An open letter to Gil Weinreich

The Thanksgiving (November 2011) issue of research contains a thought and bile provoking editor’s letter. Research is quite often an excellent magazine. In particular Bill Miller: the closing bell offers a light weight but useful alternative perspective on the self-aggrandizement of financial advisors.

However, the “starvation” letter is built upon one of those big lies that often are critical in preventing honest and honorable discussion of financial solutions.

In the midst of the financial reporting world being so often dominated by clowns like Kramer in my simple point of view it would be easier to start with some truth telling.

Weinreich in his editor;s letter “the lessons of starvation economics” retells the beginnings of the Wall Street smash and grab that makes remarkably clear the issue of moral hazard.

He states, “in 1620, when our Pilgrim forefathers arrived in Plymouth, Massachusetts, per capita GDP was nearly 0.” In reality in 1620 GDP of North America was sufficient to ensure a standard of living higher than that obtained by the peasants of England. What did not show in the accounting was
the entire natural resource asset base of North America in the type of hyper M3 that is used for making long-term commodities calculations such as the combination of proven and unproven petroleum resources. The Native American culture lived within its means and established ownership of its resources through the eminent domain of possession for multiple thousands of years with no oligarchs capable of filing an enforceable claim against them–until the pilgrims.

The Native American version of home ownership savings and retirement plans was the store of provisions within their multiple dwelling places, and those endowments placed in graves.

Just as the Greenspan-Paulson period of American predation held that resources are the natural property of the predator class, the Puritans found “corn, and beans of various colors. These they brought away, intending to give them full satisfaction [repayment] when they should meet with any of
them, as about six months afterwards they did.
“… They thus had seed to plant corn the next year or they might have starved; for they had none, nor any likelihood of getting any, till too late for the planting season.”

In simple terms, the Puritans hedged their synthetic paper that hypothecated a claim to resources without proper audit, thereby inventing Bear Stearns and Lehman Brothers, and then misappropriated funds from accounts not under their control, thereby laying out the legal basis for MF Global, and giving bright ideas to Bernie Madoff.

Weinreich notes, “actually, just under half the population did die that first harsh winter. Socialist economic policies kept the Pilgrim starving for three years, and as today, The unemployment rate needlessly high: “The experience that was had… May well advance the vanity of that conceit of Plato’s and other ancients applauded by some of later times; that the taking away property and bringing in community into a Commonwealth would make them happy and flourishing; as if they were wiser than God. For this community open. So far as it was apparent it was found to breed much confusion and discontent and retard much employment that would’ve been to their benefit and comfort.”

Actually, getting closer to the procedural issues, in 1623 “the Governor (with the advice of the chiefest amongst them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves; in all other things to go on in the general way as before.” That is, work towards a republic, exactly as Plato had said, without a self-entitling oligarchy stealing the productive resources of the governed.

To get closer to the facts, the crack about “socialist economic policies” cannot be sustained without an examination of the synthetic instrument that caused the pilgrims to be in North America.
In reality, each person transported by the stockholders in England had a patent grant to 100 acres of tillable land, provided that such patent not impede riparian rights, which remained with the government back in England rather than within the eminent domain of the Pequot. Management was granted an additional 1500 acres for the sole purpose of public works–schools, hospitals. That “granting of small plots” was no more than slowing down the plutocratic rollup. In addition, of course, the pilgrims got a license to “forcibly expel” anyone who got in their way, thereby inventing rogo-signed foreclosures powered by MERS.

Weinreich notes that, just as is as did Lenin shortly after the Bolshevik Revolution, the management of the pilgrims corporate enterprise, “allotted private plots on which families could form for themselves”–except of course that the land was already theirs, if one gives credence to the Crown issued patent. It was never management’s to give, either way.

