Saturday, July 28, 2012

Mood Altering Drugs For Everyone!

America Is A Pill Popping Nation!
While watching one of the millions of ad's encouraging Americans to "visit their doctor" to ask about getting the latest and best drug available, I came to the conclusion this is getting out of control. It appears that as a society we are giving everyone that wants them the latest mood drug, or anything that will create an up beat and positive buzz. Many people even go so far as to say that people "deserve them" if these "wonder pills" are part of the recipe to happiness. While few can deny that many of these drugs are expensive, and often under tested, they will keep the masses happy and docile.

A strange cultural phenomena that I have a hard time understanding is how mentally attached people are to their drugs. Often they see themselves interconnected with the prescription and become mentally dependent on them. With pride many people talk about their "meds" comparing price and dosages as is it elevates them in society. Could it be the more expensive pills I consume each day the more important I must be to society? Regardless of why, it appears Americans are totally in love with their drugs and their thirst for more seems unquenchable. This is a large part of why healthcare is so expensive in America.   

This is big business. The pharmaceutical industry develops, produces, and markets medicines to meet our every need. Cost on different or even the same drug or medication varies drastically depending upon where it is purchased and by whom. In 2011 global spending on prescription drugs topped $954 billion with the United states accounted for more than a third of these sales. America spent a whopping $340 billion. Global sales in 2014 are expected to reach 1.1 trillion dollars as emerging countries such as China, Russia, South Korea, and Mexico demand more and more drugs.

While it should be noted that these drugs can be liver wrecking, heart popping, and cause dizziness as they cause your stomach to spin and churn, I urge you to think of the positives. These drugs have proved capable of improving our sex lives, wiping out depression, and adding bounce to our step. Who cares if this mood alteration is a tad artificial? Who cares if it may have devastating side effects? Who cares if it will cost our bankrupt government billions of dollars? I ask, is this another way to lull us into submission, is this the modern template for happiness?              

Please take a peek at my February 7th post We Are All Slaves, an interesting thought.

Footnote: PBS did a story about how the price of drug prescriptions varied. The cost between pharmacies was almost unbelievable. It is shocking and worth viewing. It can be seen at the link below,

Monday, July 23, 2012

Spain To Big To Fail, so they said!

The news out of Spain is that the country has banned short-selling of stock shares for three months in an effort to limit the market sell off. Markets fell sharply on fears the country may need a full bailout, things turned negative on Friday, just hours after the Eurozone's finance ministers agreed on an interim bailout of the banks. The reaction caught the Spanish government by surprise. They expected their  borrowing costs would ease as a result of what they described as a "prompt and well-defined clean-up operation". Instead rates have again soared above 7%, a rate that is not sustainable. Spain is effectively shut out of the markets and cannot afford to finance itself.

The mood in Spain has turned sour, the people have grown weary of austerity and are increasingly rebellious. It was under-reported at the time but the protesters on the streets last Thursday night in Madrid may have reached 100,000 as rubber bullets flew. There were protests in 80 other towns and cities with off-duty police and firefighters sometimes joining in. What is significant is that it is no longer just the unions on the streets other citizens are joining in. More bad news was heaped upon Spain on Friday, Valencia, one of the country's 17 regions, asked the central government for a financial lifeline, and on Sunday, the Murcia region said it was considering following suit.

The financial problems in Spain are in some ways similar to those of Ireland. Spain has wildly over built during the last decade. Empty buildings and homes sit everywhere, real estate prices have now tanked, and unemployment has soared. The banks are sitting on billion of dollars of bad loans that will never be repaid. The cost of supporting the unemployed coupled with a drop in tax revenue has caused a huge government deficit. Bleak is the best word to describe the situation. To make matters worse, the government is predicting  the economy will further contract next year.

If there is is not enough gloom hanging over Europe, focus is also returning to Greece's woes. On Tuesday, officials from the so-called "troika" - the International Monetary Fund, the European Commission and the European Central Bank - will arrive in Greece to assess the progress made on reforms that were agreed as part of the country's latest bailout. Reports over the weekend suggested that the IMF will refuse calls for further aid, if, as expected, the country fails to meet targets for cutting spending and raising taxes. The IMF did say it would work with the country to get it "back on track". But the foot note from the IMF, "the viability of the monetary union is at stake" is not something to take lightly.

