion fortunes to the Gates Foundation.

So what did they consider? It appears it will disappoint our conspiracy fellows. They supposedly got together to talk about how to help the world face its many social problems. The meeting was a session to put on the thinking caps and address a few big problems by private philanthropy. How can charity function in this economic collapse? For example, we have a threat to global health. The Gates foundation is funding anti-malaria health initiatives already. We know nothing about any future actions the plan and no announcements were made. How do we help emergency relief efforts was addressed. They reported talking about scholarships for educating the poor over the 6 hour dinner meeting on May 5th. Overall charity needs were addressed by the group but concrete and specific pronouncements were not forth coming. It seems that brainstorming for charity was the driving idea, but exactly what was decided was not announced in any great detail.

Predicting Earthquakes: Is this Really Possible?

The devastation caused by a large magnitude earthquake is well known. We remember the 1906 San Francisco damage and fatalities from old pictures we have seen. In Tangshen China, a quarter million people died during a Magnitude 7.6 earthquake. In contrast though, a year earlier, fatalities were avoided when another city in China was evacuated one day before a severe quake happened. How did that happen? Did they predict it? Well yes and no. The people noted changes over a period of months in ground positions and water levels. Extensive modifications in animal behavior were observed. In addition, tremors preceded the quake for several months. This information was well known and acted upon. The Magnitude 7.3 quake hit an evacuated city. This was more matter of observation and luck than any skill. The Chinese took a conservative and safe position by getting out of Dodge.

To predict an earthquake event would be a major public health coup. In order to do so, one needs to predict exactly where it will happen and when. The method should also be reproducible. It must also predict magnitude of the earthquake. At this time official organizations involved in earthquake predictions do not recognize any current method as being accurate. It cannot be done, now and by the nature of the beast, never will be done.

What we have are seismic maps produced for different areas that predict an earthquake likelihood of a certain magnitude over a large span of years. This gives the probability of an event in an area over time. Tremors and foreshocks are not necessarily predictive of a major event.

At the outset, we eliminate psychics and so on as not scientifically testable. They are unable to meet the criteria cited above. If we consider other possible methods and we come to studying electromagnetic fields and other related methodologies. Here scientists try to determine if electro-magnetic radiation is important. Several satellites are being used to study this. Some feel this is important for tipping off animals to an impending quake. However, the data for small animal behavior is lacking. The Japanese felt that catfish could predict changes but this has not panned out in reality. Small animal sensitivity is more anecdotal reporting with no scientific backing yet found. Others include luminescence changes in the atmosphere which was noted in the Kobe quake. Changes is visible radiation were noted and thought to be due to an outpouring of silicon crystals from the earth. Radon and other chemical changes in the soil or water have been investigated. Tidal changes were thought to be related. However, none of these methods can be used to meet the above criteria for successful predictions. Presently, there is no method for prediction of earthquakes and it is unlikely for us to find one.

Is President Obama Against Abortion?

The biggest dividing issues in American Politics have been Gay Rights and Abortion. These issues sparked a major political power struggle that has come to be known as the culture wars. These issues were the major platform for the Republican Party helping it eventually gain control of both the White House and the Congress. With The Election of President Obama it was the first time in 8 years a democratic presidential nominee was able to address these issues successfully. So how did President Obama present these two politically volatile issues to the voters in a way that they could accept and understand the Democrat’s positions?

President Obama first has presented himself as a pragmatist. He used his significant communication skills and conveyed common sense approach to social issues that most voters could agree with. In the case of Gay Marriage he pushed the argument that Gay marriage was a private matter between two consenting adults. He also agreed with the policy of letting each state decide on the issue. The success of this approach has been proven by approval of gay marriage in Maine Iowa, New Hampshire, and Vermont. With the momentum provided by the state greater political support has grown for Gay right and full marriage rights.

In the case of Abortion President Obama used a situation that was filled with controversy to strengthen his position. When President Obama was invited to speak at Notre Dame University, there was great controversy considering that the school is a Catholic institution and the Church opposes abortion and the president supports a woman’s right to choose to have an abortion. The controversy intensified as the day of the speech approached with major American clerics and cardinals deciding to boycott the commencement. President Obama took the controversy head on saying that the debate was necessary but appealed to a more civil discourse and that both sides work towards the common goal of reducing unwanted pregnancies through education and preventative measures. The President used the fact that neither side actually likes abortion and used that point of agreement as a foundation for cooperation.

Finally, the President is attuned to the times. In both cases popular sentiment has shifted from previous positions. This has given the president the political will to find a middle way where none of his predecessors could. Using common sense approaches and civil language President Obama has mostly defused the impact of the culture wars on modern politics in the U.S.

Heart Attack in Women

Heart disease has in the last years become an equal opportunity killer. It is our nation’s number one killer with one quarter million deaths occurring each year. Years ago it was classically observed that heart disease was a man’s disease just as breast cancer was a women disease. But times and events are shifting. Heart disease kills more women than men. Five hundred thousand people have a heart attack each year. At the moment, heart attack is the leading killer of women. It kills more women than all the cancers combined. In middle aged women, heart attack kills more women than breast cancer. Women who have an acute myocardial infarction (heart attack) are more likely to die from it, less likely to get out of the hospital following a heart attack and more likely to succumb and die within a year than men are.

