Logical Substitution Clears the Fog


This morning in my inbox there was an email from Brasscheck TV about the government finally charging Goldman Sachs with fraud.  Included in the email was a link to a segment that Matt Taibbi did about his article, "The Great American Bubble Machine".   In the interview, one of the most significant things he talks about is the commodities market - and how Goldman Sachs opened up the market to speculators and how the speculators drove up the price - severing the relationship between supply and demand. 

Obviously, bubbles are created due to market failure.  Can you hear the screams of people who think they are capitalists?    MARKET FAILURE!   NOOOOoooooooooooooooooooooo  WAYYYYYYY!   Then they launch into Economics 101, open market, free trade, supply and demand, the bazaar view of capitalism with a couple of guys on the street exchanging goods of value... blah blah without a backwards logic check on what happened on Wall Street and why it happened. 

There are actually two failures of the market - securitization and centralization.  

The first failure, securitization, is the packaging of individual salable goods into logical bundles of like goods that can be traded.  This removes the risk of the original transaction between buyer and seller.  The bundled salable good comprised of aggregated individual transactions is a logical entity - just a pieces of paper that somebody says has value.  The paper of aggregated transactions become bytes in a computer that fly over the telecommunications system to be traded in a logical centralized "marketplace" which is nothing more than a computer system.  And the shysters of Wall Street convinced Congress that it's good idea to have a global market so that foreign governments and investors can buy these logical bundles of salable goods with an alleged value.   (I have some air for sale.  Are you in the market? )

The bundling of junk for sale in securities was the creation of the U.S. Treasury Department under the stewardship of Nicholas F. Brady for the express purpose of defrauding investors.  It was called 'The Brady Plan' and it could be described as spreading the losses. 

Excerpts - emphasis added

“The Brady Plan, the principles of which were first articulated by U.S. Treasury Secretary Nicholas F. Brady in March 1989, was designed to address the so-called LDC debt crisis of the 1980's. The debt crisis began in 1982, when a number of countries, primarily in Latin America, confronted by high interest rates and low commodities prices, admitted their inability to service hundreds of billions of dollars of their commercial bank loans. Because many of these countries' economies were then dependent on commercial bank financing, continued debt reschedulings and the resulting perception of uncreditworthiness led to a "lost decade" of economic stagnation, during which voluntary international credit and capital flows to these nations and their private sectors all but halted.

The Brady Plan was very successful in several important respects. First, it allowed the participating countries to negotiate substantial reductions in their overall levels of debt and debt service. Second, it succeeded in diversifying sovereign risk away from commercial bank portfolios more widely throughout the financial and investment communities. Third, it encouraged many Emerging Markets countries to adopt and pursue ambitious economic reform programs. Finally, the Brady Plan has enabled many Emerging Market countries to regain access to the international capital markets for their financing needs.

“Structural adjustment was the centerpiece of the Baker Plan, which the Reagan administration proclaimed during the IMF-World Bank meeting in Seoul in 1985. World Bank and IMF funds to assist the indebted countries make their interest payments were promised on condition that they adopted 'economic policies along Reaganomic lines - privatization of state enterprises, an end to subsidies, opening the economies to foreign investment.'

The second failure is the concept of a telecommunications based, centralized market for trading salable entities.  In other words, Internet-based markets - sometimes called exchanges. The Internet-based market place is a natural monopoly that is not being recognized as such probably because it is a monopoly of market rather than a monopoly of a particular commodity or good.    Internet-based markets represent the corporatization of the market which is no different than government centralization for a command economy.  The controller of the market (the computer on which the trading platform resides), can easily manipulate the market in about a million ways that the regulators would never be able to catch up to - allowing the controller of the platform to manipulate price, supply and demand (dropping orders or re-routing orders for example). 


Logical Markets

What was described above is a logical marketplace as opposed to a physical marketplace.  It is a conceptual creation that is not grounded in the physical reality.  In a logical marketplace, any conceptual creation can be bundled and sold as if it were an actual commodity.  And since it is a conceptual creation, there can be symbolic substitution meaning that the public is presented one image of what is being sold, while the underlying asset is actually something different.  Whether the symbolic substitution represents fraud or not depends upon the pin point accuracy of the symbolic definition.  For example, carbon credits are a conceptual creation that have no real underlying physical asset that is for sale.  And since corporations are in the business to make money, there is no reason for them to buy or sell them.  So carbon credits have to be a symbolic substitution for something else that would have value to the traders.   Keeping in mind the requirement for pinpoint accuracy to avoid the fraud charge, what would a carbon credit represent?   How about a living creature - human or animal?  If you consider a living creature as a carbon unit, then you can place a value on that unit.  Since there is no reason to mask the trading of animals, we can eliminate them from the conceptual carbon credit market.  That leaves humans as the tradable unit in the carbon credit market. 