Saturday, July 21, 2012

Banks Not Responsible For Housing Crash

Consumers do not always make choices in their own interest even when they have more then enough information. However, I question how pervasive such decisions are and also where the blame should be placed often someone acts as an enabler. Today I want to  concentrate on concerns I have about using the government to try to improve consumer choices. It is not clear that government bureaucrats generally understand why consumers make defective decisions, and even less likely that governments policies will help improve these decisions. It should be mentioned, government officials, including regulators, legislators, and executives, are subject to powerful pressures from interest groups that often greatly affect public policies to the detriment of consumers.

One might say that it was government policy that was responsible for the nasty housing crash in the first place, government policies encouraged offering those least able to resist, a deal they should never have been offered. Sure, some families may not have bought their homes if they had known a crash would be coming, especially families that took out mortgages just prior to the crash. But how could they reasonably be expected to know disaster was looming  when few housing market experts were predicting a crash?

To illustrate the harm done by acting as an enabler, consider sub-prime borrowers in the housing boom, "or should we say bubble",  that came crashing down with the financial crisis. It is frequently argued that these borrowers were ignorant of the risks they were taking or fooled by lenders and others into buying houses with mortgages that they would be unable to handle financially. Yet the decisions by sub-prime borrowers made a lot of sense in light of the very low, and sometimes non-existent down payments that lenders required. Coupled with the lowest interest rates in decades, these borrowers had perhaps a once in a lifetime opportunity to be owners rather than renters.

Much of the fault lies with the federal government, including the Federal Reserve that encouraged rather then cautioned sub-prime and other home-buyers. At the time leading members of Congress and other government officials pressured banks to offer mortgages on generous terms to consumers with bad credit histories and poor job prospects. The Fed contributed to the housing bubble by keeping interest rates low. Consumers made their housing decisions in an environment where both banks and governments actively promoted the purchase of homes with low interest rates and low down payment requirements.

While few people have a love for the banking and financial institutions in general they did not orchestrate the housing crash. In truth banks merely played along and raked in the profits flowing from bad government policy.  It is time we stop blaming the banks, a better target for our scorn are the Government Sponsored Enterprises such as Fannie Mae and Freddie Mac that bought these mortgages from the banks, had the banks known they would have to be responsible for the loans and had to keep them on their books, much stricter standards would of prevailed.

Thursday, July 19, 2012

LIBOR Rate-Rigged and Rotten to the Core

Another sign that the worlds financial system is rigged and rotten to the core has been revealed.  Sometimes the most important and memorable incidents in earth-changing events occur in a very common way. In the rapidly spreading scandal of how the LIBOR or [London inter-bank offered rate] is set, the crux of the problem is how casual bank traders were as they manipulated the most important figure in finance. The investigations show they joked, or offered small favors. “Coffees will be coming your way,” promised one trader in exchange for a fiddled number. “Dude. I owe you big time!… I’m opening a bottle of Bollinger,” wrote another. This explains why concerns about inter-bank lending rates are now spreading to other jurisdictions.

From what started for many as an affair involving the British bank Barclays rigging an obscure number, this is beginning to assume global significance. The number that the traders were toying with determines the prices that people and corporations around the world pay for loans or receive for their savings. The LIBOR rate is used as a benchmark to set payments on about $800 trillion-worth of financial instruments that rang from complex interest-rate derivatives to simple mortgages. How they arrive at this number that determines the global flow of billions of dollars each year is beyond flawed, it is totally rigged. All this adds to the foul odor coming from central banks that are printing money and distorting markets with record low interest rates, these low rates are punishing savers, yes the system seems rotten to the core.
Over the past week more damning evidence has emerged, in documents detailing a settlement between Barclays and regulators in America and Britain, it seems that employees at the bank and at several other unnamed banks tried to rig the number time and again over a period of at least five years. And more shenanigans are likely to emerge as investigations by regulators in several countries, including Canada, America, Japan, the EU, Switzerland and Britain, are looking into allegations that LIBOR and similar rates were manipulated by large numbers of banks. Corporations and lawyers, too, are examining whether they can sue Barclays or other banks for harm they have suffered. Before the smoke settles this could cost the banking industry tens of billions of dollars.

Wednesday, July 18, 2012

Syria Has Slipped Into Civil War

The Red Cross has made it official, they have declared that Syria is now in civil war. The shops in Damascus are barer than usual and many have taken down the photographs of President Bashar Assad that once presided over every establishment in the Syrian capital. The regime has until recently held up the city as proof of its control over the country, vast swathes of which are controlled by opposition forces. The Free Syrian Army is making incursions into the city more often and holding ground. It is becoming harder to find supporters of  Assad even in Damascus.

