11/27/14

China Strengthening Claim To South China Sea Oil And Gas

Not gone and not forgotten, China is ready to solidify its claim to the South China Sea (SCS). Recent satellite imagery confirms China is conducting significant land reclamation operations in the Spratly Islands in the SCS. The SCS is an important fishing ground and is believed to hold large amounts of oil and gas. Undermining the United States’ influence in the region, China intends to play the shepherd in one of the world’s busiest trade routes.

The Spratly Islands along with the Paracel Islands and several maritime boundaries in the SCS have been hotly disputed for several centuries. The conflict includes Brunei, China, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam and has predominantly centered on historical and cultural claims. Though offering very little in the way of land or resources, the islands serve as a tangible marker. As such, parties to the conflict have been quick to occupy them.

China’s most recent undertaking in the Spratly island chain is not their first – the last 18 months have already seen three reclamation projects. However, at more than 3,000 meters and counting Fiery Cross Reef is their grandest venture yet and appears destined to house an airstrip and harbor, both capable of supporting military hardware. The Philippines, Malaysia, and Vietnam already operate airstrips in the Spratlys, but can only support smaller, prop-based aircraft.

As it pursues expansion, China has been hesitant to engage in multilateral negotiations and meaningful dialogue on the SCS was relegated to the sidelines at the recent APEC and ASEAN summits. Instead, China – demanding an in-house solution to the convoluted matter – is content to flex its superior political and military might to limited opposition. Reluctant to step on any toes and with its feet in multiple courts, the United States is short on political recourse, and that’s how China likes it.

Though China’s aims are long-term, control of the Spratlies and Paracels is not subsidiary to any prize that may lie beneath. Chinese President Xi Jinping’s “Asian security concept” calls for Asian solutions to Asian problems and seeks to limit Western influence in such “domestic” affairs. Unchecked dominance in the SCS, whether through direct force or intimidation, would be a remarkable victory in this regard.

And to the victor go the spoils, which in this case are still pretty unclear, a side effect of the conflict itself. The Energy Information Administration estimates the SCS holds approximately 11 billion barrels (bbl) of oil and 190 trillion cubic feet (Tcf) of natural gas. That estimate jumps to as much as 22 bbl of oil and 290 Tcf of natural gas according to a U.S. Geological Survey study. Chinese National Offshore Oil Company (CNOOC) is perhaps the most optimistic and estimates undiscovered resources of oil and gas in the SCS total 125 bbl and 500 Tcf respectively.

To date, the SCS nations have been relatively successful drilling in their near-offshore waters. Malaysia and Thailand for example, have created Joint Development Agreements to expedite production without addressing territorial disputes. For its part, China has largely played the provocateur. In 2011 and 2012, China offered a slew of oil and gas blocks to foreign bidders; the blocks – in contested waters – received no bids. More recently in May, China stationed its new deepwater drilling rig within Vietnam’s Exclusive Economic Zone setting off a series of violent protests in Vietnam.

Disregarding today’s low commodity prices, the SCS is a tough sell for Western majors unwilling to take sides. Shell and ExxonMobil have been the most active in conflict-free waters and any multilateral resolution favors their size and deepwater drilling experience.

Despite the uncertainty of the resources below the surface, there is quantifiable wealth above. Approximately 14 million barrels of crude oil and over half of the global LNG trade pass through the SCS daily. In all, $5.3 trillion in total trade moves annually through the SCS. With an aim to control no less than 80 percent of the sea, China may soon be able to impose its will on global trade patterns.

Source: http://oilprice.com/Energy/Energy-General/China-Strengthening-Claim-To-South-China-Sea-Oil-And-Gas.html

By Colin Chilcoat of Oilprice.com

11/27/14

The Dow Jones: Beautiful Tree in the Desert

By: Wim Grommen

deserttreeThe Dow Jones Industrial Average (DJIA) Index is the only stock market index that covers both the second and the third industrial revolution. Calculating share indexes such as the Dow Jones Industrial Average and showing this index in a historical graph is a useful way to show which phase the industrial revolution is in. Changes in the DJIA shares basket, changes in the formula and stock splits during the take-off phase and acceleration phase of industrial revolutions are perfect transition-indicators. The similarities of these indicators during the last two revolutions are fascinating, but also a reason for concern. In fact the graph of the DJIA is a classic example of fictional truth, a fata morgana.


Transitions

Every production phase, civilization or other human invention goes through a so called transformation process. Transitions are social transformation processes that cover at least one generation. In this article I will use one such transition to demonstrate the position of our present civilization and its possible effect on stock exchange rates.

A transition has the following characteristics:

  • it involves a structural change of civilization or a complex subsystem of our civilization
  • it shows technological, economical, ecological, socio cultural and institutional changes at different levels that influence and enhance each other
  • it is the result of slow changes (changes in supplies) and fast dynamics (flows)

A transition process is not fixed from the start because during the transition processes will adapt to the new situation. A transition is not dogmatic.

Four transition phases

In general transitions can be seen to go through the S curve and we can distinguish four phases (see fig. 1):

  • a pre development phase of a dynamic balance in which the present status does not visibly change
  • a take off phase in which the process of change starts because of changes in the system
  • an acceleration phase in which visible structural changes take place through an accumulation of socio cultural, economical, ecological and institutional changes influencing each other; in this phase we see collective learning processes, diffusion and processes of embedding
  • a stabilization phase in which the speed of sociological change slows down and a new dynamic balance is achieved through learning

A product life cycle also goes through an S curve. In that case there is a fifth phase:

  • the degeneration phase in which cost rises because of over capacity and the producer will finally withdraw from the market.

Figure 1. The S curve of a transition

Four phases in a transition best visualized by means of an S curve:

Pre-development, Take-off, Acceleration, Stabilization.

