Archive for June 15, 2011

So, Why Do First-World “Elite” Store Money Abroad?

June 15, 2011 18 comments

In a previous post, I talked about the tendency of third-world “elite” to store money abroad. A few readers thought I was implying that whites are somehow better.

Sadly, for them, that is not the case. White “elites” in the first-world are just as likely to steal, scam and store money in tax free havens as non-white “elites”. It is just that the system does not let them go as far as they otherwise would.

How many large US and other western corporations pay even a cent of income tax? Aren’t accounting rules and law great- for the rich?

The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005. More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said. During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study

So who is benefiting from the money which would have gone to the government?

Shareholders.. Looked at the stock market in the last three years? Institutional investors.. Read your pension fund statements of late? Maybe the capitalists are putting it back in the economy by starting new businesses and creating new jobs.. Fat chance, unless you are talking about China.

So what are they doing with all that extra money?

Some of it is just sitting around- What Will It Take for Companies to Unlock Their Cash Hoards?

All told, the companies in the Standard & Poor’s 500-stock index are sitting on more than $960 billion in cash, a record.

Remember that the quoted figure of $960 billion is probably a fraction of the real amount hidden by all types of corporations through open obfuscation, made-to-order laws, creative classification and clever accounting. You bet that most of this money is being used for financial speculation and similar scams that hurt almost everybody else.

So, who benefits from hoarding a few trillion dollars- You? the average person? the economy of first-world countries?
There are only two groups that really benefit from hoarding such large amounts of money-

a. The senior management of companies (rulers and despots).

b. People who ‘manage’ that money (bankster-types)

So how is this situation fundamentally different from third-world rulers and despots stealing money to hoard it abroad?


Evaluating Risk: 1

June 15, 2011 5 comments

Many blogs spend an inordinate amount of time talking about risk, manliness, testosterone etc. I believe that most of such talk is worthless bullshit.

There is a fairly straightforward and objective way to assess risks for any given situation. So let me begin-

1. You simply cannot incorporate all low-frequency and high impact (black swan) events in any model of risk assessment.

Don’t waste you time worrying about such events- it is not worth it. The chance of being hit by lightning on a golf course is far less than being killed driving to, and from, a golf course.

2. Understand the true nature and occurrence of any given risk.

You are far more likely to drown while surfing than be attacked by a shark. Heck you are more likely to be die from food-poisoning acquired at a beach barbecue than be attacked by a shark. More people died from the 1918-1919 influenza epidemic than in ww1. Hunger, cold, heat, infectious diseases and infected wounds killed more soldiers until ww2 than any man-made weapon.

3. The odds for so-called ‘risky behavior’ changes over time and conditions.

Flirting with women in a large westernized city with over a million people is much less risky than doing so in a small town with 5,000-odd people. Unwanted pregnancy and STDs are much less of a threat than they were even 50 years ago. Hiking in the 10th century was far riskier (way more wild animals and outlaws) than it is today.

4. Though every action can have an extreme outcome (either way)- it is the median outcomes which should concern you.

There are people who have survived falls of more than 50 feet and there are people who have died after slipping in their bathtub- however there is a pattern. A very small percentage of people who fell over 50 feet on hard ground have survived, but most people who have slipped in their bathtub have escaped with minor and non-life threatening injuries.

5. Understand the median worst-case scenario (median loss) and median best-case scenario (median gain).

Following from the previous point- it is the median scenarios that are most likely and it is therefore useful to evaluate your willingness to accept the median loss and median gain. Getting contact info from a girl has a low rate of success (fucking her), but hardly any downside (unless you start talking her). Therefore even a situation with otherwise poor odds of success is acceptable if the median loss is very small or almost nonexistent. On the other hand, a marriage has a very high chance of failure or unhappiness and carries a massive penalty for failure- if you are a guy and should be hence avoided.

6. Do not use old information, however accurate, to model the future without factoring system changes since that era.

Once engineering was a good career choice with good pay, excellent job stability and social respectability. Today.. it is only a pale shadow of its former self. The same can be said about law school, chemistry and even medicine. Once society did not look up to smooth-talking sociopaths as emulation worthy models. Today the vast majority of people look up to, imitate and worship such people.

I will try to write more about this issue in an upcoming post.