Nothing from nothing equals nothing . . . if Billy Preston could see the Facebook debacle coming, why couldn’t you?

Come on people . . . IPOs have and always will be the equivalent of fool’s gold! Never, ever invest in a just launched IPO . . . wait a few months or longer and then do your homework after the purported hype. I mean did you not read the article predicting that Facebook would not be around in 5 years (remember MySpace?).

Or to put it another way, those who invested in Facebook got exactly what they paid for . . . hype over substance.

Let’s move this discussion beyond the anecdotal reference of a Facebook and see what history tells us relative to whether or not IPOs are a good investment.

Based on one analysis by Professor Jay Ritter from the University of Florida, it would appear that the combination of a shell-shocked Wall Street, venture capitalist greed for a high valuation and the inclination of investors to overlook solid financial performance in favor of market hype would appear to be a recipe for disaster.

The Wall Street Factor?

According to Ritter, “Until the institutional trading desks on Wall Street crawl out of their bomb shelters and begin to entertain the idea of moving their field of vision beyond the latest financial disaster that has shaken their traditional foundations, the IPO market will limp along slowly.”

While Silicon Valley VC’s are quick to shrug off the Facebook controversy – and why wouldn’t they because they are the one’s who make a great deal of money from the IPO being issued as opposed to its performance afterwards, I am not certain that either Wall Street or the investor market has a high tolerance for unsubstantiated evaluations.

This is especially true given the current economic crisis and the growing cynicism tied to what Wall Street guru Natalie Pace referred to as crony capitalism.

Can you say Groupon . . .

Venture Capitalists and the Gekko Factor

Before we look to hang the Silicon Valley VC’s from the nearest yardarm I think that it is important to understand the inherent risks they face in making an investment in an enterprise.

Back in the late 90s when yours truly sold his software company for $12 million, our VC-oriented lawyer provided me with a sobering statistic.

As it turns out, out of every 10 companies in which a VC invests, 7 fail in that they lose their money, 2 deliver some return which at best is usually a break-even proposition, while just 1 – that’s right just 1, actually pays a positive return.

It is through these numbers that the needed understanding about IPOs (including the reason why one should not touch them with a ten foot pole) is gained.  The latter is especially true when dealing with high tech offerings in which there is no discernible revenue stream.

The truth of the matter is simply this, when an IPO is issued you have the overwhelming imperative of a VC’s need to capitalize on the 1 opportunity in 10 to make back the money lost on the other 9.  Add into the equation uniformed investor greed and you have the makings for a disaster . . . or in this instance Facebook.

Within the above context, it is not the VC’s who are at fault.  Although improprieties such as the ones being bandied about regarding the Facebook offering in which information regarding diminished revenue streams was made available to a select few insiders, do factor into the equation.

Honestly I believe that it is the uninformed public trying to cash in a on a quick payday who are truly at fault.  This is particularly true when people who have no business investing in the markets do so.

You only have to look at the boom and subsequent bust for hard lessons learned that it now appears everyone has forgotten.

I can still vividly recall seeing individuals who worked at the company’s loading dock rabidly scanning their computers to check up on the latest get rich quick high tech darling.  I was at once reminded of the rows of slot machines at the local casino with players hunched over the one-armed bandits in greedy anticipation of jackpots that rarely materialized.

Of course who could blame them for wanting to get in on the action as  tens of thousands of dollars were being made daily.  However, when you bet money in a volatile market that you cannot afford to lose, your actions border on being irresponsible rather than opportunistic.

. . . we earrrrn it!

Manufacturing Value as Opposed to Earning Value

I love the old Smith Barney commercial with John Houseman who in his distinguished voice proclaims “we make money the old fashioned way . . . we earrrrrn it!”

It seems that in today’s world of self-proclaimed entitlement the concept of actually earning money or accumulating wealth is foreign to many people.

Think I am being a little judgmental or harsh here?  Perhaps, but here is the thing; If investors really did their homework, they would soon discover that “nothing from nothing equals nothing” (thank you Billy Preston).  When you have companies such as Facebook and Groupon entering the market with low revenues and high valuations, warning lights should immediately go off.

After all, would a bank loan someone money to buy a house if they had little or no income coming in?  Okay, that’s a loaded question and a discussion for another day, but you get my point.  The share price of IPOs issued under these circumstances are based on nothing more than unbridled optimism and greed.

Unfortunately, and as long as the public is willing to drink the smoke and mirrors valuation Kool-Aid, they are going to get what they deserve . . .