When we look back into the past we see three transitions, also called industrial revolutions, taking place with far-reaching effect :
1. The first industrial revolution (1780 until circa 1850); the steam engine
2. The second industrial revolution (1870 until circa 1930); electricity, oil and the car
3. The third industrial revolution (1950 until ….); computer and microprocessor

Dow Jones Industrial Average (DJIA)

The Dow Jones Industrial Average (DJIA) index is the oldest shares index in the United States. A select group of journalists of The Wall Street Journal decide which companies are included in the most influential stock exchange index in the world. Unlike most other indices the Dow is a price average index. This means that shares with a high price have a great influence on the movements of the index. Calculating stock index values such as the Dow and presenting the index in a historical graphs is a perfect way of indicating which phase an industrial revolution is in.

The Dow was first published in 1896. The index was calculated by dividing the sum of the shares by 12:

Dow-index_1896 = (x1 + x2+ ……….+x12) / 12

An index is calculated on the basis of a set of shares. Every index has its own formula and the formula results in the number of points of the index. However, this set of shares changes regularly. It is therefore very strange that different sets of shares are represented by the same unit.

After a period of 25 years the value of the original set of 12 apples is compared to the value of a set of 30 pears. In 1929 only 2 of the original 12 companies of the Dow were still present.

The most remarkable characteristic is of course the constantly changing set of shares. Generally speaking, the companies that are removed from the set are in a stabilization or degeneration phase. Companies in a take off phase or acceleration phase are added to the set. This greatly increases the chance that the index will rise rather than go down. This is obvious, especially when this is done during the acceleration phase of a transition. In 1916 the Dow was extended to 20 companies; 4 companies were taken out and 12 were added.

Dow-index_1916 = (x1 + x2+ ……….+x20) / 20

This way of calculating the index actually creates a kind of pyramid scheme. All goes well as long as companies are added that are in their take off phase or acceleration phase. At the end of a transition there will be fewer companies in those phases.

The shares of a number of companies were split during the years and for those shares a factor was added to the calculation. The formula is as follows (American Can is multiplied by 6, General Electric by 4).

Dow-index_1927 = (6.x1 + 4.x2+ ……….+x20) / 20

Things take a bizarre turn with the changes to the Dow Jones of 1 October 1928.

On 1 October 1928 the Dow Jones is enlarged to 30 shares.

Because all calculations are done by hand, the calculation formula of the index is simplified. The Dow Divisor is introduced. The index is calculated by dividing the sum of the share values using the Dow Divisor.

Because the value on 1 October 1928 must remain the same, the Dow Divisor is set at 16.67. The index graphs of before and after 1 October be a continuous line.

Dow-index_okt_1928 = (x1 + x2+ ……….+x30) / 16.67

On 1 October 1928 the value of the Dow is 239, so the sum of the shares is 3984 dollars. From that moment on an increase (or decrease) of the set of shares results in almost twice as many (or fewer) index points. In the old formula the sum would have been divided by 30.

With every change in the set of shares used to calculate the Dow, the value of the Dow Divisor also changes. This is done because the index which is the result of two different sets of shares at the moment the set is changed must be the same for both sets at that point in time. The same thing happens when shares are split. In the fall of 1928 and spring of 1929 8 shares are split decreasing the Dow Divisor to 10.47.

Dow-index_sept_1929 = (x1 + x2+ ……….+x30) / 10.47

From that moment on a an increase (or decrease) of the set of shares results in almost three times as many (or fewer) index points as a year before. In the old formula the sum would have been divided by 30. The Dow’s highest point is on 3 September 1929 at 381 points.

So the extreme increase followed by an extreme decrease of the Dow in the period 1920 – 1932 was primarily caused by changes to the formula, the constant changes to the set of shares during the acceleration phase of the second industrial revolution and splitting of s`hares during this period. Because of these changes in the Dow investors were wrong footed. The companies whose shares constituted the Dow index at that time also continued into the stabilization and degeneration phase.

The Dow Jones Industrial Average: Beautiful Tree in the Desert

In many graphs the y-axis is a fixed unit, such as kg, meter, liter or euro. In the graphs showing the stock exchange values, this also seems to be the case because the unit shows a number of points. However, this is far from true! An index point is not a fixed unit in time and does not have any historical significance. An index is calculated on the basis of a set of shares. Every index has its own formula and the formula gives the number of points of the index. Unfortunately many people attach a lot of value to these graphs which are, however, very deceptive.

An index is calculated on the basis of a set of shares. Every index has its own formula and the formula results in the number of points of the index. However, this set of shares changes regularly. For a new period the value is based on a different set of shares. It is very strange that these different sets of shares are represented as the same unit. In less than ten years twelve of the thirty companies (i.e. 40%) in the Dow Jones were replaced. Over a period of sixteen years, twenty companies were replaced, a figure of 67%. This meant that over a very short period we were left comparing a basket of today’s apples with a basket of yesterday’s pears.

Even more disturbing is the fact that with every change in the set of shares used to calculate the number of points, the formula also changes. This is done because the index, which is the result of two different sets of shares at the moment the set is changed, must be the same for both sets at that point in time. The index graphs must be continuous lines. For example, the Dow Jones is calculated by adding the shares and dividing the result by a number. Because of changes in the set of shares and the splitting of shares the divider changes continuously. At the moment the divider is 0.15571590501117 but in 1985 this number was higher than 1. An index point in two periods of time is therefore calculated in different ways:

Dow1985 = (x1 + x2 +..+x30) / 1

Dow2014 = (x1 + x2 +.. + x30) / 0.15571590501117

In the 1990s many shares were split. To make sure the result of the calculation remained the same both the number of shares and the divider changed. An increase in share value of 1 dollar of the set of shares in 2014 results is 6.4 times more points than in 1985. The fact that in the 1990s many shares were split is probably the cause of the exponential growth of the Dow Jones index. At the moment the Dow is at 16,437 points. If we used the 1985 formula it would be at 2,559 points.

