Reporters tell us what happened yesterday. Pollsters tell us what is happening today. THE POLITICAL PROPHET® tells us what is likely to happen tomorrow. An elite team of political strategists with presidential campaign experience provides analytical predictions that tend to be more precise than offerings from those who have never been “in the arena.” To assure objectivity, team members are not involved with active candidates.

The Financial Reform bill which will be signed into law this week is a lousy piece of legislation. It does things to our economy by further empowering bureaucrats that, if allowed to stand, will be devastating to wage earners, job seekers and consumers.

On the other hand, the Democrats who drafted the bill by excluding Republicans from the process completely ignored the big problem of bad mortgages and the enablers for the scam that triggered the meltdown of our economy. Fannie Mae and Freddie Mac are nowhere to be found in this political legislation which has become a dream vehicle for big banks, lobbyists and “government growth specialists.”

In spite of the bills’ huge and numerous failings, the Junior Senator from Massachusetts, Republican Scott Brown ultimately supported the bill. He was joined by the Republican Senators from Maine, Collins and Snowe.

We never know the insider wheeling and dealing that occurs among members of Congress during the final phases of the legislative process. In all likelihood, Senator Scott Brown’s vote was crucial for passage and he received important concessions for it.

The Political Prophet® predicts that we will ultimately discover that in addition to getting his way on several tax matters, Senator Brown gained some form of assurance that congressional correction of the abuses at Freddie and Fannie will move forward and that he will play a major role in that process.

(Also visit http://www.financialwire.net/?s=prphthpby for FinancialWire(tm) articles by THE POLITICAL PROPHET®.)

The Political Prophet® and all derivatives of The Political Prophet® in any form are registered trademarks of The Political Prophet® and are subject to proprietary trademark, intellectual property and copyright Laws. Copyright ©, The Political Prophet®, All rights reserved.

LightPath Technologies (NASDAQ: LPTH) recently announced the addition of “thermal imaging lens assemblies.”

OK. Maybe you’re saying, “that’s a mouthful.” And maybe you’re thinking it sounds boring. Or maybe you’re wondering what (if anything) it means to you.

Well, yes, it is a mouthful, and it may even sound a bit boring, but then, boring can be a money-making product for LightPath and a cost-saving product for its customers. And, if you hold LightPath stock, when LightPath makes money you should also see the value of your stock move up. And suddenly it is not so boring, after all.

The infrared lens assemblies are designed to be a lower cost replacement for more expensive standard optical IR lenses. The LightPath product does not require cooling (again, lowering costs for the manufacture and the end consumer), and its focal length will experience less of a change due to heat than the traditional lenses. The lenses are used in biomedical instruments and data storage devices. LightPath estimates that those markets were worth $93mm and $1.4 billion in 2009.

Interested parties should tune in to Fox Business News to listen to LightPath’s CEO Jim Gaynor talk about the company’s recent activities and discuss where he sees the company’s future growth. You can tune in July 14th at 1pm, or July 24th at 1pm.

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Note: Professional analysis and equity research reports on LPTH and the Photo Optical Equipment Industry are available via ValuEngine (at http://www.valuengine.com/rep/searchsrep?pid=42&srchfor=LPTH). In addition, Streaming (real-time, dynamically-updating research is available via Stock Smart (at http://investrend.stocksmart.com/ri/toc?tid=10234).

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Important note to investors: Reports include important disclosures, disclaimers and analyst information. Investrend and Gary Vassalotti both advise investors to exercise a reasonable degree of due diligence before trading in the equities of any public company, including carefully reading entire analyst reports and report disclosures, and then only in conjunction with advice from a registered financial advisor or broker.  Investrend and the Gary Vassalotti both further advise that any analyst rating, recommendation, target valuation, price target or opinion should be considered merely a portion of an investor’s total investigative process. (More about ratings and valuations is available at http://www.investrend.com/ratings).

In addition: The above, as well as other materials referenced therein, contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements regarding potential sales, the success of the company’s business, as well as statements that include the word “believe” or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of LightPath Technologies, Inc., to differ materially from those implied or expressed by such forward-looking statements. Such factors include, among others, the risk factors included in reports filed with the SEC under the Exchange Act. This press release speaks as of the date first set forth above and LightPath Technologies, Inc., assumes no responsibility to update the information included herein for events occurring after the date hereof. Actual results could differ materially from those anticipated due to factors such as the lack of capital, timely development of products and services, inability to deliver products and services when promised, inability of potential customers to pay for ordered products and services, and political and economic risks inherent in international trade.

What has caused the Obama team to go from great success in the political campaign to such rank incompetence in governance? THE POLITICAL PROPHET® predicts that historians will identify two factors in their analysis. First, the excessive emphasis on politics in general and partisanship in particular will get part of the blame. Eisenhower and Ford were our least partisan presidents in modern times and Carter is generally regarded as the least competent until now. President Obama can’t seem to get beyond his Chicago training and his excesses are hampering his ability to govern successfully. Second, he appears to be unable to use any approach for problem solving except to rely on growing government’s size, control, deficits, employment and tax appetite.

President Obama is a “Top Down” thinker in a world that often works best on a “Bottom Up” basis.

The flailing response of this administration to the gusher in the gulf gives graphic examples of the need for prudent application of both approaches. Stopping the leak is a technical challenge and experts in the industry are best equipped to address that issue. President Obama could and should have used the persuasive power of the Presidency immediately to pressure the industry in general and BP in particular to mobilize all of their resources throughout the world to tackle that task. It was (and remains) an emergency of the first order and should be treated with an aggressive “Top Down” strategy. Sadly, the President failed to act swiftly or decisively to protect our fragile ecosystem. It took almost sixty days for President Obama to even talk to the top executives at BP. It was as if he feared the British but in reality he feared having to publicly reject their inevitable suggestion to wave the Jones Act to get help from abroad. He knew his union supporters would punish him politically if he waved the Act. It would be like “the Arkansas message” all over again but delivered nationally. He did not speak to the top executives at the other oil companies with deep water experience to enlist their help for the same selfish political reason.

The protection of the beaches, the marshlands, the people, animals and small businesses from the oil clearly requires a “Bottom Up” application of expertise. The real knowledge and experience about mitigating such damage is not in London or Washington D.C. It resides right there in the Gulf region where many generations have dealt with the whims of nature and the idiocy of man for many, many decades. Again the power of the Presidency was urgently needed to cut through federal bureaucracy and red tape so assets could be deployed swiftly to protect the environment as much as possible. Instead, stupid, shortsighted partisanship and selfish political self interest kept this President, a Democrat, from mobilizing resources for the Governor of Louisiana, Mr. Jindal, who happens to be a Republican. In a matter of hours, the Governor was ready to swing into action but was blocked by President Obama’s underlings at every turn.

The result has been devastation caused by an excess of petroleum spread by an excess of presidential politics. Cursing is no substitute for competence especially at the Presidential level.

The next Obama insult to the people of the Gulf Region will come when the President demands control over disbursement of billions of dollars in reimbursement money financed by BP. This political patronage scheme, typical of Chicago style politics, will place his political operatives in charge of paying claims after their “legitimacy” is determined by  operatives in the field for the Democratic Party. In fact, we can expect to see ACORN or its successor organizations and operatives play a key role in any such Obama program. His willingness to play cheap politics with the lives and livelihoods of citizens who have already been devastated shows a callous disregard for the sense of fair play that should guide government policy and procedures.

If the fund administrator wants to “keep it clean” he should immediately announce a policy that no one who participated in the Democrat’s campaigns or had any relationship with ACORN would be hired to work on the fund.

It is abundantly clear that President Obama places his political demands ahead of all other considerations. He is not likely to change his “Upside Down” approach. In fact, demonstrating once again that there are no limits to his willingness to play politics with the tragic events in the Gulf, President Obama used a large portion of his speech from the oval office to make a sales pitch for his legislative proposals for a new energy tax increase.

America’s best hope is to vote for major changes in the House, the Senate and in Gubernatorial/State Legislative races this November.

(Also visit http://www.financialwire.net/?s=prphthpby for FinancialWire(tm) articles by THE POLITICAL PROPHET®.)

Reporters tell us what happened yesterday. Pollsters tell us what is happening today. THE POLITICAL PROPHET® tells us what is likely to happen tomorrow. An elite team of political strategists with presidential campaign experience provides analytical predictions that tend to be more precise than offerings from those who have never been “in the arena.” To assure objectivity, team members are not involved with active candidates.

The Political Prophet® and all derivatives of The Political Prophet® in any form are registered trademarks of The Political Prophet® and are subject to proprietary trademark, intellectual property and copyright Laws. Copyright ©, The Political Prophet®, All rights reserved.

Since I got out of the Army, I have spent a good part of my career educating non-technical professionals about complex financial products and portfolio strategies. I found many things of interest about the process of doing this effectively, and in particular, it gave me early insights into the value of what I had learned in K through 12, and what this would mean ultimately to online education via computers.

