The Land of the Free

Sometimes I think that Radley Balko is the most important blogger in the world for his tireless work in documenting daily the atrocious injustices that go on here in The Land of the Free. Of course, everyone knows we're all human, that mistakes resulting in cruel injustices happen even in the wake of good intentions and generally prudent and reasonable policies.

But what if that's not what America is, today? What if the cruel injustices are far too common? What if they are perpetrated on the innocent with bad intentions--intentions rooted in political and bureaucratic self-promotion at the expense of people who aren't hurting anybody?

I've come beyond the point where I can keep up anymore. What's more, it would be kind of silly to have every--or every other one--of my blog entries point to some new cruelty at Radley's place. So here's an idea: I'll give you about a two-week wrapup of some of the stuff I consider most important. Maybe I'll do it regularly. We'll see.

- The Drug War against math nerds

Drug cops in Falmouth, Mass. sent a hot, young female cop to pose as a student at the local high school. She befriended several adolescent boys with low self esteem by pretending she was interested in them, then she asked them to get her marijuana. If you've ever been a high school boy, it won't surprise you to learn that they came through, even though most of them had no history of drug use at all, much less of drug peddling. Of course, they were promptly arrested, booked, and touted out as the latest Drug War trophies.

- Creating Crime

- Stupid Immigrants (are you sure it's who you think?)

- Another Isolated Incident of "TACT"

A. L. Bostick and his wife, Lisa, both in their 80s, were rousted early Wednesday morning as heavily armed members of the city's Tactical Apprehension Containment Team smashed into their house on Allen Drive searching for the meth lab. [...] A. L. Bostick remained hospitalized Thursday with bruised ribs and a torn spleen. [...] Lisa Bostick was treated for a dislocated shoulder and a broken collarbone...

- "From a federal standpoint..." (Where ATF thugs promoting "Project Safe Neighborhood" forget their G.I Joe wannabe costumes, but nonetheless undertake to "defend" the U of Georgia campus from a costumed Ninja.)

- No Place Like Texas

In case you haven't been paying attention, let's summarize:  These alcohol control agents are dressing in SWAT gear to raid bars where people are drinking.

- SWAT to the "rescue"

Yes, the picture to your left is from Buffalo, New York.  Not Iraq.  Or some third world junta-dictatorship. [...] Note the artfully written third paragraph. Police "rescued" the boy, they didn't endanger him by tossing a flashbang and firing weapons into the home he was in in the first place.

"We are declaring war [...]," said Police Commissioner H. McCarthy Gipson...

- War on Doctors (just wait until you or one of your loved ones writhes in chronic pain)

Another doctor and pharmacist go down for administering opiate-based pain relief.

- Too Many to Name?

A baffling development in Los Angeles, home to some of the more notorious police abuse cases over the last several decades. The chief of police there has apparently decided that he will no longer release the names of any police officer involved in a shooting or excessive use of force case.

- Constitutional

The city of Seattle seized an independent coffee shop via eminent domain [...] The project eventually failed [...] The city sold the shop back to its original owners [...] All in all, the owners of the shop lost some $120,000 between legal fees and the $70,000 extra they had to pay above what the city originally paid them when it seized their property.

- Yea, But it Can't Happen Here

In February of last year, I told you about Lester Eugene Siler, a Tennessee man who was literally tortured by five sheriff's deputies in Campbell County, Tennessee who suspected him of selling drugs. The only reason we know Siler was tortured is because his wife had the good sense to start a recording device about halfway through the ordeal.

The audio is now available online (read the transcript here). Drug war outrages lend themselves to overuse of superlatives. But I gotta say, this may be the most horrifying 40 minutes of audio I've ever heard.

The police are attempting to get the illiterate man to sign an admission of guilt consent form to search his house without telling him what it says. They beat him, over and over, hook electrodes up to testicles and shock him, threaten to kill him, and threaten to go after his family. Early news accounts reported that the torture continued well beyond the end of the recording. After the tape ran out, the same deputies apparently repeatedly submerged the guy's head in a fish tank and a bath tub, threatening to drown him unless he confessed.

You know, one of the categories under which this is posted is "Shame and Disgrace." I used to call it "The Hate File," but found that hate can really take you only so far. This, really, is far, far beyond hate. I don't know exactly what it is, but I'm nearly at the point of embarrassment over being a human being. Still, to this very day, I have people telling me: "they're breaking the law," even over trivialities like kids crashing a condo swimming pool on one of the first hot afternoons of the year.