The most remarkable characteristic is of course the constantly changing set of shares. Generally speaking, the companies that are removed from the set are in a stabilization or degeneration phase. Companies in a take off phase or acceleration phase are added to the set. This greatly increases the chance that the index will rise rather than go down. This is obvious, especially when this is done during the acceleration phase of a transition. From 1980 onward 7 ICT companies (3M, AT&T, Cisco, HP, IBM, Intel, Microsoft), the engines of the latest revolution and 5 financial institutions, which always play an important role in every transition, were added to the Dow Jones.

Table 1. Changes in the Dow, stock splits and the value of the Dow Divisor after the market crash of 1929

Dow Jones Industrial Average

Figure 2 Exchange rates of Dow Jones during the latest two industrial revolutions. During the last few years the rate increases have accelerated enormously.

Double manipulation

On September 23 2013, the Dow got the biggest facelift since 2004 in one fell swoop with the removal of 3 company constituents:

Hewlett- Packard Co. (+21.5% ytd), Bank of America Inc. (+52.0% ytd) and Alcoa Inc. (-1.8% ytd)

And the addition of: Goldman Sachs Group Inc. (+25 ytd), Nike Inc. (+27% ytd) and Visa Inc. (+18% ytd)

What is even more striking is that the three companies removed from the index have a low share price (HP is trading at an approximate price of $22, BoA at $14 and Alcoa at $8 for a sum total of $44) while the three stocks added have a high market price (Goldman Sachs at $164, Nike at $67 and Visa at $184 for a sum total of $415). Of course there is the Dow Divisor which supposedly ensures that the value of the Dow Jones with the new shares is the same as the value of the Dow Jones with the old shares but this effect is only short-term as, in the long-term, the profits of the higher priced stocks will be greater/stronger than those of the weaker stocks that they replaced.

The Dow 30 is calculated by dividing the sum of the 30 constituents’ shares by the Dow Divisor. On September 10, the Dow Jones ended at 15,191 points. The Dow Divisor currently has a value of 0.130216081. This means that the current total of 30 shares is worth $1,978 (15,191 x 0.130216081=$1,978).

HP is trading at an approximate price of $22, BoA at $14 and Alcoa at $8 (sum total of $44). These shares will be replaced by Goldman Sachs at $164, Nike at $67 and Visa at $184 (sum total of $415) which is 9.4 times more. This means that the new sum of the 30 stocks have a value of $2,349 (1978 – 44 + 415) and, therefore we expect that the Dow Divisor will be adjusted from 0.130216081 to 0.154631 to get back to the original 15,191 index points (15,191 x 0.154631 = $2,349).

Given the above, had the three old shares increased by 10% each in price in the past the Dow 30 would have increased by 33.8 points in total (10% x 44 divided by 0.130216081 = 33.79 points) assuming there was no change in the price of the other 27 stocks.

As of September 23rd, however, a corresponding 10% increase in the price of each of the new shares would contribute 268.4 points to the rise of the Dow 30 (10% x 415 divided by 0.154631 = 268.38) or 7.94 times more points.

The influence of the 3 losers was: $44 of $1978. This is 2.2% of the Dow Jones Index.
The influence of the 3 winners becomes: $415 of $2,349. This is 17.67% of the Dow Jones Index.
This stinks pretty much of manipulation, even double manipulation!

Overview from 1997 : 20 winners in – 20 losers out, a figure of 67%

September 23, 2013: Hewlett – Packard Co., Bank of America Inc. and Alcoa Inc. replaced Goldman Sachs Group Inc., Nike Inc. and Visa Inc.
Alcoa has dropped from $40 in 2007 to $8.08. Hewlett- Packard Co. has dropped from $50 in 2010 to $22.36. Bank of America has dropped from $50 in 2007 to $14.48.
But Goldman Sachs Group Inc., Nike Inc. and Visa Inc. have risen 25%, 27% and 18% respectively in 2013.

September 20, 2012: UnitedHealth Group Inc. (UNH) replaces Kraft Foods Inc.
Kraft Foods Inc. was split into two companies and was therefore deemed less representative so no longer suitable for the Dow. The share value of UnitedHealth Group Inc. had risen for two years before inclusion in the Dow by 53%.

June 8, 2009: Cisco and Travelers replaced Citigroup and General Motors.
 Citigroup and General Motors have received billions of dollars of U.S. government money to survive and were not representative of the Do.

September 22, 2008: Kraft Foods Inc. replaced American International Group. 
American International Group was replaced after the decision of the government to take a 79.9% stake in the insurance giant. AIG was narrowly saved from destruction by an emergency loan from the Fed.

February 19, 2008: Bank of America Corp. and Chevron Corp. replaced Altria Group Inc. and Honeywell International.
Altria was split into two companies and was deemed no longer suitable for the Dow.
 Honeywell was removed from the Dow because the role of industrial companies in the U.S. stock market in the recent years had declined and Honeywell had the smallest sales and profits among the participants in the Dow.

April 8, 2004: Verizon Communications Inc., American International Group Inc. and Pfizer Inc. replace AT & T Corp., Eastman Kodak Co. and International Paper.
AIG shares had increased over 387% in the previous decade and Pfizer had an increase of more than 675& behind it. Shares of AT & T and Kodak, on the other hand, had decreases of more than 40% in the past decade and were therefore removed from the Dow.

November 1, 1999: Microsoft Corporation, Intel Corporation, SBC Communications and Home Depot Incorporated replaced Chevron Corporation, Goodyear Tire & Rubber Company, Union Carbide Corporation and Sears Roebuck.