The symptoms of a heart attack differ between men and women. In men, the classic signs of mid-sternal chest pain after exertion that may radiate to the jaw or left arm or neck are seen. Pain is described as crushing, stabbing in nature. Women sometimes have similar symptoms, but more often they have more subtle and different ones. Many times, no pain occurs at all (in four of ten women). Angina occurs in women following mental stress and not physical exertion. More GI symptoms may be seen with nausea, vomiting, simple GI upset or indigestion as a presenting clue. Fatigue, dizziness or weakness may occur. A cold sweaty or clammy wet feeling is more common in women. A feeling of impending doom or anxious feeling is observed in women. Pain between the shoulders blades, along the bra line is felt, or in the jaw. A fast heart rate or swelling in the ankles can happen.

Women may not recognize their symptoms. Indeed, they suffer sleep disorders, shortness of breath and ankle swelling as heart disease symptoms that may occur a month before the heart attack. In addition, the disease is different. Men have larger artery disease that is amenable to surgery and can be seen by radiographic studies. Women have micro-vascular disease. This is not seen on invasive studies and is not surgically correctable. This may account for the poorer outcome. Many are quick to blame physicians for not diagnosing coronary disease in women, but even in men diagnosing a heart attack is sometimes very difficult and requires a high degree of suspicion and experience. Sometimes it is just an educated hunch that something is wrong.

So what should a woman do? Eat a healthy diet, exercise regularly and DO NOT SMOKE, or quit immediately. See your doctor for an exam and blood tests like cholesterol, glucose and thyroid. Check your blood pressure routinely and have it treated it if it is abnormally high. Are you overweight? Should I be on a baby aspirin a day? Do you have a family history of heart disease? Talk to your doctor now about all of the above. Prevention is better than the cure.

How to Invest in Oil

Oil is up some 30% in the past month. It is at $68.58 a barrel and at its high since November. OPEC leader Saudi Arabia states it may be up to $75 at year end. In comparison, gold is only up 11%. How can we make money in this uptrend?

One way is to buy ETFs or ETNs. There are many of these. Some like Deutsche Bank Power Shares Double Long Crude Oil (DXO) leverages your investment and is supposed to go up two times for every one unit rise in oil. Only it does not always work that way if one buys it long term. One needs to be careful using ETNs because of this. However, DXO was at about $1.76 in January and now it is around $4.50. The ETN DBO by Power Shares does not leverage. One cans also short or double short oil using ETNs or ETFs. An investor can find gold, grains, currencies, baskets of different commodities, silver or the dollar to buy long or sell short. One can use them to play currencies. You can find these ETNs and ETFs in the WALL STREET JOURNAL under the Exchange-Traded Portfolios section.

There also other ways to buy oil and natural gas. The Master Limited Partnerships (MLP) is an excellent method for investing in this area. There are many excellent vehicles for this. They pay high dividends in cash or share re-investment. Because of the high payments, one should investigate whether their investment should be in a tax free account like an IRA or in a taxable account. You need to look into this carefully. If you place it in a tax advantaged account, you need not worry about the tax problems that can occur unless the UBTI (unrelated business taxable income) threshold is breeched.

MLPs are generally Canadian natural resource companies that have oil and natural gas pipelines. They are energy income trusts. There are also closed end funds with a portfolio of MLPs in them. They spread the risk by owning many MLPs just like a mutual fund has many stocks,

Two excellent MLPs are Kinder Morgan (KMP) has gas pipelines and pays 8.2% yield. Enbridge Energy Partners (EEP) has oil lines and yields 9.8% currently. Examine the fundamentals of each company to determine if it fits your investment outlook and if you think it is a good investment.

There are many closed end funds that hold a mixture of MLPs. Tortoise Energy Infrastructure Corporations (TYG) yields 8.54% and holds MLPs in various energy areas like gas, oil and coal. There are other Tortoise MLPs to look at as others that give good diversification.

Another well diversified MLP is the Claymore Canadian Income Fund (ENY). It is owns many MLPs and yields 6.27% now. It has increased by 47% since its March low. These MLPs are a good place for making high income from dividends and provides safety in the sense that it invests in the energy sector. If oil makes $75 a barrel, these will rise as well.

Invest in Commodities

What’s up doc? That’s the question. The answer is simple: commodities. Of course you have noticed that the price of gasoline is going up and in this month alone has gone up nearly by a third. Oil is at $67-68 a barrel at this writing and expected to go to $75 by year end. As the dollar drops, oil goes up. The dollar is losing ground against almost all major currencies. Australia, New Zealand and Canada currencies have added double digit gains against the US dollar in the last month or so. These currencies economies are based on natural resources and are surging. Gold is at $988 and silver at $15-16 per ounce. They are both up from January by 11% and 38%, respectively. Soybeans and corn are at their highest in months. Coffee is up too if you haven’t noticed that while you visited Starbucks.

This is the best month for prices of commodities since the ‘70s. People seem to be moving from the dollar and Treasuries to safer havens like the metals, grains and energy. Have we slain the deflation monster and looking again for the inflation dragon? Safety or inflation? We will see.

So how do you get into this if you want to invest in commodities? ETFs are a good cheap and simple way to do so. There is risk in owning metals or any commodity, like stocks etc. You must remember that you own shares in the ETF and not the real hard stuff in your hot little hand. This may be considered an extra risk. There are many gold and silver ETFs to buy if you think the precious metals will continue an upward trend or others that short the metals and commodities. Remember, gold and silver are not only precious in themselves but also are looked on as a currency support.

If you want gold or silver look at SPDR Gold Shares Trust (GLD) or Comex Gold Trust (IAU) which are up about 11% this year. Gold mining stocks are available in the Van Eck Market Vectors Gold Miners (GDX) and other ETFs. If you want silver, the iShares Silver Trust (SLV) can be used. It holds silver bullion.

