Author: Steve Boren

Beer for your bones

Drink up, gals — and make sure you take full advantage of Ladies’ Night: Women who enjoy their beer are a lot more fun… and they’re healthier too.

The benefits of steady-but-moderate alcohol consumption are beyond dispute for men and women alike (and if anyone tells you otherwise, thank them for their input, end the conversation there and pour yourself another drink).

But a new study shows how a good brew can also help build your bones and lower your risk for osteoporosis — thanks to a fantastic trace element called silicon.

I’ve been toasting the praises of beer for years… I’ve even told you about those high silicon levels before. But the latest research shows which brews are best — and how much of a benefit you’ll get from each.

Researchers bought 100 types of the golden elixir for lab analysis. They found that India pale ales — better known as IPAs — had the most silicon, with 41.2 milligrams per liter. That’s slightly more than two U.S. pint glasses, or what I call a good start to an evening.

When you consider that many people get 20 milligrams of silicon per day — or less — you can see how quickly beer will boost your levels. What’s more, the silicon in beer is easily absorbed and used by your body.

Other beers are also packed with silicon — although none quite hit those IPA levels. Pale ales had 36.5 mg/L, ales had 32.8 mg/L, lagers averaged 23.7 mg/L and non-alcoholic beers had just 16.3 mg/L.

Hey, if you’re drinking non-alcoholic beer, you may as well take a bath without water too.

Gents, when you buy the lady a drink, be sure to help yourself to one as well. It’s not just polite… you’re also at risk for osteoporosis, whether you’re aware of it or not.

And don’t be afraid to drink your brew at the beach — sunlight is also a great bone booster. If you want more secrets on beating osteoporosis without drugs, pour yourself a pint of beer and read the November issue of The Douglass Report. If you’re not already a subscriber, you can sign up here.

Cheers!

William Campbell Douglass II, M.D.

CDC fails at math

The feds are still squealing over swine flu — but no matter how loud they oink, their numbers just don’t add up.

The U.S. Centers for Disease Control and Prevention declared that 57 million Americans have come down with swine flu — and their media lap dogs (or are they now pigs?) just ate it up. I saw that big number repeated in headlines everywhere as if that were a fact and not a completely made-up number.

Oink, oink.

But that’s just what it is — a story as true as those Babe the Pig movies. If someone can prove to me that 57 million Americans actually came down with swine flu, I’ll trade my lab coat for overalls and take up hog farming.

I mean it… but it’s not going to happen. The truth is, no one knows how many swine flu cases there were, not even the math whizzes at the CDC. That 57 million figure is just the midpoint of a massive estimate range that claims up to 84 million Americans may have had swine flu.

They may as well say it was between 1 and 300 million.

Remember, the feds stopped counting swine flu cases in July — they actually told state and local health authorities to stop testing for it and stop tracking it. It’s better than burning evidence — because they prevented the evidence from ever existing in the first place.

Now, they can throw around any number they want without having to worry that the truth might someday come out and squeal on them.

All we know for certain — and this is based on real data from the CDC and state health departments — is that only a tiny fraction of the suspected H1N1 cases that were sent to labs for confirmation actually turned out to be swine flu, or even any kind of flu at all.

Most people just had a bad cold.

Yet the feds keep pushing this myth that Americans should STILL rush out and get swine flu shots… hinting darkly at the possibility of a "third wave."

If it’s as "bad" as the first or second wave, you can safely keep your sleeve down… because this undercooked bacon is already cold.

William Campbell Douglass II, M.D.

We sent you an email last night warring of Senator Lindsey Graham’s (R-SC) efforts to cut a deal with President Obama that would provide him with the Republican Senate votes needed to close the terrorist detention center at Guantanamo Bay, Cuba, and bring terrorists to our shores.

We posted this morning an online Petition to Senator Graham to be delivered in the next 72 hours demanding that he stop his efforts.

Your help and support of the Petition to Senator Graham is needed now. Please go to our web site – www.MoveAmericaForward.com – and sign the petition.

Then send this email to as many of your friends, neighbors and family as you can think to encourage them to join in signing.

The American people have spoken loud and clear. They do not want terrorists brought into the United States, especially when the Obama Administration wants to give them the same civil rights at trial enjoyed by American citizens.

Sign the Petition now. We need to shout loud and clear:

STOP negotiating a back-room deal to bail out the failed policies of President Obama.

DO NOT sell out our national security to Obama in exchange for a trial he was going to give up, and DO NOT close GITMO.

Dear STEVEN,

How can you tell when a president is in trouble on a big issue? When politicians of his own party avoid appearing with him when he’s in their home area.
Take yesterday. President Obama appeared in the Philadelphia suburbs to once again campaign for his health care takeover. He delivered the usual falsehoods – for example, Fox News reported that the president claimed $868 billion in savings that is simply a made-up number. He promised that his plan will not cost small businesses more, when everyone knows costs will skyrocket on small businesses.
And three Democrat congressmen from the Philly area – Murphy, Carney and Holden – did not appear with the president from their own party.

These three Democrats did not stand beside President Obama on their home turf, despite the fact that Obama carried Pennsylvania and their region in the 2008 election.
They know what we know: The American people have turned against this corrupt Washington health care takeover. The polls clearly show it, with every reputable poll showing strong majorities against the legislation. These congressmen have their ears to the ground in their districts, and they hear the powerful grassroots anger. It’s anger against the president’s arrogance in continuing to push a health care takeover while ignoring job losses and a still-faltering economy, despite the fact that the American people have clearly said, “Keep Your Hands Off My Health Care.”

We’re just days away from a crucial vote in the House of Representatives. Despite all the big talk from Speaker Pelosi and the liberals, they STILL DO NOT HAVE THE VOTES to pass their health care takeover.
Tomorrow night, Wednesday, at 8 p.m. ET we’re holding a national tele-town hall meeting with the 3rd ranking Republican in the House and a leading free-market champion – Congressman Mike Pence. I hope you’ll join us. Call (888) 356-3090 Ext.14326#.

We’ll brief you on key undecided House members, detail the likely timeline to be used by Speaker Pelosi, and Congressman Pence will walk through conservative alternatives along with his exchanges in recent weeks with President Obama.
But, there’s more we must do.
On March 16, we’re holding the "Honk Against the Health Care Takeover" event. Here’s what we’re asking you to do. At 12 Noon your time on March 16, drive to your member of Congress’s district office and join a car caravan there, circling your representative’s office while honking against the health care takeover.
Just CLICK HERE for more information and to let us know you’re on board. You’ll be able to print off your very own "Honk Against the Health Care Takeover" sign for your car when you register. Sign up tomorrow, March 10, to receive a free bumper sticker in the mail before March 16.
In addition, you can sign up to be a car caravan leader. You can pick a parking lot near your Congressman’s office and let folks know you will be there to lead them over to the district office. It will be fun to meet fellow grassroots activists and to go over in a caravan to send your message.
Here’s the bottom line. The president is in the midst of his final all-out push for his health care takeover. Yes, his campaign is dishonest and over-the-top. But, to their credit they are refusing to quit this fight. So, we’ve got to beat them in these final days before the House vote.
They’ve put everything on the line for their ideology, as flawed as it is.
The question for us is: will we do the same for our values, our freedoms and our nation?
Knowing what I know about Americans like us, I believe the answer will be a resounding YES.
Tim

PS: You want to see just how we’re winning with the American people? Our friends at HotAir.com have a story up showing that in a new Rasmussen poll 57% of Americans believe the Obama health care bill will "hurt our economy." For more info from this story CLICK HERE
Join us tomorrow night for this crucial national tele-town hall meeting with Congressman Mike Pence by calling (888) 356-3090 Ext.14326#.

And, make sure you take part in the "Honk Against the Health Care Takeover" car caravans on March 16 by CLICKING HERE.

IN THIS ISSUE:

1. Obama’s Latest Healthcare Proposal Details
2. Obama Implores Congress to Use “Reconciliation”
3. Do the Democrats Still Have the Votes?
4. The Issue of Reapportionment & Redistricting
5. Why Democrats Have Lost the Public’s Trust

Introduction

Last Wednesday, President Obama gave yet another speech on healthcare reform and implored the leaders of the House and Senate to pass his latest healthcare plan, even if by only a majority vote (51) in the Senate – the process known as “reconciliation.” Most Americans don’t fully understand the reconciliation process, but most of those who do, don’t like it, especially when it comes to healthcare, which represents over one-sixth of the economy and affects all of us.

In the wake of his recent Healthcare Summit, which changed few, if any, minds, the president presented another version of sweeping healthcare reform last Wednesday, and essentially is asking House and Senate members to risk their political futures to pass this plan, even as a growing majority of Americans oppose it.

It remains to be seen if this new 2700+ page proposal – based largely on the Senate plan, with a few incremental changes – will pass in either the House or the Senate, but President Obama is apparently willing to risk losing control of the House and/or the Senate in the 2010 elections, and maybe losing his own job in 2012.

There is one very interesting element in all of this political rancor that I don’t hear much talk about. That is the subject of reapportionment of House of Representatives seats following the 2010 census, and the redistricting that will occur in those states that gain or lose seats. If the Republicans pick up a sizable number of House seats in November, that would suggest they will pick up a number of governorships as well. If so, that will have a significant impact on redistricting in those states – to their advantage. I will discuss this in more detail as we go along.

Poll after poll shows that millions of Americans are growing angrier and angrier at Washington lawmakers over healthcare reform – such as 57% think it will “hurt the economy” and 61% want Congress to “start over.” The public clearly wants Congress focused on the economy and jobs rather than healthcare reform, yet the Democrats apparently see it differently. To help us understand why, I have reprinted a very good article at the end that is written by a Democrat. Regardless of your political persuasion, I think you will like it.

