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THE “BIG BROTHER” ISSUE By Mike Gasior While the title of this month’s edition might have an ominous tone to it, my ambition is the same as it usually is. I hope to share information with you that you may never have heard before, and I am also gunning for some interesting, summer reading. For this reason I’m going to stay away from overly financial, economic and business topics and perhaps tell you a few things that may impact you in a very serious and personal way. Another request I want to make, which I haven’t made in over 100 previous editions during the past 12 years, is to ask you to please pass this newsletter along to many of your friends and relatives. I’m constantly interested in stories that I have never heard the mainstream media mention but strike me as amazingly important and I’ve got a couple of doozies this month. And don’t just send it to friends and relatives. Send it to members of the mainstream media and ask why they didn’t TELL you about all of this. Send it to your elected officials and inquire how dare they DO this to YOU. Most important to me is that a lot of my enthusiasm for these topics stems from a significant personal event in my own life a few months ago, but more on that shortly. Suffice it to say that this “personal event” of mine left me fairly aggravated and feeling severely invaded; and I suspect you will all agree with those sentiments after I share my tale. This newsletter gives me a small mouthpiece to share news and I hope you passing this edition along to your friends will help make people aware of information that could be important to them. But first a small bit of business. SPECIAL TUITION OFFER FOR FOUR REMAINING NEW YORK SEMINARS With the developments that have taken place in the markets in the last few years, the four programs I will be presenting in New York during the second half of 2011 have taken on even deeper importance than usual. I wanted to make you aware of these extremely timely sessions. Of course, all my courses qualify for significant CPE and other continuing education credits. We are aware of how tight training budgets have become and for that reason we wanted to offer a tuition special for these important programs. When registering two paid attendees for any one of these programs we will allow a third person to attend for free. This special is for three people attending the same program and not for attending various sessions. On the final page of the registration process on our website, simply list the three people you would like to attend the seminar. If you have any questions, please call or email and we will be happy to help. This offers tremendous value for your training dollars. The four seminars taking place in New York available for the 3 for 2 special are: --Treasury Management & Operations –
September 19th and 20th --CMO, ABS & CMBS Securities – October
17th --Introduction to Securities & Markets –
October 18th, 19th and 20th --Advanced Securities & Markets – December
12th, 13th and 14th You can also view the entire 2012 Schedule at this link: http://www.afs-seminars.com/schedule.html We still have a variety of convenient dates available if your organization is interested in holding an in-house session for your staff or having me speak at your function. You can view our course catalog, which details all of our "standard" sessions at the link below. Please remember that we are also happy to create a custom program of topics that is perfectly tailored to your audience's needs at no extra cost. To inquire about either in-house seminars or my speaking availability, please call my offices at (860)347-6568 or write me at mike@afs-seminars.com JUST AN ORDINARY DAY This past Easter was actually quite a nice day in New England. The weather was unseasonably warm, the sun was shining and it was supposed to be a fairly quiet holiday. I hadn’t seen my aunt in quite some time and I had promised to come pick her up (she no longer drives) and have her come spend part of the afternoon at my house. It was about noon when I got into my three year-old ¾ ton Chevrolet Suburban and headed out of my driveway toward her condo about 10 miles away. My Connecticut house is on a mountaintop in a pretty rural area at the farthest point of a dirt road surrounded primarily by forestland, including my own. I was heading down the dirt road, less than a mile from house, and saw a smaller, silver car approaching me coming up the hill. There was nothing particularly notable about the observation. I felt the impact and I was honest with the police, paramedics and ambulance personnel that after the initial contact, my next memory was being in a ditch on my side of the road with every airbag deployed and my driver’s side front wheel torn off the vehicle and me being unable to open the driver’s door. In the rearview mirror I could see the silver Toyota Camry teetering on the edge of a semi-cliff that would have slid the car to the bottom of a 50-foot drop (the dirt road is cut into the side of the mountain) so I quickly got out of the passenger door to run and check on the other driver. He was a 78 year-old man and he looked worse than me since his windows had shattered and he was bleeding. I got him some napkins for the bleeding, sat on his hood to prevent him from tipping down the cliff and called 911. To quickly summarize the aftermath, because I had suffered a “confirmed loss of consciousness” (I kept hearing them use the term CLC) I found myself strapped to a back board with a neck brace, IV, and was rushed to Hartford Hospital since they are a Level I trauma center in case I had any more brain damage or internal injuries than I have on any given day usually. It was also in this mayhem of getting me strapped to the board and