The further a society drifts from the truth, the more it will hate those who speak it. ... In a time of deceit, telling the truth is a revolutionary act. George Orwell

Thursday, January 28, 2016

They finally proved correlation between saturated fat and heart disease...


... and it is inverse!

From Wiki
In case you missed it, see the study link and the post on Diet Doctor.  See also an interesting post on the High Fat Hep-C Diet blog.  In a nutshell:

Each additional 5% of saturated fat (SFA) contents was associated with 17% lower risk of ischemic heart disease (IHD)  : Hazard Ratio 0.83 +/- 0.1.

During 12 y of follow-up, 1807 IHD events occurred. Total SFA intake was associated with a lower IHD risk (HR per 5% of energy: 0.83; 95% CI: 0.74, 0.93). Substituting SFAs with animal protein, cis monounsaturated fatty acids, polyunsaturated fatty acids (PUFAs), or carbohydrates was significantly associated with higher IHD risks (HR per 5% of energy: 1.27-1.37). Slightly lower IHD risks were observed for higher intakes of the sum of butyric (4:0) through capric (10:0) acid (HRSD: 0.93; 95% CI: 0.89, 0.99), myristic acid (14:0) (HRSD: 0.90; 95% CI: 0.83, 0.97), the sum of pentadecylic (15:0) and margaric (17:0) acid (HRSD: 0.91: 95% CI: 0.83, 0.99), and for SFAs from dairy sources, including butter (HRSD: 0.94; 95% CI: 0.90, 0.99), cheese (HRSD: 0.91; 95% CI: 0.86, 0.97), and milk and milk products (HRSD: 0.92; 95% CI: 0.86, 0.97).

Interestingly, equal-caloric substitution of 5% of SFA in the diet with:

  •  any carbohydrate type (low GI, medium GI or high GI),
  •  mono-unsaturated fats,
  •  polyunsaturated fats,
  •  animal protein,

- correlated positively with IHD, while substitution of SFA with vegetable protein correlated negatively! (Correlation calculations were corrected against known confounding factors such as age, sex, BMI, waist circumference, educational level, physical activity level, smoking status, alcohol intake, energy-adjusted intakes of cholesterol, fiber, and vitamin C.

Stan (Heretic)

Tuesday, January 26, 2016

Manufacturing of fake profits by some corporations

(Note: I rarely post that kind of analyses but this time it is probably important to know about, and interesting to watch).  

From Wiki
Surprized by the booming US stock market in the past few years 2012-2015 in spite of rotten business fundamentals and no growth?

How to transfer cheap credit into fake profit and create an illusion of growth, simple:

  • borrow a few billions of dollars at near zero interest rate
  • buy your own corporate stock back, which allows the company to increases dividend per free trading share without incurring extra costs or improving anything nor adding anything of value. It also triggers a buying momentum on the stock market, which other "investors" tend to follow. 
  • wait until stock price increases due to higher dividend yield and due to momentum investing.  This will also increase a value of the previously purchased corporate stock held as the asset, making it available to use as a collateral for future loans.  
  • repeat the above, roll-over the old loans if necessary.

In fact, one can argue that it makes no sense whatsoever to invest in production if stock buyback brings more return on “investment” and quicker since the lag is much shorter then a new product development cycle.

What can go wrong?

  • if interest rates go up too much then rolling over the old loans would drain the cash and bankrupt the companies.  This is highly unlikely since the central banks are well aware of that kind of systemic risk and will not raise the interest rates substantially, any time soon.
  • if the stock prices decline in spite of buybacks due to market correction or declining fundamentals (as in case of mining & energy sectors and some banks) , then the own corporate stock held as a collateral must also decline which may trigger the calls on the existing loans and may make it more difficult to borrow  and to roll-over the old debt.  This may potentially expose the company to a liquidity crisis.  We will probably see some interesting examples of this phenomenon in 2016, beginning with the mining sector  and some oil companies and then possibly some banks exposed to bad loans. Previously, the governments fought it by issuing another QE (“quantitative easing” of credit), will it work this time?  We shall see.     It will cause US dollar exchange rate to rapidly go down as it happened during 2008-9, which may trigger an outflow of capital out of the US stock and bond market, again as in 2008-9 (this time into the currencies of countries that are not exposed to deflationary risk of mining and energy markets).   This will exacerbate the stock market rout in the US.  Note that the above mechanisms are not self-correcting, they form a positive feedback loop, that is a movement in one direction, up or down tends to amplify itself reinforcing the trend.     
Stan (Heretic)

Updated 9/02/2016:

Big companies have lost billions buying their own shares

And it's not just a few big corporate losers accounting for all the pain. The group includes 229 companies in the Standard and Poor's 500 index, nearly half of the companies in the study prepared by FactSet for The Associated Press. When a company shells out money to buy its own shares, Wall Street usually cheers. The move makes the company's profit per share look better, and many think buybacks have played a key role pushing stocks higher in the seven-year bull market.