Obama’s Latest Healthcare Proposal Details

The new healthcare reform proposal announced last Wednesday by President Obama is basically the healthcare bill passed by the Senate in December, which requires everyone to buy insurance or pay a fine, and companies with 50 employees or more will have to provide health insurance; however, there are some important differences:

1. The Obama proposal eliminates the special deal cut for Nebraska to buy Senator Ben Nelson’s vote, as well as provides additional federal financing to all states for the expansion of Medicaid;
2. It also addresses the “donut hole” currently encountered in the Medicare prescription drug program, eventually closing it entirely by 2020;
3. Obama’s proposal strengthens the affordability provisions in the Senate bill as well as those designed to fight fraud, waste and abuse in Medicare and Medicaid;
4. It scales back the excise tax on “Cadillac” healthcare plans while also delaying its implementation until 2018;
5. The proposal also creates a new “Health Insurance Rate Authority” to oversee private health insurance plans and prevent unreasonable rate increases;
6. As expected, the latest Obama proposal raises taxes on high-income taxpayers to help defray the cost of the bill. Generally, these additional taxes will apply to single taxpayers with incomes of $200,000 or more or $250,000 for married couples filing jointly.

There are a number of other proposals, but the above list covers the main ones. While a number of these proposals sound good on paper, the devil, as they say, is in the details. And with 2,700 pages of details, the devil has ample opportunity in this legislation. The biggest detail is that of cost, since Obama has gone on record that any healthcare reform bill should not add to the deficit, but it almost certainly will.

While Obama’s proposal lacks sufficient detail to be scored by the CBO, the similar Senate bill is estimated to cost in the neighborhood of $848 billion over 10 years. With cost reductions and additional taxes, however, the CBO has estimated that it will actually reduce the deficit by $131 billion over that time. But almost no one remotely believes that.

During the recent bipartisan healthcare summit moderated by President Obama, Republican Congressman Paul Ryan of Wisconsin stole the show when he pointed out, in great detail, how there was no way that the cost projections touted by the Democrats could be accurate. Here’s what else is wrong with the bill, as Ryan pointed out:

“The bill has 10 years of tax increases of about one-half trillion dollars, with 10 years of Medicare cuts of one-half trillion dollars to pay for six years of spending. What's the true 10-year cost of this bill? In 10 years, it is $2.3 trillion.”

“When you strip out the double-counting and what I call the gimmicks, the full 10-year cost is a $460 billion deficit. The second 10-year cost of this bill has a $1.4 trillion deficit.”

“It takes $52 billion in higher Social Security tax revenues and counts them as offsets, but that is really reserved for Social Security. So either we are double-counting them or we are not planning to pay those Social Security benefits.”

“It takes $72 billion and claims money from the Class Act, that's the long-term-care insurance program. It takes the money from premiums that are designed for that benefit and instead counts them as offsets. The Senate Budget Committee chairman said this is a Ponzi scheme that would make Bernie Madoff proud.”

“It treats Medicare like a piggy bank. It raids a one-half trillion dollars out of Medicare . . . not to shore up Medicare solvency, but to spend on this new government program.”

“The chief actuary of Medicare . . . is saying as much as 20 percent of Medicare providers will go out of business or stop seeing Medicare beneficiaries. Millions of seniors who have chosen Medicare Advantage will lose the coverage they now enjoy. You can't say that you are using this money to extend Medicare solvency and also offset the cost of this new program. That's double-counting.”

“Are we bending the cost curve down or bending the cost curve up? If you look at your own chief actuary at Medicare, we're bending it up. He's claiming we are going up $222 billion, adding more to the unsustainable fiscal situation we have.”

“We are all representatives of the American people. We all do town hall meetings. We all talk to our constituents. And I've got to tell you the American people are engaged. If you think they want a government takeover of health care, I would respectfully submit, you are not listening to them.” Well said, Congressman!

Not only do most Americans not want to see a government takeover of healthcare, most (like Congressman Ryan) don’t believe the cost estimates. Americans have now become used to seeing government cost estimates pale in comparison to the actual costs. We saw it with the Bush Medicare prescription drug bill. This was originally estimated to cost $400 billion over 10 years, but more recent estimates now put it at $700 billion. Does anyone really believe that a new healthcare entitlement will actually decrease deficits in the future? I certainly don’t.

Obama Implores Congress to Use “Reconciliation”

Virtually all major legislation that is passed in the Senate is passed by at least 60 votes, the so-called “Super Majority.” On rare occasions, major legislation has passed by only a simple majority of 51 votes – the process known as “reconciliation.” The idea behind the Super-Majority was that major legislation should have enough bipartisan support to pass by more than a simple majority.

Because of the hesitance of the Republicans to enter into another entitlement boondoggle, the Democrats realize that the bill will never be passed under the regular rules since they can’t muster enough votes to overcome a filibuster. However, Obama made it clear in his direction to congressional Democrats last Wednesday that they should pass his plan, even if it means doing it with just a majority vote.

“[Health care] Reform has already passed the House with a majority. It has already passed the Senate with a supermajority of 60 votes. And now it deserves the same kind of up or down vote that was cast on welfare reform, that was cast on the Children’s Health Insurance Program, that was used for Cobra health coverage for the unemployed and, by the way, for both Bush tax cuts — all of which had to pass Congress with nothing more than a simple majority. I, therefore, ask leaders in both houses of Congress to finish their work and schedule a vote in the next few weeks.”

The president got more specific later in the day on Wednesday and sent word to Congress that he wants the bill on his desk by Easter. That’s a tall order, if he gets a bill at all! The Senate Republican leader, Mitch McConnell of Kentucky, told reporters after Mr. Obama’s remarks the following:

“They’re making a vigorous effort to try to jam this down the throats of the American people, who don’t want it. We think that’s a policy mistake, and we think resorting to these kind of [reconciliation] tactics, to thumb your noses at the American people, is something that ought to be resisted.”

The Democrats justify use of the reconciliation procedure because Republicans have used it in the past. Most often, the Democrats point to the Bush tax cuts as examples of when reconciliation was used by the Republicans to pass legislation. However, there’s one big difference between these pieces of legislation: the Bush tax cuts had overwhelming support from the public, while the healthcare bill does not. It’s one thing to use a procedural process to overcome opposition to a popular piece of legislation, but quite another to “jam this down the throats” of American voters, as suggested by Senator McConnell.

If the Democrats believe they still have the votes to pass the healthcare measure, even by only a simple majority, then the process should proceed roughly as follows. First, the House Democrats would have to abandon their own healthcare bill that includes the so-called “public option” and vote to adopt the bill that the Senate approved in late December.

As that is happening congressional bureaucrats and lawyers will be busy writing a new bill that would incorporate all the changes that Obama put in and announced last Wednesday. Then both the House and the Senate would have to pass the final bill which would go to the president for his signature. That’s an awful lot to happen by Easter, if it happens at all.

Do the Democrats Still Have the Votes?

Let’s start with the obvious: if the Dem’s have the votes, they will pass Obama’s healthcare plan, and they will do it just as soon as they believe they have the votes. But do they? It has been four months since the House healthcare bill passed in early November by a razor-thin margin of 220-215. The Senate bill passed in December. Since then the public polls have worsened considerably on the issue.

Public approval of Congress has plummeted to the lowest level on record – only 15% approve according to the latest CBS News/New York Times poll. The latest FOX News poll has it at 14%. These are the lowest congressional approval ratings since polls have been taken!

President Obama’s approval rating has plunged as well. According to the RealClearPolitics.com average of all polls, Obama’s approval rating has sunk to only 48.7%, while his disapproval rating has soared to 45.7%, the highest it’s been. From his soaring high approval ratings just after being sworn in, Obama’s plunge since then is the worst on record.

Democrats are no doubt worried by these polls and are aware that healthcare reform, as they have crafted it, is a big reason why so many Americans are mad at them. The latest Rasmussen poll last week found that 55% of Americans want Congress to scratch the current healthcare proposals and “start over.”

At the same time these national polls are falling, dozens of Democrats in the House, and even some in the Senate, are faltering in their re-election bids in November. Several have already announced that they are retiring, which for most is code for they are not going to be re-elected in November. Even Senate Majority Leader Harry Reid of Nevada is well behind in the polls.

Despite these disturbing trends for the Democrats, President Obama is now applying maximum pressure to line up the votes to pass his healthcare reform package. In essence, he is asking congressional Democrats to “walk the plank” and risk their political careers. And he has to exert pressure on multiple fronts within the party. Let me explain.

On one front, Obama has to deal with the most liberal Democrats that vowed, after the Senate bill passed, that they would not vote for ANY healthcare bill that did not contain the “public option.” He absolutely has to get all of these congressmen to change their minds and vote yes on his bill which does not include the public option.

Next, he has to convince the growing number of Democrats who fear that if they vote for the current healthcare reform bill, they will be defeated in the November elections. Obama said publicly last Wednesday that it is more important to vote in favor of what is “right for America” than whether you get re-elected or not. Of course, that’s easy for him to say since he is not up for re-election in November. And who is to say that Obama is the sole arbiter on what is ‘right for America’?

And finally, in President Obama’s latest healthcare plan, he added in several Republican ideas, hoping to curry at least a few GOP votes. Among them, he included: 1) better protections against fraud; and 2) increased pay for doctors who treat Medicade patients; both of which most Democrats should easily go along with.

But Obama also added two more provisions that many Democrats may baulk at: 1) a hint of tort reform; and 2) making Health Savings Accounts more available. These will be bitter pills for liberal Dems to swallow – another reason Obama may not get the votes he needs.

Unlike many presidents before him, Obama is more than willing to hang Democrats in Congress out to dry in order to pursue his agenda. As I have discussed in previous letters, he is too much of a liberal ideologue to move to the political center when faced with opposition, as did Bill Clinton when his healthcare reform plan bombed.

However, using an unpopular back-door procedure to force through an unpopular bill may not only affect Congressional elections, but state and local contests as well. In short, Obama could be setting up Democrats at all levels to lose governorships and state legislative posts. This, in turn, could have a long-lasting negative effect on Democratic representation at the federal level.

The Issue of Reapportionment & Redistricting

This is a very important issue related to the use of the reconciliation vote that I find almost no one talking about. All of the 435 members of the House of Representatives are elected or re-elected every two years. Unlike the Senate which has two senators from each state, the 435 seats in the House are “apportioned” to the states based on each state’s population.

