This Investment Pays Off 100:1 – The Thesis is Sound, but is the Timing Right?

I was watching CNBC Thursday when an interesting guest presented what may be the “Big Short” incredible play of 2011-2012.  Bill Ackman, the founder of the Pershing Square Hedge Fund presented his thesis on a currency play that will pay out at 100 to 1 if it occurs.  It’s a binary trade where he’ll lose his investment completely if it fails to come to fruition, but a 10,000% return on even a small portion of his fund’s total capital could boost him into a 3-4 digit return for investors in the next year.  Here’s the premise broken down methodically as he explained it:

  • The Hong Kong Dollar has been pegged to the US dollar for decades.  Hong Kong has altered their peg multiple times throughout their history and now is an optimal time for them to do so…..

Continue Reading This Investment Pays Off 100:1 – The Thesis is Sound, but is the Timing Right?

Lying on TBP may soon be a FELONY!!

You think I’m exaggerating? Just read some of the case examples below.

In America we prosecute people who post fake Facebook pictures, and not those who loot billions.

God, I fuckin’ hate this shit.

Oh … by the way … in case you didn’t know …. Muslims hate us because of our freedoms! bwahahahahahaha!!

Oh … by the way … Smokey is going to prison for bragging about his 11 1/2 inch schlong!!

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SHOULD FAKING A NAME ON FACEBOOK BE A FELONY?

Congress contemplates draconian punishment for Internet lies.

By ORIN S. KERR

Imagine that President Obama could order the arrest of anyone who broke a promise on the Internet. So you could be jailed for lying about your age or weight on an Internet dating site. Or you could be sent to federal prison if your boss told you to work but you used the company’s computer to check sports scores online. Imagine that Eric Holder’s Justice Department urged Congress to raise penalties for violations, making them felonies allowing three years in jail for each broken promise. Fanciful, right?

Think again. Congress is now poised to grant the Obama administration’s wishes in the name of “cybersecurity.”

The little-known law at issue is called the Computer Fraud and Abuse Act. It was enacted in 1986 to punish computer hacking. But Congress has broadened the law every few years, and today it extends far beyond hacking. The law now criminalizes computer use that “exceeds authorized access” to any computer. Today that violation is a misdemeanor, but the Senate Judiciary Committee is set to meet this morning to vote on making it a felony.

The problem is that a lot of routine computer use can exceed “authorized access.” Courts are still struggling to interpret this language. But the Justice Department believes that it applies incredibly broadly to include “terms of use” violations and breaches of workplace computer-use policies.

Breaching an agreement or ignoring your boss might be bad. But should it be a federal crime just because it involves a computer? If interpreted this way, the law gives computer owners the power to criminalize any computer use they don’t like. Imagine the Democratic Party setting up a public website and announcing that no Republicans can visit. Every Republican who checked out the site could be a criminal for exceeding authorized access.

IF THAT SOUNDS FAR-FETCHED, CONSIDER A FEW RECENT CASES.

In 2009, the Justice Department prosecuted a woman for violating the “terms of service” of the social networking site MySpace.com. The woman had been part of a group that set up a MySpace profile using a fake picture. The feds charged her with conspiracy to violate the Computer Fraud and Abuse Act. Prosecutors say the woman exceeded authorized access because MySpace required all profile information to be truthful. But people routinely misstate the truth in online profiles, about everything from their age to their name. What happens when each instance is a felony?

In 2010, the Justice Department charged a defendant with unauthorized access for using a computer to buy tickets from Ticketmaster. Ticketmaster’s website lets anyone visit. But its “terms of use” only permitted non-automated purchases, and the defendant used a computer script to make the purchases.

In another case, Justice has charged a defendant with violating workplace policies that limited use to legitimate company business. Prosecutors claimed that using the company’s computers for other reasons exceeded authorized access. The Ninth Circuit Court of Appeals recently agreed.

The law even goes beyond criminal law. It allows civil suits filed by private parties. As a result, federal courts have been flooded with silly disputes. In one recent case, an employer sued a former employee for excessive Internet usage from work. The alleged offense: visiting Facebook and sending personal emails. In another case, a company posted “terms of use” on its website declaring that no competitors could visit—and then promptly sued a competitor that did.

Remarkably, the law doesn’t even require devices to be connected to the Internet. Since 2008, it applies to pretty much everything with a microchip. So if you’re visiting a friend and you use his coffeemaker without permission, watch out: You may have committed a federal crime.

Until now, the critical limit on the government’s power has been that federal prosecutors rarely charge misdemeanors. They prefer to bring more serious felony charges. That’s why the administration’s proposal is so dangerous. If exceeding authorized access becomes a felony, prosecutors will become eager to charge it. Abuses are inevitable.

Real threats to cybersecurity must be prosecuted. Penalties should be stiff. But Congress must narrow the Computer Fraud and Abuse Act before enhancing its penalties. There’s no reason to make breaching a promise a federal case, and certainly not a felony crime.

Mr. Kerr, a former federal prosecutor, is professor of law at George Washington University School of Law.

http://online.wsj.com/article/SB10001424053111903285704576562294116160896.html

I MIGHT BE PARANOID, BUT IT DOESN’T MEAN THEY’RE NOT AFTER ME

I was driving home on the Schuykill Expresway last night and I may have cut off this vehicle while merging at City Line Ave.

He pulled in closely behind me and I’m sure he was thrilled to see this bumper magnet on the back of my car.

As a DHS drone I’m sure he dutifully noted that anyone supporting Ron Paul was clearly an enemy of the state and should be considered a likely domestic terrorist. I was picturing him running my tags and having flashing red lights going off with a Most Wanted poster with my picture showing up on his screen.

Then I noticed that the white Silverado in front of me had a different color license plate. I pulled up closer and it said it was a U.S. government vehicle. I was surrounded. These two government vehicles could pull the old squish a hybrid move and it would have been lights out for Administrator.

Then I started to get pissed off. I was thinking WTF is a Federal government employee doing driving a $35,000 Silverado. Why am I paying for this guy’s truck? Why can’t he drive his own fucking vehicle? Did you know there are 600,000 Federal government vehicles being driven by government drones, at your expense? Why should taxpayers pay for Federal government vehicles driven by bureaucrats and drones? This is just the Federal level. There are government drones at the local and state levels also driving vehicles at your expense. Imagine how much money we could free up for education, debt reduction, or turtle crossings if we made every government drone in the country drive their own fucking car. My guess is $25 billion to $50 billion.

Eventually, I gave the DHS vehicle the slip and thought I was home free. Then out of the blue, there he was pulling up beside me on the Northeast Extension. I glanced over and I could have sworn he gave me one of these.

 I’m not paranoid, but someone is following me.

RICK PERRY – CHINA’S CHOICE?

I think Farrell is a little too believing in this piece. Anyone can extrapolate today’s numbers 30 years into the future and arrive at an answer that looks like China will dominate the world. Anyone who extrapolated the Japanese “miracle” economy in 1988 twenty three years into the future would have come up with a far different result than the economic disaster that is Japan today. Extrapolation is for fools. Farrell completely ignores Peak Oil and China’s demographic nightmare caused by their one child policy.

If the European and American economies continue on a downward trajectory, who does Farrell think China is going to sell their shit to? This is really a thoughtless cheerleading piece devoid of the harsh realities facing the world. Rick Perry may be a dumbass, but he is a dangerous dumbass. He will likely lead the US into a Fourth Turning war. If the war is against China, don’t expect a positive result for either country. If China really wants Perry to win, they may be sorry for what they wish for.

Why China would love ‘President Rick Perry’

Commentary: China wins economically with an ‘inconsequential’ America

By Paul B. Farrell, MarketWatch

SAN LUIS OBISPO, Calif. (MarketWatch) — China must be secretly rooting for a guy like Rick Perry as the next U.S. president. They’d love competing against an America led by another Texas governor who talks from a big hat, loves war spending and tea parties, thinks the Fed chairman is acting “treasonous,” believes Social Security is a “Ponzi scheme” and admits he’s an antiscience, antievolution, anti-intellectual who will turn back the clock to the 19th century frontier Wild West.

Yes, China’s rooting for a guy who will not only make Washington “inconsequential” for all Americans, he’ll make America “inconsequential” in a world where China knows that its competitive edge and economic growth all hinge on investing in science, innovation and intellectuals with a vision of the future.

You can bet China’s leaders are cheering for a president who’ll stall the American economy even further while China races ahead of us in the global economic war. China would probably settle for the other leading GOP candidate, that ex-governor whose values shift with the latest polls and Tea Party questions … whatever happened to the GOP’s Bill Buckley soul?

China’s commie-capitalism beating GOP’s Reaganomics since 2000

Adam Smith’s original 1776 capitalism made America the world’s greatest superpower. We’ve lost that too. So America’s now in a handicap race with China, and losing. Why?

In just the past decade China’s state-run hybrid commie-capitalism has beaten the American economy, going from a “poor country” to racing ahead to global economic dominance. Unfortunately, our politicians just don’t get it. They’re like high school teens fighting a turf war who can’t see the building’s burning down.

In his “Triumph of Politics Over Economics,” Reagan’s budget director David Stockman warns: “America’s at a crossroads struggling to redefine ourselves, at a time when even Reagan couldn’t win the GOP nomination. Why? Because myopic politicians have hijacked the economy. Politicians are the new economists. Politicians now run the economy, puppets of the Super Rich and special-interest lobbyists.”

Stockman calls this corrupt system Crony Capitalism. We call it Reaganomics and Doomsday Capitalism, a sellf-destructive ideology that works to China’s advantage.