other nonsense, a police officer asked if he could see my cell phone and I stupidly complied. Stupidly because I wouldn’t get it returned to me for over six hours. In retrospect they wanted to see if I had been talking or texting prior to the accident (I wasn’t) but I was under no obligation to surrender my phone. I would be annoyed by my decision while staring at the ambulance ceiling thinking it wasn’t exactly an appropriate moment for a police officer to be making such a request as I lie on an ambulance gurney. In the emergency room it was determined I was bruised and had torn a large muscle in my back, but I was primarily impatient and sick of being there and was pacing the halls awaiting my discharge. (The older gentleman was also discharged about the same time with fairly minor injuries as well). It was right before my discharge that I saw two uniformed police officers and a detective approaching me wanting to discuss the accident. I told them the truth that I’d never seen it coming, wasn’t using my phone and have no idea whatsoever how it had occurred. It was then they asked me if I would allow them my permission to download the data from the black box of my Suburban. My mind suddenly went racing through time as though I was on Space Mountain at Disney World. With all the thoughts I’d entertained since the moment of impact I had never thought once about the black box that is contained now in almost 75% to 80% of cars on the road. I had even dedicated a large segment of my December 2006 newsletter to warn you guys about this evil thing: http://www.afs-seminars.com/newsletter_Dec_2006.html Now I’m sitting on a rolling stretcher in the hallway of an emergency room and the police want my permission to get data off of my black box. Since I was now pretty P.O.’ed about my decision to surrender my phone, I told them in no uncertain terms that they did not have my permission at all. They said thank you and departed, as did I shortly afterward. Almost exactly 24 hours later I answered the doorbell to my house to a police officer that was there to deliver me a “written warning” for driving “too fast for conditions”, which was determined after they’d gotten a search warrant to unload the data off of my black box. It seems I was going 35 miles per hour, was not braking and was not accelerating. My road has no posted speed limit nor any centerline so I guess there was no real way to charge me with more than issuing me the warning. I also discovered you can’t challenge a written warning in court by pleading not guilty. Before the officer departed I asked how fast the older gentleman was going and the answer was “he was going nuthin”. I asked “nothing?”, which led to some vague explanation about how the man wasn’t going very fast at all. Basically, the officer shrugged his shoulders, mumbled some nonsense and headed toward his cruiser. As is my habit, I needed to do a little research on this and it led me to an article from Consumer Reports that got me pretty damn angry. According to the article, Toyota doesn’t make their data available to the police (the company claims to have only one laptop in the U.S. that can do it, plus Toyota doesn’t believe the data is very reliable anyway). This made me angry because I then knew the police hadn’t even been able to get the old man’s data because he was driving a Camry, but mine was easy because Chevrolet makes theirs easily available. Here is a link to the article from Consumer Reports: http://news.consumerreports.org/cars/2010/03/black-box-101-how-event-data-recorders-edrs-work.html Now please understand the situation. The insurance term for this accident is “a frontal offset collision”, which is basically the two vehicles contacting driver’s headlight to driver’s headlight. I’m driving a ¾ ton Chevy Suburban that weighs 6,327 pounds without fluids, passengers or cargo. I hit a 2005 Toyota Camry (that was driving uphill) that weighs 3,108 pounds and the impact was adequate to buckle the frame of the Suburban, set off all the airbags and render it “totaled” for insurance purposes. I’m no accident investigations expert, but I find it extremely difficult to believe that the old man was driving “nuthin”. All I know is that this black box is owned by me, was paid for by me and did nothing but rat me out in the case of this accident. And since Toyota doesn’t make the data available to law enforcement, the other participant in this accident was held harmless. While I am admittedly annoyed at my written warning, lots and lots of people have gotten into MUCH worse trouble than I did based on their black box divulging their activities. Here is a short list of examples: --On August 17, 2002, two teenage girls in Pembroke Pines, Florida, died when their vehicle was struck by a Pontiac Firebird Firehawk driven by Edwin Matos. The girls were backing out of their driveway. Investigators accessed the vehicle’s data recorder and discovered Matos had been traveling 114 mph in a residential area moments before impact. Matos was convicted on two counts of manslaughter, but his lawyer appealed the admission of the data recorder evidence, arguing it may have malfunctioned because the car had been extensively modified. The attorney also argued the evidence was based on an evolving technology. The Florida Supreme Court upheld the conviction, however, establishing precedent in that state that data gleaned from event data recorders is admissible in court. --In New South Wales, Australia, another teen-aged girl (a probationary driver) was convicted of dangerous driving "causing death/occasioning grievous bodily harm" in 2005. Evidence from the Peugeot's EDR showed that the car was being driven in excess of the posted speed limit. An injunction against the use of EDR evidence, obtained by the owner of the