Wednesday, May 30, 2018

Anthropomorphizing Light

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This requires a slow read as it is dense...but I think, exceptionally important


In a race to possess the oppressive foothold with which the propagation of iniquity could be democratized to substantiate the delusion of Fallen Humanity and Original Sin, Greek and Roman philosophers appealed to Greed (pleonektes and cupidus, respectively) as a generalizable abhorrent trait.  Polycarp, Tertullian, Clement of Alexandria, Lactantius, and Sextus all echoed warnings against the impulse to seek to possess beyond reasonability.  By the 4th century, the fledgling apostolic church knew that by ascribing to the teachings of their long-romanticized namesake the maxim, “the love of money is the root of all evil,” they could convince everyone of a fundamental sinful nature.  After all, who doesn’t love money?  For justification, they wove an elaborate thread around the oral tradition of the Abrahamic faith’s myth of a beginning in which the mortal crime of humanity – alleged to be resulting from the conspiracy of a snake and a woman preying on a clueless and malleable man – was the pursuit of knowledge and served as the basis for a persistent ubiquitous evil condition.  Ignoring the prima facie conundrum of an alleged “sin” derived from a deity who is the personification of Greed itself (after all, in the 10 Commandants, 1/3 are about an egotistical, self-absorbed deific greed demanding supremacy, attention and loyalty), the early ecclesiastical brainwashers took advantage of illiterate masses and manufactured a pervasive illusion of a flaw in character and made it the evidence for sinfulness.

Epiphanes of Cephalonia in the late first and early second century CE was critical of this restrictive and oppressive social construction.  Together with other Gnostics, he argued that as the sun equivalently shines on everything; nature provides for itself with equanimity; and therefor greed and avarice are born not of human nature but of the mistaken impulse to enclose thereby creating the illusion of relative abundance or scarcity.  Greed, and all other contrivances of ownership and enclosure, were evidence of manipulated darkness – not the equivalently available evidence of life-giving illumination.  This celebration of isomorphic nature was considered a heresy by the early 4th century and the Dark Ages were set in motion!
 
In an effort to understand greed more fully, I took the time to read Dr. Vadim Kaplunovsky’s TheQuantum EM Fields and the Photon Propagator in which he weaves a mathematical quantum tapestry of Feynman, Green, Coulomb, Heisenberg, Lagrange, Yukawa, and others to explain attraction, repulsion, and other basic observations of photonic behavior.  He concludes his treatise with passing observation that mathematically, fermions and anti-fermions can be attracted to each other despite the clearly repelling natures of their charges!  If you take the time to read the paper, this last sentence is worth wading through all the Greek formulae.  For in his final words, we arrive at a conclusion which confirms that there remains – in the end – a mystery.

Greek philosophers gave us an obsession with geometry and, in so doing, the illusion of boundaries.  If we examine what physicists call ‘elementary particles’, we realize that they are neither particles nor are they thermodynamically limited.  All of our sense making in quantum mechanics presupposes conditions that are illusions as falsifiable as all the myths that precede the scientific revolution.  Distance, time, vacuums, laws and constants are all dimensional projections which serve to limit what is fundamentally unlimited.  Our obstacle to understanding quantum energy states is our manipulation of a projection of distance, time, or both.  Can two particles experience non-local effects through calculable deduction?  Almost.  But to model this phenomenon requires assumptions we know to be untrue.  Would it be simpler to see energy as an infinitely orthogonal dynamic without shape or boundaries?  Of course.  But if we did that, no one could be the arbiter of the dominant general theory and, as such, hierarchy, power, control, and manipulation would be inaccessible.

I’ve been drawn to understanding photonic propagation for a particular reason.  I’m intrigued by the phenomenon of experiencing a life in which the more incredulous individuals are in the presence of generous giving, the more beneficiaries rapidly move from gratitude, to distrust, to outright parasitic expectancy.  Together with the Gnostics, I find the source of emanation energy the object of inquiry.  Much of my life’s work and activity seems to arise from a rather mysterious energy that persists even at times of extreme emotional or physical depletion.  And the beneficiaries of my actions are seldom individuals with whom a ‘contractual’ agreement or exchange exists.  In other words, my default is to share and give without consideration.  This explicit mode of engagement without expectation of ‘return’ in an equivalence or in-kind fashion does not mean that I don’t have expectations.  Quite to the contrary, if I have been generous, my expectation is that generosity will propagate.  If I have been kind, my expectation is that kindness will flourish.  And while I don’t expect reciprocity per se, I do expect that in the emanation of propagated goodness, at times, I’ll be the beneficiary of that proliferated energy.  But this is seldom the case.  In fact, the more reproducible the adjacency to receipt of my energy, the less likely I experience the flow-on effect and the more I engender expectation and dependency. 

Current photonic physics suggests the paradox of vectors of propagation which imply some sense of momentum but grapple with the observation that a photon can at once be pushing light energy outward and in the same moment be receiving the same energy.  In other words, the error of individuation or identity is the geometric, spatial and temporal fallacy.  Like the sino-atrial node in the heart, the auto depolarization is both arising from within, and responding to, perceived ‘external’ activation.  But in the absence of distance, time, or space, the activation simply is.  Not from.  Not to.  Just activation.  Similarly, my impulse towards generosity is neither “mine” nor “given to”.  It simply is an impulse which is meant for propagation – not absorption.  Yet absorption seems to be more prevalent than passing the impulse along.

So, back to Dr. Kaplunovsky’s unintentional philosophy.  When discussing the oldest assumption of electrostatics – namely, like charges repel and unlike charges attract – he hastens to point out that in certain instances of kinetics (eg. gravity) attraction transcends this “law”.  Further, the linear model of propagation fails to stay within the Quantum Electro-Dynamics (QED) theory when infinite orthogonality and inertia are added to two dimensional planar (non-realistic) assumptions.  In other words, all we think we can understand about propagation of charged particles work in conditions that never exist, using projections of our own creation, built on dimensional assumptions we objectively know to be untrue.  Besides that, we’ve got it nailed down. 