As you also know, there is a national “census” once every 10 years in years ending in “0” (2000, 2010, etc). The 2010 census will determine how many House representatives each state will get going forward. Fast growing states like Texas and Florida, for example, are set to increase their number of House representatives after the 2010 census; other states will stay the same; and still other states will see their number of representatives shrink.

Based on the results from the 2010 census, each state that sees a change in the number of House representatives it will have going forward will begin a process known as “redistricting” in 2011. In almost all states, redistricting is a very politically-charged process that is generally controlled by the political party that has the governor and a majority in the state legislature.

These redistricting battles are usually very ugly because they are setting the political landscape for the next 10 years, which can benefit the party in power today for a very long time.

And here’s the point. Most pollsters and political analysts now agree that the Republicans are going to pick up a considerable number of seats in the House and at least a few in the Senate come November, largely due to Obama’s agenda. Likewise, it is expected that the Republicans are going to win several additional governorships and state legislature majorities.

If so, the Republicans would be in control of the redistricting efforts in even more states in 2011, which could mean a big advantage for the GOP in those states, perhaps for a decade.

But apparently, President Obama doesn’t care about that either. He wants his healthcare reform at any cost, no matter the long-term damage it may do to his party. Political analysts on both sides of the aisle have to be wondering, “What are the Democrats thinking?”

Why Democrats Have Lost the Public’s Trust

A year ago, newly sworn in President Obama’s approval ratings were soaring, and Republicans were wandering in the wilderness, having lost control of both houses of Congress to the Democrats. It seemed it would be many years, if not a decade, before the GOP could reverse the tide. Yet just over a year later, Obama’s approval ratings have plunged below 50%, and Congress’s approval ratings are the lowest in history, down to only 15% in some polls.

Making matters worse, the Democrats recently lost governorships in Virginia and New Jersey to GOP challengers, and Ted Kennedy’s Senate seat of 40+ years went to a Republican in a stunning special election surprise. In addition, 16 Democrat incumbents in the House and five in the Senate have announced that they are “retiring” this year, and there could be more.

How and why has all of this happened in such a short time? I read the following column last week which offers perhaps the best analysis of the Democrat’s plight that I have seen. Interestingly, it is written by a Democrat strategist – Dan Gerstein – who served as Senator Joe Lieberman’s communications director and chief strategist for over a decade (when Lieberman was a Democrat).

Regardless of your political persuasion, I think you will find Gerstein’s analysis very interesting (and right on target in my view), so I have reprinted it below. Should you choose not to read it all, be sure to scroll down to the next-to-last paragraph to read the latest shocking poll numbers on just how angry people are with Washington – I have highlighted them in bold.

QUOTE: Deaf to America by Dan Gerstein

As I listened to the same tone-deaf talking points from the congressional Democrats at the White House health care summit last week, I was reminded of the classic excuse politicians use about their comments being taken out of context. In this case, and many others, the Democrats are suffering from the exact opposite problem–their arguments and actions are not taking in the context of the times. Indeed, over the past 14 months they have continually been trying to jam a square political peg into a round historical hole. The result has been a disastrous fit with the public mood and a deepening credibility gap.

This failure to factor can be traced back to the watershed vote on the stimulus bill, the Democrats' single big accomplishment in the Obama era. The Democrats considered the $787 billion recovery package not just an essential step for saving the economy from depression, but also a first strike in White House's “big bang” strategy. It would, by their way of thinking, build political momentum for a range of other major Obama agenda items like climate change [cap-and-trade].

But for much of the public, the poorly conceived and marketed stimulus plan was the last straw in the unsettling explosion of government and debt that began with the bipartisan bailout bonanza in the waning days of the Bush administration. Ever since that dividing line was crossed, the Democrats have seemed to be operating in a hermetically sealed political vacuum, impervious to the public's changing post-crash priorities and diminishing tolerance for big government solutions.

The complex, sector-remaking cap-and-trade bill is a perfect example. That plan may have been a tough but closeable sell in a stable economy, given the short-term sacrifices we would have to make to secure the long-term rewards. But it was a dead letter in a near-depressed economy with a mistrustful electorate prone to believe the most damning attacks about higher taxes and lost jobs. Yet the Democrats plowed ahead with a bill in the House and only stopped when Senate moderates bolted.

That was nothing, though, compared to the multi-pronged Democratic disconnect on health care. It was clear early on that the public wanted the president and Congress to focus on the economy, especially after the evidence mounted that the stimulus, whatever its disaster-preventing benefits, was not going to spur job growth any time soon. Yet the Democrats went ahead and devoted most of the last year to health care reform, which only reinforced the growing perception that Washington was still as arrogant and unresponsive as ever and that the Democrats, like their predecessors, were still out for themselves and their political aims.

Once that die was cast, it was obvious that the public's top priority was reducing costs, and they had a right to expect that's what Washington would try to do since that's how Obama sold his agenda. Yet the Democrats on the Hill crafted a contradictory trillion-dollar bill–it called for cutting costs by increasing spending–that was largely seen as being about expanding coverage. And after all the recent federal intrusions into the economy, the frustrated middle was plainly skeptical about the federal government's ability to re-engineer one-sixth of the American economy. Yet the Democrats came forward with an incredibly intricate scheme that even they could not explain.

The Republicans would like us to believe that this is just liberalism run amok and that's why the public is rejecting the majority's agenda. There is some truth to that, but it's far too simplistic an explanation. If you look at the polling over the last several years, especially on health care, you would see the problem is more temporal than ideological. The backbone elements of Obama's health care reform plan tested well in 2008, and many of them continue to do so–in isolation. Even in late spring of last year, before the protests and death panel hysteria, the public was fairly open to the public option. But then events–and the Democrats' stubbornness and incompetence–intervened.

To be specific: As the year went on, and federal spending piled on, concerns about deficits heightened. With even the modestly successful Cash for Clunkers program running out of money, confidence in the Democrats' ability to deliver on their sweeping reform promises plummeted. Following a series of sweetheart deals for special interests and self-interested politicians to curry favor [on health care reform], faith in the legitimacy of the process and the integrity of the bill eroded. The more the Democrats wrote off these reasonable warning signs as nothing but Republican fear-mongering, the more they drove off the frustrated middle. Now most polls show only 35% to 40% of Americans support the president's [health care] plan.

The full extent of the Democrats' contextual confusion was laid bare at last Thursday's health care summit. Despite all the accumulated evidence that the Democrats were pushing the wrong bill at the wrong time, as well as the president's best efforts to reposition the debate, Obama's congressional allies stuck to their unyielding and ineffective script. Led by Pelosi, they repeated their same unpersuasive arguments for universal coverage, recycled the same hollow CBO numbers as a crutch and too often resorted to the same partisan defenses in responding to what sounded like substantive Republican criticisms. Obama at least made an effort to swim against the tide, explaining why universal coverage was not just affordable but necessary to bend the cost curve. The others seemed content–or just resigned–to go down with the ship.

Those hell-or-high-water Democrats are banking on the context to change again once they pass their [health care] bill. Their theory is that once the program benefits kick in, the political benefits will soon do the same. Public support will grow over time, the system will become as ingrained and untouchable as Medicare and Medicaid, and this year's election liability will gradually become a campaign asset. It might be a plausible argument–if this were any other year, if health care were the only issue dragging down the Democrats' credibility, if the anti-government Tea Party movement had not gotten such traction, and of course, if the bill ends up working reasonably well.

This is perhaps the greatest example of the Democrats' enveloping myopia. They may reflexively put issues in silos, but average Americans don't. Most voters are impressionistic, especially independents and moderates of both parties. They look at the whole of what you have done and the how of what you have done. If Democrats ram through an unpopular trillion-dollar health care bill in this climate, with Congress' approval rating at 15%, they may well cement their image as the worst of Washington and sever their claim on the public's trust for years to come. Even if ObamaCare delivers over time–and if it avoids the substantial premium increases that the Massachusetts universal care system has produced–it most likely will be too little too late.

Again, consider the context. Trust in government–which has been trending substantially downward since the crash of 2008–is in tipping-point territory right now. A recent New York Times poll showed that 70% of Americans are angry or dissatisfied with how Washington is handling the people's business; 80% said that members of Congress are more interested in pandering to special interest groups than in serving the needs of people who elected them; and 81% said members of Congress across the board deserve to be thrown out. A new CNN poll out this week goes a step further and shows that 56% of Americans now think the federal government poses a threat to their rights, with even 37% of Democrats sharing that view.

Those numbers beg the question: Would the Democrats actually be better off if their comprehensive health care bill does not pass? I tend to think so, though as I argued last week, the best course for Democrats would be to skip the all-or-nothing trap and pass a center-out bill that contains the 80% of insurance reforms on which both sides already agree. But that's a moot point: The Democrats are going for broke (in more ways than one). The more salient question is when will the Democrats start connecting the dots–and recognize that the American people are not going to accept a government that is not willing to heed their doubts. END QUOTE

Dan Gerstein, a political communications consultant and commentator based in New York, is the founder and president of Gotham Ghostwriters. He formerly served as communications director and senior adviser to Sen. Joe Lieberman, I-Conn.

In closing, a CNN/Gallup poll last week showed only 25% of Americans are in favor of any of the current Democratic healthcare plans, and the late February Rasmussen poll found that 55% want Congress and the president to start over.

And just out today: 1) the latest Investors Business Daily/TIPPS poll now finds that 61% of Americans want Congress to start over; and 2) Rasmussen says 57% of voters believe the healthcare plan will “hurt the economy.” Wow! (See Investors Business Daily article in the links below.)

Yet Obama is imploring the Dems to pass his plan anyway – even if it costs them their jobs. That’s why I say this is the biggest political gamble of the decade. Stay tuned!