While many residents have not embraced the political opposition—a bunch of exiles—nor the Free Syrian Army, the groups of armed opponents whom many also fear. But they have turned away from the regime that has spilled so much blood. “This violence can't go on,” says a wealthy man who lives close to the presidential palace. A mother of three echoes his thoughts: “We have no idea what could come after this regime but you can't be a Muslim or a Christian and accept this killing.” Protests, although small, break out more frequently. The shelling and destruction of towns and villages across the country has sent people fleeing to the capital, bringing terrible stories, anger and unrest.

For some time I have contended that while the situation is indeed sad and very ugly, no easy answers exist. Other then continuing to bang away at those that are sending support to the Assad regime and helping refugees that flee the country little can be done to lessen the loss of life. Any programs that pour weapons into Syria risk escalating an already bad situation. More violence will desensitize the people and most likely destabilize the countries institutions, this will lead to a downward spiral and further violence.

This was seen coming:  please review my previous post from February 12th, Syria uprising is past the point of Return!

Wednesday, July 11, 2012

Huge Trade Deficits Unsustainable

It was reported yesterday that the U.S. trade deficit fell 3.8% in May to $48.7 billion largely because of lower oil imports. While a minor improvement America can not continue down this path at the same time it runs a huge government deficit as well.

This is part of  a revised  post I wrote on March 7th,
                                                 Record Imports Are A "Unsustainable" Problem
Many people that comment on Japans huge government deficit and debt fail to realize that for years Japan has offset that with large trade surpluses. This allows its citizens to buy bonds and allows Japan to control its destiny, this is unlike America that barrows from China to fuel its spending. The presidents spokesman was on Meet The Press a week ago and said, "The time for austerity is not today" he went on "we should look at cutting the budget as a long term goal but not today." As always, it is a case of kick the can down the road.

The idea that America needs to get through this rough patch before tightening the government purse strings has resulted in massive deficits. A country cannot run both a huge government fiscal deficit and also a massive trade deficit, this is unsustainable. For the whole of 2011, the US trade gap rose 11.6% to $558 billion, the highest since 2008. The economically important deficit with China for the year jumped to a record high $295 billion. Some blame China and the exchange rate that China sets for its currency against the dollar, the Senate, controlled by the Democrats, recently passed legislation to try to force China to raise the value of its currency.

But let us get to the crux of the problem, you cannot go on year after year spending more then you earn. When coupled with huge government budget deficits the trade deficits weaken the dollar and drive America in direction of bankruptcy. Let me say it again "this is unsustainable."  It is a myth that we can "export" our way out of this mess, a myth spread by politicians preaching the "no pain" method of solving a problem. The simple answer is that Americans must begin to accept reality and cut back their purchases of foreign goods. A common claim is that if the dollar goes down that helps US exports so it is a good thing, but remember this is a double edged sword, a lower dollar means imports will cost more.

As long as the US dollar is the international reserve currency, the US can just export dollars to import things. While this remains true there is no pressure for the US physical exports to equal their imports, but if the dollar falls from grace, then the US will not just be able to export dollars, and real exports and imports will have to come into balance. Successful leaders give the public reason to believe that they have a long-term program to bring a better tomorrow. America must begin to plan a way out of our explosive deficits and our hesitant and jobless recovery by reducing uncertainty and encouraging real and sustainable growth.

Footnote; People who think we will be able to create many new jobs and export our way out of this mess should read the post below,

Lie Of The Day

Yesterday an expert, who they called the "most bullish man in America" appeared on a financial show and proclaimed that the stock markets will see a huge rise by year end. He said this was due to the lowest interest rates in history. My response, then why has Japan had two lost decades since adopting its zero interest rate policies?

This brought to mind a post that I attached below. I wrote this note of irritation on March 27th it is called,
                                                         You Don't Know That!

Oh to the confident and suave television and news commentators, and the experts that speak with such authority, I include the pundits and so called specialist, to you I  say, I'm skeptical and dubious. Even when you mask your bias and your agenda is hidden, I must often remind myself that, you don't know that. It is often not the message you put out, but how you project it. I can see you now, your head a bobbing and your arms moving all around, you state your case  with such brilliance and force that often we are swept away!

This rant is in reference to all the pundits and so called experts, about all the words that spew from their mouths, about the reams of material they write, and the large quantity of often misstated facts they put forth. Sometimes these clowns even go as far as to tell us exactly what someone was thinking, for example if  a commentator states, "when the man jumped he knew it was to his death", I ask, how do they know that? It is possible that the man was an optimist or the light never came on. Fact is that when it comes down to what someone is thinking these authorities are only speculating.