If one wants to buy other commodities like copper, the grains, coffee, sugar or lumber, beef, pork and so on: ETFs exist for many of them. You can look in a WALL STREET JOURNAL or BARRON’S or other financial journal, and find them all. You can leverage your investment by two or three, or go long or short in a commodity. ETFs exist for almost all of them. Good luck.

Obama’s “Real Health Care Reform”

The battle in joined. Healthcare is now in the forefront. The Washington Post reported that things will start to heat up next month as the clash begins in earnest. Senator Kennedy plans to fight for a government controlled health care plan. This plan will be similar to the one implemented in 2006 by the Commonwealth of Massachusetts. Or like the great Medicare plan we have. Kennedy foresees a reform plan in which the federal government will compete directly with private health care insurance companies. President Obama will kick off his program June 6 with the “Real Health Care Reform” program.

The Kennedy plan that came out of the Senate also plans to open up Medicaid to a family of four with an income below $110,000 per year. In addition, it makes all physicians participate in Medicare. None can opt out. This will continue to make it difficult for physicians to run an office as Medicare pays about one third the normal fee of a private insurance. We commented before on how this will hamper access and alter physician practice and training. We will see less people go into medicine. Unexpected consequences will happen again, but now in medicine. Kennedy et al will need to move more to the middle of the road.

Everyone talks about the Massachusetts program as if it were a great success. It is not. The costs are just being observed and will continue to grow and put stress on a budget already ill. What can we look for if the federal government undertakes the Kennedy plan? Where will the money come from? President Obama says some will come from the technology changes he just brought on within the healthcare industry. Going to computerized medical records is the plan, but even Obama’s budget people (Orzag) don’t think we will save much here. Plus we know the healthcare consortium already said it did not agree to Obama’s 1.5% savings plan. They really didn’t mean it after some thought in the Washington water holes. We must look elsewhere for the money. That brings us to the 300 billion dollar tax exclusion money. If companies did not get the tax exclusion for their health care costs, that would be taxable money in the treasury. But the fight will be against the unions who have expensive insurance but with great benefits. A battle is looming over the summer in Congress.

Finally, we have to cite the article by Krishna Guha of the Financial Times (May 28th) in which we find more government double speak. The Congressional Budget Office (CBO) says that if the health care reform leads to a market tightly controlled, it would consider it run by the government. Neither Congress of Obama appears to want that. The CBO said that if mandated coverage was above 80%, it would consider this a government controlled entity. Medicare pays 75% or less. Politically this is a sensitive issue because you have government control, on the one hand, and continued private enterprise on the other. In the face of this reform, if that isn’t double spoken, what is?

The Rich are Different?

F. Scott Fitzgerald told us decades ago that the rich are different. Pimco’s Gross passes on those sentiments with a few comments in his latest INVESTMENT OUTLOOK for June. He observes that it will be much more difficult to get “filthy rich” using other people’s money now due to all the new burdens of regulation, deleveraging, taxation increases and limits on how much one can make. Interestingly, and worrisome, is the observation that the list of big money individuals on the FORBES 400 list includes less Americans. The money is moving globally. More rich people are foreigners. He sees that as troublesome since it indicates that US wealth producing capability is less. The US standard of living will decline. Lower salaries and continued high unemployment rates will go on. Our triple A credit rating may be at risk. We were warned recently by the evaluators. We may become a double A like Japan, or suffer the UK’s embarrassment. Our debt is huge. Our predicted rate of economic growth is only 1%, not the normal 2-3 %. We can’t earn our way out of this.

We are told by the administration though that they know such a debt level cannot continue long term. We will return to fiscal responsibility and conservative budgets as soon as this crisis is over. We can’t grow out of this at a 1% growth rate… We can’t increase tax levels to do it either. There aren’t enough rich people to tax and the middle class can’t help close the gap.

Let’s look at the multiple snags we yet have to get by. First, we have a health care reform being pushed by the administration and Democratic Congress. They want it enacted by year’s end. Its cost is a 13 figure number: try 1,000,000,000,000.That’s just 13 figures to show how big it is. Other bumps need to be avoided too. Medicare, Medicaid and Social Security are the land mines everyone still ignores. If we have 11.3 trillion now in dollar debt and we add the health care tab in, we still need to look at a 40 trillion dollar unfunded liability for these programs over the next twenty years. Ration care, raise the age limits and lessen the benefits are real possibilities for the next generations to accept.

Gross reports that we have a conservative debt ratio for the US of 45%. With these liabilities (the 1.5 trillion deficit per year), that will rise to 100% quickly. How do we pay for this? Will China buy our bonds? Does anyone want them any longer? No, they are looking elsewhere to diversify. China is buying gold, and buying goods from other nations. To accommodate this debt level, interest rates will climb in Treasury bonds. We see that now. The dollar will continue to weaken. It is at its lowest levels in months. The Federal Reserve will continue to buy up 400 billion in Treasuries and Agency bills each year. The balance sheet gets more unbalanced. What to do? Balance the budget as the economy gets going. We cannot sustain this level of debt.

Mourning the Stock Market

When is The Right Time to Enter the Stock Market to Enjoy the Rally?

How long does the average person mourn the loss of a loved one? It seems that the time period runs from eleven to fourteen months on average. How long does one mourn the losses in the stock market? Can I measure that?

Yes it seems we can. We have an indicator for that too. It was devised in 1962 using un-motional mathematics and technical analysis to measure emotion in the market. E.S.C. Coppock worked out a mathematical indicator to examine how mourning happens in the market. He looked at personal bereavement and took that time period to base his measurement. This is described by Hughes, Gangahar and Mackenzie in the FINANCIAL TIMES (June 6). Currently the indicator is pointing up and that is good news for equity markets. There are several other indicators that one might look into just out of interest and for fun, if not profit: The Dow Jones Theory and the Hindenburg Omen.

