Monthly Archives: February 2013

Flash Point: A Retail Collapse in the US?

Bloomberg reports that Wal-Mart Struggles to Restock Store Shelves as U.S. Sales Slump. It seems that they are having a restocking issue although it is not clear whether the problem arises due to internal operations or supply chain issues. Bloomberg notes that Wal-Mart’s inability to keep its shelves stocked coincides with slowing sales growth.

This information from a leaked company document follows another leak two weeks ago: Wal-Mart Says February Sales “Total Disaster”, Worst Monthly Start Since 2006; Stock Drops. In this earlier document, a company official was quoted as saying: In case you haven’t seen a sales report these days, February MTD sales are a total disaster.

Flash Point: Yappy Little Dogs

We have been monitoring although not writing about the tensions in the South China Sea and between Japan and China particularly. We have decided to comment.

Aside: we have observed that obnoxiousness and aggressiveness in dogs is inversely correlated with their size. In particular, we had a neighborhood pack  of three Shih Tzu mongrels that would surround you yapping and snapping at your heels.

It occurred to us that the recent rise of belligerence in Japan when compared to the rise of belligerence in China. Was an apt comparison. Japan is a comparatively small nation geographically although its population ranks 10th in the world. Still this is less than one tenth the population of China. And Japan ranks third in GDP, just behind China.

It is the demographic imbalance, however, that should muzzle Japan. China’s population in 2010, had a median age of 34.2 whereas Japan had a median age of 44.7. That’s a ten year difference. Japan cannot afford a war with China. A significant loss of young people in a war would have major economic implications down the road simply by its impact on the median age of the workforce – robots excepted. For a discussion of Japanese demographics see: Zero Hedge Guest Post: How Demography Is Changing Japan.

Socialism: Entitlement – the Engine of Transformation

We have suggested that there is a natural transformation of a democratic society into a socialist society. We believe that the force that accomplishes this is the individual’s sense of entitlement. In this essay we explore the concept of entitlement.

The CO2 / Global Warming Issue Clarified in Thirteen Minutes

All the climate models used by climate scientists to predict temperature rise due to CO2 are flawed. The predictions by the models for air temperature and ocean temperature trend rises all exceed the observed temperature changes which are essentially flat over the period of accurate observation. Predictions of atmospheric hot spots have not been validated. Predictions for for outgoing radiation from the earth are opposite from observed values.

The climate theory behind the models posits a negative feedback or “amplification” factor for CO2 production that gives the predicted temperature increases. In this case, the observed measurements do not support the theory. Therefore the theory is wrong. The precise error is in the assumed value of the amplification factor which theorists have estimated to be 3. Climate scientists on the “skeptical” side of the debate argue that the amplification factor is about 0.5 due to increased cloud production and sunlight reflection. Support for their position comes from direct measurement of outgoing radiation from the earth. It increases with temperature whereas all the models have it decreasing.

All of this is explained eloquently in this 12:53 minute video.

Why then do we still have a popular mistaken picture of Co2’s role in climate temperature change? One reason is that the high profile supporters of the theory in the scientific community have held so tenaciously to their position that their professional reputations and careers are now at stake. And the government scientist are just that, individuals hired to espouse the government position. This brings us to the core issue. Climate science is being used by some interests to create vast fortunes for themselves through carbon credit trading while others such as those at the UN are using it as a mechanism to further their political objectives of wealth redistribution.

Quote of the Day: 20130223

Today we offer two quotes by H.L. Mencken:

Democracy is a pathetic belief in the collective wisdom of individual ignorance.


Democracy is the theory that the common people know what they want, and deserve to get it good and hard.


