Monthly Archives: February 2012

PHYS/PSLV Underwriters Steal $3M+ From Shareholders

This story was interesting. The PHYS gold fund recently issued more shares, via a “secondary offering”. The underwriters exercised a 3M share “green shoe” overallotment option. This robbed the other PHYS shareholders. Do you understand why?

There was a similar 3.5M share overallotment option for a PSLV secondary offering. This also robbed the other PSLV shareholders.

There is a difference, between GLD and PHYS. GLD is an ETF. During the day, market makers buy or short sell shares of GLD. They usually hedge with short or long gold futures. At the end of the day, the market makers can redeem shares of GLD, covering their short hedge. The market markets can trade in gold futures for new shares of GLD, covering their ETF short. This arbitrage process guarantees that the market value price of GLD should stay close to the Net Asset Value (NAV) of GLD.

PHYS is a closed-end fund. There is a fixed number of shares. There was an IPO when the PHYS fund was created. Periodically, the PHYS manager Sprott issues new shares. A corporation can have a “secondary offering” to raise capital. Similarly, the PHYS fund can have a “secondary offering”.

The shareholders of PHYS and PSLV have the right to redeem shares, for gold/silver or cash. This guarantees that the market value of PHYS and PSLV will never be lower than the NAV.

However, PHYS and PSLV can trade at a premium to NAV. The shares are worth whatever people will pay, just like any other stock.

There is a valid reason to prefer PHYS to GLD. If you’re investing in a taxable account, GLD is taxed at the gold collectable rate of 28%. (There may be mark-to-market capital gains every year. I was confused about that bit of tax law.) PHYS is taxed at the long-term capital gains rate of 15%. It’s worth it to pay a slight premium for PHYS, for the more favorable tax treatment.

For GLD, there’s a loophole in the fine print of the fund prospectus. The GLD fund manager may lend gold to short sellers. If there’s a default, GLD shareholders are stuck with the loss, and not the fund manager.

PHYS claims to have 100% full reserves, stored in a vault in Canada. As a practical matter, either GLD or PHYS may defraud people. That’s a risk of any paper gold investment. The PHYS fund structure is more fraud-resistant than GLD, because PHYS claims to be 100% full reserve. With paper gold, GLD is the usual fractional reserve banking scam.

With PHYS and PSLV, the share price may be a premium to NAV. For PSLV, the premium was as high as 30%. For PHYS, it was a couple of percent.

The fund manager Sprott had a “secondary offering”, exploiting the huge premium to NAV. More shares were created, via a “secondary offering”. The shares were sold for a premium to NAV, but a discount to the latest market price. This enabled Sprott to profit the difference. They bought physical gold for the spot price, but collected spot plus premium when selling shares.

The investors in the “secondary offering” also profited. They sold at the market price but bought at the “secondary offering” price. The “secondary offering” is also an opportunity for market makers profitably cover short hedges.

The most evil part was the “green shoe”. Whenever there is an IPO or “secondary offering”, the underwriter gets a “green shoe”. The “green shoe” is an option to buy more shares at the offering price. The underwriter gets 30-90 days to decide whether they want to exercise the “green shoe” or not.

This call option is valuable. The cost is paid by other shareholders, in the form of dilution of their ownership.

A one-month at-the-money call option for GLD is worth approximately $5 per share. PHYS has a share price worth 1/10 that of GLD, making the “green shoe” options worth approximately $0.50 per share. Similarly, the “green shoe” options for PSLV were worth approximately $0.50 per share.

The “green shoe” for PHYS was 3M shares. That’s $0.50*3M = $1.5M stolen from the other PHYS shareholders. The “green shoe” for PSLV was approximately 3.5M shares. That’s another $1.5M+ stolen from the other shareholders.

Even if PHYS and PSLV delta-hedge the “green shoe” option, they still lose an amount equal to the hedging cost. It can get expensive to hedge a small-duration at-the-money short call option. You buy high and sell low if the underlying bounces around the strike.  (in fact, the underwriters are probably delta-hedging their call option.  If PHYS was also hedging, they were literally trading with the underwriters.)

PHYS and PSLV are closed-end funds. Shares can trade at a premium to NAV. Sprott and the banksters profit from this spread. They create new shares at a cost of NAV, but sell them for a premium to NAV. In the process, shareholders who paid a premium to NAV are diluted. The premium to NAV decreases when shares are issued, stealing from shareholders who paid a premium to NAV.  Even worse, the “green shoe” is a free call option to the underwriters, paid by the other shareholders.

The conspiracy theory is “Sometime in the next 5-15 years, there will be a default on a big PM fund.” With GLD, you can get robbed, because GLD holds paper gold and not physical. There is the possibility that the PHYS trustee would lie.  Being “audited” is no guarantee against fraud; MF Global was audited.  Even if the PHYS fund is honest on the 100% reserve part of the prospectus, you still lose storage fees. Even worse, you pay a premium to NAV but get diluted via “secondary offerings”. The “green shoe” is another way that underwriters rob PHYS/PSLV shareholders. The cost of the call option dilutes other shareholders.

The best gold and silver investment is physical delivery, hidden someplace safe. No matter what paper gold investment you choose, you will get robbed.

TJ Lane (Ohio School Murderer) Was Probably Taking Psychiatric Drugs

This story was interesting. A high school boy, TJ Lane, brought a gun to school. He shot four people and killed one.

I’m 99%+ convinced that TJ Lane was taking psychiatric drugs at the time of the murder. Look at this photo.

Look at those veins on his arms, especially his left arm. That’s an indication of heavy psychiatric drug use. I’ve seen it enough times to be mostly convinced.

In the mental health clinic, many patients are so heavily drugged that they’re shaking all the time. A clueless psychiatrist would say “That’s a symptom of their illness.” It’s obviously a side-effect of the drugs. I am fortunate. I’m taking a low dose of Seroquel, which seems to be helpful.

I read that psychiatric drugs are frequently a factor in murder-suicides, especially antidepressants. Many policemen know this, but the mainstream media doesn’t cover it. TJ Lane probably intended to do a murder-suicide, but was captured alive.

That aspect of the story will almost definitely not be disclosed. “What prescription drugs was TJ Lane taking?” That will be covered up, to protect the interests of the pharmaceutical cartel. Any drug TJ Lane took in the past 6 months is partially responsible, due to withdrawal.

There was another interesting aspect to the story. TJ Lane had a Facebook page. There was one writing sample quoted.  It seemed a lot like the writing of Anders Behring Breivik. It had the same sense of emptiness. Maybe there is an identifiable pattern here?

It is wrong to place 100% of the blame on TJ Lane, but he does get most of it. Some of his teachers should have noticed “TJ Lane is very disturbed.” If teachers had greater emotional awareness, they might have been able to prevent the murder.

It would be much more effective for teachers to have high emotional awareness, than to have metal detectors. Putting metal detectors in schools is treating the symptom, and not the problem.

There was another disturbing evil fnord in the mainstream media coverage. TJ Lane was quoted as a “gunman” and not a “murderer”.

“Gunman” is an evil fnord word. It implies “Any non-policeman who carries a gun is a criminal.” By itself, carrying a gun is not evil. It’s what you use it for. People are brainwashed to panic, whenever they see a non-policeman carrying a gun. This leads to problems, even in states where open-carry is legal. Most people don’t open-carry. The police like to harass people who open-carry, especially someone who’s going to refuse an “illegal search”.

I am 99%+ convinced that TJ Lane was taking psychiatric drugs before the murder. Those veins on his arms are a strong indication; I’ve seen it too many times. Will that aspect of the story be mentioned, or suppressed? Even if someone goes on TV and says “TJ Lane was not taking any drugs before the murder!”, that would only convince me that the speaker is lying. Those “drug arm veins” are a strong indication of heavy drug use.

Reader Mail – 02/19/2012 To 02/25/2012 – Gold Bubble?

Note: Due to a defect in the rawr plugin, the formatting for this post shows up wrong on the blog homepage, but it does show up correctly if you view it as a single post or in a RSS reader.