After they have used every line from "green shoots" and "edge of  the envelope" they say, "that being said" and after "having said that" they often  wow me with "just do the math" or "it is not if, it is when". But what sends me over the top is the line often used by politicians and our so called public servants to justify some unsavory action, "it would of been far worse if we had done nothing". How do they know that? I beg to differ, but on more then one occasion I wish they had done nothing.

It seems that people love to defer to the opinions and advice of so called experts so they don't have to think, of course I don't know that for sure. One thing I do know is that is not based on speculation or hearsay is that it would be a lot easier to tolerate these clowns if they were right at least every now and then.

Monday, July 9, 2012

Light bulbs discontinued

A popular song lyric from the 1960’s proclaims, “You don’t know what you have got, till it’s gone”. That situation could indeed be the case for many owners of obsolete, but still widely used T12 fluorescent lighting systems.The "Energy Independence and Security Act of 2007" eliminates the common T12 linear fluorescent lamps this month. Hundreds of millions of these bulbs still remain hanging above our heads and are used in small businesses and homes. I'm afraid many Americans will be literally left in the dark and face what can be expensive changes or retrofits because notice of the changes were so poorly communicated. What happened to the "public service announcements", notes and reminders, as well as stories in the media concerning the planed change?

This bulb will simply vanish and be unavailable as part of a law that eliminates from the market most of the remaining commonly used types of T12 linear fluorescent lamps by July 2012. The reason is the relative inefficiency of those T12 fluorescent lamps, compared to more energy-efficient alternatives. The magnetic ballasts required to operate those bulbs lamps were phased out in July of 2010. This legislation will directly affect many commercial, retail and institutional businesses; it will even affect some residences where these lights are often used in places like basements and garages. The poor communication concerning the end of availability means little time for many people to take action and become prepared for the consequences of this law that affects their daily life.

There are several alternative paths to addressing the issue of the pending unavailability of T12 fluorescent lamps. In the short term, having an adequate supply of new spare lamps on hand provides you with the ability to “keep the lights on”, until a long-term approach is selected. But the stock-pile ahead strategy is at best, only a temporary measure; since when the ballast expires, it is “game over”. You should also be aware that ballast failure can be accelerated by not replacing worn out fluorescent lamps promptly, usually in pairs, when they fail to light. The longer term approaches includes the expensive retrofitting of each existing light fixture with an electronic ballast and the same, or a lesser quantity, of T8 lamps,or replacing the existing light fixture with a new fixture containing these more energy efficient ballast and lamps

The lawmakers, with the help of a group of self serving lobbyist from the lighting industry, when making the decision to stop T12 bulb replacement failed to consider that these bulbs often have a lifespan of over ten years. The T12 bulb is still far more efficient then what most people think of as the normal screw in light bulb. A more orderly phaseout would of been more sensible and caused less harm both financially and environmentally as millions of ballast and fixtures, some seldom used, will now, because of this law prematurely find their way into landfills. I want to point out that if a fixture is seldom used, being slightly less efficient becomes less important.

While I advocate and support the goal of higher energy efficiency and had started several years ago to convert my buildings over to the more efficient T8 bulbs, I was blindsided by the phaseout and halt in T12 bulb manufacturing. I only found out about the planned phaseout weeks ago, for you that failed to notice, as my bio states I own and operate a large amount of real estate both commercial and residential. Please note; far better ways exist for government to move America towards more intelligent and efficient energy use then poorly crafted laws like this one that renders fixtures or appliances obsolete and offers next to impossible to use tax credits.


If you are interested in the environment,  I would encourage you to read a few of  my other post concerning the subject:      
                       Tuesday, January 24, 2012  Candidates shy away from "C" word
                       Thursday, April 12, 2012    What’s in a footprint?
                       Saturday, April 28, 2012     Electric cars

Thursday, July 5, 2012

GlaxoSmithKline Guilty Of Fraud

GlaxoSmithKline, one of the worlds largest healthcare and pharmaceuticals companies has agreed to pay 3 billion dollars in the largest healthcare fraud settlement in US history. The drug giant will be to pleading  guilty to promoting two drugs for unapproved uses and failing to report safety data about a diabetes drug to the Food and Drug Administration (FDA). The settlement will cover criminal fines as well as civil settlements with the federal and state governments. The case concerns 10 drugs, including Paxil, Wellbutrin, Avandia and Advair. The settlement was "unprecedented in both size and scope" said Deputy US Attorney General James Cole. My question is, where is the jail time?