Coppock developed an index of eleven and fourteen month periods and summed the rate of change, then used a 10 period moving average to smooth it all out. It’s all Greek to me. Black magic? Maybe, but it seems to work.

In seventeen buy signals, rallies were confirmed 16 times. When the indicator moves up above its zero base line, it is time to get in. It missed in 2001. Not all buy this though. Fundamental technicians like to stick to their charts and opinions and don’t look for such gimmicks. Moreover, the volatility of the last year in the markets worries many technicians who say it may not work. But we will see in the coming months.

On the other hand, many say that it may be right. Based on the three month rally we have seen, we may keep going. There is a lot of cash on the sidelines. It will pour in with any rally that seems strong. Some money will start coming into the market this year no matter what. Barclays has 14 % in cash and plans to buy through the year. In addition there were and still are a lot of anxious investors sitting in the bleachers. When they get tired of 2-3% bond yields and see things going up, they will jump in too. They already missed the rally from the 667 S&P bottom in March and are anxious to make up for it.

The rally now has more legs. The daily trading volumes are higher. This supports a continued bullish note to things. However, the S&P is having trouble getting through the resistance line of the 200 day moving average. This is a must for continued move up. In the UK, the market has been stuck at the 4500 level. The bulls must push through to keep it all going their way. So remember the Coppock Indicator and see if it is right.

Public Debt

Alexander Hamilton was appointed in 1789 the first Secretary of the Treasury by Washington. Robert Morris, who essentially financed the Revolution, was Washington’s first choice. He declined the position but recommended, to Washington’s great surprise, his former aide: Alexander Hamilton. Hamilton had widely studied the financial writers of the day while a colonel serving on Washington’s staff. He had experience as a merchant before the war. Jefferson (State), Knox (War), and Edmund Randolph (Attorney General) rounded out the first cabinet.

I have been reading Ron Chernow’s book: ALEXANDER HAMILTON. I wanted to leave a few of Hamilton’s remarkable insights before you. These thoughts come from over 229 years ago. Hamilton was a Federalist who championed a strong US Constitution and was adamantly opposed by Jefferson, Madison and Adams. He established the Bank of the US, the Coast Guard, set up the Treasury Department, our currency, debt and banking system (to name only a few of this genius’s work).

Hamilton put forward his assembled thoughts in his report to Congress entitled: REPORT ON PUBLIC DEBT. In this document, after instructing himself in the works of Hume, Montesquieu, Adam Smith, Malachy Postlethwayt, Jacques Necker and others, Hamilton presented his grand plan.

Let’s look at a few of Hamilton’s viewpoints. He wanted the new federal government to assume all state and federal war debt. Hamilton proposed making state and federal debt from the Revolutionary War one. The important point here are his thoughts: debt should always be extinguished and the government must be given the means to end it. Debt was good for the nation if properly managed. He later said that debt is the “natural disease of all governments.” Madison, commenting on government debt (bonds) stated that whoever owns the debt, owns the country. Thinking of China yet?

He also believed strongly in property rights. Hamilton linked liberty with property. They were one. Securities must be freely transferable and the owner assumes all profits and losses. Financial transactions cannot be retroactively altered. This policy became known as security of transfer and is sacrosanct in business. Thinking of Chrysler and GM bond holders yet?

On paper money as currency, he believed that “the stamping of paper…is so much easier…than the laying on of taxes…paper emission would rarely fail in any such emergency to indulge too far.” Hamilton established that the central banks could print money only based on hard assets like coins. Remember the gold standard? The money supply is rising and not backed by any hard assets. He also wisely foresaw that the head of the central bank, which set monetary policy, should necessarily be insulated from politicians. Thus we avoid abuse. This is why Bernanke can act.

In addition, he believed that speculative abuses are “an occasional ill, incident to a general good.” Abuses and bubbles will happen, but he tells us we must remember that such things do not outweigh the good banks and markets do for the general population. We should remember that now as our government looks to tougher regulations. Today, the stock market told us it did not like it.

FedEx Poor Earnings Forecast

America’s top-rated Company FedEx Shows Poor Earnings Forecast, Is The Economy Hitting It Hard?

Late yesterday, the United States’ stock market reported a decline in FedEx stocks. Fedex is America’s top-rated overnight parcel delivery company. FedEx itself announced an imminent dip in profits of 30 to 45 cents a share in this reporting period, although analysts were expecting shares of least 60 cents. Wednesday’s stock market report confirmed the predicted decline by closing at a loss of 2.6%. Fedex’s profit decline is partly attributed to its acquisition of Kinkos. Kinkos’ office services have declined in recent months due to the closing of small businesses resulting in America’s struggling economy. The improvement of office technologies and paperless systems has also contributed to Kinkos’ decline in profits. However, Fedex also said that the parcel delivery division’s earnings are hurt by depressed manufacturing activity, as well as a recent rise in fuel prices. What’s worse is that Fedex has already warned that fiscal first-quarter earnings may be as much as 76% below last year’s levels.

Fedex’s international division is said to be stabilizing and has shown signs of improvements and growth in Asia, Latin America and Europe, compared with the third quarter. “That’s a very good sign for us,” said Chief Financial Officer Alan B. Graf Jr. However, this is not the huge increase and success that would ultimately save Fedex. Fedex executives are reviewing strategies to increase growth and earnings in the second quarter.