Setting aside any moral considerations, if one does a corporate analysis of the American demographics, one finds large segments of the population that have no productive value in the 'New Economy' which is a command economy charged with the mission of reverse engineering civilization.  The conceptual packaging for it is the 'Green Economy', maximizing efficiency with government being the largest employer but also the funder of small businesses engaged in 'green jobs' which nobody can define. 

The unproductive population breaks down into a number of categories, the elderly, the disabled and semi-disabled, the illiterate, and the people who have had their careers exported but that are not re-trainable for other jobs because of the labor glut.  From a Wall Street perspective, it is unacceptable to have a large, unproductive population regardless of the fact that they created it with globalization of the economy (re-distribution of production to cheap labor markets).  The conceptual solution of course, is to securitize the junk carbon units and sell them.  But who would buy?   Simple, the underlying asset is the body.  The body has value for medical science and pharmaceutical research not coincidently timed to the completion of the Human Genome Project to map the genes and the need for a large population to use for applied genetic research. 

Outrageous you say?  Hitlarian?  Crimes against humanity?   Lest we forget, the origin of the eugenics movement was in the United States, it was in large part funded by the Carnegie and Rockefeller Foundations with the full complicity of the American government.  The academic thinking for it came out of our best universities - Stanford, Yale, Harvard.  And as was described above, the American government aided and abetted the banks in defrauding investors with securitized bad loans to third world countries.  So I think we can safely set aside morality and look at the how the market is being structured. 


Nationalized Electronic Medical Records

When the concept of electronic medical records is examined, there really is no benefit to offset the cost.  People who do have particular problems that require a bracelet or tag of some kind are a small percentage of the population and there are options for dealing with their individual problems without affecting the entire population.  They could have their entire medical record scanned and put on chip that they wear around their neck or in a ring on their finger.  No big deal. 

The media propaganda about Medicare fraud is just that - propaganda.  From the beginning of automation of medical claims - nearly 50 years ago, there has been fraud checking of claims against the claims history.  If massive fraud occurred, it was because it was by design for the purpose of the dialectical problem that demands a solution. 

The purpose that the nationalized, electronic medical records does serve is to have a symbolically conceptualized product that can be bundled and sold as a security in a carbon trading market such as the Chicago Climate Exchange.  The underlying value of the security will be determined based upon the diagnostic codes, age and other factors in the medical record.   The government's involvement in it is that they paid for the health data exchange systems to be built and the exchanges will be government contractors.  The health data exchanges will be the securitizers for the trading market.   

In the propaganda campaign concerning the health care legislation, the alleged purpose of the health data exchanges is to allow consumers to shop for the cheapest health insurance that will be required by law for everybody to have.  But it works the other way too.  If a person's medical record has attributes that interest a pharmaceutical company for research purposes, the pharmaceutical company can subsidize the insurance through an insurance company that will probably be a new, shell insurance company but not necessarily.  There are many ways that the pharmaceutical corporations can provide funding that would mask a direct connection between the subsidized price and the steering to a special plan that will allow the corporation to control the benefits and the conditions for coverage.

The Magician's Art

The art of the Magician is to focus your attention away from where the trick is actually done.  "Look over here - when you need to look the other way to see the trick".   The paradigm shift of our health insurance and health care system to focus on the healthy is a Magician's trick and a confidence game rolled into one.  Buying insurance to have them act in the capacity of a nanny is absurd.  (Any of you Eskimos want to buy some ice?)  The real purpose of the shift in focus is so that doctor's will perform an automatic triage of patients with chronic and deteriorating conditions to specialized providers of health care because if they don't, their income will be negatively affected by having sick people as patients (pay for performance).  (In a million years, I could never make this stuff up). 

The triage segregates the junk carbon population from the rest of the population in a logical corral.   The logical corral will no doubt be the member clinics and health care providers hooked into the HMO Research Network.  Members of the HMO Research Network integrate medical research with standard clinical practice.       


Follow the Logic

Following the logic of a system is like a tracker following signs.  For you city slickers, that means following the droppings.  Project Destiny is an enormous, steaming pile that was mentioned by a quivering Edward Liddy, CEO of AIG during the Congressional Hearings on the bailout of AIG.  Project Destiny is an initiative sponsored by the pharmaceutical giants to transform the pharmacy into a frontline health care provider.  Keeping in mind that applied genetics research is about body chemistry and drug interactions consider the following:

Pharmacy Groups Unveil Findings, Future Of "Project Destiny"

According to initial results of the landmark "Project Destiny" initiative, community pharmacy can ensure its healthcare services beyond dispensing medication are embraced broadly, if it acts decisively and cooperatively with healthcare industry stakeholders. The three pharmacy groups advancing the initiative now are developing a strategic plan to advance the concepts identified in the first phase, which hold promise for healthcare quality, access and affordability.