Here are 11 reasons China’s leaders would love an inconsequential president making America inconsequential in China’s march to economic world domination:

1. China’s economy: $123 trillion, 3 times America’s by 2040

In an eye-opening Foreign Policy cover story last year titled “$123,000,000,000,000: Why China’s economy will grow to $123 trillion by 2040,” Nobel economist Robert W. Fogel of the University of Chicago writes about China’s unbelievable leap forward. Back in 2000, just one decade ago, China was a “poor country” when the GOP and its “war president” took over control of America, announcing that “debt doesn’t matter.”

Yes, by 2040 “the Chinese economy will reach $123 trillion, or nearly three times the economic output of the entire globe in 2000. China’s per capita income will hit $85,000, more than double the forecast for the European Union … much higher than that of India and Japan … the average Chinese megacity dweller will be living twice as well as the average Frenchman … Although it will not have overtaken the United States in per capita wealth … China’s share of global GDP— 40% — will dwarf that of the United States (14%) and the EU (5%) 30 years from now,” one brief generation.

2. China’s political system is more capitalist than America’s

“The Chinese political system is likely not what you think,” says Fogel, “Most economic reforms, including the most successful ones, have been locally driven and overseen.” Today there’s “more criticism and debate in upper echelons of policymaking.”

Fogel attends meetings of the Chinese Economists Society. Many economists are openly “critical of the Chinese government,” will even “point out that the latest decision by the finance ministry is flawed … even publish a critical letter in a Beijing newspaper.”

3. China is rapidly turning into a capitalist consumer economy

Yes, “China’s long-repressed consumerist tendencies” are exploding,” says Fogel: “In many ways, China is the most capitalist country in the world right now.”

Get it? While we borrow from China then waste money fighting wars, while Wall Street and the Super Rich are amassing wealth in the hands of the top 1%, “in the big Chinese cities, living standards and per capita income are at the level of countries the World Bank would deem ‘high middle-income,’ with a clear, growing affinity for acquiring clothes, electronics, fast food, automobiles.”

Why? Because China’s leaders “made the judgment that increasing domestic consumption will be critical to China’s economy, and a host of domestic policies now aim to increase Chinese consumers’ appetite for acquisitions.”

4. China’s massive investments in education, ahead of America

China’s making “enormous investments” in education, says Fogel. They know “educated workers are much more productive workers. … college-educated workers are three times as productive … a high school graduate is 1.8 times as productive as a worker with less than a ninth-grade education.”

In the next generation China’s high school enrollment rate could reach 100%, the college rate about 50%, adding “more than 6 percentage points to the country’s annual economic growth rate.” Meanwhile, America runs up massive debts wasting trillions on wars, shortchanging education.

5: China’s locking up global resources, using U.S. dollar reserves

The title of a Malcolm Knox feature in BusinessWeek says it all: “The deal is simple. Australia gets money. China gets Australia.” Wake up America: While our clueless myopic politicians are fighting self-destructive election turf wars, China is using its reserves (U.S. dollars!) to buy rights to Australia’s commodities and natural resources, giving China long-term access to natural gas, minerals, iron ore.

And that’s just one continent: China’s quietly buying up future rights to commodity-resources worldwide.

6. China’s rural economy of 700 million adding to growth rate

Go beyond the Shanghai high-rises and Guangdong factories,” says Fogel. You’ll see “changes afoot in the Chinese countryside … an under-appreciated economic engine.”

From 1978 to 2003 China’s labor productivity averaged about 6%. In the future, productivity will also increase in rural areas, for about 700 million or half of China. “That large rural sector is responsible for about a third of Chinese economic growth today” and will explode as a new generation adds another hundred million.

7. China’s government statistics underreporting progress

Don’t be misled by reports that “Chinese data are flawed or deliberately inflated in key ways,” says Fogel. Just the opposite: Their “statisticians may well be underestimating economic progress … Small firms often don’t report their numbers to the government.”

And as in America, “official estimates of GDP badly underestimate national growth” because they don’t “take into account improvements in services such as education and health care.” In short, “the rapid growth of China’s service sector makes the underestimation more pronounced.”

8: Yes, China does have a long-range plan to conquer America

China is America’s worst nightmare, engaged in economic warfare against us on multiple fronts: Stealing millions of jobs, stealing U.S. state secrets, stealing proprietary patents, stealing technology, stealing our wealth. China has also forged strategic alliances with our enemies, Iran, Venezuela and North Korea. China is engaged in a not-so-secret cyber-war against America.

Ross Terrill, a China expert at Harvard, wrote in the Wilson Quarterly: “The Chinese Communists are very aware of this contest with the United States, though Americans (beyond the Pentagon) are not.” Terrill warns: “By being a shrinking violet, the United States would simply hand over the future to China.”

9: China’s aware of Pentagon strategies, is one-upping generals

You know China’s generals have copies of the Pentagon’s strategic war manual. New York Times columnist Paul Krugman warns of China’s long-range plans beyond waging “economic warfare” and tying up long-term natural resources.

Krugman says China’s actions tell us they’re planning long-term military strategies as well as economic war. He warns that in the near future, some seemly inconsequential incident may provoke “dangerously trigger-happy” Chinese leaders into escalating from defensive military strategies to a preemptive strike to advance China’s economic power.

10. The “Goldman Conspiracy” is helping China sabotage America

Li Delin’s “The Goldman Sachs Conspiracy” was a best seller in China. His Chinese readers love his vivid description: “Goldman Sachs knows when to go for your neck” like a “Manchurian tiger.”

Actually China’s playing a clever game: As author Matt Taibbi might say, China is now a “vampire squid wrapped around the face of Goldman, relentlessly jamming its blood funnel into Goldman’s capital, talent and connections.” Eventually China will suck the life out of Goldman.

11. By 2040 China will be the world’s biggest superpower (again)

“To the West, the notion of a world in which the center of global economic gravity lies in Asia may seem unimaginable,” says Fogel. “But it wouldn’t be the first time. … China was the world’s largest economy for 18 of the past 20 centuries. … While Europe was fumbling in the Dark Ages and fighting disastrous religious wars, China cultivated the highest standards of living in the world. Today, the notion of a rising China is, in Chinese eyes, merely a return to the status quo.”

And thanks to guys like Mitch McConnell, Paul Ryan, Rick Perry, Barack Obama, the Goldman Conspiracy and buddies, China is destined to once again become the world’s superpower by 2040, when China’s economy is three times bigger than America’s.

THANK GOD I’M WHITE

Fascinating report put out by the Census Bureau this morning. Here are some key points:

  • The nation’s official poverty rate in 2010 was 15.1 percent, up from 14.3 percent in 2009, the third consecutive annual increase in the poverty rate.  
  • There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009, the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published
  • The number of people without health insurance coverage rose from 49.0 million in 2009 to 49.9 million in 2010, while the percentage without coverage -16.3 percent – was not statistically different from the rate in 2009.
  • Breaking it down by ethnicity, living in poverty were 27.4% of all blacks, and 26.6% of all Hispanics. White, non Hispanics and Asians were doing better at 9.9% and 12.1% respectively.

Looks like us white folks are doing better than those minorities. I find this data fascinating. The number of people in poverty rose for the fourth consecutive year to an all-time high. But how could that be? Our very own government reported that Real GDP grew 3.0% in 2010. How could more people go into poverty if the economy grew strongly? It’s because the economy did not grow. The GDP numbers are a lie. The government borrowed from the Chinese, transferred the money to the poor and called it income.

The only people who recovered in 2010 were Wall Street bankers and big corporation CEOs like Immelt. The average person’s life got worse – little or no pay increases, higher food costs, and higher energy costs. If the economy had actually recovered in 2010, why did 6 million MORE people go on food stamps since 2009?

Obama and his minions got everything they asked for in 2009. They had both houses of Congress and they passed their plan, lock, stock and barrel. But somehow their Keynesian solutions led to greater poverty, 23% unemployment, and declining household income. Are you shocked that blacks and hispanics have almost three times the poverty of whites? When more than half your population is born out of wedlock and 50% of your kids drop out of high school and you depend on the government to pay your way in the world, what do you expect. At least they still have their Direct TV, cell phones, and SNAP cards.

The most revolting figure in the report is the real median household income of $49,445. This means 50% of the households in the U.S. make less than $49,445 per year. Below is a chart showing the real median household income going back to 1975. It is now lower than it was in 1997 and 6% below the peak, reached in 1999. Imagine the result if we used the real rate of inflation, rather that the government manipulated piece of shit called the CPI. My educated guess would be that real median household income is lower than it was in 1986.  

Year No. of Households Nominal $ Inflation Adjusted $
2009 117,538,000 $49,777 $49,777
2008 117,181,000 $50,303 $50,303
2007 116,783,000 $50,233 $52,163
2006 116,011,000 $48,201 $51,473
2005 114,384,000 $46,326 $51,093
2004 113,343,000 $44,334 $50,535
2003 112,000,000 $43,318 $50,711
2002 111,278,000 $42,409 $50,756
2001 109,297,000 $42,228 $51,356
2000 108,209,000 $41,990 $52,500
1999 106,434,000 $40,696 $52,587
1998 103,874,000 $38,885 $51,295
1997 102,528,000 $37,005 $49,497
1996 101,018,000 $35,492 $48,499
1995 99,627,000 $34,076 $47,803
1994 98,990,000 $32,264 $46,351
1993 97,107,000 $31,241 $45,839
1992 96,426,000 $30,636 $46,063
1991 95,669,000 $30,126 $46,445
1990 94,312,000 $29,943 $47,818
1989 93,347,000 $28,906 $48,463
1988 92,830,000 $27,225 $47,614
1987 91,124,000 $26,061 $47,251
1986 89,479,000 $24,897 $46,665
1985 88,458,000 $23,618 $45,069
1984 86,789,000 $22,415 $44,242
1983 85,407,000 $20,885 $42,910
1982 83,918,000 $20,171 $43,212
1981 83,527,000 $19,074 $43,328
1980 82,368,000 $17,710 $44,059
1979 80,776,000 $16,461 $45,498
1978 77,330,000 $15,064 $45,625
1977 76,030,000 $13,572 $43,925
1976 74,142,000 $12,686 $43,649
1975 72,867,000 $11,800 $42,936

 

The average family in the US is making much less money than they were 12 years ago. This supports John Williams contention that the US has virtually been in a decade long recession, despite what the government and main stream media report.