I'm not justifying trespassing. It's wrong because it's not their property. The "law"--whatever the fuck it says about it--is completely inapplicable to such a situation.

What has this one thing to do with the other--with Radley's litany of contemptible and evil abuse perpetrated by goons against innocents? If you don't immediately know, you're actually part of the problem.

April Report Card

Profit of $18,683 for the month, a 40% return on risk

March was reported here. April finished pretty much how I had accounted for it then, with details in the chart below.

April

(Remember, under the "Trd" (Trade) caption, B = buy, S = sell, T = to, O = open, and C = close. '#' is for the number of contracts purchased at 100 shares per contract. All spreads are on the SPX for April expiration. Since you can't lose on both your underside and topside positions at the same time, risk is calculated on the side with the greatest exposure.)

The green shaded trades represent one complete series in a single month. In past months, I've talked about protecting a trade by closing it down and opening a new position a month out in order to get higher premiums from time value. In this case, I was pretty certain that the 1310/1320 I entered on 3/08 was going to be in trouble, but I closed early enough (3/16) that I was able to just double my position size from 15 to 30 contracts and stay within the same month. In short, that series profited about $5,000 if you add up the black numbers and subtract the red ones.

The SPX finished up for the month (4/20) at 1311.46. Indeed, at first glance, keeping that 1310/1320 would have put me in the money at expiration, costing about $2,250 in settlement cost (15 contracts). But--and this is a little advanced for the purpose of this report--that's not what happened. The SPX, somewhat unique, doesn't settle at the closing price of the 3rd Thursday of the month. That's when trading stops for that month of options. It settles on Friday morning's opening price. In this case, it gaped up and settled at 1320.70, so keeping that 1310/1320 would have cost the full risk of $15,000. Be careful out there.

Also, in previous months I've talked about an aggressive trade I made in January that I rolled to February, then to March, then to April. It's represented by the 12 contracts of 1315/1325 opened 3/08. A few days before settlement, the SPX took a dive and I decided to exit that trade on 4/17 for a debit of only $270. I took a $1,000 profit in a troubled trade in January and kept driving it all the way to April, eventually finishing with a $3,000 profit on that series. Never give up. In this style of trading, it's not over until you say it's over. ...And good thing I closed it, too, because I just might have let it ride seeing that it was 4 points out of the money on Thursday, the last day of trading. However, I'd have been very disappointed on Friday when the settlement figure was released. That would have hit me for a settlement cost of $6,800, turning my $3,000 profit into a $3,000 loss.

I also closed down a 1255/1265 Put the day before expiration. This ended up being unnecessary, but I've been expecting a serious correction for about a month now.

May is a bit lackluster. I haven't looked at the figures but I may be up somewhere around $4,000 or so with not many opportunities to get any more trades filled at the premiums I want in this month. The SPX has been on a solid uptrend since November...

Octaprspx

...and that has driven implied volatility way down. Options premiums are priced largely by implied volatility, i.e., the more a security jumps around, especially takes big dives often, the more the market will pay you to write and sell an option contract with any reasonable risk of going against you. The key is to have premiums high enough to be able to stake positions far enough away as to give you an 80-90% chance of winning.

So, we're getting paid less for doing the same thing, waiting for the market to make another big correction so we can still hold relatively safe positions but get paid better for them.

People tell me that they have a hard time following all this, month-to-month. I understand. It's like me telling you how to play a guitar, or something. All I can say is that less than a year ago, I'd have not understood any of this. If you want to learn, go visit my good friends at OptionsLinebacker. For very little time and money, you can put yourself on track to do this month in and month out for the rest of your life.

One additional note. OptionsLinebacker too publishes their actual monthly results--unlike many newsletters that tell you only about their winning trades. I can vouch, folks. These are each and every trade covered in the newsletter and I've been there for the blow-by-blow since last October. Yes, these returns are more modest than my own (and, I suspect, more modest than those of the newsletter publishers in the trades they don't cover in the newsletter). However, as I told them the other day: you can't cover the aggressive stuff I do in a newsletter. It's too dynamic and people will just get themselves in trouble and lose big. You've got to know what you're doing and do it on your own--without help and guidance. With their help and guidance, however, you can learn to trade very safely and conservatively and still turn in annual gains better than 30%. What you do beyond that is up to you.