Which brings me back to the two millenia and counting question.  Can Emanating Light co-exist in a world that presumes Greed?  In a context in which propagation of goodness was the infinitely orthogonal presumption of non-local inter-relationship, we would be able to see the following: 
  • 1.      In the moment of goodness received, there would be an immediate recognition (not acknowledgement of or reciprocity to) the momentum vector of such goodness;
  • 2.      In the same moment, the first impulse would be the transfer of received energy to  omni-directional propagation in favor of consumption;
  • 3.      The experience of goodness would be confirmation of coherence within a field of goodness and a resolute intention to remain an active participant in such a field; and,
  • 4.      The ‘recipient’ would propagate the impulse in all vectors including the directional flow from whence the impulse was perceived.


This last point is most critical.  This is NOT an admonition to “return the favor”.  This is acknowledging that if “I” am the source of generosity, “I” might not be.  It may be that I’m merely the conduit through which propagated goodness is flowing.  Given my earlier observation, this would be plausible considering that most of my best work occurs when “I” feel least capable of being elegant, kind, graceful, or generous.  What it DOES suggest is that a flow of gratitude in the direction of or through the steward of the impulse would reillumine that which is potentially obscured enhancing the energetic exchange.

QED does not answer the ancient question of the Gnostic’s Monad.  But it does demonstrate the length to which we’ll go to reify our illusion of separation and individuation.  In the end, it is not Greed and Avarice that beset us.  Rather it is absorption (gluttonous consumption of unconsidered energy) and narcissistic supremacy (jealousy for favored status) that serve to sclerose our vitality and propagative capacity.  Recognizing that no one can receive what I cannot give, I’m invited to see myself as a propagational steward rather than a source of emanated goodness.  And recognizing that equivalently no one can take what was never mine, the absorption impulse can merely serve to identify the dissonant fields in which I do not experience coherence.  The early church fathers insisted on separation as a presumption of all subsequent social calculations.  We know that this fundamental assumption is falsifiable in every manner.  And modern physicists continue to use a blur of rules, laws, and blinding formulae to confirm theory which evidence clearly indicts by adding constants of time and space.  In neither case did any crowd ask the sun where it defines its edge.  At no point did anyone ask the leaf whether it was producing glucose in photosynthesis or whether it sees itself as merely a component of our respiring lung from which it derives CO2.  And until we can see the inseparability of it ALL, we’ll go on hoarding and harming each other, consuming that which we did not need to satiate desires we’ll never appease.


Sunday, May 20, 2018

Threadbare Jeans and the Unraveling of America

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If you live in the Bay Area, you cannot escape the 145-year legacy of today.  On May 20, 1873 Levi Strauss and Jacob Davis received their patent on what would become one of the world’s most iconic items – blue jeans!  Their patent, U.S.#139,121 wasn’t for jeans but rather for the copper rivets that reinforced the pockets and hems of jeans making them more serviceable.  Jacob Davis was an immigrant from Riga, Latvia and came to the U.S. in 1854 and became a citizen in 1871.  Levi Strauss, an Ashkenazi Jew from Germany, immigrated to the U.S. in 1847 and became an American citizen in the same year he started his dry goods business in San Francisco in 1853.  Riding the speculator wave of gold seekers across California and later into the Yukon, the two men set in motion one of modernity’s most ubiquitous brands. 


Moses Cone was born in Tennessee in 1857 to Jewish German immigrant parents Herman Kahn and Helen Guggenheim.  Thinking that “Cone” was more American than “Kahn”, Moses’ father changed his family name upon arrival into the United States.  In 1887, Moses and his brother Ceasar invested $50,000 in the C.E. Graham Mill Manufacturing Company in Asheville, North Carolina and from there aggregated several mills throughout North and South Carolina.  By 1908 their factories near Greensboro, North Carolina were the world’s largest supplier of denim.  By 1915, their relationship with Levi Strauss & Co was cemented and together, the two firms would clothe millions. 

In 2003, bankruptcy ended the Cone business.  Over 10,000 people lost their jobs and thousands of others saw their livelihoods destroyed as the era of denim faded in the West with the rise of competition from the East.  And while China exports the largest quantity of denim, Pakistan, Turkey, Egypt and Brazil are expanding their role in the global supply chain. 

I was reflecting on the Strauss / Cone paradox as a case study for the current upheaval in the world’s trade imbalance perturbations.  And, given the protagonist’s shared Jewish heritage, I was drawn to the economic cautionary parable from Genesis 25:29-34. 

29 Once when Jacob was cooking some stew, Esau came in from the open country, famished. 30 He said to Jacob, “Quick, let me have some of that red stew! I’m famished!” (That is why he was also called Edom.[a])
31 Jacob replied, “First sell me your birthright.”
32 “Look, I am about to die,” Esau said. “What good is the birthright to me?”
33 But Jacob said, “Swear to me first.” So he swore an oath to him, selling his birthright to Jacob.
34 Then Jacob gave Esau some bread and some lentil stew. He ate and drank, and then got up and left.  So Esau despised his birthright.
What strikes me about this story is the foreboding message it implies about U.S. economic behavior.  In the early days of the industrial revolution, cheap labor was an immigration issue.  When mines needed digging, railroads needed excavation, and mills needed tending, the affluent found ‘others’ to whom sub-standard wages could be paid in exchange for the promise of the ‘American Dream’.  At that time, the principal beneficiary was not a consumer paying less at the store but rather the industrialist pocketing greater profits.  As time went on, the laborers became slightly more affluent and started demanding access to goods and services – many of which they were responsible for making or assembling.  In response, in the 1970s and 1980s, a fatal decision was made to accomplish the Walmartization of the world by making vastly more products at vastly cheaper costs.  To prop up a consumer-credit financial system, the laborer-consumer demanded more stuff and bought it on credit.  That part of the equation was visible.  But what was not considered was that in exchange for sending manufacturing to ever cheaper labor markets, the ugly consequence of this would be the diminishment of the very labor that once paid the wages to support the consumer.  By demanding stuff rather than quality and value, we have ‘sold our birthright’ for thirty years of cheaper jeans. 