I found early on that my first task had to be to break down the ideas into words that meant something to the audience. Like many technical spaces, the industry adopted the use of professional terms that had to be described meaningfully to potential end users. Indeed, my first great breakthrough occurred when I realized that my industry had lost sight of who the real end client was.

I had noted with interest the efforts of early online educators to use the lessons of teaching mathematics as a guide. I particularly remember the efforts of a Math Professor from the Air Force Academy to develop an integrated line of math teaching school books which put tremendous emphasis on the power of review and repetition in every lesson, beginning with first year Algebra. He was attacked for the repetitive methodology by the mandarins of teaching, who saw his methods to be not true teaching, irrespective of the repeated fact that his students consistently scored much higher on standardized tests than did those not using his textbooks.

I used repetition in my seminars, always reviewing prior lessons and contacts both before and after my lesson plans. I use this even today to explain some concepts to non-technical professionals in finance particularly.

Early on, I became involved with the growing design of the Internet, including the patents and rules used as early as 1982. By 1985, I was working regularly on adopting high level engineering work station computing power to handle complex finance applications in securitization and portfolio management, and also for AI applications. At the same time, I knew that as computing power continued to explode, professionals with skills that didn’t exist then would have to clone themselves at a pretty high rate, or the markets would run into a log jam effect. I saw a very innovative K through 12 educational software developer in Provo, and I led them to an advanced manufacturer of engineering work stations, resulting in a strategic partnership between the two companies.

Skipping forward some years, others acted on the ideas for online education through the graduate school levels, for courses in particular with science and creative foci. Today, there has been an explosion in the power and effectiveness of online educational tools, for student 2 to 70. I have seen the teaching methodology used by the language software company Rosetta Stone used to teach infant and toddlers to read even before they can speak effectively. Some of those children are able to achieve reading skills by the age of 6 years that are the equal of the national average 6th grader, who is typically 11 to 12 years old.

As I noted when I was young, early piano and musical instrument training produced higher IQ’s in huge samples, not of 5 to 10 points, but of 40 points, something that should never be capable of being ignored. Indeed, it was shown that music was both a math and language skill, which magnified the building of neural networks in the brains of children at an incredible rate, matching in many cases the intellectual advantages of children raised using “tonal” ideogram based languages, such as Mandarin Chinese, Thai, Hindi, and more.

An online educational institution started here in Phoenix a couple of decades ago is now the largest educational institution in the US, the University of Phoenix, with over 500,000 students studying material ranging all the way from high school math to post graduate medical and science material.

I know of no major figures who saw this coming at this rate, and I can further state that I know of no one who can challenge the future reach of this technology globally.

How can each of you benefit from this growing adaptation of patterned repetitive reinforcement based teaching?

I would say that from an intense personal experience which certainly spans this country and much of the modern World, we need always emphasize review of prior lessons learned when moving forward with new efforts. As much as 60% of every new lesson should be spent reviewing previously covered material. This pattern process is absolutely able to be characterized by a contrarian view to “It’s different this time.” How? It is never is.

A brilliant Wall Streeter attributed his many years on Wall Street to teaching him this lesson in graphics. He would repeat it like an inverted mantra. He was one not to suffer fools or geniuses lightly, damning both frequently for making the same kinds of errors in logic.

For those of you genuinely interested in helping your family, children, and friends, introduce them to programs such as Your Baby Can Read, or to the learning of a tonal language such as Mandarin via the Rosetta Stone program. These programs use images of objects (the way Mandarin is written) to accelerate the learning and memorization not only of words, but their structure, spelling and meaning. Such teaching methods can wire new neural nets in the brains of those exposed to it, and re-wire old harnesses that have weakened with age, stress or other toxic exposure.

There is the old saying that you only start to die when you stop learning. The good news is you can make it a lot more fun with a much bigger payoff for a lot less effort today, thanks to the visionary work of some great minds many years ago.

That should remind you of the story of how this Country and its values came into being. A very small and highly intelligent group of literati here in the 1700’s came up with an idea for a republic that could survive if it didn’t destroy itself. This handful of no more than 200 men and leaders backed by less than 10% of the population freed this country from the most powerful empire in the World at the time, when every “informed” person in the world would have bet against them, except with their hearts.

I remember one of the key lessons taught in kindergarten was to share. We do that like no country in the world. If you want to see this country survive, you must do the same, and give of your time and your minds to preserve our history. That will only happen if we continue to respect a dynamic learning environment, in which measured results are the only thing that matters significantly. If our population can’t or won’t read, can’t or won’t continue to develop respect for the individual, then we are doomed. Things may already have been done that will kill this country’s vitality and imagination. If so, remember this when you reach out in our next lives. We are blessed.

This week, we saw the Federal Government jam a series of actions down the throats of the American people, the unintended consequences of which can be felt at a visceral level. This Administration seems determined to drive the American people into a series of decisions that they seem unready to make, but for which they are being forced to act whether they are ready or not.

Some of you may be familiar of the story of Reagan taking the Russian Premier to an American grocery store. Shown the immense arrays of products and foods, he left there convinced that Russia could never defeat the United States. In the nineties, the US had a significant influx of Russian and Eastern Satellite country immigrants flow into this country at an unprecedented level. I asked a gifted psychiatrist what their most serious integration problem was and he described the grocery store problem from a different perspective.

These immigrants came from non-free market economies with little or no choice. When they entered the same kind of grocery store we all take of granted, they would freeze up with all the alternatives, literally experiencing a form of decision paralysis. Some could not overcome it, and withdrew to closed family and friend units.

Why do I bring this up? Today, the American people are facing a similar decision paralysis, one leading them into a form of psychosis. Our systems are in breakdown, whether it is out of control Government spending broken by debt and entitlement programs, illegal immigration, staggering crime, a broken legal system, wholesale dishonesty and a breakdown of human courtesy. Add a catastrophe like the Gulf Oil Well break, and what you have is a need for clear thinking and elemental leadership, which appears right now to be non-existent.

Start with basic courtesy. Many years ago, a friend of mine was put into a difficult situation where a casual female acquaintance related to someone he knew as an acquaintance behaved badly in a social situation. She needed a threat to bring another relationship target to heel, and he was the bait without his knowledge. It worked for her. The friend lost a wasted weekend, learned a valuable lesson, but otherwise viewed it as a personal matter, and said nothing to anyone. In a thumbnail sketch of a converse situation, I could describe our political system in similar terms, as I look at the disgraceful trial of Governor Blagojevich, wherein I see a user who has taken to the opposite tack, attempting to taint individuals who were former allies in the open, possibly with less than credible motives.

Our Government seems unable to open its mouth without lying. Living in the State of Arizona, I can tell you we have a crisis created by the Executive Branch unilaterally choosing to selectively fail to enforce crucial immigration laws that are bankrupting the State, while endangering the lives of common citizens. Arizona determined that in order to survive, it needed to pass complimentary legislation to aid the Federal Government in enforcing laws pertaining to illegal immigrants, and it passed a law that was actually more liberal than the Federal Law it was forced to aid. Now the President has actually lied to Senator Kyl, telling him first that there would be no border enforcement support until he got comprehensive immigration reform, which he then denied after Kyl told Arizona voters what was going on. You can choose to assess who the liar is.

Louisiana faces a crisis that could literally destroy it as a functioning economic entity. The Gulf Oil spill threatens not only the core Oil and Gas industries that are the foundation of the State’s economic activity, they also face loss of their two next largest segments, those being fisheries and tourism. Governor Jindal is an astute and honest man in a job not known historically for attracting such people. He saw the spill crisis, and he wanted to move immediately to ameliorate the horrific impact of this careless and irresponsible failure of BP to follow proper safety procedures. He immediately asked to bring in skimmers from other parts of the world, to get immediately to work building sand berms and barriers to limit the spread of the discharged oil from the broken well head, to involve his State’s resources along with those of adjacent States who faced similar catastrophic dangers.

Why did this even occur? The Obama Administration barred drilling in shallow waters in the Gulf, thereby driving the major Oil companies into deep water with attendant risks everyone was aware of. He could have allowed drilling in waters under 500 feet in depth, or in Alaska, or in the Bakken play in Montana, but no, he wanted to begin to shut down access to Oil domestically as part of his environmental agenda, based on worthless science, to drive his big government agenda for a Cap and Trade program that would shatter the American Economy. So how long did it take the Federal government to act?

They did nothing for 9 days, then blocked any State action or foreign help with skimmers or berms for another 8 weeks. Short of a major miracle, the fisheries and tourism industries of Louisiana are dead for 20 or more years, and its oil and gas industry is shut down and permanently crippled for the forseeable future for an ill-conceived political attempt to drive drilling rigs out of the Gulf, to locations elsewhere in the World where it might benefit Soros and other Obama supporters. Oil platforms are expensive to build and maintain, and they can easily cost upwards of $500,000 a day to keep idle. What happens? The Oil companies move them where they can be used now, and America is the loser.