In reality, the failure of the pilgrims to abide by their patent created an entitled social class. In 1623, the actual incident that Weinrich calls “small plots” was “In 1623, the Pilgrims divided up their land. The people mentioned in the Division of Land came on the Mayflower (1620), the Fortune (1621), and the Anne (1623). A couple may have arrived on the Swan (1622) or the Little James (1623), but these were small ships carrying mostly cargo. The Division of Land is recorded in Volume XII of the “Records of the Colony of New Plymouth”, and reprinted in the “Mayflower Descendant”, 1:227-230. Each family was given one acre per family member.
http://www.histarch.uiuc.edu/plymouth/landdiv.html

All the “Mayflower Compact”, an effort to legitimise a warrant-less land grab actually said about private or public ownership of resources was “We, whose names are underwritten, the Loyal Subjects of our dread Sovereign Lord King James, by the Grace of God, of Great Britain, France, and Ireland, King, Defender of the Faith, &c. Having undertaken for the Glory of God, and Advancement of the Christian Faith, and the Honour of our King and Country, a Voyage to plant the first Colony in the northern Parts of Virginia; Do by these Presents, solemnly and mutually, in the Presence of God and
one another, covenant and combine ourselves together into a civil Body Politick, for our better Ordering and Preservation, and Furtherance of the Ends aforesaid: And by Virtue hereof do enact, constitute, and frame, such just and equal Laws, Ordinances, Acts, Constitutions, and Officers, from time to time, as shall be thought most meet and convenient for the general Good of the Colony;…”
All the rest of the “story” about “socialism” “welfare” and “capitalism” is later created excuses and justification.

Weinreich complains that, “the notion that American should accept increased taxes and ’shared sacrifice’ in time of need, but the experience of our Pilgrim forebears shows that people will literally starve rather than work for the ‘Commonwealth’ policies that discourage free enterprise…. Do we not see in today’s foodstamp economy rise in brazenness by able people? It seems like a week doesn’t go by without a flash mob army, endowed with expensive cell phones, looting a convenience store run by some hapless immigrant.”

By my experience and training someone seeking financial advice will be well served checking the sanity of potential advisors. I encourage anyone reading this to use what ever Bouleian search algorithm satisfies them to determine the actual incidence rate of “flash mob armies”, the ” looting of convenience stores”, “stores owned by immigrants.”

Weinreich concludes by stating, “our forebears came to America seeking religious freedom, and learned the necessity of economic freedom”. The reality is – ask any Pequot – that the Puritans foreclosed on a hypothecated mortgage registered in a MERS database confirmed by Robo signature performed by European oligarchs whose world view demanded that the worlds wealth was the natural property of certain wellborn, well-connected, self entitling aristocrats. The Puritans’ business plan execution, as Weinreich notes, lacked capital spending allowance, resource management, inventory control, proper paper trail, and regard for the rights of others. It was, as Weinreich notes, strong on child labor and disregard for the weakness, inability and unpreparedness of the assigned labor class.

It was backed purely by the firepower of English weapons.

The current American experiment holds instead that wealth creation comes from an environment that makes putting either monetary, intellectual or labor capital at risk as safe a bet for all parties on all sides of the table a naturally occurring event. That is the point of view inherent in the recent comments by Warren Buffet and others concerning rational tax policy.

I have been told by many people (some of them clients) that they “made their own money” or “created their own wealth.” My standard reply is to demand to see the iron ore-bearing dirt beneath their nails or signs of having built and worked a smelter from which could come the base metals of an industrial age. None of them can. I have asked a few to show me the solder burns on their fingers from wiring up the computational devices they use to plan and execute wealth creation strategies. The most honest of them then admit that they believe themselves too precious to be sacrificed to the common good, too self-involved to be aware of the social capital bestowed upon them.

During the financial meltdown of 2008 a notable percentage of the wealth generation capabilities of the United States was destroyed. I have seen no one asking the rich to make sacrifice: I hear many voices suggesting to those who profited from the system that they pay the money back or leave the country.

Does your RIA reject the social contract? That may explain what happened to your 401(k).

If “19th Century rationalism” is going to be invoked, then the American economy is an engine. Any engine that loses energy through internal force transference– through cams, gears, chains, poppets, belts–unnecessarily is about to be an abandoned engine. Economic engines transfer raw energy and material resource into capital stores of cash, social environment, education and safety. Efficient ones do not empower garbage such as the torquing of American history into one of Ayn Rand’s sociopathic fairy tales.

