Of Camels and Needles

It is easier for a camel to go through the eye of a needle than for a rich person to enter into the kingdom of God. - Matthew 19:24

You may want to print this blog post as a collector’s item. I have a hunch, as we go into the Presidential election madness, that this may be the one of the few times that you’ll see my deep empathy for Gov. Mitt Romney. To be clear, Governor Romney is a contender for the Republican nomination not because he’s the greatest civic leader the party can field. He’s not the front-runner because he has the courage to truly confront the nationalist denials which keep us from confronting the structural problems facing our economy and society. He’s not getting media attention because he can evidence leadership based on the power of an American ideal of liberty over the recent legacy of anonymous drone-laden assassinations of our ideological foes. He’s on all of our radar screens because, among other attributes, he’s rich and in our society, that means he can buy our attention.

My heart truly aches for him this week. In what will undoubtedly be a defining moment for all of the wrong reasons, his careless comment seeking to highlight his commitment to addressing the priorities of the middle class has been ravenously devoured by those who love nothing more than to begrudgingly envy wealth only to decimate its incarnations the moment they see any alloy of inhumanity. I do not know Governor Romney but I am certain that he “cares” about the poor. And watching pundits from the Utopian left to Pharisees on the militant right pile onto this gaffe reflects not our vigilance for social justice but our most distasteful lust for gladiatorial butchery.

In a meeting yesterday, one of the world’s leading private wealth managers observed that, “Being just a little bit richer is not as good as being a lot poorer is much worse.” [For those of you not given to word puzzles; consider this. If you have $100,000 and gain $10,000 your happiness does not increase at the same proportion as the disappointment experienced if you had $200,000 and lost $90,000. While you’re still, in the moment holding an absolute $110,000, the instance of gain pales in comparison with the agony accompanying the perception of loss.] The wealth manager’s firm handles in excess of $4 trillion and, as such, he’s seen the emotional tsunamis of perceived loss eclipse countless apathetic compounding years of modest and stellar gains.

The manager’s comment echoed off the cavernous walls of inhumanity perpetuated by relentless media drumbeats on the too-late penitent Governor. But as I contemplated this present dissonance, I was invited to reconsider one of my life’s most poignant lessons.

My recollection of an event in India (described in a blog post last year) raced into my consciousness. The idea that we can place ourselves in a position of feigning sympathy or empathy for those we deem to be “poor” or “disadvantaged” while expressing none of the same impulses for those we deem as “rich” or “privileged” says more about ourselves than those we judge. The only reason why Mitt’s apparent insensitivity is garnering so much attention is because we hold up an artificial standard. Somehow we convince ourselves that because we’ve acquiesced to the illusion that with his wealth comes some level of insulation from careless insensitivity or simple misstatements, his comment becomes far more than it is. To be clear, it was in poor taste and lacked sensitivity. You know it as does he. But equally lacking in taste is the elephant in the room – namely, our frequent incapacity to see that position (either granted by merit or purchased by money) has never assured an evidence of perpetual refinement or grace. Regrettably, what the events of the past week demonstrate is that we’re far more likely to pillory those whom we’ve exalted rather than engage in genuine, respectful critique of the deeper questions we all face as a society.

And by the way, enough with the temporal and moral relativism! Let us recall that the same Bible that is embraced Governor Romney and so many liberal and conservative self-proclaimed Christian adherents reports a crusading Jesus being equally dismissive if taken out of context: Matthew 26:11 records the statement that, “the poor you will always have with you.” And lest you think that there’s any air-gap between the mis-contextualization of a week ago versus two millennia ago – let’s be clear. This Gospel account has been frequently used by those who want to rationalize non-engagement or discontinuation of purposeful, compassionate action when it comes to those who society has most marginalized. Isolating statements uttered in error or in malevolence as a point of dogmatic contention is inappropriate as it masks the genuine issues that are pleading for attention. Remember that from 1980 – 1988, those officially under the poverty line increased during what we called the Reagan revolution – worst among the urban disadvantaged and children (can anyone remember “the least of these…”?). But with 1980s gas prices low, official unemployment low, and wealth transfer for the top 5% of asset holders expanding at a then-record rate, our indifference allowed this gap to widen to a point where now we’ve expanded the ranks of those left behind to levels unimaginable under the Actor-in-Chief. We’ve spent three decades “not caring about the poor,” so when a careless statement utters the truth of our consensus behavior, we may be well advised to take care in casting the first stone.