As if this weren’t enough, this Administration would endanger not only our economy, but our basic financial foundation. The Federal Reserve spoke Friday of injecting an additional $5 Trillion dollars of liquidity into the economy, basically devaluing the US dollar by 1/3 in a single move. Obama would have the US dollar trade at parity with the Peso. This is a none too subtle move on the part of the hard left to drive our economy into a meltdown that they can use to expand Federal power, consistent with the Alinsky, Cloward and Piven agenda.

The Group of 8 has expressed their concern with the economic actions of the US with regard to its profligate spending, which has passed the tipping point where it can be reversed without the American people paying a terrible and long drawn out price to re-establish a free market economy.  We now have total debt and unfunded liabilities in excess of $130 Trillion. That cannot be serviced or retired from an economy whose GDP is only $14 Trillion.  Prime Minister Merkel heard the US plea that Europe not stop stimulating its economy, and they firmly slammed Obama for his irresponsible spending here, at a time when they are cutting government spending, reducing benefits, pushing out retirement ages, raising taxes and cutting back health care benefits.

Does anyone get where we are now? We are on the event horizon edge of an economic black hole.

Texas Congressman Joe Barton (R) inadvertently made the largest contribution of the year to the Democrats’ campaign committees and to President Obama. Single-handedly, he gave audio, video and print copy advertising material to every consultant trying to salvage the reelection hopes of dozens of marginal Democrats.

Here’s what Barton should have said; “If the attorney general of the United States publicly threatened a corporation (or individual) in Texas with criminal indictment and used that threat to negotiate for a civil settlement ($20 billion comes to mind) the chief law enforcement officer could very well could be subject to disbarment or other sanctions under the Texas Rules of Professional Conduct for Attorneys. Mr. Holder acted in an unethical manor and the President of the United States encouraged him to break the rules.”

It is an established fact that some politicians are just tone deaf. Clearly, Barton fits the mold, as does former Vice President Dick Cheney whose former boss many years ago, President Ford, was a legislative genius but tone deaf as a politician.

Barton has now become an embarrassment to the Republican Party. He must be escorted out of sight and kept in places where he can do no further damage, including service as a poster boy for the Democrats. He has gone the way of many whose seniority and chairmanship of an important congressional committee inflated his assessment of his own acumen well beyond all reason. Something as simple as reviewing your planned remarks with a trusted staff member must be standard operating procedure for high-profile spokesmen, and either Barton didn’t check before he spoke or someone on his staff is tone deaf too.

THE POLITICAL PROPHET® predicts that the video of Congressman Barton from the hearing will be the “gift that keeps on giving” for the Democrats and that he will either choose to retire or he will face serious primary opposition in 2012. House GOP Leadership will let the dust settle, inventory the situation and either ease him toward the door or ignore him. He is still young enough to make some serious money as a former member and it is unlikely that leadership will arrange the chairmanship for him again.

(Also visit http://www.financialwire.net/?s=prphthpby for FinancialWire(tm) articles by THE POLITICAL PROPHET®.)

Reporters tell us what happened yesterday. Pollsters tell us what is happening today. THE POLITICAL PROPHET® tells us what is likely to happen tomorrow. An elite team of political strategists with presidential campaign experience provides analytical predictions that tend to be more precise than offerings from those who have never been “in the arena.” To assure objectivity, team members are not involved with active candidates.

The Political Prophet® and all derivatives of The Political Prophet® in any form are registered trademarks of The Political Prophet® and are subject to proprietary trademark, intellectual property and copyright Laws. Copyright ©, The Political Prophet®, All rights reserved.

In a stunning move last week, the United Kingdom liquidated its Financial Services Authority (its analog to the US’ Securities and Exchange Commission) with little notice, and in the move, shifted all of their regulatory functions and authority to the UK Central Bank. The stated reasons for this move were several. First, the Government cited numerous regulatory oversight failures, not the least being their failure to pick up on the monstrous frauds in sub-prime mortgages and CDO’s. Other breaches of their fiduciary duties included failures to properly regulate UK hedge funds, along with the absence of proper oversight of off shore entities involved in manipulation while under Commonwealth legal authority.

The plight of Great Britain, who has been the most steadfast ally of the US in the Middle East crisis, has reached the severest of levels, with their national debt now exceeding 400% of the Gross Domestic Product, currently at 1.5 Trillion GBP. Social welfare and health entitlement programs are all at a crisis tipping point, where it is obvious that such socialist largesse is no longer economically sustainable. Permanent unemployment now hovers at around 25%, and it is hard core and not able or willing to be retrained.

The socialist national health care programs now absorb fully 50% of the national budget of the British Government, providing mediocre care to millions of British citizens with no other alternatives unless they have private wealth. The National Health now employs more than some 1.4 Million people, making it the third largest employer in the World, behind the Chinese People’s Liberation Army, and the Indian National Railway System. Fourth is the US retail chain, Walmart, with 1.3 Million employees.

The British Government converted its national economy to a financial services paradigm beginning during the tenure of Margaret Thatcher. They had many successes early on, as evidenced by the successful banks and brokerage activities centered not only on Britain but also on their adjacent European Markets. Part of the growth of this sector was a Government mandated form of benign neglect of securities regulation, allowing free capital markets to grow internally with very little intrusive control exercised by their FSA. It was a very non-confrontational system, and while it was working, both sides of the political spectrum took credit for it.

Now that the model is imploding, we are seeing a blame game played that is reminiscent of what happened in the US after the start of the Great Depression that began in 1929, bottoming in 1933 with the collapse of the national banking system of the US. This blame game assigns responsibility for the national economic crisis to profiteering bankers and brokers, who were only recently lionized by the British Press and Government for great genius and effective competition from a small country with limited resources.

Does anyone mention those elements of British society that don’t work, or the enormous costs associated with their socialist programs, some implemented during World War II (the 1944 National Health Act)? Not a word. The regulators were always subordinate to the UK Government and its Central Bank, the Bank of England. They had no control over currency printing presses, anymore than they could determine an intelligent way to operate as a regulator without being compromised incestuous relationships with the very financial service units they were responsible for regulating. This should sound familiar to citizens and investors in the United States.

The British legal system has never permitted the abuses we live with here in the US. There is a very weak class action and plaintiff’s bar that exacts breathtaking penalties on those who would even consider trivial litigation. You can know that any lawsuit filed in the UK has legal and evidentiary foundation or it is never filed. I can’t say it works better than our system, but neither can I say it works that much worse.

Socialist bureaucracies have always treated their active members as a class apart, and they have protected themselves better in Britain than in any other European Socialist system. In turn, these bureaucrats have treated their duties with more respect and less corruption that compared with say Italy, or Spain. Like our left here, they survive and thrive by promising and delivering to their under classes benefits that cannot be paid from historic taxation.

About two months ago, the National Inflation Association noted the US had passed a tipping point, one where if we were to tax all income from all sources at 100%, we could no longer cover our regular US Government expenditures. That tipping point was crossed more than two decades ago in Britain.

Banking abuses of currencies, offshore accounts and wealth and more have been legion. Many credit Great Britain with inventing the modern offshore banking model to support the opium trade in the 1700’s. The Seven Tongs of the Triads had proper Englishmen in their now legendary seven “Tai-Pans” (named for the most poisonous family of snakes on the Globe), the merchant bankers of Hong Kong, who fronted for many of the more nefarious activities until relieved of these profitable burdens by modern evolving mechanisms.

It is no secret that the FSA was inspired by the SEC created by Joe Kennedy Sr., certainly the closest thing we will ever have the head of a criminal dynasty in the 20th Century. Joe Sr. made the SEC his tool, and he imbued self-interest in his operations and use of the SEC to achieve is personal goals, including the destruction of both his enemies and competitors. The FSA was a more civilized by a league, in operating with the insulated mutual cooperation of the parties involved in such a way that they protected each other first, and then worried about the public afterwards.

If you have any interest in understanding how closely this mimics the history of our security markets until the SEC’s strangled birth, you can find the living model in the story of the Stutz Bearcat Short Squeeze of the mid-1920’s. When the Stutz specialist caught and trapped manipulative short sellers in his stock, with the threat of forced bankruptcy of these parties, he was literally assaulted socially and personally to relent.

Our SEC faces its own mortality looking at the fate of the FSA. Our Federal Reserve would be the end recipient of the authority and responsibility of our SEC if the British model were followed. I can only hope as one person that this is not allowed to happen. The privately owned Federal Reserve Bank has far too much taint on it for its US currency machinations, and with its global power, it could make a new enterprise with the SEC’s old concessions (and hopefully new personnel) an unmanageable operating enterprise with the power to manipulate the US Government as if it were simply tiny independent pieces on a board of their own design and control, in a game where the only rules are theirs, and they are never shared.

I recite this in hopes that some of you will understand that things could get worse, faster than you expect. Close your eyes and breathe deeply.

(Go to http://investrendweblogs.net/?s=advctaarp for other “AARP Advocate” posts.)

