Looting Public Pensions

This is a follow-on attempt to get my reader(s) to take a look at the article in my previous post. Matt blogs about his article and neatly summarizes his own more detailed report (see link above):

Looting Public Pensions: A New Think-Tank Study

His summary:

There are really three main themes to follow in this pension scandal:

1) Many states and cities have been under-paying or non-paying their required contributions into public pension funds for years, causing massive shortfalls that are seldom reported upon by local outlets.

2) As a solution to the fiscal crises, unions and voters are being told that a key solution is seeking higher yields or more diversity through “alternative investments,” whose high fees cost nearly as much as the cuts being demanded of workers, making this a pretty straightforward wealth transfer. A series of other middlemen are also in on this game, siphoning off millions in fees from states that are publicly claiming to be broke.

3) Many of the “alternative investments” these funds end up putting their money in are hedge funds or PE funds run by men and women who have lobbied politically against traditional union pension plans in the past, meaning union members have been giving away millions of their own retirement money essentially to fund political movements against them.

My fraction of a cent to attempt to elevate this…

More sad news about the elite

Looting the Pension Funds
All across America, Wall Street is grabbing money meant for public workers

A rather sad article that details the hopeless stranglehold the elite have on the steadily shrinking middle class, but this time from the perspective of those hardy souls that work in the public sector. It used to be that the lifetime earnings of working in the public sector evened out when compared to the private sector (relatively meager salary, but nice pension for the public workers, nice salary but cruddy retirement for private sector), but now working in the public sector is just dumb, you get screwed now AND later. _EXACTLY_ like our federal government has robbed from Social Security and left nearly worthless IOUs, many states have done with their pension funds. Now, rather than admitting their part in the shell game, governments are now forcing these poor public workers to take it in the ass as their pensions are cut, sometimes by 50% or more (and try living off of $2K a month BEFORE that gets cut in half!). And, to add insult to injury, the states are now ‘investing’ their money into hedge funds that are taking the money and spending it on PR and politicians to further erode the pension to begin with. But hey, the rich keep getting richer from tax payer dollars, that is all that is important!

Why these dumb-assed tea party morons can’t see this is beyond me.

Low crime tax

6 shocking revelations about how private prisons make money
Private prison companies are striking deals that guarantee high prison occupancy rates

I have talked about the prison industrial complex a time or twain before so this won’t be news to my regular reader(s), but I figured it wouldn’t hurt to slide it in for a bit of repetition. Here are the revelations for those of you who won’t take the time to read the article:

  • 65 percent of the private prison contracts ITPI received and analyzed included occupancy guarantees in the form of quotas or required payments for empty prison cells (a “low-crime tax”). These quotas and low-crime taxes put taxpayers on the hook for guaranteeing profits for private prison corporations.
  • Occupancy guarantee clauses in private prison contracts range between 80% and 100%, with 90% as the most frequent occupancy guarantee requirement.
  • Arizona, Louisiana, Oklahoma and Virginia are locked in contracts with the highest occupancy guarantee requirements, with all quotas requiring between 95% and 100% occupancy.
  • Though crime has dropped by a third in the past decade, an occupancy requirement covering three for-profit prisons has forced taxpayers in Colorado to pay an additional $2 million.
  • Three Arizona for-profit prison contracts have a staggering 100% quota, even though a 2012 analysis from Tucson Citizen shows that the company’s per-day charge for each prisoner has increased an average of 13.9% over the life of the contracts.
  • A 20-year deal to privately operate the Lake Erie Correctional Institution in Ohio includes a 90% quota, and has contributed to cutting corners on safety, including overcrowding, areas without secure doors and an increase in crime both inside the prison and in the surrounding community.

Ain’t it great that taxpayers provide so much to the rich and powerful! So sad that they can’t get by on their own resources and need so much help, but we are a great country and we help out those who are in need.

The Shadow Knows!

The True Size of the Shadow Banking System Revealed (Spoiler: Humongous)
The shadow banking system is vastly bigger than regulators had thought, say econophysicists who have developed a powerful new way to measure its hidden impact

Evidence for shadow banking

I have read a few articles on the ‘shadow banking’ system before and this fits in with what I recall. The graph above refers to a common phenomenon seen in natural systems where there are size progressions that are powers of ten (the largest entities tend to be 1/10th as numerous as medium sized entities which are 1/10th the number of smaller entities, etc.). Plotting banking against that scale shows a rather interesting drop off in the linear relationship indicating that the measurement system is not keeping up with the reality (meaning that there is, indeed, a larger number of ‘banks’ in the system that are unaccounted for):

These guys begin with empirical observation that when economists plot the distribution of companies by size, the result is a power law. In other words, there are vastly many more small companies then there are large ones and the difference is measured in powers of 10. So not 2 or 3 or 4 times as many but 100 (10^2), 1000 (10^3) or 10,000 (10^4) times as many.

These kinds of power laws are ubiquitous in the real world. They describe everything from the size distribution of cities, websites and even casualties in war.

That’s not really surprising. A power law is always the result when things grow according to a process known as preferential attachment, or in common parlance, the rich-get-richer effect.

In economic terms, big businesses grow faster than smaller ones, perhaps because people are more likely to work with big established companies. Whatever the reason, it is a well observed effect.

Except in the financial sector. Fiaschi and co say that this power law accurately governs the distribution of small and medium-sized companies in the financial world. But when it comes to the largest financial companies, the law breaks down.

