Monthly Archives: February 2012

Fraudclosure Scandal – Banks Settle For Minus $500 Billion

This story is interesting. Banks “settled” the fraudclosure scandal. Under terms of the settlement, banks are paying approximately minus $500 billion.

Mortgage and property rules are determined at the state level and not the Federal level.  The attorney general of each state was persuaded/bribed into signing the agreement, making it “legal”.

The “fraudclosure” scandal was related to mortgages and mortgage bonds. Banks packaged mortgages into bonds and sold them. However, they didn’t file the paperwork properly. This broke the “chain of title”. The mortgage holder could no longer prove they owned the mortgage. This changed the loan to an unsecured personal loan, maybe even completely uncollectable, with the house no longer collateral for the loan.

Suppose you owned a house and mortgage. You default on the mortgage. I don’t own the mortgage, but try to foreclose. You can say “Prove you actually own the mortgage!” I don’t own the mortgage and can’t foreclose. A complete stranger can’t foreclose on a mortgage he doesn’t own. Due to faulty paperwork, banks were reduced to the legal equivalent of a complete stranger trying to foreclose on a mortgage he didn’t own.

That isn’t the only evil part of the fraudclosure scandal. Even though the paperwork was defective, banks foreclosed anyway. Some paperwork was forged. Some lawyers or accountants wrote letters saying/lying “I checked the mortgage foreclosure paperwork and verified it’s valid.” That is perjury. These are the “robosigners”.

It is hypocritical that Roger Clemens and Barry Bonds were indicted for perjury (they hurt nobody), but not the robosigners. Unlike Roger Clemens and Barry Bonds, the robosigners’ crime had a victim. The victims are people who were kicked out of their homes based on fraudulent foreclosure paperwork.

Also, the “robosigners” signed a ridiculously large amount of mortgage foreclosure paperwork each day. There is no way they could have properly verified the paperwork for each mortgage. They were caught committing perjury.  There were some “document forging services” that openly advertised the ability to forge mortgage foreclosure paperwork.

Under normal circumstances, the only people who default on mortgages are complete deadbeats.  Due to the housing bubble and bust and recession, some reasonably educated people wound up defaulting.  Some of them hired a lawyer, looking to challenge or delay foreclosure.  At least one lawyer checked the paperwork and found it defective.  When that resulted in a judge throwing out the foreclosure, that lead to lots of people trying the same thing, and the scandal was discovered.

“No perjury indictments for robosigners” is an example of “There is no Rule Of Law in the USA.” If you “lie on your taxes”, you might be prosecuted, which isn’t a real crime. (It’s a violation of natural law and common law for State thugs to compel you to tell them about everything you do, via a tax return and other reporting requirements.) The robosigners/banksters/insiders can lie, steal property based on a lie, and get away with it.

The banks were fined $25B, paid into a “special fund” (more on that later). Banks received a direct TARP bailout of $700B. Banks receive indirect State bailouts from the Federal Reserve, via a Fed Funds Rate of 0%-0.25% and negative real interest rates. This secret Federal Reserve bailout is worth $1T/year or more. This State subsidy is paid by everyone else via inflation.

It is hypocritical for the State to give banks $1T and then fine them $25B. It would be logically equivalent to giving banks $975B, with no fine. Here’s another analogy.

Policeman: I caught you doing 100mph in a 15 mph school zone.
Bankster: You got me! I shouldn’t have done that.
Policeman: Here’s $10,000. (gives bankster $10,000)
Policeman: Your traffic ticket costs $200.
Bankster (takes $200 out of the $10,000 and gives it back to the policeman) Ouch!  I’m sorry! You really shouldn’t fine me so much! This hurts!
Policeman: I hope you learned your lesson!
Bankster: Yes, this was a valuable lesson about the way the system works.
[I really should try "Promote freedom via comedy".]

There is no point for the State to give a business a ton of money, and then take back a little bit via a fine. That is “justice” and not justice.

This is a very common theme.  When insiders get caught doing something wrong, they pay a fine.  The fine is large in dollar terms, but small compared to the profit from the crime.  $25B is negligible compared to what banksters steal each year.  As another example, when drug corporation executives get caught covering up negative side-effects of a drug, the lawsuit damages/fine are typically less than 1 year of profits from the drug.  That encourages and rewards executives for fraud.  The fine seems large in dollar terms, but it’s negligible compared to the proceeds of State insider crime.

The $25B fine is paid into a “special fund”. What does that mean? This “special fund” is given to people with underwater mortgages, so they can partially pay down their debt.

