So much for that "smart diplomacy"

After being bitch-slapped by Hong Kong and Russia, Obama gets bitch-slapped by Ecuador:

"Ecuador will not accept pressures or threats from anyone, and it does not traffic in its values or allow them to be subjugated to mercantile interests," government spokesman Fernando Alvarado said at a news conference.

In a cheeky jab at the U.S. spying program that Snowden unveiled through leaks to the media, the South American nation offered $23 million per year to finance human rights training.

The funding would be destined to help "avoid violations of privacy, torture and other actions that are denigrating to humanity," Alvarado said. He said the amount was the equivalent of what Ecuador gained each year from the trade benefits.

Didn't America get some respect in the world back in the old days?

Trader Joe’s ~ You’re So Close to Nirvana

Belo Horizonte ~ I found a gas station that sells unbelievable premium beer here in Belo Horizonte. In a country where light lager rules, the micros, Belgians and and local micro brew movement is taking a stand. It just happens to be at a Petrobras gas station, and I don’t mind.

The gas station even sells the finest Anderson Valley, Sam Adams and Rogue offerings as well as one of my favorite breweries in the world, Brew Dog out of Scotland whose mission is to replicate California’s IPA movement in the UK. Fantastic beer.

But the purpose of this post is to point out how Trader Joe’s teases to appease. Those that shop there in California will recognize this light lager offering from the Netherlands called Oranjeboom:

It’s a very satisfactory light lager if that’s what you are in the mood for. But I also found this ambrosia here in Brazil that TJ's fails to offer:


That 14 means what it advertises. This is a 14% “light” lager that is reeelllyyy graaatteee. I’ve had 3 so farrr and these stufffff are ggggrraaaaaattttt. Cave...saw...today...... theyyyy weeeeerrrr beaaauuuutttt…..beaaattii…….cool. Neeway, try (SCORE LIONS!) Oranjebooms 14, it’ssssss the wetlhdgfjhafljghkfalghklaru,…………………………………………… ………………………………………………………………..zzzzzzzzzzzzzz zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

Supreme Court doesn't give gays the courtesy of a reacharound

Celebrating the Prop 8 ruling? Not so fast. The Supremes didn't rule on Prop 8 at all, just that Prop 8 supporters didn't have legal standing to challenge the lower court's ruling against 8. And since Governor Jerry Brown and Attorney General Kamala Harris don't like Prop 8 and refused to defend it, there's no one to take the case to court.

In fact, the ruling undermines the California initiative process by allowing the Governor and Attorney General to refuse to defend anything they don't like. How about Prop 13? Legal professors are already saying this opens a door to kill it. Somebody sues against Prop 13 in federal court, Brown and Harris refuse to defend it, et voilà, game over!

Gay marriage advocates deserved their day in court. They probably would have gotten Prop 8 ruled unconstitutional. They didn't get it. This was a trick by Brown and Harris that backfired, and a punt by the Supremes.

Brazilians LOVE soccer

Sign post in the Horto neighborhood of Belo Horizonte.

Riot: Brazil scored 2, Uruguay scored 1, Protesters scored 0. When Brazil wins an international soccer match ain't nothing going to stop the party or make people care about political issues afterwards. Thank goodness they won though. Had they lost things might have gotten nuts.

UPDATE: the destruction and violence I didn't witness was extraordinary yesterday here in Belo Horizonte. It's surreal how I can mingle in a section of the city that is in pure euphoria because of a soccer win while a nearby section of the city is in complete turmoil and violence.

I had a cab ride today with a cabbie that went off on how absurd this soccer tournament (Confederations Cup) is and how it's so negatively impacting the average Brazilian. Fifa is a mafia and I am pleased with the population that is rising up to illustrate this even if I somehow end up sections of town where all that matters is the game. That's a peculiar conundrum.

John Bogle: Social Security is the new fixed income

With last week's epic bond slaughter, and the brutal 14% face-ripping that Apple bond buyers just got in two months, it's worth listening to the advice of sages on bond investing.

Here's Vanguard legend John Bogle: Are retirees holding too many bonds?

“Social Security's the greatest fixed income you'll ever get,” Mr. Bogle said.

With that in mind, it would behoove retirees to pay more attention to dividend-paying stocks in a retirement account.

“Dividends go up virtually every year with two exceptions: the Great Depression and 2008. I don't think that's likely to happen again,” Mr. Bogle said. 

Traditional asset allocators have rules of thumb like that your equity exposure should be 100% minus your age, e.g. a 30-year-old should be 70% equity and a 70-year-old should be 30% equity. I think that's bunk, and it seems Bogle agrees. Perhaps such a model could be defended when real interest rates are significantly positive, but with nominal rates still near all-time lows, I wouldn't touch fixed income with a 10-foot pole.

Bogle has a great point: use your Social Security income for the fixed-income portion of your portfolio, and allocate the rest to stocks (and precious metals, obviously). Unless, of course, you've saved enough that you'll be means-tested out of Social Security, in which case you'll be well-off enough to weather the volatility and you'll still want the real return and inflation protection of stocks over the puny nominal yields of bonds.

A Socialist's Response to Protest

Belo Horizonte ~ Former Brazilian bank robber, and current socialist Brazilian President, Dilma Rousseff has, in response to the protests SWEEPING the nation of Brazil, called for numerous changes that actually violate the constitution of Brazil. This seems so familiar to this American. But the difference from the response in the United States is the opposition parties (yeah plural, crazy that) have expressed extreme outrage bordering on traitorous declarations. This is very refreshing after witnessing the Republican party not really express anything other than the sound of their swallowing while on their knees. Dilma backed down from her requests. It's nice to see a real opposition party instead of the Democratic Republican representatives we have in Boehner, Graham and McCain. Although from what I've understood from the current administration, no one avoids using teeth better than they.

HSBC BRAZIL ATM TRAVEL ADVISORY

Belo Horizonte ~ If you have an HSBC USA account that you regularly use in Brazil, be advised that last month HSBC Brazil lowered the daily limit one could withdraw from an account from 1000 reals ($500) to 200 reals ($100). HSBC USA still has a daily limit of $500 but HSBC Brazil explained to me today that FOR MY PROTECTION the limit was reduced to 200 reals and it was not possible to get more than that. In further banking comedy HSBC defines a day as a business day which on the weekend is from Friday at 8AM until Monday at 4PM. One is only allowed to withdraw a total of 200 reals during that period. An entire weekend for 4 people on $100. Grab the Let's Go Brazil book!

This makes it impossible to use HSBC to get cash to pay for my needs. A hotel costs more than 200 reals a night, the cab to the airport is 90 reals, a typical dinner for 4 is 150 reals and the bus costs 3 reals here in Belo Horizonte. Further in Brazil the credit card fee is generally paid by the customer instead of the vendor like in the USA. So if you use your Mastercard here, the cost of the purchase is 3 to 5% higher depending on the vendor's mood.

What HSBC is stating to their depositing masses is that they are not needed for them to make money. This makes sense because when your The World's Neighborhood Drug Money Laundering (NOT EVEN ALLEGED!) Bank, then why do you need silly depositors. All you need is legal immunity in the USA to launder Mexican drug cartel's money and you've got a new business model. Cut services and attrition will take care of your ridiculous depositor overhead.

HSBC used to be a fantastic bank to use in Brazil because all the services they provided but those have all slowly been cut and since I don't deal in the drug trade I guess I'm not the type of customer they need to keep.