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Posted under business, finance, social

This post was written by admin on November 25, 2011

biotime annual report

here are the highlights of the 10k–which came out amazingly “early”. of course that can have nothing to do with my woofing about the biotime habit of waiting til the last minute.
The number of common shares outstanding as of February 26, 2009 was 25,213,569
that’s a 3 million share increase.
“As of March 10, 2009, there were 6,676 holders of the common shares”
was that increase in authorised discussed at the last annual meeting?
when was the last annual meeting?
“We intend to submit that amendment to our shareholders for approval at our next annual meeting.”
:” Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.”
lolol…
for thoughts on accounting and filing with the sec, see
http://baltbear-on-finance.com/stock-market-speculating-is-a-hold-up-shoot-them-with-x-barrels

and  lookie lookie…some amusing info about “big al’s basis”. wunderbar:
:”We paid Greenbelt $90,000 in cash and issued 200,000 common shares for services rendered for the twelve months ending March 31, 2007.  Greenbelt permitted us to defer until October 2007 paying certain cash fees that otherwise would have been payable earlier in the year.  In return for allowing the deferral, we issued Greenbelt an additional 60,000 common shares.  For the 2008 calendar year, we agreed to pay Greenbelt $135,000 in cash and to issue 300,000 common shares.  Greenbelt permitted us to defer paying the entire $135,000 cash fee until January 2009.  In return for allowing the deferral, we issued Greenbelt an additional 60,000 common shares during January 2009.  We have agreed to file a registration statement, at our expense, to register Greenbelt’s shares for sale under the Securities Act of 1933, as amended, upon Greenbelt’s request.  We also agreed to indemnify Greenbelt and its officers, affiliates, employees, agents, assignees, and controlling person from any liabilities arising out of or in connection with actions taken on our behalf under the agreement.

ok, 620k share at a basis of…..zero.
zero.

and: $225,000 in cash.
so, here’s the algebra problem:
a train leaves the nasdaq at 9:30 in the morning with 620k shares which can be sold at any price at all, and bought back at any price less than sold for;
a train leaves park avenue with $225k cash
to buy stock at any price and sell it for any amount more than was paid for;
what is big al’s  basis?
the answer?? 0 on more and more of the shares in his control+ 9% profit after trip tickets are paid for+ $225,000 in cash.
extra credit question:
if late comers to biotime should have to pay 4x more than al pays, what should be their basis?

Since inception, we have primarily financed our operations through the sale of equity securities, licensing fees, royalties on product sales by our licensees, and borrowings.

our total research and development expenditures were approximately $1,700,000 and our administrative expenditures were approximately $2,600,000.
The Credit Agreement permits us to borrow up to $3,500,000, and as of March 6, 2009, BioTime had outstanding Credit Agreement loans of $3,330,000.

Current loans under the Credit Agreement bear interest at the rate of 12% per annum and will mature on April 15, 2009, at which time the outstanding principal balance of the loans plus accrued interest will be due and payable.

Currently, lenders may exchange their notes for our common shares at prices ranging from $1.25 to $1.50 per share,

and our ability to commence and complete the clinical trials that are required in order for us to obtain FDA and foreign regulatory approval of products, depend upon the amount of money we have.

so, taking “big al” lol..out of th equation, what is there for fair market price in the opinion of those who have access to serious due diligence???
1 1/4–1 1/2 ….divided by 1.12.

hmmmm.
that put’s a price amusingly close to 1 3/8..which got defended as a raw marker…
and verrry close to 1 5/32….right where the defense kicked in.

so, those who see that hextend >>>works<<< and give a dang aobut that;
who see that hetacool therefore >>might work<<;
who think that “dr west” matters one way or the other;
and who can overlook an over 20 year trip to the gorss receipts level, and overlook the r&d/g&a of this puppy;
now know what price to pay.
there are 2 ways to pay it:
call them up and ask when they are getting ready for the next level of dilution (which is alread oocurring by seling embryome stock)
or trade this puppy into accumulation s that u end up with shares closer to “big al’s” basis.
so..what is big al’s basis???

anybody notice what this burst of news, did for volume?? 9k thru 2 pm…another 7k tossed back and forth in the last 30 minutes to to create illusion?
http://finance.yahoo.com/echarts?s=BTIM.OB#chart2:symbol=btim.ob;range=1d;indicator=bollinger+ema(20,50,10)+psar+ke_it+volume+rsi+volumema(10);charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined
anybody notice that the whole “sector” as a “story” play now rests on the spines of 8 rats?