The situation continues to deteriorate. These families made up for their decline in income, by increasing their credit card, auto loan and student loan debt from $1.4 trillion in 1999 to $2.5 trillion today. Without jobs, incomes can’t rise. The Obama solution will be to funnel more of your money to those classified as in poverty. The only solution that will work is to liquidate the banks, liquidate the debt, wipe out those who made bad decisions, and start over. No one wants to accept the reality of this solution. It is too painful. It is mean and brutish. Tough shit. It is the only way. We could soften the blow by withdrawing our troops from around the globe, protecting our own borders and freeing up hundreds of billions in war spending for domestic purposes. What a concept – building bridges in the U.S. rather than rebuilding bridges we blew up in Iraq.

Otherwise we will continue on a path of ever declining income and bankers enriching themselves at our expense. But, at least I’m white. I got that going for me.

Income, Poverty and Health Insurance Coverage in the United States: 2010

Summary of Key Findings

     The U.S. Census Bureau announced today that in 2010, median household income declined, the poverty rate increased and the percentage without health insurance coverage was not statistically different from the previous year.

     Real median household income in the United States in 2010 was $49,445, a 2.3 percent decline from the 2009 median.

     The nation’s official poverty rate in 2010 was 15.1 percent, up from 14.3 percent in 2009 ─ the third consecutive annual increase in the poverty rate. There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009 ─ the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published.

     The number of people without health insurance coverage rose from 49.0 million in 2009 to 49.9 million in 2010, while the percentage without coverage −16.3 percent – was not statistically different from the rate in 2009.

     This information covers the first full calendar year after the December 2007-June 2009 recession. See section on the historical impact of recessions.

     These findings are contained in the report Income, Poverty, and Health Insurance Coverage in the United States: 2010. The following results for the nation were compiled from information collected in the 2011 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC):

Income

  • Since 2007, the year before the most recent recession, real median household income has declined 6.4 percent and is 7.1 percent below the median household income peak that occurred prior to the 2001 recession in 1999. The percentages are not statistically different from each another.

Race and Hispanic Origin (Race data refer to people reporting a single race only. Hispanics can be of any race.)

  • Among race groups, real median income declined for white and black households between 2009 and 2010, while changes for Asian and Hispanic-origin households were not statistically different. Real median income for each race and Hispanic-origin group has not yet recovered to the pre-2001 recession all-time highs. (See Table A.)

Regions

  • Households in the Midwest, South and West experienced declines in real median income between 2009 and 2010. The apparent change in median household income for the Northeast was not statistically significant. (See Table A.)

Nativity

  • Median income for households maintained by native-born householders declined between 2009 and 2010 in real terms. The change in the median income of all foreign-born households was not statistically significant. (See Table A.)

Earnings

  • In 2010, the earnings of women who worked full time, year-round were 77 percent of that for men working full time, year-round, not statistically different from the 2009 ratio. The 2010 real median earnings of these men and women were not different from the 2009 earnings.
  • Since 2007, the number of men working full time, year-round with earnings decreased by 6.6 million and the number of corresponding women declined by 2.8 million.

Income Inequality

  • Based on the Gini Index, the change in income inequality between 2009 and 2010 was not statistically significant, while the changes in shares of aggregate household income by quintiles showed a slight shift to more inequality. The Gini index was 0.469 in 2010. (The Gini index is a measure of household income inequality; zero represents perfect income equality and 1 perfect inequality.)

Poverty

  • The poverty rate in 2010 was the highest since 1993 but was 7.3 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available. Since 2007, the poverty rate has increased by 2.6 percentage points.
  • In 2010, the family poverty rate and the number of families in poverty were 11.7 percent and 9.2 million, respectively, up from 11.1 percent and 8.8 million in 2009.
  • The poverty rate and the number in poverty increased for both married-couple families (6.2 percent and 3.6 million in 2010 from 5.8 percent and 3.4 million in 2009) and female-householder-with-no-husband-present families (31.6 percent and 4.7 million in 2010 from 29.9 percent and 4.4 million in 2009). For families with a male householder no wife present, the poverty rate and the number in poverty were not statistically different from 2009 (15.8 percent and 880,000 in 2010).

Thresholds

  • As defined by the Office of Management and Budget and updated for inflation using the Consumer Price Index, the weighted average poverty threshold for a family of four in 2010 was $22,314.
    (See <http://www.census.gov/hhes/www/poverty/data/threshld/index.html> for the complete set of dollar value thresholds that vary by family size and composition.)

Race and Hispanic Origin (Race data refer to people reporting a single race only. Hispanics can be of any race.)

  • The poverty rate for non-Hispanic whites was lower in 2010 than it was for other racial groups. Table B details 2010 poverty rates and numbers in poverty, as well as changes since 2009 in these measures, for race groups and Hispanics.

Doubled-Up Households

  • Doubled-up households are defined as households that include at least one “additional” adult: a person 18 or older who is not enrolled in school and is not the householder, spouse or cohabiting partner of the householder. In spring 2007, prior to the recession, doubled-up households totaled 19.7 million. By spring 2011, the number of doubled-up households had increased by 2.0 million to 21.8 million and the percent rose by 1.3 percentage points from 17.0 percent to 18.3 percent.
  • In spring 2011, 5.9 million young adults age 25-34 (14.2 percent) resided in their parents’ household, compared with 4.7 million (11.8 percent) before the recession, an increase of 2.4 percentage points.
  • It is difficult to precisely assess the impact of doubling up on overall poverty rates. Young adults age 25-34, living with their parents, had an official poverty rate of 8.4 percent, but if their poverty status were determined using their own income, 45.3 percent had an income below the poverty threshold for a single person under age 65.

Age

  • The poverty rate increased for children younger than 18 (from 20.7 percent in 2009 to 22.0 percent in 2010) and people 18 to 64 (from 12.9 percent in 2009 to 13.7 percent in 2010), while it was not statistically different for people 65 and older (9.0 percent).
  • Similar to the patterns observed for the poverty rate in 2010, the number of people in poverty increased for children younger than 18 (15.5 million in 2009 to 16.4 million in 2010) and people 18 to 64 (24.7 million in 2009 to 26.3 million in 2010) and was not statistically different for people 65 and older (3.5 million).

Nativity

  • The 2010 poverty rate for naturalized citizens was not statistically different from 2009, while the poverty rates of native-born and noncitizens increased. Table B details 2010 poverty rates and the numbers in poverty, as well as changes since 2009 in these measures, by nativity.

Regions

  • The South was the only region to show statistically significant increases in both the poverty rate and the number in poverty — 16.9 percent and 19.1 million in 2010 — up from 15.7 percent and 17.6 million in 2009. In 2010, the poverty rates and the number in poverty for the Northeast, Midwest and the West were not statistically different from 2009. (See Table B.)

Health Insurance Coverage

  • The number of people with health insurance increased to 256.2 million in 2010 from 255.3 million in 2009. The percentage of people with health insurance was not statistically different from 2009.
  • Between 2009 and 2010, the percentage of people covered by private health insurance declined from 64.5 percent to 64.0 percent, while the percentage covered by government health insurance increased from 30.6 percent to 31.0 percent. The percentage covered by employment-based health insurance declined from 56.1 percent to 55.3 percent.
  • The percentage covered by Medicaid (15.9 percent) was not statistically different from 2009.
  • In 2010, 9.8 percent of children under 18 (7.3 million) were without health insurance. Neither estimate is significantly different from the corresponding 2009 estimate.
  • The uninsured rate for children in poverty (15.4 percent) was greater than the rate for all children (9.8 percent).
  • In 2010, the uninsured rates decreased as household income increased from 26.9 percent for those in households with annual incomes less than $25,000 to 8.0 percent in households with incomes of $75,000 or more.

Race and Hispanic Origin (Race data refer to those reporting a single race only. Hispanics can be of any race.)

  • The uninsured rate and number of uninsured in 2010 were not statistically different from 2009 for non-Hispanic whites and blacks, while increasing for Asians. The number of uninsured Hispanics was not statistically different from 2009, while the uninsured rate decreased to 30.7 percent. (See Table C.)

Nativity

  • The proportion of the foreign-born population without health insurance in 2010 was about two-and-a-half times that of the native-born population. The 2010 uninsured rate was not statistically different from the 2009 rate for native-born, the foreign-born overall and noncitizens but rose for naturalized citizens. Table C details the 2010 uninsured rate and the number of uninsured, as well as changes since 2009 in these measures, by nativity.

Regions

  • The Northeast and the Midwest had the lowest uninsured rates in 2010. Between 2009 and 2010, there were no statistical differences in uninsured rates for any of the regions. The number of uninsured increased in the Northeast, while there were no statistically significant changes for the other three regions. (See Table C.)

