Wednesday, August 24, 2016

What Can We Say About a System that Criminalizes a Safe Painkiller (0 Deaths) and Promotes Big Pharma Opiates that Have Killed 165,000 Americans?

So when will the citizens wake up to the criminality of their government in favoring killer corporate opiates over safe natural painkillers?
Set your mindset to objective and come with me to the little-known but plucky nation of Lower Slobovia. The residents of Lower Slobovia have two choices when they are suffering from chronic pain:
1. A natural, non-addictive medication that they can grow themselves that has never caused a single fatality due to overdose, adverse reactions or mixing with other drugs (polypharmacy), or
2. synthetic opiates manufactured by pharmaceutical corporations that are highly addictive, trigger multiple adverse reactions, manifest dangerous polypharmaceutical attributes and have killed over 165,000 people in the past 15 years-- 28 times the nation's 5,790 combat deaths in recent military conflicts.
The corporations manufacturing and distributing the synthetic opiates as "safe" hid the truth about their medications from doctors, patients and the media: 'You Want a Description of Hell?' Oxycontin's 12-Hour Problem (via John F.) OxyContin’s stunning success masked a fundamental problem: The drug wears off hours early in many people, a Los Angeles Times investigation found. OxyContin is a chemical cousin of heroin, and when it doesn’t last, patients can experience excruciating symptoms of withdrawal, including an intense craving for the drug.
So take a guess which class of drugs is perfectly legal and widely promoted by Lower Slobovia's healthcare system, and which one is classified as a restricted Schedule 1 drug by the nation's Drug Enforcement Agency (DEA), i.e. as dangerous as heroin?
I suspect you saw this coming, right? The natural painkiller that never killed a single soul and can be grown at home is criminalized, while the drugs that have already killed 165,000 people (a number that grossly understates the total number of deaths at least partly attributable to synthetic opiates) and addicted and/or harmed millions of other users is perfectly legal, declared "safe" by the pushers (oops, I mean pharmaceutical manufacturers) and the government, and distributed in the tens of millions of doses by the "healthcare" system.
Lower Slobovia's DEA, the corporate manufacturers of the killer-opiates and its healthcare system that slavishly distributes millions of the killer pills should be immediately escorted to Devil's Island and left to rot, right? And the insane laws reversed so the killer corporate synthetic opiates are declared Schedule 1 and heavily criminalized, and the natural nobody-dies painkiller legalized and distributed, right?
Isn't this obvious? Yes, I realize cannabis and opiates are not apples to apples, but you get the point--the drugs that have killed more than 165,000 people and ruined the lives of hundreds of thousands of others should be on Lower Slobovia DEA's Schedule 1 of criminalized drugs instead of being passed out like candy by its "healthcare" system-- a distribtion that has reaped tens of billions of dollars in sales and profits for the pharmaceutical sector.
If you need some official statement to accept the obvious, well then, here you go: Could Medical Cannabis Break the Painkiller Epidemic? (Scientific American, September 2016 issue) A body of research suggests yes, but scientists are having to fight red tape to study whether medical marijuana could substitute for opioid drugs.
The U.S. “is in the midst of an unprecedented opioid epidemic,” according to the Department of Health and Human Services. Prescription opioid overdoses killed more than 165,000 Americans between 1999 and 2014, and the health and social costs of abusing such drugs are estimated to be as much as $55 billion a year. The problem has led experts to scramble for a less dangerous alternative for pain relie--and some research points to medical marijuana.
Published in 2014, the study revealed an intriguing trend: between 1999 and 2010, states that permitted medical marijuana had an average of almost 25 percent fewer opioid overdose deaths each year than states where cannabis remained illegal.
So when will the citizens of Lower Slobovia wake up to the criminality of their government in favoring killer corporate opiates over safe natural painkillers, the criminality of the pharmaceutical racketeers who hid the truth from doctors and patients, and the complicity of a "healthcare" industry that has been happy to pass out deadly drugs like candy--at a profit, of course.
As you might have guessed, there is no Lower Slobovia. There is only the U.S.A., a nation "in the midst of an unprecedented opioid epidemic,” a nation blind to the lethality of its Destruction Enforcement Agency (DEA), its corporate pushers and its government-funded and enforced "healthcare" system.
Disclosure: I am not a user of either recreational or medicinal cannabis or any corporate opiate. I just think it's time we finally confront the terrible, needless cost in human lives and suffering from our nation's insane, benighted drug laws and our needlessly costly, destructive but oh-so-profitable "healthcare" system.