Like Riding a Bike

Well, that's the saying anyway. Today it proved to be somewhat true in my case. Longtime readers (thank you so kindly) are aware of my initiative last spring to earn my ticket flying powered airplanes. This was my last entry on the subject, from last July. I was well on my way to finishing up in September. Then, we decided to sell our house, buy a downtown loft, move, invest in and sometimes fix-up real-estate--and now build new townhouses--and it all got to be a bit of overload. And I haven't even covered running a company with a couple of dozen employees--or blogging. ...Or having my customary evening cocktails and making sure the hard disk on my TiVo doesn't get past 80% capacity...

I called Jim, my instructor, a few weeks ago describing how my morning 3-mile walk underneath the final glide for SJC was just killing me. Every morning I watch airplanes land when we're in a high-pressure weather pattern (rare, lately) and take off when we're in low pressure pattern and rain is coming (too common). By the way, clearly the most impressive spectacle is the morning landing of the FedEx DC-10, probably arriving from Memphis. Day in; day out. What a cool looking bird in full landing configuration.

So I called Jim, and then it commenced raining--again--day after day and I let it go by. Yesterday, he called me and I told him: "Jim, unless we schedule something right now, it isn't going to happen." So we did. I met him at Amelia Reid today at 1 p.m. I had told my wife last night: "Don't worry; I'm not stupid enough to go up by myself even if Jim was stupid enough to let me."

It's been eight months. My last log entry was August 20, 2005.

We did a crosswind departure out to the training area where I demonstrated coordinated turns to the right and left, some power-on slow controllable flight at 50 mph indicated, some power-on stalls, kissing stalls with turns, and some power-off stalls with power recovery. When he was satisfied that I could still keep myself "out of the bucket" (a metaphor that integrates being behind the power curve and close ground clearance) on short base & final, we went back and did two landings to full stop and two touch & go's. It all went superbly and upon return to base he endorsed my logbook for another 90 days of solo flight.

There was an interesting, self-reflective aspect to it all. My landings--where the rubber meets the road--where all superb--even with a bit of a cross wind. I recall that on my last solo outing, on August 20, I was unhappy with a good majority of my eight landings. So what's going on? I believe it's part of our wonderful human condition. We have the mental, the physical, and the all-important integration of the two. But we also have a mental capacity that allows us to train ourselves--to compartmentalize so that we achieve a state of being able to do things with near perfection that requires no conscious thought on our part. To catch a phrase: "muscle memory." That's where the riding-a-bike metaphor comes from.

It's also why any training endeavor needs to be integrated with sufficient time. We tend to want to "overthink" things, and this is a real and valid concept/concern. We certainly must keep our wits about us at all times, but there is also reason to "let go," so to speak, and allow the amazing matching which is our integrated body and intellect show its true and awesome power. There's a fine line, and I think perfection is to be found by dancing along its edges. Today, it was only essentials that were in my conscious sphere and not a lot of other stuff that's part of the training process. That's what made the difference.

Some would say it's a gift from God. I'd say it's how we built civilizations on our own.

“Unfair”

I cannot begin to describe to you the general contempt I have for what that concept has come to mean in this culture. I'm not sure, but I can well imagine that it originally served to describe those who behave dishonorably in their dealings with others.

Today, in terms of dishonest word manipulation, it's at the very top. Today, when you hear it, it's nearly always a veil intended to cover an outright theft. When a big company is acting "unfairly," it means: somebody is laying claim to something to which they are not morally entitled, and "fairness" is trotted out as a legal principle in order to carry out a legally legitimized usurpation--an outright theft--you know, like when it was perfectly legal to enslave, buy, and sell another human being or send him to the back of the bus because of his skin color. (It's always important to keep "the law" in fine historical perspective.)

So I get an email from a lawyer yesterday. As lawyers go, he's a very fine one. He defends businesses from the sort of theft that goes on in the courts--and more often: backroom settlement--to the tune of hundreds of millions every day. He does what he can, which is a lot. Anyway, the purpose of the email was to highlight an article he'd just published in a law review concerning the unsettled nature of the legal definition of "unfair" in the appellate courts.

So I wrote back.

M:

It's interesting, and for what it's worth, I'm glad there are defenders of business out there such as yourself. I understand what you're up against and I certainly don't envy you your task. The playing field is sloped to your definite disadvantage and the deck is most assuredly stacked heavily against you: yet you manage with sophisticated legalisms to save the skin of clients time and again who haven't harmed anyone (and aren't going to).