Project Destiny is a joint initiative of the American Pharmacists Association (APhA), the National Association of Chain Drug Stores (NACDS) and the National Community Pharmacists Association (NCPA). Pharmaceutical companies supporting the project financially include sanofi-aventis, GlaxoSmithKline, Boehringer Ingelheim Pharmaceuticals, Pfizer U.S. Pharmaceuticals and Wyeth.

The stated objective of Project Destiny is to develop a replicable, scalable, measurable, and economically viable future model for community pharmacy. The project seeks to identify ways that patients and the healthcare system can benefit from community pharmacy's medication expertise, in a way that is economically viable for all parties.

Industry Presentation - Kerr Drug / HIT Impact     (don't you love acronyms?)

The National Association of Chain Drug Stores (NACDS) news release, August 25, 2008  (note elections reference)

Retail Pharmacy and the Electronic Medical Record (Opportunities)


Connection to government:

"We will not succeed in our efforts to improve health and save money without innovative new steps to coordinate care," said Mark B. McClellan, M.D., Ph.D. Director, Engelberg Center for Health Care Reform; Senior Fellow, Economic Studies; Leonard D. Schaeffer Director's Chair in Health Policy; Brookings Institution. "Helping pharmacists work together with physicians, payers, and other stakeholders is critical to achieving the goal of affordable, accessible, quality health care."

 Connection to the Junk Bond King, Michael Milken

Michael Milken was the model for the Gordon Gekko character in Wall Street - "Greed is Good".   He went to jail for several years in the early 1990's  for his dealings in junk bonds and corporate raiding.  Immediately after getting out of jail, he started a Foundation, the Milken Institute, and he began lobbying for more funding for medical research.   Of course he wasn't bitter about going to jail.  The time out at Club Fed caused him to transform from a Vampire Squid to Mother Theresa - if you believe in fairy tales.

The connection between Milken's Institute and Project Destiny came to light in the petition that the Board of Pharmacy Specialties filed to request certification for the new pharmo-doc professional classification.   In the certification, they referenced a 2007 Milken Institute Study that provided the alleged financial cost savings that could be had by market-based health care reform.  

See Maria Bartiromo and Michael Milken on Health Care. 

2004 CNBC Power Lunch Interview with Michael Milken  and Cora Daniels, Author of "Michael Milken - The man who changed medicine"     (Note:  portfolio theory - access to data at the end of the video interview).


Carbon Trading Market

Recapping, we've established that the market-based system is a logical market over a telecommunications system and that it provides a platform for logical trading of commodities that can be physical or conceptual (logical) and that a conceptual commodity like carbon credits can be represented symbolically because there is no physical good being traded that one can point to as in the case of a real commodity like gold, pork bellies or oranges. Further, from a business point of view, the carbon credit trading system makes no sense for a capitalist country because it's intended purpose is reductionist - destructive to production, destructive to capitalism.

Continuing with the logical inconsistencies of the Chicago Climate Exchange is that it is a privately owned carbon trading platform that was paid for by grants from the Joyce Foundation The grants were issued when Barack Obama was sitting on the Board of Directors.  The decision to fund the building of a CO2 carbon credit trading system has to be considered suspect because there already was an established carbon (energy) market that had been in business for nearly half a decade.  That's too far lagging behind for a new commodity trading system to catch up.  But if one applies the concept of carbon credits as being symbolic, representative of securitized medical records put up for sale to insurance and pharmaceutical companies, then it all makes sense - except for one thing.  How to explain the market when Cantor Fitzgerald already controlled the market for the real energy commodity and it would have been the logical place for a carbon credit trading system to offset the carbon trading which blows the cover of the symbolic representation of carbon credit units. 

Did I mention that Michelle Obama worked for the University of Chicago hospital system?  And that she had been an intellectual property lawyer prior to going to work for the University hospital system and that she was Executive Director of Community and External Affairs - and that she would have been the point of contact for anybody who was interested in developing a system to trade electronic, securitized medical records?   Consider it mentioned.    And we won't even mention Rahm Emanuel and his brother, Ezekiel who is a Doctor

The problem for these people - these monsters who conceived the carbon credit trading system is that while they can produce a Madison Avenue marketing campaign to make it appear to be something that it isn't, they can't correct the logical inconsistencies.  The logical inconsistencies are resolved once the symbolic representation of 'carbon credit' is replaced with that actual value which is 'electronic medical record' which defines the characteristics of a carbon unit - a human being. 


Vicky Davis
April 18, 2010

Vicky L. Davis was a Computer Systems Analyst/Programmer who spent 20 years designing and writing computer systems for large corporations and state and local governments.  For 15 of those years, she worked as a Contractor, which gave her exposure to a wide variety of different businesses and their internal applications and operations.  

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