Governor Romney is a wealthy man. I am a wealthy man. I know a bunch of wealthy men and women measured in every dimension by which one can measure wealth. I’ve never met anyone on Earth that has enjoyed the breadth of experience; the dynamic range of joys and sorrows; the access and privilege that I’ve had as I have been fortunate to participate in the lives of what likely numbers in the millions by now. While I have chosen a mode of transacting my life that has consciously elected not to be dependent on money – the object of so much violent conflict, aspiration, derision, fear and hatred – this choice in no way alters the truth that I have unfathomable wealth. And, if you’re reading this blog post, you’re probably among the world’s most privileged if you truly measure your life in all dimensions of value.

With wealth – in any form – comes accountability. And it is in this spirit that I would kindly suggest that to Form a More Perfect Union, those of us who seek to transform the tide of inhumanity hold a touch of discerning Mercy. Whether Governor Romney is a man of compassion, I do not know. Whether he would embody that quality of mercy that, in Shakespeare’s eloquence, “becomes a throned monarch better than his crown,” I do not know. But what I absolutely know is that attacking any person for a moment of insensitivity – particularly when the energy animating that attack is at times amplified by a deeply suppressed schizophrenic envy which seeks to accumulate the artifact of derision – serves to destroy our humanity. I trust that we don’t deepen our poverty of spirit by standing in self-incriminating judgment on a man and his ill-considered utterance. After all, it is We the People who have allowed his currency to buy our attention and until We the People lessen our idolatry elevating everyone from kings to Kardashians, we will be standing behind the asses of a lot of queuing camels.

We Are The 0.00000021928% and We Vote

Alright all you conspiracy theorists, Occupites (#OWS), adherents to the economics of Republican Presidential candidate Ron Paul, and inquiring minds who just want to know; it’s time to finally name names. It’s time to establish beyond all reasonable doubt who it is that really runs the show. It’s time to get into the weeds and I’m not talkin’ about this nonsense 99% / 1% divide that has galvanized so many for so long. No, I’m talkin’ about the real, hardcore, scientific notation kind of global population derived REAL power behind the entire global economy.

In no particular honorific order save the inspiration from the seventh century BCE Etruscan, Greek, Phoenician, proto Semitic, Visigothic mash up we now know and love as our alphabet (props to the Visigoths!):

Bank of America*
Barclays*
BlueMountain Capital*
BNP Paribas
Citadel LLC*
Citibank
Credit Suisse*
D.E. Shaw Group*
Deutsche Bank*
Elliott Management Corporation*
Goldman Sachs*
JPMorganChase, N.A.*
Mizuho
Morgan Stanley*
Nomura
Pacific Investment Management Co. LLC (PIMCO)*
Societe Generale
The Royal Bank of Scotland
UBS*

*Indicates an entity that has determination control over the Americas, Asia Ex-Japan, Australia and New Zealand, Europe/Middle East/Africa, and Japan.

The most recent action taken by these folks is a wonderful Kodak Moment which offers a snapshot (which you can print on some EktaChrome, well, not so fast) of the constitution of the group that holds Damocles’ Sword over the global economy. Their meeting reportedly took place on Thursday, January 19, 2012 when they unanimously voted to determine that Eastman Kodak Co. had indeed become bankrupt. I would have loved to have been a fly on the wall to hear the debate on this one. After all, the company had filed its Chapter 11 business reorganization petition in the U.S. Bankruptcy Court for the Southern District of New York on, are you ready for this, January 19, 2012. The actual proceeding is even more fascinating.

The first question voted on by this august body was, “Has a Bankruptcy Credit Event occurred with respect to Eastman Kodak Company?” There were 15 recorded “Yes” votes and 0 recorded “No” votes. The second question – which is slightly more existentially mysterious given that they had just determined that Kodak was BANKRUPT was, “If a Credit Event did occur, is that date of the Credit Event January 19, 2012?” Once again, a unanimous vote in the affirmative. Then the third question, “Is the date on which the DC Secretary first effectively received both a request to convene the Committee and Publicly Available Information that satisfies the requirements of Section 2.1(b) for the Credit Event with respect to Eastman Kodak Company January 19, 2012? (This question is asked to determine the Event Determination Date.)” Yet again, all voting “Yes”. And the final question, “Should ISDA hold one or more auctions to settle Relevant Transactions with respect to which a Credit Event Resolution has occurred in accordance with the terms set out in the form of Credit Derivatives Auction Settlement Terms with respect to Eastman Kodak Company?” By now, I bet you’re on pins and needles with the suspense kind of like watching the NY Giants stick it to the 49ers in OT. But no surprise here – they all voted “Yes”. This model of democratic process and consensus should make our hearts beat in patriotic unison as, finally, we see a group of independent parties come together with such magnanimous unanimity to confirm…well, let’s see, an undisputable, publicly disclosed event that had ALREADY BEEN PUBLICLY REPORTED marking the long heralded demise of one of America’s iconic industrial brands.