Historical Impact of Recessions

Since 2010 represents the first full calendar year after the recession that ended in June 2009, one can compare changes in income, poverty and health insurance coverage between 2009 and 2010 with changes during the first year after the end of other recessions:

  • Median household income declined the first full year following the December 2007 to June 2009 recession, as well as in the first full year following three other recessions (March 2001 to November 2001, January 1980 to July 1980 and December 1969 to November 1970). However, household income increased the first full year following the November 1973 to March 1975 recession, and the changes following the July 1990 to March 1991 and July 1981 to November 1982 recessions were not statistically significant.
  • The poverty rate and the number of people in poverty increased in the first calendar year following the end of the last three recessions. For the recessions that ended in 1961 and 1975, the poverty rate decreased in the next full calendar year.
  •      After the most recent recession, there was no significant difference in the uninsured rate during the first full year after the recession. However, in the year following the recessions that ended in 1991 and 2001, the uninsured rate increased.

Supplemental Poverty Measure

     The Census Bureau’s statistical experts, with assistance from the Bureau of Labor Statistics and in consultation with the Office of Management and Budget, the Economics and Statistics Administration and other appropriate agencies and outside experts, are now developing a Supplemental Poverty Measure. The Supplemental Poverty Measure, for which the Census Bureau expects to publish preliminary estimates in October 2011, will provide an additional measure of economic well-being. It will not replace the official poverty measure and will not be used to determine eligibility for government programs. See Income, Poverty, and Health Insurance Coverage in the United States: 2010 for more information.

     The Current Population Survey Annual Social and Economic Supplement is subject to sampling and nonsampling errors. All comparisons made in the report have been tested and found to be statistically significant at the 90 percent confidence level, unless otherwise noted.

     For additional information on the source of the data and accuracy of the estimates for the CPS, visit <http://www.census.gov/hhes/www/p60_239sa.pdf>.

I SURVIVED THE 9/12 TERRORIST ATTACKS. DID YOU?

Once Janet Nepalatano, the Queen of DHS, announced a credible terrorist threat, I knew I had to jump into action. The threat level was clearly elevated. We had reached Elmo Red threat level.

And then when our resident TBP terrorist threat analyst declared unequivically that September 12th would be the day of a devastating terrorist attack on our country, I was sure I had to make a run for it. You had to take this guy seriously. He’s a Boomer and has never been wrong in his entire life.

I was sure there were hundreds of suitcase nukes planted all over the country. I envisioned mushroom clouds across the land. The horror!!!

So, I jumped in my car and high tailed it to my Wildwood condo last night after work.

I had thought this through. Muslims hate water. They also would be kept away by the chocolate covered bacon sold on the boardwalk. Plus, think of the bad publicity they would get if they blew up my Section 8 black neighbors. My plan was foolproof.

I didn’t really go down to my condo to clean it before my next tenant goes in. I wasn’t down on my hands and knees in the bathroom cleaning pubic hairs off the floor, I was cowering in fear from the Muslim menace that lurks behind every bush.

It was a fearful evening, as our TBP analyst was sure of the imminent attack. But, then the clock ticked 8:00 pm and all was well. The GOP Presidential Debate came on CNN and all my fear and worry dissipated. What a fine group of patriots. And the Tea Party crowd at the debate was wonderful. They must have all had Mensa level IQs. Our country is in great hands with these men and women at the helm.

I think a ticket of Gingrich/Santorum would do wonders for our country. Behind the mantle of Jesus Christ and American Exceptionalism, this tandem would put an end to this pussy footing around and take out Iran, North Korea, Syria and any other ragheads that act up. Newt rightfully pointed out that tripling war spending in the last ten years is disgraceful. We should have quintupled it. Think of the jobs. The deficits wouldn’t exist because we could have plundered the riches of all the countries we would have invaded. With Jesus on our side any torture or collateral damage caused by our drones and cruise missiles is justified.

I can’t understand how Santorum lost his PA Senate seat by 16%. Maybe it is the foaming at the mouth issue he has when he addresses Ron Paul.

It is shocking to me that if you add up Gingrich’s and Santorum’s support in the polls, you get a number lower than a snake’s ass. The Fox News Tea Party is out for blood. They are itching for a good old fashion Christian/Muslim Armageddon showdown. But don’t cut their Medicare or Social Security.

Rick Perry was under blistering attack during the debate. In my opinion, he deflected it pretty well. He has essentially stolen most of Ron Paul’s hot button issues. He has called Bernanke treasonous, declared he is for sound money, called Social Security a ponzi scheme, and actually said we need to bring the troops home from Afghanistan. His low taxes, more jobs Texas story is connecting with the Republican base. He has somehow been able to hide his religious fundamentalist extremism, just as GWB did in 2000.

Southerners will never get behind Romney. He is considered a smooth talking Yankee Mormon. Perry will win the Republican nomination.

There are only a few states actually in play in the general election. Nevada, Florida, and Ohio have some of the worst economic problems in the country. People vote their pocketbook. If two of these states go Perry’s way, he wins in 2012. I expect the economic situation to worsen across the board between now and November 2012. Perry may win in a landslide. The Grey Champion of the Fourth Turning has arrived on stage.

When I departed Wildwood this morning at 5:45 am for my almost two hour trek to work, I turned on the radio to listen to the reports of the terrorist attacks. I was SHOCKED to hear that none had taken place. I’m sure we owe it to the 50,000 noble warriors at DHS that foiled the Muslim terrorists. Remember, turn in anyone that doesn’t look like you. It’s the American way.

3 Ways Older Americans Are Going to Wreck Your Life

I have nothing against old people.  I adored my grandparents and I’ll be old some day and I may well be in the same position, but given the demographic shift America is facing and the economic realities we’re now dealing with, the elderly population in America is set to screw you three ways to Tuesday.  Here’s how:

They Take Your Jobs – Americans who are approaching what used to be the “normal retirement age” aren’t retiring.  They’ve lost all the equity in their homes, their 401(k)s have taken a haircut and they can no longer keep doing cash out refinancings on their homes like an ATM to support their lifestyle …

…Continue Reading 3 Ways Older Americans Are Going to Wreck Your Life

LLPOH Short Story: Why Manufacturing is Going to China

Recently, I read an article written by Joe Biden (I cannot explain why I would ever have done that, except the title was something to the effect that “China is not a threat to US manufacturing”). Additionally, I regularly see TBP members calling out CEOs of corporations for destroying American jobs by sending product (and, more and more, services) overseas. Biden implies that we can overcome difficulties simply by working smarter and getting smarter. Additionally, some TBP members believe, apparently, that the CEOs are simply evil and are eliminating jobs out of spite. In combination, these two things have prompted the following article.

I believe that Biden, and many Americans, simply do not understand the cost differential (not to mention the regulatory differential and costs thereof) between running a manufacturing company in the US versus running a similar company in China. Following are the comparative costs of employing a manufacturing employee in the US versus employing one in China.

I do not wish to make this too technically complex. I have made a lot of assumptions herein, but in general terms the figures are accurate. Some of the assumptions relative to a manufacturing employee in the US are as follows:

– Average salary of $20 per hour
– Family health insurance of $12,000 per year
– Pension of 5% of total pay
– Worker’s compensation and payroll tax of 7.5% each
– Minor other miscellaneous costs of approx.
– Indirect labor costs (ie. managers/engineers/planners/QA/etc.) calculated at $75,000 per year plus above costs, and at a ratio of 4:1
– Vacation of 3 weeks/year, 10 national holidays, 8 days sick leave
–
When you blow through all the USA numbers, you get a cost per hour of employing a manufacturing worker of $47.91. But this number is at 100% efficiency – and allows for no coffee breaks, going to the toilet, chatting with co-workers, coming back late from lunch, etc. When these items are factored in, the cost per one hour of actual work is approx. $59.89 per hour. Major corporations have costs far exceeding these.

Is anyone out there surprised? And please remember these costs do not include profit, materials, indirect expenses like rent/property tax/electricity/ etc. Some indirect compliance costs are included (ie. the costs of EPA compliance, etc. are largely captured in overhead personnel.).

Following are the costs associated with employing a Chinese manufacturing worker. Assumptions are as follows:

– Monthly wage of $600 per month (this is highly variable subject to location, etc. but seems to be a reasonable number) inclusive of overtime
– On-costs (pension is the largest percentage at approx.. 20%), et al of 40%
– Cost of indirect workers at $15,000 per year plus 40% on costs
– 2 weeks of vacation and 10 annual holidays per year (widely variable but considered the norm)
– Direct to indirect of 4:1. This assumption is overstated, as there is far less regulation to attend to (EPA, etc.), and thus should really be reduced, but I have left it the same for comparison purposes.

When these assumptions are entered, the standard rate for a manufacturing employee in China is $6.54 per hour, and $7.70 when allowing for inefficiency estimates.
So we get a per hour DIFFERENTIAL between the cost of labor in the US versus China of $41.37 gross and $52.19 net. Stunning, isn’t it? Generally, when I am asked to quote on a part, I consider the likelihood of the part being eventually offshored to China. For simplicity, I simply assume the labor component of the Chinese made part to be zero, so insignificant is it to the process of making a comparison.

Further, there are huge differentials in cost of rents, cost of purchased materials (sourcing materials locally in China is obviously cheaper than sourcing materials locally in the US), etc. Plus there are often incentives granted by the Chinese government, and company tax is lower in China.

So let’s take a look at what this means to a manufacturer. Let us assume we have two manufacturing plants, one in the US and one in China, each having 100 direct manufacturing employees. The labor cost differential between the two is approx. $9.2 million per year. That is $9.2 MILLION PER YEAR! Plus all other cost differentials. I estimate the total cost differential would be approximately $15 to $20 million when all other cost differentials are included. Again, I ask, is anyone astonished?

Stuck, in a recent post, made comment about a $15 dollar Chinese made toaster. Let us look at that particular case. I am not a toaster manufacturer, but I can make some estimates that should be close.
First, the retailer probably has a $5 mark-up on this item (50%). That leaves $10. I have calculated shipping costs to be approximately $2 per toaster, leaving $8 dollars. Of this, let us say $1 is profit (10%), leaving $7. Assuming a material rate 70% for this item (the most expensive item will almost certainly be the carton!), that leaves a labor cost of $2. Going back to our cost per hour of $6.54, we can calculate the toaster is assembled/handled in 18 minutes. That seems reasonable, perhaps even overstated, to me, in my experience.