And now, when we want to “Make America Great”, we’ve got a tiny problem.  Our affluent expectations cannot be met by our own domestic production.  And while we’re pretty sure that the world will go on making cheaper jeans for us ad infinitum, the reality is that the world’s industrialized labor pools are themselves now growing their new lower middle class.  Domestic consumption rather than export is a growing reality for much of the world’s markets.  And what this means is that our temporary consumer orgy fueled by cheap labor is now starting to hit a wall.  The promise of perpetual growth, the always-better-tomorrow that would be the siren song of America’s capitalism, the illusion of our intellectual superiority always saving the day is now being shown for exactly what it is.  Hype and propaganda.  In his article in The Diplomat (“Chinese Consumers Will Change the Global Economy, April 6, 2017), Matthias Lomas highlighted the fact that the 400 million Chinese middle-class consumers are increasingly selecting quality, brand and status over price-sensitive consumption.  What if the world’s new middle class actually prefer ‘better’ to ‘more’?  In a world in which the American generation was based on ‘more’, we don’t have a clear picture on quality.  And this means that “Great” is a reach that may exceed our grasp. 

Our birthright – if there was one – was to be an experiment on democratized access to opportunity.  We turned it into a opium den of consumption.  And what did we get for it?  Cheap jeans! 

x

Monday, April 30, 2018

Australian Banking Royal Commission Chasing Smoke...While the Fire Burns

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Australian Prime Minster Malcolm Turnbull and Commonwealth Treasurer Scott Morrison have been facing a tsunami of evidence of their negligence with respect to defending the behavior of the banking sector prior to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.  Australians have been witnessing the gradual unraveling of the executive cover-ups in Australian banks and have seen the abject failure of the political and oversight agencies to whom banks were ostensibly accountable.  Opposition Leader Bill Shorten has wasted no time in painting the Royal Commission proceedings as evidence of the counterfeit leadership of the seated government.  But before he jumps on the bandwagon of “I told you so” he would be wise to consider a far more egregious failure that his Labor Party has ignored.  In his class warfare appeal to the working class Australian (as opposed to his vilification of the “rich” and the “elite”), he has entirely ignored the fact that Labor’s stalwart supporters have preyed on the financial ignorance of working class Australians and have delivered pathetic returns year in and year out abjectly failing the public’s fiduciary interests.  And Labor’s supporters are quite happy to point the accusatory finger at banks – an easy populist target – without considering their own complicity in a bigger act of negligence.


The following is excerpted from an open letter that I sent to Australian State and Federal Treasuries and oversight agencies over 1 year ago.  The letter was also shared with national and regional media outlets.  In short, I highlighted that fact that both Liberal and Labor are fighting over banking fees and commissions while the real heist is happening in the superannuation business.  I was told that “the public wouldn’t understand” or “there’s really no interest” in examining the dismal state of affairs in the superannuation business because Australians are basically content with year-on-year growth. 


In the February 21, 2017 Australian Prudential Regulation Authority (APRA) Quarterly MySuper Statistics, the regulated entities in Australia report their target asset allocation by investment product.  In this report, 199 MySuper products report exposure to international equities representing an average of 27% total asset allocation.  For both the single strategy and multi-strategy products, the net return to members in the reporting period was just over 2% (High of 5.04% for Aon’s MySuper High Growth; Low -2.07% for the State Public Sector Superannuation Scheme). 
 
The equivalent of 36% of the GDP of Australia is invested in Global Equities ($483b) according to the Association of Superannuation Funds of Australia (AFSA).  A considerable number of superannuation managers have reported returns on these equities at less than 10%.  During the same period, the CNBC IQ100 powered by M·CAM has demonstrated a performance exceeding 20%.  Much of the international equity exposure is accessed through consolidated products (Exchange Traded Funds (ETF) and mutual strategies).  Due to the absence of domestically managed and deployed investment products, Australia lost as much as $86 billion in returns that could have built the Australian economy while preserving fee income to the local economy in the past 12 months.  In the reporting period we have examined, we've identified losses (underperformance and opaque fees) over the past two years of nearly $130 billion (almost 10% of Australia's GDP).  This represents a taxable income loss as well as an undisclosed management fee revenue taxation loss.   In addition, it has been unable to attract funds under management to a domestic pension or superannuation management offering while New York, London and other markets are flooded beyond capacity. 

When I proposed that we repatriate management of funds to Australia (as a taxable enterprise in Australia), I was asked, “how many jobs would you create in doing this?”  That’s right, faced with the possibility of bringing $130 billion into the economy (10% of the GDP of the nation), the dismissal of the idea was based on the fact that this wouldn’t lead to sufficient job creation. 

I trust that a few Australians wake up to the fact that the Royal Commission on banking is a smokescreen for the real failure.  Australian Superannuation – an invention of the Labor Government – has built a culture of contempt.  Because citizens must allocate funds to managers for each dollar they earn, the managers have no fiduciary incentive to work for their clients’ best interest.  In conversations over the past 18 months, managers across Australia echo the phrase, “No one ever got fired for buying IBM.”  This is code for managers justifying mediocrity based on consensus behavior.  And the tragedy is that consensus means that Australians are losing money at the hands of managers who have no incentive to see them succeed. 

The Royal Commission is hearing evidence on egregious abuses of fees for sham or bad advice.  This is an important problem.  But the Royal Commission doesn’t have the courage to ask the real hard questions.  These are about the returns that did not come to Australian investors based on a culture of complacency that pervades the financial services industry in Australia.  And if the public is to be served, attention should be paid to the conflagration of complacency masked as “risk aversion” rather than the back-burn brush fires of fee abuses.  Both are damaging Australia but the real fire is being ignored.

x


Wednesday, April 11, 2018

Sore Losers in a 30 Year Game

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On August 14, 2017, U.S. President Donald Trump released a document he neither read nor understood.  In the Presidential Memorandum for the United States Trade Representative, he recited the tired echoes of the 34th U.S. Secretary of Commerce Donald Louis Evans about Chinese “unfair” “violations” of intellectual property rights.  In the memorandum, he asserted that China “potentially threaten United States firms by undermining their ability to compete fairly in the global market.”  The saber-rattling of the past few weeks has spooked markets and generated yet another media-fueled volatility that is a tempest in a teapot.

In July 1987, the Office of Technology Assessment of the U.S. Congress issued a report Technology Transfer to China.  Director John H. Gibbons, acting on behalf of the House Committee on Energy and Commerce and the Senate Committee on Banking, Housing and Urban Affairs, sought to conduct an objective review of the role U.S. technology could play in the transformation and modernization of China’s economic and social order.  In its preamble, the justification for technology transfer to China was based on the assumption that either U.S. or Soviet technology was going to support broader political and strategic implications on the future of China and the U.S. needed to use its technology as an agency for closer ties.  From GE’s first contract with the Chinese government for locomotive sales in 1976 until the time of the report, the company itself saw that the transfer of technology served its economic interests in securing contracts that had been going to German, French, Romanian, and Soviet suppliers.  The same could be said about AMC (which ironically was sold to the French the same year as this report), IBM, Wang Computers, and other early market entrants into China.

