Fire Fighters

69 bushfires in NSW today

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While a bushfire in Dobroyd Point, Sydney looked terrible it was classified as a scheduled burn-off. Looking at the NSW Rural Fire Service, there were 69 fire incidents across the state today. So for those that were concerned about the Sydney fire, you can keep tabs here.

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Double Dipper Dan

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Social Justice Warrior and Victorian Premier Dan Andrews is in hot water after 21 of his Labor MPs have been embroiled in a “Rorts for Votes” scheme investigated by the Ombudsman which breached parliamentary guidelines. It found Labor misused almost $388,000 during the 2014 election campaign. Labor spent $1,000,000 of taxpayers dime over two years trying to stop the Ombudsman investigating them. While the money has reportedly been repayed, Andrews & Co are pleading honest mistakes with regards to probably the most basic and well understood laws of election campaigning. Were someone to rob a bank, invest the proceeds to make a big return then return the original funds, would the justice system turn a blind eye? Andrews would seem to think that there should be no consequences.

Dan Andrews is the first to point the finger at everyone else for morals and ethics. How quick he is to virtue signal on social media at his amazing feats for the state of Victoria which put the rest of the country to shame. To belt neighboring states inferior unemployment rates when his government has been creating New Deal type tax spending programmes to fund new jobs.

Here is a list of just five of the shocking lapses in ethics and morals his government can lay claim to:

1) Andrews handed over $500mn in taxpayer funds to contractors for the backflip on the East-West link. He said during the election campaign he would honour those contracts but said after becoming Premier that “Be very clear about this: there will be no compensation paid.” Then still burnt the funds.

2) He told Victorians that the closure of the Hazelwood coal fired power station would hit electricity bills by 85c/week for the sake of the environment. This turned out to be an average of $278/year because of the over reliance on wholesale electricity markets. Despite all of his hair brained renewables schemes, to make up for the shortfall of closing Hazelwood 100MW of dirty diesel generators were secured to offset any shortfalls in baseload. He also spoke of how many green jobs would be created. Facts show that green job creation has been on a long term downtrend

3) Was instrumental in forcing rural fire-fighting volunteers (those who do it from the heart) against their will to come under the control of the fireman’s union who helped him get elected.

4)  To indoctrinate diversity the Vic Police practiced segregation in police recruiting seminars as the blueprint to reach nirvana in terms of the type of open mindedness and multi-cultural society we should strive for. If they truly wanted to teach the virtues of diversity why don’t they just have a come one come all seminar which didn’t base it on gender, religious or sexual orientation. Victoria has more cops per capita than any other state yet home invasions, carjackings and other crime rates are soaring.

5) The Andrews’s government wants to allow girls as young as 11 to get access to the contraceptive pill without consent from the parents. Most parents worry about their kids. What they eat and what they put in their bodies. Some kids may only want it to reduce pain during their menstrual cycle but to have a government provide a service which deliberately allows kids to bypass parental approval is downright wrong.

While Opposition Leader Matthew Guy has hardly helped his cause by having dinner with a member of the underworld in August 2017 in what was dubbed ‘Mobster-Lobster-gate’ this should hopefully wake up socialist Victoria to the crooked nature of the incumbents.

Truly sickening US Public Pensions data

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Following on from the earlier post and our 2016 report on the black hole in US state public pension unfunded liabilities, we have updated the figures to 2016. It is hard to know where to start without chills. The current state of US public pension funds represents the love child of Kathy Bates in Misery and Freddie Krueger. Actuarial accounting allows for pension funds to appear far prettier than they are in reality. For instance the actuarial deficit in public pension funds is a ‘mere’ $1.47 trillion. However using realistic returns data (marking-to-market(M-2-M)) that explodes to $6.74 trillion, 4.6-fold higher.  This is a traffic accident waiting to happen. US Pension Tracker illustrates the changes in the charts presented.

Before we get stuck in, we note that the gross pension deficits do not arrive at once. Naturally it is a balance of contributions from existing employees and achieving long term growth rates that can fund retirees while sustaining future obligations. CM notes that the problems could well get worse with such huge unfunded liabilities coinciding with bubbles in most asset classes. Unlike private sector pension funds, the states have an unwritten obligation to step up and fill the gap. However as we will soon see, M-2-M unfunded liabilities outstrip state government expenditures by huge amounts.

From a layman’s perspective, either taxes go up, public services get culled or pensioners are asked politely to take a substantial haircut to their retirement. Apart from the drastic changes that would be required in lifestyles, the economic slowdown that would ensue would have knock on effects with state revenue collection further exacerbating a terrible situation.

CM will use California as the benchmark. Our studies compare 2016 with 2008.

The chart above shows the M-2-M 2016 unfunded liability per household. In California’s case, the 2016 figure is $122,121. In 2008 this figure was only $36,159. In 8 years the gap has ballooned 3.38x. Every single state in America with the exception of Arizona has seen a deterioration.