So what would the toaster cost to make in the US? Eighteen minutes of labor would cost $14.50. Materials would be more expensive, so let us say $7 in materials. Profit of 10% would be $2.15. Retail mark-up would be $11.80. Therefore, the retail price of the US made toaster would be in the order of $35.45. So a toaster can be made in China, shipped to the US, and sold for $15 dollars, where an identical US made toaster would sell for $35. Who on earth is going to buy that US toaster? Not your average Walmart shopper, that is for sure.

So this is what US manufacturers are up against. American CEOs are not sending jobs overseas just because they are evil – they are sending jobs overseas because they cannot sell their $35 dollar toasters when the same toaster is available for $15 dollars. They simply have no choice but to compete – otherwise their companies will go broke.

It is this reality that proves when Joe Biden says China is not a threat he has no idea what he is talking about. Not only does China have a massive cost advantage with respect to labor, China does not have the headache of the massive regulatory requirements of the US (EPA/OSHA/NLRB/state and local regs/et al).

There was a time when US manufacturers could make a case that they offered far superior quality of product. While China still has some issues in this regard, they have dramatically closed the gap, and manufacturers can no longer assume American made is more desirable from a quality perspective.

Similarly, the US was once much, much more efficient in its manufacture of goods than was China. It was not unusual to find that it took five Chinese laborers to do the job of one American laborer. Again, those days are gone (largely), and China has tooled up and equipped itself to compete much more effectively on this front. As an example, next year China is scheduled to complete a heavy truck manufacturing facility capable of producing 4 million trucks per year. Let me say that again for effect – 4 MILLION trucks per year! This facility will be highly efficient – you simply cannot make that volume of trucks inefficiently. What will that do, in the long-term – to truck manufacturing in the US/world-wide?

So where does that leave US manufacturing? I think that only companies with the following characteristics will have any chance of survival in the long run: First, the product will need to be difficult or expensive to transport relative to the cost of manufacture, or highly susceptible to transport damage. Second, the product will need to be specialized and largely unique/special made (think custom painted/special ordered/etc.). Third, the product will also need to have very tight delivery time requirements (ie. the product is special and it is required now, not in six weeks).

Even these specialized products will gradually be squeezed out, as China finishes off “low-hanging fruit” (low hanging fruit is the fruit that is easiest to pick). Right now, China is going for the volume items, but will eventually turn its sights to the lower volume, and more specialized, manufacturing fields. In the end, most true manufacturing will disappear from the US, and any that remain will more likely be assembling of foreign made components rather than true manufacturing as such. The perfect illustration of this is US automotive manufacture – the US really does not manufacture automobiles any more, but rather assembles parts, a great many of which are imported, into the finished vehicle.

So in summation, this article was intended 1) to clarify the huge cost differential between the US and China cost of labor, 2) to refute the general argument that US CEOs are choosing to manufacture in China, and show that they have no viable alternative, and 3) to paint a realistic picture of what is the likely future of US manufacturing. The regulatory red tape that is drowning small manufacturers is a further obstacle and makes the prospects of overcoming the cost pressure being applied by China (and its ilk) even more unlikely.

Clearly, I am very pessimistic about the future of manufacturing in the US. Surely, the cost differentials will close over time. But it will be far too late for the vast majority of US manufacturers, as they will have long disappeared before this happens. The next thing that will come under attack will be service industry that can be done electronically. Right now, call centers are the perfect example. But soon it will include accounting, etc. The cost of labor in the US is simply uncompetitive internationally. The US is moving far too slowly to improve its skill base sufficiently to justify the current differential. China and similar countries are educating and training their citizens by the millions, while the American standard of education continues to fall. The coming collapse will be monumental. It is unlikely that even the most skilled and innovative Americans will be able to ride out this storm unscathed.

OSAMA WON

Osama bin Laden got a 660,000,000% return on his investment. SIX HUNDRED AND SIXTY MILLION PERCENT. He’s dead, but we’ve bankrupted ourselves. He would have died eventually. We didn’t have to bankrupt ourselves. But we did. He won.

http://www.nytimes.com/interactive/2011/09/08/us/sept-11-reckoning/cost-graphic.html

Shorting Treasuries For the Ultimate Risk-Takers

While there are numerous ways to short Treasuries, there are several different approaches investors choose to take, each suited to a particular strategy and risk tolerance.  What I’m outlining today is both high-risk and highly likely to succeed – IF I can outlast the Fed.  See, I entered into the ultimate risk short today that I’ll describe further below, but want to emphasize that this probably isn’t a prudent approach for most retail investors and requires the ability to short, a margin account, and intestinal fortitude.

Short Treasury Strategy

The approach I took was to combine the leverage that options offer, the poor performance of leveraged ETFs over time (see more on ETF Decay), and the time value decay of both options and leveraged ETFs.

  • Sold TMF Calls (TMF was priced at 61 during Tuesday trading)
  • Strike Price $75
  • Expiry November
  • Premium 3.40 each

TMF is the 3X leveraged 30-Year Treasury Bond ETF from Direxion. 

This is about as turbo-charged as you can get in looking to short bonds.  In the past, I’ve already sold TMF short as an ETF holding, but now I’ve turbocharged the play even further.

Here’s the Rationale AND Risks:

…Continue Reading Shorting Treasuries For the Ultimate Risk-Takers

WHERE’S OUR OIL PRICE COLLAPSE?

Make no mistake about it, without plentiful, cheap, and easy to access oil, the United States of America would descend into chaos and collapse. The fantasies painted by “green” energy dreamers only serve to divert the attention of the non critical thinking masses from the fact our sprawling suburban hyper technological society would come to a grinding halt in a matter of days without the 18 to 19 million barrels per day needed to run this ridiculous reality show. Delusional Americans think the steaks, hot dogs and pomegranates in their grocery stores magically appear on the shelves, the thirty electronic gadgets that rule their lives are created out of thin air by elves and the gasoline they pump into their mammoth SUVs is their God given right. The situation was already critical in 2005 when the Hirsch Report concluded:

“The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.”

In the six years since this report there has been unprecedented oil price volatility as the world has reached the undulating plateau of peak cheap oil. The viable mitigation options on the demand and supply side were not pursued. The head in the sand hope for the best option was chosen. The government mandated options, ethanol and solar, have been absolute and utter disasters as billions of taxpayer dollars have been squandered and company after company goes bankrupt. The added benefit has been sky high corn prices, dwindling supplies and revolutions around the world due to soaring food prices. The last time the country went into recession in 2008, the price of oil plunged from $140 a barrel to $30 a barrel in the space of six months. I’d classify that as volatility. We’ve clearly entered a second recession in the last six months. So we should be getting the benefit of collapsing oil prices.

But, a funny thing happened on the way to another oil price collapse. It didn’t happen. WTI Crude is trading for $87 a barrel, up 23% since January 1. Unleaded gas prices are up 54% in the last year and 43% since January 1. Worldwide oil pricing is not based on WTI crude but Brent crude, selling for $113 per barrel, only down 10% from its April high of $125. The U.S. and Europe consume 40% of all the oil in the world on a daily basis. Multiple European countries have been in recession for the last nine months. The U.S. economy has been in free fall for six months.

Some short term factors will continue to support higher oil prices.  The Chinese continue to fill their strategic petroleum reserve, Japan is still relying on diesel generators for electricity post-tsunami, and the Middle East is developing a love affair with the air conditioner. But, it’s the long term factors that will lead to much higher oil prices for myopic oblivious Americans.

U.S. GDP 2011 Q2 update 2009-2011 US GDP second Q2011 (percent) July 2011

John Hussman describes the situation on the ground today based upon six economic conditions presently in effect:

There are certainly a great number of opinions about the prospect of recession, but the evidence we observe at present has 100% sensitivity (these conditions have always been observed during or just prior to each U.S. recession) and 100% specificity (the only time we observe the full set of these conditions is during or just prior to U.S. recessions).

With 40% of the world in or near recession, how come oil prices are still so high and much higher than last year, when the economies in Europe and the U.S. were expanding? The number of vehicle miles driven in the U.S. is still below the level reached 43 months ago and at the same level as early 2005. The price of a barrel of oil in early 2005 was $42. The U.S. is using the same amount of oil, but the price is up 112%. It seems the U.S. isn’t calling the shots when it comes to the worldwide supply/demand equation.

It would probably be a surprise to most people that U.S. oil consumption today is at the same level it was in 1997 and is 10% lower than the peak reached in 2005. This is not a reflection of increased efficiency or Americans gravitating towards smaller vehicles with better mileage. Americans are still addicted to their SUVs and gas guzzling luxury automobiles. It’s a reflection of a U.S. economy that has been in a downward spiral since 2005.

1996 18,476.15 3.89 %
1997 18,774.07 1.61 %
1998 18,946.01 0.92 %
1999 19,603.83 3.47 %
2000 19,717.92 0.58 %
2001 19,772.60 0.28 %
2002 19,834.31 0.31 %
2003 20,144.82 1.57 %
2004 20,833.01 3.42 %
2005 20,924.36 0.44 %
2006 20,803.93 -0.58 %
2007 20,818.37 0.07 %
2008 19,563.33 -6.03 %
2009 18,810.01 -3.85 %

If the U.S. isn’t driving oil demand in the world, then why are prices going up? There are three main factors:

  1. Dramatic increase in demand from China and other developing countries.
  2. A plunging U.S. Dollar
  3. Peak oil has arrived

Surging Developing World Demand

The Energy Information Administration issued their latest forecast and it does not bode well for lower prices:

Despite continued concerns over the pace of the global economic recovery, particularly in developed countries, the US Energy Information Administration expects worldwide oil consumption to increase this year and next spurred by demand in developing countries. US oil consumption, however, is forecast to contract from a year ago. Worldwide oil demand, led by China, will increase by 1.4 million b/d in 2011 to average 88.19 million b/d and by 1.6 million b/d in 2012, outpacing average global demand growth of 1.3 million b/d from 1998-2007, before the onset of the global economic downturn.