Very best regards,

Gary D. Halbert

SPECIAL ARTICLES

Understanding Obama’s real agenda (this is good!)
http://www.realclearpolitics.com/hor…_house_de.html

Healthcare: Congress, Start Over or You’re Finished
http://www.investors.com/NewsAndAnal…aspx?id=525756

Another list of what’s wrong with healthcare reform
http://www.nytimes.com/2010/03/09/opinion/09brooks.html

More…

03.09.10 08:01 AM

Let's start with the conclusion to today's Outside the Box:

“The underlying principle flows from the financial balance approach: the domestic private sector and the government sector cannot both deleverage at the same time unless a trade surplus can be achieved and sustained. Yet the whole world cannot run a trade surplus. More specific to the current predicament, we remain hard pressed to identify which nations or regions of the remainder of the world are prepared to become consistently larger net importers of Europe's tradable products. Countries currently running large trade surpluses view these as hard won and well deserved gains. They are unlikely to give up global market shares without a fight, especially since they are running export led growth strategies. Then again, it is also said that necessity is the mother of all invention (and desperation, its father?), so perhaps current account deficit nations will find the product innovations or the labor productivity gains that can lead to growing the market for their tradable products. In the meantime, for the sake of the citizens in the peripheral eurozone nations now facing fiscal retrenchment, pray there is life on Mars that exclusively consumes olives, red wine, and Guinness beer.” – Rob Parenteau, CFA

Let me state upfront that this is not the easiest to grasp Outside the Box that I have sent you. But if you can get what Rob is saying, you will understand why the problems facing the world, and especially Europe, are so difficult. Everyone cannot export their way out of this crisis. Someone has to actually run a current account (trade) deficit.

My suggestion is that you read this once through, and then read it again. If you see where Rob is going, it makes it easier to understand the second time. Warning: Rob Parenteau is an Austrian economist. In many circles, what he is saying is controversial, if not at least counter-intuitive. But it makes us think, which is the purpose of Outside the Box. If I get a response that is robust and thoughtful, I will run it in the future. The problem that Rob articulates is the center of the problems we face. There are no good or easy choices, as I have been writing for a log time.

Rob Parenteau, CFA, is the sole proprietor of MacroStrategy Edge and editor of The Richebacher Letter. He also serves as a research assistant to the Levy Institute of Economics. For those interested, you can subscribe to The Richebacher Letter at https://reports.agorafinancial.com/R…0/landing.html (yes, more hyper marketing copy, but that is the link if you want his letter.)

John Mauldin, Editor
Outside the Box

Will the Earnest Quest for Fiscal Sustainability Destabilize Private Debt?

By Rob Parenteau

The question of fiscal sustainability looms large at the moment – not just in the peripheral nations of the eurozone, but also in the UK, the US, and Japan. More restrictive fiscal paths are being proposed in order to avoid rapidly rising government debt to GDP ratios, and the financing challenges they may entail, including the possibility of default for nations without sovereign currencies.

However, most of the analysis and negotiation regarding the appropriate fiscal trajectory from here is occurring in something of a vacuum. The financial balance approach reveals that this way of proceeding may introduce new instabilities. Intended changes to the financial balance of one sector can only be accomplished if the remaining sectors also adjust in a complementary fashion. Pursuing fiscal sustainability along currently proposed lines is likely to increase the odds of destabilizing the private sectors in the eurozone and elsewhere – unless an offsetting increase in current account balances can be accomplished in tandem.

To make the interconnectedness of sector financial balances clearer, proposed fiscal trajectories need to be considered in the context of what we call the financial balances map. Only then can tradeoffs between fiscal sustainability efforts and the issue of financial stability for the economy as a whole be made visible. Absent consideration of the interrelated nature of sector financial balances, unnecessarily damaging choices may soon be made to the detriment of citizens and firms in many nations.

Navigating the Financial Balances Map

For the economy as a whole, in any accounting period, total income from producing final goods and services must equal total expenditures on final products. There are, after all, two sides to every transaction: a spender of money and a receiver of money income. Similarly, total saving out of income flows must equal total investment in tangible capital during any accounting period.

For individual sectors of the economy, these equalities need not hold. The financial balance of any one sector can be in surplus, in balance, or in deficit. The only requirement is, regardless of how many sectors we choose to divide the whole economy into, the sum of the sectoral financial balances must equal zero.

For example, if we divide the economy into three sectors – the domestic private (households and firms), government, and foreign sectors, the following identity must hold true:

Domestic Private Sector Financial Balance + Fiscal Balance + Foreign Financial Balance = 0

Note that it is impossible for all three sectors to net save – that is, to run a financial surplus – at the same time. All three sectors could run a financial balance, but they cannot all accomplish a financial surplus and accumulate financial assets at the same time – some sector has to be issuing liabilities.

Since foreigners earn a surplus by selling more exports to their trading partners than they buy in imports, the last term can be replaced by the inverse of the trade or current account balance. This reveals the cunning core of the Asian neo-mercantilist strategy. If a current account surplus can be sustained, then both the private sector and the government can maintain a financial surplus as well. Domestic debt burdens, be they public or private, need not build up over time on household, business, or government balance sheets.

Domestic Private Sector Financial Balance + Fiscal Balance – Current Account Balance = 0

Again, keep in mind this is an accounting identity, not a theory. If it is wrong, then five centuries of double entry book keeping must also be wrong. To make these relationships between sectors even clearer, we can visually represent this accounting identity in the following financial balances map as displayed below.

On the vertical axis we track the fiscal balance, and on the horizontal axis we track the current account balance. If we rearrange the financial balance identity as follows, we can also introduce the domestic private sector financial balance to the map:

Domestic Private Sector Financial Balance = Current Account Balance – Fiscal Balance

That means at every point on this map where the current account balance is equal to the fiscal balance, we know the domestic private sector financial balance must equal zero. In other words, the income of households and businesses just matches their expenditures (or alternatively, if you prefer, the saving out of income flows by the domestic private sector just matches the investment expenditures of the sector). The dotted line that passes through the origin at a 45 degree angle marks off the range of possible combinations where the domestic private sector is neither net issuing financial liabilities to other sectors, nor is it net accumulating financial assets from other sectors.

Once we mark this range of combinations where the domestic private sector is in financial balance, we also have determined two distinct zones in the financial balance map. To the left of the dotted line, the current account balance is less than the fiscal balance: the domestic private sector is deficit spending. To the right of the dotted line, the current account balance is greater than the fiscal balance, and the domestic private sector is running a financial surplus or net saving position.

This follows from the recognition that a current account surplus presents a net inflow to the domestic private sector (as export income for the domestic private sector exceeds their import spending), while a fiscal surplus presents a net outflow for the domestic private sector (as tax payments by the private sector exceed the government spending they receive).

Accordingly, the further we move up and to the left of the origin (toward the northwest corner of the map), the larger the deficit spending of households and firms as a share of GDP, and the faster the domestic private sector is reducing the stock of net financial assets it holds. This usually entails an increasing its private debt to income ratio, or a falling net worth to income ratio (absent an asset bubble, which would raise the valuation of assets held). Moving to the southeast corner from the origin takes us into larger domestic private surpluses, where households and firms can increase their holdings of net financial assets.

The financial balance map forces us to recognize that changes in one sector's financial balance cannot be viewed in isolation, as is the current fashion. If a nation wishes to run a persistent fiscal surplus and thereby pay down government debt, it needs to run an even larger trade surplus, or else the domestic private sector will be left stuck in a persistent deficit spending mode.

When sustained over time, this negative cash flow position for the domestic private sector will eventually increase the financial fragility of the economy, if not insure the proliferation of household and business bankruptcies. Mimicking the military planner logic of “we must bomb the village in order to save the village”, the blind pursuit of fiscal sustainability may simply induce more financial instability in the private sector. Fiscal sustainability may ultimately prove destabilizing to the economy.

Leading the PIIGS to an (as yet) Unrecognized Slaughter

The rules of the eurozone are designed to reduce the room for policy maneuver of any one member country, and thereby force private markets to act as the primary adjustment mechanism. Each country is subject to a single monetary policy set by the European Central Bank (ECB). One policy rate must fit the needs of all the member nations in the eurozone. Each country has relinquished its own currency in favor of the euro. One exchange rate must fit the needs of all member nations in the eurozone. The fiscal balance of member countries is also, under the provisions of the Stability and Growth Path, supposed to be limited to a deficit of 3% of GDP. The principle here is one of stabilizing or reducing government debt to GDP ratios. Assuming economies in the eurozone have the potential to grow at 3% of GDP in real terms, and inflation is held to 2%, nominal GDP growth of 5% will be likely over the medium term. Starting from a 60% government debt to GDP ratio nominal terms, which is also the proposed public debt limit, a fiscal deficit of 3% of nominal GDP, when combined with a 5% nominal GDP growth tendency, will stabilize the government debt ratio at this limit (.03/.05 = .6, and the average debt ratio will migrate toward the marginal over time).

In other words, to join the European Monetary Union, nations have substantially diluted their policy autonomy. Markets mechanisms must achieve more of the necessary adjustments – policy measures are circumscribed. Policy responses are constrained by design, while experience suggests relative price adjustments in the marketplace have a difficult time at best of automatically inducing private investment levels consistent with desired private saving at anything approach the level of full employment income. This is a recipe for subpar growth outcomes, if not stagnation, and it presents quite a challenge if growth paths are knocked down by a global financial crisis, for instance.

Now let's layer on top of this structure three complicating developments of late. First, current account balances in a number of the peripheral nations have fallen, in part due to the prior strength in the euro. Second, fiscal shenanigans along with a very sharp global recession have led to very large fiscal deficits in a number of peripheral nations. Third, following the Dubai World debt restructuring, global investors have become increasingly alarmed about the sustainability of fiscal trajectories, and there is mounting pressure on governments to commit to tangible plans to reduce fiscal deficits over the next three years, with Ireland and Greece facing the first wave of demands for fiscal retrenchment.

