San Juan Mountains

San Juan Mountains
San Juan Mountains: Grenadier Range

Friday, January 25, 2013

Hawaii Is A Beautiful Place

I spent the last week of 2012 in Maui.  I also spent the first week of 2013 in Maui.  Since returning from Maui I have been posting crazed rants that are filled with anger and vitriol.  Today I would like to take a break from all of that.  I could post numerous articles filled with outrage about how Hawaii is amazingly socialistic....but I won't.  I could rant and carry on about how Hawaii is a testament to the failure of imperialistic government expansion....but I won't.  No, today I am going to sooth your soul with the balm of a dozen photographs from beautiful Hawaii.

Here is a shot of a young man pondering his future.  Should he hop on his board and head for Molokini?  Or should he just enjoy the surf?  I did not stick around to see what he decided to do.



Many people are familiar with the famous "Haleakala Sunrise" excursion.  Here is a shot of the sun rising over Haleakala while on board a ferry boat to Lanai.  On Lanai I climbed the high point of the island, Lanaihale, at 3,395 feet, in a pouring rain.



From the slopes of the Haleakala crater (at 10,000 feet) one can see the high point of the Hawaiian islands in the distance, just peering out above the cloud deck.  Those two mountains are Mauna Kea and Mauna Loa, found on the Big Island of Hawaii and just shy of 14,000 feet in elevation.



This is the morning view into the Haleakala crater.



While on Haleakala I decided to stroll down the SW ridge of the mountain.  I quickly came upon this warning sign, no doubt posted by a diligent government agent who wanted to protect me from falling trees.



OK, I said I was not going to take any cheap shots at government.  I can't help it.  I have to do this.  This picture is what it looked like immediately beyond the warning sign shown above.  Anybody see any trees?   Still, the government made me feel safe...and I didn't get hit by any falling trees.



The Iao Needle is a well known part of Maui.  It is found in the Iao State Park in the West Maui mountains.




A forbidden trail that starts at the end of the Iao Needle trail leads to this jungle view, high up in the West Maui mountains.



The Lahaina Pali trail is a desert trail on the west side of the island.  This shot looks down on the Maui coast near Lahaina and shows the island of Lanai in the background.



The island of Lanai is almost entirely owned by Larry Ellison.  This being Christmas, Larry was in town.  Here is a shot of his yacht which was anchored in Manele Bay on the island of Lanai.



Hawaii is full of beautiful flowers.  Here is one of them.



My last shot is one of me showing my skill on a surfboard.  I was late catching the boat for my dinner cruise ship so I had to improvise.  No doubt you will be glad to know that I arrived in time for dinner.


I am feeling calmer already.  Aren't you?

Thursday, January 24, 2013

CNBC Complicit In Erroneous PIMCO Predictions

The Great Recession was a difficult time for people in the financial business.  Mostly it was a difficult time for anyone who held investments in stocks and stock mutual funds.  The collapse of the S & P 500 from a high of 1565 on October 9, 2007 to a low of 677 on March 9, 2009 caused many stock market gurus to predict the death of equities as long term investment vehicles.  As proof of the allegation that stocks were dead, financial reporters were quick to point out that stock mutual funds witnessed net outflows every year from 2008 through 2012.  No reputable adviser, or so we were routinely instructed, would have recommended purchasing stocks during that time. On the other hand, the bear market associated with the Great Recession was a great time for proprietors of bonds, bond mutual funds and gold.  Bonds, as most of you are probably aware, rise in value when interest rates drop.  The Fed's relentless pursuit of lower interest rates was very good for bonds.  At the same time those who came to believe that we were witnessing the end of western civilization as we have known it did very well selling gold and gold related investments. 
Two different parties profited greatly from the panic associated with the Great Recession.  CNBC is a national business news television network.  It does not really matter to CNBC if the market is going up or going down.  What matters to CNBC is that there is a great deal of hype associated with whatever it is the market is doing.  Hype and market volatility creates fear or greed in investors.  Fear and greed motivates investors to watch CNBC.  The worst possible situation for CNBC would be a market that is steadily rising or falling.  For those who understand such things, a VIX below 40 is bad news for CNBC (the VIX sits at 13 as I write this).  Violent swings and high volatility are what CNBC needs to ensure a large viewing audience.  Anything CNBC can do to hype the volatility is in its best interest.
PIMCO is a investment management company that specializes in bonds and bond funds.  I believe it to be the case that PIMCO has more assets, almost $2 trillion, under public management and placed in bonds than any other investment management company in the world.  Clearly PIMCO had a vested interest in prolonging the bond bull market.  Equally as obvious is the fact that PIMCO had a vested interest in hyping the alleged collapse in value of stocks and stock mutual funds.  Over the past couple of years CNBC and PIMCO have bound themselves together to spew out a constant stream of emotional propaganda about the collapse of stocks and the need for all investors to adjust their investment expectations to something they entitled the "new normal".  Not surprisingly, investing in the new normal generally involved loading up on bonds and bond funds sold by PIMCO.
PIMCO has two CEOs.  Bill Gross and Mohammad El-Erain are the co-founders and CEOs of PIMCO.  They have been featured on CNBC regularly over the past five years.  Gross writes a monthly investment newsletter.  Here is a direct quotation from the September 2009 edition of that newsletter:

"Well, the surprise is that there’s been a significant break in that growth pattern, because of delevering, deglobalization, and reregulation. All of those three in combination, to us at PIMCO, means that if you are a child of the bull market, it’s time to grow up and become a chastened adult; it’s time to recognize that things have changed and that they will continue to change for the next – yes, the next 10 years and maybe even the next 20 years. We are heading into what we call the New Normal, which is a period of time in which economies grow very slowly as opposed to growing like weeds, the way children do; in which profits are relatively static; in which the government plays a significant role in terms of deficits and reregulation and control of the economy; in which the consumer stops shopping until he drops and begins, as they do in Japan (to be a little ghoulish), starts saving to the grave."

This article started all of the talk about the new normal that was to come to dominate the business news as reported by CNBC for the next couple of years.  As you can clearly see in the text above, Gross was predicting that stock market returns would be much lower than previous historic averages for at least the next ten years and probably for the next twenty years.  If that state of predicted affairs actually came true, it would be a financial boom for PIMCO.  Gross actually chastises investors for being foolish enough to invest in stocks and stock mutual funds during this period.  He says that investors need to grow up, become mature and realize that bonds are the place to be.  As a result of following the advice contained in this article, many investors missed out on one of the greatest opportunities to invest in stocks and stock funds that has come along for many decades.   Gross,however,  was not done with his doom-filled predictions.  In his monthly newsletter (August 2012) he is reported as writing:

"Bill Gross, Pimco’s co-founder and co-chief investment officer, says stock investors should think again about the age-old 'buy-and-hold' investing mantra. He says consistent, annual returns are a thing of the past.
'The cult of equity is dying, like a once bright green aspen turning to subtle shades of yellow then red in the Colorado fall, investors’ impressions of ‘stocks for the long run’ or any run have mellowed as well.'
Gross points out stocks have averaged a 6.6% annual gain on an inflation-adjusted basis since 1912. But he labels that rate of return as an 'historical freak' that isn’t likely to be duplicated anytime soon, due to slowing economic growth around the globe."