China is now consuming over 9 million barrels per day. This is up from an average of 7 million barrels per day in 2006. Platts, a global energy analyst, put China’s 2010 figures at 8.5 million barrels per day, up 11.43% from the previous year. The forecast for China’s crude throughput in 2011 is an average of 9.24 million barrels per day up 8.5% from 2010. In the first seven months of this year, total crude throughput stood at average of 8.95 million barrels per day.

Standard Chartered Bank predicts that, by the year 2020, China will overtake all of Europe as the second largest consumer of oil in the world, and should catch up to the U.S. by the year 2030 as China’s demand continues to rise while U.S. demand is expected to be flat. Chinese crude imports grew 17.5% in 2010 to 4.79 million barrels per day. China is importing 55% of its oil today versus 40% in 2004.

China’s oil consumption per capita has increased over 350% since the early 1980s to an estimated 2.7 barrels per year in 2011. Consumption per capita has risen nearly 100% in just the past decade. Oil consumption per capita in the U.S. currently ranks among the top industrialized nations in the world at 25 barrels per year. However, today’s consumption levels are approximately 20% lower than they were in 1979. The chart below paints a picture of woe for the United States and the world. China overtook the United States in auto sales in 2009. They now sell approximately 15 million new vehicles per year. India sells approximately 2 million new vehicles per year. The U.S. sells just over 12 million new vehicles per year. In China and India there are approximately 6 car owners per 100 people. In the U.S. there are 85 car owners per 100 people.

They call China, India and the rest of the developing world – Developing – because they will be rapidly expanding their consumption of goods, services and food. There will certainly be bumps along the way, as China is experiencing now, but the consumption of oil by the developing world will plow relentlessly higher. China isn’t the only emerging country to show big increases in per capita consumption. The growth in consumption for several other countries far outpaces China. Consumption per capita in Malaysia has nearly quadrupled since the mid-1960s. Consumption in Thailand and Brazil has more than doubled to roughly 5.7 barrels and 4.8 barrels per year, respectively.

Developed countries, especially those in Western Europe, have experienced substantial declines in oil consumption. Today’s per capita consumption in Sweden is roughly 12 barrels per year, down from 25 barrels per year in the mid-1970s.  France, Japan, Norway and U.K. all use less oil on a per capita basis than they did in the 1970s. These countries have been able to drive down the consumption of oil by taxing gasoline at an excessive level.

Americans pay 43 cents in taxes out of the $3.70 they pay at the pump for a gallon of gasoline. A driver in the UK is paying $4 per gallon in taxes out of the $9 per gallon cost. Gasoline costs between $8 and $9 per gallon across Europe today. The extreme level of gas taxes certainly reduces car sizes, consumption and traffic. Too bad the mad socialists across Europe spent the taxes on expanding their welfare states and promising even more to their populations. Maybe a $6 per gallon tax will do the trick. Forcing Americans to drive less by doubling the gas tax is a quaint idea, but it is too late in the game. Europe is still made up of small towns and cities with the populations still fairly consolidated. Biking, walking and small rail travel is easy and feasible. The sprawling suburban enclaves that proliferate across the American countryside, dotted by thousands of malls and McMansion communities, accessible only by automobiles, make it impossible to implement a rational energy efficient model for moving forward. We cannot reverse 60 years of irrationality. Even without higher gas taxes, the price of gasoline will move relentlessly higher due to the stealth tax of currency debasement.

A Plunging US Dollar

The US dollar has fallen 15% versus a basket of worldwide currencies (DXY) since February 2009. This is amazing considering that 57% of the index weighting is the Euro. If you haven’t noticed, Europe is a basket case on the verge of economic disintegration. The US imports a net 9.4 million barrels of oil per day, or 49% of our daily consumption. Our largest suppliers are:

  1. Canada – 2.6 million barrels per day
  2. Mexico – 1.3 million barrels per day
  3. Saudi Arabia – 1.1 million barrels per day
  4. Nigeria – 1.0 million barrels per day
  5. Venezuela – 1.0 million barrels per day
  6. Russia – 600,000 barrels per day
  7. Algeria – 500,000 barrels per day
  8. Iraq – 400,000 barrels per day

These eight countries account for over 70% of our daily oil imports. You hear the “experts” on CNBC declare that our oil supply situation is secure because close to 60% of our daily usage is sourced from North America. The presumption is that Canada and Mexico are somehow under our control. There is one problem with this storyline. US oil production peaked in 1971 and relentlessly declines as M. King Hubbert predicted it would. Mexico will cease to be a supplier to the U.S. by 2015 as their Cantarell oil field is in collapse. Most of the oil supplied from Canada is from their tar sands. Expansion of these fields is difficult as it takes tremendous amounts of natural gas and water to extract the oil.

The rest of the countries on the list dislike us, hate us, or are in constant danger of implosion. When the Neo-Cons on Fox News try to convince you that Iraq has been a huge success and certainly worth the $3 trillion of national wealth expended, along with 4,500 dead and 32,000 wounded soldiers, you might want to keep in mind that Iraq was exporting 795,000 barrels of oil per day to the U.S. in 2001 when the evil dictator was in charge. Today, we are getting 415,000 barrels per day. Dick Cheney was never good at long term strategic planning.

We better plant more corn, as our supply situation is far from stable. Maybe we can install solar panels from Obama’s Solyndra factory on the roofs of the 65 Chevy Volts that were sold in the U.S. this year, to alleviate our oil supply problem. The reliability and stability of our oil supply takes second place to the price increases caused by Ben Bernanke and his printing press. The average American housewife driving her 1.5 children in her enormous two and a half ton Chevy Tahoe or gigantic Toyota Sequoia two miles to baseball practice doesn’t comprehend why it is costing her $100 to fill the 26 gallon tank. If she listens to the brain dead mainstream media pundits, she’ll conclude that Big Oil is to blame. The real reason is Big Finance in conspiracy with Big Government.

Ben Bernanke is responsible for Americans paying $4 a gallon for gasoline. Zero interest rates, printing money out of thin air to buy $2 trillion of mortgage and Treasury bonds, and propping up insolvent criminal banks across the globe have one purpose – to deflate the value of the U.S. dollar. The rulers of the American Empire realize they can never repay the debts they have accumulated. They have chosen to default through debasement. It’s an insidious and immoral method of defaulting on your obligations. Let’s look at from the perspective of our two biggest oil suppliers.

A barrel of oil cost $40 a barrel in early 2009. The U.S. dollar has declined 30% versus the Canadian dollar since early 2009. The U.S. dollar has shockingly declined 20% versus the Mexican Peso since early 2009. How could the mighty USD decline 20% against the currency of a 3rd world country on the verge of being a failed state? Ask Ben Bernanke. Our lenders can’t do much about the continuing debasement of our currency, but our oil suppliers can. They will raise the price of oil in proportion to our currency devaluation. Since Bernanke’s only solution is continuous debasement, the price of oil will relentlessly rise.

Peak Oil Has Arrived

“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. At present, investment in oil production is only beginning to pick up, with the result that production could reach a prolonged plateau. By 2030, the world will require production of 118 MBD, but energy producers may only be producing 100 MBD unless there are major changes in current investment and drilling capacity.” – 2010 Joint Operating Environment Report

We’ve arrived at the point where demand has begun to outpace supply and even the onset of another worldwide recession will not assuage this fact. World oil supply has peaked just below 89 million barrels per day. Supply has since fallen to 87.5 million barrels per day, as Libyan supply was completely removed from world markets. The International Energy Agency is already forecasting worldwide demand to reach 90 million barrels per day in the second half of 2011 and reach 92 million barrels per day in 2012. The IEA warns that “just at the time when demand is expected to recover, physical limits on production capacity could lead to another wave of price increases, in a cyclical pattern that is not new to the world oil market.”

project global oil production through 2100

The world is trapped in an inescapable conundrum. As supply dwindles, prices increase, causing global economies to contract, and temporarily causing a drop in prices, except the lows are higher each time. The drill, drill, drill ideologues do nothing but confuse and mislead the easily led masses. We have 2% of the world’s oil reserves and consume more than 20% of the daily output. We consume 7 billion barrels of oil per year.

Drilling for oil in the Arctic National Wildlife Refuge in Alaska and areas formerly off limits in the Outer Continental Shelf will not close the supply gap. The amount of recoverable oil in the Arctic coastal plain is estimated to be between 5.7 billion and 16 billion barrels. This could supply as little as a year’s worth of oil. And it will take 10 years to produce any oil from this supply. The OCS has only slightly more recoverable oil at an estimated 18 billion barrels and the BP Gulf Oil disaster showed how easy this oil is to access safely. The new over hyped energy savior is shale gas. The cheerleaders in the natural gas industry claim that we have four Saudi Arabias worth of natural gas in the U.S. This is nothing but PR talking points to convince the masses that we can easily adapt. The amount of shale gas that can be economically produced is far less than the amounts being touted by the industry. The wells deplete rapidly and the environmental damage has been well documented. And last but certainly not least, we have the abiotic oil believers that convince themselves the wells will refill despite the fact that there is not one instance of an oil well refilling once it is depleted.