Diluting American Values: Why the U.S. will be an Islamic State in 10 years

“A few years ago, an inter-faith group of 10,000 people met at the Vatican in Rome. The group included the Pope, the Dalai Lama and Muslim Imam W. D. Mohammed. An outspoken Hindu woman was quoted as saying, It was refreshing to note that the idea that all religions have universal truths, and are merely different paths to the same goal was accepted as a given from the outset by all delegates without a single dissenting voice.”

As I read the above recounting of the inter-faith conference, I was immediately reminded of an interview I did last August with the respective heads of the Jewish Defence League of Canada, the Canadian Hindu Advocacy and the Christian Heritage Party (Is Valley Park Middle School Canada’s Ground Zero Mosque?).

The subject for discussion was the controversy surrounding a Toronto district’s decision to allow 300 Muslim students to worship in the school’s cafeteria during school hours.

While the issue of school prayer in and of itself makes for an interesting and polarizing discussion, it was the subtle undertones that many may have missed that were the most disconcerting.

. . . many quasi-religious groups to unite around a mixture of religious teachings and then brand honest Christian believers as bigots for clinging to salvation in Christ alone.

The undertones to which I am referring were two-fold in that in their ongoing efforts to avoid dissension amongst themselves (re avoid offending those of different faiths), the three leaders on the panel admitted that they were caught by surprise by the school district’s decision.

In an effort to get ahead of the controversy they made observations along the lines that Muslim prayer and in particular the Islamic leanings behind it was not really a question of religious freedom but one based on a political imperative.  Specifically, the Muslim services are part of a much bigger agenda to proselytize Canada and the United States.  This reasoned the panel, is the real threat!

If the “threat” as they called it is political in nature and is real, which I will explain why it may very well be the case in a few moments, then the leaders’ apathetic acquiescence to a syncretism doctrine is what has opened the door to said threat.

Like banning Christmas trees or sending students home for wearing t-shirts proclaiming their faith in the name of a false tolerance for other religions, we have diluted our own values.  In the process, we have become vulnerable to those who do not have to deal with such division or duplicity of belief.

Now the question of course is how, in an age when school prayer is frowned upon, did those who are of a Muslim faith gain approval to hold worship services on school property during the lunch hour?

Again the esteemed panel reasoned that there is a political element to this story that circumvented the long-standing, carefully structured “understanding” between them.  Overlooking the fact that their inter-faith dealings are about as useful as the crew of the Titantic arguing who is at fault for hitting the iceberg while the ship sinks into oblivion, they point to the power of Islamic money as the driving force behind the district’s decision to allow school prayer.  In this light they may be on to something.

In my series Islamic Fundamentalism: The Pending Storm, I delve deeply into the increasing global influence of the Islamic Financial Platform in which both New York and London are battling to become the the global financial center for tapping into the wealth of Muslim investors.

An objective that should be noted, is shared by venerable American corporations such as General Electric.

General Electric, who openly acknowledged that they “want to become a regular sukuk issuer over time,” having already issued a $500 million bond as part of an overall $8 billion strategy, expressed their hope that “other Western players would follow their lead and issue sukuks.”

In short, and if you follow the money, you have to ask yourself this question . . . can our politicians be influenced by the financial industry?  If the answer is yes, then Muslim prayer in school could be a logical consequence . . . and perhaps just the beginning.

The reasoning for this is quite simple.  The financial markets and for the most part politicians are agnostic in terms of their achieving their objectives.

With the former greed, pure and simple, is the driving force, while politicians are motivated by those that can lead them to the pinnacle of power re get them elected.  If you agree with this simple premise, then it is not a stretch to realize that those who possess the power to influence are likely going to be the one’s who are heard and accommodated.

If you question the above statement, research Operation Ajax and the fall of the democratically elected Mossadegh government in Iran.  You will discover that a “We the People” democracy takes a back seat to financial interests.

This of course brings us back full circle to the see no evil, speak no evil and hear no evil vanilla panel, whose quest not to offend has diluted our own religious convictions under the facade of universal truth and tolerance.

It is this mindset that has made us vulnerable to the shifting realities of global economic influence.

So what is the answer?

Stop trying to appease one another and hold steadfast to your beliefs and position in society and the world around you.  For Christians who believe that Jesus Christ is the only way to heaven say so proudly and without hesitation – no apologies necessary.  And for goodness sakes put up a Christmas Tree and wish people Merry Christmas.  If some are offended, too bad because tolerance is supposed to be a two-way street.

The same should also go for the other religions, as the primary objective of one’s beliefs should not be one of compromise so as to avoid offence.  This is a lukewarm doctrine that serves no one’s best interests!