car (the parents of the defendant), was overturned in the NSW Supreme Court. --In Quebec, Canada, the driver of a car who sped through a red light, crashing into another car at the intersection and killing the other driver, was convicted of "dangerous driving" in 2001 after EDR information revealed that it was he, not the deceased driver of the other car (as the defendant asserted), who was speeding. There were no other witnesses to the crash. --The first such use of EDR evidence in the United Kingdom was at Birmingham Crown Court during the trial of a 19 year old man who crashed the Range Rover Sport he was driving into a Jeep in 2006. The accident left a baby girl paralyzed and the driver was sentenced to 21 months in prison. The EDR evidence allowed investigators to determine the driver was speeding at 72mph in a 30mph zone --On 12 April 2007, N.J. Governor Jon Corzine was seriously injured in an automobile accident. According to the superintendent of state police, an Event Data Recorder in the SUV he was traveling in recorded he was traveling at about 91 MPH five seconds before the crash. The speed limit on the road is 65 MPH. The Governor was not the driver of the vehicle. I’m not condoning any of the ridiculously dangerous behaviors exhibited in most of the above cases, but it is at least notable that it was the person’s own device that testified against them. It’s already a scary world where there seems to be a camera watching us everywhere we go, but now we’re paying to let Big Brother watch us. The problem is that there is no Federal law protecting this data as private as well as the 37 states that do not address this issue either. There are only 13 states that have passed laws pertaining to the release of black box data, but even then, the simply require a search warrant or subpoena by the courts or police to gain its release. It appears that Connecticut must be one of those states. You should also be aware that your auto insurance company will now routinely subpoena the data from the box in civil cases to avoid paying insurance claims when they think your driving behavior my disqualify your coverage. And although I haven’t been able to produce evidence, I have also heard stories of auto manufacturers voiding your warranty coverage based on data from this box. All in all, it’s certainly not beyond the realm of imagination. To help you readers as much as I possibly can, I tried to locate as much useful information as possible. This is why I’d like for you to forward this newsletter to as many people as possible. The biggest question you are probably asking right now is if your car has one of these devices in it. Here is the most comprehensive listing I’ve been able to find that was current as of June 29th of this year: http://www.harristechnical.com/downloads/cdrlist.pdf Another troubling website for you to look over is the following one geared toward insurance and crime investigators on how to collect this data. The source is “Forensic Magazine”: http://www.forensicmag.com/article/collecting-edr-data-crash-investigations What I am very sad to report is that I’ve been unable to find anything conclusive with regard to getting these EDR’s removed from your vehicle or disconnected. In a world that is filled now with people invading your privacy, I would have thought there would be a cottage industry popping up of entrepreneurs willing to take care of this “problem”. Unfortunately I have nothing solid to report on that front. Perhaps I’ve found myself a new business to pursue. ANOTHER REASON YOU SHOULD PASS THIS ALONG In doing my research after my accident about devices buried within automobiles, I came across this rather catchy news headline: “CBO: Taxing mileage a 'practical option' for revenue enhancement” For those of you who don’t follow the dealings of Washington D.C. as closely as I sadly do, the CBO is the Congressional Budget Office. But without further ado, allow me to give you the executive summary of what tax might be next for us Americans. It seems that U.S. car buyers truly have been moving to vehicles with better and better gas mileage in the past couple of decades, which was something it seemed the government was encouraging us to do in order to save the environment and natural resources. Not to mention cutting back on our dependence on foreign oil imports. Unfortunately the downside of this better mileage is that the revenue received by the government on fuel taxes (which is collected on each gallon bought) has declined steadily for many years now. Making matters worse was the spike gasoline made above $4.00 several summers ago combined with a Federal budget deficit that is spiraling out of control. So with the Obama administration proposing many highway and infrastructure projects, Senate Budget Committee Chairman Kent Conrad, Democrat from North Dakota asked the Congressional Budget Office earlier this year for viable alternatives to increase revenues via transportation. The resulting report from the CBO stated that the most viable option would be to develop technology that would allow the government to implant devices in every registered motor vehicle and be charged a VMT tax (Vehicle Miles Traveled). If you think I’m just making all of this up, by all means go read a full report about this on “TheHill.com”, which is a magazine and website geared toward Washington insiders. I completely expect it might curl your hair if it otherwise isn’t curly: And for all of you people who bought a Prius or other hybrids or electric cars and were making judgments about me in my 6,000 pound Suburban…well it appears Senator Conrad considers me a patriotic American and you some sort of tax dodging weasel. Here are his thoughts: "Do we do gas tax?" Conrad asked. "Do we move to some kind of an assessment that