The media and markets are missing what the Trump Administration wishes to deny.

     
  • Most intellectual property in the United States does NOT represent invention and is not associated with any product or service.  Most intellectual property is either subtle modifications of existing patents in attempt to “ever-green” market protections in violation of the law, outright plagiarism of competitors’ patents, or “defensive” patents procured for litigation avoidance or cross-licensing conflict resolution.
  • China bought most of the technology (and associated intellectual property) from the companies that are alleging “unfair” practices.  When part of a sale includes know-how and intellectual property, alleging it to be stolen is not fair – it’s pathetic.
  • The United States Patent and Trademark Office has had evidence for over a decade that over half of its patents, when challenged in court, are invalidated in part or in whole.  Yet no fundamental quality reform has been implemented.  As a result, when China independently reviews unenforceable intellectual property claims and elects to commercialize goods or services derived or enabled by disclosures in wrongfully granted patents, they’re not stealing.  They’re shrewd. 


It’s time for investors, markets, and the media to grow up.  We made a number of assumptions in the 70s and 80s about the China we wished to influence.  In many ways we succeeded.  We simply failed to appreciate that China wouldn’t stay “poor” and “incapable” of being a competitor.  That’s on us, not on them. 



Sunday, April 8, 2018

IDEAS or Fixed Delusions?

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It may be my recent move into the Kew Asylum atop a bluff on the Yarra River in Melbourne that triggered my renewed fascination psychology.  Built in the 1870s as the institution for the insane, the inebriate, and the idiot (wow, did they nail the branding back then or what?) I often muse about which category would most closely approximate the diagnosis that would have placed me in line for a room with the view that I now call home.  Over the last few weeks, I’ve been on a speaking tour of Africa and have encountered plenty of all three diagnoses – mostly in the form of political, academic and industrial self-proclaimed “leaders” and those who seek to reinforce said egos.  And while there are countless observations that compete for my fingers’ attention at this keyboard, the one that has immediacy is my abject abhorrence for the proliferation of “ideas”. 




Image may contain: one or more people, car and outdoorIn his 1829 writings, Analysis of the Phenomena of the Human Mind, James Mill gave us the linguistic gift of the term “ideation”.  In his use of the term and throughout the ensuing few decades, “idea” and “ideation” were used to describe the synthetic process of placing perceptions and sensations into a representational construct.  In the Journal of Psychological Medicine and Mental Pathology (Vol 9), Dr. J. Russell Reynolds’ 1855 essay on “The Diagnosis of Diseases of the Brain, Spinal Cord, Nerves and Their Appendages” clarifies the concept of ideation as the abstraction of reality which, in the extreme, leads to a perverted construction of “fixed delusions”.  As I listened to countless speakers recite the unconsidered doctrinal mantras of humans as “markets” or “consumers”, education as a means to the illusory ideal of employment, enterprise as an industrial manipulation of finite supply to extinguishing consumption for the purpose of rent extraction, and money as the single arbiter of social relevance, I was amused at the number of times I heard the term “idea” being used.  In the past three weeks, whenever I heard the word “idea” mentioned, I found it helpful to appeal to Dr. Reynolds’ notion of “fixed delusions”. 


Now, just in case you’ve been living under a rock, let me catch you up on the hottest new idea.  Nearly all human challenges can be solved with a blockchain cryptocurrency mobile telephony technology funded with an ICO deployed by Gen Xers who use their parent’s horded wealth or reputation to occupy shared workspaces in which echo chambers of ideas proliferate at the speed of caffeine.  The “developing world” will be “developed” when each wanna-be Silicon Valley incubator funds the sufficient number of developers coding in Python powering their lithium and cobalt off-grid mobile devices to more rapidly get ever decreasing tolls on ever diminishing-in-relevance urban transactions.  Oh, and if you’re at the cutting edge, you’ll have a solar panel on the roof to trickle charge your “solutions” to the world’s most pressing problems like ordering take-out food, booking your Uber, or purchasing your tickets to the next crypto conference in a hackathon warehouse.

I suggested to a room full of academics, policy-makers, and industrial engineers that the integration of lithium and cobalt batteries (for which said miners have life expectancies of 45 and 37 years, respectively) into a pacemaker to animate the heart of a 67-year-old white collar, obese, sedentary, steak gobbling retired executive may be more industrial disease management than healthcare.  I challenged them to identify a single component of “innovation” that they integrate into their devices that didn’t have – somewhere in its engineering history or supply chain – the unconsidered life or livelihood of person for whom their engineering can never be effective due to price, access, or entitlement.  The room was silent.  But when it came time to talk about “ideas” to build the economy, the room was alight.

“I think we need a professional association.”
“I think we need more funding.”
“I think we need a way to take our ideas to market.”
“We’ve got great ideas but don’t seem to convert them into business.”
“We’ve got to patent and protect our ideas.”

In the nearly 2 hours of “ideation”, not a single word was mentioned that I haven’t heard in EVERY U.N. Development, World Bank, World Economic Forum, YPO, WPO, business school, venture conference, entrepreneurial gathering for the past 25 years.  There were no “ideas” – merely the recitation of “fixed delusions”. 

With roughly 4.5 billion people on Earth who struggle to access potable water, adequate nutrition, commonly available sanitation and health technologies, how is it that we can continue to suggest that humanity’s future is somehow mediated on the proliferation of smartphones and digital devices?  Doesn’t anyone see that our lemming-like race to the sea of Apple, Samsung, Microsoft, Google and Huawei is lubricated by the genocide of extractive industries that continue to perpetuate a system in which:
  • Utility is defined by Edison and Westinghouse at 60Hz on 110, 220, or 240 volts of distributed power;
  • Communication is defined on narrow RF spectrum at 3G, 4G, or 5G;
  • Value is defined by fiat currency accumulation; and,
  • Education is defined by consensus facility with approved technology?