There was one interesting discussion about "Is there a gold bubble?" I say "No. There is no gold bubble. It's merely high inflation and hyperinflation."

If you invest in physical gold and silver, your inflation-adjusted return should be 0% minus transaction costs and storage costs. The bad news is that's the best investment available. In the stock market, you get ripped off by crooked CEOs. In the bond market, you get ripped off by inflation. With real estate, you get ripped off by property taxes. Gold and silver literally are the best investment.

FSK is a retard commented on node.js Is VB6 - Does node.js Suck?.
Wow, Maybe you are just a retard that can't understand anything not written for retards.

Anyone who thinks PHP is a good language is clearly a retard since PHP was created by amateurs who built up a disjoint language full off illogically put together features, bugs and security flaws.

The fact you can't understand Ruby and Javascript, two simple and easy to test and maintain languages says it all.

Actually, saying you can't deal with calbacks shows you are single digit IQ retarded.

You are not intelligent, you are like Michelle Bachmann or Rick Perry, too stupid to know they are stupid.

If you're a typical person who likes node.js, then it's obvious that everyone who uses node.js is a twit.

Tincup commented on Facebook IPO - Pump And Dump.
Good article. But I wanted to add a couple points. Might gold also be yet another pump and dump scheme? I don't think gold is a useful substance. I want to call your attention to a guy named Mike Stathis at AVA Analytics. Read a few of his articles with an open mind and then re-consider your stance on gold. In short, he believes the dollar is tied to oil and commodities given the USD is the currency used worldwide or these trades. Oil and commodities have use as opposed to gold. Mike thinks gold is just another pump and dump ponzi scheme.


I also encourage you to read Mikes thoughts on the Face Book pump and dump. He is a very informed finance expert and makes very interesting arguments. He goes so far as to say the whole social media sector is in a bubble and is in and of itself a pump and dump. There are five parts to his articles. I will just post the link to the section of his firm's website that contains these articles. Take care and good post.

Oh boy! Not this subject again!

I strongly disagree with "There's a gold bubble." Actually, that's the true inflation rate, 20%-30% per year.

Here's a good link. If you look at "gold divided by national debt", there is definitely *NOT* a gold bubble.

I believe that gold/silver/platinum will outperform almost all other investments over the next 10+ years. If you look back 10 years, gold has *CRUSHED* the stock market by nearly 1% per month. Even if you overpay by 20% for gold, you still should outperform over 10+ years.

With stocks you get earnings and (maybe) a dividend. However, there's all the fraud/waste/corruption associated with a large corporation. With stock, the CEO gives himself huge share grants, diluting your ownership. Unfortunately, the fraude/waste/corruption is greater than the value of the earnings, making the stock market a losing proposition. The only people who really benefit from owning a public corporation are the CEO and other insiders.

The is more misinformation for gold and real money than almost every other subject. I'm offended when State shills like Warren Buffet trash gold and hype the stock market.

Tincup commented on Facebook IPO - Pump And Dump.

Thanks for your reply. I enjoyed your discussion of Facebook, which is why I am confused that you don't find the same type of mechanism being used to pump up the sheep to buy more gold. I am not going to claim I am an expert financial advisor and know for certain gold is merely a bubble, but I will make a few points some of which are philosophical and some which are grounded in the status quo realm of thought or "reality". But I do urge you to at least read the article by Mike Stathis (link below) which deals in the realm of "reality". You can find part 1 and part 3 of the article if you search his site. I must say, I have read articles from many financial "experts", but I am really impressed with what I have read from this guy thus far.

First, let me establish a small piece of credibility. I have worked for Fortune 500 companies for over a decade in finance (not the finance industry) and I have firsthand knowledge of the crap that goes on within companies to ensure executives get their nice bonus and stock options. I should know, I enjoyed those perks too. But now I am unemployed and have been so for quite some time. I look upon the whole financial and economic system in its current corrupt form as nothing more than a grand Ponzi scheme. For the record, I began to observe this when I was fully employed so it isn't bitter feelings that have motivated my point of view, but bitter feelings are coming out in the form of blogging about what I believe in regards to the economic Ponzi scheme. Some of my rants are aimed at the status quo, and some of my points of view fly off to space in the realm of philosophy.

Now, I assume you read Mike Stathis's article above. He deals with reality, but I am going to go off on a philosophical path to make an argument against gold. Gold may have made some sense from an investment perspective when it was tied to currency. There is a limited amount of gold therefore if paper money is tied to this scarce item the idea of value could be constructed by simple supply and demand dynamics. This paper money tied to gold is useful in that one can buy necessities and nice things to have via transactions. But, as soon as man developed the idea that he could simply print more money regardless of the amount of gold on hand this concept was violated and thus man invented inflation and learned of its devastating impacts. And eventually, man simply abandoned the linking currency to gold all together. Therefore, gold is simply valued for being a precious medal.

But from a philosophical level, what good is gold? What can it be used for? In of itself it can be molded and transformed into nice aesthetic things like chains, bracelets, and other forms of jewelry. It is nice to look at like as are other precious metals and stones, but what use does it really have? Can one drink or eat gold? No. And if we enter a crisis like many of the gold dealers push as a reason to buy gold, what do you think will be in demand? Well, the same things that the U.S. dollar is currently tied to and traded with in the world-wide market -- oil and food commodities. You would be better off stocking up on oil, gas, water and food than you would gold.

Now back to reality. Have you seen all those television ads promoting gold? You made fun of media ads pumping up Facebook (and I agree with you), but you must admit that gold ads are just as bad. When I watch those ads I tell myself the last thing I would do is buy gold. And, if you read Mike's article you will realize that saying gold has quadrupled in value would be misleading as inflation isn't part of the equation.

I have put Mike on a pedestal and I am willing to listen to your arguments. I haven't clicked on that link you provided but I am going to do so now.

OK, I read that link. I was not impressed. I've read a lot of blogs. I'm very good at judging an article just by a brief glance.

He's made a common pro-State troll fallacy, regarding gold. "All gold investors are idiots! 1980! HAHAHA!!" I've heard that lie so many times it's disgusting.

There are serious differences between now and 1980. In 1980, the Federal Reserve was serious about fighting inflation, jacking up interest rates. Now, the Federal Reserve is keeping interest rates at 0%, inflating like gangbusters and bailing out the banksters.

In 1980, the world's central banks owned most of the gold. After the spike in 1980, they adopted a policy of gradually selling gold to suppress the price. Anytime the price of gold rises, a central bank sells a huge chunk of gold. They have much less gold reserves now, making it harder to manipulate the price.

In 1980, a CEO was somewhat serious about making returns for shareholders. Now, CEOs grab as much as they can via option grants and share grants. That's why gold is much better than stock.

He also said "If you time the market right, you can outperform a buy-and-hold investment!" That's a lie. If you believe that, go ahead an gamble your savings away to banksters. "You can time the market!" makes as much sense as "If you make the right bets, you can win at roulette." A buy-and-hold index fund investment is a ripoff, losing to inflation. The best gold investment is taking physical delivery and hiding it someplace safe.

Groups like GATA claim there's a conspiracy to keep the price of gold down. Zerohedge also has some good bits. They point out when futures exchanges raise/lower margin requirements, manipulating the price. (On zerohedge, not all articles are written by the same person. There's some great stuff and a lot of nonsense.)

I once performed a "historic volatility" calculation for gold. I expected that gold would have nearly the same actual volatility as silver. Gold had much lower actual historic volatility then silver. That is evidence that gold is manipulated. Bubbles tend to have high volatility, not low volatility.

As the MF Global disaster indicated, the paper futures market can't be trusted. If you trade futures, you're risking that you'll get Corzined out of your investment. The real price of gold and silver may be higher than the "official" paper price.

Sometime in the next 5-15 years, there will be a default on one of the big PM funds (GLD, SLV, or another). That will cause a spike, when people switch from paper to physical. The conspiracy theory is that GLD and SLV are one big con. People are tricked into buying paper gold instead of physical. If you read the fine print of the GLD prospectus, they may lend out their gold to short sellers.