Alright, so what’s up here? What is ISDA and why is there democratic process so important when determining when a publicly reported event has, in fact, been publicly reported. The International Swaps and Derivatives Association “… fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products.” It’s pretty important to understand that, while nominally representing as much as the entire world’s GDP at their peak in 2007 and now representing notional value exceeding that of any sovereign nation on Earth, these swaps are (and I will simplify) quasi-insurance products sold by financial institutions like banks to investors who buy a bet against one day owning a defaulted credit.

My personal favorite part about the ISDA and its mission is the fact that the decisions on when a “default” has been triggered is NOT based on what you and I would necessarily see as rather empirically derived from a credit agreement. Say that you don’t make a payment on your credit card or mortgage. That’s an event of default and, based on a series of remedies set forth in your contract with the financial entity, you may have a time during which you can cure the breach of your contract after which the financier can take action such as foreclosure on your assets. By the way, that’s been happening a lot lately. But the institutions that extend this debt financing to customers do not agree to play by the same rules. For them, they get to decide when a literal default is actually a default. And remember, they are NOT disinterested third parties with ANY independence. Every decision they make triggers an event when the bank, for example, has to lose the ‘asset’ of the defaulted loan, and the investor has to pay up on the insurance policy and ‘own’ the defaulted instrument. So it’s no surprise that the board is made up of a mutually assured destruction membership of sellers and buyers who get to decide when they have to pay up to each other.

ISDA is made up of real people who work for real institutions with real names. And before you start feeling squeamish about this conspiratorial sounding event fixing (note my diplomatic avoidance to suggest that any of these actions should be reviewed by the Justice Department under the Sherman Act despite the fact that ALL competing institutions agree on prices), be delighted to know that you are likely one of the beneficiaries of this scheme. If you’ve got a retirement plan, a life insurance policy, or any other managed fund where you don’t know the company into which all of your money is invested, you’re assuredly pumping liquidity into this dance.

And, not surprisingly, it is this system that gives us the seemingly endless headline about whether Greece has “defaulted”. For those of us who actually live in the non-collusive illusion world of swaps, the answer is that Greece defaulted when their capacity to service their debt ended. Kind of like when you don’t make your mortgage payment because you’re out of work. But that’s not the world that counts. The world that counts is made up of the arbiters of consequence identified above and these are the ones who would have to pay up big time if a default was declared. The “Determination Committee” – an unregulated group of real people – gets to decide whether they are accountable when the chips are down. And, I know you’ll be stunned to find this out but they have a remarkable track-record of deciding that their problem is… well, not their problem.

Let’s face it. ISDA isn’t “them”; it is “us”. It has 825 members who happily benefit from the complete opacity that the public has with respect to their specific activities. During the heady up markets when “wealth” was being created, no one was occupying anything screaming for transparency from this legacy of the Reagan Administration. And now that they control more financial instruments than the notional value of any nation’s GDP, they have become the un-elected, unaccountable, inaccessible, arbiters of all of our futures. It is OUR blind participation with blind investments that pumps the blood that animates this supranational organism and it’s OUR conscious decision to reclaim our individual responsibility and accountability that is the ONLY path to build A MORE PERFECT UNION!

If you didn’t know about ISDA before reading this, send this blog link to 10 of your friends and see if we can all start waking up!

To understand the importance of this group, you may want to refer to this sample Auction document to get a clearer picture on how the economy in which you’re participating actually works.

Intrepid Into the Unknown

From last Spring’s loyalist cavalry punctuated protests in Tahrir Square to the shivering tired, huddled masses yearning to breathe in #OWS enclaves and police lines dotting chilly cities across America, the rhythm of disenfranchisement seems to undergird the vox populi. Ironically, this primordial stirring seems to gyrate combatants on both sides of the 99th percentile battle lines. From the 20-something Occupite who cannot find gainful employment with her liberal arts degree with a specialization in conflict studies to the recently engorged Goldman Sachs executive wondering how he’s going to make ends meet with his paltry slice of his government-subsidized $1 billion profit sharing bonus, the future holds terrifying opacity for both. With the eurozone in free-fall, the U.S. in insolvency denial, and the BRIC hunkering down with protectionist policies for the foreseeable future, our economic and social system failures are now well past transient and have become a fixture.