According to a recent article at the AARP website (http://www.aarp.org/health/health-care-reform/info-04-2010/a_user_s_guide_to_health_care_reform.html), here are 10 important points, from “ A User’s Guide to Health Care Reform”:

1.)  Helps 32 million more Americans get insurance.

2.)  Makes pre-existing medical conditions a thing of the past. Insurers can’t use pre-existing medical conditions to deny coverage from this tear going forward, or for adults starting in 2014.

3.)  Guarantees basic benefits for everyone in Medicare; makes preventative services free for most, and; gradually closes the “doughnut hole” in the Part D drug program.

4.)  Sets up a temporary program in July to help people with pre-existing conditions (who have been uninsured at least six months) to obtain coverage.

5.)  Provides new benefits for most people who already have insurance, such as coverage for adult children until age 26.

6.)  Leaves medical decisions in the hands of your doctor and you.

7.)  Requires most people to have coverage by 2014, but offers subsidies for those with moderate to low income and makes more people eligible for Medicaid.

8.)  Creates state-run insurance exchanges offering a menu of private insurance plans for people who are uninsured, self-employed or between jobs (in 2014).

9.)  Offers immediate tax credits to help small businesses buy insurance for employees.

10.)  Keeps Medicaid financially sound for nearly 10 more years and reduces the U.S. deficit by an estimated $143 billion.

(Source: http://www.aarp.org/aarp/presscenter/pressrelease/articles/aarp_expects_drugindustrytohonorcommitmentstohelpclosedoughnutho.html).

See also:  “5 Things in the (Health Care) Law That May Surprise You” (http://www.aarp.org/health/health-care-reform/info-04-2010/five_things_in_the_law_that_may_surprise_you.html).

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DISCLAIMER: The AARP is in no way associated with the “AARP Advocate” weblog at Investrend Weblogs, and any viewpoints expressed and/or statements made in the “AARP Advocate” weblog at Investrend Weblogs may not reflect those of the AARP; And individuals who author posts in/for the “AARP Advocate” weblog at Investrend Weblogs do not claim, in any way, to be speaking on behalf of the AARP or to be representing the AARP.

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From the AARP: AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world’s largest-circulation magazine with over 35.7 million readers; AARP Bulletin, the go-to news source for AARP’s millions of members and Americans 50+; AARP Segunda Juventud, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

[advctaarp]

For those who have not been listening carefully, the left has taken the first steps to seize the public and private pension assets of US Citizens without their consent. Over the past several months, Nancy Pelosi and other Administration operatives have sent up several trial balloons preceding an outright attack on the control of individual retirement accounts, beginning with the proposal for a special excise tax on those who begin to draw down their IRA, 401K, ERISA, Roth and other types of retirement assets accumulated without tax consequence. The Employee Retirement Income Security Act of 1974, as modified, created the modern financial asset base of the US, in creating the very first Government backed systematic savings plans in our national history.

The current parallel debt and deficit crises threaten to overwhelm our national systems. The socialist left has coveted the seemingly enormous assets of individuals and plans that arose from ERISA. They have sought to determine mechanisms for either heavily taxing these assets in direct contravention of the philosophy of the laws that established their creation, to indeed, actually seizing these assets in a nationalization move. Such a law would constitute an outright declaration of those in control that the Constitution is dead. Not a great deal of imagination would be required to determine what intended consequences could, or indeed would, arise from such actions.

If you haven’t paid attention to the recent general elections in Great Britain two weeks ago, then you would be unaware of one of the trial balloons seen in that election. The Liberal Party proposed that in this moment of their financial crisis, the Parliament should realize that it might be in the best strategic interest of the Nation to nationalize retirement and investment accounts, giving back some form of annuity, but also effectively shutting off the true owners of these assets from any control over their principal balances. For such a significant amount of money, including assets held offshore, over $12 Trillion GBP, any annuity would require government backing. But the question is what value would the backing of the British Government be when its debt exceed 400% of its GDP? This hint of intent was squashed, certainly contributing mightily to Gordon Brown’s defeat.

How could such a thing happen here? Nancy Pelosi has proposed an excise tax of 25% on retirement accounts accrued to date. Operatives linked to Pelosi and the Obama Administration have put out hypothetical queries as to the necessity of nationalizing the retirement and pension accounts of this Country. The public reaction was a shout down that was prompt and morally lethal. The Democratic Party is divided on this, but they would seek to pass such a bill by the same methods used to pass Obama care. What are those methods? Move on the legislation without seeking 60% agreement, but rather pass the bill with a 51% majority and to hell with anyone objecting.

Similar tactics have been employed last week with the ruling that Cap and Trade standards for carbon restrictions would be removed from legislative process and made an authority of the EPA without review of either House of Congress. Knowing they didn’t have the votes, they sought the amoral way to make a change for which there is no public support, based on science that is highly questionable. The sheer arrogance and irresponsibility of such an action in the time of the worst recession in our history, with a national debt and unfunded liability load exceeding $121 Trillion dollars borders on sedition.

Can such actions be allowed to proceed? Obama care was passed without any legislative representative being allowed time to read its 2600 pages. I say SHAME on our leaders. Such behavior throws the legitimacy of our entire Government into question.  Is this a republic or not? Can such behavior be excused on any level? The answer does not require a degree in Macro and Micro-Economics, nor does it require a Nobel Prize. What is required is that every representive, Congressman and Senator be told that they have been part of the destruction of our Country, and that they will be held accountable.

Any objective observer notes that many times, if not consistently, the Congress has moved more to protect its power than to protect the people. These imperialists must be shown that they live to serve the people, not the other way around. Where was the outrage at Obamacare? Where is it about the EPA implementing a rule of law circumventing legislative process or judicial review? Maybe the two party systems that we have must be crushed and an entirely new regime of interests is tested. It would be hard to under-perform the one we have. But then again, looking at the socialist states in Europe, it has to be a possibility.

Every year, hundreds of thousands of people seek to leave their socialist countries to come here. I have had Russians ask me if the American people have literally lost their collective minds. When I explain the tactics of the Obama Administration, they say, “You don’t have to tell us, we lived in the Soviet Union.” Is this what you want to leave for your children and grand-children?

Everyone is going to be forced to step up or otherwise walk the plank. We are being run by the most divisive and racist administration in our history, peopled by a legion of America hating, capitalism killing bureaucrats who have never done a thing in their lives, never created a business or job, never hired anyone but their own kind, while aggressively discriminating against any and all who oppose their utopian elitist state model.

I would assert that any attempt by this Government to nationalize the retirement and investment assets of this nation is an analog to the Weimar Reset, and that can’t be done without the informed consent of ALL US citizens.

Years ago, I was educated that the three legged stool of all contract laws were underpinned by the following principles:  (1) Specific Performance, (2) Binding Mutual Fiduciary Duties, and (3) Change only by Mutual Informed Consent. I would contend that the laws we have seen passed these last 18 months fail all three tests. The Supreme Court can only make its rulings based on the Constitution. Should SCOTUS abdicate this responsibility, the US will dissolve, and rightfully so.

At the major IT industry conference held this week, the long term debate over the future of computing was nearly settled by two events. The first event was the announcement by Google that it would no longer use Windows products. The second event was the practical equivalent of a concession speech by Microsoft CEO Steve Ballmer that they were in a position to be prepared for any “changing technology” paradigm. So what was the future envisioned by these two organizations?

The answer of course are the shifts of computing models to the long discussed “cloud computing”, in some ways a shift back to parallels to the original mainframe technology, updated for the many new technologies that have emerged in the last 30 years. Several years ago, a great presentation emerged from a presentation made to a major US IT Board of Directors about coming changes in the World. The presentation was called “Shift Happens”, and if you haven’t seen it, now in version 2, you need to watch it, and take notes, then watch it again.  If forecasts a reality of a new world that will roar out of the next 30 years of technology evolution, which will occur at an astounding speed, possibly even challenging Moore’s Law, which forecast in the late 1970’s that the speed of microprocessors would double and their cost would halve every 18 months for the visible future. The change seen in “Shift Happens” races away from that, as power and speed go exponential while prices drop exponentially. What other technologies have seen comparable increases in speed and power, with married drops in costs? Surely communications, mass storage, remote storage, server technology, light communications, and more have seen comparable changes.

If mainframe computers were partially succeeded by mini-computers, then they in turn were succeeded by different mass server farm models for storage, driving distributed processing of input, query and output tied to personal computer technologies. What is being discussed now is a quantum shift, in which the personal computer will almost disappear into an entirely new paradigm, a more profound shift than the PC revolution.

Now, all programs, data, information, images and more will reside on huge globally distributed server farms accessible by devices which will literally project images, link to printers and projectors, and provide real time personal data inputs for pennies, with prices dropping even faster than power and capabilities will increase.

Without singling out Microsoft, or Dell, what does this do to their business models in general terms? Such change will require the ability to be agile, efficient, and customer-oriented, in a way that they have never before had to face, particularly Microsoft with its enormous market share both here and internationally. What does it do their product planning? What future products will be used that don’t even exist now, not even on drawing boards?