March 17, 1997: Travelers Group, Hewlett-Packard Company, Johnson & Johnson and Wal-Mart Stores Incorporated replaced Westinghouse Electric Corporation, Texaco Incorporated, Bethlehem Steel Corporation and Woolworth Corporation.

Real truth and fictional truth

Is the number of points that the Dow Jones now gives us a truth or a fictional truth? 
If a fictional truth then the number of points now says absolutely nothing about the state that the economy or society is in when compared to the past. In that case a better guide would be to look at the number of people in society that use food stamps today – That is the real truth

A fata morgana is an optical phenomenon, and so is the graph of the The Dow Jones Industrial Average.

Wim Grommen

Mr. Grommen was a teacher in mathematics and physics for eight years at secondary schools. The last twenty years he trained programmers in Oracle-software. The last 16 years he studied transitions, social transformation processes, the S-curve and transitions in relation to market indices. Articles about these topics have been published in various magazines / sites in The Netherlands and Belgium.

11/26/14

Elizabeth Warren gushes about big government, says GOP caused recession

By: Renee Nal
New Zeal

Elizabeth Warren1

Elizabeth Warren speaks at the progressive Center for American Progress

Potential Democratic presidential nominee Massachusetts Senator Elizabeth Warren spoke at the George Soros-funded Center for American Progress on Wednesday, where she assured her progressive audience that the 2014 election outcome was not a referendum against big government, rather, people are worried about “who government works for.”

She declared:

This is not about big government or small government. It’s not the size of government that worries people. Rather, it’s a concern for who government works for.

While Warren is correct that Americans realize that the federal government is no longer working for them, the size of government is a major concern for those who fund the government through their taxes.

In January, a Gallup poll reported:

One reason Americans are dissatisfied with how the government system is working is that they believe it is too big and powerful. Two-thirds of Americans (66%) are unhappy with the size and power of the federal government.

Here is a chart tracking American’s dissatisfaction with the size and power of the federal government:

Gallup Poll

Gallup Poll

Democratic politicians, who pledge an oath to the Constitution, consistently make the case for big government, despite their knowledge of the system of “limited government” as envisioned and implemented by America’s founding fathers.

While speaking of the size of government, James Madison wrote in Federalist 48:

It will not be denied that power is of an encroaching nature and that it ought to be effectually restrained from passing the limits assigned to it.

Warren continued to praise the progressive style of governance, telling her audience that strict regulations on the financial sector and “investments” in state universities, roads and bridges caused Americans to thrive, but all that was taken away when Republicans sought to deregulate “Wall Street,” which caused the 2008 economic recession.

The 2008 economic recession can be traced to disparate impact policies, and believe or not, a young Barack Obama was heavily involved in the promotion of these policies. In fact, he was “a pioneering contributor to the national subprime real estate bubble.” But Obama did not start the crisis, although he was certainly a part of it. In fact, the problems began with the 1977 Community Reinvestment Act, which were compounded under President Bill Clinton, and then again under President George W. Bush.

Consider an excerpt from this article foreshadowing the crisis by the author of “America’s Trillion-Dollar Housing Mistake: The Failure of American Housing Policy,” Howard Husock from 2000:

The Clinton administration has turned the Community Reinvestment Act, a once-obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American cities—and, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation’s banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups, intent, in some cases, on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being.

As reported at WayneDupree.com:

Academia, the federal government, and activist organizations pushed, pushed, pushed, pushed banks to make bad loans.

The bottom line is that banks were strong-armed by groups such as the criminal enterprise once known as ACORN to give loans to people who could not afford them. The banks sadly folded under pressure perhaps, at least initially, for fear of being referred to as “racist.” If the government was not meddling in their business, those loans would never have been given because they did not make financial sense. But banks, who knew that the loans were backed by the taxpayer-funded government sadly allowed themselves to be trampled upon, adding to their bottom lines and pushing the costs, once again, on taxpayers who believe their representatives are actually representing them. Despite the fact that they are now paying a heavy price, in addition to being the scapegoat for the 2008 recession, banks can only blame themselves.

In an incredibly revealing New York Times article from 2008, the authors did a good job of proving that the crisis was due to government policies promoted by President George W. Bush. The authors, however, forgot to mention that banks were not only under pressure by George Bush, but also by activists, academia and Democrat politicians. Instead, they blamed “lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.”

So, to summarize, banks stupidly did what they were told in lending to those who could not afford it, then they were blamed by the people who pushed them to make the bad loans in the first place as being “predatory lenders” who caused the 2008 economic recession.

In his first inaugural address, Thomas Jefferson said:

A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned – this is the sum of good government.

The federal government was never meant to meddle in the affairs of citizens. If not for the actions of the federal government, the 2008 recession would never have happened. Banking institutions simply would not have given loans to those who could not have afforded them.

Warren’s speech has been compared to President Obama’s infamous “You Didn’t Build That” speech, where he also invoked “roads and bridges” to assure business owners that their accomplishments could not have occurred without taxpayer dollars:

Last month, former Secretary of State Hillary Clinton said:

Don’t let anybody tell you that, you know, it’s corporations and businesses that create jobs.

Watch her comments here:

Warren made similar comments in 2011, as reported at TheBlaze:

There is nobody in this country who got rich on his own — nobody. You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate.

Watch her presentation here:

Trevor Loudon writes about Elizabeth Warren’s socialist ties here, here and here.

In an essay in the Boston Gazette in October 1771, Samuel Adams wrote:

The liberties of our country, the freedom of our civil Constitution are worth defending at all hazards; and it is our duty to defend them against all attacks. We have received them as a fair inheritance from our worthy ancestors. They purchased them for us with toil, and danger, and expense of treasure and blood, and transmitted them to us with care and diligence.