This week we saw the media, the government, and the markets callously misrepresent the employment picture yet again as the Department of Labor released its January 19th data. The alleged improvement to a seasonally adjusted rate of 325,000 new benefit seekers (supposedly good news) was the statistical façade for the ACTUAL number of people seeking state benefits which was a whopping 521,316. Civilian Federal employee unemployment rose nearly 100% in the week’s data and newly discharged veterans’ unemployment rose as well. And most alarming, while totally neglected by media and markets, is the fact that from 2008 to the present, we’ve permanently lost close to 6 million ‘covered employment’ jobs. In other words, with unemployment still placing millions in distress, our government and its interlocutors have shrunk the denominator by 4.7% placing even the flawed statistics at an unemployment rate pushing 13%. Getting better? No chance in hell.

In the face of these blatant abuses of data to evoke the illusion of progress, it is no wonder that many in the public find themselves certain of the fallacy of the established order. In this conclusion, they are correctly taking the measure of things. Regrettably, however, I have encountered, during this same time, the thus-repulsed masses clinging relentlessly to the agents of the incumbency as they clamour for an alternative experience. “Give me change,” they cry, “but make sure that it comes in a form that I find palatable.”

Georg H. W. Hegel (German philosopher; 1770 - 1831) in his Philosophy of Right ponders the question of public deception in ways few modern thinkers dare inquire.

“A great mind has publicly raised the question, whether it be permitted to deceive a people. We must answer that a people does not allow itself to be deceived in regard to its substantive basis, or the essence and definite character of its spirit; but in regard to the way in which it knows this, and judges of its acts and phases, it deceives itself.”

“No matter what passion is expended in support of an opinion, no matter how seriously it is defended or attacked, this is no criterion of its practical validity. Yet least of all would opinion tolerate the idea that its earnestness is not earnest at all.”

“Public opinion deserves, therefore, to be esteemed and despised; to be despised in its concrete consciousness and expression, to esteemed in its essential basis. At best, its inner nature makes merely an appearance in its concrete expression, and that, too, in a more or less troubled shape…. Who does not learn to despise public opinion, which is one thing in one place and another in another, will never produce anything great.”

Allow me an example. Last May, I wrote a blog post in which I challenged the world to get engaged with a dislocated community that needs to have its basic needs addressed including developing reliable access to clean water. Since then, hundreds of people have ebbed and flowed around the idea; some passing through the arena as spectators and some suiting up to go out onto the field to play in the match. For over two decades – first in Mosaic Technologies and then in M•CAM – I have become accustomed to the voyeurism inspired by our fusion economy ethical engagement structures that indict all conventional business and social narratives. I have also become somewhat immune to the wistful attraction predictably preceding the near unanimous passive or violent repulsion experienced when individuals become aware of the completeness with which we animate our activities outside the realm of conventional thinking and acting. But what I find the most amazing is the number of individuals who profess a desire to learn how to engage transformative processes that we’ve demonstrated can be reliably replicated throughout the world but would like them to have boundaries of time, budget, logistics, and hierarchical (un)certainties – NONE of which exist when you’re truly operating outside the enslavement of the mechanized colonial industrial complex and memes.

Which brings me back to Hegel and the succor provided by his nearly two century old wisdom. Incumbency (the ‘bad guys’ in many popular circles) and transformationalists (the ‘good illumined beings’ in many popular circles) too often find themselves equivalently enslaved by “acts and phases” by which they deceive themselves. The axiom which states that “Problems cannot be solved with the same consciousness that created the problem,” needs to embrace the corollary that “Solutions cannot be manifest through the application of metrics conventionally used at the time the problem was defined.” (This corollary is my humble contribution to the greatest philosophers of all time!) Your impulse that ‘something needs to change’ is an intuition that is trustworthy. Your reflex to look for both the utilities with which you’ve become comfortable (schedules, budgets, creature comforts, etc.) and the validation of others (encouragement, praise, peer validation, etc.) through which you’ve come to expect affirmation are in absolute error. If We the People seek to engage the needs of humanity and the ecosystem in ways that alter our collective experience of enslavement and extractive wont, we must embrace a liberty from the trappings of convention at all levels and accept that the world we seek will be unrecognizable through the optics with which we’ve existed in the consensus illusion of the present.

