March 2017

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Reflecting on last week’s litigation while on the treadmill I came to some conclusions.

The ‘technical’ aspect of litigation is important, but is not actually that hard if you set about it the right way. Essentially you need to know what you need to win and then set about cross-examining the witnesses to get it. Pretty easy once you have done it once or twice. The most important thing is not to appear aggressive or nasty while you are attempting to get what you need. The second thing is to know when you have ‘got enough’ or what you need for your case.

The second aspect is simply one of form, which is easy enough to learn, when to stand sit etc.

The most important and the one that will be hard to ‘learn’ is having the balls to actually litigate in the first place. This one you can learn, but if you don’t have it naturally, then I don’t think you will ever enjoy litigation, although you may become technically competent.

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Totally ignoring all of the media stories, fundamentals, anything other than the 3 charts, the charts would suggest that for a long while since 2000, the market has gone essentially nowhere until the current breakout.

The charts would suggest that the breakout has a long way to run yet. In fact, it is just getting started.

I’ve blogged about the eventual breakout previously and recommended hanging on, which I still would advocate, purely on a chart basis.

The important thing is that the ‘news’ around the breakout, as it was historically, is usually bad. There are all manner of problems. Hang on, somehow.



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The federal debt has gone from astounding to unbelievable to incomprehensible, a new problem has emerged: The US government is actually running out of places to borrow.

How Many Zeros Are in a Trillion?

The $20 trillion debt is already twice the annual revenues collected by all the world’s governments combined. Counting unfunded liabilities, which include promised Social Security, Medicare, and government pension payments that Washington will not have the money to pay, the federal government actually owes somewhere between $100 trillion and $200 trillion. The numbers are so ridiculously large that even the uncertainty in the figures exceeds the annual economic output of the entire planet.

Since 2000, the federal debt has grown at an average annual rate of 8.2%, doubling from $10 trillion to $20 trillion in the past eight years alone. Who loaned the government this money? Four groups: foreigners, Americans, the Federal Reserve, and government trust funds. But over the past decade, three of these groups have cut back significantly on their lending.

Foreign investors have slowed the growth in their lending from over 20% per year in the early 2000s to less than 3% per year today. Excluding the Great Recession years, American investors have been cutting back on how much they lend the federal government by an average of 2% each year.

The Fed is the only game left in town.

Social Security, though, presents an even bigger problem. The federal government borrowed all the Social Security surpluses of the past 80 years. But starting this year, and continuing either forever or until Congress overhauls the program (which may be the same thing), Social Security will only generate deficits. Not only is the government no longer able to borrow from Social Security, it will have to start paying back what it owes – assuming the government plans on making good on its obligations.

With federal borrowing growing at more than 6% per year, with foreign and American investors becoming more reluctant to lend, and with the Social Security trust fund drying up, the Fed is the only game left in town. Since 2001, the Fed has increased its lending to the federal government by over 11% each year, on average. Expect that trend to continue.

Inflation to Make You Cry

For decades, often in word but always in deed, politicians have told voters that government debt didn’t matter. We, and many economists, disagree. Yet even if the politicians were right, the absence of available creditors would be an insurmountable problem—were it not for the Federal Reserve. But when the Federal Reserve acts as the lender of last resort, unpleasant realities follow. Because, as everyone should be keenly aware, the Fed simply prints the money it loans.

A century of arguing about how much to increase spending has left us with a debt that dwarfs the annual economic output of the planet.

A Fed loan devalues every dollar already in circulation, from those in people’s savings accounts to those in their pockets. The result is inflation, which is, in essence, a tax on frugal savers to fund a spendthrift government.

Since the end of World War II, inflation in the US has averaged less than 4% per year. When the Fed starts printing money in earnest because the government can’t obtain loans elsewhere, inflation will rise dramatically. How far is difficult to say, but we have some recent examples of countries that tried to finance runaway government spending by printing money.

From 1975 to 1990, the Greek people suffered 15% annual inflation as their government printed money to finance stimulus spending. Following the breakup of the Soviet Union in the 1990s, Russia printed money to keep its government running. The result was five years over which inflation averaged 750%. Today, Venezuela’s government prints money to pay its bills, causing 200% inflation which the International Monetary Fund expects to skyrocket to 1,600% this year.

For nearly a century, politicians have treated deficit spending as a magic wand. In a recession? We need jobs, so government must spend more money! In an expansion? There’s more tax revenue, so government can spend more money! Always and everywhere, politicians argued only about how much to increase spending, never whether to increase spending. A century of this has left us with a debt so large that it dwarfs the annual economic output of the planet. And now we are coming to the point at which there will be no one left from whom to borrow. When creditors finally disappear completely, all that will remain is a reckoning.

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I woke up today, with nothing to do. No studying for degrees or courses, no trial prep, no work. This is the first day, in 4.5 years, that I have nothing to do today.

Obviously I am going to ride the bike if the weather holds, the past 2 days have been glorious, so fingers crossed.

Tomorrow I’m back to work, so I’ll enjoy today.

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We have finished all the witnesses. This was completed yesterday, today, we give oral and written closing submissions.

I have been up pretty much all night finishing and referencing the submissions.

We have a pretty good case, and we did win the first case, so I am hopeful that we can make it home once again.

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So yesterday was day 1 of the trial.

Opposing counsel had written opening submissions, which she read. I on the other hand had memorised my opening submissions and presented them orally. The Judge seemed to like that.

My client was the first witness to give evidence. No matter how much you coach them prior to this, something always goes wrong.

Anyway, stuff went wrong when the opposing counsel cross-examined. I had stuff to fix during the re-examination and I was dancing a fine line between legitimate re-examination and re-leading evidence-in-chief. I got away with it, I was challenged twice, but fought off both objections.

That was the tough part of the case for me. Cross examination of the opposing witnesses is always easier.

I’m still trying to finish closing submissions.

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I am in court all week defending a decision that I won a year ago in the Employment Authority. The case is scheduled to last all week, possibly extending into next week. I think that we will probably manage to conclude it this week.

I’m currently working on my closing submissions. All last week I was at work, trying to earn back some of the money I had lost during the completion of the ‘Legal Professionals’ course, more on that another day.

So, of course I am behind schedule, which is why I was up at 0300hrs typing up submissions that I have been working on all w/e.

I work better in the mornings, I know after a day in court [today] I won’t be in any state to write coherent submissions, therefore, some early mornings for me this week until they are complete. Not too far off.

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