Robyn O’Brien shares her personal story and how it inspired her current path as a “Real Food” evangelist. Grounded in a successful Wall Street career that was more interested in food as good business than good-for-you, this mother of four was shaken awake by the dangerous allergic reaction of one of her children to a “typical” breakfast. Her mission to unearth the cause revealed more about the food industry than she could stomach, and impelled her to share her findings with others. Informative and inspiring. Here is the direct link.

• Is the European crisis over or just beginning? (Hint: credit default swaps)
• For Greece a bailout; for Europe perhaps just an illusion
• For Boomers its a new era of ‘work ’til you drop’
• When bosses attack, send them to the gym
• China manufacturing data suggests 4th month of contraction in February
• France poised to approve financial transaction tax (applicable to High Frequency Trading and Credit Default Swaps)

The bad food industry and big pharma are killing us, literally.  People are desperate for affordable drugs, but the vast majority would not need drugs at all if they ate healthy foods in appropriate quantities.  Harvard economics professor Ken Rogoff (co-author of ‘This time is different’ on the credit crisis) offers us an important reminder on the bad economics of allowing the food industry to freely poison our population.  A few big players make big profits while we, the tax payers and society as a whole, are left to bear the crippling costs of a population who are physically handicapped and slowly destroyed by the food they are ingesting.

Of course individuals and parents need to take much more responsibility and care in the food they are “using”. But at the same time, as a civil society, we see fit to regulate and control the sale and use of other addictive, harmful substances like drugs, cigarettes and alcohol. It is not ok to offer cigarettes to our children, why is it ok to feed them poisonous food?  Why are we allowing (even tax-subsidizing) poisonous and addictive food to be freely marketed and inflicted on children and adults across the board? When I see everyday that about half of the people around me are literally eating themselves to death, I see them as similar to other drug addicts.  They might as well have needles dangling from their arms.  And yet there is an attitude today that this type of self-destruction is a personal choice beyond the concerns of the state.  It is impolite to mention.

The fact is that the societal cost of all this is enormous and the health care system in its current form cannot bear it.  The economics of our current attitudes and ideas about food are simply not sustainable.

Here is Rogoff:

“A systematic and broad failure of regulation is the elephant in the room when it comes to reforming today’s Western capitalism. Yes, much has been said about the unhealthy political-regulatory-financial dynamic that led to the global economy’s heart attack in 2008 (initiating what Carmen Reinhart and I call “The Second Great Contraction”). But is the problem unique to the financial industry, or does it exemplify a deeper flaw in Western capitalism?

Consider the food industry, particularly its sometimes-malign influence on nutrition and health. Obesity rates are soaring around the entire world, though, among large countries, the problem is perhaps most severe in the United States. According the US Centers for Disease Control and Prevention, roughly one-third of US adults are obese (indicated by a body mass index above 30). Even more shockingly, more than one in six children and adolescents are obese, a rate that has tripled since 1980″.

See the whole article: Coronary Capitalism.

Economic growth in developed economies almost ground to a halt in the last three months of 2011, with the U.S. driving what growth there was, according to the Organisation for Economic Co-operation and Development (OECD)

Gross domestic product (GDP) in the 34 economies in the OECD, including the U.S., Germany, Japan and the UK, grew by just 0.1 percent in the last quarter from the previous one. It rose 1.3 percent from the same time a year earlier – the slowest rate of growth in two years.

This despite the concerted efforts of global central bankers including the European Central Bank, the Bank of Japan and the Federal Reserve to flood the banking system with more liquidity in recent months.

More austerity cuts in the Eurozone as well as State and local governments in the US will accentuate already slumping growth.  See: Recession looms as growth slows in developed countries.  Here is the latest data for each country (chart: Simon Hunt Strategic Services)

Jonathan Tepper of Variant Perception and co-author of Endgame (with John Mauldin) offers us an excellent, detailed and wonderfully readable paper on how and why currency break-ups have been common, important solutions throughout economic history. His conclusion: far from the end of the world, Greece and Portugal should leave the Euro as soon as possible.

“Many economists expect catastrophic consequences if any country exits the euro. However, during the past century sixty-nine countries have exited currency areas with little downward economic volatility. The mechanics of currency breakups are complicated but feasible, and historical examples provide a roadmap for exit. The real problem in Europe is that EU peripheral countries face severe, unsustainable imbalances in real effective exchange rates and external debt levels that are higher than most previous emerging market crises. Orderly defaults and debt rescheduling coupled with devaluations are inevitable and even desirable. Exiting from the euro and devaluation would accelerate insolvencies, but would provide a powerful policy tool via flexible exchange rates. The European periphery could then grow again quickly with deleveraged balance sheets and more competitive exchange rates, much like many emerging markets after recent defaults and devaluations (Asia 1997, Russia 1998, and Argentina 2002).”

See the whole excellent report: A Primer on the Euro Break-up:  Default, Exit and Devaluation as the optimal solution

“Let Greece go bankrupt, let all the people who are bankrupt go bankrupt, and then you can start over, you reorganize the assets and start over,” Jim Rogers, CEO of Roger Holdings, told CNBC. “Until that happens, this is going to be an on-going endless discussion,” he said. Here is the direct link. Caveat here: Rogers is a billionaire who has a defined percentage of specific funds (that he can afford to lose) allocated to various speculations. Few people are in the same boat as Rogers; so I do not mean that everyone should take their investment allocations from his lead. But his overall assessment on the need for bankruptcy to flush out the impediments to global recovery are important.