The economy and gas prices are not the only woes facing Fedex. Just this month, Fedex launched an expensive and politically charged campaign against the unionization of 100,000 of its workers. FedEx contends that its employees are properly classified and that this movement to unionize would cause disruption, less reliability for the company and higher costs. On June 9, FedEx launched its campaign, “Brown Bailout”, which will soon be seen on television and print ads. The campaign asks consumers to complain to their senators about union legislation. “Brown Bailout” refers to Fedex’s main competitor, UPS; (its workers wear the color brown) receiving a government bailout for its purported struggle to compete with Fedex.

Frederick Smith, founder and CEO of FedEx, is not looking for a government bailout. However, there might be signs that Fedex is acquiring a new client, the United States government. This possible new deal for Fedex would not be for delivering parcels, but for its tracking technology. Fedex has been responding to a growing political term called the “Fedex Approach”. The Fedex Approach theory, originated by Republican Mike Huckabee, a one-time republican candidate for president, suggests that the technology of tracking packages by FedEx should be implemented by the government to track the 12 million illegal immigrants around the country. Frederick Smith agrees with the Fedex Approach and said, “Using information technology is possible to handle very large problems. There are structural issues inside the federal government that prevents it from doing so, but technologically, it’s very feasible.” Despite a grassroots effort by some republicans to outsource illegal immigration tracking to Fedex, Frederick Smith does not entertain the notion as a serious offer yet.

Supermodel Gisele Bundchen Is Pregnant

World Highest Paid Supermodel Gisele Bundchen is Expecting a Baby Early Next Year

Sources confirm that Brazilian supermodel, Gisele Bundchen, is indeed pregnant. Bundchen, who is 28 years-old, married the handsome American NFL football quarterback, Tom Brady, in February of this year. Bundchen recently told People Magazine that, “Family is everything”. People Magazine has also reported that Bundchen is “ecstatic” about the baby and is due to Deliver early next year.

Speculation of the supermodel’s pregnancy was the topic of this week’s Sao Paulo Fashion Week in the country of Brazil. Gisele strutted the runway wearing a baby pink and baby blue short baby doll dress. Yes, that is a lot of symbolism for the word “Baby”. This runway appearance could have been Gisele’s way of announcing her pregnancy to the world. Bundchen, who has previously denied the pregnancy rumors following being seen, leaving an obstetrician’s office a few weeks ago, is not denying the claim today.

No doubt that Bundchen has put the word “super” in supermodel. She has a super-salary, it is reported that she is ranked the 16th richest woman in the entertainment industry and worth approximately $150 million USD. She also has a super-career, with her image on the cover of more magazines than any other model. She has a super-body, at nearly 6 feet fall.

Bundchen became a household name when she climbed to the top of her career as the face and body of lingerie company, Victoria’s Secret. Oh, and let’s not forget her former relationship with superhunk and actor, Leonardo DiCaprio. DiCaprio is said to still be pining over Bundchen despite his now long time relationship with Israeli supermodel and stunner, Bar Rafaeli.

Everything seems, well … “super” in Bundchen’s life. She has a baby on the way, a great career, a handsome and successful husband, looks, money and everything else. However, things might not be as perfect as they appear to be. Though this is the first child for this mom-to-be, there is a slight problem. It is well publicized that Bundchen’s husband, Brady, has a 22-month-old son with actress and ex-girlfriend, Bridget Moynahan.

Both Brady and Bundchen, who are now married, insist that they were dating prior to the discovery of Moynahan’s pregnancy. However, it has been widely rumored that Brady abandoned his then pregnant girlfriend, Moynahan, to pursue a dating relationship with Bundchen. Whether or not Brady knew of Moynahan’s pregnancy prior to dating Bundchen is still subject to speculation.

Will Bundchen include Brady’s son, John, as a part of her ideals of a happy family? Moynahan and Bundchen have had many problems adjusting to their new roles in Brady’s life. There have been multiple incidents of hard feelings between the two ladies. Just this March, Bundchen told Vanity Fair Magazine that she felt vested in John’s life and said, “I understand that he has a mom, and I respect that, but to me it’s not like because somebody else delivered him, that’s not my child.

I feel it is, 100 percent”. Moynahan was reportedly “furious” with Bundchen’s comments about John, accusing Bundchen of trying to take ownership of her son. Although Moynahan has not publicly made comments about Bundchen, that has not stopped Moynahan’s friends from talking to the media to express her views.

The New Apple iPhone 3GS

New 3GS Apple iPhone – Why Should AT & T Customers Rethink Before Buying It?

The technology world waited breathlessly late last week for the new Apple iPhone to be released. The new iPhone differs from the former model iPhone by adding some new technologies and devices. Some of the favorite features of the new iPhone is the Spotlight Search which enables users to sort out all of their applications with ease. Instead of going through each application manually, Spotlight Search starts to sort the applications the moment you begin typing your request. The new iPhone will sort the address book feature, web applications, notes and all other applications in mere moments.

Another new feature is the Global Positioning System chip installed in the new iPhone which will eliminate the need for a separate navigation system, for which many consumers pay a lot of money. YouTube is a natural benefactor of another new feature, an included state-of-the-art video camera, complete with professional editing features and an easy upload feature to sites such as YouTube.

Another convenient and important new feature is the enhanced Wi-Fi technology of the new iPhone which provides users with up to 9 hours of battery life. Also, a larger landscape keyboard allows faster messaging. It seems that Apple has thought of everything when creating the new iPhone functions. With additional attachments, the iPhone can be used as a blood sugar monitor, music editing and applications for doctors to make house calls and even can double as a garage door opener.