Do you get the joke? The banks are paying the fine to themselves! The money is given to people with underwater mortgages, and they’re required to use the money to pay off their mortgages! This is logically equivalent to the banks writing off $25B of bad debt, which they should have done anyway!

This also is an insult to any homeowner that isn’t underwater on their mortgage. They get $0.

There’s another interesting clause in the settlement. I’m not 100% sure, because the details were not finalized yet. This is why I value the “penalty” of the settlement at negative $500 billion.

The deal contains an “amnesty” provision. If a bank foreclosed based on fraudulent paperwork, they get to keep the house. If the mortgage paperwork is invalid, the bank is forgiven and can foreclose anyway.

That is a total ripoff. It steals from foreclosed homeowners and gives to banks.

A pro-State troll says “Those people deserved to lose their homes. They bought a home they couldn’t afford.” The housing bubble created the false price signal that a home was a great investment. That was created by the State. The housing bubble was caused by the central bank credit monopoly and negative interest rates. Bank lobbyists changed the rules, so that it was easier to get a mortgage. The bubble was created by the State and banksters, so they could profit.

Some people were tricked, but how could they be sure?  The housing bubble could have crashed in 2005.  It could have lasted another 10-15 years, and then people would have missed out on a profit opportunity by not buying.  The economic game is rigged to favor insiders at the expense of individuals.  A pro-State troll says “They made a bad decision to buy a house!”, but that decision was based on faulty price signals.  Also, the banks should bear some responsibility, for writing bad mortgages and for messing up the paperwork and for lying/perjury while foreclosing.

Again, there are two justice systems, one for insiders and one for everyone else. Individuals lost their homes and their savings. The insiders who created the bubble got a bailout. A fraudulent foreclosure is a wealth transfer from victims to the criminals who caused their problem. Why were the banksters bailed out, but not individuals?

There’s another evil aspect of the amnesty clause. Suppose you won in a mortgage foreclosure trial, using a “Show me the note!” argument. The judge didn’t rule “You don’t owe your mortgage.” The judge merely ruled “This specific creditor doesn’t have the legal right to foreclose.” The amnesty clause of the settlement nullifies the “Show me the note!” defense. Even if you already won in a foreclosure trial, this settlement may mean that the same bank (or another bank) may try again. This time, it’s irrelevant that the mortgage paperwork is invalid, due to the settlement.

I’m not sure what is the total value of mortgages covered by the “amnesty clause”. I’m making a guess of $500 billion. If the deal does contain an “amnesty clause”, forgiving defective mortgage paperwork, then this deal contains a gift of $500 billion to the banksters. This deal may forgive fraudulent foreclosures that already occurred, preventing homeowners from suing and recovering their home.  This deal may enable banks to foreclose on homes that they previously couldn’t, because the mortgage paperwork was defective.

I’m pretty sure that the “settlement” contains an amnesty clause.  I’m not sure, because the details weren’t finalized yet.  If the deal does contain an “amnesty clause”, it’s a total farce.

Banks receive huge direct and indirect State subsidies.  TARP was an direct State subsidy of $700B.  With ZIRP, QE2, twist, etc., banks are further bailed out.  This bailout comes from inflation and negative real interest rates.  The Fed Funds Rate is 0%-0.25%, while inflation is 20%-30% or more.  The exact details of this bailout is not disclosed.  It’s a secret State subsidy worth $1T or more per year.

The “fair value” of the fraudclosure settlement is minus $500 billion or even less.   It is pointless to fine banks $25B, when they receive direct and indirect State subsidies of $1T+ per year.  The $25B itself is a joke, because the banks are paying the money to themselves.  The $25B goes to people with underwater mortgages, who must use the $25B to pay off their mortgages, and the $25B goes right back to the banks.  It’s a meaningless accounting gimmick, because the banks should write off underwater mortgages anyway.

The real evil of the agreement comes from the “amnesty clause”.  Past fraudulent foreclosures are forgiven.  Banks can now foreclose, even if the mortgage paperwork was defective.  I’m not 100% sure that the “settlement” contains an “amnesty clause”, but it probably does.  If there is an “amnesty clause”, that’s worth $500B or more to the banks.  The real value of this settlement is minus $500B.  The $25B payment is meaningless; the banks are paying the money to themselves.  $25B is negligible compared to the direct and indirect subsidies banks receive each year.  The “amnesty clause” is a huge windfall for banksters.

If the settlement does contain an “amnesty clause”, individuals will lose their homes so that bank CEOs can buy a 2nd mansion.  It’s a total farce.  It’s “justice” and not justice.

Intellectual Property Tax

“Intellectual property” is not a valid form of property. It is only valuable because the State “justice” system gives it value. All you get from owning “intellectual property” is the opportunity to sue someone, or a defense if someone else sues you.

