Hello DK,

This is already happening in our country. There are people who can live with it and there are people who cannot.

Sovereign Wealth Funds?

In Europe opinions are divided about this. In the East they seem to have understood it.

Well, to me it seems all in the Scheme Of Things: the irresistible shift of (economic) power to the east.

Hopefully the east is able to balance things globally :).

http://en.wikipedia.org/wiki/Sovereign_wealth_fund

Well, one creates at the speed of light these days :)

Love and best wishes from

Mieke

Dear Mieke,

How are we to explain that on Dec. 11th you write the story about the villagers and Acorns related to how the Stock Market works and then the next day on Dec 12th the story appears "Scientists baffled by mysterious acorn shortage". Click my name to read.

I was fascinated by the synchronicity. So we have disappearing bees and now acorns.

We should note that it is normal that after a heavy yield year, which we had last year, for it to be followed by a light yield but no one has really seen a NULL yield year before. I checked my back yard and sure enough no acorns!

Perhaps the trees are responding to a change. I wonder what that change is? They must have got some environmental signal? They are adapting and going with the flow?

So I studied up on acorns while most everyone else was watching TV escaping reality and getting programmed.

Found two things of note.

After a century during which North American landscapes have not been managed by indigenous peoples, disastrous fires have ravaged crowded, fuel-laden forests. (looks like we have some job potential here).

In years that oaks produced many acorns, Native Americans sometimes collected enough acorns to store for two years as insurance against poor acorn production years. After drying them in the sun to discourage mold and germination, Native American women took acorns back to their villages and cached them in hollow trees or structures on poles, to keep acorns safe from mice and squirrels. These acorns could be used as needed. Storage of acorns permitted Native American women to process acorns when convenient, particularly during winter months when other resources were scarce. Women's caloric contributions to the village increased when they stored acorns for later processing and focused on gathering or processing other resources available in the autumn.

Maybe the mysterious force is at work and it is a sign we should be storing food for the floods of 2010, there is historical precedence and scientific data to support a high probability of unusual flooding in this year.

Which means 2009 is the last year to plant and store Amaranth to avoid societal upheaval from hunger and starvation in 2010 and 2011.

We should also note that the burning and destruction of things actually helps to preserve life.

For example the riots in Greece provide one good thing, work for those that do repair. Since the real problem is more economic it is almost as if a solution was subconsciously generated, the blessing of destruction.

There is a better way then rioting, and that is simply we collectively agree to upgrade the infrastructure for sustainability this creates work and eliminates the need for riots which are just pain signals from the body.

There is some wisdom to be found in all this.

DK, thanks for the information. Notice in the acorn story the Indians "collected enough acorns to store for two years as insurance ".

Another type of insurance.

When you think about it, it opens up a whole new field of opportunity for the insurance industry.

Dear DK,

As I have written in similar before, in the great Socratic Dialog… http://socratic.me which has been updated some.

There is the divine side of insurance; a collaborative effort to chip funds into a pool so that no single individual is financially devastated due to a natural calamity.

Then there is the ego side.
Greed and or profiting from fear or insurance for artificial “unnecessary” potential man made calamity.

Don’t worry it will get much worse lest until one has the world’s full attention and the cooperation and access to resources such that one and ALL may orchestrate the remedies. At some point these changes will become an absolute necessity, the mother of invention and natural dictate.

Mark my words, for insurance we better plant and store Amaranth and take many other preemptive measures to accommodate climatic upheaval in the next couple years.

Everyone understands that the Divine is orchestrating and intervening at a level most will not first comprehend. The only obstacle for our selves is our own ego. It is not an obstacle for spirit, which passes through it like the wind through a chain link fence and so can you.

I have certain advantage points and see it’s orchestration, and all the connections to the unfolding of the divine plan. I bet many of you have as well.

Trust and look for the signs, insights, clues, and synchronicity.

Everything happens perfectly as it relates to our evolution.

Light Speed action is required; one would not want to waste the attention on the trivial it will take care of itself.

Wishing you all the highest good for you, since I don’t claim to know what that is.

This old Seth book found it's way out of a box it was in for almost two decades into my local surroundings. "The Unknown Reality".

One day I was walking by and it captured my attention and prompted me to open it up, it opened to page 114. I only needed to read the first paragraph.