I wrote an article called Peak Denial About Peak Oil exactly one year ago when gas was selling for $2.60 a gallon. I railed at the short sightedness of politicians and citizens alike for ignoring a calamitous crisis that was directly before their eyes. Just like our accumulation of $4 billion per day in debt, peak oil is simply a matter of math. We cannot take on ever increasing amounts of debt in order to live above our means without collapsing our economic system. We cannot expect to run our energy intensive world with a depleting energy source. There is no amount of spin and PR that can change the math. Un-payable levels of debt and dwindling supplies of oil will merge into a perfect storm over the next ten years to permanently change our world. The change will be traumatic, horrible, bloody and a complete surprise to the non-critical thinking public.

“In the longer run, unless we take serious steps to prepare for the day that we can no longer increase production of conventional oil, we are faced with the possibility of a major economic shock—and the political unrest that would ensue.” – Dr. James Schlesinger – former US Energy Secretary, 16th November 2005

We were warned. We failed to heed the warnings. If we had begun making the dramatic changes to our society 5 to 10 years ago, we may have been able to partially alleviate the pain and suffering ahead. Instead we spent our national treasure fighting Wars on Terror and bailing out criminal bankers. Converting truck and bus fleets to natural gas; expanding the use of safe nuclear power; utilizing wind, geothermal, and solar where economically feasible; buying more fuel efficient vehicles; and creating more localized communities supported by light rail with easy access to bike and walking options, would have allowed a more gradual shift to a less energy intensive society.

We’ve done nothing to prepare for the onset of peak oil. Until this foreseeable crisis hits with its full force like a Category 5 hurricane, Americans will continue to fill up their M1 tank sized, leased SUVs, tweet about Lady Gaga’s latest stunt, and tune in to this week’s episode of Jersey Shore. Meanwhile, economic stagnation, catastrophe and wars for oil are darkening the skies on our horizon.

 

“Dependence on imported oil, particularly from the Middle East, has become the elephant in the foreign policy living room, an overriding strategic consideration composed of a multitude of issues. …. Taken in whole, the National Energy Policy does not offer a compelling solution to the growing danger of foreign oil dependence.  …  Future military efforts to secure the oil supply pose tremendous challenges due to the number of potential crisis areas.  …..  Economic stagnation or catastrophe lurk close at hand, to be triggered by another embargo, collapse of the Saudi monarchy, or civil disorder in any of a dozen nations.”–  America’s Strategic Imperative A “Manhattan Project” for Energy

IS ADMIN AN ANTI-CAPITALIST?

Well, of course he isn’t. But I never thought I’d see the day when Admin attacked one of the most successful businesses in America, Southwest Airlines. Why? All because Southwest had the effrontery to kick off Green Day band member Billie Joe Armstrong from a flight because this slug got on the flight with the waistband of his pants somewhere close to his knee caps while revealing a butt crack which would make a member of a plumber’s union blush. Oh, the horror. Southwest enforced some modicum of decorum from its passengers on its flights. What next? Saying “please” and “thank you”?

ACTUAL MUGSHOT, WITHOUT EYE LINER, OF BILLIE JOE ARMSTRONG AFTER A DUI ARREST

BILLIE JOE WITH EYE LINER. WHERE’S THE LIPSTICK?

Billie Joe Armstrong

Here’s how it went down between Admin and me on the thread of “Farewell WYSP.”

SSS posts article of Armstrong getting booted off of a Southwest flight from Oakland to Burbank.

ADMIN: “Southwest Airlines Eats Shit. Are you actually condoning people getting thrown off airplanes because their pants are sagging? I guess that Federal Government mindset still breaths (sic) in you.”

SSS: “Are you against private businesses like Southwest Airlines which create thousands of jobs and SUCCEED? I could care less whether Southwest kicked this punk off their plane because of his low riders. It is THEIR AIRPLANE AND THEIR DECISION TO MAKE, not some government drone frisking little girls at a security checkpoint. If Southwest’s actions offend the public in general, then it’ll read about it on the bottom line of its annual report. This has absolutely nothing to do with a federal government mindset, but everything to do with letting a business alone and letting them run its show the way it sees fit.”

(edited) “Southwest Airlines commenced Customer Service on June 18, 1971, with three Boeing 737 aircraft serving three Texas cities-Houston, Dallas, and San Antonio. Today, Southwest operates 550 Boeing 737 aircraft among 72 cities. Yearend results for 2010 marked Southwest’s 38th consecutive year of profitability. Southwest is the United States’ most successful low fare, high frequency, point-to-point carrier. Southwest operates more than 3,400 flights a day coast-to-coast, making it the largest U.S. carrier based on domestic passengers carried as of December 31, 2010.

ADMIN: “Nice copy and paste about Southwest. It seems their reputation is doing better than their actual results. Their profits are on track to be down 30% this year and their stock has collapsed from $14 to $8.”

————————–end of thread————————–

You seem to be focused on profits and stock prices, Admin. Well, so what? Businesses have good years, and they have bad years. What else is new? Try and focus on the price of oil, please, since it is a harbinger of the profit margin of the airline industry. Anyway, you like people to bring facts and figures to the table when they show up on TBP. I did so with my “copy and paste” response above, which didn’t seem to meet your threshold of truth. So chew on these.

—-Southwest Airlines employs nearly 35,000 people. Those are PURE tax-paying jobs, in addition to Southwest’s corporate taxes.

—-Southwest Airlines has bought 550 Boeing 737 jet airliners. Tell me that hasn’t helped one of America’s most important manufacturers. Tell me that hasn’t helped Boeing’s growth. Southwest has been the LAUNCH CUSTOMER for the Boeing 737 300/500/700 series of jets. What that means is that these aircraft were first ordered and bought by Southwest. Let me put it more simply: Southwest Airlines has been critical to Boeing aircraft sales.

Want some more facts, Admin? Will a pie or bar chart help?

A BRIEF FOR WHITEY

Not much introduction needed on this one. Smokey knows how to pick ’em (from a link he provided). This was written in March, 2008, but is still relevant. I’m not trying to beat a dead horse here. I didn’t really want my first posts to be on this topic, nor did I expect to post on consecutive days, but it needs closure now. Racial issues are about as much fun as picking a scab off your ass year after year, but they are essential to the discourse of this country. If there is a final word on the subject, this essay would be it.

A Brief for Whitey

By Patrick J. Buchanan
March 21, 2008

How would he pull it off? I wondered.

How would Barack explain to his press groupies why he sat silent in a pew for 20 years as the Rev. Jeremiah Wright delivered racist rants against white America for our maligning of Fidel and Gadhafi, and inventing AIDS to infect and kill black people?

How would he justify not walking out as Wright spewed his venom about “the U.S. of K.K.K. America,” and howled, “God damn America!”

My hunch was right. Barack would turn the tables.

Yes, Barack agreed, Wright’s statements were “controversial,” and “divisive,” and “racially charged,” reflecting a “distorted view of America.”

But we must understand the man in full and the black experience out of which the Rev. Wright came: 350 years of slavery and segregation.

Barack then listed black grievances and informed us what white America must do to close the racial divide and heal the country.

The “white community,” said Barack, must start “acknowledging that what ails the African-American community does not just exist in the minds of black people; that the legacy of discrimination — and current incidents of discrimination, while less overt than in the past — are real and must be addressed. Not just with words, but with deeds … .”

And what deeds must we perform to heal ourselves and our country?

The “white community” must invest more money in black schools and communities, enforce civil rights laws, ensure fairness in the criminal justice system and provide this generation of blacks with “ladders of opportunity” that were “unavailable” to Barack’s and the Rev. Wright’s generations.

What is wrong with Barack’s prognosis and Barack’s cure?

Only this. It is the same old con, the same old shakedown that black hustlers have been running since the Kerner Commission blamed the riots in Harlem, Watts, Newark, Detroit and a hundred other cities on, as Nixon put it, “everybody but the rioters themselves.”

Was “white racism” really responsible for those black men looting auto dealerships and liquor stories, and burning down their own communities, as Otto Kerner said — that liberal icon until the feds put him away for bribery.

Barack says we need to have a conversation about race in America.

Fair enough. But this time, it has to be a two-way conversation. White America needs to be heard from, not just lectured to.

This time, the Silent Majority needs to have its convictions, grievances and demands heard. And among them are these:

First, America has been the best country on earth for black folks. It was here that 600,000 black people, brought from Africa in slave ships, grew into a community of 40 million, were introduced to Christian salvation, and reached the greatest levels of freedom and prosperity blacks have ever known.

Wright ought to go down on his knees and thank God he is an American.

Second, no people anywhere has done more to lift up blacks than white Americans. Untold trillions have been spent since the ’60s on welfare, food stamps, rent supplements, Section 8 housing, Pell grants, student loans, legal services, Medicaid, Earned Income Tax Credits and poverty programs designed to bring the African-American community into the mainstream.

Governments, businesses and colleges have engaged in discrimination against white folks — with affirmative action, contract set-asides and quotas — to advance black applicants over white applicants.

Churches, foundations, civic groups, schools and individuals all over America have donated time and money to support soup kitchens, adult education, day care, retirement and nursing homes for blacks.

We hear the grievances. Where is the gratitude?

Barack talks about new “ladders of opportunity” for blacks.

Let him go to Altoona and Johnstown, and ask the white kids in Catholic schools how many were visited lately by Ivy League recruiters handing out scholarships for “deserving” white kids.

Is white America really responsible for the fact that the crime and incarceration rates for African-Americans are seven times those of white America? Is it really white America’s fault that illegitimacy in the African-American community has hit 70 percent and the black dropout rate from high schools in some cities has reached 50 percent?

Is that the fault of white America or, first and foremost, a failure of the black community itself?