We can apply the financial balances approach to make the current predicament plain. If, for example, Spain is expected to reduce it's fiscal deficit from roughly 10% of GDP to 3% of GDP in three years time, then the foreign and private domestic sectors must be together willing and able to reduce their financial balances by 7% of GDP. Spain is estimated to be running a 4.5% of GDP current account deficit this year. If Spain cannot improve its current account balance (in part because it relinquished its control over its nominal exchange rate the day it joined EMU), the arithmetic of sector financial balances is clear. Spain's households and businesses would, accordingly, need to reduce their current net saving position by 7% of GDP over the next three years. Since they are currently estimated to be net saving 5.5% of GDP, Spain's domestic private sector would move to a 1.5% of GDP deficit, and thereby enter a path of increasing leverage.

Spain already is running one of the higher private debt to GDP ratios in the region. In addition, Spain had one of the more dramatic housing busts in the region, which Spanish banks are still trying to dig themselves out from (mostly, it is alleged, by issuing new loans to keep the prior bad loans serviced, in what appears to be a Ponzi scheme fashion). It is highly unlikely Spanish businesses and households will wish to raise their indebtedness in an environment of 20% plus unemployment rates, combined with the prospect of rising tax rates and reduced government expenditures as fiscal retrenchment is pursued. More likely, they will try to preserve their recent net saving or financial surplus position.

Alternatively, if we assume Spain's private sector will attempt to preserve its estimated 5.5% of GDP financial balance, or perhaps even attempt to run a larger net saving or surplus position so it can reduce its private debt faster, Spain's trade balance will need to improve by more than 7% of GDP over the next three years. Barring a major surge in tradable goods demand in the rest of the world (especially demand for Spanish tradable goods by chronic current account surplus nations in the eurozone like Germany), or a rogue wave of rapid product innovation from Spanish entrepreneurs, there is an additional way for Spain to accomplish such a significant reversal in its current account balance.

Prices and wages in Spain's tradable goods sector will need to fall precipitously, and labor productivity will have to surge dramatically, in order to create a large enough real depreciation for Spain that its tradable products gain market share (at, we should mention, the expense of the rest of the eurozone members). Arguably, the slack resulting from the fiscal retrenchment is just what the doctor might order to raise the odds of accomplishing such a large wage and price deflation in Spain. But how, we must wonder, will Spain's private debt continue to be serviced during the transition as Spanish household wages and business revenues are falling under higher taxes or lower government spending?

Spain Ensnared in the EMU Trap

As evident from the financial balances map, there are a whole range of possible combinations of current account and domestic private sector financial balances which could be consistent with the 7% of GDP reduction in Spain's fiscal deficit. But the simple yet still widely unrecognized reality is as follows: both the public sector and the domestic private sector cannot deleverage at the same time unless Spain produces a nearly unimaginable trade surplus – unimaginable especially since Spain will not be the only country in Europe trying to pull this transition off.

As an admittedly rough exercise, we can assume each of the peripheral nations will be constrained to achieving a fiscal deficit that does not exceed 3% of GDP in three years time. In addition, we will assume each nation finds some way to improve its current account imbalances by 2% of GDP over the same interval. What, then, are the upper limits implied for domestic private sector financial balances as a share of GDP for each nation?

Greece and Portugal appear most at risk of facing deeper private sector deficit spending under the above scenario, while Spain comes very close to joining them. But that obscures another point which is worth emphasizing. With the exception of Italy, this scenario implies declines in private sector balances as a share of GDP ranging from 3% in Portugal to nearly 9% in Ireland.

Private sectors agents only tend to voluntarily target lower financial balances in the midst of asset bubbles, when, for example home prices boom and gross personal saving rates fall. Alternatively, during profit booms, firms issue debt and reinvest well in excess of their retained earnings in order take advantage of an unusually large gap between the cost of capital and the expected return on capital. We have no compelling reasons to believe either of these conditions is immediately on the horizon. If peripheral eurozone private sectors try to maintain something close to their current financial surpluses, current account balances will not to improve more dramatically, or nominal income growth will slow, if not fall into deflation.

The above conclusion regarding the need for a substantial trade balance swing in nations pursuing fiscal retrenchment flows straight from the financial balance approach, and yet it is obviously being widely ignored, because the issue of fiscal retrenchment is being discussed as if it had no influence on the other sector financial balances. This is unmitigated nonsense. It is even more retrograde than primitive tales of “twin deficits” (fiscal deficits are nearly guaranteed to produce offsetting current account deficits) or Ricardian Equivalence stories (fiscal deficits are nearly guaranteed to produce offsetting domestic private sector surpluses) mainstream economists have been force feeding us for the past three decades. Both of these stories reveal an incomplete understanding of the financial balance framework – or at best, one requiring highly restrictive (and therefore highly unrealistic) assumptions.

The EMU Triangle

This observation is especially relevant in the eurozone, as the combination of the policy constraints that were designed into the EMU, plus the weak trade positions many peripheral nations have managed to achieve, have literally backed these countries into a corner. To illustrate the nature of their conundrum, consider the following application of the financial balances map.

First, a constraint on fiscal deficits to 3% of GDP can be represented as a line running parallel to and below the horizontal axis. Under Stability and Growth Pact rules, we must define all combinations of sector financial balance in the region below this line as inadmissible. Second, since current account deficits as a share of GDP in the peripheral nations are running anywhere from near 2% in Ireland to over 10% in Portugal, and changes in nominal exchange rates are ruled out by virtue of the currency union, we can provisionally assume a return to current account surpluses in these nations is at best a bit of a stretch. This eliminates the financial balance combinations available in the right hand half of the map.

If peripheral eurozone nations wish to avoid a return to private sector deficit spending – and realistically, for most of the peripheral countries, the question is whether private sectors can be induced to take on more debt anytime soon, and whether banks and other creditors will be willing to lend more to the private sector following a rash of burst housing bubbles, as well as a severe recession that is not quite over – then there is a very small triangle that captures the range of feasible solutions for these nations on the financial balance map.

It is the height of folly to expect peripheral eurozone nations to sail their way into the EMU triangle under even the most masterful of policy efforts or price signals. More likely, since reducing trade deficits is likely to prove very challenging (Asia is still reliant on export led growth, while US consumer spending growth is still tentative, and, as mentioned earlier, most of the eurozone trade takes place within the eurozone itself), the peripheral nations in the eurozone will find themselves floating somewhere out to the northwest of the EMU triangle. The sharper their fiscal retrenchments, the faster their private sectors will tend to run up their debt to income ratios.

Alternatively, if households and businesses in the peripheral nations stubbornly defend their current net saving positions, the attempt at fiscal retrenchment will be thwarted by a deflationary drop in nominal GDP. Demands to redouble the tax hikes and public expenditure cuts to achieve a 3% of GDP fiscal deficit target will then arise. Private debt distress will also escalate as tax hikes and government expenditure cuts the net flow of income to the private sector. Call it the paradox of public thrift.

As it turns out, pursuing fiscal sustainability as it is currently defined will in all likelihood just lead many nations to further destabilization of private sector debt. European economic growth will prove extremely difficult to achieve if the current fiscal “sustainability” plans are carried out over the next three years. Realistically, policy makers are courting a situation in the region that will beget higher private debt defaults in the quest to reduce the risk of public debt defaults through fiscal retrenchment. European banks, which remain some of the most leveraged banks, will experience higher loan losses, and rating downgrades for banks will substitute for (or more likely accompany) rating downgrades for government debt. A fairly myopic version of fiscal sustainability will be bought at the price of a larger financial instability involving private debt as well.

Summary and Conclusions

These types of tradeoffs are opaque now because the fiscal balance is being treated in isolation. Implicit choices have to be forced out into the open and coolly considered by both investors and policy makers. It is not out of the question that fiscal rectitude at this juncture could place the private sectors of a number of nations on a debt deflation path – the very outcome policy makers were frantically attempting to prevent but a year ago.

There may be ways to thread the needle – Domingo Cavallo's [Argentina] recent proposal to pursue a “fiscal devaluation” by switching the tax burden in Greece away from labor related costs like social security taxes to a higher VAT could be one way to effectively increase competitiveness without enforcing wage deflation (http://www.voxeu.org/index.php?q=node/4666). The cost of exported goods is thereby lowered (as in a currency devaluation) without the need for domestic wage cuts and nominal income deflation, and this introduces the possibility of an improved trade balance with an unchanged fiscal balance.

Cavallo's claims to the contrary, however, it was not the IMF that tripped him up in pursuing this fiscal devaluation angle. Cavallo was, like Greece, under pressure to reduce Argentina's fiscal deficit. Fiscal expenditure cuts and tax hikes begat lower domestic income flows, which led to subsequent tax shortfalls, missed fiscal balance targets, and another round of fiscal retrenchment, in a vicious spiral fashion (another illustration of the paradox of public thrift).

Regardless, more innovative and effective solutions than the fiscal devaluation approach, need to be considered. Financial stability, not just fiscal sustainability, must be taken into account. But such solutions will not even be brought to light unless policy makers and investors begin to think coherently about how sector financial balances interact.

Or to put it more bluntly, if eurozone countries try to return to 3% fiscal deficits by 2012, as many of them are now pledging, unless the euro devalues enough or some other measure produces a large current account swing, then either a) the domestic private sectors of many nations will have to adopt a deficit spending trajectory, or b) nominal private income will deflate, and Irving Fisher's paradox will apply (as in the very attempt to pay down debt leads to more indebtedness), thwarting the ability of policy makers to achieve fiscal targets. In the case of Spain, (or adjacent to the eurozone, the UK) with large private debt/income ratios, this is an especially critical issue. In addition, given the eurozone tended to run a minor current account surplus (until recently) as a whole, falling nominal incomes in the peripheral nations, or improved current account balances in the periphery, will tend to come at the expense of growth in the eurozone's current account surplus nations. This introduces a possible contagion vector for Germany in particular, one that lies beyond the exposure of German banks to peripheral nation public debt or private debt. It is not obvious Germany's policy makers have fully considered these possible feedback effects which could lead to larger. Ironically, Germany's own fiscal balance could decline if these effects prove large enough on German income growth.