We’re using 140-year-old distributed power models to power 95-year-old radio technology to rent airwaves to disseminate propaganda for which we pay subscription access fees on the “free” internet.  And we congratulate ourselves on “development” with our modern “ideas”. 

James Mill and J. Russell Reynolds offered us a view of the cognitive process in which we observe the world around us and then abstract it into social forms which allow for the consensus acceptance or rejection of values and norms.  Upon the fabric of these normative perspectives, we embroider embellishments which attract more or less attention based on what we seek to highlight or obscure.  But what we don’t do is challenge any of the underlying compositions of the threads that form the warp, the weave, or the enhancement.  And by this I mean we don’t engage in:
  • ·        the explicit consideration of the essence of matter and energy;
  • ·        the unmasking of incentives behind the animating utility energizing the apparatus;
  • ·        the beneficiary of the consensus technology that dictates incumbent modalities; and,
  • ·        the introspection on what alternative mode or method might achieve equal or better results with less phase inefficiency from which rent can be extracted.

Until each of these four steps is routinized into our acceptance, adoption and integration of technology or behaviors, we haven’t innovated, we haven’t ideated.  We’ve merely reinforced the fixed delusions and, in so doing, cost someone somewhere their liberty and in many cases, their life.

x

Sunday, March 25, 2018

In the Image and Likeness of What God?

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For the past week, I’ve been on an observer mission.  I was generously invited to Rwanda to witness the African Continental Free Trade Area (AfCFTA) Extraordinary Session of the African Union.  Among the many events of the week, I took part in the AfCFTA Business Forum promoted under the title “Leveraging the Power of Business to Drive Africa’s Integration.”  Witnessing the sage pluck with which H.E. Olusegun Obasanjo, Former President of Nigeria, confidently challenged sitting Presidents to improve their knowledge of business and the world was poetically brilliant theater.  The polished sagacity of H.E. Emmerson Mnangagwa, President of Zimbabwe responding to journalists with flawless reference to constitutional rule of law was legendary.  And the social adept positioning of issues like cross-border freedom of movement demonstrated by H.E. Cyril Ramaphosa, President of South Africa, put many of the deflection-oriented world leaders to shame.

But as I listened to the speeches at the African Continental Free Trade Area Business Forum on 20 March, 2018 and as I traveled to universities, businesses, and ministries this week, I kept hearing Genesis 1:27 echoing in my mind.  Into What Image and Likeness is Rwanda Being Crafted?  When the Germans saw the region as a coffee production opportunity, was that a Rwandan vision?  When the Belgian’s saw the region as an agriculture and religious colony, was that a Rwandan vision?  When Louvain Catholic University’s Reverend Canon Achille Salee and F. Delhay conducted the geological surveys to provide the basis for Rwanda-Urundi Tin Mines Company (1930) and the Muhinga-Kigali Mining Company (1934) did the casserite, wolframite, and coltan serve a Rwandan-defined vision for the land or its people?  And when UN, IMF and other Development Agencies tell Rwanda that it must be an ICT hub today, does anyone in Rwanda know the wheel or the car to which that hub is attached?  Is becoming an educated, low labor cost cog in a global supply chain the aspiration of the country or is it a necessity of the callous colonial industrial engine that eats the souls and lives of the laborer-consumer mandate?

I watched Heads of State and their agents recite the catechism of “Development” that has been the grist for the industrial colonial overlord’s mill for decades.  Without a moment of consideration, the following doctrinal invocations were hypnotically dispensed:

The pursuit of business is for the sake of profit.
The population of a place must be seen as consumers.
The aggregation of wealth by the few will inure to its distribution to others.
And of course, economic growth is the only path to a better society.

Past President Obasanjo offered the only glancing deviation from the dogma when he observed in unprepared remarks that “Education without employment is very dangerous.”

Should we lament the location in which this summit occurred?  While Rwandan President H.E. Paul Kagame has, in fact, presided over the pacification and social reconciliation of a country torn apart by colonial-power fueled genocide barely 3 decades ago, I saw a disturbing narrative emerge.  Rwandans have modeled the power of reconciliation between themselves to be sure.  And well done there!  But no voice was raised to indict the colonial influence of the Catholic Church and the largely European (and now Asians) “developers” who continue to see the region and the continent as indentured laboring consumers.  The establishment of ICT training and call centers received more attention than the reconsideration of enterprise at its essence.  If one country in Africa can finally consume and use more computers and smart phones built on the relentless trade of conflict metals from slave-labor conditions in another part of Africa, have we “developed”?  If Rwanda’s economic success comes at the expense of its neighbors, is it success?  And to be clear, President Kagame IS an out-spoken voice for a new narrative but he's constantly bombarded with loud voices reinforcing a dominant narrative that has derailed many visionaries before.

What if business was for the balanced stewardship of both resources and utilities in which the primary objective was to achieve maximum benefit with the least inefficiency?  What if social impact and reputation for quality and access were valued above the profits derived from capital and ignorance arbitrage?  After all, to be a “better market”, governments had to provide inducements to foreign corporations that include tax concessions, profit repatriation, and land appropriation.  Is that success or is it seduction?  When Africa is described as a “market of 1.2 billion people”, have any of us stopped to consider the colonial dependencies not only on what is on offer but who is doing the offering?

In my lecture at the University of Rwanda at the generous invitation of Amb. Dr. Charles Murigande I discussed the subtle – yet important – distinction between what it means to “Choose” an outcome or “Select” from what’s on offer.  To choose, I argued, is a process in which observation, discernment, valuation, and consideration are fully engaged.  To select, on the other hand, is to be presented with a series of options and rank them.  In the case of the former, the individual or community is encouraged to become highly informed and engaged.  In the latter, the individual or community is cowed into opaque motivations by anonymous actors.  In the AfCFTA summit and its appendages, selection – not choice – was on offer.  Education – defined by governments and institutions controlling the narrative – is for jobs in sectors that serve a global product and service mandate – NOT an African-defined vision.  Infrastructure is selected to satisfy the multi-national corporation’s production and distribution mandates.  After all, no one questioned whether the Africa of tomorrow could transcend the addiction put in motion over 100 years ago by Edison and Westinghouse.  Electronics are assumed, not chosen.  No one considered whether within the biome, topography and culture of Africa there are options for power, transport, health, nutrition, and an array of other opportunities that leap-frog the last century’s addictions and inefficiencies.  In short, the summit was not about Africa as the birthplace of humanity but rather the cul-de-sac of Western and Asian consumption-fueled economic models. 