Granted the every-day professional will never venture far from their Blackberry, it is what they know and are comfortable using. However, there is a large population of technology savvy consumers who have been desperately awaiting new cell phone technology and have pounced at the change to tinker and use their new iPhone 3GS. Emmet B. Keeffe III, co-founder and CEO of iRise, a Los Angeles-based technology firm that develops software for the enterprise market, was one of the first to receive the new iPhone. “It was difficult knowing that my new iPhone was on my desk at work while I was on an airplane”, said Keeffe who could not wait to return from a trip to start exploring the iPhone’s new features. Keeffe, a happy user of the former model iPhone, said that the 3GS is, “much better, because it is faster”. Keeffe admits that he is a technology hound waiting for the latest and best technology, but he said that he also genuinely likes the new features in the latest version of the iPhone. Indeed, the new iPhone is faster, try two times faster than the previous model.

Some complaints about the new iPhone have been mild so far. For example, some consumers are complaining that their air-time contractor, AT&T, has not been able to activate the new iPhones which has resulted in an apology rebate by Apple for $30.00 USD. AT&T vows to fix the problem in the next 48 hours. However, most consumers have reported that it was surprisingly easy to use which might have disappointed some new users because many have been honing their skills in anticipation of the challenge of exploring their new phone. In America, the new iPhone 3GS is on shelves now at many retailers. AT&T is offering an introductory rate of $199 USD with a two year contract for air time.

Millions of Americans are Victims of Marketing Fraud each year

Millions of Americans are Victims of Marketing Fraud each year. Don’t be one of them

An interesting alert was published by Karen Blumenthal in THE WALL STREET JOURNAL (June 17) on scams perpetrated on the elderly. Unfortunately, everything Blumenthal wrote was already familiar territory for me and my siblings. It brought to mind our family’s run in with these con artists. We had previously endured the rip-off of two of our relatives. Millions of Americans are victims of marketing fraud each year. The elderly are among the chief prey. They are easy and they have money.

We found out about my mother’s fraud one day when I called to tell her she had won $100 on a legitimate lottery ticket that I had purchased for her from my alma mater. She laughed and told me that was nothing. Her luck had turned and she was waiting for a man in a limousine to come and give her a check for 50,000 pounds for her Irish lottery ticket winnings. She just had to pay a transfer fee of $100.00 to him when he got there. I asked her when this would be and then got hold of my siblings. They were able to head this off and have the police there to arrest the man when my mother turned over her money. It turned out the scam was run out of Canada and not much could be done. But we got a few of the locals involved in the scam. The local police referred us to the FBI. They filled us in on what was going on. They could do very little except give us information and inform the Canadian authorities. My mother’s sister had been doing similar things. She sent money to lotteries all over the world in cash. She received phone calls from Jamaica and this cost her $400 in the scam. They took her number and used it. The phone company gave us some credit of but not much. The scammers got their credit cards and charged a monthly fee to them in the scam. We looked at my mom’s losses over 4 years and found it was $40,000.00.

The major tricks are in weight loss, and lotteries with three million new targets a year. Like my mom, they like to send checks to your loved one and have them deposit them and immediately send money back to them. The check bounces and your bank expects you to make it good. You are stuck with the charges.

These scams are mainly run out of Jamaica, Canada and The Netherlands, although many US run scams exist. What can you do to protect your elderly loved ones from this? You have to be an 800 pound gorilla with soft hands. Parents want their independence. However, they have decreased physical and mental capacities and can no longer function alone. You may have to get legal power of attorney to handle their financial affairs. You may need to take their check book, close credit cards, and check the mail and get rid of the junk mail they get. Go through it all as this is where the scams come to them. Telephone number(s) and usage may need terminated or controlled. Remember that these folks are now on the extortionist’s list and get sold to other scammers.

Two of the scammers were arrested and tried in Boston federal courts. We are kept up to date on the progress and sentencing which we were asked to comment on. And we did. We asked for maximum sentences for these animals that prey on the elderly (they got 10-15 years). If you have family in this age group, please check out the article as it has a lot of good information to help you with. Hopefully, you’ll be more aware of it than we were.

Michael Jackson Death Mystery

Michael Jackson Death: Is Questioning his Personal Physician Dr.Murray Justifiable?

Dr. Conrad Murray, Michael Jackson’s personal physician, was questioned by the Los Angeles Police for three hours on Saturday night (Pacific time) regarding Jackson’s sudden death last week. Dr. Murray was alone with Jackson at the time of his cardiac arrest and resulting death. In fact, Dr. Murray was performing CPR on Jackson when the ambulance arrived at Jackson’s home. A spokesperson representing Dr. Murray confirmed the doctor’s questioning by the police and announced that Dr. Murray responded to, “every and all questions.” The spokesperson also confirmed that Dr. Murray, “will continue to cooperate fully with the authorities …”

After Jackson was taken from his home by ambulance, the Los Angeles Police impounded Dr. Murray’s vehicle to search for narcotics or other evidence pointing to the cause of Jackson’s death. It turns out that Dr. Murray might be answering further questions quite soon, perhaps not to investigators, but to the public. Sources are confirming that Dr. Murray is not board certified in any medical practice specialty. Although, board certification is not necessarily a requirement to practice medicine, sources say that Jackson hired Dr. Murray three years ago believing that he was hiring a cardiologist.

Certainly, the public is now aware that Jackson was planning a come-back performance prior to his death. His upcoming concert was to commence in London and was called “Dangerous.” The concert promoters, who were paying for the tour event, required Jackson to pass a physical as an insurance requirement. Indeed, Jackson was administered a five-hour physical in February of this year. A physical was required to make certain that Jackson was physically prepared for the vigorous concert demands, including dancing. The concert promoters are saying today that, “Michael passed the physical with flying colors.”