Are we teaching our children appeasement under the guise of being tolerant?

As for the schools, give equal access to all students to practice their faith on school grounds.  If a Christian or Jewish group of students want to hold lunch time services then let them.  If fights ensue deal with it!  Don’t run away from it by pretending your tolerant when all you are is just cowardly.


There is definitely a “parent problem” in America!

Dad straps 4 kids to car hood and drives away, police say” reads one headline.

Drunken grandparents use SUV to tow girl in toy car, deputies say” proclaims another.

With a recent segment of the Dr. Phil Show in which he interviewed a 12 year old girl who was invited to a sleep over party only to be beaten up by the 12 year old girls that invited her, which is why they invited her in the first place, I have just one simple and succinct question . . . What the heck is the matter with parents in America?!?

While political leaders fight over nonsensical dribble, and school districts suspend students for wishing someone a Merry Christmas during the Holiday Season, it appears that America is rotting from the inside out.

Along with the student loan crisis (which has lowered the standard of education by granting access to anyone despite an absence of aptitude), it appears that the entitlement mindset in which being a parent is viewed as a right as opposed to being a privilege has permeated yet another former stronghold of American society.

The above statement may anger some.  Fair enough.  But tell me that this isn’t a reasonable assessment given headlines such as the ones cited at the beginning of this post that scream BAD PARENTING!

I mean come on, do you honestly think that Grandma and Grandpa were kindly old folks who after baking cookies and whittling with their grandchildren suddenly woke up and said “hey, today seems like a good day to tow our granddaughter behind the SUV on the Interstate!”  Give me a break!  Never mind the let’s use the kids as hood ornaments parents.

I still stand by the observation made by Keanu Reeve’s character in the movie Parenthood when he said, “You know, Mrs. Buckman, you need a license to buy a dog, to drive a car – hell, you even need a license to catch a fish. But they’ll let any butt-reaming A**H%#$ be a father.”

Would you want these two as your parents?

Maybe it’s time that we make it mandatory for people to take a course and pass a written exam before being granted a license to become parents.  In fact I feel so strongly about this that I would even support a student loan program!


Is the Canadian School System Anti-Christian?

The question is in and of itself controversial and without a doubt polarizing, but is is one that demands an answer.

Last year I interviewed representatives from The Jewish Defence League of Canada, the Canadian Hindu Advocacy and the Christian Heritage Party regarding the Valley Park Middle School’s decision to allow 300 Muslim students to worship in the school’s cafeteria during school hours.

It was to some listeners an incendiary discussion, especially given the assertion by the panel that Muslim prayer is more an act of political sedition than it is a question of freedom of religion.  By the way, here is the link to that interview; Is Valley Park Middle School Canada’s Ground Zero Mosque?

Within the context of the Valley Park controversy, one has to wonder what is happening in our school systems when a single student can be suspended after “defying instructions to stop wearing a religious-themed T-shirt.”

The offending T-shirt in question states simply that “Life is wasted without Jesus.”

Putting aside for the moment the generally questionable attire of most students these days – and no I am not yet at the stage or age where I want to move to Florida, wear my pants high on my belly and complain about taxes, it seems more than a little unfair and unbelievable that this one student’s attire should be singled out for expressing his personal beliefs.  After all, isn’t free speech a concept upon which all democratic nations have been built?

Yet here we are once again, bending over backwards in one part of the country to demonstrate this very principle, while in another part imposing what I can only describe as being an act of prejudicial censorship.

Toward what end is this country headed when our values have been compromised, and our beliefs muted for no other reason than to avoid the purported offense on the part of either a sole or small group of detractors?

What’s next, telling Toronto Maple Leaf fans that they can’t wear their team’s jerseys in the Montreal Canadiens home rink because it might offend the Les Habitat fans?

Come on Canada, wake up!

If we continue to remain silent while the values that are held by the majority of Canadians are routinely banned we are going to one day wake up in a country that we will no longer recognize!

What are your thoughts?


Does the pharmaceutical industry influence doctor diagnosis of mental illness? (Part 1 of 2)

As I have come to read more and more about you and of course spend some time on your blog I find that you have an edge that enables you to provide a different take on mental illness Natalie.

One thing that stands out and on which I would like to get your feedback centers on the reference to 1 in 4 people living with mental illness.

Specifically I have been covering the pharmaceutical industry extensively over the past few years in both articles and on my radio show.

One post that stands out referenced the fact that in 2006 close to $7 billion (which represented the single largest expenditure through Medicaid that year) in anti-psychotic drugs was prescribed to patients – many of whom were children between the ages of 3 and 17 years old.