It would be interesting to read some of the quotes from the founding fathers on limited government to progressive politicians for their response.

This article has been cross-posted from Broadside News.

11/26/14

Watcher’s Council Nominations – What Stays In Vegas Edition

The Watcher’s Council

Snake Eyes for ol' Snake eyes.

Snake Eyes For the Snake-In-Chief!

From the awesome Chris Muir at Day By Day, of course.

Welcome to the Watcher’s Council, a blogging group consisting of some of the most incisive blogs in the ‘sphere and the longest running group of its kind in existence. Every week, the members nominate two posts each, one written by themselves and one written by someone from outside the group for consideration by the whole Council. Then we vote on the best two posts, with the results appearing on Friday morning.

Council News:

The Council In Action!!

Tom White of Virginia Right is increasing in awesomeness every time we turn around! Aside from his status as a political guru in the Old Dominion, being virtually alone in predicting Dave Brat’s upset victory, he’s now becoming a local go to on other issues as well.

This week, he was cited in the Richmond Post-Dispatch, was interviewed on WRIC, the local ABC outlet and linked to on the station’s website after he wrote a big story locally about how parents in his locality were upset by the odd use of the name ‘Jihad’ in a kid’s math problem, which goes along with the Muslim Brotherhood line about ‘Jihad’ merely meaning ‘struggle’ and thus normal behavior… even though all four Muslim fiqhs (Muslim schools of jurisprudence) agree that it’s primary use is to refer to holy war against the infidel. Here’s Tom in action:

You just know that the retired teacher they let follow him is a hardcore Democrat, right? Outstanding, sir.

And speaking of outstanding, there’s another little matter we need to get to. Tom White just had a birthday that slipped by my notice, so it’s time for a belated festiva, que sabe?

Shadow Birthday Cake

This little number is called a Shadow Cake… yellow sponge with homemade chocolate buttercream, with some candy roses on top.

http://www.obrienswine.ie/media/catalog/product/cache/1/image/41d1648ae883b8c941ef5f6213644ae5/1/9/19023.jpg

And to drink, I’m going to resist the urge to go local and splurge on some Veuve Cliqot.

And, for those of you whom indulge, some wondrous Virginia moonshine, manufactured by men who despise both the revenooers (don’t we all?) and the idea of turning perfectly good corn into ethanol. Instead, they provide us with this nectar.

Slanje, Lechaim and Kempai!

Tom is what used to be referred to as a Renaissance man, someone who does many things superbly well. Aside from his undoubted blogging talent (he was chosen a top political blogger by the AFP in the 2012 elections), he’s a highly accomplished singer/songwriter who gigs locally and has his own studio, is highly active in Virginia politics, runs his own insurance agency and is a top IT consultant as well.

Of course, all that aside, he’s a great guy and a firm friend. He’s never failed to help out any of us who are mired in techi-type difficulties and that especially applies to me. Although none of us on the Council have ever met him personally, he was our unanimous choice to be the Council’s treasurer, which is just a small indication of the respect we have for him and the esteem we hold him in.

Me? All I’ll say is that from minute one, Tom was one of those people I instinctively liked. And also on the plus side, he puts up with me… how good is that?

Happy belated my friend. Many, many more.

This week, Le·gal In·sur·rec·tion, The Political Commentator, The Elder Of Ziyon and Seraphic Secret earned honorable mention status with some great articles.

You can, too! Want to see your work appear on the Watcher’s Council homepage in our weekly contest listing? Didn’t get nominated by a Council member? No worries.

To bring something to my attention, simply head over to Joshuapundit and post the title and a link to the piece you want considered along with an e-mail address (mandatory, but of course it won’t be published) in the comments section no later than Monday 6 PM PST in order to be considered for our honorable mention category. Then return the favor by creating a post on your site linking to the Watcher’s Council contest for the week when it comes out on Wednesday morning.

Simple, no?

It’s a great way of exposing your best work to Watcher’s Council readers and Council members while grabbing the increased traffic and notoriety. And how good is that, eh?

So, without further ado, let’s see what we have for you this week…

Council Submissions

Honorable Mentions

Non-Council Submissions

Enjoy! And don’t forget to like us on Facebook and follow us on Twitter… ’cause we’re cool like that! And don’t forget to tune in Friday for the results!

11/21/14

The Council Has Spoken!! This Week’s Watcher’s Council Results – 11/21/14

The Watcher’s Council

http://www.romanobritain.org/Photos/roman-senate2.jpg

The Council has spoken, the votes have been cast and the results are in for this week’s Watcher’s Council match-up.

“This morning in Jerusalem Palestinians attacked Jews who were praying in a synagogue. To have this kind of act, which is a pure result of incitement, of calls for ‘days of rage,’ of just irresponsibility, is unacceptable.”

“People who have come to worship God in a sanctuary of a synagogue were/// murdered in a holy place in an act of pure terror and senseless brutality and murder.” – U.S. Secretary of State John Kerry

“There are two races of men in this world but only these two: the race of the decent man and the race of the indecent man.” – Victor Frankl, Auschwitz survivor, in ‘Man’s Search For Meaning’

“It’s not enough for us to say: ‘There are those carrying out Ribat’ (religious war over land claimed to be Islamic). We must all carry out Ribat in the Al-Aqsa [Mosque]. It’s not enough for us to say: ‘The settlers have arrived [at the Mosque]’. They have come, and  we have to prevent them, by any means necessary, from entering the Sanctuary. They have no right to enter it. They have no right to defile it. – Mahmoud Abbas, inciting violence on Official Palestinian Authority TV

http://3.bp.blogspot.com/-_nEAkWOufFU/T366WMxCdrI/AAAAAAAABOg/easpV-8FMnM/s400/Joshua_Dali_Sun.jpg

This week’s winning essay was Joshuapundit’sThe Blood Of Zion Cries Out. It was my reaction on the day four rabbis and a Druze traffic cop who tried to stop the killers were murdered with guns and meat cleavers in a Jerusalem synagogue. Here’s a slice:

Early this morning, four Jews at morning prayers were murdered in a synagogue in Jerusalem after two Palestinian broke in and assaulted the worshipers with gunfire and meat cleavers.