Alchemie invertere - Mission Accomplished

Plumed serpents, white horseman, a passing comet, morphogenetic butterflies, you name it – all cluttering up the metaphoric pantheon of heralds of the end of one era and the dawning of the new. In some myths, the new is prophetic fiery cataclysm that melts everything into an apocalyptic puddle save those with fire retardant robes. In others, a celestial harmony vibrates the plaque from the incumbent order and allows the diaphanous-clad vestal light-beings to emerge. For me it was a ball cap wearing, green shirted fellow – we’ll call him ‘M’ to protect his identity – at the Airways Hotel in Port Moresby yesterday afternoon (Sunday the 15th for those of you wondering what timezone I’m referencing at the moment).

M had heard that I was in town working with several landowner groups in our on-going effort to encourage the government of Papua New Guinea to stand-up to the innumerable national mining, tax, customs, employment, firearms, and international securities laws abuses relentlessly perpetrated by gold mine operators from Australia, Canada, and the United Kingdom. The exploration license for gold mining in his home had lapsed and he wondered if there was any possibility that I would be willing to consider helping to sponsor his village’s effort to apply for, and obtain the license. If, he argued, we would help his people we could form a joint venture where we could develop a gold mine without having the brutality – burning homes, beating local community members, forced removal of people from sacred lands – all manner of blights that had been visited upon the village by previous explorers. He had a written proposal personally addressed to me identifying all of the clans including the names of the 48 clan elders. The letter contained their statement of unanimous endorsement of our invitation to work with them to use their market resources “so that goods and services such as education, health, roads and bridges, airports can flow to the communities to improve the standard of living so that poverty and law and order problems can be reduced.” He laid a giant map in front of me and pointed to two mountains.

“This is my home where my family lives,” he said pointing to a spot on the middle of the map. “And over here is the mountain that is a spiritual man. Here, when a man enters this mountain, the time clock ticks faster making it dark quickly.”

He described the area between the two mountains where the land was given a Western name because there were gold nuggets “hanging all over the mountain”.

I sat for nearly 10 minutes while M gave his impassioned pitch for our involvement in this project.

“Tell me about the people who live on these mountains,” I inquired at the first moment he paused in his carefully rehearsed presentation.

He shifted gears and went into an explanation about the matrilineal and patrilineal dynamics of the major clans separated by a valley but united in marriages and traditional Customary practices and a common language. During the whole of the first 15 minutes of our interaction, he never looked me in the face preferring to look down and to the left, his head slightly bowed.

At the next pause, I slowly inquired, “M, tell me about Custom. If you are from your village but the gold is spread across several villages, are the wishes of the people all in alignment to actually have a mine here?”

His head snapped up and he looked at me perplexed.

“Yes, we want the license to develop the mine,” he replied.

“I understand what you’re saying,” I replied, “but that’s not what I was asking. If a decision is made in your village to mine in an area where the other village has a Customary use of the land – gardens, burial plots, ceremonies, etc – is there a way in which you build consensus about how such decisions are made? For example, if the sacred mountain has a lot of gold but it has more Customary value, would you and your people agree to leave the gold untouched and preserve your values?”

He looked at me for about 30 seconds with his eyes wide open. “I cannot believe this!” he exclaimed. “I’ve never heard of a white man who would even know to ask about this question. When I tell my people the words you are saying, they will think that you are one of us – one of our clan.”

For the next hour, M and our team discussed the ways in which we have engaged other situations similar to this in other parts of Papua New Guinea. His near constant refrain was, “I cannot believe I’m hearing our language from a white man!” The afternoon wore on as we laid out the sequence that we would use if we were to engage in a review of the entire spectrum of values held by the communities and how one might go about aligning community desires with the abundance over which they had stewardship.

As our time grew to a close, I was transported to a conversation that I had with Peter Buffett, the collaborating composer of “Blood Into Gold". Prior to writing the song for the U.N. commemoration event of trans-Atlantic slavery, I shared a dream with him. The dream had visited me after he and I spoke of a bit of his creative writers-block in coming up with a song commemorating slavery. In my dream, a small child – a girl – wandered through humanity’s history visiting alchemists - from Egypt to Greece to Europe to the Americas to Asia - all chasing the elixir that would turn the mundane into gold. As she watched, each alchemist from all parts of the globe and every epoch of human existence, in desperation, would lash out in exhaustion and pour human blood into their potion and, each time it was human blood that would ultimately be transformed into gold. In my dream, the girl looked at me and asked, “Will anyone ever turn the gold back into humanity?”

Wherever that little girl is on this 15th day of January, 2012, the answer is, “Yes.” It just happened. And if you would like to learn more about our Inverted Alchemy efforts, you’re just an e-mail, phone call, or visit away.