“Intellectual property” is owned by the inventor. In practice, most of it winds up owned by large corporations. You have to sell your “intellectual property” to a corporation and get anything published (although the Internet changes that somewhat).  Even when individuals do control their IP until they die, their heirs typically sell it to a large corporation.  Getting a patent approved is expensive, and a patent lawsuit is even more expensive; most patents are owned by large corporations.  Most “intellectual property” laws are corporate welfare for the insiders who own most of the ideas.

Physical property is subject to property taxes. You must pay a % of the value each year, or lose it.

Why is there no “property tax” on intellectual property? Patents expire after 34 years, limiting the abuse. With retroactive copyright extension, copyrights effectively last forever now. Trademarks also last forever.

That also would solve the “orphan works” problem.  If nobody paid to re-renew the copyright, then you know it’s public domain and free to use.  Currently, if you can’t find who owns the copyright, it’s still illegal to copy it, even for old-but-still-copyrighted works.

If someone owns “intellectual property”, they should be forced to pay a % of the value every year or lose it, just like with physical property. The older the copyright or trademark, the greater the % tax should be.

There is no “property tax” for intellectual property. That is more evidence that “intellectual property” primarily exists for the benefit of insiders. It is hypocritical that people say “Intellectual property should be treated like physical property!”, without simultaneously arguing for an intellectual property tax.

Apple Subsidizes Banksters

This story is interesting. Apple has a $100B cash reserve. Apple employees, customers, and shareholders are subsidizing the banking cartel.

Apple earns close to 0% on its cash reserves. True inflation is 20%-30% per year or more. Apple earns a real return of negative 20% or less on its cash reserves. With $100B in cash reserves, that’s a gift of $20B+ per year. That is stolen by the banking cartel, via inflation.

That article proposed that Apple invest its cash surplus in gold. That article had a serious error of omission. It’s illegal for a corporation like Apple to hold a lot of gold or other investments. Otherwise, Apple would start falling under laws regarding a hedge fund or mutual fund, rather than a regular corporation. That would lead to a less favorable tax treatment. Effectively, it’s illegal for Apple to hold its cash reserves in gold.

Suppose that a small corporation had huge cash reserves like Apple. Then, some hedge fund (like Bain capital) would do a leveraged buyout. They would use the corporation’s own cash and equity to do a buyout. The hedge fund would take out the cash and load the corporation with debt. They would use the cash and equity to finance the buyout and immediately pay themselves a huge dividend, making it practically risk-free to leveraged buyout a corporation and strip it.

Why are leveraged buyouts profitable? It’s the usual answer, negative real interest rates. The hedge fund may borrow at 2%-5% while true inflation is 20%-30%+. The central bank credit monopoly and paper money subsidize hedge funds.

Why do banks lend money to do leveraged buyouts?  The answer again is negative interest rates and the central bank credit monopoly.  The bank borrows from the Federal Reserve at 0-0.25% and lends to the hedge fund at 2%-5%.  The loan is backed by a tangible business, making it less risky.  It pays for the hedge fund to borrow at 5%, because true inflation is 20-30%+.  In effect, the State inflation tax booty is shared between the bank and the hedge fund.

The leveraged buyout industry didn’t explode until after 1971, after the gold standard was completely abandoned. Negative real interest rates subsidize leveraged buyouts. Only in a system of paper money and negative real interest rates, is it profitable to use financial tricks to buyout another business.

A pro-State troll says “A hedge fund manager is a brilliant business leader. He’s taking risks and allocating capital.” That is false. In a really free market, banks provide a useful service. With a corrupt State financial system, a hedge fund manager profits by exploiting defects in the financial system.

In a really free market, banking is an honest business. Free market banks match savers and businesses that need capital. Fractional reserve banking is inherently fraudulent, and would not exist in a real free market. Instead, banks would match time deposits and loans, avoiding the inevitable runs that occur in a fractional reserve system. (Even before 1913, State law forced banks to operate under the fractional reserve model and not the time deposit model.) Also in a free market, interest rates would be positive. It wouldn’t be possible to profit by loading up on debt without doing anything else.

In the present, the financial system is completely corrupt. There is a system of paper money, a central bank credit monopoly, and negative real interest rates. The State central bank cartel creates recessions and inflationary booms. A hedge fund exploits these defects to profit. The hedge fund manager borrows from the State more than investors, making him the recipient of a huge State subsidy. For example, if a hedge fund has $1B of investor money, they will borrow $5B-$10B+ from the State banking cartel. In effect, the hedge fund actually is in the money printing business, obfuscated behind complicated financing arrangements.