If you buy physical, your inflation-adjusted return should be 0% minus transaction costs and storage costs. Unfortunately, that's the best investment out there. In the stock market, you get robbed by crooked CEOs. In the bond market, you get robbed by inflation. With real estate, you get robbed by property taxes; via property taxes, you don't actually own real estate. Physical gold/silver/platinum is the *ONLY* investment where you get full allodial title.

The gold/silver ratio is around 50, close to the 20 year average. That is evidence for "no gold bubble".

Platinum used to be around 20% more than gold (per ounce). Now, gold is slightly higher than platinum. By that reasoning, gold is at most 20% overpriced. Even if you overpay 20% for gold, gold has been outperforming the stock market by nearly 1% per month! Even if you overpay by 20%, you'll be even with other investments in 2 years.

Also, if you look at a 10 year chart of gold/silver/copper/platinum, they track each other pretty closely.

There's another trick, to minimize your risk of exposure to bubbles. Dollar-cost-average. Buy an equal amount of gold every few months, rather than one big purchase all at once. That minimizes the risk that you will buy at a local maximum.

Even though gold is the best long-term investment, it certainly is possible that gold could go down 20% or even 50%. I would view that as an opportunity to buy more at a discount, rather than proof that all gold investors are idiots.

As another argument, if you look at prices 100+ years ago, quoted in gold, they are mostly unchanged. For example, a model T car cost about 20 ounces of gold. You can get a new car for less than 20 ounces of gold now. Gold preserves its purchasing power over time. For all good where there's a reliable 100+ year old price, gold has preserved its purchasing power.

The ads for Goldline *ARE* a ripoff. Most gold dealers that advertise on TV *REALLY ARE* con artists. They are selling "collectable"/numismatic coins, at high premiums to spot metal. That doesn't automatically mean that all gold dealers are con artists. There are respectable dealers like APMEX and Kitco. You should never pay more than a couple percent premium to spot, for gold and silver.

Here is another example, reconstructed M3. Reconstructed M3 is increasing by 20%-30% per year, which is very close to the rate of gain for gold. Also, "reconstructed M3" probably understates true inflation.

Gold isn't a bubble. Gold/FRNs is going up by 20%-30% per year, BECAUSE INFLATION REALLY IS 20%-30% PER YEAR. It isn't a gold bubble. It's dollar hyperinflation.

I don't understand why you're so eager to convince me. I'm pretty sure that gold is not in a bubble. Gold is an accurate measure of inflation. True inflation really is 20%-30%+ per year. In fact, I'm more likely to believe "Banksters conspire to keep the price of gold down!" than "Gold is in a bubble!"

Tincup commented on Facebook IPO - Pump And Dump.

Thanks for the thoughtful reply FSK. I liked your comment about CEO's in the 80's. My dad rose from dockworker to CEO for a Fortune 500 trucking company. He cared about the company, the people that worked there, and was a relatively good man compared to what you see today. And there are many stories he told us at dinner that taught me more about business than any educational program could ever accomplish.

I am not trying to convince you that gold is a bad investment. I am just exploring different points of view. But you did mention that if you had 20 ounces of gold one-hundred years ago you could buy a Model-T Ford and with 20 ounces of gold today you could buy a new car. This example shows that gold is safe maintains its purchasing power, but it really doesn't build wealth as an investment. You could buy a car with it 100 years ago and you can still buy a car with it today. So, if you are looking for a safe investment simply to maintain purchasing value perhaps that is a good argument. But, I wouldn't look to gold for big gains. Gold would be nice to have if market and economy collapses and perhaps nice to have if you are rich and want to diversify your portfolio.

I did say that, the expected return of a gold investment is 0% minus costs. The bad news is that's the best investment out there. Due to rampant corruption, a buy-and-hold physical gold/silver/platinum investment really is the best option.

I recently worked at a large financial institution, as a consultant. My coworkers thought I was really effective and really knew my stuff. I realized "Even if I work here for 20 years, I have zero chance of getting promoted to vice president, even though I clearly know my stuff very well." That was disappointing. My contract ended and I no longer work there.

There definitely are fewer opportunities now compared to 20 years ago. I'm not in the "management career track", even though I'm a really good computer programmer. I'm way overqualified for a grunt programmer position, but I don't have the experience to get anything better.

Rose commented on Whitney Houston Drug Coverup.
I have arthritis, and I was put on so many prescription drugs by various doctors that I believe it was bad for my health and maybe even dangerous. I carried the full list around with me to each doctor I saw and expressed concern at the number of drugs and the lack of results. Rather than searching for the real cause of my problems, most doctors just added more drugs to the list. I had to figure out for myself which ones were necessary and which ones were not. No sick person should have to sort through dozens of presciptions and try to figure out which ones are needed! I am down to a half dozen prescriptions now, and finally have a correct diagnosis. Things could have gone way differently for me if I had trusted the over-prescribing doctors. I had to visit a dozen or more specialists to get proper treatment! For profit medicine is just plain wrong, everyone who made a buck off me being misdiagnosed and over medicated is in the wrong, medicine is supposed to help people, not hurt them to make a fast buck. Poor Whitney, I have no doubt her doctors are at least partially to blame for her early demise. Yet the doctors will retire in luxury!

For-profit medicine is not inherently evil. It's only evil when combined with the State. The State restricts the supply of doctors. The State restricts permissible treatments, promoting drugs at the expense of other things. The State regulates insurance.

That's a common fallacy. "Free-market X is evil!", while the evil in X occurs in collusion with the State.

I agree that patients should push-back and refuse drugs that aren't helping.

It took me more than 10 psychiatrists and several hospitalizations, before I found one who tried Seroquel. It's much better than the other drugs that were forced on me. If I hadn't refused the other drugs, I never would have had the opportunity to try Seroquel.

Anonymous Coward commented on I Didn't Get Paid For My Sick Day!.
A stable job with an acceptable salary is worth more than an unstable job with a higher salary. Or a job with a manager that drives you mad. Or back-stabbing co-workers. Or idiot co-workers that destroy every software project they touch.


I've had jobs where at the absolute minimum I've worked 50 hour weeks. Quite often working 55 - 65 hour weeks.

Unlike in the USA, back in the days when I was a recent graduate, starting salaries for computers programmers could often be quite low - in fact very low.

I started programming for a hobby in my teens. I did a very large programming project at university. So when I left university I actually had a lot of programming experience and even published software titles.

However companies discarded all the experience I got working for myself as they only consider working in company jobs! A lot of employers said they only take on people with 2 - 5 years experience.

So the only job I could get in a reasonable amount of time was a job paying a low salary. And for a company that boasted they had as customers a huge percentage of investment banks around the world. They had even won Export Awards. Within a few months my manager realized I was actually good at my job and my working week suddenly became a 60 - 65 hour working week. But my salary stayed crap.

I was a fool. I left to get another job. They said there would be a company pension but they lied. At the time that rankled. They delayed putting my salary up and so I left for yet another job. That was stupid. The company actually got the equivalent of several million dollars as an advance for the work I was doing a huge percentage of. It is stupid when an employee leaves a wealthy company just because the directors are too stupid to pay at least proportional to the hours work. At my second job, I worked at least 10 hours a week more than all the other people I shared an office with. But I actually got paid the least amount of money. Because I was doing an important project, the director in charge of me made it difficult for me to get any vacation time off at all. The guy that sat next to me actually took off more than his allowance of vacations.

It was really horrible working long, long hours and getting paid crap. So I know what you mean.

Later on in life, a couple of companies straight out cheated me out of thousands of pounds and dollars (I've worked in different countries).

But do make a properly informed and thought out decision. You may jump ship but your new job will just be lousy in different ways.

Don't expect to get everything from work. Get what you want in your evenings and at weekends.

It doesn't hurt to shop around. My current job is nothing special. I'm underpaid by 30%-50%.

For a direct comparison, my current job is much worse than my previous job. It's worse in terms of salary, interactions with coworkers, and overall work conditions. This definitely was a step backwards and not forwards, career-wise.

The vibe I get from my bosses is not "Wow! Mark really knows his stuff! We're glad to have him around!" It's pretty clear they don't respect me.