The Annotated Speech from the Throne of the Province of Ontario

This is your annotated guide to the Speech from the Throne from the resurrected Liberal Party and their new leader, Premier Kathleen Wynne. To provide context for the speech, Ontario has a debt of more than a quarter of a trillion dollars, a budget deficit of more than $11 billion, and a credit rating outlook that has been downgraded by Moody’s. It has moved from the category of a “have” provinces to the category of a “have-not” province meaning the entire province is on national welfare. The Liberal government has been caught in a number of multi-billion dollar scandals and fiascoes and had to dissolve the legislature to terminate scrutiny and a contempt of parliament motion over their most recent scandal. How does the government intent to handle all of these issues? You be the judge. Here is the throne speech verbatim with our annotated commentary in red.

Islamism: One of the Two Great Destructive Forces of the Twenty-first Century

This post is the head of the thread on Islamism. The other great destructive force is Socialism: One of the Two Great Destructive Forces of the Twenty-first Century. Essays on Islamism are found through the links listed by topic below, in reverse chronological order of posting (most recent first) within topic. We will rely on the work of others, acting as an editor of an anthology. This is a topic we have sufficient knowledge to organize essays on the topic while lacking any depth to create much of a contribution of our own. As an inaugural essay we offer the essay Islam and Terrorism by David A. Noebel and Peter Hammond. We also refer the reader to the work of Prof. Paul Merkley whose work we publish and may be found here: Introducing Paul Merkley.

Socialism: More on Education and Wage Ghettos

In Socialism: “When Work Is Punished: The Tragedy Of America’s Welfare State” we studied how in the case of a single mother with two children living in Pennsylvania, the optimal income from employment was $29,000. Taking into account social benefits, this was the income that gave her the highest gross income for any earned income amount up to $69,000 per year. We had argued that this person was in an employment ghetto – that the rational decision was not to advance beyond $29,000 due to the penalty of decreasing gross income. We will now argue that this person is in an education ghetto also. Afterwards, we present a video of Milton Friedman and follow with a discussion on minimum wage ghettos.

Framing the Global Warming Issue

From our friend JR, a few quotes that bring the climate change issue into perspective:

Former U.S. Senator Timothy Wirth (D-CO), addressing the Earth Summit in 1992, said, “We have got to ride the global warming issue. Even if the theory of global warming is wrong, we will be doing the right thing in terms of economic policy and environmental policy.’” At the same conference, Deputy Assistant of State Richard Benedick said, “A global warming treaty [Kyoto] must be implemented even if there is no scientific evidence to back the [enhanced] greenhouse effect.”

IPCC co-chairman Ottmar Edenhofer said just before the 2010 Climate Summit in Cancun, “… one has to free oneself from the illusion that international climate policy is environmental policy. Instead, climate change policy is about how we redistribute de facto the world’s wealth.

The emphasized part of the last quote reveals what the debate is really all about.

Flash Point: Canada, You Suck. Even More!

We penned the post Flash Point: Canada, You Suck. with a title that we hoped would invite some serious attention. Well here we go again. A post by Mike Shedlock today, 2012 Export Growth by Country; China and US at Top of List; World Trade Slowdown; Rebalancing at Glacial Pace, displayed the following chart from the New York Times (click on the chart to open in a new window):

The chart surprised us as it shows a net 2.8% decrease in Canada’s balance of trade in 2012. What this means is that the country as a whole lost wealth implying a decreasing standard of living. Is this a one-off event? Statistics Canada tells us in Table 1, Imports, exports and trade balance of goods on a balance-of-payments basis, by country or country grouping, that since 2008, Canada’s balance of trade has deteriorated 3 of the last 4 months with the one exception printing at an anemic 2% of earlier positive trade balances.

Table 1. Imports, exports and trade balance of goods on a balance-of-payments basis, by country or country grouping (millions of Canadian dollars).

2007 2008 2009 2010 2011 2012
Balance 45,594.5 43,669.6 -6,554.5 -10,776.3 911.9 -11,954.3

Many countries with a negative trade balance find that the energy component of imports is the major cause. Canad lacks that excuse. Simply put, Canadians continue to buy toys from the rest of the world living well beyond their means.

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