The underlying principle flows from the financial balance approach: the domestic private sector and the government sector cannot both deleverage at the same time unless a trade surplus can be achieved and sustained. Yet the whole world cannot run a trade surplus. More specific to the current predicament, we remain hard pressed to identify which nations or regions of the remainder of the world are prepared to become consistently larger net importers of Europe's tradable products. Countries currently running large trade surpluses view these as hard won and well deserved gains. They are unlikely to give up global market shares without a fight, especially since they are running export led growth strategies. Then again, it is also said that necessity is the mother of all invention (and desperation, its father?), so perhaps current account deficit nations will find the product innovations or the labor productivity gains that can lead to growing the market for their tradable products. In the meantime, for the sake of the citizens in the peripheral eurozone nations now facing fiscal retrenchment, pray there is life on Mars that exclusively consumes olives, red wine, and Guinness beer.

Rob Parenteau, CFA
MacroStrategy Edge
February 22, 2010
[email protected]

http://feedproxy.google.com/~r/John_…nion-trap.aspx

Budget cuts slash California rehabilitation program for prisoners
The Department of Corrections and Rehabilitation is slashing $250 million – almost 45 percent – of the $560 million it was to spend on rehabilitation this fiscal year. That means a 30 percent trim in high school equivalency and other literacy and vocational courses – 800 out of 1,500 instructors have been let go – and a 40 percent cut in substance-abuse programs.
Sacramento Bee

LA Superior Court to lay off 329 employees on April 1

Los Angeles Superior Court officials informed employees that 329 of them will be laid off on April 1 because of the ongoing budget crisis. A memo from Executive Officer John Clarke said as many as 1,800 more positions will be lost to layoffs and attrition in the next four years or so. "This is one of the saddest days for the L.A. Superior Court in its history," Clarke said in an interview. "This is an unprecedented layoff." Layoff notices will go out on March 16. After that, the court will provide workshops to assist with unemployment insurance, working with the county’s retirement plan and health benefits.
Torrance Daily Breeze

Grand Opening of the Granada Hills Veterans Park…

Work is nearly complete on the Granada Hills Veterans’ Park and the date is set for the grand opening ceremony on Memorial Day, Monday, May 31, 2010. More details on the event will be announced.

This project by the Granada Hills Rotary Foundation has transformed a dilapidated traffic median at the corner of Zelzah Ave. and Chatsworth St. into a beautiful tribute to the military men and women who have served our country.

The improvements include a new pergola (thanks to the generous contributions of the Granada Hills Improvement Association), new landscaping, brick and cement work, flagpoles, a monument and a statue (thanks to the generous contribution of Jake Parunyan, the 2009 Gil Benjamin Granada Hills Citizen of the Year.)

In addition to support from our office, other contributors have been Granada Hills South Neighborhood Council, Granada Hills North Neighborhood Council, Veterans of Foreign Wars Post 2323 and the Granada Hills Rotary Foundation.

The tribute bricks are currently being installed, and more are still available for community members to dedicated to veterans, businesses, friends and loved ones. For information about donating for tribute bricks, contact John Weitkamp at (818) 363-3144 or [email protected].
Greig Smith’s E-Mail Letter

Great Southern California ShakeOut Receives Prestigious Award…

Scientists, emergency planners, businesses and organizations who worked on communication efforts for the 2008 Great Southern California ShakeOut earthquake drill received a prestigious Federal award this week. Our office helped spearhead this important effort to learn more about earthquake response and help get the public prepared for the big one.

The U.S. Geological Survey (USGS) Eugene M. Shoemaker Awards for Communications Excellence are given annually to recognize extraordinary effectiveness in communicating complex scientific concepts and discoveries into words and pictures that capture the interest and imagination of the American
public.

The 2009 award in the multiple-product category was awarded to The Great Southern California ShakeOut Campaign. Working with an initial
committee of 12 people, the group superbly planned and executed a multimedia communication approach resulting in the drill being the largest of its kind in U.S. history, with more than 5 million people participating.

The scenario, written by USGS earthquake experts, called for a magnitude 7.8 earthquake to hit Southern California along the San Andreas fault. The drill was so successful it has become an annual event, with 6.9 million people participating in 2009. The next Southern California ShakeOut will take
place Oct. 21, 2010.

To learn more about ShakeOut, visit www.ShakeOut.org.
Councilman Greig Smith’s Office E-Mail Letter

Scent of a woman gets men going

Ladies, if you’re looking to grab a man by his nose and get a reaction from another part of his body, forget the usual pricey and toxic chemical perfumes.

Your own natural body odor will do just fine if you use it right.

I know what you’re thinking… B.O. = P.U.!

But a new study finds that all it takes is a whiff of an ovulating woman to get a man literally drooling with extra testosterone. You can’t put that in a bottle — but there’s already talk of trying.

Researchers found two women who were ovulating, two who were not and gave each a plain white T-shirt. Then, they told the gals to sleep in those shirts each night for three straight nights.

Hey, I know people who’ve gone much longer without changing their shirt — so why not?

The shirts were then labeled and frozen while they gathered some men to come and take a whiff of the ladies’ laundry. Shouldn’t have been too hard to find volunteers — I read about these sniffers being arrested all the time.

As the men sniffed, researchers collected saliva samples for testosterone tests. And it turns out there’s nothing like the smell of the egg factory kicking into overdrive to get a man going: Men who sniffed the shirts of the ovulating women had 37 percent more testosterone than those who sniffed the shirts of the non-ovulating women.

In a second experiment, they had some men sniff the shirts of the ovulating women, while others sniffed plain shirts that had never been worn. Men sniffing the shirts of the ovulating women had, on average, 15 percent more testosterone than those who sniffed the new shirts, according to a recent paper in Psychological Science.

Of course, these are shirts frozen in plastic bags like peas and carrots — I expect the scent of a real, live highly fertile woman would give most red-blooded men an even bigger testosterone boost.

Ladies, remember: If men were attracted to perfume, we’d be three-deep at the cosmetics counters just hoping for a whiff, instead of standing impatiently off to the side holding your bags.

What’s more, those perfumes are packed with completely unregulated chemical scents. They also contain phthalates — a powerful chemical linked to sexual dysfunction in men. If you’ve been forcing him to inhale that junk, no wonder he’s not in the mood anymore.

So next time, skip the toilet water and bask in your own odor instead. You might be surprised at the results.

Sniffing out the truth,

William Campbell Douglass II, M.D.

Pricey screenings make no difference in treatment

Breast cancer survivors are routinely held up for thousand- dollar MRI exams… but a new study shows they don’t make a dime’s bit of difference.

Of course, if you’ve been listening to me, you already know that.

The new study looked at women who’d been conned already by the breast cancer scam — patients who were treated once (almost certainly unnecessarily) and facing the possibility of going under the knife again.

Nothing like a repeat customer, right?

British researchers followed 1,623 breast cancer patients at 45 clinics who were put through the ringer of the standard "triple assessment." That’s the unholy trinity of an exam, an X-ray or ultrasound, and a lab test used to trick more women into unnecessary cancer treatments.

Roughly half of these women got MRIs as well… while the other half didn’t.

In the end, 19 percent of the women in both groups were told they’d need another operation within six months of their first surgery. That’s 19 percent – whether they had that big-money MRI or not, according to the study published in Lancet.

And a year later, there was no difference in the quality of life of either group. I’m sure a few MRI owners had a boost in their quality of life, though — with breast scans that can cost up to $1,500 a pop, the machines are like giant ATMs.

Yet the American Cancer Society is STILL pushing these pricey exams on supposedly high-risk women… with no real evidence that they add anything to the already-questionable breast cancer diagnosis.

Other studies have found that women who get expensive breast MRIs are more likely to undergo aggressive treatments, yet neither live longer nor have a lower rate of recurrence.

But since most breast cancer survivors don’t realize the only thing they really survived was a battle with a greedy doctor, they’re more than happy to line up outside these machines like pizzas waiting to go into an oven.

In fact, most of these women never needed surgery in the first place — and more than a few had cancers CAUSED by all their routine mammogram screenings and X-rays.

If you’ve been hit with a cancer diagnoses, don’t rush in for surgery. You can beat the Big C without chemo. Click here and I’ll tell you how.

William Campbell Douglass II, M.D.

03.06.10 02:20 PM

I, Robot
The Mauldin Test
Who Stole My Nanotech?
Water, Water Everywhere, Nor Any Drop to Drink
The Promise of Biotech
DIY-Bio
Random Takeaways
Home Again, Cambridge, and Cincinnati

We are in an era of accelerating change, moving toward a future that will be profoundly different from the past we grew up in. But what will the nature of that change be? What will the future look like? For the last 7 days I have been in an executive program designed by Singularity University (www.singularityu.org) to give some insight into that complex question. We looked at a number of technological fields, lectured by experts assembled to give us some idea as to where current research is and to where it is going. We visited some of the cutting-edge companies here in Silicon Valley.

Just as interesting, I got to visit with 44 of my fellow information seekers from 15 countries and extremely diverse backgrounds, along with a dozen college students, as well as the faculty. The group ranged from very successful entrepreneurs to academics to relatively high-level government workers to starry-eyed young people just starting out. There were a lot more applicants than could be accommodated, and the staff did a good job of choosing a group of people who all “brought something to the table” besides their entry fee of $15,000. The days were typically 14-15 hours, and there was a lot of discussion amongst us on the topics of the day.

This week we depart from my usual letter on finance and economics so I can report on a few of the ideas I came across. Some truly grabbed my interest, some confirmed my thinking, and others quite frankly either disappointed or alarmed me. This will not be my normal narrative, but rather short observations cribbed from my notes and thoughts. As I am on (yet again) a plane to San Antonio for a speech tomorrow morning, there will not be the usual links; and in some cases I must confess I made notes without writing down the name of the speaker. Mea culpa. So, sit back and let me share what has been a great week. (And I suspect that a few of you will be happy that we are ignoring Greece for at least one week!)

Quick note. My Strategic Investment Conference is almost sold out. Details at the end of the letter.