My new book is #9 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book's website.

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Tuesday, August 23, 2016

The Stock Market 2015-2016: Ugly Chopfest with an Equally Ugly Megaphone

There's something fishy about this "new all-time highs" rally of 2016.
It's interesting to take a longer-term view of the S&P 500 (SPX). Looking at a 10-year chart, the decline from almost 1,600 to 667 in the Global Financial Meltdown of 2007-2009 doesn't look like that big a deal, given the incredible 6-year uptrend since March 2009.
The boost phase of the rally lasted over 2 years, from 3/09 to 6/11, when the Greek debt crisis caused a temporary swoon in global markets.
Once central banks rescued markets (again), the rally resumed, but beneath the trend line.
This rally ran out of steam in early 2015. The marginal new highs in May 2015 and July-August 2016 are not even visible on this chart.
What is visible is a giant megaphone pattern that targets the old all-time high from 2007 around 1,600. A 600-point drop from 2,200 to 1,600 is of course "impossible" due to the Yellen/Kuroda/Draghi Put, i.e. central banks will buy "whatever it takes" to keep markets elevated forever.
Despite the visible "impossibility" of the SPX ever declining 600 points, that's what the pattern targets.
Even the casual observer is struck by the market's wild yo-yo'ing since early 2015--rather than trace out a definable uptrend, it's been a chopfest of dizzying declines and furious rallies.
This is not characteristic of a powerful Bull market. Rather, it is evidence of a Bull market faltering, eroding and being saved by increasingly outsized and visibly desperate central bank interventions.
$180 billion a month of additional stimulus is now required from the major central banks to keep the market afloat. Yet the returns continue to diminish.
What we have is a Red Queen's Market. The Red Queen's race refers to running fast just to stay in the same place. In a Red Queen's Market, central banks must continually increase their level of stimulus, intervention, jawboning, etc. just to keep the markets in the same place.
There's something fishy about this "new all-time highs" rally of 2016; the declines are deep but the new highs are modest. This is a tired Bull, and a spear tossed from somewhere in the restive crowd could bring it down all too easily.

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Monday, August 22, 2016

What Are the Odds that the 2020-2022 Olympics Will Be Cancelled?

It's tough to pay for an Olympics when 95% of your supposed "wealth" has vanished.
In the modern era (1896-present), the Olympics have only been cancelled in wartime: 1916 (World War I), 1940 and 1944 (World War II). But world war is not the only circumstance that could derail the Olympics; a global crisis in energy, finance or geopolitics could send the risks and costs of the Olympics beyond the reach of most participants.
The key to understanding the odds of an Olympic cancellation is Liebig’s Law of the Minimum, which states states that "growth is controlled not by the total amount of resources available, but by the scarcest resource."
As I have outlined elsewhere, the three resources that will become increasingly scarce globally going forward are:
1. Geopolitical stability
2. Energy abundance (i.e. abundant and affordable to the bottom 95%)
3. Financial/currency stability
A global scarcity of any of these three could sink the Olympics in 2020 and 2022. I've discussed the geopolitical, financial and resource risks in four recent posts:
The current confidence that everything will remain stable for years to come is based on a misleading extrapolation of current trends. Just because the global status quo has managed to maintain a facade or normalcy for the past eight years does not mean the New Normal (central banks pumping $180 billion a month into the global financial system to keep it afloat) is identical with the pre-crisis Old Normal.
Seneca's Cliff offers a more accurate model of reality: everything stays the same until it doesn't. The slide down is much faster and more abrupt than the steady advance to the cliff's edge:
The reality is the status quo has been forced to increase its interventions just to maintain the steady-state facade of normalcy. This constant increase of resources being devoted to prop up an unsustainable system is not consequence-free; the effort generates unintended consequences and increases the systemic risks.
The status quo must then ramp up its interventions and manipulations to compensate for the strains and risks breaking through the carefully managed facade of normalcy.
War is not the only possible disruptor of the 2020-2022 Olympics. Geopolitical tensions could rise to the point that boycotts effectively gut the Olympics. Global disruptions of energy (severe shortages and soaring costs) could put the Olympics out of reach for many participants--and of course these two risks are connected. Energy shortages and geopolitical conflicts go hand in hand.
A funny thing happens in a severe currency crisis: 95% of the phantom wealth suddenly disappears. The value of fiat currencies is established by a number of factors, but the primary one is demand for the currency, which is tied to participants' trust that the currency will retain its current value (or appreciate) going forward.
Once that trust is lost, the downward spiral creates panic selling.
In the current narrative, central banks can always "save the day" by printing money or opening the floodgates of unlimited credit.
The problem won't be a lack of currency or credit--the problem will be a scarcity of trustworthy collateral to back up the credit and currency. If the value of the collateral is impaired, the credit leveraged on the collateral will also be impaired.
In other words, a loss of faith in a currency cannot be reversed when faith in the central bank's magical powers has also been lost. The dramatic decline in the purchasing power of Venezuela's currency offers a modern-day example of what happens to phantom wealth in a currency crisis.
It's tough to pay for an Olympics when 95% of your supposed "wealth" has vanished. To save face, the host nation may attempt a severely truncated Olympics with a few participants and mostly empty venues, but the reality will be visible to all: it would have been better to cancel the Olympics and avoid the embarrassment of a failed show crippled by scarcities.
What are the odds that the 2020-2022 Olympics will be cancelled (or completely distrupted)? A lot higher than most people think.
Of related interest:
Jeffrey Snider: All Signs Point To Systemic Reset