At the time Gross wrote this the S & P 500 had just dropped 10% from its spring high and investor sentiment was highly negative.  Gross was not alone in his assertion that "buy and hold" was dead.  Investment advisers like David Mitchell (April 4, 2012 post) had said the same thing.  Then, something happened in the last quarter of 2012.  The stock market continued to rise.  In fact, the stock market rose 110% from the March 2009 low through the end of 2012.  As it turned out, decent returns in stocks and stock funds were not "historical freaks".  Nor were they "unlikely to be duplicated anytime soon".  In fact, they had just been duplicated over the previous three year period. Then the federal government revised its economic growth statistics.   The most recent revision to Real GDP showed it to be +3.1%.  Then, to top it all off, the beginning of 2013 has witnessed a return to net inflows to stock mutual funds.  Apparently everyone has now become a bull.  Apparently everyone is now optimistic about the future for the stock market. 
It came as no surprise to me when on January 18th, 2013, PIMCO co-founder and co-CEO Mohammad El-Erain stated that the "new normal" is already over.  Further, in direct contradiction to what his partner Bill Gross had written just a few years earlier, he asserted that he never expected the new normal to last more than a couple of years.   Nobody, especially the reporters at CNBC, challenged him as to how the new normal so quickly became obsolete.  Nobody, including the financial experts at CNBC, asked him how equities could so quickly return from the dead.
I suspect that PIMCO will slowly disappear from the scene.  CNBC has little interest in continuing to promote a bond management company when stocks are back in favor.  With very short memories and no sense of conscience whatsoever, CNBC will quickly jump on the stock bandwagon and begin promoting stocks.  Everything the experts at CNBC have said the past five years will disappear down the memory hole.  Some new expert from some stock fund management company will no doubt begin to appear regularly on CNBC.  He will tell us how stocks are the best investment for most people.  He will predict above average returns for stocks into the "foreseeable future".  And everyone will forget how CNBC was complicit in the erroneous predictions of the two geniuses at PIMCO.  Everyone will forget that stocks were supposed to be dead.  Everyone, that is, except for those poor fools who followed the advice being given by PIMCO through CNBC during the Great Recession.

 

Wednesday, January 23, 2013

Phil MIckelson Was My Hero

I was watching the Golf Channel the other night when a report came on about comments Phil Mickelson had made during an interview after completing a day of competition at the Humana Challenge in La Quinta, California.  Apparently Phil was being asked questions of a general nature and a question came up that he associated with recent tax law changes that directly impact him.  In addition to changes to the federal tax code, there were certain changes made to the California tax code that directly impact him as a California citizen.  Here is what Phil said:
"It's been an interesting off-season, and I'm going to have to make some drastic changes. I'm not going to jump the gun and do it right away, but I will be making some drastic changes.  I'm not sure what exactly, you know, I'm going to do yet, I'll probably talk about it more in depth next week. I'm not going to jump the gun, but there are going to be some drastic changes for me because I happen to be in that zone that has been targeted both federally and by the state and, you know, it doesn't work for me right now. So I'm going to have to make some changes.  If you add up all the federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate's 62, 63 percent.  So I've got to make some decisions on what I'm going to do."
The 42-year-old golfer and winner of 40 PGA tour events said he would talk in more detail about his plans — possibly moving away from California or even retiring from golf — before his hometown Farmers Insurance Open, the San Diego-area event that starts Thursday at Torrey Pines. His comments were particularly shocking because Phil has participated in television commercials produced by the state of California extolling the virtues of living and working in California. 
