‘Nigerian Prince’ Arrested in Louisiana, Orrin Hatch Retires, and ‘Monster Storm’ Threatens East Coast: P.M. Links

  • “Nigerian prince” arrested in Louisiana.
  • Utah Senator Orrin Hatch is retiring, paving the way for a possible Mitt Romney Senate run.
  • Air Traffic Control reform advocate Rep. Bill Schuster (R-Penn.) is retiring from Congress.
  • Israel threatens African migrants with deportation or imprisonment.
  • “Monster storm” prepares to hit East Coast.

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Simple Wisdom From One Of The Most Famous People Ever To Go Broke

Authored by Simon Black via SovereignMan.com,

In the late 1800s towards the end of his life, Mark Twain wrote one of his greatest observations of humanity:

“When you remember we are all mad, the mysteries disappear and life stands explained.”

Twain’s quote was primarily a commentary on himself.

A lot of people don’t know this, but Mark Twain went bankrupt late in life.

 

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His enormous fame as an author had brought him substantial wealth. But Twain squandered it all on countless business and investment blunders.

Twain’s publishing company, for example, racked up record sales of its 11 volume “Library of American Literature”.

The problem, however, was that the books cost him $25 to produce… but he only collected $3 up front from customers.

The more volumes he sold, the more money his company lost.

Twain started borrowing heavily to keep his business afloat, eventually mortgaging his home and taking substantial personal loans from wealthy friends.

But Twain was unable to indebt himself back into prosperity, and the company was run into the ground.

Simultaneously Twain made some hilariously boneheaded investments.

He chose NOT to invest in Alexander Graham Bell’s telephone (even though he boasted one of the country’s first telephones in his own home).

Instead Twain dumped more than $40,000 (nearly $1.5 million today) in a failed technology that went bust.

Twain invested in another technology that was supposed to revolutionize steam engines. Per the terms of the deal, Twain paid the inventor a stipend of $35 per week.

Twain wrote in his journal,

He visited me every few days to report progress and I early noticed by his breath and gain that he was spending 36 dollars a week on whisky, and I could never figure out where he got the other dollar.

Twain lost money in the stock market too, famously buying shares of Oregon Transcontinental Railroad at $78 per share, ignoring the stock bubble when it hit $98, and ultimately selling at $12.

Obviously there’s nothing wrong with buying stocks or even making high-risk speculations.

But Twain had an extraordinary knack for massively overextending himself… betting way too much on deals with excessive risk.

Even on the rare occasion that one of Twain’s businesses or investments turned a bit of success, it got wiped out in the Panic of 1893.

Every major newspaper in America picked up on his troubles, publishing stories like “Mark Twain Fails” (Washington Times) and “Mark Twain’s Company in Trouble” (New York Times).

Twain was nearly 60, yet he was totally insolvent and had been publicly humiliated. Even worse, the stress of his financial situation was starting to have a serious effect on his health.

Reflecting on his life, he was probably mystified at where he ended up. But “when you remember we are all mad. . .”

Now, Twain’s story ultimately has a happy ending.

He eventually found the grit and wherewithal to embark on a multi-year speaking tour, giving lectures around the world in places as far away as Australia, Bangladesh, and South Africa.

Today we’d think of these ‘lectures’ as stand-up comedy shows.

Between the tour and the stories he wrote about his travels, Twain managed to claw his way out of debt.

There’s a really fantastic book called Chasing the Last Laugh which chronicles Twain’s misfortunes and speaking tour– I highly recommend it.

I spent much of my holiday break over the past few weeks re-reading parts of the book, and it really drove home a very simple ethos: avoid major mistakes.

Twain made plenty of enormous mistakes, and he suffered dearly for them. His life would have been totally different had he avoided them.

Looking around today I see a multitude of opportunities to make major mistakes.

Nearly every major asset class– property, bonds, stocks, venture capital, etc. is simultaneously at all-time highs with valuations not seen since historic crashes… yet investors keep piling in.

Even emerging asset classes have created spectacular bubbles that have literally never been seen before in history, replete with novice speculators who truly believe that they are hot shot investors despite having zero financial literacy.

Almost every major western government is so deeply in debt that they are officially insolvent, i.e. their debts and liabilities dramatically exceed their assets.

Trillions of dollars worth of debt has been issued by bankrupt governments at NEGATIVE interest rates. It’s insane.

National pension funds, which tens of millions of people depend on, are rapidly running out of money.

These conditions are so irrational, it’s hard to imagine how we even got here. But “when you remember we are all mad. . .” it starts to make sense.

In our upcoming conversations I’d like to dive into these risks in greater detail, and talk about how to avoid major mistakes.

It’s incredible what a profound impact it can have on your life when you follow this rule.

Avoiding major mistakes doesn’t mean hiding in the basement and cowering in fear. It means acknowledging some basic realities, being brutally honest with yourself, and staying rational.

We usually make major mistakes when we’re driven by emotions… especially when those emotions are fear, greed, or ego.

(I’ve committed more than my fair share of those mistakes over the years… though fortunately fewer and fewer of them as time goes on. I’ll tell you some of those stories this week.)

We also make major mistakes when we totally misjudge (or fail to see) obvious risks.