Imagine All (Imaginal) the Butterflies

a.k.a. In Praise of Reptiles


“Why do I feel that the more I ‘wake up’ the more dead I feel?” lamented a dear friend over the holidays. He, like so many others is realizing that the great Adam Smith consumption of the human soul – exchanging passionate, purposeful engagement for a paltry salaried existence as a consumable unit of finite production – is bankrupt. And, along with the disillusioned hordes of similarly trafficked, transacted lives, he was struggling with the seduction of the post-modern puff-pastry spirituality which celebrates the birthing of a new humanity with rhinestone encrusted rouge optic consciousness. This oily elixir can be purchased by attending just the right number of over-priced weekend retreats where purveyors of positivism piously promote panaceas for the pernicious proclivities of the pedestrian populace. Like Epaon inspired penances in 517 (later laundered in the fourth Lateran Council), this vacuous promise of a post-enlightened effervescence seems, all too often, to smack into a very different reality. Namely, the more aware, awake and turquoise you become, the more dizzyingly seasick you feel.

Over the course of the last several months, I’ve been intrigued by the frequency with which I’ve encountered the Deepak Chopra credited “Caterpillar Effect”. In glorious simplicity, this metaphor of the potential for humanity goes something like this…

The caterpillar eats ravenously and it starts to ‘die’… then some cells (creative “imaginal cells”) imagine a new future … they do some ninja moves on immune cells in a primordial soup inside the carcass of the caterpillar … they tag team into making a beautiful butterfly and, viola, flight!

You can hear the extended play story here. You see, if just enough creative imaginal cells get together, the metaphor implies, we’ll have a new emergent, metamorphic experience on Earth. And, the illusion invites, there’s something aspirationally beautiful about this experience. You know, it’s a butterfly.

Which got me thinking; “I wonder how a post-modern guru has been credited with this phenomenon and why so many people think that butterflies are a good metaphor for the next phase of humanity?” So, like I do, I tried to find out what metamorphic biologist unleashed this timely narrative which has become the transcendent ideal of New Agers, Birthers, and Enlighten-nexters. Turns out, we can thank Chester I. Bliss (damn, who would have thought we could have had such a perfectly apropos last name?) who, in 1926 unleashed Deepak’s Imaginal Imaginarium in a paper entitled “Temperature Characteristics for Prepupal Development in Drosophila Melanogaster,” published in the Journal of General Physiology. Oops! Not very recent. Not very with it. And, hold on, isn’t Drosophila Melanogaster the fruit fly? Why, yes it is. And Bliss cited the original work on imaginal disks studied in metaphorically less suitable bugs like the blow fly and the apple maggot. I wonder how throngs of enlightenment seekers would ooh and aah if they’d hear their transformation heralded as blow flies and apple maggots?

Now we can all chuckle about this little selectivity in our speciation of transcendent metaphors and pass it off as of little consequence. But that’s before you take into account my friend and the thousands like him who, having gorged themselves on the leafy foliage of a system that rewards gluttonous consumption, pupate into a nutritious gooey ooze and imagine waking up to beautiful wings warming in the sunlight ready to waft freely on the lilting breezes in a post euphoric reward for having transmografied. Imagine all the people… yes, go ahead and hum the song, … waking up to find no wings, no breeze, and overcast skies. Imagine finding out that when you awaken, you apprehend the cost of your unconsidered consumption. Imagine finding out that your monetary system – the same money that you paid the enlightened expert at your retreat – has led to the enslavement of a humanity you didn’t recognize before. Imagine finding out that the minerals and energy that you use are costing the lives of thousands who are murdered and displaced by corporations who feed your 401(k).

Might I propose, a more mundane, possibly more appropriate metaphor more aptly aligned with the consciousness that our species evidences on a far more reliable basis? And for this proposal, might I remind you that in every culture that has perpetually inhabited their homeland for over 5 millenia, it is the reptile – turtles, crocodiles, and serpents – that are the metaphor for spiritual source and transformation. These animals, far more like the typical experience of human awakening don’t molder into a soup only to emerge in a glorious, fragile butterfly. No, when the skin that served one phase of their existence no long serves its purpose, they molt. They scrape and slough against rocks and obstacles breaking loose the flaking, dead encrustations that keep them from moving into life with the flexibility and dynamism they need and, when they’ve removed the last old dead skin, they’re a more beautiful, fresh version of themselves – just improved.

