Author: Petros

Nicolas Santa still in federal custody

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Cross posted from the Isaac Brock Society.

FAIRBANKS, Alaska (BSP) Nicolas (Claus) Santa, Bishop of Myra, has been in federal custody since his arrest at the North Pole on Christmas Eve, 2011. Fish and Wildlife agents apprehended him and seized several tons of exotic woods forbidden by the Lacey act. Santa has been charged with multiple counts of money laundering, illegal exportation of currency, illegally importing into the United States toys made of contraband–rare woods, ivory and other banned substances, as well as violating slave labor and child labor laws. A grand jury has also indicted Santa on 190 counts of criminal failure to file the Foreign Bank Account Report (FBAR). For those charges alone, Santa risks a sentence of 950 years in prison and fines equal to 300% of his wealth. Santa was laundering money from his illegal trafficking in toys.

His court-appointed representative, Legolas L’Elfe, has decried his treatment at the hands of federal authorities since his capture. Denied bail as a flight risk, his keepers abandoned him in his windowless cell at the federal detention centre in Fairbanks, Alaska, from February 22 – April 7, 2012. They gave him neither food nor water during this time, and at one point Santa despaired for his life, says L’Elfe. He survived by drinking his own urine. In addition, L’Elfe says, that Santa is a Greek orthodox bishop from the fourth century, when it was normal for priests and bishops to practice severe forms of asceticism. “If it had not been his practice to live many days without food and water, he probably would have died after the first seven days of isolation.” Federal authorities have issued an apology. They said that they are suffering from budget cuts and do not have sufficient personnel at the detention centre. They just simply forgot that they had put him in the cell.

So far no trial date is set. L’Elfe has demanded that the United States release Santa on grounds that his right to a speedy trial has been violated. An anonymous spokesperson for Justice Department retorted, “Who does he think he’s kidding. Nobody ever gets a speedy trial in the United States.”

L’Elfe has indicated that most of the charges stem from Santa’s alleged United States citizenship. State Department officials claim that Santa obtained citizenship during his brief interlude in the 1940s and 1950s of making movies in Hollywood, such as the beloved Miracle on 34th Street. L’Elfe says that this is a case of mistaken identity, and that Santa is actually a stateless individual who was born in the 4th century in the Roman Empire which has not existed as a nation since 1453.

L’Elfe has declined to comment on accusations of a recent report that Santa is a notorious felon whom the Emperor Diocletian (303-311) imprisoned for several years. The report claimed that the Emperor Constantine offered a general pardon to convicts like Santa and that he had been a fugitive until his recent capture by Fish and Wildlife agents.

Santa has asked to renounce his US citizenship in prison in a letter addressed to the State Department. But officials in the State Department refuse to enter the prison to hear his oath of renunciation. They claim that: (1) Santa must pay $450; but since his bank accounts were seized, he hasn’t a penny to his name; (2) he must be outside of the United States when he renounces, unless it is in a time of war; (3) even if Santa did renounce his citizenship, it would not relieve him of the taxes and penalties, including FBAR fines, that accrued while he was still a US citizen. L’Elfe says, “This is pure discrimination. If Eduardo Saverin can renounce his citizenship and save billions of dollars in capital-gains tax for money he made in the United States, why can’t Santa renounce and be relieved of FBAR violations for accounts containing charitable funds that international donors from around the world have gifted so that Santa could continue his benevolent work of providing good gifts to destitute children?” Commissioner of the IRS, Douglas Shulman retorted, “We really don’t care if those accounts were for charitable purposes. It is clear that Santa had signing authority on them. He refused to file the FBARs and come clean on his taxes before we caught him so now he must face the full brunt of the law; we will crucify him so that others will comply.”

Nicolas Claus in 1994 remake of Miracle on 34th Street

Questrade orders not going to market

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Well, this helps me make a decision about what broker to use:  anybody but Questrade.  I’m on hold with trade desk now 34 minutes.

NOTE to self:  Now that you have the CLN, take all your accounts back to Waterhouse.

The following explanation is from Questrade:

Please be aware due to a technical issue, accounts that traded, deposited, or withdrew funds on Monday may now display incorrect positions and balances. Accounts affected by this issue will have any new or replacement orders reviewed by Questrade’s trade desk; this process will delay the orders from being sent to the market. This issue is expected to be fully corrected by Wednesday morning. If you have any questions please contact Questrade at 1.888.783.7866.

Call the number and be prepared to be on hold.  The orders were not “delayed”; they were not going to market at all.  This is absolutely unacceptable.  I can’t afford to stay at Questrade.  I’ve decided to leave Questrade over the recent breakdown of their web trader platform.  I waited patiently for weeks as the market has plummeted, and today I finally go to market to make a trade and the dumbass platform won’t even take my orders to market.

I read the following at a forum:

 

Jaanu Teene wrote:

Hi sparxtrading,

I’d like to clarify – this issue has not suspended our clients’ ability to close or open positions.

Here’s the full details: due to a technical issue, accounts that traded, deposited, or withdrew funds on Monday may now display incorrect positions and balances. Accounts affected by this issue will have any new or replacement orders reviewed by Questrade’s trade desk. This will not impact your ability to trade. In some cases, it may delay an order being sent to market. This issue is expected to be fully corrected by Wednesday morning.