My new book is #9 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book's website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
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Sunday, August 21, 2016

Our Society Is Sick, Our Economy Exploitive and our Politics Corrupt

Any society that tolerates this systemic exploitation and corruption as "business as usual" is not just sick--it's hopeless.
In noting that our society is sick, our economy exploitive and our politics corrupt, I'm not saying anything you didn't already know. Everyone who isn't being paid to deny the obvious in public (while fuming helplessly about the phony cheerleading in private) knows that our society is a layer-cake of pathologies, our economy little more than institutionalized racketeering and our politics a corrupt auction-house of pay-for-play, influence-peddling, money-grubbing and brazen pandering for votes.
The fantasy promoted by do-gooders and PR hacks alike is that this corrupt system can be reformed with a few minor policy tweaks. If you want a brief but thorough explanation of Why Our Status Quo Failed and Is Beyond Reform, please take a look at my book (link above).
If you want an example of how the status quo has failed and is beyond reform, it's instructive to examine the pharmaceutical industry, which includes biotech corporations, specialty pharmaceutical firms and the global corporate giants known as Big Pharma.
I hope it won't come as too great a surprise that the pharmaceutical industry isn't about cures or helping needy people--it's about profits. As a Big Pharma CEO reported in a brief moment of truthfulness, We’re in Business of Shareholder Profit, Not Helping the Sick
Here's an excerpt from the article:
"Already this year, Valeant has increased the price of 56 of the drugs in its portfolio an average of 66 percent, highlighted by their recent acquisition, Zegerid, which they promptly raised 550 percent. Not only does this have the unfortunate side effect of placing the price of life-saving drugs out of reach for even moderately-insured people, but it has now begun to call into question the sustainability of this rapidly-spreading business model.
Since being named CEO in 2008, Valeant has acquired more than 100 drugs and seen their stock price rise more than 1,000 percent with Pearson at the helm."
Longtime correspondent John F., M.D. has been sending me a steady stream of media accounts of pharma companies jacking up prices by 400% and 500%, even though the medications are off-patent and have been around for years or even decades.
John F. explains the context:
"The Epi-Pen (or the generic equivalent) is the only thing that people with severe allergies - including many children - can carry that will save their lives if used at the start of a severe allergic reaction. There is no substitute. The maker, Mylan, has increased the price six-fold over the past few years. Epinephrine is a very old generic drug. It is the packaging that makes it patentable. There is absolutely no reason for the cost to make Epi-Pens to have increased.
People who have had a life-threatening allergic reaction to food or insect stings need these - they are absolutely essential to save their lives. Epinephrine has been generic since I was in medical school in the '70s, yet the FDA have allowed the manufacturer to increase the price 600% in the last few years.
There is a generic substitute for the Epi Pen now, but they jacked the price of it up to around $400 (it's near the end of the article). These kits are cardboard boxes with two plastic syringes with one needle each, with a little medicine in them. I can't imagine they cost more than $10 to make, and they have been around since I was in medical school in the '70s, so it's not like they must recoup extensive research costs."
"I wrote to you about the huge increase in price of colchicine, an excellent drug for people with gout, and sometimes the only drug they can use, which is generic, but the FDA allowed a manufacturer to jack the price to the sky in the past 12 months. Now, the two major pharmacy benefit companies are dropping it from coverage. I can't emphasize this enough - this is the only drug some patients can take for a disease that sometimes is life-threatening (can cause kidney failure), and by all rights should be ten cents a pill or less."
Unsurprisingly, pharma sales have been soaring. Take cheap generic drugs and jack up the price by 400%, and it's no surprise that sales have risen from $550 billion annually in 2004 to over $1 trillion in 2014.
All of the exploitation, deception and corruption has been well documented in dozens of reports and books. Here is a small sampling of recent titles on the sickness of our pharmaceutical/"healthcare" systems, the political system that funds and enforces these pathological systems and the tragic consequences of these pathologies.