"When, *at this point NOW* (which was underlined), of mankind's development, his emerging unconscious knowledge is denied by his institutions (I know the feeling), then it will rise up in despite those institutions and annihilate them. Cult after cult will emerge, each unrestrained by the use of reason, because reason will have denied the existence of rampant unconscious knowledge, disorganized and felling only it’s own ancient force.
-End of Seth quote

When they Seth speaks of Cult I think of them as bastions of pure egoic fiction, religion fits the bill.

My unconscious knowledge has been a focus of my own study lately, figuring how to tap into it better. I like to think of it as the non-linear dynamic Right Hemispheric processing component.

The Bailout attempts have already been thwarted by greed.

So I have begun on my own designing a backup (redundant) financial system. A fail safe that allows for a high tech temporary barter exchange and resource management. That can work first at a local level and can then be bridged with other regional systems eventually reestablish a global commerce framework.

We can all take comfort in the blessings of destruction and no doubt some where out there amidst all the destruction there will be an Oasis for those with the knowing to take refuge and rest.

So wrote the Prophet.

Should be: disorganized and "feeling" only it’s own ancient force.

I really liked this sentence, fits the theme well,

■rise up in despite those institutions and annihilate them■

Back in 1977 somebody knew what was coming.

Some interesting new scientific data and correlations have made themselves available for understanding in the last couple months.

So I am writing this piece for dissemination called

"THE GREATE DELUGE"

Class is dismissed.

For your homework assignment.