Anonymous Coward commented on I Didn't Get Paid For My Sick Day!.

In previous jobs, I've done more work than several co-workers put together. Yet, due to the stupidity of managers only paying similar to your last job, I actually got paid less.

A summary of my last moan here, is that my previous managers realized I was good at my job and gave me big, important projects that occupied sometimes 60 - 65 hours a week of my time. Yet, when it came to salary they were incredibly slow to fix things. In one instance I was doing a project that the credit card processing quality engineers (they were part of another, rather large, famous company) said usually a whole team would implement. They further added they were acquainted with the fact that single software developers do occasionally write whole systems and when they do the resultant solutions can be very high quality pieces of work.

So it was very stupid I left that job just because the directors got paid millions but were too stupid to pass anything of that on to me. I was living in an expensive city and was barely making living expenses.

Actually my work was very respect in my first two jobs. My work was also respected in my third job, although I got fired from that with about 40% of the work-force and the stupid employees were left behind. In political, nasty or stupid companies, good workers aren't respected.

Anonymous Coward commented on I Didn't Get Paid For My Sick Day!.

In my first job, I was contractual promised a pay rise after _x_ months of working there. I was told I was going to get a large pay rise as I was underpaid. Months rolled by and nothing happened. I was told my pay rise would be back-dated. Eventually I got a pay-rise but it was just a token amount. They even messed up back-dating it. I thought why should I bother working weekends and getting my software correct, when the idiots I was working for couldn't even bother to get back-dated salary properly worked out. I thought of all the weekends I had worked for "free" and they idiots were short-changing me.

Sometimes, more nasty political backstabbing occurs in a 10 person company, than in a large corporation.

For example, the other programmer was the sole programmer for a long time. Now that I'm there, he has less job security. He's less indispensable. That leads to tension. He isn't thinking "Wow! FSK is helping me and reducing my workload!" He's thinking "Uh oh! FSK really knows his stuff. I don't have any leverage with my boss anymore."

Ironically, the huge financial institution was the least dysfunctional place I worked at, in the past few years. I didn't notice any political backstabbing (although my contract did end). (I did suspect that some of my coworkers were sabotaging their software on purpose, so they could steal and launder money. I didn't say anything.)

Anonymous Coward commented on I Didn't Get Paid For My Sick Day!.

Couldn't you form an informal union with your co-worker i.e. if even one of you gets fired, the other one promises to resign or object?

When I was working in a small company, one co-worker deliberately didn't tell me things he did know. A few months rolled by and I heard him talking about the things, he told me earlier he didn't know about.

He then angled to be made a team leader and bizarrely his team only consisted of me. The directors knew this guy was lazy and not a software developer and they promoted him just to keep him happy (or shut him up). For the project, I was doing 99% of the work. The work he was doing was basically already done and he just needed to configure it. He actually couldn't write software at all. All he knew was mindlessly hacking lines of code and he couldn't even do that properly as he didn't understand C functions in any detail and wouldn't look anything up.

The directors were often overseas. So I had a team leader than wouldn't actually fight my corner and actually see whether I got my proper allowance of contractual vacation days and try to push for a pay rise to compensate me for all the hard work I was doing.

It was a recipe for disaster and I left. It was absurd I was working 10 - 15 hours a week more than anyone else in the office, but was paid the least.

I can't say enough how stupid this was as the company got millions of dollars as an advance for the work I doing. I was getting less than 1% (after tax) of the cash pile they were given. And then they would get even more when it was sold to their other clients! Very stupid.

If these people actually implemented my pay rise on time and allowed me vacation time when I wanted and actually gave me time-off if I had to work at the weekend (as they promised!), then I wouldn't have left. And pay should be proportional to the hours you work. It ain't rocket science.

Anonymous Coward commented on I Didn't Get Paid For My Sick Day!.

>The vibe I get from my bosses is not “Wow! FSK really knows his stuff! We’re glad to

>have him around!” It’s pretty clear they don’t respect me.

You misunderstand your position. It is not enough the directors get all the profit from the company, they have to be seen as the clever ones as well.

The manager is the clever one that does the brilliant design and architecture. The software developer is the stupid pleb.

Only you know that you do clever stuff. Maybe the manager knows as well, but he isn't going to say it out loud.

Anonymous Coward commented on I Didn't Get Paid For My Sick Day!.

>The vibe I get from my bosses is not “Wow! FSK really knows his stuff! We’re glad to

>have him around!” It’s pretty clear they don’t respect me.

It took the Black Death in England before the medieval peasants got respect from the landowners and Lords.

Less competition for work meant the peasants could start negotiating for better conditions.

That is why your clown managers farm out work to other countries and why they have the non-immigrant work visas.

Why should we pay FSK a decent wage when we can get someone else for half the money?

Anonymous Coward commented on I Didn't Get Paid For My Sick Day!.

Seriously, don't jump to another job until you have found a good job. Hint: Lousy companies have the highest turnover and so do the most hiring. Statistically that means the hiring companies are the worst companies and by chance the scumball companies will suck you up first.

I have had low paid jobs in the past, hated being taken advantage of and moved to new jobs too quickly and so the pattern repeated again.

Bide your time and only change job when you have done your research and found the best job you can get.

Are all of these comments by the same Anonymous Coward? I'm not sure, because this UK AC's ISP gives him a non-static IP address.

My strategy is "look for a new job while holding on to my current one". I'm going to be more picky this time.

That is an amusing selection bias. The worst employers are always hiring. Also, the same unemployable twits are always looking for a job. (Some people will say I'm an unemployable twit. I say that I have a hard time working for evil scum, which unfortunately covers most employers.)

I shouldn't have let them lowball me on salary. They offered me just enough that I would have lost my unemployment benefit, if I rejected it. Also, it was the end of November. I probably would have been stuck until January/February if I turned it down.

Most job ads are for at least 50% more than my current salary. I'm making 20% less than my last job, where I was for 2 years without an increase. I definitely got lowballed.

I am getting .NET experience, which is nice. However, it was easy to learn. I don't understand why people demand specific language experience. They aren't demanding 50 hour workweeks, which is nice. However, I can hold out for another job with reasonable hours.

The two main owners are barely computer literate. They can't tell that I'm doing well. I'm getting hostility from the other programmer, who was the sole programmer for a long time. He's concerned that he's dispensable, now that I'm there.

Regarding "forming a union", the other programmer is much more interested in CYA and holding onto his turf, than making a stand. There is no way he would get a lead programmer job anywhere other than here. From my point of view, there are plenty of other employers willing to disrespect me for a below-market salary.

That is a problem. The other programmer isn't going to say "Wow! FSK is awesome! He's a great bargain!" He's going to try to make me look inferior, so he protects his turf.

For another example, I've been there 4 months, and they haven't given me the production server password. That's an insult. With only 2 programmers, I should be the backup for production support. The other programmer doesn't want me to have the production server password, because then he's replaceable.

The bottom line is that I'll do my best while I'm there. I'm looking for a new job. I'm placing myself back on the market. I'm going to be more picky this time.

The last two times I was unemployed, I was only out of work for 2 months, so I shouldn't be too concerned.

Justin commented on Reader Mail - 02/12/2012 To 02/18/2012.
Hey fsk I saw you are using open office. You should give lotus symphony from ibm a shot, its a free swt app, but it just seems snappier to me.

Really? I've used Lotus Notes as my work E-Mail client at two jobs. Lotus Notes is the only E-Mail client *WORSE* than Outlook.

I just spent some time figuring out how to get Open Office to do what I want. I'm not in the mood to try that again.

f commented on Reader Mail - 02/12/2012 To 02/18/2012.

I feel like there has been a definite, deliberate push against the internet recently.

>On Feb. 27, a diplomatic process will begin in Geneva that could result in a new treaty giving the United Nations unprecedented powers over the Internet. Dozens of countries, including Russia and China, are pushing hard to reach this goal by year's end. As Russian Prime Minister Vladimir Putin said last June, his goal and that of his allies is to establish "international control over the Internet" through the International Telecommunication Union (ITU), a treaty-based organization under U.N. auspices.