As for racism, its ugliest manifestation is in interracial crime, and especially interracial crimes of violence. Is Barack Obama aware that while white criminals choose black victims 3 percent of the time, black criminals choose white victims 45 percent of the time?

Is Barack aware that black-on-white rapes are 100 times more common than the reverse, that black-on-white robberies were 139 times as common in the first three years of this decade as the reverse?

We have all heard ad nauseam from the Rev. Al about Tawana Brawley, the Duke rape case and Jena. And all turned out to be hoaxes. But about the epidemic of black assaults on whites that are real, we hear nothing.

Sorry, Barack, some of us have heard it all before, about 40 years and 40 trillion tax dollars ago.

MICHAEL VICK GETS A $100 MILLION CONTRACT

You knew I had to post about the Michael Vick contract. Below are two opposing views of Michael Vick. The first is a response to the second. I know Smokey and Stuck are huge Vick supporters and will rally to his defense if anyone attacks him.

Michael Vick

“What if Vick were white?”

 

Michael Vick has a shiny new, six-year, $100 million NFL contract, and that’s swell.

Mazel tov. Really. May your creditors be paid off soon, your bankruptcy lifted and your tribe increase.

But what’s even more interesting — to me, at least — is a column last week by an ESPN Magazine writer named Toure who poses the question: “What if Michael Vick were white?”

As in, what if Vick were white and raised not in the low-income, predominantly black southeast community of Newport News, but in some generic white neighborhood, far from the “projects” culture that apparently corrupted him? Would he have ended up serving 18 months in federal prison for running an underground dogfighting operation out of Surry County?

And what’s really, really interesting is the accompanying photo-shopped image of Vick, showing him as Caucasian. You can check it out here:

 http://espn.go.com/espn/commentary/story/_/id/6894586/imagining-michael-vick-white-quarterback-nfl-espn-magazine

Toure has taken heat for posing his question and for the digitized image of Vick in “whiteface” — which Toure apparently had nothing to do with — but has also been praised for discussing the issue thoughtfully.

“Would a white kid have been introduced to dogfighting at a young age and would it become normalized to the extent that he builds it into his life after he joins the NFL? It’s possible, but it’s far less likely because what made Vick stand out among dogfighters is less race than class. … Vick’s stunningly stupid moral breakdown with respect to dogs is certainly related to the culture of the world he grew up in, which he says fully embraced dogfighting. But it’s also related to the household he grew up in.”

Toure then mentions Vick’s father, Michael Boddie, had admitted to The Washington Post that he abused drugs and alcohol around young Vick and even set up a dogfighting ring in the family garage so Vick could stage fights there.

Too many men “left to define manhood on their own,” Toure writes, gravitate toward “ghetto celebrities who are unsavory role models with bad habits.”

But a big hole in Toure’s analysis is that dogfighting isn’t just a “ghetto” thing. It isn’t even a “black” thing. Poor white country boys, some of whom also do drugs and alcohol, fight dogs, too.

As reprehensible as dogfighting is, the “culture” of dogfighting is that it truly is a blood sport — emphasis on “blood,” of course. But dog owners tend to take a certain pride in their dogs, even as they send them into a pit to rip others to pound pieces.

This is where Vick went far beyond merely fighting dogs — he reveled in the blood, the power over life and death. He became a death-dealing beast, himself.

He attacked, tortured and killed his own underperforming dogs in creative and cruel ways.
Drowning, electrocution, hanging, grabbing them by the legs and slamming them to the ground over and over to break their backs.

He did this while he was an NFL star with a $130 million contract. A college graduate who’d been exposed to enough non-ghetto cultures to know that dogfighting wasn’t just illegal, but immoral.

This is not a “stupid moral breakdown” — this is sheer absence of a conscience or soul. This is knowingly and willfully breaking bad.

To say socio-economics or culture crafted Vick the boy into Vick the man is an insult to the majority of black kids who grow up poor and don’t torture and kill animals.

I hope Vick makes the most of his second chance. But I would never trust him with another animal.

Because Vick didn’t just gravitate toward unsavory role models — he became one, himself.

And he did it not because he grew up black or he grew up poor, but because he wanted to.

Posted by Tamara Dietrick on Wednesday, August 31, 2011 at 11:29 AM

What if Michael Vick were white?

 

Since the day he was arrested, people have asked. The answer isn’t what you think.

By Touré
ESPN The Magazine

 

This story appears in the Sept. 5 issue of ESPN The Magazine.

WHEN MICHAEL VICK PLAYS, I see streetball. I don’t just mean that sort of football where you have to count to four-Mississippi before you can rush the quarterback, nearly everything breaks down and it’s all great fun. I also mean street basketball. Vick’s style reminds me of Allen Iverson — the speed, the court sense, the sharp cuts, the dekes, the swag. In those breathtaking moments when the Eagles QB abandons the pocket and takes off, it feels as if he’s thumbing his nose at the whole regimented, militaristic ethos of the game.

All of that is why, to me, Vick seems to have a deeply African-American approach to the game. I’m not saying that a black QB who stands in the pocket ain’t playing black. I’m saying Vick’s style is so badass, so artistic, so fluid, so flamboyant, so relentless — so representative of black athletic style — that if there were a stat for swagger points, Vick would be the No. 1 quarterback in the league by far.

Race is an undeniable and complex element of Vick’s story, both because of his style as well as the rarity of black QBs in the NFL. A decade after he became the first black QB to be drafted No. 1 overall, about one in five of the league’s passers is African-American, compared with two-thirds of all players. But after his arrest for dogfighting, so many people asked: Would a white football player have gotten nearly two years in prison for what Vick did to dogs?

This question makes me cringe. It is so facile, naive, shortsighted and flawed that it is meaningless. Whiteness comes with great advantages, but it’s not a get-out-of-every-crime-free card. Killing dogs is a heinous crime that disgusts and frightens many Americans. I’m certain white privilege would not be enough to rescue a white NFL star caught killing dogs.

The problem with the “switch the subject’s race to determine if it’s racism” test runs much deeper than that. It fails to take into account that switching someone’s race changes his entire existence. In making Vick white, you have him born to different parents. That alone sets his life trajectory in an entirely different direction. Thus when this hypothetical white Michael Vick … wait, I can’t even continue that sentence in good faith. I mean, who would this white Vick be? That person is unknowable. When you alter his race, it’s like those Back to the Future movies where someone goes back in time, inadvertently changes one small thing about his parents’ dating history and then the person starts to disappear. If Vick had been born to white parents, you wouldn’t even be reading this right now. That Vick would have had radically different options in life compared with the Vick who grew up in the projects of Newport News, Va., where many young black men see sports as the only way out.

This is not to say there aren’t insights to be gained from hypotheticals. One pertinent question: Would a white kid have been introduced to dogfighting at a young age and have it become normalized to the extent that he builds it into his life after he joins the NFL? It’s possible, but it’s far less likely because what made Vick stand out among dogfighters is less race than class. The deep pockets of an NFL star led to a kennel that was too big not to fail eventually. But if it did, though, would this white kid have been busted? Remember, it wasn’t suspicion of dogfighting that started the investigation that put Vick in jail. It was that element that we’ve all seen hold back or bring down so many athletes from the hood — the entourage. Vick’s cousin Davon Boddie was arrested and charged with possession of marijuana with intent to sell in Hampton, Va. When police asked him for his address, he led them to the home where Bad Newz Kennels was located. After that, Vick never had a chance.

Here’s another question: If Vick grew up with the paternal support that white kids are more likely to have (72 percent percent of black children are born to unwed mothers compared with 29 percent of white children), would he have been involved in dogfighting? I ask this not to look for an excuse but to explore the roots of his behavior. Vick’s stunningly stupid moral breakdown with respect to dogs is certainly related to the culture of the world he grew up in, which he says fully embraced dogfighting. But it’s also related to the household he grew up in.

Vick’s father, Michael Boddie, was not a positive influence on him growing up. Boddie admitted to The Washington Post that he was a cocaine user and had been high and drunk around young Vick. He says he often prepared the family garage so Vick could have pit bull fights there. Boddie’s account is disputed by a family friend, who says Vick’s mother would not have allowed that. Either way, at some point in Vick’s youth, his father became estranged from the family. This breakdown of Vick’s paternal relationship is a pattern that’s all too common among black men of his generation. Too many are left to define manhood on their own, so they gravitate toward the most charismatic and inspiring men in their world. Sometimes those men are gritty local sports coaches who teach them the value of hard work, but sometimes they’re ghetto celebrities who are unsavory role models with bad habits.

Ultimately, there is no separating Vick from his circumstances: his race, parents, economics and opportunities. Alter any of those elements and everything about him and how the world sees him would be unrecognizable.

So let’s look at him a different way. Let’s see him as someone in the third act of the epic movie that is his life, leading a team that many expect to see in the Super Bowl. Bob Marley’s “Redemption Song” is playing underneath because the humbled protagonist has finally overcome his personal demons and has begun living up to his athletic promise. And to those who believe we should judge a man by how he responds when dealing with the worst life has to offer — with how he climbs after he hits rock bottom — Michael Vick has become heroic.

And that has nothing to do with race.

HAPPY BIRTHDAY JUNIOR ADMINISTRATOR

The Junior Administrator turned 18 today. He can vote. We’ve got one more onboard the Ron Paul bandwagon. This is his first birthday in 18 years not spent at home.

Avalon can’t stop herself from thinking of him like this. Tears are flowing.

I prefer to think of him winning his high school hockey championship. He is trying out for the Penn State Altoona hockey team this week. Good luck Kev. Channel the intensity you displayed in that championship series and you’ll do fine.

Happy Birthday Kevin!!!!!

I know you are probably too busy studying to celebrate, but remember your mommy today. And Jimmy has moved into your room and really likes it.