Let’s turn the 2,000 years of anti-serpent mythology on its head and start embracing the wisdom of the ancients. Last time I check, National Geographic has some amazing pictures of lizards eating butterflies… but that’s another blog post.

Right Scenario, Wrong Waterway

Over the past six weeks oil prices and their inextricable correlated dollar cousin have been allegedly responding to the reported threat of Iran’s interruption of the Straits of Hormuz. As tired as this war-game scenario is, for some inexplicable reason, it still seems to scare globally myopic investors into playing volatility games with currency and energy. Actually, the explicable part of the scenario is the timeless adherence by Evangelical Christians and their apocalyptic allies to manifest their desire to see certain horseman bridled for some prophetically mandated showdown in Israel. And given the number of Prince-of-Peace advocates who fantasize about the bloodbath orgy that will usher in their new earth – a fanaticism that cannot be discounted given how many prayer breakfasts portend would-be tactical launch code initiations – the relevance of the geography in the global economic scheme of things is correlated to religious blinded ‘gundamentalists’ (a term coined by my dear Egyptian friend Moustapha Sarhank). While I have long ago tired of trying to tackle this sociopathology, I find it amazing that the global markets are overlooking the true waterways that could truly disrupt global trade.

One of the most problematic contributors to global economic instability are marginalized – frequently financially disenfranchised – communities who, in desperation fueled by the world’s collective blindness to their plights, turn to asymmetric violence to gain recognition. And while the number of groups thus defined are too numerous to count as we continue to ignore ever widening swaths of humanity, there are a few geographies that, unless we awaken to their destitution in 2012, will be catalysts for epic instability in the near term. So, on this first day of the New Year, let me encourage you to wake up and at least figure out where these places are. Better yet, learn about the people that live in the vicinity and see what you can do to make a difference for them before they make an explosive difference for the world.

Somalia. Now if it weren’t for the collective intelligence and media co-opting during the Bush-Cheney regime, we would all be conversant about the increasing volatility coordinated by individuals – armed by Europeans, Russians, MENA interests, Asians and, yes, military suppliers from the U.S. – who have callously seen the starvation and torture of their fellow countrymen as expedient tactics to build allegiances built on terror aimed squarely at the base of Maslow’s hierarchy of human needs. Al-Shabaab and their extensive sectarian adherents and competitors continue to expand while we spent hundreds of billions chasing our Congressional and CIA-supported (yes, remember when we were arming ‘Freedom Fighters’ during the Soviet occupation of Afghanistan before they turned into modern-day, al-Qaeda militants) ‘enemies’ into the hinterlands of Pakistan, Afghanistan and countless other countries. Had we invested a bit in feeding Somalis and insuring that starvation caused by infrastructure failures wasn’t such an effective recruiting tool for militants, we could have lessened the risk now posed in the Indian Ocean and the Gulf of Aden. Rather than the Straits of Hormuz, the more relevant risk is expanded technical sophistication – proven in the successful U.S.S. Cole attack – in Yemeni and Somali operatives who, armed with unmanned undersea vehicles can disrupt 30% of global shipping and well over 50% of energy shipments from the Middle East. Do something as a blog reader? You bet. Look at who is arming the conflict and who’s benefiting from the East African instability – particularly the banks that are funding deals in the region and become a voice to inform your investment managers and your friends.

Indonesia, Malaysia, Singapore. No place in the world represents a greater single point failure than the Straits of Malacca. In the relatively accessible areas of the waterway – like Rupat, Alor Gajah, and Meral Tebing – well placed naval strikes could not only disrupt seafaring trade but could profoundly disrupt key economies that rely on transshipment – Malaysia and Singapore. Sinking freight ships or blowing up LNG or CNG vessels thereby creating massive kinetic and thermal damage would have a long-tail effect on the flow of trade into and out of the Bay of Bengal, the Gulf of Thailand and the South China Sea. While the security infrastructures of Singapore and Malaysia are acutely aware of these geopolitical risks, little is being done to address growing micro-insurgency in Indonesia and the growing ties between them and other disaffected groups. Once again, failure to address factors that contribute to recruitment now will spell disaster later. And since there’s no radio preacher in Virginia or Texas yapping about the return of a savior in this part of the world, we’re ignorant of issues impacting this region at our collective peril.