Your approach to that is certainly different than mine. See: I believe in property rights (unequivocal ones). So with the exception of outright force initiation or fraud--which definitions should certainly not require nearly so much nitpicking as the concept of "unfair"--all of this is just one giant usurpation, theft, and parasitic destruction on the part of the state. ...The sole purpose being, of course, to provide endless avenues for the bogus "saintly good fairies" (politicians, government officials, consumer "advocates") to point fingers at the imaginary "demons" (big business and the rich)--all for the general consumption of a population of abject morons with chips on their shoulders, founded in destructive envy and brought on by breathtaking ignorance in virtually all disciplines. Such ignorance has become systemic in the culture.

It's not the America I would have hoped to live and do business in.

(some metaphors above borrowed from here)

Minus $16 Billion

That's the net worth of the once great General Motors if you count their contractual pension obligations going forward (and why wouldn't you?). Recently, out of a real business necessity, they're pursuing cash flow at the expense of profits to the tune of about $1,200 cost (borrowed) each time they sell a vehicle.

Know what? I really don't care if GM--or any other once-great American company, for that matter--goes under. Sell it off for scrap, for all I care. Do you know what else? The prospect of tens of thousands of GM employees and retirees losing their pensions and medical benefits fills me with a strange sense of satisfaction. Oh, not because I don't want them to prosper. I do. I want everyone to prosper beyond their wildest dreams--but only in a manner that reflects reality and the natural order of things. It's kind of like Lottery stories: they hold no interest with me whatsoever; and when I hear that some former winner is broke, again, I'm neither surprised nor saddened.

GM stockholders, directors, officers, and employees have been ignoring reality for decades. Employees got pitched a deal that for monthly dues to a union organization, they could make GM pay them more than the worth of their production. Everyone bit, of course. What do they know?

I guess my problem is that I really don't want to point my finger, laugh, and mock the employees for what I said would happen from the moment I began to understand business dynamics and economics. Downing a whiskey a bit earlier, I reflected that my feeling in this regard was akin to watching a child burn his fingers on a hot stove he'd been admonished not to touch over and over. Be honest. Do you not feel some satisfaction when that child, screaming in pain and horror, is afforded such an important lesson at so low a cost? And how efficient. You could admonish "hot: don't touch" for a decade and it won't begin to contain the influence of that micro-second touch.

But children also have a good and reasonable excuse: they're children; ignorant in most things.

While GM employees don't have that excuse, I find it hard to lay too much blame at their doorstep. I lay it squarely at the doorstep of a generations-worth of worthless, spineless, unprincipled, quarter-end-bottom-line directors and executives who refused to stand up to the theft that was being perpetuated by the union, backed by the federal government. If anyone had the wherewithal to pull an Atlas Shrugged, they did. Now it's too late.

The UAW, the whole labor-union movement, and the left-“liberal” intellectual establishment, which is their father and mother, are responsible for foisting on the public and on the average working man and woman a fantasy land of imaginary Demons (big business and the rich) and of saintly Good Fairies (politicians, government officials, and union leaders). In this fantasy-land, the Good Fairies supposedly have the power to wring unlimited free benefits from the Demons.

Without the UAW and its fantasy-land mentality, autoworkers would have been motivated to save out of wages actually paid to them, and to provide for their future by means of by and large reasonable investments of those savings— investments with some measure of diversification. Instead, like small children, lured by the prospect of free candy from a stranger, they have been led to a very bad end. They thought they would receive endless free golden eggs from a goose they were doing everything possible to maim and finally kill, and now they’re about to learn that the eggs just aren’t there.

It’s very sad to watch an innocent human being suffer. It’s dreadful to contemplate anyone’s life being ruined. It’s dreadful to contemplate even an imbecile’s falling off a cliff or down a well. But the union members, their union leaders, the politicians who catered to them, the journalists, the writers, and the professors who provided the intellectual and cultural environment in which this calamity could take place—none of them were imbeciles. They all could have and should have known better.

What is happening is cruel justice, imposed by a reality that willfully ignorant people thought they could choose to ignore as long as it suited them: the reality that prosperity comes from the making of goods, not the making of work; that it comes from the doing of work, not from the shirking of it; that it comes from machines and methods of production that save labor, not the combating of those machines and methods; that it comes from the earning and reinvestment of profits not from seizure of those profits for the benefit of idlers, who do all they can to prevent the profits from being earned in the first place.

That's just a small taste. Go read George Reisman's complete article.

(via Beck)

The Stupidity of Theft

From a comment, here:

Your right we should be ashmaned of ourselves. and for Katrina too. I dont like the republicans anymore. they inspire hate for our own, but let scum like Iran breathe.