The talking heads at the Golf Channel immediately began their analysis of Phil's comments.  I was a bit surprised by what they had to say.  I had incorrectly assumed that, as lovers of the game of golf and as people who understand that successful golfers make a lot of money, they would not be filled with envy for the amount of money Phil Mickelson makes.  I was wrong.  They were riddled with envy,  just like every other citizen in the Socialist Democracy of America.  One of the commentators opened his laptop and announced to the television audience that Phil made $46 million in 2012 and that after paying taxes at his 62% bracket would still have taken home $17 million.  While completely missing the point that Phil was trying to make, he then asked why Phil would have a hard time living on $17 million.  The other announcer picked up on that comment and predicted that Phil was about to experience significant blow back from the public for his allegedly aristocratic and elitist ideas that he should not be required to hand over two thirds of his income to pay for all federal government goods and services delivered to the bottom half of the income population in the SDA.  Arousing the wrath of the bottom half  of the income population was expected to bring about a popular uprising against one of the most popular players on the PGA tour.
I was looking forward to the comments that I expected to come from Phil this week.  I was hoping that he would instruct the Golf Central gurus that theft is still theft, even when the money being stolen is being taken from a rich man.  I was hoping that he would point out that envy is still envy and covetousness is still covetousness and both are always sins.  I was hoping he would say that paying 62% of his gross income in taxes is grossly unfair.  I was hoping he would say that he earns every penny that he makes and that nobody, including the all-powerful government, has a right to take his money away from him and give it to somebody else.  I was hoping he would say that the fact that he makes a lot of money is irrelevant and that the only relevant issues in his situation were envy and theft.  Sadly, he did not say that.
Apparently Phil has had a change of heart.  He is generally up for a good verbal sparring but this time is different.  On Monday night Phil contacted Fox News and issued an apology.  It was the standard form of apology that is characteristic of our times.  It said nothing and was designed to do nothing more than diffuse what could be a potentially difficult public relations situation.  Here is what Phil had to say,
"Finances and taxes are a personal matter and I should not have made my opinions on them public. I certainly don't have a definitive plan at this time, but like everyone else I want to make decisions that are best for my future and my family.  I apologize to anyone I may have upset or insulted by my comments..."
So there it is.  I certainly cannot disagree that finances are a personal matter.  Phil is under no moral obligation to discuss his personal financial affairs in the public eye.   In fact, Phil is free to backtrack on his comments and refuse to talk about them further.  What bothers me about his response is the specific content of the apology proper.  How could his comments about excessive and unfair taxation have "upset or insulted" any reasonable human being?  How could any reasonable person be insulted or upset by the fact that Phil believes having 62% of his income taken away and given to someone else is unfair?  Complaining about a confiscatory and immoral tax burden is not insulting or upsetting.  In fact, anyone who would become upset or consider himself insulted by the things Phil had said earlier is clearly suffering from sinful envy and is in desperate need of repentance.  By allowing for the possibility that it is morally proper for people to consider his previous comments as immoral, and thus bringing about a condition of emotional upset and injurious insult, Phil is enabling the cult of thievery that dominates this society.  Phil's actions only encourage and enable the legion of "takers" that exist in this country.  That is very upsetting and insulting to me.  
I wish Phil had stuck to his guns and came out with both barrels blasting this week.  Lo, I do not think that is going to happen.  Phil Mickelson has been my golf hero for some time.  I have watched him play many times.  I stood a couple of feet away from him and watched him hit a "duff" shot that showed me that even professionals can hit a shot like me.  I have always enjoyed his affable personality and his accessibility to the press and public.  His goofy smile is an endearing attribute of his personality.  His six inch vertical leap after a tour victory is a pleasure to behold.  Still, today he is a little bit tarnished in my view.  I wish he had stood up for the minority of taxpayers in the SDA who are footing the bill for all the takers.  I wish he had stood up for the rich guys.  I wish he had followed up his earlier comments with an attack upon the envy-filled haters of the rich that live in this land.  He is still a good golfer but I am no longer sure he is my hero.