California. Whether it’s the unmanned subs transporting drugs from Mexico and Central and South America or the undetectable, anti-cavitation, silent propulsion subs owned by Pakistan and other nations within range of the Pacific, the West Coast of the U.S. is remarkably vulnerable. While we’ve focused unfathomable naval attention on the Middle East, we’ve largely ignored our vulnerability in Southern and Central California. Drug dealers can penetrate our defenses with narcotics and guns. It wouldn’t take much to have other payloads onboard and, for the right price everything from Long Beach to San Francisco is in range.

Our government – at every level – has demonstrated remarkable blindness to our real vulnerabilities. We’ve got more Achilles’ heels than we have feet which is not a good position in which to find ourselves. This leads me to my recommendation that we very publicly, very intentionally focus conversations and attention on matters that are camouflaged by 24-hour talking head media puppets of the regime. Companies are entering their season of Annual Meetings. They all ship goods and energy through the waterways of import. They all rely on goods and services that transship these regions. They all have supply chain vulnerabilities that are impacted in material ways by these issues. And you, some of whom are shareholders who get anonymous proxy statements and invitations to Annual Meetings can become active in asking the questions that we all ignore at our collective risk of great instability and destruction. The system isn’t too big to address. It just needs a few people with the courage to pose the question nobody is asking. Be one of those people. Understand the supply chain of the companies in which you’ve invested BEFORE you blindly return your pro forma proxy and ask questions about what your investments are doing to mitigate the human factors that, if ignored, will spell calamity for more than just the markets. In this New Year, make a resolution to be informed and act on that information. Maybe we can dodge the bullet meant for the Archduke Ferdinand. Look it up!


Images courtesy of Google Earth

Seeing Red

This post needed to wait until the reports of the Christmas Day meeting needed to be made public. Expect another post on the New Year!

As most of the Occident celebrated the 4th century fiat which misplaced the lambing season (the reason why shepherds would be in the fields with their flocks for those of you without an agricultural background) at the Roman winter solstice – Dies Natalis Solis Invicti – a star was rising in the East if you were a Wiseman looking for such a thing. Somewhat ironic that the Roman church – the same Rome that reportedly executed the venerated New Born – chose this day less as a celebration fit for buying plastic imports from Asia and more as an affront to the pagan traditions of, well, here it gets a bit circular, Rome. And while we’re at it, I am intrigued, in light of last week’s post, about the near silent astronomer geeks (silent, save the little whirring sound made by the minute gears in their telescope mounts) who try to figure out what the Iranians (Persians, Magi, etc) saw that was the “star in the east”. One of my favorites is the work of University of Notre Dame’s theoretical astrophysicist, Grant Mathews who suggested that the ‘star’ wasn’t a star – rather the April 17, 6 B.C. alignment of the sun, Jupiter, the moon and Saturn in the Constellation Aries sandwiched by Venus and Mars. So ironic that so much of our consumer based economics revolves around a capricious date when a shepherd to the poor and outcast was allegedly born in abject poverty. Uh oh, I may be sounding a bit Scroogy!

But back to the real star of December 25, 2011 – the meeting of Chinese Premier Wen Jiabao and Japanese Prime Minister (for now) Yoshihiko Noda in Beijing. Marking the epiphany of their 40th anniversary of normalized relations in 2012, these two men announced their intentions to move the economic fulcrum of the globe Eastward while most Americans and Europeans were pickling themselves in eggnog – carbo-loading for the post Christmas sales orgy. This largely dismissed meeting is more symbolic than substantive in the minds of most Western-educated (and compensated) economists. And, in the near term, there may be some truth to this. However, as one of the few people who has been sounding the horn for nearly a decade about the structural instability of our Bretton Woods inspired system, I must, yet again, remind you that this is NOT to be taken lightly.

The disintermediation of the dollar happened precisely as I had forecast. As of this agreement – entered into in 2011 – China and Japan have agreed to formally demote the dollar as a conversion or clearing currency. However, of greater import is Japan’s agreement to buy Chinese bonds. It is this latter point that is more likely to keep modern-day Herod’s awake in their bed chambers. Because if you want to go out and exterminate future threats, this bond exchange in the East is the real long-term currency and economic threat. Japan’s relevance as the postwar reconstructed manufacturing behemoth is gone. This position has been taken by China, Vietnam, Thailand, India and, to a lesser extent, Korea. However, its currency reserves of $1.2 trillion are being tactically deployed to insure that it still has influence in key markets. And it’s placing its bets on China, India, and Korea.

At this time, it would be prudent for those who find themselves uncomfortably jittery about what feels like a collapsing empire to look to the Oriental Star and see where it’s moving. You may find a swaddled baby or you may find a newborn power that will shape generations to come.

Wake up! There’s more than a New Year coming.