Many others were wounded and four are in critical condition.

The terrorist attack took place in Har Hof a predominantly Orthodox neighborhood at the Kehilat Yaakov synagogue on Agasi Street.

The Murder victims were identified as Rabbi Moshe Twersky, the head of the Torat Moshe yeshiva, 59; 40-year-old  Rabbi Aryeh Kupinsky; 50-year-old Rabbi Kalman Levine; and 68-year-old Rabbi Avraham Shmuel Goldberg(HY”D). Rabbi Kupinsky, Rabbi Levine and Rabbi Twersky were all American citizens, while Rabbi Goldberg was a British subject. A Druze policeman, 30-year-old Master Sergeant Zidan Sif subsequently died of his wounds as well, and all Israel will mourn and honor him.

The killers stormed the synagogue at 7 AM local time. There was no warning and no way for the victims to defend themselves.The rabbis were murdered during the sacred prayer of Shimoneh Esrei, with siddurim (prayer books) in their hands and their tefillum on.

Eye witness Ya’akov Amos said: ‘The terrorist moved to within a metre of me then started shooting. One, two, three, bang, bang, bang. I immediately hit the ground and tried to protect myself with a prayer stand. He kept screaming ‘Allah hu’Akbar’.

There was blood everywhere, so much that one of the medical workers slipped in it and broke his leg.

The international reaction was interesting. Even U.S. Secretary of State John Kerry seemed shocked, with his voice quavering. He even used the “T” word and called for an end to incitement against Jews.

Phillip Hammond, Britain’s Foreign Secretary contented himself with a bloodless statement that ‘both sides’ should seek to ‘reduce tension.’ President Obama, of course, said much the same thing. Somehow, I doubt they would have merely talked about both sides reducing tension if four imams had been murdered by a Jew and Qu’rans profaned in this way.

Israel’s economics minister Naftali Bennett was interviewed by the BBC today, and provides us with another indication of exactly how sick and depraved Britain has become when it comes to Israel and the Jews.

(just a hint – when Bennett mentions Abu Mazen, he is using Mahmoud Abbas’s nom de guerre, the terrorist name he used as Arafat’s second-in-command.)

Notice how the interviewer doesn’t even address the issue of Abbas inciting terrorism, but pulls the case of an Arab bus driver who died yesterday, as though that made the savage murder of four Jews at prayer legitimate. That Arab driver, by the way, had a full investigation and an autopsy done on him and there is no doubt he committed suicide. Unlike the Palestinian Authority, Israel jails murderers no matter who they are.

I really felt like saying ‘Kol Hakavod’ when Bennett held up a picture of one of the victims, which the interviewer hastily told him to put down lest he upset the gentle sensibilities of her viewers. I think it is absolutely essential to do just that – to let the British public see what their government is funding and supporting. And I hope it upsets them to the point of utter shame.

At the end of the interview, Bennett says that Britain is going to have to make a choice of whether they support the Free World or not. As I’m sure Bennett knows, the British Government has already made that choice. Which is why, perhaps, they feel compelled to put up with soldiers being beheaded in broad daylight and no go areas for police and non-Muslims in London and other large British cities.

The murderers were both killed in a shootout with police at the scene. They were Ghassan and Oday Abu Jamal from the Jabal Mukaber neighborhood in east Jerusalem. Needless to say, they were acclaimed as heroes and martyrs by all the factions of the Arabs whom call themselves Palestinians.

A Palestinian woman scatters sweets as she celebrates with others an attack on a Jerusalem synagogue

Palestinian supporters of The Popular Front for the Liberation of Palestine, (PFLP), a small militant group, dance while waving their flags, after they heard the news of the shooting

“We responded with shouts of joy when we received the news about their deaths,” Ala’a Abu Jamal said of his cousins Ghassan and Uday Abu Jamal to Yedioth Aharonoth. “People here distributed candies to guests who visited us, and there was joy for the martyrs.”

In a message published on its official new website Al-Resalah, Hamas said the attack was “a quality development in fighting the occupation. We highly value the heroism of its operatives.” Hamas spokesman Sami Abu Zuhri praised the attack on Qatari news channel Al-Jazeera as “heroic,” calling for more attacks of the same kind.

Hamas MP Mushir Al-Masri happily wrote on Twitter that “Jerusalem has nothing but men who love martyrdom. The heroes of the knife are in Jerusalem. The heroes of the run-over [car attacks] are in Jerusalem. In Jerusalem men take revenge.”

And he posted this on his Facebook page:

A cartoon posted on the Facebook page of Hamas MP Mushir Al-Masri has perpetrators of the Jerusalem attack dressed in religious Jewish garb asking 'where are they?' (photo credit: Facebook)

The Arab killer is asking ‘Where are they hiding?” Needless to say, in spite of what this cartoon shows none of the worshipers were armed.

And Fatah? Mahmoud Abbas, AKA Abu Mazen issued a ‘condemnation’ that wasn’t one. In a statement (in English, not Arabic) it said that “The Palestinian presidency” condemns violence “from whatever source” and “demands an end to the invasions of Al-Aqsa Mosque and the provocations of the Settlers.”

In other words, ‘So sorry, but unless you surrender Jerusalem to us expect more of the same.’