If We The People want to evidence a “better” version of business, social interactions, political structures, or our own existential improvement, its time to CHOOSE wisely.  Rather than selecting from the buffet designed to make us compliantly obese, let’s emancipate ourselves to critique what’s been on offer and choose a new path.  And maybe, with a little bit of luck, Africa can model for the rest of the world A More Perfect Union!

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Saturday, March 17, 2018

Don't Bother Your Father While He's Bankrupting You

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On November 15, 2017, the Director of the Pension Benefit Guaranty Corporation W. Thomas Reeder told America what I’ve been saying for several years.  The PBGC and the 40 million Americans who count on it to preserve the promises made to working Americans are out of luck.  The 840,000 people served by the 4,845 failed pensions currently managed by the PBGC have seen their anticipated benefits reduced and, by 2025, the Multiemployer Program (in spite of the Multiemployer Reform Act of 2014) will run out of money. 

When the Employee Retirement Income Security Act of 1974 (ERISA) was established, the PBGC was created to make good on the promises of single and multi-employer pension plans.  Ironically, the latter typically are created in collective bargaining scenarios with unions and classes of workers (eg. transportation, construction, mining, hospitality, etc.).  Massive unfunded pensions like Sears, Nortel, Avaya, Durango Georgia Paper Co. present one form of challenge while the closure of other pensions have another.  In FY2017, 1,480 pension plans ended for companies like Kroger, Accenture US Pension, Bright House Networks, INOVA Health Systems, Samsonite, Sunoco and institutions like Deseret Mutual.  The unfunded risks are self-evident.  If a plan doesn’t have assets, PBGC has to cover these costs.  But when plans are terminated, the premium income from those plans goes away.  And while the investment allocation to Public Equities returned 17.6% in 2017 helping to diminish some of the program’s deficits, the extremely low fixed income returns (0.7% in 2017 compared to 10% in 2016) spell on-going trouble for investment income.  The $75 billion deficit facing PBGC means U.S. pensioners are blindly going into an illiquid future and it was spelled out for all to see… and no one seemed to pay attention.

Oh, and one of my favorite bits from page 40 of the FY 2017 Annual Report was the adoption of new “generational mortality tables” that offered the encouraging fiscal stimulus of “shorter longevity” decreasing the presumed liability.  That’s right, part of the official statistics about when PBGC runs out of money is buoyed by the fact that new data suggests that you’ll live shorter lives!  And where you live those shorter years will matter if misery loves company.  Forty-three of America’s 50 states have pension funds that are underfunded.  Pennsylvania, Colorado, Connecticut, New Jersey, Kentucky, Illinois, Oregon and Minnesota are all vying for the unenviable position to out do each other for breaching the public confidence of their pension programs.  While the Fed plays around with raising interest rates (a few fractions of percentage points which will cause equity markets to go down full percentage points), the pension cliff these states are facing is too politically charged for policy-makers to discuss.

But if the several billions of shortfalls here and there aren’t bothersome, Brian Riedl’s The Entitlement Crisis Ignored article in the National Review (March 1, 2018) echoes the alarms that I’ve been raising in Inverted Alchemy for nearly a decade…only louder.  By adding the interest calculations on the funding of the Social Security and Medicare shortfalls I’ve discussed, he projects a whopping $82 trillion “avalanche” that will bury the U.S. economy and economies dependent thereupon.  He concludes with this ominous observation:
Frédéric Bastiat long ago observed that “government is the great fiction through which everybody endeavors to live at the expense of everybody else.” Reality will soon fall like an anvil on Generation X and Millennials, as they find themselves on the wrong side of the largest intergenerational wealth transfer in world history.

If you’ve made it this far into my post, you’ll also know that I find it desirable to make tangible suggestions about how to go about offering a positive outlook where most pundits see the problem.  And, despite the tone of this communique, I would offer that, as a point of departure, you’re already more solution than you know.  Like many other observations I make, this post is not drawn from my extrapolations of loosely woven strands of logic.  This is the incredulous reality that We the People are being told that the promises upon which we rely are being broken already!  By reading this, you’re at least capable of inquiring into what can be done.  But that’s not enough.

There are three approaches that we can adopt.  In varying degrees, we will whether we chose them or not.  But as with most interventions, the choice to constructively engage prior to crisis is far more desirable (albeit less frequently engaged) than waiting until calamity befalls us.

Over the past 5 years, I have established and run an investment fund – Purple Bridge Management – that provides evidence that informing investment activities with non-consensus information can lead to superior market performance.  Over the past year and a half, we’ve replicated the evidence of this in the CNBC IQ100 U.S. equity index.  In this case, by measuring what we call Innovation Alpha, we can identify companies that are capable of exceptional performance based on their ability to create, aggregate and deploy innovation.  Together with others, we’re demonstrating that financial data doesn’t tell the whole story about the prospects of companies and that measuring other factors that are opaque to the market provides a more precise way to achieve investment returns with no additional risk.  Our pioneering development of Intelligent Alpha has clearly demonstrated that consensus beta – letting the market dictate through size what is best – is a suboptimal path out of interest rate and equity market manipulated deficits.

There’s a big world beyond the reach of most of us.  It’s a world with billions of people who have been marginalized and neglected in the last 250 years of Adam Smith’s industrial imperialism.  Across Africa, Asia, and the other Americas, these people live with the capacity to influence the future of energy, agriculture, water and other essential elements of life.  Engaging with communities of diversity now will build networks of resilience for the unraveling future of the consumer-fueled industrial insanity surrounding us.  And the old models of indenturing resources through old debt and corruption are giving way to newly informed strategies of engagement.  Out of sight neither means out of mind nor out of the reach of information parity.  In short, the informed local is a new reality best met with collaboration and engagement – not with ignorance arbitrage.