Tuesday, January 22, 2013

King Obama, Stop Lying, We Are A Nation Of Takers

In his coronation address on Monday, King Obama stated that "we are not a nation of takers."  That statement is a lie and he knows it.  The mere fact that he perceived the need to deny the truth proves that he knows the truth about our covetous ways.  In fact, describing this country as a nation of "takers" is probably one of the most accurate assertions that can be made about us.  Perhaps no better illustration of how we have become a nation of takers can be given than the concept of "fair share" that exists in our national dialogue.  Everybody talks about the concept of a "fair share" but nobody ever takes time to define the phrase.  In fact, if popular usage is any indicator of the meaning of the phrase, the definition changes depending upon the context in which it is used.  Allow me to illustrate what I mean.
When mom is serving up pieces of cake to her children the children will watch the cutting of the portions like chicken-hawks.  Any serving that is not exactly the same size as the others will immediately be subjected to the multiple protests of the recipient of the smaller serving.  Or, if one serving is larger than the others, those who received the smaller portions will issue howls of protest.  In the case of cake, a fair share is clearly an equally sized portion.
If two young people agree to perform manual labor for a neighbor by doing such things as cutting the grass, pulling weeds, and raking up dead leaves, they expect to receive the same compensation for their efforts.  Assuming that both worked the same amount of time and assuming that they were not deadbeats or cheats, they rightly expect to be paid the same amount for their services.  If the owner of the home pays one more than the other, we all know that the young man who is paid the lesser amount will issue a strongly worded complaint that the homeowner is being unfair.  Clearly the concept of fair share means equal amount.
There is much said and written about the "glass ceiling".  It is alleged that the glass ceiling is a mythological entity that prevents women from receiving equal pay for equal work.  Women and liberals are notorious for complaining about how female workers are not given their fair share of the corporate income for the equal amounts of work they perform, when compared to their male counterparts.  Clearly the concept of fair share in this context means equal share of the income.
When professional baseball players agree to submit their contract negotiations to an official arbitrator they do so with the understanding that they will receive their fair share of baseball's revenues for that year.  Arbitrators labor diligently to compare the statistics of each player to ensure that every person who submits to arbitration is paid in strict compliance with his statistical output from the recent past.  The agreed upon dollar number for the present contract is a direct result of previous performance.  In this case each player realizes that his fair share of the income will be essentially the same as any other player who produced the same statistical output.  Once again, fair share clearly means equal share per unit of output.
I might be beating a dead horse here but is it not abundantly clear to anyone who does not possess a soul that is riddled with class envy that fair share always means equal share?  The very concept of "fair" implies the concept of "equal".  That universal truth, however, does not exist in the mind of the person who sinfully hates those who make more money than him.  Under those circumstances the concept of fair share becomes strangely perverted into something that is grossly unfair.
The IRS came out with its 2010 tax statistics recently.  For those of you who delusionally persist in the belief that the "rich" (whoever they are) are not paying their "fair share" (whatever that is), consider the following statistical facts:
  • The top 1% of the income population earned 19% of the adjusted gross income and paid 37% of all federal income taxes in 2010.  To be in this group one had to have an AGI greater than $370k.
  • The top 5% of the income population earned 34% of the adjusted gross income and paid 59% of all federal income taxes in 2010.  To be in this group one had to have an AGI greater than $162k.
  • The top 10% of the income population earned 45% of the adjusted gross income and paid 71% of all federal income taxes in 2010.  To be in this group one had to have an AGI greater than $117k
  • The bottom 50% of the income population earned 12% of the adjusted gross income and paid 2% of all federal income taxes in 2010.  To be in this group one had to have an AGI less than $30k.
If the total percentage of federal income taxes paid are expressed as a percentage of the total percentage of adjusted gross income earned, the following percentages are derived for each group listed above:
  •  Top 1%  -------  195%
  • Top 5%   -------  174%
  • Top 10% -------  158%
  • Bottom 50% ---   17%
I challenge anyone, even the most envy-filled, covetous, hateful, wild-eyed and crazed liberal, to justify the percentages shown above as "fair".  In no other situation or set of circumstances in life would anyone agree to tolerate such egregious unfairness.  If we were not talking about dividing up a pot of stolen money among a group of conscienceless thieves, there would be no question that we would all agree that the way income taxes are paid in this country is patently unfair.  Those who make the most money are severely abused by those who make less.  The rich are not paying their fair share.  They are paying an amount that is much higher than their fair share.  Everybody knows this and, to make matters worse, nobody, other than the "rich",  cares about this state of affairs.
The problem, of course, is that we live in a democracy.  Under the terms of life in the Socialist Democracy of America it is the case that whatever the majority wants to do, it will do.  The rights and property of the minority are ignored, exploited and stolen as a matter of business as usual in the SDA.  The majority of the citizens in the SDA do not want to pay any federal income taxes so the bottom 50% of the income population ends up paying only 2% of the total federal income tax bill.  This majority, consumed by envy, force the minority of taxpayers in the top ten percent to pay almost three quarters of the total federal income tax bill.  In other words, the bottom fifty percent are getting a totally free ride off of the taxes paid by the top ten percent.
To put this another way, the majority has made it legal to steal the money of the top ten percent and use it to pay for almost all federal government services provided in this land.  The fifty percent of the citizens of the SDA who are in the lower income cohort receive all government goods and services, with the exception of Social Security and Medicare/Medicaid which are ostensibly paid for with their own tax,  for free.  For those who care about such things, in 2012 Social Security/Medicare receipts were $828 billion and expenditures were $835 billion.  The net impact is that the top half of the income population ended up subsidizing the social security and medicare payments of the bottom half to the tune of $7 billion.  What is that, if it is not a nation of takers?  Then, to top off this reprehensible act of theft, the bottom fifty percent propagandize that those who have just been robbed (the top ten percent) in order to provide them with a free ride are immoral people who stubbornly refuse to pay their fair share.  At the same time they cast themselves as pitiable victims of the oppressive rich minority who, in some indescribable and economically indiscernible fashion, prevent them from rising up the economic scale.  Make no mistake about it,  we are a nation of takers.  Judgement day will come for the envious takers. I hope it will be soon.  I am tired of paying for a nation of deadbeat takers.  Aren't you?