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This post was written by admin on March 24, 2009

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What Caused the Recession?

"The group’s Business Cycle Dating Committee, the semi-official arbiter of these things, defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators."

While analysts have been all but certain that a recession has been underway for months, there has been some debate over exactly when it began. Last winter, employers started cutting jobs and growth slowed significantly,"
 says the washington post, just 2 month after blaming all the troubles on bankers.
if we date "last winter" as strting around halloween, which is what  iwas seeing, then 3 mortgage payments later an accelerating process of failure to service derivatives begins to make the sytem weak. and by summer, with key end-payers in increasing trouble, the insurers of the derivatove packages get into serious trouble, and 3 months later things begin to be undeniable, and lehman bros, and aig "take the fall" for the fact that american industry was losing jobs while the number of people needing them stayed constant, a wave front briefly stabilised by migrant workers leaving–sometimes with "help"–but nonetheless, fewer and fewer ways for the end payer to make a payment, leading the banking industry to diog deeper and deeper into the risk pool to find cash flow, thereby making the collapse all th larger.
    This left the "media" free to blame banks for predatory lending, when the systemic culprit was merely an avbsence of need for goods and services, caused in part by improvements in qulaity in goods, extending their life cycle.
  (Most readers here wll not be able to recall cars needing a "valve job" or (if ur a brit) a "de-coking" every 10-20 thousand miles, then onto 50,000 miles, and onto the unibody rysting away without the head ever coming off on many cars. they will not recall 100,000 miles being the "life" of a reliable car, which then fell into a spiral of changing ownership faster ad faster as those who could choose nothing but the risk/reward profile of a "$50 roller".)
    Change these odds? Undertake a way to create "meaningful" jobs, ad let the results filter up into mortgage derivativs stability, bank profits, investment safety? Get 4.5 million cars off the road–fast–and >>replace them<< and add another 2.5 million cars a year to the "tuna can" part of the cycle. At the sae time, repair bridges, overpasses, bottlenecks and safety hazards that cuase fuel to be wasted. This gives reduced oil dependece as pure profit. Improved air qualuty gives lower health care costs, and quality of life as pure profit. It makes taking risk in "green" vehicles worth taking both by the end consumer and the angel investor.
   Inother words: let’s stop placing blame and begin finding solutions. 

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Posted under finance

This post was written by admin on December 1, 2008

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the 10 cent solution for gm, f, etc.

today gm announced it can see the end of its cash reserves.
conbress has already told gm to go take a hike.
is this a poker game, gm bluffing to see if congress folds?
probably, becuase neithr side wishes to deal with the issues:
the roads are filled with cars that people value, becuase thy have no choice.
while oil is “cheap” and to kep it that way, a 10 cent fuel tax,
with the proceeds to go to buying cars made before 89 off the roads,
cars turned into tuna cans, not “recycled” as cars,
buying the cars at their original retail price with vouchers usable
only for buying cars made after 2002 that meet forward looking cafe goals
would get assembly lines moving again, provide locked base leverage for
extending credit, reduce health care costs, reduce oil dependence.
directing such vouchers back to the car “makers” as tax offsets, or
to be exchanged rirectly for r&d money maintains the forward motion,
and the delivery channels already exist between dealers and makers.
used car lots can use the vouchers as payment for floor plan with banks.
banks can hold the vouchers as capital for loss reserves,
and a clear, fast, utterly trsanparent market can immediately appear
for moving the “cash” value of thse vouchers, in th same way that a dtc
can keep track of “street name” equities.
ten cent a gallon equals about $18 billion dollars.
cars being taken of the road, let’s call it $8000 each,
thereby retiring 2.25 million cars, without “debt”.
invoke debt against tax revenues as a model, and double to 4.5 million cars a year.
let’s pretend there is shrinking dependence on a dead car in the driveway,
and say a demand for an additional 4 million vehicle units a year is created.
is that enough to bail out gm?
ask your congressman why it isn’t being done.
and pass this post along to anyone you know
who pretends to be “looking for solutions.”

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This post was written by admin on November 8, 2008

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