I, Robot

I think the positive surprise takeaway (for me at least) was how far we have advanced in artificial intelligence and especially robotics. Artificial intelligence has been promised to us for decades, and has been a disappointment for so long that I have consigned it to the dustbin of my research. Ditto for robots. I mean, seriously, if the Roomba (a glorified vacuum cleaner) is the best we can do after decades of work, how are AI and robots going to change the world? This is hardly the world that I grew up reading about in Isaac Asimov's brilliant I, Robot sci-fi series some 40 years ago.

It is all well and good for a single-purpose robot to be designed to make a spot weld on a car, but a general-purpose robot seemed a long way off. As far as AI goes, I am reminded of the old joke about a young geek who specializes in AI sitting at a bar, and this gorgeous blond comes up to him and they begin to talk. One thing leads to another and they end up in her room, where he proceeds to spend the entire night telling her how good things are going to be. AI has been a lot of talk for decades, and as with our geek, not much more.

The robotic sessions were led by Dan Barry, a three-time astronaut and veteran of many space station adventures (as well as appearing on Survivor!). What I saw onscreen and heard about has made me rethink my doubts about robotics. There are significant strides being made in mobility and utility in robotics. I saw robots walking on four feet through very difficult terrain, on ice, and up stairs. Robot “hands” are a lot further along than I had thought. Mobile robots on wheels, and walking balanced on two feet, are working today.

The ability of robots to recognize their surroundings, to differentiate between a table and a glass on the table (which is a very difficult thing to program), to pick up the glass, etc. is advancing at a fairly good pace. Dan is an enthusiastic advocate, and it was easy to get infected with his vision, but I can see a robotics industry in the 2020s actually having some significance in the US and world economy. We explored all manner of potential uses for robots, some with more economic potential than others. I am often asked where the jobs of the future will come from. It may be in robotics.

I was particularly drawn to the personal assistant robot. It is actually plausible to design a robot to be the “maid” in a home, to be able to purchase groceries, to assist the elderly, etc. These are the repeatable types of tasks that can be programmed and learned. We may only be ten years away from a nascent and powerful new industry. Now, this is not the robot of I, Robot. It will not have intellectual conversations with you. But it will respond to voice commands and clean up, put away toys, etc. Cooking, however, other than microwave foods, is a LOT harder. You will have to make your own omelets for a few decades.

The Mauldin Test

When (if ever) do we get computers that are self-aware? Alan Turing proposed in 1950 what has become known as the Turing Test of a machine's ability to demonstrate intelligence. It proceeds as follows: a human judge engages in a natural-language conversation with one human and one machine, each of which tries to appear human. All participants are placed in isolated locations. If the judge cannot reliably tell the machine from the human, the machine is said to have passed the test.

One participant suggested that in the future, as we get closer to true AI, computers should be tasked with designing the next generation of AI and computers. I pointed at that if we were to do so, then the Turing Test might not be the best way to determine if we had true artificial intelligence rather than just extremely sophisticated programs. I proposed the Mauldin Test. When a computer tells us that it no longer wishes to program a smarter computer, we will have arrived at the point of self-awareness and survival instinct. I suggest that is true AI. Just a thought.

Who Stole My Nanotech?

Ralph Merkle regaled us with the promise of nanotechnology to make anything and everything. Very tiny molecular machines would assemble all manner of things, from roads and homes to furniture to computers. The problem is that this was pretty much the same speech he was giving ten years ago. Not much progress has been made in the ensuing decade. This was perhaps the most disappointing note at the conference for me.

Let me differentiate between nanotech and nanoscale. Nanotech is the ability of very small machines to build useful objects one atom and molecule at a time. Nanoscale is the technology that creates very small objects to do useful things. An example would be carbon nanotubes, which are proving to have all sorts of useful properties.

There is very little money being put into actual nanotech research. We are at least two decades and hundreds of billions away from Merkle's (and Freitas' and others') vision, if even then. It is still in the arena of pure research, far from any potential commercial application. And there does not seem to be a lot of research in the field.

Nanoscale, however, is a different story. Batteries made from carbon nanotubes hold tremendous promise for better storage (by 400 times less weight per watt output). Filtering of seawater to produce fresh water, increased computer speed and power – there is a long and rapidly growing list of nanoscale advances.

If we ever do get actual molecular nanotech, it may look more like biotech, as we slip in on nanotech from the side. After all, combine a few cells and you eventually get a human being. For some, this is the path to robust nanotech.

Water, Water Everywhere, Nor Any Drop to Drink

And speaking of water (above), I was hoping to hear that we were further along with the cheap purification of water. I queried several venture capitalists, who see literally thousands and thousands of business proposals. While lots of people are working on it, they are aware of nothing on the near horizon. Water may be my #1 concern about the future. It is an intractable problem and one that must be solved. There is Microsoft- or Google-type wealth awaiting the team that creates an inexpensive way to purify water. Water management will be a major issue in the future. There are those who think we will go to war over oil or energy in the future. I rather doubt it. Water rights are going to be the issue that will divide nations and peoples unless we can find new technologies to create cheap supplies of fresh water and move it to where it is needed.

The Promise of Biotech

Ok, I am on record of late with my view that biotech is going to be a bubble in the latter part of this decade. I am actually starting to invest in smaller-cap biotech companies that hold what I think is significant potential intellectual property. In conversations with my fellow attendees, I think the consensus is that biotech holds the most immediate promise for transforming our lives.

A little background. The human genome project was launched in 1990. It cost $3 billion. At the time, detractors said it was a waste of time, as it would take a thousand years – and they were right, if you assumed then-current technology. It actually took only 11 years (to 2001), as new technologies were constantly invented. Craig Venter started Celera in 1998 and finished in a dead heat with the government for a fraction of the cost, at around $300 million.

Where are we now? Ray McCauley of Illumina told us of a machine they make that can do the entire human genome in one week. The cost of the machine is $750,000. He predicts that by 2013 the cost of doing your personal genome will be around $100, and in the future the cost will be as little as $1.

A prize has been offered for the first team to sequence 100 human genomes for $10,000 each in ten days or less. The $10 million USD prize, donated by diamond prospector Steward Blusson, will be claimable until the deadline of 4 October 2013. Many scientists around the world think it is highly likely the prize will be claimed before the deadline, probably substantially before.

Moore's Law says computing power is doubling every few years? That's so slow and old hat by biotech standards. Genome “power” is doubling every six months. It will be routine for you to get your own human template in a few years.

Those expensive toys that do your genome? Jun Wang (for some firm) in China bought 128 of them. That is the equivalent of being able to process the entire NCBI genome databank every 15 minutes. Although Ray would not say, I got the impression the Chinese simply opened their checkbook and said “How many will you sell us?”

Put this into context. Arguably one of the true US experts on stem cells, Mike West of Biotime, is also going to China to do a joint venture with the leading stem cell researcher there. They will be in human trials soon. (It's the same story with International Stem Cell Research, which is going to Russia.) Mike lamented to me over dinner that he could not get the trial speed he needs here in the US. There are a lot of other areas of research that are going offshore, too. Biotech is an area where the US has a clear lead today. We are in danger of losing that. Someone at the FDA needs to start a program that can keep up with the warp speed of change in the biotech world, or watch our lead go to the rest of the world, which is quite willing to leapfrog us. For all the talk about jobs, you would think someone would pay attention here.

DIY-Bio

I don't know how I feel about this next one. It has possibilities for both good and evil. Do It Yourself Biotech (DIY-Bio) is becoming a real movement, akin to the movement created by computer nerds in 1975, looking to build their own personal computers. But the real difference now is that this time they are connected by the internet.

The movement is just what it sounds like. The equipment and technology to do genetic experiments is getting cheaper and easier to access. Literally, some people do it in their closets. Want to drop a duck gene into a pig cell? That could be fun. Do you get a pig that can fly? But you can also test the water ecology around you and do other quite socially useful things, and even have a chance to stumble on a real advance. One teen group in New York recently bought a lot of fish from various restaurants and stores. Their genetic testing determined that 35% of what was sold as a particular type of fish was something else. Just cover it up with sauce and who can tell?

I like the idea of ten thousand people randomly working on solutions to real problems. But, and this is a big but, playing with genes seems a little problematic to me in a non-lab setting. The presenter pointed out that there are all types of really bad bugs out there, and the human race has survived, but somehow that did not allay my concerns.

The next presentation was from Special Agent Edward You of the FBI, who told us that the FBI is paying attention. That made me feel better, until he basically said they were not sure what to do. We can't dial back the clock, but some self-policing mechanism needs to be set up. As one person pointed out, we require all sorts of licenses for people who want to dive into the ocean. Increased complexity (diving into caves, for instance) requires additional licenses.

I am generally your basic libertarian. Let people do what they want to do – but I think I draw the line here. Access to equipment, materials, etc. ought to require some sort of license and some awareness training. Call me old-fashioned, but just as we don't let kids randomly experiment with uranium, maybe we should think about how we go about playing God. Don't get me wrong, I want people experimenting and pushing the edges. I just want someone supervising the sandbox.

Random Takeaways

OK, the next few pages are going to be short paragraphs from my notes, with no real connections among them. Very stream of consciousness. Take a deep breath and dive in.

The major cost of biotech is people. China has cheap people, and that may give them an advantage.

In regards to the DIY-Bio movement, one of attendees behind me said, “OK, does this mean in the future we buy 99-cent bio apps for our iBiophone?” Think about that for a second. Just a few years ago, the thought of 100,000 iPhone apps for a few bucks or even pennies or free seemed ridiculous. Now it is commonplace. By the way, I met a young kid from India. He has an app to turn my letter into a very easy iPhone app and is also programming for the rest of the phone world. Watch for me on your phone in a few months. It is indeed a brave new world.

The theme of the conference was accelerating technology. Things are going faster and faster. I had a thought. Our bodies can take only so much acceleration before we pass out. Will an increasingly fast world have the same effect on our minds? Is there a limit to how much change we can adapt to? Just a question; not sure of the answer.