■FOLLOW THE WHITE RABBIT■

☻Click my name☻

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....just fiddling for copyediting practice and to learn the insurance industry concepts given here to clarify them in my mind in an amateur’s simplicity......hope you get a laugh from my mistakes...have really enjoyed so much the extremely interesting ideas in this article and thank you very much, Dr. Matai....
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janie.
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Will the Insurance Industry
Be the Next Victim
of the Global Financial Crisis?
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DK Matai
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December 13, 2008
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Pension insurance, life insurance, general insurance, and reinsurance—the DNA of capitalism—may well become the next victims of the Great Unwind as a result of the unprecedented level of disruption in global financial markets.
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The scale, speed, severity, and synchronization of the global economic slump are turning new chapters in history every single day, and comparisons to 1929 are being rendered inadequate in real time. Generals tend to prepare to fight tomorrow’s war in keeping with the criteria laid down in yesterday’s war. Are governments and central banks mistakenly doing the same with the present Great Unwind global financial crisis by dealing with it as if it were 1929 all over again? Mark Twain made a comment once that contains some sage advice for today’s financial actors: "History doesn't repeat itself— it rhymes!"
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Today’s focus is entirely on cutting interest rates, rescuing banks, and arranging government stimulus. Along the way, we have forgotten to visualize how this crisis is likely to affect global business’s entire protective overlay, including rooftop and roof beams (pension insurance, life insurance, and general insurance) and the vertical columns that support this overlay (reinsurance), all of which together provide a safety zone of sorts within which globalized capitalism can more confidently carry out needed economic operations. Today’s narrow focus on cutting interest rates, rescuing banks, and arranging government stimulus is a child of runaway capitalism, which has created and must deal with the massively interconnected so-called eight economic bubbles that are now bursting or ready to burst (and which we have already highlighted and quantified in a previous Socratic dialogue on ATCA—namely, subprime mortgages; emerging-market loans; commodities; corporate bonds; commercial and residential property; credit card debt; currencies; and credit default swaps within derivatives).
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Pension insurance, life insurance, general insurance, and reinsurance need more attention. They are the DNA of modern capitalism. In order to understand how modern capitalism works and how risk is syndicated, one has to be able to understand the mechanisms of risk transfer that are inherent within insurance and reinsurance. Too often we overlook or take for granted the vital role that the insurance industry plays in our future within a globalized economy, when in fact it is the underlying fabric of commerce, community, and globalization. Clearly discernible already and embodied within the insurance and reinsurance markets (as nascent or even established risk transfer mechanisms) are the many areas of challenge and innovation that humanity will be addressing increasingly in coming years—including climate chaos and the environment; geopolitics and energy; organized crime and extremism; advanced technologies (bio-, info-, nano-, robo-, and artificial intelligence); demographic skews; resource shortages; pandemics; financial systems and the associated systemic risks; transhumanism; and ethics. Lloyd's of London Insurance indeed regularly maps out and covers global risk of different types via its syndicates.
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The different specialized components of the insurance industry stand to fare very differently from each other in the global credit crunch. Pension insurers and life insurers are likely to take a harder hit than will health, property, and casualty insurers because of pension insurers’ and life insurers’ typical asset mix and greater exposure to global equity markets, commercial-property markets, and corporate bonds—asset classes that have suffered heavy falls this year, with the accompanying severe impact on balance sheets, which have in many cases already taken a hidden hit from the way assets in many complex securities are reported (which has resulted in unprecedented collapse in market-to-market valuations, even if balance sheets looked solid a year ago). American International Group, for instance, is seeking to sell large chunks of its U.S. unit—life insurance, business insurance, online car insurance—in order to repay some of the government loans that saved it from bankruptcy.
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Times are not so rosy either for Bermuda- based XL Capital, whose story is different but also similar in many ways. The company’s market capitalization recently declined by nearly 60 percent in just one week on a report that XL was searching for a buyer after a severe markdown in its underlying capital. The company was formed in 1986 by sixty-eight of the world's largest companies, and in the past decade it had expanded through mergers, acquisitions, and launches of new businesses, becoming the largest insurance and reinsurance company in Bermuda, an important offshore center for the industry. The company was undone by a foray into insuring “structured product” (financial instruments designed to meet specific investor needs by incorporating special nonstandard features). In 1999, the firm formed bond insurer XL Capital Assurance (renamed Security Capital Assurance at IPO and then renamed to Syncora Holdings), which sold guarantees on debt such as municipal bonds and on mortgage-backed and more complex securities such as collateralized debt obligations (CDOs). As house prices fell and foreclosures soared, such mortgage-backed securities and collateralized debt obligations began to sour, forcing Security Capital/Syncora's main bond insurance subsidiaries to pay out on some of their guarantees, which rendered them insolvent. The fate of XL Capital now hangs in the balance.
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Furthermore, given American International Group’s and XL’s relationship with other large insurers and reinsurers, some additional systemic risk potentially exists for them in view of rising global economic uncertainty, in the sense that they reinsure their own competitors and are also reinsured by their competitors in the market. Many instances can be cited of similar players’ sharing the same business program with each other in a collective.
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What are the lessons?
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Pension insurance, life insurance, general insurance, and reinsurance players, like other investors, have in the past often taken insufficient care in evaluating the risks of structured credit products (financial instruments designed to meet specific investor needs by incorporating special nonstandard features), in part because of too heavy a reliance upon the evaluations provided by the credit-rating agencies. Going forward, these insurers—who constitute the DNA of capitalism—will be forced to take more responsibility for developing independent views of the risks of investing in complex securities, as banks are already beginning to do.
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Additionally, their management teams must invest in and purvey only those products that they truly understand and have core expertise in. Meanwhile, Solvency II (the EU initiative that revises insurance solvency rules) will also have a great effect on the European insurance sector. The Great Unwind, coupled with Solvency II, is likely to accelerate further consolidation in the insurance industry. The remaining players may need to consider reducing scale, reducing risk, raising capital, employing more risk mitigation, merging with other insurers, selling the business, or closing to new business—that is, going into run-off.
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All of this ferment will radically alter the way in which businesses and individuals operate and make decisions. The transformation and mutation of the DNA of capitalism (insurers and reinsurers) have begun and will be accelerated by developments such as those at American International Group and XL Capital and by other unpredictable unknowns that may manifest at insurance entities worldwide.
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What will emerge? It is too early to say, but the world of insurance may have taken a new path that will see it changed into something almost unrecognizably different in the coming years. Given increasing global conditions of debt default, demand destruction, deflation, and depression, buyers may become much more wary of buying insurance from nontransparent players. Many insurers may not be able to insure as they become severely undercapitalized, with inadequate ratios in the area of reserves and solvency. After the painful bloodletting and subsequent clean-out, a more robust, more resilient, and more reliable insurance industry is likely to emerge. In the past, new capital has always rushed in to form new entities and to revive many old ones, perhaps this time in the form of sovereign-wealth (state-owned) investment funds?
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