The Truth About the Drug Companies: How They Deceive Us and What to Do About It(Dr. Marcia Angell, The New England Journal of Medicine)
How We Do Harm: A Doctor Breaks Ranks About Being Sick in America (Dr. Otis Brawley, chief medical and scientific officer of The American Cancer Society)
Less Medicine, More Health (Dr. H. Gilbert Welch)
Here is a sampling of the reviews posted by readers on Amazon re: Overdosed America:
I have been a physician for 10 years. I have seen my profession gradually being taken over by the pharmaceutical industry. I have seen countless patients harmed - alas even killed - by drug reactions and polypharmacy.
I have sat and listened to countless drug representative presentations that were outright falsehoods and misrepresentations. It has been months - maybe even years that I have had available to me a medical education conference that was not somehow tainted by drug company money and therefore propaganda.
I have repeatedly had patients in my office begging me for medication that they do not need. They want it simply because it was on TV News last night - and came with a promise of metaphysical salvation. I spend much time every day dissuading patients from taking medication they simply do not need - indeed may even cause real medical problems.
The issues that are discussed in this book are very very real - and the scary part is I do not see my fellow physicians doing a single thing to address these huge problems.
*     *     *     *     *    
Abramson gives specific examples where published drug studies focus on recipients non-representative of typical (target) users - eg. younger, and less prone to adverse reactions. Sometimes the reported data show (if one has the time to read carefully) that the true targets do WORSE with the medication, and this finding is obscured by positive results with the more numerous (atypical) younger selected test patients.
Other medical research reporting ploys utilized by drug companies include: 1)reporting initially positive results, while omitting adverse subsequent outcomes, 2)combining serious (when increased) and minor (when decreased) adverse event numbers to cover up problems, 3)comparing a strong dose of a new medicine with an inappropriate weak dose, comparing a new drug with a placebo, instead of existing efficacious drugs, 4)not reporting negative drug trials, 5)failing to point out that lifestyle changes often provide much better results than drugs, and 6)pulling advertising from medical journals running unfavorable articles.
*     *     *     *     *    
As a consumer who believed until recently was an "informed consumer," I was shocked to discover that the information I was getting on the National Institute for Health's website "pubmed.org" was less than definitive when it came to clinical trials. With Dr. Abramson's book, I now understand that those clinical trials, which most doctors depend on in helping them treat their patients are wildly distorted.
I applaud Dr. Abramson for writing this book. Just as Rachel Carson's book "Silent Spring" served as a catalyst for supporting changes in how we respect our environment, physicians, consumers and politicians should read this book and take action to protect our nation's health.
The political corruption that enables and enforces this sick, exploitive system society is equally obvious and well-documented. Sir Angus Deaton, recipient of the 2015 Nobel Prize in economics, recently summarized the innate corruption of the American status quo in a Scientific American article (Sept. 2016 issue): How Inequality Threatens Civil Society: A spiral of slow growth and rent-seeking by powerful interests pose a danger to democracy (subscription required; or try to find a print copy at a library)
"In the U.S., we spend enormous sums on health care, much of which has little or no effect. This system is fiercely defended by those whose incomes and power come directly or indirectly from the nearly one-fifth of American GDP that health care absorbs.
The very size of the health care and financial sectors gives them political power that makes them very difficult to control. These sectors then become engines of inequality, generating huge rewards for some while slowing growth and undermining innovation."
Any society that tolerates this systemic exploitation and corruption as "business as usual" is not just sick--it's hopeless. No, you can't fix this layer-cake of pathological deception, exploitation, corruption and racketeering with the usual pathetic "reforms" offered by lobbyists, insiders and think-tank lackeys: the status quo is itself the source of the sickness and the rot.