I had an image of the legendary Malcolm X speech over 40 years ago before his assassination, in which he compared the black experience in America with the following words: “We didn’t land on Plymouth Rock, Plymouth Rock landed on us.” The IT industry as we have known it had a small pebble hit it when the PC came into being and took off like a veritable Jet. This Cloud Computing change will land on the IT world like a planet killing asteroid, throwing everything into a kind of chaos, one in which almost all prior experience and knowledge will be decimated, leaving an unrecognizable landscape whose culture will have to adapt to entirely new realities.

What else will be impacted? Certainly, the workplace can only be described as something that will exist as if created by people throwing darts blindfolded. The tests of these workplaces, many of which will have to become virtual, will involve knowledge and skills that haven’t even been projected or imagined, using and depending on people being able to change jobs like they do underwear, with no stress, and no intellectual dependence on their knowledge of a single domain before they came to their latest tasking.

I am sorry I wasn’t born a little later, as I love the process of change, and this will not be part of my life experience at a technical level. I will get to watch it, but I won’t be allowed to contribute to it. The day to day life of a worker and even more so, a manager, will become an exercise that might be compared to playing multi-dimensional chess on a spinning board in the dark. The first players won’t just suffer from this change, they may have to learn obsession like it was a Zen exercise. Actors call this living in the moment. It may be just a bit more difficult than that.

The average person of the next half century will have a new job every 3 or fewer years, and most of those jobs do not even exist now, doing things and achieving goals that can’t even be described right now. Much has been written about management of change. The kind of change that I see coming hasn’t even been described in science fiction literature. In the term of my professional life, I could pretty much cover my technical spectrum with three publications, those being Popular Science (for early previews of things coming), Scientific American (for peer review articles addressing peer reviewed science articles from other peer review journals), and Nature (for advances in the broad biochemistry arena that defines life).  Our children and grandchildren won’t have it nearly that easy.

They will have to learn to adapt and learn, even while sleeping. It is estimated that all human knowledge since the beginning of time will be captured electronically in 20 years on computer the size of a notebook able to run processors at lower wavelengths than light (2 angstroms), most possibly and probably on neural nets that learn faster than humans, Artificial intelligence redefined.

And they must recognize problems. This technology won’t be free, nor will it be without costs and dangers. Honey bees are disappearing at an astronomical rate, and many suspect it may be because of our dependence on an ocean of wireless signals that disrupt and overload their 800,000 cell brains. How much microwave radiation can the human body stand? When does it sterilize humans or compromise their immune systems?

The early adapters of this new technology paradigm face some daunting challenges. I think that they will only survive if they realize that almost everything they know, someone else knows better and sooner. Deciding how to position humans in this gladiatorial arena will be hard, gladiatorial in the sense that only the strong will survive. In a world with 12 Billion people (by 2050), how will those who can’t adapt to this altered reality be handled? Menial labor may overwhelm everyone at this end of the skill spectrum, and their only reward may be not enough food.

Prepare for take-off. It will be a trip, if nothing else.

Australian Broadcasting Corporation’s commentators Clark and Dawes did a great comedic explanation of the current debt crisis in Europe, incorporating factual debt numbers for some critical nations in the European Union. Their numbers pertaining to the actual debts were rather shocking, particularly when viewed through the prism of the United States Government.

The amounts owed by the nations of Greece, $367 Billion EUD, Italy, $1 Trillion EUD, Spain, $1 Trillion EUD, Ireland, $865 Billion, were in fact mostly amounts owed to other EU member nations and their banks. They didn’t get to Portugal’s debt in this discussion, and they certainly didn’t include the unfunded liabilities of their socialist worker programs, the real monsters in the debt soup, just like the US.

They cited the nations with the biggest liability exposures to these borrower nations as being Germany, Great Britain, and France, none of which are solvent in their own stead. Indeed, each of these lending countries carries national debt that is a multiple of their GDP, with the greatest of these being Great Britain, with a debt load of 400% of its GDP, before its unfunded liabilities. The song sung in this little ditty, repeatedly, was how were these insolvent lenders going to survive while insolvent borrowers ask for more money to bail them out, when they can’t service the debt they already have. It is a formula for a perfect storm.

They proffer the reason for the current flight to the US dollar as being a flight to safety, not because the US Debt picture is any better, but rather because, for now, our economy is so much stronger than those of Europe, individually or in total. And what is our debt picture?

Many are familiar with the US Debt Clock maintained by the US Treasury. It reflects a debt of the US at $13 Trillion today, steadily exploding, moving $5 Trillion in the last 18 months, more than the added amount accrued in the previous 8 years of the Bush Administration. It also reflects an estimate of the current debt from unfunded liabilities of our social welfare programs (including Social Security, Medicaid, Medicare, Head Start, School support, etc) at roughly $108 Trillion Net Present Value (NPV), giving the US a total debt load of about $121 Trillion, before the factoring in of the future costs of Obama’s health care reform act. A $14 Trillion GDP economy, which is the US now, simply can’t pay off such obligations.

What is most shocking about these numbers is the absolute refusal of leftist “social justice” advocates/revolutionaries to acknowledge that obligations of this size simply overwhelm the US from just the dual costs of servicing the cost of the debts’ borrowing, and any retirement of principal. Leftist flights of fantasy include absorption of all pension and retirement accounts nationally into the US Treasury, which would bring down the US Government overnight.

Reflecting their abysmal ignorance of basic economics, they put this forward without addressing the fact that this pittance ($14 Trillion est.) won’t last a decade. More significantly, they could not be trusted to keep their hands off these funds, anymore than they could be trusted to keep their hands of the original trust funds of the Social Security system, or of the Medicare system. These political pick-pockets have the ethics of single cell viruses, and their ideas are just as deadly.

So what some potential answers to this crisis? The first would be to immediately freeze all new USG spending across the board. Next, you would need to form a commission that would be mandated to cut all USG spending by 50%, with the Government spending frozen at these levels for 10 years. Then, you would have to cut USG payrolls by 50% of personnel, followed by a cut of their salaries and benefits by another 50%, with one exception, that being the military. Then, you would have to derail Obamacare, which could be accomplished by forcing all Congressmen and Senators to live with the coverage they come up with, which should be sufficient to get them to keep their eyes on the ball, and their butts in their seats.

Finally, I would cut all taxes, including estate taxes to a flat 10%, fixed, with no deductions. What could come from this? There would be such an explosion in investment in this country, it would look like the launch of an interplanetary missile, as funds sidelined by fear and uncertainty (currently over $9 Trillion by best estimates) would be reinvested along with an avalanche of offshore monies seeking higher returns than the current 2% yield for 10 year paper.

If this option is rejected or not implemented in some form, what then could we expect? I would forecast an economic meltdown, as the Federal Reserve attempted to monetize the US Debt (NOT including unfunded liabilities), which should cause our currency to literally melt to almost no value. We would have a re-run of the Weimar republic, ended by a literal clearing of the financial board here, with nothing worth any form of currency. The exercise would become one familiar to chess students, where by the entire board of a game is cleared of playing pieces in one sweeping move, and everything is rebased to zero. (Does anyone remember the old “Zero Base Budgeting”)? These actions would turn the US into a third world economy for at least 50 years, and our assets’ ownership would be shifted as if by magic. This nearly happened in 1933, following the banking collapse, and the removal of the Gold standard to back our currency. Fiat currency that replaced Gold backed currency was and is too easily manipulated, and ownership of an interest in the economy is never certain. Those talking of banksters would get to find out first-hand what the term means, as everything they owned would be seized on collection, as if loan sharks were owed this fantasy money.

What are needed now are prospective solutions, ones that stand up to reality. Too many have had too much given to them for too little. This is going to end, one way or another.

We have reaped the wind, only to harvest the whirlwind. If you don’t see the outcome we are headed for if nothing is done, you have no one to blame but yourself.

I had to take a break involving several pressing matters involving long term professional investments I have made of my time in some spaces ranging from 15 to 18 years, all of which have seem to have hit critical mass at the same time. I had guests come to my city at the same time on several matters, while I explored getting involved in a potential black swan in an unexpected space with people I like personally. At the same time, I began to support a reunion of some military friends from many years ago in a first ever association convention in my City of this group.

The first three weeks of May saw a vindication of my views of the pending global debt crisis, beginning with the collapse of Greek sovereign debt on an enormous scale, requiring an initial bailout of over $1 Trillion EUD, with more to be necessary within 12 to 18 months. Next, we saw proof of the major investment bank’s involvement in the manipulation of the Greek sovereign debt issues. This included manipulative use of illegal naked short positions in these bonds combined with leveraged real and synthetic credit default swaps, in such a manner as to have said bank actually end up short 400% of a debt they touted institutionally to buyers while they bet on the collapse of not only the debt issues, but the underlying national credit.