Updated 10/02/2016:

Why Stock Buybacks Won’t Save The Market This Time

There's a reason investors have blindly trusted Wall Street's "buy the dips" mantra since 2009. In fact… there are 2.3 trillion reasons. That's because since 2009 U.S. companies spent more than $2.3 trillion buying back their own shares, according to a report by Aranca Investment Research Services. All that buying acted as a floor for stocks and launched the major indices to new heights.
Fundamentally, spending cash on or debt-financing buybacks is touted by management as "returning cash to shareholders" by reducing share count, which reduces the number of shares the company's earnings are divided across. So, by reducing shares through buybacks, earnings per share can rise even if actual earnings are flat or falling. And that's a source of positive sentiment for those holding those stocks.

Update 14/03/2016:

There is only one buyer keeping S&P 500 bull alive

When The Prop Drops - Company Share Buybacks Accounted For 100% of New Stock Market Cash Since 2010

Monday, January 25, 2016

The Skinny on Fat by Credit Suisse

A better title would have been "Money and greed trump medical lies and stupidity"
I shall better be kind to the bankers, some of them are on our side!

Credit Suisse Investor's report   (a short summary titled The Real Skinny on Fat is available on The Financialist page) concludes that saturated and monounsaturated animal fat is healthy and was unjustifiably blamed for the health problems that were in fact more likely caused by the overconsumption of vegetable polyunsaturated  oils and carbohydrates.  The institute's report is thus    advising to invest in natural food producers selling product rich in saturated fats.  

Wednesday, January 6, 2016

Praising civilization for saving life on Earth by increasing carbon dioxide!

We should be proud of carbon emission rather than ashamed.  According to  one of the original Greenpeace founder Patrick Moore.  Read his excellent  presentation on October 2015,  Annual GWPF Lecture, Institution of Mechanical Engineers, London.


Here is the shocking news. If humans had not begun to unlock some of the carbon stored as fossil fuels, all of which had been in the atmosphere as CO2 before sequestration by plants and animals, life on Earth would have soon been starved of this essential nutrient and would begin to die.

Given the present trends of glaciations and interglacial periods this would likely have occurred less than 2 million years from today, a blink in nature's eye, 0.05% of the 3.5 billion-year history of life.

No other species could have accomplished the task of putting some of the carbon back into the atmosphere that was taken out and locked in the Earth's crust by plants and animals over the millennia.

This is why I honor James Lovelock [proponent of Gaia hypothesis] in my lecture this evening. Jim was for many years of the belief that humans are the one-and-only rogue species on Gaia, destined to cause catastrophic global warming. I enjoy the Gaia hypothesis but I am not religious about it and for me this was too much like original sin. It was as if humans were the only evil species on the Earth.

But James Lovelock has seen the light and realized that humans may be part of Gaia's plan, and he has good reason to do so. And I honor him because it takes courage to change your mind after investing so much of your reputation on the opposite opinion.

Rather than seeing humans as the enemies of Gaia, Lovelock now sees that we may be working with Gaia to "stave of another ice age", or major glaciation.

This is much more plausible than the climate doom-and gloom scenario because our release of CO2 back into the atmosphere has definitely reversed the steady downward slide of this essential food for life, and hopefully may reduce the chance that the climate will slide into another period of major glaciation.

We can be certain that higher levels of CO2 will result in increased plant growth and biomass.

We really don't know whether or not higher levels of CO2 will prevent or reduce the eventual slide into another major glaciation. Personally I am not hopeful for this because the long-term history just doesn't support a strong correlation between CO2 and temperature.

It does boggle the mind in the face of our knowledge that the level of CO2 has been steadily falling that human CO2 emissions are not universally acclaimed as a miracle of salvation.

From direct observation we already know that the extreme predictions of CO2's impact on global temperature are highly unlikely given that about one-third of all our CO2 emissions have been discharged during the past 18 years and there has been no statistically significant warming. And even if there were some additional warming that would surely be preferable to the extermination of all or most species on the planet.

You heard it here.

"Human emissions of carbon dioxide have saved life on Earth from inevitable starvation and extinction due to lack of CO2".

Updated link 08/01/2016:    Researchers Predict That A “Mini Ice Age” Is Coming Very Soon