In the present, bankers don’t need deposits; they can borrow from the government. Bankers don’t need to lend to individuals and small businesses; they can lend to the government and large corporations. The State protects the large corporation from competition, making it less risky to lend to large corporations. Individuals and small businesses can borrow, but they typically pay higher interest rates than a large corporation.

Also, the hedge fund manager is typically investing other people’s money, another classic scam. If the hedge fund fails, the fund declares bankruptcy. Very often, the hedge fund manager immediately starts a new fund. (He may warn “preferred customers” to withdraw their cash before the bust is announced. Then, they invest in his new fund.) The hedge fund manager has no personal liability if his investment fails. If his investment succeeds, he keeps a huge chunk of the profit.

There’s a lot of “stupid money” invested in hedge funds. One large source is State pension funds, either government pensions or large corporation pensions. The pension fund trustee is also managing other people’s money. He may agree to invest in a hedge fund in exchange for favors, such as hiring his brother-in-law at a high salary. With “stupid” investment money, the trustee is concerned with CYA more than a good return, making hedge funds attractive. The details of a hedge fund are nearly completely obfuscated, making it impossible to determine if the hedge fund manager is doing a good job or not.

Even though I would probably make a good hedge fund manager, I don’t have any connections, so that career path is closed to me. Besides, now that I know that the State financial system is one big scam, my honest best investment advice is “Buy gold and silver and platinum. Take physical delivery. Hide it someplace safe.” It’s hard to base a hedge fund on that principle.

A hedge fund manager isn’t a brilliant businessman. He’s merely profiting from defects in the financial system. A hedge fund produces nothing useful. The hedge fund manager is brilliant according to State anti-logic, because he successfully managed a corrupt system, maneuvering himself into a position where he can leech other people’s money. It is an example of excellent psychopath skills, but not real skills. With a corrupt financial system, a hedge fund manager can make a huge profit while destroying real wealth.

The leveraged buyout is profitable due to defects in the financial system.  The leveraged buyout is practically risk-free. There’s usually an immediate dividend and “management fee” almost equal to the investment. The hedge fund waits a few years, waits for inflation, and cashes out by selling the business. Inflation and negative interest rates are why it’s profitable for a hedge fund to “Do a leveraged buyout, load up on debt, wait a few years, and sell the business.”

Each deal is a separate corporation. Even if one corporation is ruined by the debt burden, then just that one files for bankruptcy, while the hedge fund still manages the others.

Why can Apple have large cash reserves and not a small corporation? Apple is so big that it can’t be a leveraged buyout target. Therefore, Apple can hold cash reserves without some hedge fund targeting it for a leveraged buyout.

This is another evil aspect of the State banking cartel. The State paper money system favors huge corporations over small ones. A large corporation (Apple, Google, Microsoft) can afford to hold large cash reserves, because it’s too big to be a takeover target. It’s effectively illegal for a small corporation to have no debt and cash reserves, because then some hedge fund will leveraged-buyout it.

A small public corporation can’t bootstrap growth by saving cash reserves.  First, cash reserves are stolen by inflation.  Second, if a small public corporation has large cash reserves, then it becomes a leveraged buyout target.

There are “balance sheet guidelines” for how much debt a small or medium public corporation should have. A small profitable public corporation with no debt will borrow money and pay a dividend or repurchase shares. This prevents a hostile takeover. These “guidelines” are “Have enough debt on your balance sheet so that the corporation isn’t a leveraged buyout target.”

There is a problem, when the small corporation carries a lot of debt. Then, it is at risk for bankruptcy during the next recession. Then, then bondholders/banksters explicitly take control of the corporation.

This gives Apple and other large corporations another advantage. The huge cash reserve means that Apple can make it through a recession, without being forced into bankruptcy. When small corporations are struggling, Apple can use its cash to finance a buyout.

Apple has huge cash reserves, approximately $100B. With negative interest rates, this subsidizes the banking cartel. It’s effectively illegal for a small corporation to have no debt and huge cash reserves, because then some hedge fund will do a leveraged buyout.

Coupon Hyperinflation

Someone was handing out coupons for a new restaurant. It said “$5 sandwich”.

However, someone had scribbled “.50″ on the coupon, changing the price to $5.50.

That was pretty funny. It’s a sign of hyperinflation. The price of the food increased from $5 to $5.50, between when they printed the coupons and started handing them out.

Reader Mail – 01/29/2012 To 02/04/2012

There weren't that many comments this week!