Here is the question . . . it is clear that between the above statistics and the significant amount of off-label marketing done by pharmaceutical companies that it is in their interest for people to be diagnosed with an illness.

Does this mean that the 1 in 4 finding is potentially skewed to reflect pharmaceutical industry interest as opposed to reflecting an actual situation.

After all, doctors and their prescribing practice is likely influenced by big pharma.

What do you think?

By the way, here is the link to the above referenced article titled “Antipsychotic Prescriptions . . . for Children: Is the Medicaid Story Today’s Version of Go Ask Alice? (UPDATE for 2011)

The following is a question that I posted to Natalie Jeanne Champagne’s blog Healthy Place: Recovering From Mental Illness in which she states “If one in four people, at some point in their lives, live with mental illness we are in large company. Albeit probably not happy company, but company nonetheless.”

What prompted my query was a comment made by Andy Behrman during a recent interview when he suggested that the pharmaceutical industry’s focus is on driving sales as opposed to treating people with an illness. For those who may not be familiar with Behrman, he is the author of the book Electroboy; A Memoir of Mania that is slated to become a major motion picture in 2013.

A few days after the show, I came across an article that indicated that a study was championing Seroquel – a powerful anti-psychotic drug used to treat Bipolar Disorder, as a cure for the fear of public speaking and social phobia.

The study, which was the result of a collaborative effort between the University of Minnesota and AstraZeneca (who is the drug’s creator), clearly sets off a number of alarms. Similar to the sentiment expressed by the Ruth Stafford Peale axiom of finding a need and filling it, the company appears to be creating a need or illness and filling it . . . with a prescription of Seroquel.

There are a number of serious questions this raises besides the obvious ones regarding a cash grab.

For example, what impact do this broadening of the drug’s use have on doctor diagnosis of mental illness? Even more interesting is how does this affect treatment and recovery of people who actually suffer from a mental illness within the framework or context of traditional diagnosis?

Think about this last point for a moment . . . if mental illness becomes normalized in terms of encompassing more of the populace, then are we not redefining the boundaries for what is in fact good mental health – and the responsibilities this implies?

As a result, does the at times defiant outcry from those suffering from (or claiming to) suffer from a mental illness, that they are not alone because many people are part of the struggle, provide a platform of justification that hinders as opposes to helping the treatment process. After all, some may reason that if half the people I know are on Seroquel or for that matter any other anti-psychotic drug, maybe I am not really as ill as I think I am.

The danger of course is that those who truly do deal with a mental illness are often times in denial and less likely to stay on a prescribed medication, while those who use the drugs as an escape are likely to become regular paying customers.

In Part 2 of this series I will examine these as well as the other possible implications of an industry whose apparent main objective is not to cure but to perpetually treat.


Firing of Unwed Texas Teacher Polarizes American Sensibilities While Raising the Question of the State Interfering in Church Affairs

@ Fred Hollister . . . Wow Mr. Hollister, you raise a good point on so many different levels.  To start, by preventing a young woman from graduating high school because she became pregnant creates a perpetuating cycle of unemployment, poverty and ultimately loss of hope for a good life.

Now, on the other side of the coin, and I think that we can all agree at least in point that babies having babies is a very bad idea, the question as to why these young women became pregnant speaks to a much larger problem.

Think about it for a moment . . . there are the all too frequent cases of both a young mother and a young father shaking their babies to death for interrupting them with their crying while the young parents were playing an online game.

Then there was the message sent out by Brittany Spears’ younger sister who bore a child as a teenager . . . I do not believe that this was well received by the public in general because of fear that it set the wrong example.

Within this context, it certainly adds another interesting layer to the unwed teacher becoming pregnant doesn’t it . . .

The above is just one of my responses to the many, many comments I have received so far regarding my April 12th 49th Parallel Forum post about the firing of a teacher from a Christian school for becoming pregnant out of wedlock.

While there are certainly those who support the school’s decision to terminate the teacher based on a moral imperative that is tantamount to a good conduct clause in an employment contract, the vast majority feel that the school acted both hastily and harshly referring to it as a hypocritical action that fails to reflect the Christian value of forgiveness.

The comment by Mr. Hollister that led to the response highlighted in today’s opening paragraph added another dimension in that it spoke to the fact that in situations such as these it is usually the woman as opposed to the man who gets punished.  Specifically, and citing instances where teenaged girls were not allowed to graduate as a result of an unplanned pregnancy this individual, perhaps inadvertently, raises a much bigger issue.  And one that may in fact be far more supportive of the school’s decision than even he anticipated or would like to consider.