>[author] Mr. McDowell is a commissioner of the Federal Communications Commission.


Are you referring to ACTA?

The "official reason" is copyright infringement and "child pornography".

The real reason is to crack down on freedom of political speech.

China has a pretty harsh Internet censorship system. The "country-level Internet censorship software" is mostly written by US companies!

Politicians in the USA wish they could censor the Internet like in China. A hardcore prosecutor could say that my blog "advocates criminal activity", by advocating for agorism, boycotting the Federal Reserve and IRS. If I'm put in jail, that requires a due process farce. It'd be much simpler if prosecutors could seize my website without trial.

Once you have the ability to censor websites for "copyright infringement", it's very easy to extend the censorship to other things. A judge will say "We already have the ability to ban websites for copyright infringement. We can use that same process to block FSK, because we don't like him."

Another trend is "Websites are responsible for the content of users." YouTube, FaceBook, and Twitter would be allowed, but it'd become illegal to make a new website that competes with them. It might become illegal to make a new website that allows user-generated content.

Another trend is "Real names required!" FaceBook and Google+ require real names. I sometimes work as a financial programmer. It'd be risky for me to criticize the financial industry while blogging under my real name.

commented on Jeremy Lin Fnord.
Here's a good question for you. Have you checked out any of the Satanic Hollywood, Evil Movie Industry, etc. (there are a bunch of them under different titles, presumably from different YouTubers)? I was watching some the other day and it was scary as hell! But is any of it true? What do you think about this, and also, to make the question more general, what is your take on the conspiracy theories that everything is run by an ancient psychopathic/Satanic religion?

I haven't watch any of those specifically. Do you have a good link?

I have a more mundane explanation for the same outcome. Evil people will spontaneously cooperate and trade favors. I call then "pyschopaths". Almost every State leader has the same personality type as Bernard Madoff. This applies to politicians, CEOs, high-ranking bureaucrats, and other State leaders.

There are some honest-but-easily-manipulated people among the leaders. They are manipulated by the psychopaths to implement their agenda.

Here is my alternate explanation, to "evil Satanic cult". A bunch of evil leaders cooperating has the *EXACT SAME OUTCOME* as a massive coordinated evil conspiracy.

Bob Sala commented on Andrew Napolitano's "Freedom Watch" Cancelled.
I would disagree that Judge Napolitano stayed close to the limit of the debate ceiling. I was a regular viewer of Freedom Watch and one of the main draws of the show for me was just how much he seemed to me to raise the debate ceiling. Topics such as ending the Federal Reserve, opposing war in the middle east, and the general anti-big government sentiment expressed on the show was something that was not seen anywhere else on television. Sure, you could argue that he should have gone further, but compared to everything else on television, he was head and shoulders above everyone else when it came to raising that ceiling.

If it is someday possible to say the full truth on TV, it will be a result of people like Ron Paul and Andrew Napolitano pushing the limits.

I'm definitely arguing that he should have gone further. On the other hand, if he did that, he would be fired and wouldn't get to push the limits at all.

I never watched him, because he wasn't that interesting. He was on The Daily Show a couple of times, and didn't impress me.

Steve commented on Andrew Napolitano's "Freedom Watch" Cancelled.

It is very saddening to see yet another voice for freedom and liberty and constitutional guarantees be silenced by the powers that are rapidly taking this country down a path to fascism. We will miss you Judge. I hope you will find another venue to continue to tell the sheeple what is really happening to their country.

Anonymous Coward commented on Catholic Contraceptive Fnord.
Herein lies the truth.

commented on Larken Rose Still Thinks Like A Statist.
Have you considered putting up a PayPal donation button so you can try to make a living off of writing? Not saying that it would work, but it might be worth a try.

I considered it, and decided it wasn't worth it (yet).

I have approximately 200 regular readers. If they each gave me $5, that's only $1000.

If I put ads back on the site, I may offer an option for people to donate to hide the ads. Of course, you could use adblock Firefox extensions.

If you pay me via PayPal, you're using the State financial system. I'd be obligated to report the income and pay tax on it. It would be evil for me to solicit donations, if a huge chunk of it wound up going to the State.

I considered asking for people to mail me silver rounds. Is that legal? I looked it up, and it wasn't clear. I'd much rather have someone give me silver rounds, than pay me via the State banking system. I'd be concerned that, if someone mailed me silver, the post office would scan the envelope, and either seize it or treat me as a criminal.

Also, I'm not sure about how PayPal works. Would I have to give out my real name, in order to accept donations?

I wanted to create a PayPal account so that I could buy some games and stuff. My parents said no. Technically, I'm an adult, but I'm forced to do what they say as long as I'm living with them.

Remember the #1 rule of PayPal. USE A SEPARATE ACCOUNT FOR IT, IN A BANK YOU DON'T USE FOR ANYTHING ELSE! This way, if PayPal freezes and seizes your account, you only lose your PayPal account, and not your entire savings. Only leave the minimum balance in your PayPal account.

The most likely way to profit from my blog, is using it to start some agorist businesses. That is risky. Some of my regular commenters may be undercover State spies! There's spying software that creates multiple online identities. If you're a full time propagandist, it's easy to troll many blogs and spread lies, and pretend to befriend bloggers.

commented on Larken Rose Still Thinks Like A Statist.

Yes, the state controls the internet. The state created the internet. The internet is a creation designed to keep tabs on a couple billion people. It also happens to be a powerful learning tool.

Who cares about state spies? The state spies on everyone who turns on a computer or picks up a telephone. The NSA is jacked into the telephone companies. Privacy in modern society is a myth, and they don't need human beings to do the spying - machines do that for them. (not saying that there are not plenty of pro-state trolls spread out across the internet - there obviously are, especially in the comment sections of articles about Dr. Ron Paul).

Machines have given the state the power to do pretty much whatever it wants. Personally I think the state has existed in various forms a very long time, at least thousands of years. What we're seeing is just another incarnation of Babylon The Great Mystery, in my opinion.

Not that there's anything overtly wrong with that - I appreciate some aspects of the state. I also appreciate the free market theory - I call it a theory because I'm not sure we've ever truly seen one.

For me, the concept is relatively simple. People should be given the freedom to do exactly as they please, as long as they're not hurting anyone else. That means all drugs would be legal and the prisons would be half emptied. I think all censorship laws should be removed permanently so that citizens are forced to think critically about their decisions instead of having them spoon-fed by their "betters".

And most importantly, I think that privacy should be restored to all citizens. Whatever your take on 9/11, it's safe to say that it was either an inside job or blowback, perhaps a bit of both. Either way, U.S. citizens are 100 percent innocent and should not be made to suffer from draconian collective punishment at the hands of a borderline-sociopathic power structure that revels in the death and destruction of hundreds of thousands of brown people in the middle east (racism never went away, obviously).

Yes, you probably have to use your real name to open a Pay Pay account, but I think only Pay Pal would see it, not your readers (but don't quote me on that). I appreciate your dedication concerning the silver. I admit that I wouldn't really care - silver, paper, whatever pays my rent. I'm not very idealistic when it comes to that stuff. If the S. hits the fan, what are we supposed to do, drag around wheelbarrels of yellow metal?

In my opinion, the only thing worthwhile these days is original, critical thought, because it is being actively obliterated by the state. They seem to prefer a bunch of mind washed drones to actual human beings. I think they are mistaken. Any society, utopian or otherwise, requires criticism.

Sociopaths need "regular" people to peacefully counterbalance their reckless behavior with peaceful political dissent. Without that, the sociopaths will eventually turn on each other and level the entire planet (which according to some historians has happened before).

Each time they convince themselves that they don't need us around. They build it up and knock it down, over and over again. What they fail to realize is that us "regular" folks have consciences that may help halt their cycle of destruction.

And, conversely, sometimes we need them around. Not everything they do is totally despicable.

I think our country would be better if Dr. Paul was president. Could he really change that much? Probably not. But it would at least show that we have taken a step in the right direction (for a change).