As if that were not enough, Goldman Sachs had to settle an SEC civil indictment that they had facilitated 385 counts of naked short selling, focused on their clearing and settling said trades while knowing they were naked short positions. Goldman astutely settled these charges for a “valet tip” of $450,000, not a dollar of which will go to the victim shareholders of the underlying securities which were shorted manipulatively. DOJ months ago promised indictments of 5000 financial entities and persons for financial fraud, with the first yet to be see. If a package of these criminal indictments doesn’t focus on this episode and the thousands of others like it, then I doubt we will ever see another major organization indicted for the acts of sedition their behavior has entailed.

AG Holder has stepped on another figurative landmine in my State, Arizona, with baseless charges made against the State for its new laws to assist Federal officials in enforcing illegal immigration laws here. The AZ law was passed right after a rancher living on the AZ-Mexico border was assassinated by a professional sent to kill him by the Mexican drug cartels, Bob Krenker, shot through the lungs and left to die. The law we passed is more liberal than the Federal law it is designed to aid, after numerous insults made to the State by the Federal Government, which has refused to enforce the laws intended to protect our border and our society. In a State with a population of just 2.8 Million, we had 90,000 serious crimes last year, some 95% of which were committed by illegal alien criminals. Over the past 10 years, 80% of violent crimes against law enforcement officials have been committed by the same illegal alien criminals. By way of comparison on scale, the City of New York with a population of 8.6 Million had 116,000 serious crimes last year. Only a person with the IQ of amoeba would not be able to understand this isn’t proportionate. We have over 450,000 to 500,000 illegal immigrants here, costing the State over $2.8 Billion every years, driving the State to edge of bankruptcy. That doesn’t even touch the 250,000 to 300,000 illegal immigrants who transit through here every year. They are breaking the back of our social services systems, including welfare and healthcare in particular, and the Federal agencies provide no solutions to the problem.

On the crime front, I go back to the case of Bob Krenker. While he was dying, he managed to alert his neighbors by radio to his plight, and they rallied a posse save him and to chase down the murderer. They were too late to save him, as he had bled out in great pain from his wounds. After tracking the perpetrator 8 miles towards the border (which the Border Patrol sits back from by 60 miles generally) these ranchers and cattlemen cornered the suspect in a dry arroyo canyon. As they were about to smoke him out to seize him and arrest him for murder, in swooped the Border Patrol and Federal Marshalls with their posse supported by a helicopter, who immediately demanded the locals back off and cede the capture of the suspect to them. Lots of luck. In an abominable performance, they managed to let the suspect escape almost inexplicably from a one way position. It has been speculated on here that they didn’t want him. If by any chance that were to be proved, these officials should be put in prison themselves.

California has made a 24 Karat ass out of their major cities in the South and North assailing an AZ law which they, like AG Holder, have never read. They threaten boycott of Arizona from which they get 25% of their electric power, and crucial water from the Colorado River basin. Arizona has responded astutely, threatening California with a cut off of their electric power, and their water to Southern California.

The Bureau of Land Management has made a catastrophic mess out of water resources in the Western US over the past century, and it is time they should be thrown out on their asses. Southern California can always go to Northern California’s watershed which supplies the SF basin and the Central Valley. The BLM has shut off 90% of their water, so plenty should be left over for SoCal. RIGHT! Maybe BLM officials can share cells with some of the thousands of California felons we warehouse for that State’s overcrowded prison system.

The never ending attack of the Obama Administration on our systems for the division of Church and State remain under attack. No one person has done more than Glenn Beck to point out these contradictory messages of the Obama Administration. In their latest move, they seek to force Churches to “Go Green” or face harassment by the EPA. This country was built on the faith of its founders. Too few of our citizens are even marginally aware of this, or of the presence of the two Latin Words on the Top of the Washington Monument, “Laos Dei”. Obama seeks to have religion be a subordinate of the State, and to penalize them if they disagree with him on Constitutional rights.

What is the common theme of the writings above? We have a President and his associates who don’t believe in our republican democracy, who disrespect the Constitution unless it is convenient for them, who are disrespectful of faith, and who would destroy the very core of our systems of democracy and capitalism. I say that when they fail, they must be shipped away from our shores, never to return. Do you have a better idea?

I applaud the courage of German Chancellor Angela Merkel for banning naked short selling in Germany. And a “wag of the finger” goes to the rest of the Euro-Zone — plus the Securities and Exchange Commission and Congress in the US — for not doing the same. Naked short selling is the ultimate theft. It is selling what you not only don’t own but have no intention of ever delivering.

The U.S. supposedly has laws against this already, but those laws are not enforced. After the Crash of 1929, they were called “Blue Sky Laws” — so named because brokers were selling stocks that had nothing behind them except the clear blue sky. Still, the fails to deliver that are the evidence of naked short selling topped $6 billion even after the Crash of 2008. Worse yet, fails to deliver in US Treasury bonds topped $2.5 trillion (yes, Trillion with a “T”) and stayed there for 7 weeks. No fines, no prosecution, not even a reprimand were issued to the primary dealers that perpetrated naked short selling against their own country.

Every market should be prohibiting naked short selling or failing to deliver securities for settlement. According to data from a UK research firm, five percent of all trades executed for pension funds fail to settle on time. Each instance of securities sold but not delivered denies the issuer of the benefit of capital market support. It is no different than a broker issuing phony, counterfeit bonds and deceiving an investor into thinking that they are investing in — supporting — the German government.

All governments — from nations to the local sewer district — are at risk for this behavior. As Merkel told lawmakers in Berlin yesterday, the consequences of inaction are “incalculable.” The only limit is the clear blue sky.

The EUR USD plunged sharply lower on Thursday breaking through 1.26 and approaching dangerously close to the October 2008 bottom at 1.2329. There may be a technical bounce if this area is tested, but longer-term swing charts project a possible break to 1.14.

Early Thursday morning the Greek government passed its new cost cutting measures, making Greece eligible for the bailout money offered by the European Central Bank and the International Monetary Fund. The Euro continued to weaken however, as bearish traders focused their attention on similar fiscal problems developing in Spain and Portugal.

This morning the ECB voted to leave interest rates unchanged at 1.0%. It also added that rates would remain low with financial uncertainty still expected to be a draw on the Euro Zone economy. Because so much money is being set aside to bailout Greece and additional funds may be needed to support the economies of Spain and Portugal, the ECB cannot afford at this point to begin raising interest rates without risking a possible double-dip recession.

ECB President Jean Claude Trichet offered no solid relief to investors in his post-meeting press conference. Many traders had expected him to make a much stronger statement regarding the Euro Zone problems but his talk failed to instill any confidence in investors. In fact, the Euro continued to break sharply after his press conference.

Major players wanted to hear Trichet address the possibility that the ECB is considering buying government bonds or diverting financial stimulus from other parts of the economy to address the fiscal needs of the struggling nations. During his talk this matter never came up. Throughout today’s massive sell-off, traders were looking for, and analysts were calling for, the ECB to step in and start buying government bonds.

Trichet also said there would be no default of Greek bonds. Traders however continued to punish the Greek capital markets after this statement. This sent a clear signal that the Greek government, the ECB or the IMF did not have a grasp of the situation. In fact it reaffirmed that bearish traders were in charge. What is known at this time is that hedge funds and large speculators are committed to the short-side of the market and not expected to lighten up because the fundamentals clearly support a weaker currency.

Analysts continue to feel that the worst is yet to come as the capital markets in the Euro Zone continue to run out of control. Many feel that the ECB has been behind the curve and that the ECB hasn’t acted fast enough to stem the Euro’s downfall. Unless the central bank steps in to provide stimulus or to buy Greek bonds, look for the same weakness in the currency to continue tomorrow.

[Also visit http://www.financialwire.net/?s=Brewer+Investment+Group for related FinancialWire(tm) futures and forex articles submitted by the Brewer Investment Group. Also go to http://www.investrendweblogs.net/brewer-profile/ for important disclaimer information about Brewer Blog posts.]

(By Steve Reynolds, Chief Investment Officer) — Over the last few years, we have navigated through the building and bursting of a global credit bubble, the collapse of our modern financial system, a severe worldwide recession, unprecedented government stimuli, and a historic rebound in financial asset prices from panic lows.

The post-crisis United States is left in a proverbial “Goldilocks” environment:  neither too hot (inflationary) nor too cold (recessionary).  Liquidity is plentiful, interest rates are low and stable, inflation is muted, consumer spending is no longer a drag, exports are reviving, and profits are soaring.  In fact, it appears that corporate profitability will achieve record levels in 2010.

Despite a number of headwinds — including scarcity of business and consumer credit, excessive structural fiscal deficits, mounting foreign sovereign debt risk, the burden of household debt, high level of unemployment, and political uncertainty — the economy is transitioning to a self-sustaining expansion (albeit slower than we would expect based on history).

Investors are becoming more optimistic while holding historically high amounts of cash and fixed income investments.  Across the broad spectrum of institutional and individual investors, there are significant shortfalls in actuarial and retirement needs that have to be replenished.  To satisfy these deficiencies, many may move to greater equity exposures.