Dr. Murray has been the target of a lot of scrutiny from the public in the last few days. It has been revealed that Dr. Murray has a history of personal misdeeds. Although no patient-doctor medical complaints have been made against him, he is embroiled in several personal legal matters such as tax liens, education loan defaults, car registration charges, non-payment of child support and credit card debts. Dr. Murray’s one-time medical practice, Global Cardiovascular Associates, has also been sued by several vendors for its failure to pay creditors. Many speculate that Jackson’ sudden death was caused by an overdose of prescription medications. However, a few doctors hold out opinion that Jackson’s death could have stemmed from a complication of an auto-immune disorder, for which Jackson suffered, called Lupus. Jackson has been diagnosed with Lupus, which can cause sudden heart attacks to its victims when in their 40s or 50s. Though African-Americans are four times more likely to be Lupus victims, Lupus is far more prevalent in women than men.

A more presumable cause of the heart attack, many physicians agree, was a combination of medications. Jackson was known to have been taking pain killers called Dilaudid and Vicodin, a muscle relaxer called Soma, a sedative called Xanax, an antidepressant called Zoloft, an antianxiety drug called Paxil and heartburn medicine called Prilosec. An autopsy of Michael Jackson’s body has been performed but was determined to be inconclusive. No funeral arrangement have yet been made for Michael Jackson by his family.

Anal-Cancer and Herbal Supplement Therapy

Farrah Fawcett lost her battle with Anal-Cancer: Are you aware of this Rare illness?

With the passing of Farrah Fawcett last week, anal and rectal cancer and their therapies need scrutinized. The anus is the end passage of the intestine through which waste products of the bowel is eliminated. It is about 1-2 inches long and has two muscle sphincters which relax and contract to allow stool passage. The anus has two tissues forming it: 1. the inner intestinal lining; 2. outer skin.

Discovered in 2006, she underwent standard treatment of surgical excision with radiation therapy and chemotherapy. She was declared cancer free in 2008 because the tumors in her liver were inactive. Later, new tumor was found growing in the rectum and liver. She underwent another form of chemotherapy and traveled to Germany for six herbal treatments non- approved of for US use.

Anal cancer is very rare. Rectal cancer is about twenty times more common. Bleeding, itching, pain, a mass or discharge can be symptoms. Most people think of hemorrhoids when bleeding and itching occur. A change in bowel habits is also seen. It is found more often in smokers, people over age of 50 years, and those having anal sex and with multiple sexual partners. HIV may also be related. The cancer is highly related to human papillomavirus (HPV), a sexually transmitted disease. The HPV vaccine protects against cervical cancer, and may have an effect in anal cancer. However, it is not given yet to alter this cancer risk. Data is still being collected.

More men get anal cancer up to the age of 50; afterwards more women get it. Prognosis is good if found early. Five year survival is over 80%; it decreases as metastasis occurs. Only 20% of patients survive five years if the cancer is found in other organs. With re-occurrence, surgery, radiation and chemotherapy are used again.

Upon learning of the re-occurrence of her tumor, she underwent treatments in Germany. They were herbal supplements and immune therapy. Mistletoe and other herbals were apparently used to attempt to boost the immune system and fight off the tumor. Mainstream American doctor agree with the theory that immune strengthening can be used to kill cancer cells. It is just that at this time we are strong on theory and weak on practice. There is not strong scientific evidence to show that we have any herbals supplements that can do that. Doctors suggest people be aware of possible medical scams. You should decide just what they want to obtain in treatment. It is pain relief or cure or something else. Finally, look at the major cancer centers in the US for new, experimental therapies that may work.

Quitting Smoking can be Harmful to your Health? The US FDA gives a New Warning

The Surgeon General of the United States makes many warnings about cigarette smoking, including the risk of cancer and heart disease. But today, the Food and Drug Administration (FDA) warns about the potential for deadly side effects of nicotine suppression drugs. The side effects are not physical like smoking, but rather mental. The drugs used to assist smokers, called Chantix and Zyban, are studied and theorized to cause “bizarre behavior” in its users.

Bizarre behavior isn’t the half of it. The aforementioned drugs are suspected to induce suicidal thoughts, suicide attempts and hostility. The FDA warns users of these prescription products to be monitored closely by their physicians.

Certainly, those who aspire to quit smoking should understand that smoking is a great health risk. Therefore, doctors caution that quitting smoking is a significant health benefit. However it is recommended that those using prescription drugs to achieve that goal, be warned about reporting any changes in behavior.

Some smokers who are trying to quit smoking have asked if “cold turkey” is a safer means of stopping, meaning without any medication. According to some doctors, the act of quitting smoking itself will cause withdrawal symptoms that can cause moodiness and other behavioral changes and the cold turkey method is not highly successful.

Based on the FDA findings, it appears that the drug Chantix is the riskier or the two. Zyban has a study result of 14 suicides compared to Chantix with 98. Though these studies have not been fully completed, the FDA takes early precautions in warning the public and applying a “black box” warning on the products identifying the risk to its users.

Pfizer, the maker of the drug Chantix, explains that it will continue to conduct clinical tests on its own with respect to the dangers of the drug, but contends that the, “drug remains an important tool for people who want to quit smoking”.