I don't need evil people to tell me what to do. I can figure it out on my own.

That is one of the problems. Under "normal" circumstances, evil people are restrained by the honest people around them. In the present, evil people have managed to pretty nearly completely remove themselves from any accountability.

Anonymous Coward commented on Larken Rose Still Thinks Like A Statist.

In your post you talk about not expecting much from lawyers and trials.

In previous posts you have spoken about representing yourself if you ever find yourself in court and not using a lawyer, because they will sell you down the river and the lawyer won't make the arguments that you want to make.

Interesting I saw film Woody Harrleson film called "Rampart" yesterday. In the film his character is talking to the District Attorney and he says that if she files charges against him, he will represent himself, not use a lawyer and use the court case to talk about his time in Vietnam and go through all the disorders he has. He said afterward he will get his own talk show and invite her on as his first guest.

My point is that he is using as a threat the fact that he will defend himself in open court and so may say some embarrassing things and drag the case out, therefore costing the county more money.

He also said that juries only consist of the mentally deficient and so he would be found guilty!

Even if you represent yourself, you may not be allowed to tell the truth. The prosecutor and judge can bar you from mentioning certain things. If you disobey, that's "contempt of court".

Judges and prosecutors do get uncomfortable, when a defendant is saying "WTF? This isn't fair!" for the whole trial. No matter how pro-State brainwashed you are, it's uncomfortable when an honest person questions your lies. If you use a lawyer, he'll be arguing legal technicalities, rather than "WTF? This is wrong!"

Trials are expensive. That does prevent prosecutors from going after everyone. They go after the big fish, and then claim to get everyone who disobeys.

If it's $20k in tax evasion, it isn't really worth an expensive trial, unless you're a high-profile activist.

Open Pandora, PSP, or Android?

I’ve had my Android phone for almost 6 months. I have a Motoral Droid 3.

For blogging via the Jota text editor, it’s great. It’s easy to write text drafts and then copy them to WordPress.

For gaming and emulators, I have mixed results.

The best emulators are yongzh’s GBCoid (Game Boy/Game Boy Color) and GameBoid (GameBoy Advance). Those games were designed for a handheld. They work pretty well on my phone. However, the emulator does crash occasionally.

I haven’t had much success with other emulators. Adosbox doesn’t work on my phone. Adosbox seems like a dead project. I might buy AnDosBox.

Frodo64 and Vice64 don’t work for me.

Gensoid and Gearoid were OK, but I haven’t used them much. Cadash crashed a lot in gensoid.

Droid2600 was nice. I like the way they implemented paddles via the touchscreen. I had trouble with Droid800.

Mame4Droid is buggy. It’s based on an old version of the MAME core. It’s hard to play an emulator without save-states, when playing on the subway.

I tried SNESoid, and found it buggy. There is a for-pay SNES emulator. I haven’t used NESoid much. Even though I have a multi-touch keyboard, it doen’t work for games that require simultaneous keypresses. For example, the run+dash+jump combo doesn’t work in Super Mario Bros.

My Android phone works for blogging. It’s inadequate for gaming. I considered getting the Android SDK and fixing buggy open-source emulators, like adosbox. However, I don’t have much programming energy left after working.

If I spend 20 hours of my time fixing a buggy open source emulator, that’s almost equivalent to spending cash buying a better device, or buying one of the for-pay emulators. I’m considering buying andosbox and fpse.

I’ve seriously considered getting something else, and downgrading to a regular non-smartphone, when my Verizon contract expires.

Open Pandora is promising. It’s optimized for gaming, with controllers. It has a keyboard, so I could use it for blogging. There are some drawbacks.

First, it’s a bit pricey, around $500. However, that’s comparable to what an unlocked contract-free smartphone costs.

Second, it’s partially vaporware. They’ve only made a handful. They have a back-order, even for people who paid for a pre-order. They did start making another batch, but haven’t shipped yet.

Third, I wasn’t sure about the software catalog. For example, the latest MAME wasn’t ported to Open Pandora. That should be easy, because Open Pandora is Linux-based.

There aren’t that many Open Pandoras in circulation. That makes it less likely that software will be ported to the Open Pandora. It’s the “network effect” problem. If many people own an Open Pandora, there’s a greater benefit to buying one. If few people own an Open Pandora, I may be SOL, without any software support. (I don’t understand the problem. Why can’t any open source Linux program be easily ported to Open Pandora?)

Finally, there’s Moore’s law. They keep improving the specifications, as hardware gets cheaper and older parts aren’t available. That gives me an incentive to wait. Instead of buying a new Open Pandora, maybe I should wait a few years and buy a better one or a cheap used one.

Android has a large market share. That should guarantee good software support. That’s one advantage of Android over Open Pandora.

There’s another interesting alternative. I could get a PSP. With the PS Vita coming out, old PSPs should get cheap.

There’s an active “homebrew” community for the PSP. The PSP has encryption, preventing people from self-publishing. Some people cracked the encryption, and started publishing their own stuff. Notably, many emulators were ported to the PSP. Sony cracked down on homebrew by locking down the OS, via upgrade patches. There are no exploits for the latest PSP firmwares.  Some games have bugs, enabling people to bypass the security via a corrupted save file.

Unfortunately, there’s no keyboard on a PSP. That makes it unusable for blogging. That rules it out, unless I want to carry both an Android phone and a PSP.

Also, I don’t want to support Sony by buying a PSP. If they’re going to be jerks and lock down their hardware, I shouldn’t support them.

Overall, I like my Droid 3. For blogging on the subway, it’s great. For gaming, it’s mediocre. I may spend a couple dollars buying emulators. I’m considering fpse and andosbox. I’ve seriously considered getting an Open Pandora, and downgrading from a smartphone to a regular phone. I’ve also considered getting a cheap used PSP, and using that for playing old games in emulators.

The Daily Show And PETA

There was an interesting bit on the Wednesday February 15 episode of The Daily Show. Wyatt Cenac was making fun of PETA. You can watch it here.

They were ridiculing PETA, for a stupid lawsuit. PETA objected to whales in cages and performing. They filed a lawsuit saying that is “slavery”. Even though the lawsuit failed, it was a publicity stunt.

Whales and cows and dogs and cats are property. You should be able to do whatever you want with them. It is disgusting, but not illegal, if an animal is abused. (That is a common State lie. If a lot of people think that something is offensive, then it should be illegal.)

Watch that bit, and see if you notice anything unusual about the PETA woman. Try to identify it before reading my observation.


Did you see it? When the PETA woman was talking, only half her mouth moved! Watch again and see if you notice.

You can see that frequently, when watching professional liars. If only half of someone’s mouth moves when they talk, it’s a good indication that they’re lying! That isn’t an absolute indication. Some people don’t give that tell, especially world-class liars and entertainers. That PETA woman doesn’t appear on TV much, making her a less-skilled liar.

I was disappointed that The Daily Show writers missed that bit. When the PETA woman spoke, only half her mouth moved! That was the funniest part of that segment.

Larken Rose Still Thinks Like A Statist

Larken Rose is one of the better anarchist writers. He’s gone from saying “The income tax is invalid due to a legal loophole!” to “All taxation is theft!”

I was really disappointed by this post. Larken Rose is still thinking like a Statist.

Larken Rose is considering filing a lawsuit against the State, regarding unfair treatment by the IRS. He’s learned nothing. Does he really expect a fair trial? A slave will never get a fair trial with State tax collectors in State court, especially when that slave questions the legitimacy of taxes and the State.

Larken Rose has comments disabled on his blog. That’s antisocial. He has a problem, where people say “You’re a thief who isn’t ‘paying his fair share’.” I would leave a comment saying “You’re an idiot if you expect a fair trial or a fair hearing.”

Larken Rose spent a year in jail as a political prisoner, after a dispute with the IRS. He was using the “861 argument”, which is a variation of “The income tax isn’t valid due to a legal loophole.” Based on convoluted language in the law and tax code, some people interpret the income tax as invalid, when applied to individuals. Unfortunately, judges and IRS agents say that the law is 100% valid, as enforced. They have a monopoly. Their opinion is the only one that counts.