After such a traumatic shock to the global economic and financial systems, it is unlikely the world will return to its pre-crisis state.  The failures and their fixes have altered the landscape.  Thus, traditional methods of analysis may need to be modified.

By viewing economies through a different prism, investors can define “a new world order.”

We visualize a world not segmented by geography (Asia, North America, and Europe) or stages of economic progress (emerging and developed markets).  Instead, we see one in which countries are separated by their financial soundness:  (1) those that entered the crisis with strong financial systems and (2) those that were over-leveraged and under-regulated.

To be sure, even those countries that were prudent in the regulation and supervision of their financial activities could not avoid the global meltdown.  Most still suffered recessions, but their financial systems withstood the stress.  Traditional monetary and fiscal stimulus proved effective, enabling their financial institutions to transmit public policies to private business and household activity.

As the result of a quick return to economic growth, several of these countries have already begun to withdraw their stimulus programs.  Interest rates are being raised in Australia, Canada, Norway, China, and India, all of which stand out as countries that successfully survived the financial storm.

They have the advantage of financial flexibility and thus the ability to manage their economies more effectively.  Over time, they should be able to generate above average growth and gain share of the world profit pie.  From an investment view, companies that operate in or sell products and services to these countries should be secular market leaders.

In contrast, profligate countries were brought to their knees.  Government actions were able to stabilize the system only through measures that were unprecedented in speed and size, creative in structure…and questionable in legality.  The negative consequences of the financial crisis on their economies will be felt for years.

These countries remain saddled with three major structural issues.  First, the extent of the bad debt problems soaked up inordinate amounts of financial relief that would normally have flowed through to the general economy.  In the U.S., the political will for further meaningful assistance has been drained.  Second, the consumer remains over-leveraged and is limited in his ability to accelerate housing and autos, the traditional jump-starters in a recovery.  Third, the high rate of unemployment requires high levels of social welfare payments, exacerbating state and local government deficits.  This has weakened the federal government’s efforts to create new jobs.

In the countries with impaired financial systems, attempts at economic stimulation have in most cases provided only stabilization.  These countries account for perhaps 40% of the global economy and their financial flexibility is hindered by fiscal deficits of over 10% of their GDPs.  Their sub-par growth has reduced demand for imports, inhibiting trade and overall global growth.

Such countries may in the future implement policies that harbor unknown consequences.  When their unconventional stimulus plans are inevitably withdrawn, their economies may be susceptible to relapse.  Like the private banking sector, many of the governments’ financial initiatives were “original” in construct.  The financial engineers of Wall Street now have brethren in the global central banks and the Departments of Treasury.  Their massive, complex, and often opaque schemes — while successful in stabilizing the financial system — may have only kicked the proverbial can down the global road (or the dromos, camino, vegur, or aopora).  As these unconventional stimulus programs are unwound…watch out for the potholes.

The outlook for the financially damaged U.S. — after the current snap-back in economic activity — is for moderate growth.  Ironically, this provides for a long “sweet spot” for market participants.  However, it also encourages and enables speculators to create new bubbles, an outcome for which we are vigilant.

As the U.S. economy shifts from a recovery led by fiscal stimulus and inventory restocking to a more moderate expansion, the stock market is likely to become more selective.  Many sectors, industries and companies will find it difficult to continue to make meaningful earnings progress on cost cutting alone.  This results in two attractive areas of investment opportunity:  (1) companies that can show strong top line growth in a sub-par economic expansion and (2) undervalued small-and micro-capitalization companies that have been overlooked by Wall Street.

In the early 1970’s, the market leadership was defined as “The Nifty 50.”  This group was comprised of dominant companies that investors felt would have high levels of revenue and earnings growth for an extended period of time.  Because of their extraordinary outlooks, they were called “one decision” stocks…never to be sold.  Large, consumer non-durable companies, such as Disney and Avon Products, populated the list, commanding multiples well in excess of 50 times earnings.

As this bull market unfolds, a similar, but new leadership group will likely emerge comprised of companies that can achieve strong revenue, free cash flow, and earnings growth.  This group will be broad-based in market capitalization and sector/industry representation.  They will distinguish themselves by optimizing revenue growth from new technologies, product innovations, market share gains, and exporting to and operating in countries with sound financial systems.  Investors may be drawn increasingly to this select group of growth companies whose valuations should expand from today’s rather conservative levels.

The Great Credit Collapse and Severe Worldwide Recession were devastating to the typical equity, but even more so to most small- and micro-capitalization stocks.  The market’s illiquidity was extreme at the panic lows.  Small- and micro-capitalization stocks in particular were divorced from fundamentals, in relation both to business models and balance sheets.  In fact, many bottomed at prices near or even below net cash per share.

With limited Wall Street research coverage, market participants have been slow in returning to this sector, so that meaningful undervaluation persists.  The combined benefits of increased research coverage, individual company earnings growth, rising merger and acquisition activity, and the eventual return of the public to equities make this area attractive.

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Craig Drill Capital does not provide legal, accounting or tax advice.  Any statements regarding legal, accounting or tax matters was written in connection with the explanation of the matters described in any posts and are not intended or written to be relied upon by any person as definitive advice.  Any discussion of U.S. tax matters contained within any articles is not intended to be used and cannot be used for the purpose of avoiding penalties that may be imposed under applicable Federal, state or local tax law or recommending to another party any transaction or matter addressed herein.  Each person should seek advice based on its particular circumstances from independent legal, accounting and tax advisors regarding the matters discussed in any posts.

(Via: http://www.zangani.com/node/5817)

A mathematical model has revealed part of the secret to why some people infected with HIV never get sick, providing a new target in the attempt to harness that ability in a vaccine, according to research published in Nature.

People who can control their HIV infections carry a specific subtype of the gene for the major histocompatability complex (called HLA in humans). The immune system relies on HLA molecules to train T cells to avoid attacking the body’s own tissues by presenting self-peptides. T cells that don’t bind too strongly to the HLA-self-peptide complex are then activated against pathogens. Researchers found that individuals with a specific subtype of the HLA molecule, HLA-B57, have a lower level of HIV RNA without any retroviral therapy — but just how this molecule confers protection has been an area of intense study.

Rather than attack the question with biochemistry and molecular biology, Arup Chakraborty from MIT and his colleagues went after the question using mathematical models, which, according to Chakraborty, are well suited for investigating complex evolving systems like the immune system. (Read more about Chakraborty’s take on using physical sciences to understand immunology in his March 2010 feature.)

Chakraborty and his colleagues used their model to predict that the HLA-B57 subtype can bind to fewer self-peptides than other subtypes. As a result, this subtype trains T cells against fewer self-peptides.

When that training is less restrictive (with fewer peptides presented), T cells leave the thymus with the ability to bind to a broader array of antigens than when their training is more restrictive. This makes their binding specific, but at the same time more flexible to variants of their target — a crucial ability, given HIV’s rapid rate of mutation.

The researchers tested their model against samples taken from HIV patients, and found that, in those that tended to progress in their disease, their HLAs were also able to bind to more self-peptides.

“This is a remarkable paper because it starts from a clinical observation, integrates it with experimental observations, generates a valuable model and derives from the model a deep understanding of the behavior of the human immune system. Rarely does one read a paper that stretches the mind so surprisingly far,” said David Baltimore, in an MIT press release.

While these findings might help target scientists’ efforts in the search for a vaccine, they are a long way off from an immediate impact, Chakraborty warned. “We are in the early stages in HIV research,” Chakraborty told The Scientist. “We don’t know for sure what it is about an immune response that might help it control HIV” infection and spread, he added.

The study, said Chakraborty, implies that new vaccine efforts should try to find ways to mobilize and multiply T cells that are not only specific for the HIV virus, but that are also highly flexible in their binding — a goal that scientists have not yet figured out how to tackle.

(Read more at: http://www.the-scientist.com/blog/display/57394/)

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The European Central Bank is expected to hold its benchmark interest rate steady at 1.00% this morning. In addition, look for it to issue a statement saying that rates will remain low for quite some time because of the fiscal problems in several Euro Zone nations and the risk of contagion.

Because so much money is being set aside to bailout Greece and additional funds may be needed to support the economies of Spain and Portugal, the ECB cannot afford at this point to begin raising interest rates without risking a possible double-dip recession.

With a few major nations raising rates or set to raise their benchmark rates in the near future and the ECB set to hold rates steady, traders will continue to sell the Euro because of the interest rate differential.

Following the release of the ECB policy statement, President Jean Claude Trichet is expected to try to instill confidence in the Euro during his post-meeting press conference. In his talk, he may address the possibility that the ECB is considering buying government bonds or diverting financial stimulus from other parts of the economy to address the fiscal needs of the struggling nations.

Whether Trichet will be successful at persuading investors to continue to back the Euro cannot be determined at this time. What is known, however, is that hedge funds and large speculators are committed to the short-side of the market at this time and not expected to lighten up because the fundamentals clearly support a weaker currency.