This is the same Mahmoud Abbas who accused Jews of “contaminating” Al-Aqsa Mosque last week, who just a few days ago was telling his people, in Arabic, to ‘defend Jerusalem’ by any means necessary. This is the same Mahmoud Abbas who said nothing when Fatah published cartoons and Facebook posts encouraging terrorist attacks on Jews and “days of rage” to defend the ‘threatened’ Al-Aqsa.

Tawfik Tirawi, former chief of the Palestinian General Security in the West Bank and a member of Fatah’s Central Committee made it even plainer, and in Arabic. Today he told a radio station in Hebron that the attack was “nothing but a reaction to the recent crimes of the occupation and the settlers in occupied Jerusalem and across the nation. The threats of the occupation against our people and the Palestinian leadership, represented by the president, will only increase our efforts in safeguarding our rights.”

His remarks were reprinted on Fatah’s official Facebook page.

I should make something clear here. This is not the fault of Abbas, or Hamas, or any of the Arabs who identify themselves as Palestinians.

It is the fault of the Israeli government.

A significant number of the Palestinians are simply acting as they have always acted since the 1920′s, and these tendencies were unleashed even further once Arafat and the PLO were allowed in to take over after Oslo.

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Israeli governments since Oslo have always allowed themselves to be pressured to ignore these instances of sheer horror… to release  convicted murderers, to make concessions to the terrorist entities on Israel’s borders, and most of all to avoid  finishing them off entirely when their violence and bloodshed mandated a response. This has been especially true since Barack Obama, who styles himself as the Palestinian’s very own community organizer entered the White House.

Is it any wonder that this sort of thing continues to happen? Is it really so puzzling that after allowing Hamas to continue in Gaza and maintaining any kind of relationship with Abbas and the PLO once they allied themselves openly with Hamas that they would resort back to Arafat’s tactics?

Yasser Arafat himself outlined for his followers what this war was really about. On Jordanian TV, right after signing the Oslo Accords he was criticized for signing a peace agreement with the Jews. He responded by reminding his audience of the Peace of Hubidiyeh, a treaty Mohammed made with the Quraysh tribe that he violated as soon as he was strong enough to massacre them, a story every Muslim knows. And then he outlined exactly what this war was about, saying that “either the Jews will push us into the sea or we will push them into the sea.”

Arafat, the leaders of Hamas and numerous members of Fatah have sung the same songs for years. Is it their fault that Israeli governments for years have refused to take them seriously?

More at the link.

In our non-Council category, the winner was Victor Davis HansonA Moral primer submitted by Joshuapundit. Hanson is an old classicist among his other virtues. In this essay, he looks at the state of America and the world, and especially the president who leads us and sees a lack of political and personal morality as a deadly problem, possibly a terminal one for our republic. Do read it.

Here are this week’s full results:

Council Winners

Non-Council Winners

See you next week!

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11/20/14

From knowledge based economy to wisdom society

By: Wim Grommen

Every production phase or civilization or other human invention goes through a so called transformation process. Transitions are social transformation processes that cover at least one generation (= 25 years). In this article I will use one such transition to demonstrate the position of our present civilization and its possible effect on stock exchange rates.

When we consider the characteristics of the phases of a social transformation we may find ourselves at the end of what might be called the third industrial revolution. Transitions are social transformation processes that cover at least one generation (= 25 years). A transition has the following characteristics:

  • it involves a structural change of civilization or a complex subsystem of our civilization
  • it shows technological, economical, ecological, socio cultural and institutional changes at different levels that influence and enhance each other
  • it is the result of slow changes (changes in supplies) and fast dynamics (flows)

Four transition phases

In general transitions can be seen to go through the S curve and we can distinguish four phases (see fig. 1):

  1. a pre development phase of a dynamic balance in which the present status does not visibly change
  2. a take off phase in which the process of change starts because of changes in the system
  3. an acceleration phase in which visible structural changes take place through an accumulation of socio cultural, economical, ecological and institutional changes influencing each other; in this phase we see collective learning processes, diffusion and processes of embedding
  4. a stabilization phase in which the speed of sociological change slows down and a new dynamic balance is achieved through learning

A product life cycle also goes through an S curve. In that case there is a fifth phase:

  1. the degeneration phase in which cost rises because of over capacity and the producer will finally withdraw from the market.

The S curve of a transition

exchange1

Figure 1: Four phases in a transition best visualized by means of an S curve.

Examples of historical transitions are the demographical transition and the transition from coal to natural gas which caused transition in the use of energy. A transition process is not fixed from the start because during the transition processes will adapt to the new situation. A transition is not dogmatic.

Three drastic transitions

When we go back into the past three transitions took place with far-reaching effects.

  1. The first industrial revolution

The first industrial revolution lasted from around 1780 tot 1850. It was characterized by a transition from small scale handwork to mechanized production in factories. The great catalyst in the process was the steam engine which also caused a revolution in transport as it was used in railways and shipping. The first industrial revolution was centered around the cotton industry. Because steam engines were made of iron and ran on coal, both coal mining and iron industry also came to bloom.

This revolution ended in 1845 when Friedrich Engels, son of a German textile baron, described the living conditions of the English working class in “The condition of the working class in England“. The result of this revolution: an immense gap between rich and poor.

  1. The second industrial revolution

The second industrial revolution started around 1870 and ended around 1930. It was characterized by ongoing mechanization because of the introduction of the conveyer belt (? assembly line), the replacement of iron by steel and the development of the chemical industry. Furthermore coal and water were replaced by oil and electricity and the internal combustion engine was developed. Whereas the first industrial revolution was started through (chance) inventions by amateurs, companies invested a lot of money in professional research during the second revolution, looking for new products and production methods. In search of finances small companies merged into large scale enterprises which were headed by professional managers and shares were put on the market. These developments caused the transition from the traditional family business to Limited Liability companies and multinationals.