is based on how many miles vehicles go, so that we capture revenue from those who are going to be using the roads who aren't going to be paying any gas tax, or very little, with hybrids and electric cars?" I hope you sense my sarcasm, since as an economist, I have railed for years about the government punishing good behaviors (paying your mortgage on time and driving fuel efficient vehicles) and seemingly rewarding bad ones (walking away from your mortgage when you could have paid and driving 6,000 pound monsters). I don’t think I have to tell you much more about why this edition is titled “The Big Brother Edition”. DEBT CEILINGS AND DEFAULTS I’ll make this one quick and to the point since I wanted this newsletter to be more entertaining than most and perhaps even appropriate beach reading. Here is the simple basis of my feelings on this current “crisis”. A technical default is not going to be catastrophic. Not fixing the underlying problem will ultimately be very catastrophic. I have spoken about my disagreement with moves taken by both the Federal Reserve and government since this crisis began over three years ago. Here are a couple of my videos where I voice that displeasure: --“Fed Up” --“Rubber Bands and Chewing Gum” I am hoping the current stalemate persists until the technical default occurs and then the politicians may have an adequately large fire under their rear ends and will address the true problems. Both parties have been literally useless with regard to actually addressing the massive deficit and debt problems that accelerate every day. Perhaps they will consider their responsibilities more seriously if the lenders who have financed the drunken spending spree we’ve been on express their concerns by asking for much higher rates of interest on these loans. With the outstanding value of Treasury securities in the order of $14.3 trillion, an increase in the interest rate of only 1% on that total amount would increase our cost $143 billion dollars every year. Now imagine if U.S. interest rates ever increased to where they were in November 1981 when the Treasury issued 20-year non-callable bonds with a 15.75% interest rate while money market accounts paid in excess of 20%. One would think we’d be up quite a creek at that point. So while I don’t think a default is a good thing, it might at least be a motivational tool for these morons in Washington. And besides, it won’t be without precedent nor will it be the end of the civilized world. After all, it will likely end up being that investors get their principal or interest a few days late, since there is ZERO likelihood of us actually not paying monies we owe. Investors seem to have very short memories, because Russia defaulted and completely screwed over their foreign lenders back in 1998 and more recently General Motors screwed over even their secured lenders in 2008 with the help of the U.S. government. Today, investors routinely lend tons of money to both, so clearly the default didn’t poison their situation very much. Hopefully, the technical default happens, markets implode, and Obama and Boehner can stop screwing around on the golf course and get some actual work done. Americans seem to know more about the dire nature of our situation than the politicians do and I’m hoping this would be an event that would motivate them. FINAL THOUGHTS Although I don’t talk much about it here, I did spend my own time in politics including being elected to public office and participating at various levels, so I have accumulated some hardcore friends on both sides of the aisle. What I have found striking is how seriously much of the poll data coming out lately is being interpreted by them. I’ve heard from several that it seems we (Americans) are almost in a “pre-revolt” state of mind, which can make for wild elections. There was a poll done by Newsweek about a month ago and some of the findings were alternately alarming and funny to me. Here is a sample that I think well conveys our current state of mind: --81% don’t think the economy is producing enough jobs. --50% don’t think Obama has any plan to balance the budget. --58% don’t think the Republicans do either and just like to blame Obama. --52% say their personal economic situation makes them nervous. --48% say it makes them anxious. --44% say it makes them upset. --30% say it makes them angry. --56% are so angry about their personal economic situation that they have lost sleep. --57% say their relationship with their spouse has become worse. --70% of Americans are nervous about their retirement because of their personal economic situation. --45% are nervous about being able to put their children through college. --31% are nervous about starting a family. --29% are nervous about being able to afford to buy a home. And then the statistic that I at first found funny, and then worrisome: --33% of Americans disapprove of the job that God is doing. When a third of Americans think God is only doing a slightly better job than Obama and the Republicans…we must be in a brave new world. YOUR JULY BRAINTEASER In the second paragraph of this newsletter I made mention that I had a couple of stories that were “doozies”. So for a lighthearted summer brainteaser that will also offer some insight into a common pop culture cliché used by many people around the world, here is your July brainteaser: “Where did the term ‘it’s a doozie/doozy’ come from to describe anything that is special or out of the ordinary?” Give it a good effort before caving in and peeking early, but when you want to view the answer you can do so at the following link: http://www.afs-seminars.com/brainteaser_July2011.html Copyright 2011, Michael Gasior. All Rights Reserved AFS Seminars LLC |
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July 2011 Newsletter
