The US Medical System -- Knee Replacement

In the USA, the average cost of a knee replacement procedure is $57,000.
In Germany it is $24,000  (Free for German citizens)
In Taiwanese hospitals supervised by the  Joint Commission International (JCI) it is $11,000.

Any justification other than "we screw them because we can"?

CPI adjustment

What Bernanke said: “Over a period of time, we want to move inflation always back toward 2 percent,”

What Bernanke thought: “... and we’ll keep changing the way we calculate inflation to guarantee that the numbers always meet this objective.”


... and in Haiku form:

C.P.I is made

To be what I say it is

Bernanke Dumpty

Market Economy

“US market up on stimulus hopes”; “US market down as hope for stimulus abates.” Up or down, one thing is clear, the US market no longer believes in market economy.

All or Nothing

picture by Stacy Annx (http://xstacyxannx.deviantart.com/)

Las Vegas ...

An entire city built as a grandiose backstage for the largest deliberate illusion man has ever created. A city built with a single purpose in mind, to take your material possessions in return for hopes and dreams. An ostentatious illusion created to make you believe that with a role of the dice, you too can change your luck. 

Just like most other religious cities, like Guadalupe in Mexico or the city of Medjugorje, the pilgrims to Las Vegas believe that their fate will not follow that of the millions who depart worse off. Instead, they all hold the belief that they are the chosen ones; the few and far between that will be blessed with a miracle. 

But it’s not Las Vegas alone. This faith is the very heart of the American dream, or as some may call it, “The Great American Delusion.” It’s the delusion that luck and alchemy can turn debt into ever-lasting prosperity. 

So far, however, the alchemy has worked in the opposite direction. Generations of American economic growth has yielded 12 trillion dollar debt. That is, every man, woman and child in America owes someone overseas over $35,000. The debt is of such magnitude that no economist, academic or politician knows how to tackle the problem. It’s a debt that cannot be paid by our generation, which makes us the first generation in modern history that robbed wealth from their children. This dubious honor will not be forgotten by future generations who will not be able to afford the life that today we take for granted. 

It’s absurd that the more economically successful America has been the bigger its debt has grown. After all, common sense dictates that an economy that has been expanding since WWI – as we are often told – should have accumulated wealth rather than debt. But common sense has not been part of any financial policy for quite some time. 

It’s nonsensical to believe that we can increase debt forever, without bearing the consequences. Because if there is one thing we know about debt, it’s that it does not go away by itself. For a country, just like for an individual or a company, when the last lender has refused to lend any further, financial collapse is imminent. Who will be our last lender? 

It’s irresponsible to base our entire financial system on millions paying for the very few at the top of the pyramid. This is a pyramid scheme, also known as a Ponzi scheme. When Madoff’s scheme was found out he was sent to 150 years in jail, when an entire country is based upon a similar scheme, we call it ‘economic model’. Whatever we call it, there are two things we know about Ponzi schemes. The first is that they always collapse. The second is that collapse happens without a warning. A great success today can turn into a total ruin tomorrow. And once collapse has occurred, recovery is impossible. 

Like any other Ponzi scheme, this one is based upon faith – the belief that with a stroke of luck, debt will turn into prosperity. This is the very same belief that built Las Vegas. 

Just like in Las Vegas, millions of hopeful pilgrims pay for a handful of winners. Unlike Las Vegas, where casinos always win, this house is bankrupt. 

… and the dice keep rolling.

If you still don't understand Wall Street

Despite the two years of non-stop information about the financial crisis, I still find that many do not understand how our financial system really works. I hope that this old fable, will demystify Wall Street for you, once and for all.

Once upon a time in a village in India, a man announced to the villagers that he would buy monkeys for $10. The villagers seeing there were many monkeys around, went out to the forest and started catching them. The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts.

The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further and people started going back to their farms.

The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.

In the absence of the man, the assistant told the villagers: 'Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50.'

The villagers squeezed together their savings and bought all the monkeys back.

The financial system and the Hudson River Landing

It’s been a year since the amazing emergency landing of the Airbus A320 on the Hudson River after the aircraft had struck a flock of geese. This landing was a demonstration of risk management at its best.

This was the very first time that landing on water had been attempted successfully. Yet, simulators were built, procedures put in place, and pilots trained to handle such an unlikely risk. None of these were based on historical events, but rather on foresight. It was this foresight that made the difference and saved the lives of the 155 people aboard the plane.

This should be a lesson to the financial industry.

But this is not the only lesson. Learning from other mistakes and disasters in the airline industry can be just as valuable.

For instance, a couple of years ago a pilot of a Garuda Indonesia, who had crashed his aircraft, was charged with negligence and deliberately causing an accident. It was shown that the captain had knowingly ignored 15 warning signals from an onboard system and from his co-pilot, and force-landed his Boeing 737, which then skidded off the runway and burst into flames killing 21 people.

The investigation found that had the pilot listened to the warnings and followed the proper procedures, he’d be required to fly his plane round the airstrip a second time. This would have consumed more fuel and cost him his ‘saving fuel bonus.’ So he chose to land. This is the very same incentive that led to the crash of many financial institutions – the incentive to ignore risk signals in order to maximize personal remuneration.

We too often forget that the financial industry is not the only industry that practice risk management. Many industries and disciplines – from airline to drug manufacturing, from space exploration to building submarines – have developed ways to manage risk. None is based on historical analysis alone, as is the common practice in the financial industry. Yet, the financial industry has arrogantly chosen to ignore all these important development and insisted on practices that benefits a minority of individuals who run these institutions, and nobody else.

So why don’t we force our regulators and those who invest our money to learn how other disciplines manage their risk? After all, we have already been proven us that we cannot rely on the financial industry to self-regulate itself, nor make socially responsible decisions. So let us force them. Isn’t that what democracy and capitalism should be about?

Our Financial system explained by Marquis de Sade

All, all is theft, all is unceasing and vigorous competition in nature; the desire to make off with the substance of others is the foremost - the most legitimate - passion nature has bred into us and, without doubt, the most agreeable one.

Marquis de Sade