After the roaring twenties the revolution ended with the stock exchange crash of 1929. The consequences were disastrous culminating in the second world war.

  1. The third industrial revolution

The third industrial revolution started around 1940 and is nearing its end. The United States and Japan played a leading role in the development of computers. During the second world war great efforts were made to apply computer technology to military purposes. After the war the American space program increased the number of applications. Japan specialized in the use of computers for industrial purposes such as the robot. By now the computer and communication technology take up an irreplaceable role in all parts of the world. The acceleration phase of the third industrial revolution started around 1980 with the introduction of the micro processor. The third industrial revolution has clearly reached the saturation and degeneration phase. This phase is characterized by a saturated market and growing competition. Only the strongest companies can handle the competition or buy up their competitors (think of the takeovers by Oracle and Microsoft in the past few years). Essentially there is relatively little new technology in the IT world despite what the marketing machines from America would have us believe.

We can safely state that in some 25 years an industrial revolution has effectively dismantled a welfare state; the excesses of our society are visible everywhere (excessive salaries for executives, bookkeeping fraud, fraud with shares). There will be consequences for the stock exchanges. It is a matter of time but unavoidable.

Dow Jones exchange rates

exchange2

Figure 2: Exchange rates of Dow Jones during the latest two industrial revolutions. During the last few years the rate increases have accelerated enormously.

Triggers

What events could end the latest industrial revolution and cause another stock market crash?

1 Shortage of raw materials

The shortage of raw materials or water which enlarge the chances of war between groups of people? The changes in the climate taking place on mother earth which force mankind into a different kind of behavior? Everyone is convinced that we can not go on the way we are going now. The present course will eventually lead to a gradual decrease of economic activity which will make the indexes drop slowly. This transition will stretch over a longer period.

2 Natural disasters

Another phenomenon that can cause a stock market crash is formed by natural disasters. This scenario is not linked tot the present industrial revolution. History has taught us that earthquakes and tsunamis can make complete cultures suddenly disappear (like Atlantis). If this happens to an economic super power like Japan or the US the consequences for the stock market indexes will be obvious.

3 Man made changes

Or will human behavior itself, as so often in history, be the cause of the end of the third industrial revolution? What might happen when suddenly a counsel of wise men and women appears that wants to reform to a society of wisdom and convince the population that such a reform is much better for a lasting society?

The political leaders of our country have continued the privatization process over the past years. According to the politicians of our country more competition will lead to lower cost for our citizens. However, people have noticed that the cost of primary services has shown an enormous increase over the past few years and have lost their faith in politics. The government policies clash with the policy of the captains of industry who want an increase of scale to lower their cost. We can conclude that the process of privatization of elementary services in our society has failed completely.

Suppose this counsel of wise people were to start a sparkling campaign among the people called “From knowledge based economy to wisdom society”.

Having asked for an offer for all 17 million citizens, the counsel calls on the people to change to the same health care supplier and the same energy supplier. The effect of this call for an increase in scale will be: less housing cost, less personnel cost, less ict cost, less marketing cost, less accountancy cost. This will result in lower cost for health care and energy supplies for Dutch citizens.

After three years the counsel will call on the citizens to change to the same grocery store, the same bank and the same fuel supplier.

The effect of this call for scale increase will again be: less housing cost, less (outrageous) personnel cost, less ict cost, less marketing cost, less accountancy cost. The cost of bank and fuel cost for Dutch citizens will also decrease dramatically.

The effects of this call for increase in scale for the society as a whole will be enormous. There will be less work for the same number of people.

According to the counsel of the wise there will be immense advantages to this increase in scale:

  • After retraining and redistribution of work more people will be available for education, health care, security and welfare so that our welfare state, which has been dismantled in 25 years, can slowly be restored.
  • The citizens of the Netherlands will have more spare time
  • Society will be less stressed, which will lower the cost of mental health care (and probably also lower the amount of senseless violence).
  • Fewer people will be on the roads on their way to work thus automatically solving traffic problems and ending the need for new roads
  • The Dutch citizens will have more time to teach their children the social values that everybody thinks are so important
  • The Dutch citizens will have more time to make the integration process a success
  • There will be less pressure on the environment, improving the durability of society.

“Every advantage got its disadvantage” is a saying by a well-known Dutchman. This increase in scale will cause an immense implosion of economic activity in a society. The effects on stock market indexes will be obvious.

Conclusion

According to the Mayan calendar described in “The Mayan calendar and the transformation of consciousness” by Carl Johan Calleman we live in a very special time. The Mayan calendar is a metaphysical map of the evolution of consciousness and records how spiritual time flows. The calendar presents nine cosmic cycles that represent nine phases of consciousness. In 2011 these nine cycles that the earth has gone through will end simultaneously. The book reveals that the Mayan calendar is a spiritual and prophetic device that enables a greater understanding of the evolution of consciousness driving human history. It predicts a phase of radical changes for the world and humanity. After the failure of communism in 1989 the calendar also predicts the imminent collapse of capitalism. The first hairline cracks in this system are already beginning to show.

This article was published in “Technische en Kwantitatieve Analyse van Beleggers Belangen” in November 2007.

Sources used

Transities & transitiemanagement, casus van een emissiearme energievoorziening, Prof. dr. ir. Jan Rotmans) , Geschiedenis Werkplaatssite by Wolters-Noordhoff.

Wim Grommen worked as a mathematics and physics teacher. He has been an ict trainer in for 25 years. At the moment he is a trainer for Transfer Solutions, an ict company specialized in services for Oracle databases and applications and Java technology. For the past few years he has been studying social transformation processes and the S-curve.