Greg Papadopoulos, who is the Chief Technology Officer of Sun Microsystems, gave us his thoughts on the breakthroughs that are likely to happen and will change the world as we know it. New approaches to energy efficiency are on the horizon in 5-10 years. We will see a major breakthrough in memory, which will make the ability to remember (store) things really cheap. He speculated that there will be a new energy technology that will come out of left field to completely change the energy equation. By the way, this prediction showed up several times, from a variety of speakers. (I must admit that is also my personal prediction as well.) Greg thinks we will have silicon photonics by 2020 (think faster, more powerful computers). Quantum computing is way out there, but biocomputing may be here in the mid to late 2020s.

Steve Jurvetson, the #1 most influential geek (according to Wired, I think) simply blew us away. I would like to tie him to a chair for five hours and find out why he invested the billions of dollars in the scores of companies he has helped launch. He is focusing on clean tech, as is a lot of Silicon Valley. He sees 5,000 business plans a year. He talks about how we are soon in for Perpetual Future Shock. There are 6 x 10 to the 21st microbes in the ocean. There are microbes that only exist in certain parts of the ocean. We have only begun to explore the world. It is going to take a long time to switch to renewables. Maybe by 2030. He is blown away by how many incredible ideas there are. This is a guy who did his EE major at Stanford in 2.5 years and was #1 in his class. Intimidatingly smart.

As an aside, someone mentioned that at the TED Talks a few weeks ago, Bill Gates made a major commitment to nuclear energy. Did you know that the nuclear waste we already have could power the US for centuries? The technology exists to use it, as France has done for a long time. If someone truly thinks the US should be energy independent from foreign oil, this is the path. And it is green! Why not government-guaranteed loans for nuclear power and a requirement that every state or locality find a place to put a nuclear plant in their area. Pick a locale. If you choose not to put one “in your backyard” then you pay double for your power, which makes the power for the areas that choose to have nuclear plants free! That would attract some voters for nuclear plants. We need to stop sending money to the rest of the world for oil. Now that is stimulus you can believe in! (OK, off my soapbox.)

Another speaker saw potential game changers in low-cost photovoltaics and a smart grid. (Let's hope he's right!) He also speculated and laid out the technology to use CO2 as a source for fuel. Basically, you take CO2-emitting sources and use them to feed biofuel farms. Seems plausible.

Christopher deCharms, CEO of Omneuron, blew me away. Seems they can recognize patterns in your brain when you see certain (simple) objects. And they are teaching patients to control certain regions of their brains that have to do with pain. They are having some success, although he stressed that it was early and the tests were rudimentary. That aside, that we are even potentially in that world is amazing.

Jason Bobe from the Personal Genome Project at the Harvard Medical School talked about how they intend to first publish (publicly) 100 personal genomes and then go on to 100,000 in order to create a database for researchers to use to find correlations between certain genes and diseases. I plan to volunteer to be part of that initial 100, if they will take me. I really don't care who knows my genome, and if it will help move the science forward I am more than ready.

They are also moving beyond the human genome. They can now “sample” your blood to see what kind of exposure to certain diseases, metals, cancers, etc. you have had and then relate that to your genes. That is going to produce some very powerful and controversial results. But what we learn is going to give us clues to how to fight all sorts of diseases.

Jason noted that people who participate have no guarantee of being anonymous. It seems some young man a few years ago, upon hearing that he was the offspring of an anonymous sperm donor, did some research and found out who his father was. “Surprise! I'm your anonymous son!”

In the future, the world will get turned on its head. Instead of 15 minutes of fame, you will only get 15 minutes of anonymity.

The day before something is seen as a breakthrough, it is a crazy idea.

One guy was asking for dollar bills and other small foreign currency. They are doing DNA samples to see where and how many people have touched a particular dollar bill. In the not too distant future, you'd better be careful who you pay with cash if you don't want to be traced.

Dr. James Canton gave a very interesting talk on the future of the internet. He predicts that within 3-5 years we will live in a blended reality. Everything will be connected. The internet will become self-assembling. In the near future, information will find you rather than the other way around. Future networks will mimic living ecosystems. Web 3.0 will be the Collaborative Web. Not human to human, but human to machine to avatar to network. I am not sure what that means exactly, but he was quite convincing.

Information that finds you? Will there even be a need for me in the future? He too thought the really big surprise in the future would be a new source of energy, not to mention a new search topology with more predictive analytic search. There is a lot more, and if I can get a link to his speech I will.

We are now landing in San Antonio, so I need to call a halt and get ready to hit the send button. What a week!

Home Again, Cambridge, and Cincinnati

As it turns out, I got to the hotel and got swamped. I decided for the first time in ten years to finish the letter on Saturday, so this one is getting to you later than usual, and I apologize. I was just wiped out, and I wanted to have the time to edit the letter at least once.

I spoke this morning at the Cambridge Research conference. This is a group of their top brokers coming together for a weekend of strategy sessions. It was a new speech and seemed to go over very well, and the questions and discussion afterward was really good. This is a bunch of smart guys.

I get on a plane to go back home in a few hours, and I am ready. Monday a week my partner at CMG, Steve Blumenthal, is coming to Dallas, where we will hold a conference for about 75 brokers and advisors to talk about our mutual fund. That night we will crowd them into my house for Texas BBQ (emphasis on crowd!). Should be fun.

Then I fly to Cincinnati to meet with another very interesting biotech startup. In and out, but there is real potential here and I want to learn more directly from the source.

As for my conference, I want to give you a chance to register for my 7th (where do the years go?!) annual Strategic Investment Conference, cosponsored with my friends at Altegris Investments. The conference will be held April 22-24 and, as always, in La Jolla, California. The speaker lineup is powerful. Already committed are Dr. Gary Shilling, David Rosenberg, Dr. Lacy Hunt, Dr. Niall Ferguson, Jon Sundt, and George Friedman, as well as your humble analyst. We are talking with several other equally exciting speakers and expect those to firm up shortly.

Look at that lineup. These are the guys who got the calls right over the past few years. They called the housing crisis, the credit bubble, and the recession. And, in my opinion, these are some of the best in the world at giving us ideas about where we are headed.

Comments from those who attend the annual affair generally run along the lines of, “This is the best conference we have ever been to.” And each year it seems to get better. This year we are going to focus on “The End Game,” that is, on the paths the various nations are likely to take as they try to solve their various deficit problems, and how that will affect the world and local economies and our investments. We make sure you have access to our speakers and get your questions answered, and you'll come away with excellent, practical investment ideas.

This conference sells out every year, and it looks like it will do so this year. You do not want to miss it. There is a physical limit to the space. Every year I have to tell people, including good friends, that there is no more room. Don't wait to sign up. There is still an early-registration discount. And while it pains me to say it, you must be an accredited investor to attend the conference, as there are regulations we must follow in order to offer specific advice and ideas. Click on the link and sign up now. https://hedge-fund-conference.com/20…px?ref=mauldin

It's time to hit the send button, pack my suitcases, and go home. Have a great week!

Your believing the future is going to be better analyst,

John Mauldin

http://feedproxy.google.com/~r/Thoug…he-future.aspx

Fitness game does real harm

The exercise is fake — but the damage is real.

I’ve already told you how the so-called exercises in the "Wii Fit" videogame provide no workout at all…barely even rising to the level of simple walking.

But while you won’t get a real workout…you may get something else that exercise offers: Injuries. A recent letter in the New England Journal of Medicine shows Wii Twits suffering from sprains, broken bones, head injuries, chest trauma and dislocations — all from playing a stupid TV game!

And if you don’t wreck your body attempting these ridiculous exercises, you might wreck your home. Wii players are accidentally smashing TVs, windows and furniture with their full-motion games.

Just enter "Wii damage videos" or "Wii injuries" in your favorite search engine or on YouTube. You’ll see dummies hurting themselves, hurting each other and destroying their homes in the name of this moronic game.

You’ll laugh so hard at these poor fools you might get hurt yourself.

Humans aren’t the only ones at risk. Just last month, a Wii player in Michigan walloped her dog with one accidental swing of the controller. The pooch had no breath or pulse… but was revived by a skilled neighbor.

Remember, the best exercise is no exercise at all — just make sure your body gets a steady amount of natural movement.

And that means turning off the TV.

Out to prove that health is not a game,

William Campbell Douglass II, M.D.

The Democrats’ Charles Rangel Problem

Speaker of the U.S. House of Representatives Nancy Pelosi has a Charles Rangel problem. All Democrats in the House have a Charles Rangel problem. President Obama has a Charles Rangel problem.
Their Charles Rangel problem is ethics and corruption, government ethics and corruption, Democratic ethics and corruption.
The problem is not going to disappear as a result of Mr. Rangel, on March 3, taking a "leave-of-absence" from his Chairmanship of the powerful House Ways and Means Committee.
Read more now.

The Limited Government Senate Class of 2010?

There has been a correspondent decline in the quality of America’s senators since the Seventeenth Amendment’s progressive taint poisoned the waters of the Potomac. There is a reason that the 20th century didn’t produce a Webster, Clay or Calhoun. With states generally forming political entities too diverse to speak with a common voice, the result is usually senators who amplify rather than clarify the cacophony.
2010 may prove to be an exception to this pernicious trend, however. The public is rallying around a common sense of sobriety that finds the case for limited government as philosophically compelling as it is pragmatically compelled. And the result could prove to be an incoming class of freshman senators more amenable to the principled skepticism of the Founders than any in recent history.
Read more now.

Al Gore Emerges from Hiding, Calls Us a "Criminal Generation"

Let’s give Mr. Gore a soft golf-clap for demonstrating the courage to show his face in public. After a seemingly endless February that witnessed record snowstorms and winter disruptions across the country, he could have simply continued his hibernation while an increasingly skeptical nation mockingly asked, "Where’s Al?"
Well, just like Punxsutawney Phil emerged to seek his shadow, Gore finally emerged in The New York Times with a February 28 opinion piece astonishing for its tenacious adherence to stale admonitions and predictions of doom. Entitled We Can’t Wish Away Climate Change, Gore betrays his transparent larger agenda in his very first sentence by insisting that we face "an unimaginable calamity requiring large-scale, preventative measures to protect human civilization as we know it."
Read more now.

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