Note that this ‘shadow banking’ system is estimated to comprise of $100 trillion dollars (looking at the GDP of the world’s countries, it is, in aggregate, less than $100 trillion dollars. Also quite interesting:

Of course, there is an 800lb gorilla in the room. That’s how these financial companies come to be so huge in the first place. The global economy is dominated by financial firms. On the Forbes Global 2000 list of the world’s largest companies, the first non-financial firm is General Electric, which ranks 44th.

Why is that, do you think? Exactly what contribution does moving all this money around (and around (and around)) serve society? It is a massive three card Monte with the world as the mark, or heads they win, tails we lose. Reversing that trend is probably impossible and much of this trend has been with us throughout history. I think the shadow banking system has stepped too far out from the shadows this time (I think that happens periodically when they get over confident), but I am not sure that there is anything that can be productively done against them without causing that segment of the world to have a huge depression (manufactured, of course, by the system).

Breakfasts of champions

Myths Surround Breakfast and Weight

I am also guilty of repeating this concept. I do know that your glycogen levels are at their lowest in the morning (which is why that is the best time to exercise, your body has to use fat to keep going) and that your body is reluctant to switch over to burning fat, so I was easily convinced that eating breakfast would cause your metabolism to increase (to digest the meal) and then remain higher, so you have a net reduction in calories (calories consumed minus calories burned) by eating breakfast. However, it seems that I am guilty of jumping to conclusions, this article takes pains to point out that the little bit of evidence from controlled experiments indicates the exact opposite: that the reduced metabolism is not reduced so much that it overcomes the increase in calories of the breakfast. I would be curious to see an experiment done where pre-breakfast exercise was included, but such is increasingly unlikely, I think, given the budget cutbacks and that no cereal company would sponsor such.

The next ice age cometh?

And now it’s global COOLING! Record return of Arctic ice cap as it grows by 60% in a year

  • Almost a million more square miles of ocean covered with ice than in 2012
  • BBC reported in 2007 global warming would leave Arctic ice-free in summer by 2013
  • Publication of UN climate change report suggesting global warming caused by humans pushed back to later this month


They say a picture is worth a thousand words, this one really exemplifies the case:

North pole ice increasing by 60%

I babble about global warming from time to time as a ‘skeptic‘, but it seems to me that there is increasing hard data that show things are failing to perform as expected. Given that models are well-known to be nearly worthless (largely because chaos theory practically requires them to be incapable of functioning when we can’t accurately measure the starting conditions or adequately quantify all the changing variables), it is quite amazing to me how quickly people have jumped on the end-of-the-world band wagon (though I babble about the apocalypse all the time so I shouldn’t be the pot calling the kettle black). Models are great in an academic sense and certain models can identify broad trends that occur much of the time, but models tend to be nearly worthless at specifics. Sure, we can posit that in the long run the increase in CO2 will cause a higher level of global temps, perhaps even several degrees, but that is over the course of thousands of years. In the shorter term (centuries) other weather oscillations might totally cancel out (or reverse!) the long-term trend, for periods of decades or longer.

Don’t forget: the long-term (next 10,000 years) we are slated to go back to our ‘normal’ climate of an ice age. That is almost a certainty since that cycle has been well documented to be based on solar system-wide cycles, so we might soon wish we has ‘too much’ CO2 in our atmosphere. We certainly don’t want to sequester any CO2 too well!


I was over at http://xkcd.com/, prompted by a link from a comment at a blog I follow, when I decided to catch up on the ones I haven’t seen yet. Many interesting ones, but this one stood out and prompted me to make this post:


The last week has been ‘interesting’. A week ago last Friday I got “the call” that told me that (presuming the powers-that-be honor that commitment) I have until the end of Oct to find a new job. The exciting life of a contractor! I have a couple of promising leads so far, but given the agency’s push back on our inflated salaries (if they would clear more people that problem would resolve itself automagically) it is mostly about how small a pay cut I am forced into rather than keeping the same pay or increasing it. That would be so much easier to deal with if we didn’t automatically increase our spending to match our income, but such is life, eh?

Regarding the greenhouse/pool, we are pretty much done with the framing and have the plumbing roughed in and now are starting on wiring. Regarding the plumbing, we have an interesting problem: when pressurized with air the system leaks in places we can’t identify (going from 85 PSI to nada overnight). Because the bubble test wasn’t locating the leak I put water in the lines (the system is currently isolated from the rest of our plumbing) to see if we could see a leak that way. Overnight, guess what? The pressure went from 85 all the way down to 84. It seems there really is a leak, but we can’t find any wet spots. When we left yesterday the pressure had dropped down to about 81.5 (hard to be precise as there is a bit of parallax when viewing the gauge), still no signs of leaking water. Next weekend should be interesting, but my real worry is we have zero pressure and no signs of water.

I have been considering crowd funding for my DNA research, but can’t get past the idea that this is the wrong time to publicize my efforts. It is well-known that if you generate too much enthusiasm for your product-to-be before you can sell your product you do more harm than good. If the posited customer base really is there then you reveal it to competitors (who generally have deeper pockets) who now are incentivized to move into the market. On the other hand, if you _fail_ to get the expected consumer interest, you now have made an even larger headache if you try to find investors later on. As such I am likely to drop that line of approach. Though I abhor the idea of promoting the idea publicly (I have nothing but a bad taste in my mouth from my last foray into publicly discussing my project ideas, maybe I will blog upon that some day), and this argument could be just massaging that prejudice, I do think in this case keeping my mouth shut might pay off going forward. I do, though, have a big company that is thinking about purchasing my IP, but that company moves in slow motion and will probably want to really low ball any offer. Unless they want to negotiate, I am not expecting to get anything meaningful from them when they finally do get around to making a decision.

Not much else going on (and not being grabbed by anything I read on line), hence the dearth of posting. Sorry to let all my reader down…