Ponzi Schemes and Carbon Reduction Schemes

December 26, 2008 by · Leave a Comment
Filed under: Australian News, International News 

There is a Russian proverb – ‘when you live beside the graveyard, you can’t cry for every funeral’.

Recently in the news, there has been nothing new, just repetitions of the same themes over and over – economic bailouts, corporate fraud and distraction politics. As a result, I have become desensitised and no longer feel any shock.

I will comment on two piece of related news: Bernie Madoff’s $50bn Ponzi Scheme and Kevin Rudd’s Carbon Pollution Reduction Scheme. How are they connected? They are both scams.

Bernie Madoff’s Ponzi Scheme

For many years, New York investment manager Bernie Madoff  operated a hedge fund that consistently returned 12% per annum to investors for many years.

Early this month, it all fell apart when investors wanted out. The fund turned out to be a Ponzi Scheme that merely used new investors capital to pay distributions to previous investors.

This has been described as the “world’s biggest corporate fraud by a single individual”, resulting in estimated losses of $50 billion US dollars. I personally doubt that he acted alone.

Incredibly, the alarm bells were raised as far back as 9 years ago when an analyst named Harry Markopolous sent a report to the SEC titled “The World’s Largest Hedge Fund is a Fraid”. It is not clear if the SEC took any action on this.

How did he get away with it? I’m not sure, but he did have many friends in high places – after all, he was a former chairman of NASDAQ.

Regulators generally don’t care about small investors, but now that some  rich and prominent people got hurt, perhaps the SEC will start taking corporate transparency seriously.

Kevin Rudd’s Carbon Pollution Reduction Scheme

Australian Prime Minister Kevin Rudd set a token 5% Carbon Dioxide reduction target for the year 2020. Expectations were as originally as high as 15% and some were demanding a reduction of 25%.

Clearly, he wanted to maintain his popularity by doing something to appease the Climate Change believers,  but not dare risk anything to further exacerbate our economic problems.

So what was has been achieved by this? Apart from the fact that Global Warming Alarmism is bullsh**, China’s own CO2 emission growth will of course outstrip our savings within several months. Even if we ignored China, the flawed computer models (that others believe in) indicate that a much much larger cut would be needed to reverse a warming tread.

Season’s Greetings

December 23, 2008 by · Leave a Comment
Filed under: Announcements 

Here’s Trouble wishes all of you the best for the Holiday season, and a retun to prosperity in the New Year.

Help your friends and family, and accept help from them. You will achieve more and have a greater impact than any politician or capitalist.

Do Australian University Students Struggle?

December 13, 2008 by · Leave a Comment
Filed under: Australian News 

In the recent Sydney Morning Herald article article Too Many Uni Students Cry Poor,  economics editor Ross Gittins says “One group I’ve never had much sympathy for is self-pitying university students”.

I respect the old man, but he is really out of touch with the realities facing young people today. Are today’s Australian university students struggling more than students in previous decades? I say yes.

Degrees Are Worth Less Today

Contrary to what Ross Gittins says, having a degree these days does not even guarantee a job, let alone a high salary.

Tertiary qualifications are now the baseline

Decades ago, the Australian workforce had a vastly different composition – Many students left high school before before year 12 and without receiving their Higher School Certificate (HSC). There was a lot of unskilled work and many more people learnt a trade. There were also far fewer women in the workforce. Only a small elite chose to attend university to get a degree, and these people were snapped up by employers.

Today, things are very different. According to the Australian Bureau of Statistics report on statistical trends in education for the state of NSW in 2007, 85% of students complete their HSC, and almost 40% of those between 20 and 25 years of age are enroled in post-secondary education. Degrees, Diplomas and TAFE Certificates are now assumed knowledge for a majority of careers.

Teaching Standards Have Fallen

The Government has cut university funding since the late 1980s, whereas during the same period, private sector salaries increased greatly. This has led to talented Australia academics deciding to quit academia.

In their desperation for money, Australian universities have increased their reliance on full fee-paying Interational students, mainly from Asia and the Middle East, who pay lots more than locals for the privilege of an Australian degree.

University course content, assignments and exams have been dumbed down over the years to help ensure that people finish and ‘get out the door’ with minimum delay.

An Oversupply of University Graduates

Due to the large number of people that have degrees and the lowering of teaching standards, graduates face far more scrutiny when seeking employment.

Today’s employers want candidates to have practical experience in a commercial setting, objective proof of competence and demonstrated achievement in their field.

One of the greatest ironies is that due to the shift towards university education, there are now shortages of tradespeople in Australia. Bricklayers and plumbers now earn more money than many degree-qualified professionals.

Living and Educational Expenses Have Increased

Gittins is correct in stating that HECS [university course fees] can be deferred, and are only repayable once a student has an income greater than a predefined threshold (about $41,000 per annum). However, there are many expenses that cannot be deferred.

Textbooks and Course Notes Are More Expensive and Frequently Updated

We live in an age of rapid obsolescence and changes in the legal and political landscape.

New editions of textbooks are released almost every year and these can cost up to $200 per book. Some courses require multiple textbooks. For a full-time university student who studies four courses per semester, this can amount to $2000 per year.

Learning Tools and Equipment

Today’s students need modern learning tools. Although Universities say that they are optional, in practice no student wants to be disadvantaged compared to their peers. Such tools include laptop computers, mobile phones and broadband Internet access.