Analysts continue to feel that the worst is yet to come as the capital markets in the Euro Zone continue to run out of control. Many feel that the ECB has been behind the curve and that the ECB hasn’t acted fast enough to stem the Euro’s downfall.

Last night the Euro reached its lowest level since March 2009 while piercing the 1.28 price level. Today, more unrest is expected in Greece as the government and protesters clash about the implementation of austere financial measures. With the situation worsening, the ECB may have to consider what many see to be a drastic measure, and that is buying the sovereign debt of the ailing Euro Zone nations in the secondary market.

June Treasury Bonds are called lower this morning after closing sharply higher on Wednesday as equity markets collapsed and demand for safer assets increased. The rally early in the trading session sent yields plunging while triggering a breakout over the last main top at 121’05. T-Bonds began to break from the 121’14 high near the mid-session after triggering stops above the last main top at 121’05. Higher volatility and strong upside momentum should underpin the markets, but gains could be limited if traders decide to lighten up their positions ahead of Friday’s U.S. Non-Farm Payrolls Report.

June Gold is trading higher overnight. On Wednesday gold finished higher after a successful test of a key 50% level at $1158.60 encouraged fresh buying. Gold initially broke after a strong rally in the U.S. Dollar. A break in equity markets also helped drive down demand for the metal. After testing the 50% level at $1158.60 and putting in a bottom at $1156.20, gold began to rally as the Euro plunged over 1%.

Speculators began buying gold as a hedge against a possible collapse in the Euro. The strong momentum late in the trading session could lead to a follow-through rally on Thursday. The only negative to the gold market at this time appears to be margin call selling. Should equity markets break sharply again, traders may have to sell gold to meet their margin calls in the equity markets.

Global equity markets are trading in a tight range overnight. On Wednesday, U.S. stock markets broke sharply lower after a steady opening as unrest in Greece led traders to shed risky equity positions. As we approached the mid-session, buyers stepped in to gobble up low priced stocks, triggering a massive short-covering rally that took the indices back to unchanged for a little while. Short-term oversold conditions could trigger a rally along with position evening ahead of this Friday’s U.S. Jobs Report.

The weakening Euro is putting pressure on energy prices overnight. On Wednesday, a drop in demand for higher risk assets and the possibility that a slowdown in the Euro Zone economy will lead to lower demand for energy helped drive June Crude Oil lower early in the trading session. Shorts began to take profits after testing a key 50% level at 79.17, but bottom pickers were unable to turn this market positive. If the break continues through 79.17 then look for a possible test of the Fib retracement level at 77.18.

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AARP Executive Vice President John Rother released this statement today following the release by the Centers for Medicare and Medicaid Services (CMS) of draft guidance for implementing the Medicare Coverage Gap Discount Program:

“The recently released draft guidance is a positive step towards bringing relief from skyrocketing prescription drug costs to millions of AARP members and older Americans in the Medicare Part D prescription drug program. This first step begins to close the drug coverage gap or ‘doughnut hole.’ Each year, more than three million people in Medicare Part D fall into the doughnut hole, resulting in many older Americans being forced to choose between either paying bills or skimping on pills.

“We are concerned, however, that the congressional intent to require a 50 percent discount for all brand-name drugs may be thwarted by a potential loophole in the guidance that tries to accommodate this year’s plan deadlines for bids. Millions of seniors are counting on relief in the doughnut hole in 2011—in the form of the discount—and they have been told it is coming. By potentially giving drug manufacturers the option in 2011 of not participating in the program to close the doughnut hole, we risk confusing people in Medicare Part D and greatly raising their distrust of how the program will be implemented. People will also be at risk of spending thousands of dollars in out of pocket expenses for their brand-name medications due to government deadlines that are beyond their control.

“AARP expects drug manufacturers will live up to their pledge to help make their drugs more affordable for the millions of older Americans who depend on them. We will keep a vigilant watch on prescription drug manufacturers, as well as CMS guidance, and will let our members and all Americans know of any manufacturer who fails to honor their commitment to help close the dreaded doughnut hole for people in Medicare.

“Closing the doughnut hole is an important achievement that will help millions of Americans in Medicare Part D and we applaud CMS for working to ensure that brand-name drug manufacturers participate in the discount program. We look forward to working with CMS, Congress and the Administration to ensure full compliance with the 50 percent discount provision in 2011.”

 (Source: http://www.aarp.org/aarp/presscenter/pressrelease/articles/aarp_expects_drugindustrytohonorcommitmentstohelpclosedoughnutho.html)

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DISCLAIMER: The AARP is in no way associated with the “AARP Advocate” weblog at Investrend Weblogs, and any viewpoints expressed and/or statements made in the “AARP Advocate” weblog at Investrend Weblogs may not reflect those of the AARP; And individuals who author posts in/for the “AARP Advocate” weblog at Investrend Weblogs do not claim, in any way, to be speaking on behalf of the AARP or to be representing the AARP.

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From the AARP: AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world’s largest-circulation magazine with over 35.7 million readers; AARP Bulletin, the go-to news source for AARP’s millions of members and Americans 50+; AARP Segunda Juventud, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

[advctaarp]

It’s kind of interesting that Brinker International (NYSE: EAT) announced that it was selling its “On the Border” chain of Mexican restaurants a few days before “Cinco de Mayo,” as Texas Roadhouse (NASDAQ: TXRH) joined Buffalo Wildwings (NASDAQ:  BWLD) and Panera Bread (NASDAQ: PNRA), in surprising analysts with less than rosy outlooks for the near future.

The stock market rallied on 5-3 behind a robust ISM manufacturing index and the heralded return of the consumer to the economic recovery. Yet, the data is backward looking, and more current information does suggest that a slightly different take is worth considering. And as the action on 5-4 showed, this is a fickle market.

We’ve been bullish for a while, but as we look around  we’re becoming skeptical about the ability of the economy to sustain its recovery without something more tangible to drive it, such as jobs, and less of a threat of higher taxes. Call us old fashioned, but there you have it.

Over the last few weeks, one of our running themes has been the relationship between the casual dining sector and the consumer. It’s fairly clear that when consumers are upbeat about their prospects, they dine out more often. Yet, lately, when things have seemed bleak, we had on many occasions scratched our heads about the large crowds in restaurants such as Texas Roadhouse and Panera Bread, among others.

In a piece here, on March 8, we noted: “it was a huge surprise when this scribe trucked the family to the Texas Roadhouse (NASDAQ: TXRH) in Mesquite at 5:30 in the afternoon, and the place was already packed with about thirty to forty people waiting outside and inside at any one time to get a table.” In April, we were in Wichita Falls, TX, and we visited another Texas Roadhouse restaurant. The crowd was still big, but it seemed to us that it seemed to thin out more quickly than other similar crowds we had seen at other shops from the same company.

Last week, Buffalo Wildwings told analysts that same store sales were likely to disappoint, and the stock fell, as did the rest of the casual restaurant sector. Now, after the bell, on May 3rd, Texas Roadhouse told analysts that “April comparable restaurant sales fell slightly,” and shares took a beating in the after-hours session.

Here is the issue. On 5-3, the market rallied on what it interpreted as good economic news, the consumer was back spending money. But a close look at the personal income figures shows that consumers spent their savings in April, and some analysts are saying that much of the spending boom in March and April may have been partially due to tax refunds, as well as employment benefits. If that’s true, then Buffalo Wild Wings, Panera, Brinker, and Texas Roadhouse are confirming what we noticed over the weekend, empty tables at restaurants that were full just a month ago.

And if the restaurants are empty, that means that consumers aren’t all that positive about things, which could mean that the rosy scenario painted by data from March and April, is just that, a rosy scenario that’s already passed us by, leaving the data behind.

Ask yourself this question.  If business was so good, why would Brinker International be selling its second high profile brand, On the Border, after it jettisoned the majority ownership in Romano’s Macaroni Grill in the past few months?

(Via: http://www.zangani.com/node/5813)

They tried to fit in at this year’s iGEM synthetic biology competition. They really tried. Piers Millet from the United Nations Office of Disarmament Affairs sported a white hoodie with an iGEM insignia that was slightly too tight. Beside him, Lindsay Hartmann, a Weapons of Mass Destruction analyst with the Federal Bureau of Investigation, wore nails painted black—the look of a rebellious college kid. The bracelet with charms of a badge, handcuffs, and gun, however, gave her away.

Around them, student competitors whooshed by before the next round of presentations inside the Massachusetts Institute of Technology Stata Center. Some headed for the cookies and juice trays. Some gossiped about the 11-year-old who made a liquid handling robot out of Lego bricks. A duo of artists working with a team from Cambridge shuttled around a suitcase of fake, neon-spotted feces—replicas, they said, of a digestive diagnostics tool from an imagined future.

(Read more at: http://www.the-scientist.com/2010/5/1/44/1/#ixzz0n9q3PTKB)

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