GSK, has admitted it promoted antidepressants Paxil and Wellbutrin for unapproved uses, including treatment of children and adolescents, this illegal practice is known as off-label marketing. The company also conceded charges that it held back data and made unsupported safety claims over its diabetes drug Avandia. It agreed to resolve civil liability for promoting asthma drug Advair and two lesser-known drugs for unapproved uses. In addition, GSK has been found guilty of paying kickbacks to doctors. It appears the sales force bribed physicians to prescribe GSK products using every imaginable form of incentive, from Hawaiian vacations, paying doctors millions of dollars to go on speaking tours, and distributing tickets to Madonna concerts.

As part of the settlement, GSK has agreed to be monitored by government officials for five years. GSK said in a statement it would pay the fines through existing cash resources. Andrew Witty, the firm's chief executive, said procedures for compliance, marketing and selling had been changed at GSK's US unit. "We have learnt from the mistakes that were made," Mr Witty said. "When necessary, we have removed employees who have engaged in misconduct" was another comment he made. This is all just fine, but again I ask, where is the jail time? This is no small deal, this company broke the law, and through fraud took "billions of dollars" from the American people, insurance companies, and the government. Why are those responsible not on the way to jail ?

"Per Mile Car Tax"

In another attempt to tighten the noose around the necks of Americans the Obama administration has floated a transportation authorization bill that would require the study and implementation of a plan to tax automobile drivers based on how many miles they drive. The plan is a part of the administration's Transportation Opportunities Act, the White House, however, said the bill is only an early draft. “This is not an administration proposal," said White House spokeswoman. News of the draft follows a March Congressional Budget Office report that supported the idea of taxing drivers based on miles driven. Among other things, CBO suggested that a vehicle miles traveled (VMT) tax could be tracked by installing electronic equipment on each car to determine how many miles were driven, and that payment could take place electronically at filling stations.

The proposal seems to follow up on that idea in section 2218 of the draft bill. That section would create, within the Federal Highway Administration, a Surface Transportation Revenue Alternatives Office. It would be tasked with creating a "study framework that defines the functionality of a mileage-based user fee system and other systems." The idea is supported by some in Congress who say fuel taxes won't keep paying for roads much longer. Americans are burning less fuel as the economy struggles and vehicles are becoming more efficient, at the same time the cost of maintaining or building roads has continued to rise. Currently the U.S. government sends about $35 billion a year to states and local governments for building highways, about a fourth of their total road-building costs.

The plan that was floated creates a new government "office" that would be funded a total of $300 million through fiscal 2017. This project would also require that government be expanded, rather then merely raising the existing gasoline tax that might further reduce demand for oil and reduce Americas dependency on imported oil. Having to create more government to monitor and collect such a tax would be expensive and somewhat redundant. Cost to business would have to be passed through to consumers. Before finished such a bill might even go so far as to contain exemptions for the poor or those required to drive for say religious or educational reasons. It appears the goal of this bill would not be to reduce traffic congestion, reduce pollution, or promote healthy lifestyles, but rather to collect more tax dollars and extent the culture of wealth transfer.

Sunday, July 1, 2012

Utilities Owe Us Reasonable Service!

As a monopoly that is granted the right to serve an area, utilities owe consumers a fair deal. I do not think we are owed much in this world but this contract with society makes utilities a quasi-government agency that is guaranteed a profit. In exchange utilities are expected to give customers fair and reasonable service. When a utility does not treat its customers fairly it should expect consequences.

In the city where I live we are serviced by Indiana And Michigan power Company, also known as I&M. A hard blow ripped through the city Friday afternoon, the storm about thirty miles wide originated in Indiana and went all the way to the East coast. It left many without electricity as it tore down trees and wires. As I bang this out it is Sunday evening, well over sixty thousand in our city remain without power. I have traveled back and forth across town since the storm and have not seen one I&M work truck.

It seems our electric provider that recently asked for a 22% rate hike has decided to concentrate and "complete" restoring service in smaller and less affected areas in northern Indiana before moving repair crews to Fort Wayne. They are calling for work to be completed late Wednesday night. I consider this to be an unfair and downright stupid work plan. Fort Wayne, the second largest city in Indiana, is densely populated, we deserve the same service and priority treatment from this monopoly as its other customers.

I have to wonder if I&M allowed hard feeling towards the city and its administration to influence its repair schedule. It recently lost a court battle that cost the company millions. Is this pay back? My neighbors and I continue to swelter in our dark homes, the food in our refrigerator and freezers has began to spoil, and businesses remained closed. I would say to those I&M executives who have made this decision, you better be ready to defend it as questions will be asked.