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.


f commented on Tim Thomas Makes A Heroic Stand.
I was wondering more about their thoughts on 'directed history' and such. For example: I was thinking of making an effort to move to Hong Kong (rated freest economy on the planet), but if China were indeed controlled by Anglo-elites, then I'd probably rather stay and work towards freedom in America.

For example, some Chinese communities seem to have some agorism up and running fairly well, to the extent that they are even funding offshore agorist enterprises: http://reason.com/archives/2011/11/15/chinas-black-market-city/singlepage . Plus, their success with local politics makes me wonder if local politics might not be worthwhile target to aim for.

Maybe more generally, your thoughts on the prospect of agorism in America vs other countries? And have you heard of 'seasteading'? A lead developer towards seasteading is actually Milton friedman's grandson. Now he's working on sanctioned libertarian enclaves within permissive states: http://www.fastcoexist.com/1678720/former-seasteaders-come-ashore-to-start-libertarian-utopias-in-honduran-jungle

I'm not so sure about Hong Kong. Allegedly, China is cracking down on gold and silver dealers.

In China, dealing with politics is even harder than in the USA. For example, it's illegal to organize a union.

The Wukan revolt is interesting. Allegedly, the Chinese government asked the villagers to nominate leaders for negotiations, and then those people were arrested for treason.

Seasteading is problematic. First, it isn't (yet) technologically feasible for the seastead to become 100% self-sufficient.

Suppose the seastead is successful and really free. Then the propaganda is "Those seasteaders are selling drugs!" or "Those seasteaders are selling guns!" Then, there's an invasion and the seastead is shut down.

That's the problem with seasteading. It's too susceptible to invasion.

It's also a problem to go to a 3rd world country. All the usable land is claimed by some State. If you have a small group and are successful, you'll be invaded and shut down.

If you're small, you can fly under the radar. Once you're successful, you're a target. Even if you have a group of 1000-10000 people, the State military still can crush you. If you're successful enough, then you're a tempting target.

A group of activists in the same area can be both good and bad. It's good, because you can trade with each other and support each other. It's bad, because you're a tempting target if you're successful.

Suppose you have a group of 1000 people that are prepared to fight to defend their freedom. First, some of them will be undercover cops and State spies. Second, most people might talk tough and train tough, but they'll back down once confronted with actual violence. State thugs adopt a "Get the ringleaders!" strategy, so the other people may abandon you when the going gets rough.

That's why I like agorism and stealth. Plus, for personal reasons, I can't move.


Anonymous Coward commented on Intrade Flaw - The Time Value Of Money.
> Consider Ron Paul. Realistically, his odds are zero.

Who says? What is the arithmetically basis for your decision?

The mainstream media always dismisses him as having no chance and so suggest it is a wasted vote.

You are doing the same thing.

Maybe tomorrow people will wake up a get a clue.

It would certainly be worth it just to get an honest President.

Ron Paul is my favorite candidate, but realistically he has no chance of winning.

If it were possible for Ron Paul to get elected, he wouldn't need to run.

Anonymous Coward commented on Intrade Flaw - The Time Value Of Money.

Yes, but you are essentially telling people not to vote for him because he has no chance.

It is a self-fulfilling prophecy.

Don't you just hate it that every time the mainstream media mention him, they say he has no chance of winning!!!!

I've mostly given up on the idea of reform via voting. I'm looking towards other things.

For example, I decided that it wasn't worth the effort to change my registration to Republican, so I could vote for him in the NY primary.

"Vote for Ron Paul!" is itself a form of pro-State trolling. Freedom is a lot more work than voting for the right person.

However it is encouraging that Ron Paul is getting around 10% of the vote. That's a lot of anti-State sentiment. However, most of those people are still thinking "If only we could keep government small!" instead of market anarchism.

Anonymous Coward commented on Intrade Flaw - The Time Value Of Money.

Although off-topic, the main problem in the United Kingdom is that rents, property prices, taxes on selling homes, estate agents fees and taxes in general are too high.

This means people cannot move home to get new jobs.

This means people can't start their own businesses as too much income has to be diverted into paying taxes and paying rent.

This means people cannot move off of welfare to do low-paying jobs.

You're blaming the symptom and not the cause.

Rising rents and home prices are a symptom of inflation.

As another example, I'm trying to save up my salary to someday start my own business. Inflation makes this much harder. My investment returns don't keep pace with true inflation. That makes it harder for me to accumulate savings and bootstrap a business.

Salaries don't keep pace with inflation, because State insiders are grabbing a larger and larger chunk of the economic pie.


Anonymous Coward commented on Facebook IPO - Pump And Dump.
The rule of law is breaking down in the United Kingdom. A key principle is that everyone is EQUAL UNDER THE LAW. If you enforce the law you must enforce it for everybody.