Of course the point that the woman often bears the lion’s share of the heartache under these circumstances as opposed to the man is a discussion in and of itself, and one for another day.  By the way, I truly believe in the axiom that it takes two to tango, and as such both the man and woman need to shoulder the responsibility for a pregnancy.

However, I cannot help but believe that the erosion of values to the point where the State encroaches on the Church’s core values should at least be considered when weighing the response to the firing of the teacher.  After all, I would not be surprised if these very same people, who are chastising the school, are the very same ones that also protest the interference of the church in State affairs.

What are your thoughts?


Justice is supposed to be blind . . . but it now appears that in America it is also incompetent and dishonest . . .

better that ten guilty persons escape than that one innocent suffer

English jurist William Blackstone in his Commentaries on the Laws of England, published in the 1760s

There is a pureness in the law’s desire to be just, to ensure that every person in America receives due process and is judged by his or her peers based on the facts of the case as they are presented.

No where was this honorable intent best expressed but, by a flawed perhaps even beaten Frank Galvin played by Paul Newman in the movie The Verdict.

Perhaps it is just a movie but . . .

Now I know you will say that this was just a movie, but take a moment to absorb Galvin’s final address to the jury as he fights through the legal technicalities that have snatched truth and justice from his client;

Galvin: Well…You know, so much of the time we’re just lost. We say, “Please, God, tell us what is right. Tell us what is true.”

I mean there is no justice. The rich win; the poor are powerless. We become tired of hearing people lie. And after a time we become dead, a little dead. We think of ourselves as victims — and we become victims. We become weak; we doubt ourselves; we doubt our beliefs; we doubt our institutions; and we doubt the law.

But today you are the law. You are the law, not some book, not the lawyers, not a marble statue, or the trappings of the court. See, those are just symbols of our desire to be just. They are, in fact, a prayer, I mean a fervent and a frightened prayer.

In my religion, they say, “Act as if you had faith; faith will be given to you.”

If we are to have faith in justice we need only to believe in ourselves and act with justice. See, I believe there is justice in our hearts.

Unfortunately, and according to an article in today’s Washington Post (Convicted defendants left uninformed of forensic flaws found by Justice Dept.), no such belief resides in the heart of the American judicial system.  Specifically, and I am quoting here, “Justice Department officials have known for years that flawed forensic work might have led to the convictions of potentially innocent people”

The flaw to which the article refers centers on what was called the “sloppy work by examiners at the FBI lab,” resulting in “unreliable forensic evidence in court trials.”

All right, so Houston we have a problem and its name is incompetence.  A big problem to be certain but one, especially if you are an ardent believer in the principles and spirit of the Blackstone ratio as it is known, in which you would want to do everything in your power to make it right.  At least one would not only think but indeed expect this from the American Justice Department. . . . long pause here waiting for an answer that sadly never comes.

You see rather than acknowledging this sloppy work, the Red, White and Blue justice machine buried it, leading to potentially thousands of trials at the federal, state and local levels being tainted by – let’s call it as it is here, false evidence.  Aren’t you glad that the death penalty exists in some 34 of the 50 states?

So while both Democrats and Republicans sling nonsensical dribble back and forth dealing with such earth shattering issues such as what books the President reads or how Republicans are anti-women, fellow American citizens are being wrongfully convicted.  Bravo!

Now my words may offend many, but wake-up America!  Even the greatest of empires will fall when cynicism and the lack of faith in the judicial system is shaken.  Similar to how close the country came to the collapse of its economy when not that long ago, our collective confidence in the bankers and Wall Street was seriously rattled, this disclosure while limited in terms of the breadth of its actual impact – the Post article talks about the wrongful conviction of hundreds of defendants, its effect is insidiously greater because it attacks the very character of what I still believe to be the greatest nation on earth.

Or to put it another way, money is just paper.  It is the people or institutions behind it that give it its value.  Justice and the law are no different in this regard.  While it comes as no surprise to anyone that our faith in those who pull the financial strings of the country is low, I am not certain that a similar decline in confidence or the belief in the American justice system is one that the country can survive.

I am of course not talking about the good ol’ USA disappearing from the face the earth . . . at least not in the foreseeable future.  What I am talking about is a slow and imperceptible decline in our hope and belief that we live in a just and decent country.  I will leave it to you to decide how serious such a decline would be.  However for me, and similar to when a cheating spouse is found out, while they can be forgiven – maybe, things are never the same.  And this my friends is almost always the beginning of the end.

Or to coin a phrase from the song, “it’s the end of the world as we know it.”

By the way, the following is the video excerpt from the Galvin summation . . .