Monday, January 21, 2013

Call Me A Racist, Again

King Obama's coronation took place yesterday.  It took little more than a couple of minutes as he deceptively swore an oath promising to "preserve, protect and defend the Constitution" that he has no intention of fulfilling.  Queen Michelle held the Bible that he place his right hand upon during the oath.  The Bible is the Word of God and should not be mocked.  A man walks in dangerous territory when he swears an oath in the name of God that he has absolutely no intention of fulfilling.  Contrary to popular opinion, God does take note of such hypocrisy.  That, however, is not the point of today's post to this blog.
The Bible that Queen Michelle was holding allegedly belonged to Martin Luther King.  Today is the national holiday in celebration of Martin Luther King's day of birth.  I believe it is entirely fitting that the Socialist Democracy of America should celebrate the birthday of a man who foisted such a powerful socialist agenda upon the black citizens of this land.  King's influence can be credited with bringing about a great deal of the poverty, statism and victim-complex thinking that exists in so many black citizens in the SDA today.  Like King Obama, Dr. King also mocked the contents of the Bible.  He denied a great deal of the doctrines taught within it.  It was very fitting and symbolically proper that King Barak should use his Bible for his coronation ceremony.
I have probably already offended a couple of the tiny number of people who read this blog.  So be it.  Last year I composed a post to this blog about MLK.  It has received a grand total of seven hits over the course of the last year.  I think it was well written.  I think it is worth saying again.  I repeat it below. 

Today is the day the United States Government has declared that all citizens must celebrate the birth of a man who was a plagiarist, a socialist, and a serial adulterer.  Failure on the part of any citizen to acknowledge that this man was, arguably, the greatest American citizen ever born will immediately subject one to charges of racism.  The man was Martin Luther King and, in addition to being a plagiarist, an adulterer, a socialist and a Christian minister who denied that Jesus was God,  he was black.
I am sick and tired of being labeled racist simply because I believe that anyone who practices plagiarism is immoral.  I am fed up with being called a racist because I do not admire men who are serial adulterers.  I have had it up to here with those who call me a racist because I believe that the coercive redistribution of wealth and income by the government (aka "socialism") is a vile and reprehensible activity and that anyone who advocates socialism is a moral reprobate. I will no longer stand being called a racist because I believe a man who is ordained as a Minister of the Gospel and yet denies the virgin birth and bodily resurrection of Jesus should be excommunicated and thrown out of his church.
In an article on MLK in today's Denver Post it is stated that "Many never learned about King's crusade for a guaranteed annual income" and that King's "Poor People's Campaign" "demanded that the American President and Congress help the poor get jobs, health care and homes.  The concept of the government providing a "guaranteed annual income" is one of the most ridiculous ideas ever conceived.  Has anybody ever heard of the story of the Little Red Hen?  Are we all really so stupid we believe that marginal producers will continue to work if they are guaranteed an annual income for not working?  Are we so filled with envy that we believe it is morally proper for the government to forcefully extract the income of those who work and hand it over to those who do not?  Are we so economically ignorant that we actually believe that the President and Congress have the ability to create jobs, produce medical services and build homes?
I have a dream.  I have a dream in which each person is paid for the work that he does.  I have a dream in which each person is allowed to keep what he earns.  I have a dream in which  I keep my mind on my own affairs and leave others alone.  I have a dream in which the citizens of this country mind their own business.   I have a dream where, when I do think of my neighbor,  it is to rejoice in his success or privately assist him in his poverty.  I have a dream in which I live in a world without the destructive effects of envy.  I have a dream that I live in a land in which men who dedicate their entire lives to expanding the power of government to forcibly transfer the wealth and income of one group to another are not deemed to be national heroes.  I have a dream that I live in a land where I can believe that a man who repeatedly commits terrible immoralities can be pronounced to be an  immoral man without my being labeled a racist.  Oh yes....it is a dream.  When I wake up I will be back in the real world where I will find, not surprisingly, I am being called a racist.