The following chart shows the growth rate in M-2-M pension liabilities to total state expenditure. In California’s case that equates to 3.2x in those 8 years.

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Sadly it gets worse when we look at the impact on current total state expenditures these deficits comprise. For California the gap is c.6x what the state spends on constituents.

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Then taking it further,  in the last 8 years California has seen a 2.62-fold jump in the gap between liabilities and state total expenditures.

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This is a ticking time bomb. Moreover it is only the pensions for the public sector. We have already seen raids on particular state pension funds with some looking to retire early merely to cash out before there is nothing left. Take this example in Illinois.

Sadly the Illinois Police Pension is rapidly approaching the point of being unable to service its pension members and a taxpayer bailout looks unlikely given the State of Illinois’ mulling bankruptcy. Local Government Information Services (LGIS) writes, At the end of 2020, LGIS estimates that the Policemen’s Annuity and Benefit Fund of Chicago will have less than $150 million in assets to pay $928 million promised to 14,133 retirees the following yearFund assets will fall from $3.2 billion at the end of 2015 to $1.4 billion at the end of 2018, $751 million at the end of 2019, and $143 million at the end of 2020, according to LGIS…LGIS analyzed 12 years of the fund’s mandated financial filings with the Illinois Department of Insurance (DOI), which regulates public pension funds. It found that– without taxpayer subsidies and the ability to use active employee contributions to pay current retirees, a practice that is illegal in the private sector– the fund would have already run completely dry, in 2015…The Chicago police pension fund held $3.2 billion in assets in 2003. It shelled out $3.8 billion more in benefits to retired police officers than it generated in investment returns between 2003 and 2015…Over that span, the fund paid out $6.9 billion and earned $3.0 billion, paying an additional $134 million in fees to investment managers.”

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To highlight the pressure such states/cities could face, this is a frightening example of how the tax base can evaporate before one’s eyes putting even more pressure on bail outs.

This problem is going to get catastrophically worse with the state of bloated asset markets with puny returns. Looking at how it has been handled in the past Detroit, Michigan gives some flavor. It declared bankruptcy around this time three years ago. Its pension and healthcare obligations total north of US$10bn or 4x its annual budget. Accumulated deficits are 7x larger than collections. Dr. Wayne Winegarden of George Mason University wrote that in 2011 half of those occupying the city’s 305,000 properties didn’t pay tax. Almost 80,000 were unoccupied meaning no revenue in the door. Over the three years post the GFC Detroit’s population plunged from 1.8mn to 700,000 putting even more pressure on the shrinking tax base.

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Throw these dill pickles out of Hamburg

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What is it with protestors these days? Hate the outcome of the US presidential election all you wish but ask yourself does trashing innocent businesses in Hamburg which have zero relationship to Trump achieve anything other than show your utter contempt for democracy? Tiger Copenhagen is a peace loving Danish purveyor of colourful homewares. Anyone would struggle to find a Tiger connection with US foreign or domestic policy. I’ve actually met the management (owners) when they set up in Japan and you’d struggle to find nicer people. Still such behaviour shouldn’t surprise. After all, post Trump’s victory on Nov 8, similar buffoons were trashing Starbucks, perhaps the most virtue signaling corporate and supporter of their causes on the planet.

One of the worst things about these protestors is that none of them are prepared to own it. Masked in the hope they don’t get caught carrying out willful destruction of private property and violence on others. Hopefully many that are arrested have the book thrown at them. Sadly in Merkel’s Germany I would wager it will be buried like most other activity of the sort. The stats are telling of the rise in left and right wing violence.

In Berlin, radical left anarchists are burning cars and smashing bank buildings in retaliation for what they claim is police brutality. Far-left activists in Berlin warned that they would exact €1m in revenge for any police raids on their squats and other ‘projects’ in the capital Dozens of cars were burned.

The police have reported a significant increase in far-left violence nationwide in 2015, with politically motivated left-wing crimes jumping 18 percent to 9,600. The refugee influx is a root cause with far-right groups have reacting violently and far-left groups attacking them in response. In January this year 211 far-right extremists were arrested for hosting an anti-refugee rally in Leipzig complaining Chancellor Merkel is ruining their homeland after the cover up after the new year sexual assaults in Cologne.

The Interior Ministry revealed that 39,000 (+19%YoY) politically motivated crimes were committed in 2015, with 23,000 having a far right motive. Crimes against refugees have soared from 199 in 2014 to over 1,000 in 2015.

Expect the 2017 figures to be even worse.

Tsunami Tales pt.1: Remember the selfless bravery of Miki Endo in Minamisanriku

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On March 11, 2011 Miki Endo (24) kept announcing to the 17,700 citizens of her hometown Mimamisanriku to seek higher ground as the tsunami approached. As the tidal wave engulfed the town, Miki tragically lost her life as the three story building wasn’t high enough to escape. Despite the huge rebuild in Minamisanriku today, the skeleton of the building will be preserved as a memory of that fateful day.