Wally:

That's quite a mix of things. I suppose the only way to tie them together is under a common premise of "entitlement."

Immigrants are entitled to social services. Katrina victims are entitled to disaster relief. Americans at large are entitled to be taken care of before those in other countries.

If you remove that premise, what do you have? Suppose nobody has a right to take from me and you--or anyone else--without our say-so. Note: I'm not saying there's anything wrong with giving immigrants a helping start. Not saying there's anything wrong with massive relief efforts for victims of natural disaster. Not saying there's anything wrong with various forms of assistance for Americans at large, or "taking care of our own," first.

But stealing from me, you and every other productive person renders all of those things the spoils of theft--not the charity from good and kind people those things should be.

I don't have a right to stop an immigrant from crossing a line on a map--except as it concerns my own property; which means: I also don't have a right to steal your property or anyone else's to help them. I don't have a right to stop you or anyone else from giving your last nickel to help a disaster victim, but I have no right to compel you to "give" a single nickel either, and no one has a right to compel me.

Taxation under threat of force tarnishes, ruins and embitters everything that American charity--the greatest in the history of the world--was supposed to be.

Theft is always stupid. It's a shortcut that undercuts the benevolent humanity underlying all genuine charity.

Dear Lawbreakers:

Yes; I'm talking directly to you.

See, I'm reading and hearing a whole lot lately about how sacred are the "laws of the land." ...How respectful and reverent we must be and how solemn must be our demeanor when contemplating the dire warnings of crumbled civilizations brought about by the prospect of lawbreakers!!! Well, dear reader:

YOU ARE A LAWBREAKER!

Do you own a computer? An Internet connection? Browse the Internet? Ever shop? Buy anything online? Ever not be charged sales tax, like from Amazon, or a private purchase on eBay or the like? Yes? Uh...and did you calculate your sales tax liability over the entire year of purchases and send in a check to your governor? Do you send in a check for purchases you make in other states with no sales tax or a lower sales tax while traveling or on vacation?

LAWBREAKER

Online purchases from sites like Amazon.com and eBay may seem to arrive in a state of untaxed bliss. But the law actually requires shoppers to pay their own state's sales tax rate--the concept is called a "use tax"--and voluntarily cough up the exact amount owed each year at tax time.

[...]

New York state has added a line to income tax returns requiring all residents to calculate how much they should pay on Internet, mail order or out-of-state purchases. The threat is explicit: Anyone who creatively underestimates will face stiff penalties if an audit occurs.

"If you've written zero or left it blank, during the audit we're going to make you produce your financial records, bank statements, credit card statements," said Michael Bucci, a spokesman for the New York Department of Taxation and Finance. "If we find out you have made purchases you haven't reported to us, not only are you going to be liable for the amount owed, the tax liability, but also interest and penalties, which...could be up to three times as much as what you actually owe."

For the first time this year, California has taken its thou-shalt-pay-up warnings to the Internet through banner advertisements on four newspaper Web sites. One on the Sacramento Bee's site warns: "Make online purchases? You might owe use tax." (It has the benefit of being easily, and accurately, misread as "You might owe us tax.")

[...]

"One reason we want to collect the use tax and have been very aggressive about it is that 100 percent of the sales tax goes to education--the use tax does too," said Danny Brazell, a spokesman for South Carolina's Department of Revenue.

South Carolina is one of the more diligent states--or from a taxpayer's perspective, one of the most brutal. It has signed a deal with the U.S. Customs Service to obtain records about state residents who import expensive items from abroad; has sent out random mailings to taxpayers; and has added a line to its income tax return.

[...]

"In the event that we were auditing one of our customers, one of our taxpayers, if we found a use tax liability, yes they would be held accountable for that and there would be penalties," said Gore, the California tax agency spokeswoman. Those include an interest rate of 9 percent, and, if negligence is proven, a 10 percent additional penalty.

California residents pay a sales and use tax of up to 8.75 percent in some areas, one of the highest in the nation. Golden State laws are strict: If Californians travel to a state with a 5 percent tax and shop there, the law requires them  to write a check to the state tax agency for up to the 3.75 percent difference upon their return.

Well, you know, since we live in a day when the most essential attribute of America that most people seem to be able to regurgitate is that we're a "nation of laws," it seems to me that we're in quite a pickle. ...Although, I'm sure that the thousands of people who read that CNET article, the hundreds who read this blog entry, and the many who'll be informed elsewhere will immediately commence sending in their checks--you know--since "we're a nation of laws" & all.

(via DeCoster)