My new book is #18 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book's website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
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Thursday, August 18, 2016

What the Fed Hasn't Fixed (and Actually Made Worse)

The Fed has not only failed to fix what's broken in the U.S. economy--it has actively mad those problems worse.
The Federal Reserve claims its monetary interventions saved America from economic ruin in 2009, and have bolstered growth ever since. Don't hurt yourself patting your own backs, Fed governors past and present: it's bad enough that the Fed can't fix the economy's real problems--its policies actively make them worse.
After seven long years of politicos and the financial media glorifying the Federal Reserve's policies as god-like in their power and efficacy, let's take a quick look at the results of these vaunted policies: ZIRP (zero interest rates), (QE) quantitative easing, both of which are ways of shoving nearly-free money ( a.k.a. liquidity) into the banking sector, where all this free money is supposed to filter into the global economy, working miracles of prosperity.
The stated goal of the Fed's zero-interest rate policy (ZIRP) and quantitative easing (QE) was to make borrowing easier for both corporations and consumers, the idea being that companies would borrow to invest in new productive capacity and consumers would buy the new goods and services being produced with the Fed's cheap credit.
The secondary publicly stated goal was to spark a rally in stocks, bonds and real estate that would spark a wealth effect: as households saw their net worth rise, they would feel wealthier and thus more likely to borrow money to buy more goods and services.
Let's start by stipulating that the Fed's policies are unprecedented. Keeping interest rates near-zero for over seven years and pumping up its balance sheet from $800 billion to over $4 trillion are both completely off the scale of central bank policy in the U.S.
The most charitable assessment we can make of Fed policy is that the "prosperity" it created is concentrated in the most parasitic and politically powerful sector: finance. Why should we be surprised that the Fed, itself a servant of the banking sector, should devise policies that enrich financiers?
The Fed's policies have been an unqualified success for financiers and an abject failure for everyone who has to work for a living. The Fed has not just failed to rectify the nation's obscene inequality in wealth and income; it has actively widened it by handing guaranteed returns to the banks and financiers while stripmining what's left of the middle and working classes' non-labor income, i.e. interest on savings.
So let's see what corporations and financiers did with the Fed's free money for financiers:
They borrowed billions to buy back their own stocks:
Which boosted the the value of the stocks, enriching the corporate managers and big shareholders:
Did corporations share the wealth with their employees? The top 5% have done very well, the bottom 95%--well, their real incomes stagnated or declined:
Did corporations and financiers create more breadwinner jobs? That is, full-time jobs that pay enough to support a household (i.e. the employee doesn't have to live in his/her parents' basement).
Nope. Breadwinner jobs have declined. The "growth" measured by GDP is mostly increases in prices, not growth in full-time jobs or wages for the bottom 95%.
Did they invest the Fed's free money for financiers in new productive capacity? No, productivity has tanked:
But the Fed's near-zero interest rates and easy credit must have encouraged investors and entrepreneurs to launch a tsunami of new businesses, right? Wrong -- new business growth has collapsed since the Fed's policies were put in place:
But certainly the Fed's policies have kept inflation low, correct? No--not if you pay rent, college tuition or healthcare:
But surely the Fed's vaunted wealth effect has trickled down to all households? Not even close--wealth/income inequality has soared:
Berkeley economics professor Emmanuel Saez put out an update to his estimates of income inequality, and the headline figure has everybody outraged: 95% of income gains since 2009 have accrued to the top 1%.
The Fed has not only failed to fix what's broken in the U.S. economy--it has actively made those problems worse. The first step in solving these problems is to eliminate whatever is making them worse--i.e. the Federal Reserve.


My new book is #5 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book's website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
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