In the following Daily Mail article a woman is being prosecuted for claiming welfare benefits, but no declaring a man is living with her.

http://www.dailymail.co.uk/news/article-2096155/Former-Miss-Great-Britain-hopeful-accused-claiming-22-000-benefits-fraud.html

OK, so why wasn't David Laws (ex-Chief secretary of the Treasury) prosecuted for claiming tens of thousands of pounds rent which he gave to his lover? He failed to declare their relationship.

Why wasn't Jack-Boots Jacquie (Labour MP and former Home Secretary) prosecuted for claiming her sister's bedroom was her primary residence?

THERE IS NO RULE OF LAW, UNLESS THE LAW IS APPLIED EQUALLY.

THIS WOMAN SHOULD NOT BE PROSECUTED UNLESS DAVID LAWS AND ALL THE OTHER MPS ARE PROSECUTED FIRST.

Super Bowl Trademark Foolishness

This story was interesting.  Many stories are having sales and promotions for the Super Bowl.  However, they can’t use the word “Super Bowl” in their advertisements.  “Super Bowl” is trademarked.  The NFL aggressively sues any business that uses the word “Super Bowl” without paying a licensing fee.

Most stores use “Big Game” instead.  The NFL tried to trademark that phrase also, but lost.

That techdirt post missed the point.  He said that some small businesses should stand up to the NFL for abusing its trademark.  He’s missing the point.  No small business can afford the legal fees with a lawsuit against the deep-pocketed NFL.  A large business won’t risk losing a ton of money via legal extortion and a lawsuit loss.

State law encourages such foolishness, in multiple ways.

Due to the way trademark law works, the NFL *IS REQUIRED* to aggressively defend its trademark.  Otherwise, the NFL forfeits its trademark.

Also, damages are set to be ridiculously high.  That encourages lawsuits.

Trademarks are often abused.  Here is another example.  One designer trademarked the idea of red soled shoes.  If that trademark holds up after a lawsuit, then nobody else will ever be allowed to make red soled shoes!

Here are more examples of trademark foolishness.  Essentially, most of the names are “used up”.  If you make a new product, you have to make sure that the name has no resemblance to any name that was ever used before.  Otherwise, you can be the victim in a lawsuit.  That’s why many new products have ridiculous-sounding names.  They have to make sure it’s a name that hasn’t been used before, and doesn’t resemble anything that’s been used before.

In some ways, trademarks are more evil than patents and copyrights.  Patents only last for 34 years.  Copyrights only last for 75 years (but there are more and more retroactive extensions).  A trademark lasts *FOREVER*.  (at least until the State collapses)  If a phrase or idea is trademarked, then other people are absolutely barred from using it without a license.  For example, one guy got a trademark for “goat on a roof”, and he goes around suing other people that put goat signs on a roof.  Why should everyone be forever barred from doing this, just because one guy filed for a trademark?

The correct answer is “Intellecutal property is not property”.  That applies to patents, trademarks, and copyrights.  Why should everyone be forever be banned from using an idea or phrase, just because someone filed paperwork with the State.  In a really free market, there are no patents, trademarks, or copyrights.

Media Corporations Encourage “Illegal” Downloading

I didn’t notice that there were more new episodes of “Kitchen Nightmares.  I missed the 3 in January.  I like “Kitchen Nightmares”, because Ramsey indirectly covers productive/parasitic relationships among employees.

Because I missed the shows, I have to watch them on the Internet.  My best option is to “illegally” download the episodes via BitTorrent.

When you watch YouTube, it buffers the video for you, if you have slow connection.  You also can use dwhelper to download.  I usually use dwhelper, because I have a slow DSL connection.  It’s easier to just download a video, than try watching with a connection that’s slower than the rate of video buffering.

Most media corporations have crippled video players.  You can’t use dwhleper to download.  The video doesn’t buffer, as a countermeasure against people grabbing the video.  The media corporation executives are paranoid about people downloading the video, so they only offer crippled players.

The News corporation’s video player has those flaws.  I have a slow connection, making it unwatchable.  My only option is an “illegal” download.

I noticed another neat feature of uTorrent and the website I used.  They now have “magnet” links.  In a “magnet link”, it’s a decentralized way to grab the torrent..  However, there were also trackers, for the ones I grabbed.

I would watch “Kitchen Nightmares” on the official website.  Unfortunately, they have a DRMed crippled viewer.  Instead, I just do an “illegal” download via BitTorrent.  That’s one problem that media corporations have.  An “illegal” download is more convenient for me than watching it “legally”.