In a special hour hosted by Morley Safer, “60 Minutes” presents in-depth profiles on three remarkable women: country singer Dolly Parton, Vogue editor Anna Wintour and actress Meryl Streep (all in their 60′s and all at the top of their professions).

I personally have no understanding of why one as authentic as Dolly needs such an ornate facade. And the world of high fashion is far beyond my terms of reference, but I find the stories of these three unorthodox women thought-provoking on many levels. Here is the direct link.

We saw “The Iron Lady” today. Interesting, surprising, entertaining little film. Shot more like a play than a movie. I enjoyed it. Meryl Streep is a stunning treat as usual. Parallels from the Thatcher political era in the 70′s and our own time today are obvious.

This quote from Thatcher is one of many that for me, strikes a cord with present times:

“I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government’s job to cope with it!” or “I have a problem, I will go and get a grant to cope with it!” “I am homeless, the Government must house me!” and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people who look after themselves first. It is our duty to look after ourselves and then also to help look after our neighbour. Life is a reciprocal business and people have got the entitlements too much in mind without the obligations.”

Interesting panel and legal discussion on the financial crisis and prosecution process. In law, willful blindness and willful disregard of a duty of care, are a basis for criminal culpability. Here is the direct Youtube link.

Danielle was a guest on Talk Digital Network with Phil Mackesy today, talking about recent developments in the world economy and markets. You can listen to the audio clip here.

Alan Simpson and Erskine Bowles, co-chairs of President Obama’s Deficit Commission, have released a “Chairmen’s Mark,” a broad plan to reduce the federal deficit by cutting spending and raising taxes. The plan incites the horror of reality across the political spectrum (a sure sign they are on the right track). You can read a summary of their proposal here. As well as follow the movement here at The moment of truth project.
Watch Simpson’s no BS Reuters interview here.

Excellent article from the Globe today reiterating the horrendous conflicts in the investment advice business. The article focuses on Canada but the structure and problems are worldwide.

The financial industry continues to lobby-for-its-life against a fiduciary standard that would place the “best interests of the client” as the primary duty and objective in investment advising. There is no question that fiduciary duty is the only respectable standard of care for the advising industry and especially now, at a time when governments and employers are increasingly shifting the burden of retirement funding onto the shoulders of individuals.

The fact that most people unwittingly take their investment advice from the non-fiduciary sell side, is one of the more frustrating and damaging facts in the world today.  (Yes, yes, I know most brokers and advisors are very nice.  Sadly ‘nice’ is not the standard of care we need here).  See: The flaws in Canada’s [the world's] financial advisor system

Jim Bianco and Aaron Task look at what Central Banks are really trying to do when they intervene to artificially support asset prices.  Here is the direct link.

A few good articles worth reading tonight if you are bored, or tomorrow morning over your fair trade coffee and green tea:

• The Japanese Liquidity Trap Revisited
• oops all this talk of Greek debt cuts has got the Irish rethinking, see: Negotiate new terms on promissory note before April
• A new study this week shows 84% of 400 foreclosures in San Francisco appeared to be illegal: “The audit in San Francisco is the most detailed and comprehensive that has been done – but it’s likely those numbers are comparable nationally,” Diane Thompson, an attorney at the National Consumer Law Center, told Reuters. [Recall that the $25 billion settlement announced last week will include no admission of wrongdoing by the banks--think about that for a moment].  There will be no real healing until there is admission of fault:  remember it is admit, repent, reform, recover. See:  Foreclosure abuse rampant across US, experts say.
• The truth about default:  Iceland (and others) have lived to tell the tale.  See:  Iceland comes in from the cold, three years after default, Fitch moves Iceland bonds back to investment grade. (psssst..Greece, Ireland, Portugal, Italy, Spain…read this one twice)

Day to day the cacophony of noise and nonsense can be deafening.  Day traders seek to buy and sell fleeting price swings.  Extremely few do it with lasting success over time.  Some people strike huge gains on fortuitous timing which they then mistake as superior intelligence and skill and spend the rest of their lives and fortunes striving to replicate.  Life is long and day to day fortunes can turn on a dime.  Living is full of every kind of risk.

The best way I know to survive longer term is to control risk in every way that we can. This means spending less than we earn no matter how much or little our earnings may be.  It means avoiding debt no matter how much our bankers assure us we can carry.  It means investing in our health, skills and relationships every day.  It means always hoping for the best while still weighing the probabilities of the worst.

When it comes to the global economy and asset markets, effective risk management starts in my view, with discerning the season.  If we get the season right, we are more likely to be properly equipped to navigate our needs and fortunes through it.

Today I believe we are working our way through a long and tedious winter.  We will no doubt have periods of milder days, some interim opportunities, but overall the world’s debt abuse over the past 15 years has left us waist deep in snow banks.  It is slow slogging to move forward.  But it does not have to be fatal or impossible.  I am reminded of stories of my grandfather who was a Canadian pioneer and a trapper in the far north.  He said it was amazing what humans could survive and navigate so long as they were prepared and didn’t lose their head.

This interview with economist and asset manager Lacy Hunt gives some excellent top down insight (and fabulous charts) on the world’s present season (via John Mauldin). Read it here:  Face the Music: the road back to prosperity is through shared sacrifice