Yet risk assessment is far from rocket science:

If your government is bankrupt, it probably makes sense to diversify a bit. If assets are trading at record high valuations, it might make sense to consider taking some money off the table. Simple.

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Will the Government Ban Human Driving?

SelfDrivingEvgenyGerasimonovDreamstimeWhen self-driving vehicles become safer than human-driven ones, the government will ban people from driving. Or that, at least, is the claim made in some recent articles in Automotive News and National Review. Bob Lutz, former vice chairman and head of product development at General Motors, declares in Automotive News that vehicles “will no longer be driven by humans because in 15 to 20 years—at the latest—human-driven vehicles will be legislated off the highways.” By the time 20 to 30 percent of vehicles on the roads are fully autonomous, Lutz argues, officials “will look at the accident statistics and figure out that human drivers are causing 99.9 percent of the accidents.”

Most self-driving vehicles, he believes, will be standardized modules ordered and operated by big transportation fleet companies; riders will summon them with the touch of a screen or a voice command to a digital assistant. Human driving of high-end specialty vehicles will continue, Lutz predicts, but only as an elite pastime confined to country clubs and the equivalent of motorsport dude ranches. “The era of the human-driven automobile, its repair facilities, its dealerships, the media surrounding it—all will be gone in 20 years,” he writes.

Similarly, National Review‘s Charles C.W. Cooke writes: “At some point in the future, be it years, decades, or a century hence, the federal government will seek to ban driving.” Cooke agrees that those seeking to ban human driving will base their arguments on the dramatically lower level of highway carnage that self-driving vehicles will bring about.

Lutz is more or less resigned to a future where human driving is banned, but Cooke fiercely argues for resisting any such ban. Indeed, he urges the adoption of a constitutional amendment: “Congress shall make no law restricting adults from driving licensed vehicles.”

In the 20th century, Cooke points out, automobiles were machines of liberation enabling people to go where they wanted when they wanted without having to tell anyone what they were up to. In contrast, the fleet owner of automous vehicles would know where the car picked you up, where it let you out, and how many passengers traveled with you. The company will probably also monitor you via video to make sure you don’t vandalize the module. Cooke argues that such a vehicle “would become a telescreen on wheels—an FBI-approved bug, to be slipped beneath the chassis in plain sight of the surveilled. At a stroke, my autonomy would be gone.”

Cooke has a point. Still the fact is that our robocar travels will add only a bit more to the copious data exhaust we already leave in our wakes as we wander through the world using our credit cards, Apple Pay, ride-hailing services, E-Z passes, and mobile telephones. Protecting our privacy from government snooping will take far more than guaranteeing folks the right to drive themselves. (For example, the U.S. Supreme Court is currently considering a case in which police demanded without a warrant the geolocation cell phone data that they used to prosecute a suspected armed robber.)

Whether or not human driving is ever actually banned, a good first step toward for protecting our privacy, including our privacy while traveling in self-driving vehicles, would be the adoption of the Geolocational and Privacy Surveillance Act. This law would require the government to show probable cause and get a warrant before acquiring the geolocational information of any U.S. person. The act would apply “to all law enforcement acquisitions of the geolocational information of individual Americans without their knowledge, including acquisition from commercial service providers as well as direct acquisitions using ‘Stingrays‘ and similar devices or tracking devices covertly installed by the government.” The act would require a warrant for real-time tracking of a person’s movements and for the acquisition of records of past movements.

In any case, most folks will probably switch voluntarily to hiring self-driving vehicles on demand—not just because they’re safer, but because using them is projected to cost as much as 75 percent less than owning a car. It will be interesting to see how much liability insurance will cost folks who still want to drive on public roads in world where automobile accidents will have become very rare. Don’t be surprised if it’s the market, not the government, that ends up “banning” human-driven automobiles.

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Nasdaq’s Best Start To A Year Since 2013 As Bitcoin, Bullion, & Bond Yields Spike

Investors started 2018 like this…

And those same investors bought tech stocks (and Biotech) with both hands and feet today as Nasdaq massively outperformed (along with Trannies) and the Dow lagged…

 

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S&P, Trannies, and Nasdaq record high.

This was Nasdaq’s best start to a year since 2013… and closed above 7,000 for the first time ever…

 

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Futures show the excitement better…

 

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VIX was monkeyhammered lower after Friday’s spike…From an opening high over 11 to 9.5…

 

 

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Biotech’s best day in 4 months, FANG’s best day in 3 months, but banks lower…

 

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Plenty of chatter today about Treasury yields spiking (and the yield curve steepening) as being some sign of rotation but the reality is that today’s action was much more likely based on rate-locks being set ahead of a very heavy week of IG issuance (expectations of over $30bn in sales this week and $136bn for Jan)…

 

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30 year yields spiked to Christmas Eve levels…

 

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The Dollar continues to freefall – down for the 5th straight day to the lowest close since Sept 26th…

 

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After an initially weak start to the year, Bitcoin soared higher today – above $15000 – after Thiel headlines; Ethereum remains the winner so far…

 

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Gold and Bitcoin have recoupled from their pre-December normalized relationship…

 

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With gold futures tagging $1320 into the close…

 

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Since The Fed hiked rates in December, there is only one winner…

 

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