Amortised over the period of a degree, these tools can cost anywhere between $500 to $2000 per year.

Accomodation in Capital Cities is Expensive

Some students can continue living with their parents. Others can’t – this may be because their university is not close to their home, or they have a partner, or simply want their independence. These people require accomodation.

Most of the large reputable Australian Universities are located in capital cities. Over the last 10 years, the asset price bubble pushed capital city property prices to atmospheric heights.

Relentless immigration coupled with a slowdown in new property development have resulted in rental costs exploding. In the eastern suburbs of Sydney, a 1-bedroom apartment now rents for $500/week.

Previous generations certainly did not have to deal with this.

The Man Who Lost His God

December 5, 2008 by · Leave a Comment
Filed under: International News, Religion 

A 22 year old American man, Jesse Kilgore, committed suicide in October by walking into the woods near his New York home and shooting himself. According to the original article, his father Keith Kilgore attributed his death to his son having read the book book ‘The God Delusion’, by the British atheist evolutionary biologist, Professor Richard Dawkins.

Jesse’s death is a tragedy and my heart goes out to his family and friends. Sadly, in their anger, they place blame on three parties – the book author Richard Dawkins, the Professor who recommended the book to Jesse and the secular public school system.

Instead, they are ignoring the underlying issues that may have led this to happen – after all, a normal healthy person does not commit suicide after reading a book!

I believe that the real factors are:

  • Jesse’s fear of being ostracised or isolated by his family and friends. Would Jesse have been able to discuss the book with his father, a ‘retired military chaplain’, without being shouted at or abused?
  • His sheltered upbringing may have prevented him from being exposed to multiple different belief systems that would have built up his mental ability to deal with uncertainty and doubt.
  • It is also possible that he was suffering from an undiagnosed mental illness like depression or anxiety that he masked by sheltering in his religious observance.

There are a few points in the article which I will also answer:

“One of his friends, and his uncle (they did not know each other) both told me that Jesse called them hours before he took his life and that he had lost all hope because he was convinced that God did not exist, and this book was the cause,” Keith Kilgore told WND.

Religion was clearly a pillar of Jesse’s identity. I can understand why his spirits were broken by a book that convinced him that his religious beliefs were illogical and that his past observance had been a waste of time.

Does this mean that the correct course of action was to kill himself? Of course not! Jesse clearly drew the wrong conclusions from the book. Here are some conclusions that a person of healthy mind could have made:

  • “I was misguided, but it was not my fault – I was brought up that way.”
  • “I am glad I found this out at a young age”
  • “I can live out the rest of my life free of unnecessary restraints”
  • “I can be still be a kind, virtuous person – even more so, as I am now doing what I personally think is right, and not just because I fear the wrath of god”
  • “I will talk this over with my local priest or a counsellor and see what they think”
  • “I can still maintain my relationships with my family and friends by going to church and celebrate religous holidays with them”

He was pretty much an atheist, with no belief in the existence of God (in any form) or an afterlife or even in the concept of right or wrong,” the relative wrote. “I remember him telling me that he thought that murder wasn’t wrong per se, but he would never do it because of the social consequences – that was all there was – just social consequences

Absence of religion does not imply that there is no morality. For example, the Golden rule ‘Do unto others as you would have others do unto you’ has a solid logical basis and does not need a god to back it up.

If one reads the Bible (and many other religious texts), there are in fact plenty of examples of religiously sanctioned murder that are considered highly unacceptable and immoral in secular western societies, e.g. the stoning to death of homosexuals, idolaters and others.

“I’m all for academic freedom,” Keith Kilgore said. “What I do have a problem with is if there’s going to be academic freedom, there has to be academic balance.

“They were undermining every moral and spiritual value for my [son],” he said. “They ought to be held accountable.”

He suggested the moral is for Christians simply to abandon public schools wholly.

I’m glad that he supports academic balance – unfortunately in this case the balance came in the form of Richard Dawkin’s book – a large undigestible chunk, too big for Jesse to swallow after being brought up immersed in religious dogma. If he wanted proper balance, it should have happened from a young age.

It is the job of a responsible education system to present truthful information and teach the ability to discern fact from fiction. Moral and ‘spiritual’ values need not be based on falsehood.

During my childhood, I was educated in an Australian public school. On Friday’s, we would have a 1-hr period set aside for religous education, where representatives of various faiths would come in and teach those who followed their respective religions. Why can’t religious schools have a weekly 1hr period where an atheist can put forward their case?

“Here’s another thing,” he continued. “If my son was a professing homosexual, and a professor challenged him to read [a book called] ‘Preventing Homosexuality’… If my son was gay and [the book] made him feel bad, hopeless, and he killed himself, and that came out in the press, there would be an outcry.

“He would have been a victim of a hate crime and the professor would have been forced to undergo sensitivity training, and there may have even been a wrongful death lawsuit.

I find this most amusing. American Christian churches frown upon homosexuality, don’t they? And there are books on preventing homosexuality that are readily available, aren’t there?

In order for a book to be implicated in a hate crime, the book would have to incite readers to illegally discriminate against or mistreat people. Does Dawkin’s book advocate such a view? I haven’t read it, but I don’t think it did.

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