Larken Rose was lucky, to only get a year in jail. Other people who challenged the IRS got tougher sentences. (Sometimes, I wonder if people spend time in jail to get their “street cred”, and then go deep undercover, infiltrating various anti-State movements. Just because someone spent time in jail, doesn’t mean they aren’t spying for the State!)

In exchange for a lighter sentence, Larken Rose filed amended tax returns. Larken Rose thought that was amusing. The judge ordered him to commit perjury, because Larken Rose really believed that wasn’t taxable income!

There’s an weird bit of State law, called “mens rea” . Basically, it says “In order for something to be a crime, you had to do it on purpose”, i.e. “criminal intent”.  This loophole applies to State insiders all the time. For example, Jon Corzine didn’t commit a crime. Jon Corzine is a swell guy who would never rob his customers. There’s no “mens rea” and therefore no crime. For another example, Timothy Geithner didn’t lie on his taxes; he made an honest mistake.

Most “tax protesters” claim they fail the “mens rea” test. They sincerely believed their actions weren’t taxable. Unfortunately, judges won’t allow such arguments. Via “jury selection”, prosecutors stack the jury with statists, leading to a conviction. (It isn’t too hard to stack a jury, because most people are cluless statists. Here’s another conspiracy theory. In a high-profile trial, undercover police go into the jury pool, and some of them get picked.)  Also, it’s awkward when the “tax protester”‘s lawyer is arguing about the “mens rea” of the defendant, rather than advocating for “jury nullification” or “WTF?  All taxation is theft!”  In that sense, the lawyer sells out his client for an easy conviction, by making a weaselly “mens rea” argument rather than the truth.

That is an amusing irony. “Mens rea” is a “get out of jail free” card for State insiders, because they’re obviously swell guys who would never steal. Applied to “tax protesters”, that argument is not accepted. There are two justice systems, one for insiders and one for everyone else.

“Mens rea” is a stupid legal loophole. It’s a variation of “The truth is relative!” What matters is outcomes and not intentions. The important point is that Jon Corzine’s customers were robbed of $1.6B. It makes no difference whether Jon Corzine did it on purpose, or if he’s so incompetent that he can’t obey the “segregated customer funds” law. Jon Corzine set up a system of sloppy accounting and yes-men subordinates, encouraging the loss. For example, Jon Corzine fired a risk manager who objected to his risky bets in European bonds.

Larken Rose’s wife owned a business. Larken Rose decided to stop filing tax returns for the business, based on “The income tax isn’t valid due to a legal loophole.”  Also, Larken Rose went around publicly saying that the income tax was an invalid law, making State thugs eager to silence him and “make an example”.

Larken Rose filed amended personal tax returns. However, the IRS now questions his business tax returns.

The IRS claims that Larken Rose had employees. The IRS claims that Larken Rose owes back W-2 withholding. Larken Rose claims that they were independent contractors, paid on 1099.

That is Larken Rose’s current dispute with the IRS. It’s based on “Were these people employees or independent contractors?” It has nothing to do with “The income tax is invalid due to a loophole.”

Unfortunately, the IRS has already marked Larken Rose as a “tax protester”. Larken Rose sends the IRS a letter saying “They were independent contractors and not employees.” The IRS responds “Your argument is frivolous.”

Larken Rose says that the IRS is denying him due process, regarding the “Employees or contractors?” issue.

The “Employees or contractors?” regulation is not uniformly enforced. Most large financial institutions in NYC abuse the contractor rule. For example, at my last wage slave job, the IRS could have ordered me reclassified as an employee, if they wanted to enforce the law. If the IRS wanted to enforce the law, most consultants at large financial institutions would actually be employees.

There is no Rule of Law in the USA. Large financial institutions can abuse the employee/contractor distinction. For the little guy and Larken Rose, there’s zero tolerance enforcement.

The IRS has already marked Larken Rose as a “subversive person”. Their files say “Ignore whatever Larken Rose says or writes, and rule against him.” As a practical matter, IRS agents should refuse to talk to Larken Rose. Larken Rose is good at explaining “All taxation is theft. You’re a criminal, working for the IRS.” If an IRS agent spent 2 hours talking to Larken Rose, Larken Rose might succeed in convincing them that the State is evil. It’s better to deny Larken Rose any hearing or due process. Besides, the courts and IRS are colluding to enslave everyone. The IRS agents know that, if they go to trial, they will probably win.

Larken Rose now wants to sue the IRS, for denying him due process regarding the “employees or contractors?” dispute. He wants to file a “Bivens” lawsuit against the IRS. He’s looking for a lawyer to represent him, on contingency or pro bono. Larken Rose is an idiot, if he expects a fair trial on that issue. The judge will say “Larken Rose was already convicted of tax evasion. I’m ruling against him, without reading the rest of his arguments.”

Any State-licensed lawyer would be an idiot to represent Larken Rose. Larken Rose has zero chance of winning, making a contingency arrangement stupid.

A lawyer would be an idiot to represent Larken Rose for free. The judge would say to the lawyer “You filed a frivolous lawsuit. I’m revoking your law license.” Even if that didn’t happen, it’s a bad career move for a lawyer to antagonize a judge. There are many other ways for State thugs to get even with a lawyer.

One lawyer cynically said “The merits of your legal arguments are irrelevant. The reputation of the lawyer and the person represented matter much more, than the legal merits of any argument.” There is no Rule Of Law in the USA. Any lawyer who represented Larken Rose would be intentionally trashing his reputation. In a Police State, it’s a bad idea to help out an Enemy Of The State.  It would be an bad career move, for a lawyer to represent Larken Rose.

Just because you file a lawsuit, doesn’t mean you’ll get a chance to argue your case in front of a jury.  Most lawsuits against State thugs who abuse their power are dismissed at the “summary judgement” stage, citing sovereign immunity.  Some criminal defense lawyers laugh at their clients, when their client tells a story of being beaten by police and he wants to sue the police.  The lawyer knows to not waste his time.

Quite frankly, IRS agents could show up at Larken Rose’s home, beat him up, and leave, and he still wouldn’t be able to have a successful lawsuit.  Police know to shout “Stop resisting!” when they beat you, Taser you, or shoot you.  All a policeman has to do is say “I thought he had a gun!”, and now it’s legal for him to summarily execute you.  During a no-knock raid, it’s very easy for police to get confused and think that the victim is armed.

If Larken Rose wants to go full hardcore anarchist, here is the proper response. Larken Rose should say “You IRS thugs think I owe you money? I’m broke. Go ahead and try to collect!”

There are drawbacks to the “hardcore anarchist” approach. I don’t know if Larken Rose has any assets. He claims to be broke. Larken Rose would be unable to own any real estate, because the IRS could seize it via a tax lien. (Remember that, due to property taxes, you don’t really own land. You have a perpetual transferable lease, where the State can arbitrarily and unilaterally raise the rent (property tax).)  If Larken Rose does “own” real estate, he probably should sell and cash out now, before the IRS seizes it via a tax lien.

Larken Rose could not use the State banking system at all, because the IRS would seize his balance. Larken Rose could not solicit donations via PayPal, because the IRS would seize them. Larken Rose could not sell books on, because the IRS would seize the proceeds. Larken Rose could not take any on-the-books job (1099 or W-2), because the IRS would seize/garnish his salary.

Without access to the State banking system, Larken Rose would be forced to invest his savings in gold/silver/platinum.  If it’s stored in a safe place, the only way the IRS could seize it is if they physically seize the metal.

There is a huge drawback to the “hardcore anarchist” approach. You’d be totally shut out of the State economy and State financial system. There is a loophole. Larken Rose could find someone else to sell his books for him and solicit donations.

I couldn’t go “hardcore anarchist”. I have State paper investments that I would lose. (I’m considering cashing them out and converting to physical gold/silver/platinum. I’ll probably keep my State paper investments, but all new investments will go to gold/silver/platinum.) Also, I make decent income as a wage slave programmer. I probably could not make an equivalent salary in the underground economy.