This safety news is bad news for many people who seek help to quit smoking. According to a study by the American Cancer Society, deaths attributed to nicotine and tobacco use has caused nearly 20 percent of the deaths in America. Since about 43 million Americans smoke, the deaths associated with cancer and smoking will far outweigh any side effects from nicotine prevention drugs. The death and taxes argument is doubled in the case of smoking. Based on studies by several American agencies, smoking can cause death. However, the financial impact of smoking has also become a good reason to quit now. The federal government as well as the individual states has imposed additional tobacco taxes that have caused certain hardship to Americans during this economic crisis.

Source of Taliban Funding

Afghan Poppy is a Deadly Source of Taliban Funding, US and NATO Attempting to Stop Drug Trafficking

Afghanistan is the world’s largest producer of opium poppies, about 93% is grown in the southern Afghan province of Helmand. Helmand is mostly a lawless region; it has no form of government and has been over-taken by the Taliban insurgents, who headquarter there. In Afghanistan, the poppies are not considered flowers; rather they are called crops, crops used to make the narcotic drug heroin.

It is no coincidence that the Taliban controls much of southern Afghanistan, where the poppy crop is farmed. These poppy farms keep the Taliban in control by providing it with crop sales. The sales of
the poppy crop produce enormous profits which are used by the Taliban insurgents to fight US troops by its purchase of expensive and sophisticated weaponry. The money is also used by the Taliban to recruit new jihadists or holy warriors. The Taliban is said to have control over the poppy farms by substantially taxing the farmers and taking control of the distribution of the final product.

For years, the US has attempted to eradicate the poppy farms in Afghanistan. However, this plan has backfired for the US because attempting to stop harvest and production by the Afghan farmers was only causing the farmers to join the Taliban. Why do farmers opt to join the Taliban instead of discontinuing production of the crop? While some farmers say that Taliban militants force them to grow poppies under threat of death, other farmers say that they are proud to be supporting “jihad” against Americans.

The US, concerned about the rising risk of insurgencies and weaponry in Afghanistan, are also concerned about the trafficking of this highly addictive substance. Large quantities of heroin have been spread all around Europe from Afghanistan after at stop in Iran. The drug has become widely available due to the Taliban farming and distribution. The drugs Heroin and Opium, both from the poppy, are considered to be dangerous narcotics, according to the World Health Organization which is also studying ways to prevent health risks from these drugs.

The US has been trying a dangerous new tact, the U.S. and NATO forces are attempting to stop the trafficking and warehousing of the drug before it leaves southern Afghanistan. The mission is top secret, the details are not being revealed by the Pentagon. But this might be the only way to stop the Taliban insurgents in Afghanistan and return it back to its people, according to a US Envoy in Afghanistan.

The poppy is widely used to make the drug heroin. However, the poppy has medical uses as well. It is used to make pain medicines such as morphine and codeine.

Poppies are a decorative flower that comes in many different colors. The seeds of the poppy are used for all sorts of culinary recipes. However, the drug is harvested from the milky latex sap of the mature seed bulbous capsule. When the pod is cut, the sap drips from the fresh cuts. Once the sap oxidizes in the air it turns black, the net result is the resin to make heroin.

Obama prepares for talks in Moscow amidst Rumors of Relationship strain between Putin and Obama

US President, Barack Obama, has scheduled a visit to Moscow, Russia to discuss various political issues and reconciliation with Russia’s Prime Minister, Vladimir Putin and with Russian President, Dmitry Medvedev. President Obama aspires to update the approach of diplomacy between Russia and the United States.

Obama describes Putin’s approach with the US as still having, “one foot in the old ways of doing business and one foot in the new.” Since Obama feels that the “old Cold War approaches” are “outdated”, he will attempt to develop a more timely relationship with Russia. Obama believes that Putin still has a lot of influence in Russia and hopes to reconcile as many differences as possible between them.

In April 2005, Vladimir Putin, Russia’s then-president, made a speech stating that Russia will develop democracy at its own pace and will not tolerate any outside interference from the United States. Since that speech, Putin has not progressed his views about relations with the United States. This is an attitude that Obama hopes to correct.

A motivating factor in Obama’s upcoming visit to Moscow is partly attributed to his outreach vow to foreign leaders. Obama is looking to develop a “very good relationship” with Medvedev, Russia’s president. Part of Obama’s approach with Russia is to reduce nuclear arms in the world.

Obama admits that Russia has not been an obstacle in confronting Iran or North Korea in their zeal to amass nuclear arms. However, Obama would like open communication with Russia instead of propaganda, posturing or messaging.

Indeed, communication and good relations are in order. As of last week, Russia debuted its 16 year-old project, its strategic nuclear-powered Yury Dolgoruki submarine. Testing has uncovered that the submarine vessel cannot accommodate Russia’s Bulava rocket, but nonetheless Russia’s Defense Ministry reports that this will be corrected in the next year.

Another challenge for Obama, standing in the way of a successful meeting with Russia, is the underground whispers of dissension between Putin and Medvedev. There are rumors between the two cabinets in Russia that “they may be playing various games” with each other.

Just in the last few days, the two leaders have confronted each other on gambling matters and retail sales. Another hurdle for Obama is the on-going conflict between the country of Georgia and Russia. Last August, the two countries engaged in a war lasting five days. Though the two countries publicly disagreed today in Geneva about their politics, more talks are scheduled to resume in Geneva on July 14 and on Sept. 17. It is Obama’s goal to further discuss a solution to the conflict between Georgia and Russia.

As Obama plans to visit Moscow this month, he might not receive the adulation that he did in Germany and in Cairo, inspiring his audience toward conflict resolution. Obama is predicted to be disappointed by Russia’s confidence in him. A recent poll by the BBC found that only 23 percent of Russians felt confident that Obama will “do the right thing in world affairs.”