And most of all – the illusion of hording for a “future” will end with this generation.  There isn’t enough to pay $400,000 for medical bills per retiree when they deposited less than $150,000 in their life.  Getting really clear on the personal responsibility each of us has to see our well-being as our own accountability rather than disease management being the public responsibility placed on others from our own neglect is the only path we can take today to get our public pensions through the next decade.  Comic isn’t it?  That the best path to financial health in the future is health today!  So, after you’ve read this post and shared it with your network of influence, get up, get outside and take a walk.  The journey to your fully living future is just beyond the doorway.  Enjoy!

x

Monday, February 26, 2018

Congolese Conflict Metals in Florida

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There’s one metal count that the U.S. is leading.  And it’s not a good one.  Tin, tungsten, tantalum, and gold (known as “3TG”) sourced from conflict regions where suppliers benefit from destitute poverty and regional violence continue to flood consumer electronics and jewelry manufacturers.  And lately, a new metal has become the latest to fuel the humanitarian carnage in places like the Democratic Republic of Congo – cobalt.  Why?  Well, if you’re reading this blog on an Apple iPhone 8, Congratulations!  You’re the winner of a genocidal abuse that places over 40,000 children in virtual slavery.  And why?  Oh, that’s right, so that your lithium ion battery is a more effective power supply for your tweets about the 17 lives recently lost in Florida.

I remember the first time I had an automatic weapon in my ribs.  I was walking down Avenida Central in San Jose Costa Rica in the fall of 1986.  As I turned the corner to head towards the Post Office to send a letter back to the States, a careless guard was coming the opposite way with his gun barrel at my chest height.  The encounter was so abrupt that neither one of us knew what to do.  The M-16 hit my ribs with such force that both of us recoiled.  He apologized.  I acknowledged the apology and went on with my day.  Little did I know that I would refer to that as “the first time I had an automatic weapon in my ribs.”  Several weeks later I was in the line of carelessness and in the line of fire when I was in Northern Costa Rica as the villages where I was working were intermittently visited by Nicaraguan, Sandinista, and U.S. combatants. 

When I heard about the Florida school shooting, my heart broke for the parents and families of those who lost their lives.  The thought of sending a loved one to school only to have them never come home is a chilling indictment on what we call modern civilization.  And those in Congress and in the White House that so ardently manipulate the 2nd Amendment of the U.S. Constitution – a provision aimed at legitimizing the arming of citizens not to kill school children and teachers but to overthrow tyrannical government – should lead by example.  Show your affection for the Constitution and remove metal detectors and security at the Congress and at the White House.  Restricting gun access to both locations is an absolute violation of the 2nd Amendment.

What do these three seemingly unrelated stories have to do with each other?  The answer is quite simple.  The U.S. economy relies on death to operate.  Strum Ruger, Remington Outdoor, and Smith & Wesson all benefited from school massacres with increased sales and profits.  BlackRock, Vanguard, Fidelity and others passed some of those returns onto most of the unsuspecting public.  From Springfield Armory – named for the 1777 ammunition and arms depot established by George Washington – to Austria’s Glock to Russian, Polish, Chinese and Australian manufacturers, the business of arming the world is immense and growing.  What gave rise to the proliferation of guns in Central America?  Oh, that’s right…the Carter and Reagan impulse to spread democracy using a tangled web of Iranian militants, Columbian drug cartels, and gun runners out of Arkansas, Texas and Miami.  After pressure from Apple and others, the Dodd-Frank Section 1502 rule compelling companies to audit their metal supply chain to insure it was conflict-free was eviscerated because compliance was “too difficult”.  And while school children can demand tougher gun laws to restrict access to firearms in the moral outrage inertia in Florida, where are the same protestors when Apple continues its death march across the globe looking for impoverished governments to corrupt and looking for children to put into slave labor?  Oh, that’s right.  They’re lining up outside glass cathedrals in shopping malls and in cities across the world breathlessly waiting for their latest phone.

Oh, in case you were wondering, in response to massive community pressure Apple, Google, Microsoft, Signet and Tiffany each “contributed over $100,000 in their last full fiscal year to projects addressing a range of issues include child mining and poor safety standards for miners,” according to the Enough Project’s 2017 report.

The most recent time I had my encounter with an automatic weapon was on a tiny airstrip on an island north of New Ireland, Papua New Guinea.  I was asked by the government to examine the possibility of seeking basic human rights in response to the egregious abuses inflicted on the local communities by an Australian mining company.  After holding the airplane door closed across the beautiful sea during our 40-minute flight, we landed on an airstrip and were immediately rushed by armed employees of the mine.  They demanded that I leave.  I didn’t.  They approached me with their weapons at the ready.  One mercenary walked right up to me, shoved his gun barrel in my abdomen and proceeded to tell me what he was about to do with me.  I didn’t comply with his demands and, in a rather awkward moment, I realized that we were in an existential spiral that could go only a few ways.  I suggested that he probably didn’t want to add killing me to the list of things he had done that day and, after a few tense moments, he lowered the gun barrel. 

In a world awash with gun-aided violence and intimidation, the recent terror in Florida will soon be lost in the echoes of gun-fire somewhere else in the world.  We’ll here the gunshots in suburban U.S. neighborhoods.  We’ll here about Australia’s gun ban after the mass shooting it experienced.  The U.S., Australia, Europe, China and others may periodically apply the veneer of legislative response over the gaping moral pestilence of industries that couldn’t make their profits but for guns and the loss of innocence.  But will all lives matter?  Will all dead children count?  Hell no!  Not as long as there’s money to be made and the dead are far enough away… and black.  Sure, did Australia reduce its citizens’ gun ownership?  Yes.  But did it turn a blind eye as its corporations gunned down workers in the Pacific where the dead weren’t middle class whites?  Absolutely.  Did the U.S. pass an assault weapons ban?  Sure.  But its companies exported and distributed record amounts of fire arms all the same. 

Our persistent unconsidered adoption of consumer electronics and “green” tech is coming at a massive humanitarian cost.  While we plug in our cars and text our 140-character morality, we are willfully blind to the lives that we’re consuming.  And when the focus gets too hot on the DRC and central Africa, we just find another place out of reach for the prying eyes of the inquiring concerned and repeat the carnage there.  Take it from someone who has been on the wrong end of M-16s, Kalashnikovs, AK-47s and numerous other weapons and has watched as their masters have been tamed with humanity.  If we really want to address the senseless killings in Florida, we need to activate a much larger impulse and make the profiteering on death a social and moral relentless pursuit.  Otherwise, we’ll just move the carnage to another town and hope that it doesn’t hit the news so we can blissfully ignore what we’re doing to each other!

x

Saturday, February 17, 2018

Generosity Knows No Need

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Alright.  This post is a bit different so let’s agree to stay with it to the end.  Most of the moments of my life pass and I don’t pause to deeply reflect on them or assimilate “deeper wisdom” from them.  This is not one of those “most moments”.  This one is special.