There’s another amusing bit. The “statutory interest rate” for an unpaid tax bill is approximately 8%. That’s less than true inflation. If you’re taking the “hardcore anarchist” approach, you can refuse to pay the IRS and invest the difference in gold and silver (hidden someplace safe). Taking into account inflation, that’s profitable.

I read an amusing story. A man had a “common law” marriage and not a State-recognized marriage. He put all his property in his wife’s name. The IRS went after him. He had no assets. There was nothing for the IRS to seize! He wasn’t legally married, so the IRS couldn’t seize his wife’s assets!

Larken Rose, Richard Simkanin, Robert Kahre, Ed Brown, and Irwin Schiff all made huge mistakes. Here are lessons to learn from their example, if you’re serious about tax resistance and freedom.

First, DON’T INCORPORATE YOUR BUSINESS! When you incorporate your business, you’re voluntarily registering it in the State taxation system.

Second, DON’T USE THE STATE BANKING SYSTEM. Tax collectors can seize bank records. They will use bank records against you. Under the ironically-named “Bank Secrecy Act”, a bank has an obligation to report transactions to the IRS. Cash deposits count as “suspicious”. DON’T DO IT.

Third, declare some income, but not all of it. This makes it look less suspicious. If some customers pay by cash and some by check, declare all the by-check income, and maybe some of the cash income. Also, if you need to pay a mortgage or buy a car, you will need some on-the-books assets. Ed Brown got caught because he used money orders to pay his mortgage. It would have been smarter for him to declare enough income so he could pay his mortgage.

Suppose you don’t declare some of your income, but not all of it.  Then, if the IRS goes after you, you’re saying “Prove I didn’t declare all my income!” rather than “The income tax is invalid!”

Of course, your surplus savings shouldn’t be kept in FRNs, because you’ll get robbed by inflation.  You should buy gold/silver/platinum.  For this reason, an agorist gold/silver/FRN barter network is desirable.

Also, if you’re promoting tax resistance, you’re a bigger target. Larken Rose, Simkanin, Schiff, and Kahre were all promting tax evasion. They had acquired a decent audience. That made them an attractive target. If you don’t spend any effort promoting freedom, it’s easier to fly under the radar.

The IRS and State aren’t omniscient. They go after the people who publicly taunt the IRS, and then claim to have gotten everyone.

Larken Rose is an idiot, if he expects to get a fair hearing, regarding his “Employees or contractors?” dispute with the IRS. He’s an even bigger idiot if he expects to sue the State and win, for denying him due process. Any State-licensed lawyer would be an idiot to represent Larken Rose, either on contingency or pro bono. (Contingency would be pro bono, because Larken Rose has zero chance of winning.)

Larken Rose is a good advocate for freedom. On this issue, he’s still thinking like a Statist. Only a Statist would expect to sue the State and win, especially on the issue of taxes. I’d be impressed if he went full “hardcore anarchist”, daring the IRS to try and collect. He’d have to work 100% off-the-books, have no State assets, and not use the State banking system. If the IRS claims a large debt, that may be the right approach.

Catholic Contraceptive Fnord

There was an amusing “contoversy”. The new healthcare “reform” law requires health insurance providers to cover contraceptives. This led to religious objections.  The law affects churches and their related charities, especially the Catholic church.

The church itself is exempt. However, the church also controls charities. The church hires secretaries and non-religious employees. The church would have been forced to cover contraceptives, for the non-religious employees and the charities.

This led to a controversy. “Should the Catholic Church be required to cover contraceptives for its employees?” This is a good fake issue, because it divides people nearly evenly. Some people say “Churches should be forced to follow the same rules as everyone else.” Others say “It’s a religious freedom issue.”

This is a problem with State health insurance. If the law says “X must be covered!”, then everyone who doesn’t need X pays higher premiums. If the law says “X is not covered!”, then everyone who needs X pays more; they pay insurance premium plus separately for X.

Insurance really is supposed to cover only disasters. “Insurance covers routine medical expenses.” isn’t really insurance. That policy originated as an income tax loophole. Corporations gave employees health insurance as a tax-free benefit. The law was changed to make this loophole explicitly legal. Because health insurance is a tax dodge, it covers almost everything. The current system of health insurance maximizes the economic rent of the State medical cartel. Via health insurance, patients pay indirectly and not directly, providing little incentive to keep costs down.

The actual economic value of this dispute is negligible. It probably comes to less than $10 per month per person.

Why is this important? The issue is dividing and conquering the slaves. The issue is a distraction from more important issues.

A typical slave thinks “I have an opinion on abortion. I have an opinion on health insurance and contraceptives.  Therefore, I’m knowledgeable about politics.” People talk about stupid things instead of “Jon Corzine stole $1.6B from his customers and got away with it!” or “The Federal Reserve is printing a ton of money. That’s an indirect bank bailout!”

People talk about trivial issues like abortion and contraceptives. They don’t talk about the big issues like “The Federal Reserve is evil!” or “Government is too big!” or “All taxation is theft!”

The “Catholic contraceptive” debate is a clever distraction. The slaves are debating minor issues. They ignore the important things. By heavily debating trivial issues, this makes the slaves think they know about politics, while they’re totally manipulated.

FBI Terrorism Entrapment

This story is interesting. The FBI claims that they stopped a “terrorist plot”.

The problem is that the “terrorist” was totally set up by the FBI. They gave him a “bomb”. They encouraged him. The victim may not have tried to blow up a building, if he didn’t receive support and encouragement from the FBI.

This leads to the old joke

Q: How do you identify the undercover cop in your group?
A: He’s the guy telling you to blow up stuff and murder people!

What actually happened?

Scenario #1:
Victim: I’m disgruntled.
FBI Agent #1: You should blow up a building!
FBI Agent #2: That’ll show them!
Victim: I’m not sure.
FBI Agent #1: I’ll help you get a bomb!
FBI Agent #2: Go for it! You’ll be a hero!
Victim: OK. I’ll do it.

Scenario #2
Terrorist: I want to blow up a building.
FBI Agent #1: That’s a bad idea! You’ll hurt innocent people!
FBI Agent #2: You should see a therapist for your anger problem.

Scenario #2 is what police should do. They really should be helping people. Instead, they’re setting someone up for a high-profile arrest.

Scenario #1 might be what actually happened. The guy was encouraged by the police. Is the victim really a terrorist? He’s probably a fool who got tricked by the FBI.  He might have never tried a violent crime, if the FBI didn’t encourage him.

If the victim was a disgruntled lonely person, the undercover FBI agents may have been his only real friends.  They pretended to be his friend, just so they could set him up as a terrorist.

Incidents like this stink. The police set someone up for a high-profile arrest. The police will selectively show evidence against the victim. They won’t show all the support and encouragement they gave the victim. Really, judges and juries should throw out stupid entrapment setups. The victim will probably plea-bargain.

It’s also disgusting the way the mainstream media reports this story. They say “This guy was a dangerous terrorist! Hooray for the State! All that spying we do is worth it!” instead of “WTF? This is entrapment. That guy may never have tried a violent crime, if he wasn’t encouraged by the FBI.”

The victim isn’t guilty of a real crime. He was playing terrorism games with undercover police.

Andrew Napolitano’s “Freedom Watch” Cancelled

Andrew Napolitano’s “Freedom Watch” was cancelled. That’s a disappointment, because he was the most (L)libertarian mainstream media host. However, Andrew Napolitano was boring and I never watched him.

It sometimes hurt to see Andrew Napolitano reading from a teleprompter. He wasn’t very good at it.

The conspiracy theory is “He was fired because of what he said.” I doubt that. He stayed pretty close to the Libertarian limit of the “debate ceiling”.

I believe the official explanation. “His show was cancelled due to poor ratings.”

Andrew Napolitano was boring. I’m much further along the path to freedom than what he’s saying. If I had my own TV show, I’d be much better at promoting freedom.

Jeremy Lin Fnord

I decided to watch some Knicks games.  I noticed something really weird.

The announcers say “Jeremy Lin!” with a special tone in their voice.  It’d different than when they say other players’ names.  That was amusing.  Watch a game and see if you can notice.