Facebook IPO – Pump And Dump

There’s a lot of hype surrounding the upcoming Facebook IPO.

I noticed an amusing fnord while listening to the radio news/propaganda. The announcer was saying “Buy shares in Facebook!” with the same tone of voice as “The Lotto jackpot is big! Buy a ticket!”

One of my coworkers at my first job was ripped off, via the PALM IPO. He bought shares the day of the IPO, after trading started. The price was $100/share. He placed a MARKET order and not a limit order. He bought for $150/share. In two days, he made a $20k donation to the bankster bonus pool.

I saw an amusing conspiracy theory regarding Facebook. Someone said “All of a sudden, the mainstream media started heavily hyping Facebook. That’s obviously a government psy-op.” What probably happened is “Facebook hired a PR firm.”

However, PR firm propaganda and State propaganda are the same. A corporation uses a PR firm and focus groups to market a new brand a cereal. A politician uses a PR firm and focus groups to try out his slogans. It is scientifically created propaganda. PR firms are a key component of State evil.

A lot of people make money promoting “hot IPOs” and the stock market.  There isn’t much money to be made giving honest advice.  Therefore, almost nobody in the mainstream media points out “Over the past 10-15 years, gold and silver were a better investment than almost every stock.”  A lot of people will make money off the Facebook IPO.  They’re all promoting it.  The others “journalists” are lazy and following the hype, or obeying orders and saying what they’re supposed to say.

It is almost certain that Facebook shares will underperform gold over the next 5-10 years. I thought that people were idiots for buying Facebook shares at a valuation of $25B-$50B. If they cash out with an IPO valuation of $100B, then maybe they weren’t so stupid. They found a greater fool.

There are rules regarding “qualified investors” for pre-IPO corporations. That shuts out the average slave. By the time everyone is allowed to invest via an IPO, it’s usually too late.

With an IPO, that’s usually the end of the Ponzi chain. As an individual, you will probably get ripped off.

In a corruption-based economy, good hype is more important than a good product. With a large user base, Facebook automatically has great hype. Every Facebook user is a potential victim, ready to be fleeced via the IPO. Most people aren’t fooled. If only a tiny % are fooled, that’s a huge bankster booty.

If Facebook shares do spike after the IPO, there will be heavy naked short selling. That further rips off individuals.

Google’s share price was $585 yesterday.  According to Yahoo Finance, Google closed at $100 on the first day of trading on August 19, 2004.  That’s a gain of 485%.  According to usagold, gold was at $406 on August 19, 2004, and was $1751 yesterday, a gain of 331%.  However, that’s only an annualized difference of 4%.  Even a ridiculously successful corporation like Google only outperformed gold by a little.  (APPL did even better in the same period, but Apple has a longer track record.  If you go back to 2000 or earlier, it’s less dramatic of a difference.)  If you look at almost any other corporation with a 10 year history, gold was a better investment by a wide margin.  (Also, there’s survivorship bias.  There’s no comparison for Enron or Bear Stearns or Lehman or MF Global.  With physical gold, you won’t suffer a 100% loss unless you are robbed literally, rather than robbed by financial tricks and fraud.)  Gold has a lower volatility and higher return than the stock market.  For example, for almost every recent 2-3 year period, the FRN-denominated value of a gold investment would have at least broken even.

Don’t buy the FaceBook IPO. Don’t invest in the stock market. Buy gold or silver or platinum and take physical delivery. Hide it someplace safe.

I found the radio “news” hilarious.  The reporter was talking about the Facebook IPO in the same tone of voice as the Lottery.  I’m noticing lots of evil fnords now that I didn’t see before.

Internet Censorship And State Incrementalism

I’ve seen some interesting discussion regarding Megaupload and SOPA/PIPA/ACTA.  These are laws that make it easier to censor the Internet to fight “copyright infringement”.

A lot of people are saying “They’re only going after those evil filesharers.  They won’t come after us.”  Some people on retrogaming trackers say “They’re only going after people who share current stuff.  They won’t go after people who share 10+ year old games.”

Why do police kidnap someone who grows marijuana and smokes it himself?  Because they can, and “They must enforce the law as written”.  If the law is changed to make *ALL* sharing of copyrighted work illegal, then police who “strictly enforce the law as written” must crack down on all filesharing, even for old no-longer-marketable stuff.

Some people say “It’s just the people who share current movies and music.  They won’t go after us.”  That is missing the point.  One common State trick is incrementalism.  An evil policy is implemented gradually.