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This is what it looked like 6 years ago. Miki had been clinging to the tip of the radio mast but  it wasn’t high enough.

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Here are the pictures I took of Minamisanriku over 5 years ago.

This is what it looks like today

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The rebuilding of the town will take at least another 5 years. It is hard to know what to think. So much reclaimed land, huge mounds of dirt and lots of temporary buildings which mostly house convenience stores. When the workers go, will there be a Minamisanriku to call home? It just looks temporary. Nothing should take away the bravery of Miki Endo.

US heroin deaths up 6x since 2002! Why?

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The chart above shows the total number of U.S. overdose deaths involving heroin from 2002 to 2015 with a 6.2-fold increase in the total number of deaths over the period. Automobiles killed around 32,000 people last year or a little over 2x that of heroin overdoses. When adding non-methadone opioids (illicit fentanyl) overdose that number surged to 20,000, a 33% YoY jump on 2014 and 5.9x 2002. Why is it happening? The problem is that for many prescription painkiller users is that once their bottle ends, the addiction doesn’t stop meaning many switch to heroin to get the same ‘opioid’ hit.

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Looking at deaths caused by all illicit drugs, we are looking at 50,000, more than double the level of 2002. So illicit drugs killed almost as many as car accidents and gun murders combined in 2015.

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Overdose deaths from taking pain relievers has also been shockingly high. Drugs such as OxyContin which contain opioids have also found their way to creating problems in the US armed forces.

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The US Government has recorded stats on the use of illicit drugs by active duty military personnel. While still off the highs (no pun intended) of the 1980s, since the 1990s the trend has been climbing. The chart above shows the usage as a % of total active personnel. The USAF has the lowest incidence of drug abuse. Illicit drug use includes marijuana, cocaine, hallucinogens, heroin, methamphetamine, inhalants, GHB/GBL and prescription drug misuse.

Excessive use of pain relievers make up a large proportion of illicit drug use. Oxycodone is one of the more common type of opiate pain killer and it is highly addictive. In 2010, the US Food and Drug Administration (FDA) required the formulation of OxyContin be changed to make it harder to become addicted to.

A policy of zero tolerance for drug use among DoD personnel is likely one reason why illicit drug use has remained at a low level in the military for 2 decades. The policy was instituted in 1982 and is currently enforced by frequent random drug testing; service members face dishonorable discharge and even criminal prosecution for a positive drug test.

According to the National Institute on Drug Abuse (NIDA), “Suicide rates in the military were traditionally lower than among civilians in the same age range, but in 2004 the suicide rate in the U.S. Army began to climb, surpassing the civilian rate in 2008. Substance use is involved in many of these suicides. The 2010 report of the Army Suicide Prevention Task Force found that 29 percent of active duty Army suicides from fiscal year (FY) 2005 to FY 2009 involved alcohol or drug use; and in 2009, prescription drugs were involved in almost one third of them.”

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As opioid overdoses rise, companies such as Adapt Pharma have seen sharp rises in the sales of products like Narcan (Naloxone) which basically revives victims from the dead. Narcan publicizes its price that is even insured meaning one can overdose and revive with a $10 co-payment.

“94% of insured lives in the US have coverage for NARCAN® Nasal Spray*. According to IMS Health, nearly three quarters (74%) of prescriptions for NARCAN® Nasal Spray have a co-pay of $10 or less**. For those paying cash, ADAPT Pharma has partnered with retail pharmacies to reduce out of pocket costs (Retail is $62.50/dose)…To expand community access, NARCAN® Nasal Spray is available to all qualified group purchasers for $37.50 per 4mg dose ($75 per carton of 2 doses). This pricing is available for all Qualified Group Purchasers, such as first responders (EMS, Fire Department, Police), community organizations and Departments of Health, regardless of size. This pricing represents a 40% discount off the Wholesale Acquisition Cost (WAC) of $125 per carton.”

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Price hikes have been a feature of naloxene. As of January 2015, Amphastar’s version of naloxone was up to $41 a dose, according to Fierce Pharma, a pharmaceutical industry news website. That follows a price increase from $17 to $33 a dose back in October 2014, according to data provided by Truven Health Analytics. So not only is volume spiking, so is price. Walgreens has expanded the availability of prescription-free naloxone to 33 states.

West Virginia health officials are responding to opioid overdoses by distributing more than 8,000 kits with Naloxone that can get people breathing again if administered in time. Money for the kits comes from a $1 million federal grant to West Virginia, which has had the nation’s highest rate of overdose deaths at 41.5/100,000 people.

Local emergency medical services agencies in West Virginia administered 4,186 doses of Naloxone in 2016, up from 3,351 the year before and 2,165 two years ago and that data doesn’t include uses by hospital emergency departments, urgent care centers, first responders and family members.

So layered on top of poverty, food stamps and deteriorating employment we now seem to have an America that is increasingly becoming high on opioids. I am working closely with a company which is developing the antidote and progress is good. It will knock out the addiction even including ice in Australia. Tests are promising.