I don’t know when human relationships started being transactional.  And try as I might, I can’t for the life of me see a rationale for that behavior.  Each day of my existence has been viewed through a simple lens.  I exist.  I exist in a context made up of others, a plethora of matter and energy, and the sum of all the experiences I and others have had and elect to share in some fashion.  And the “doing” of what I do involves perception, activation, design, conscription, action, reaction awareness, synthesis into experience and the cycle starts again.  For better or for worse, I don’t have a default that includes concepts like approval, permission, or validation as these are, in the end, notions that require the caprice of others – something that I have found largely unhelpful.

Due to my default towards self-directed action, the majority of those in my communities of influence assume that I “have all I need” and “there’s nothing that they can do to help.”  The former is almost true.  The latter is patently false.  But it’s not quite that simple. 

The value of the worldview with which I operate is a central understanding that I, and all of us, have ALL.  The notion of “need” – the very construct of the impulse that bears that name – is objectively erroneous.  We live in a world where abundance is reality and the illusion of “need” is derived from the unequal distribution of, and access to – not to the objective quantity of – anything.  (I find it fascinating that our common use of the term “need” has tripled in the last century suggesting that the industrio-consumer illusion is making us less satisfied.)  In short, when I do something, I don’t “need” anything as it is mine to accomplish the undertaking with the resources and energy I can conscript and engage. 

The corollary about nothing to do to help is incorrect.  While I’ve spent most of my life as an opportunity alchemist – in other words, taking what wasn’t visible and rendering it accessible and functional – I’ve done so in an effort to demonstrate the persistent and generative possibility of that mode of action in others.  I don’t do a thing so that others do it.  But I do do things, in part, to demonstrate that they can be done by merely engaging as a conscious being.  This distinction is important.  The motivation to act in every instance emanates from within an endogenous (internal) process.  And the action is not taken for a transactional return.  All that said, over the past several decades, I’ve been deeply saddened by the individuals I’ve experienced that come to expect benefit, absorb goodness, and neglect activating an equivalent mode of engagement in their own spheres.  When people come to expect a benefactor to “just be there” without considering the well-being of that person, resentment arises not from the absence of a transaction but from the neglect to enliven for the benefit of others.

Bottom line: there’s Enough to Go Around to quote my friend Chip Duncan’s book title.

Two parables in the New Testament of The Bible are wonderful examples of this.  The first, from Luke 17:11-19 is the story of 10 sick men who experience a healing.  The healer doesn’t heal expecting to be thanked.  He heals because he perceives the suffering of the men.  One, a foreigner, returns to thank the healer.  The other nine take and acknowledge nothing.  The other story is from Matthew 18:23-34.  In this story a debtor is forgiven a large debt by a king.  Once forgiven the debtor goes out and finds a servant who owes him money and, rather than perpetuating the mercy he’d just received, forces the servant to pay his debt.  Both of these stories (and thousands more) tell of acts of kindness, mercy, goodness, courage or generosity that are done.  Not FOR something.  They’re just done.  But the grievous offence is when the recipient of goodness does not then go on to embody and engage the same.  Goodness, like Light, just emanates.  When it’s absorbed or experienced, that’s great.  But when it doesn’t experience a propagation – NOT a reflection – then darkness builds. 

Now this is a long way to get to the beginning of this week’s post.  But you’ll see that it was worth the wait in a moment. 

Nineteen years ago, a dentist walked into my office with a polymer licensed from a regional university.  His aspiration was to use the polymer for the treatment of xerostomia – a painful condition afflicting many of his patients.  To his consternation, he learned that the pharmaceutical company selling a highly ineffective treatment for the disorder at exorbitant prices filed and owned a patent blocking a non-pharmaceutical intervention.  In other words, the drug company decided to make sure that their drug was the only solution available despite its limited effectiveness.  Holding the polymer in my hands, I suggested that the material could be used to cover burns and wounds and do so without harming the healing tissue.  The dentist and his business partner left and formed a company which today has healed the wounds of thousands.  In 2009 I was asked to develop a strategic product roadmap for the company and suggested a number of products which would address various infectious diseases and other health concerns.  One – a means of addressing the proliferation of MRSA – showed some early promise in military medicine.

A few weeks ago, I received a letter.  In it I was advised of a new commercial venture that was being considered based on one of my suggestions from a follow-up briefing in 2011.  “What would I need,” to be involved was the gist of the letter.

Yesterday, the same dentist and his wife came to my office.  As we gathered, I expressed my deep gratitude for the fact that this meeting represented the first time that anyone has returned to include me in a commercial idea that I gave them.  Billions of dollars have been made on ideas that surfaced from me.  This was the first time anyone came back to acknowledge and engage!  We sat down and had a deep conversation about the journey from 1999 to the present.  We talked about the ups and downs of the two-decade effort to build a company that now serves patients across the country.  We talked about the importance of keeping humanity in business.  We talked about the distraction and resentment that can come from being overlooked and ignored for the contributions that you make for the benefit of others.  We talked about the toll that our innovation ecosystems had placed on our families and relationships.  But most of all, we expressed gratitude for the fact that we shared common values about alleviating the physical suffering of people.  The greatest reward we both had experienced was the recognition that anonymous beneficiaries had better lives because our lives had intersected, activated and propagated goodness.

As I reflected on the conversation, I realized something quite profound.  This unsolicited impulse to re-engage, include, and collaborate ignited within me a strange new spark.  The ease with which the strategic roadmap for the new business flowed was effortless.  The provisioning for taking the first step to prototype was in place by the time the meeting ended.  By being fully human, by sharing a common commitment to hold gratitude as the cornerstone of our interaction, and by integrating whole-of-life conversations – not the B.S. that tries to keep “business” and “personal” apart – we put into motion commercial and social greatness that will keep us going for the next 20 years.

I’m the beneficiary of effervescent goodness.  I didn’t need it.  I didn’t want it.  But let me tell you what!  My life is the better for it.  Thank you, Guy and Robin Levy!

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