Consider the income tax in the USA.  Politicians said “It’ll only be a couple percent, and only on the super-wealthy”.  This conned people into supporting it.  Originally, it was only a few percent, and only on people with really high incomes.  Then, it grew to the monster it is today, where the average worker pays taxation rates of 50% or more.  (50% isn’t an exaggeration.  25% Federal income, 15% Social Security and Medicare, 10% NYC+state tax, plus other taxes)

Suppose that the PIPA/SOPA internet censorship law is in place.  A website can be seized without trial, for “copyright infringement”.  Then, a prosecutor tells the judge “We don’t like the way FSK criticizes the Federal Reserve and IRS.  He is guilty of treason.  Take away his website.”  The judge would say “There already is a website-stealing process for copyright infringement.  We can also use it to steal FSK’s website.”  In fact, some other countries already do this.  A “internet censorship process” was created for “copyright and child pornography”.  Then, it was extended to anything that judges don’t like.

For another example, Irwin Schiff could be prevented from publishing his book, via the same process used for copyright censorship.  (I disagree with Irwin Schiff, who says “The income tax isn’t valid due to a legal loophole.”  Even if he’s right, a slave will never get a fair trial regarding taxation in a biased State court.  Based on legal precedents and the way the system actually works, the income tax (as enforced) is valid in the eyes of State thugs.)

This is a common trick.  An evil policy is incremented gradually.  “Copyright infringement” and “child pornography” are issues that State propagandists use to justify Internet censorship.  First they’ll only go after the people who share current movies and songs.  Then, they will go after other things.  A prosecutor could argue that I’m guilty of treason, when I say “All taxation is theft!” and “You should boycott the Federal Reserve and IRS.”  If they put in me in jail, that’s expensive and requires a “due process” farce.  It’d be much easier if they could seize my website without a trial.

LTRO – A New Name For An Old Scam

This story is interesting. I’ve seen a new acronym thrown around.  It’s “LTRO”, which stands for “Long Term Refinancing Operation”. It’s the latest bank bailout package in Europe. It’s the usual trick of “The central bank (ECB) prints new money and gives it to banks.” The details are slightly changed each time, helping to obfuscate the evil.

It’s amusing the way State comedians pick their acronyms. “LTRO” makes it sound complicated and not evil. Why don’t they call it the “Long Maturity Asset Organization”? That would be a more accurate name.

Here’s the details of the LTRO scam. Banks in Europe own junky European government bonds (Greece, Italy, etc.). With the LTRO, the banks swap their junky bonds for LTRO money, valuing the junk bonds at par, borrowing at a rate of practically 0% (actually 1%). Then, the banks use this money to buy more junky government debt. Also, the bank CEO needs a new mansion and yacht.

The banksters get a risk-free profit. They borrow for practically nothing and buy higher-yielding bonds. If there’s a default, the banksters may stick the central bank with the loss. In a paper monetary system, the central bank has an unlimited budget.

This has a perverse/intended effect of preserving the illusion of solvency, for bankrupt European governments.  The bankrupt government sells bonds to banks.  The banks swap the bonds with the ECB for cash.  The banks use this cash to buy more bonds.  The governments use the cash from these new bonds to pay off their old bonds!  As long as the ECB buys junk bonds for par, the banks can keep buying the bonds, enabling the governments to keep refinancing their debt.  In a paper monetary system, you can “extend and pretend” indefinitely, covering up problems with more and more paper.  The only limit is hyperinflation and complete collapse of the paper monetary system.  In the meantime, banksters make a risk-free profit.  They borrow from the ECB and buy higher-yielding government bonds.

In the USA and Europe, the central bank isn’t allowed to buy government debt directly. Instead, private banks buy the debt and then sell it to the central bank. The “advantage” of doing it this way is that banks get to scalp a profit. They buy low and sell high. The buy bonds from the government and sell them back to the central bank for a profit. It’s pure illicit interest arbitrage. It’s pure corruption capitalism.

These profits aren’t free. The cost is paid via higher inflation.

The banksters make a ton of money speculating in government bonds. They use this free cash to buy politicians and the mainstream media. They will always block reform. They have fake reform, changing the details of the scam, while blocking real reform.

That’s the “advantage” of paper money. Politicians and banksters can always steal via inflation. Politicians can keep printing more paper to refinance government debt.  No matter how much money “too big to fail” banks lose when gambling, they can get a bailout. When they gamble and win, they keep the profits, paying themselves huge bonuses for their brilliant “leadership”. When they’re wrong, they get a bailout.

The European LTRO is the usual bankster scam. The central bank creates money and lends it cheaply to banks.  Each time, the details are slightly changed and the scam is given a new name. That helps obfuscate what’s going on.