I’d like to add a few more details:
• If you can see the position, you can place the trade yourself and it will go to broker review
• If you cannot see the position and you want to close it, contact our trade desk.

Our client services are at 1.888.783.7866. The trade desk is at 1.866.980.9590

Regards
Jaanu Teene
Questrade Inc.

Clearly this Jaanu Teene has no idea what she is talking about.  I placed orders that didn’t go to market for over a 45 minutes.  Jaanu Teene:  it’s your job to troll the internet to see what bad things people are saying about Questrade.  Here I am.  Come do damage control here.

Tony Robbins video on USA Federal Solvency

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Tony Robbins has made a video on the United States budget.  The video serves to show how far out of whack the federal budget is, and more especially, how the plan of taxing the rich so that they pay their fair share, which is the rhetoric coming out of the Obama campaign, will not solve the problem.  Taxing expats, US citizens living abroad, won’t solve the budget problems either.  Basically, Robbins shows, using Iowahawk’s numbers, that confiscating all the profits and all the wealth of the rich and corporations would not balance the budget, unless the US were also to stop (1) foreign aid; (2) pull out of Afghanistan and Iraq, (3) etc., etc.

Meanwhile, Cullin Roche, the Pragmatic Capitalist, calls Tony Robbins’ video stupid;  he claims to understand monetary policy and says that it is impossible for a money currency issuer to go insolvent (e.g., Zimbabwe, Weimar Germany, Argentina, Chile???); rather, he says that such an entity can cause inflation.  He says that this is not merely a semantic distinction.  Are you buying that?  I have argued that the United States government is already insolvent, but that its money creation ability makes it able to extend and pretend, to kick the can down the road, until the dollar itself becomes a meaningless symbol of value, since measuring other assets in dollars is reification.  The United States has already defaulted.   So have many currency issuers in history.  Monty Pelerin agrees.  Here is Roche’s video:

But the United States government is much worse off so far this year than what Robbins projects; it is not borrowing 40 cents on every dollar it spends but 53 cents.  The debt death spiral is at work.  Expect a government that is so desperate to continue to put in place desperate measures.  It becomes a predator, seeking food high and low, including expat food.  It is currently cannibalizing its own expats, rather than facing the fact that it must both (1) cut its budget and (2) raise taxes on all Americans living in the United States.  Raising taxes on the rich and those living on foreign countries will not solve the insolvency.

Hat tip:  Business Insider.

October to March: US government borrows 53 cents on every dollar in “budget”

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From Zerohedge, US Posts Biggest March Budget Deficit In History:

Following the all time record high February budget deficit of $232 billion, the US March budget deficit number is in, and in addition to being bigger than expected, coming at $198.2 billion on expectations of “only” $196 billion, the government outlay in the past month also is the largest March deficit on record. This brings the total deficit in fiscal 2012 to $779 billion, which is to be expected for a country gripped in total political chaos and which is unable to either raise revenues or lower spending. What is more disturbing is that over the same period (Oct 1 2011 – March 31, 2012), the US government issued $792 billion in debt, a trend that will continue. What is most disturbing is that the comparable tax revenues net of refunds, “matching” this increase in deficit and spending, are only $693 billion, in other words the US government is funding well more than half of its cash needs with debt rather than with tax revenue.

My math tells me that the US is borrowing 53.3 cents on every dollar in expenditures over the last six months.  No government or any other entity (unless you can change water into wine) can continue to do this, not even the mighty United States, without eventually facing a day of reckoning.

 

“Price is a function of liquidity”: Charles Biderman speaks with Chris Martenson

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“Price is a function of liquidity, having nothing to do with value.”

Charles Biderman recounts how he went bankrupt in 1987 even though he had a positive net value in his real estate investments.  Why, because his banks went bankrupt and his loans were called.  If he had had time to sell his properties, he says, he wouldn’t have had to declare bankruptcy.  This taught him the following:

Price is a function of liquidity, having nothing to do with value.

What does this mean for the investor?  Ultimately, in the real world, fundamentals should eventually win, but the market depends not on that value but on the ability of investors to maintain their liquidity.  Thus, the most liquid players during severe downturns will be able to add value to their portfolios.  The real trick of investing is twofold:  (1) Determining what stocks have a real value; (2) being liquid when the vast majority of other market participants are illiquid–only then can the investor be assured of getting the bargain basement price for an asset.  This means keeping a tight lid on one’s use of leverage.  My policy is to keep leverage below 1:1 debt to equity; and to use only a fraction of the bank loan permitted to me.

Another lesson is perhaps less obvious:  Never invest in the company in which you carry your loans.  If that financial institution goes bankrupt, so will your investment.  So you will be hit with a double whammy.  Say you invest in ABC bank where you have your line of credit which is your funding of last resort for your margin account.  When ABC bank goes bankrupt, then your loan gets called.  At the same time, your portfolio takes a hit because your ABC bank investment has also gone down to zero.  This could result in the margin call to which one is unable to respond, except by liquidating the remaining portfolio at severe losses.