BREAKING NEWS: Department of Justice and Federal Bureau of Investigations (DOJ and FBI) are investigating Herbalife

According to an Federal official, and reported by multiple sources such as Financial Times and Los Angeles Times, FBI and DOJ had opened a criminal investigation into Herbalife several MONTHS ago, before FTC announced their own investigation.

With SEC and FTC also investigating the company, this may be bad news for Herbalife.

See LA Times Link: http://www.latimes.com/business/la-fi-herbalife-fbi-20140412,0,5064592.story

Who Really Decides What Is Safe In your Food (and Nutritional Supplements)?

English: Logo of the . (Photo credit: Wikipedia)

Obvious fact:  nutritional supplements are considered "food" by the Food and Drug Administration (FDA).

Not so obvious fact: what ends up in the nutritional supplements are often UNregulated
by the FDA, because companies can simply declare some ingredient to be "generally regarded as safe" (GRAS) based on some internal studies, and include them without telling the FDA.

Some ingredients are submitted to FDA with full studies and gains full FDA approval, but most ingredients are not approved by the FDA, and are merely declared to be GRAS by internal studies. A third way, where the GRAS study was submitted to FDA for approval, are often withdrawn, and the ingredient used any way.

GRAS was meant to be used for common ingredients like vegetable oil, vinegar, and so on. But the law, enjoying its 56th birthday recently, is now an anachronism and a loophole for companies to punch through ingredients without formal review by the FDA.

National Resource Defense Council has published a paper where it tracked 56 companies involved in 250+ chemicals declared as GRAS, as reported by Consumerist. Some of which are... troubling. And you need to be aware if you are drinking or taking any weight-loss or energy formulas.

Scam Psychology: Don't be a GIMP (Good Inexperienced Money People)

Carl Sagan, famous scientist, who said
"extraordinary claims require extraordinary proof"
 (Photo credit: Wikipedia)

There are many types of people looking for additional income, and vast majority of them are GIMPs i.e. "good inexperienced money people" (my thanks to M_Norway on BehindMLM for introducing the term). There really is no formal definition for a GIMP, but its closest synonym is "money sheeple", i.e. people who are just not savvy with money and scams, and thus, invested in scams and shady businesses with their hard earned money.

GIMPs are typically people who know little about network marketing, internet, and scamworld in general. They don't understand that anybody can make a website in hours, and meeting rooms can be booked and sleek presentations can be done for minimal costs nowadays. Even income claims can be faked or exaggerated. Claims are worthless without a basis for comparison, and to quote the great scientist Carl Sagan, "extraordinary claims require extraordinary proof", most of which is not forthcoming.

Part of the problem stems from our daily use of money, which leads us (through self-serving bias / optimism bias) to believe that we are far more savvy with decisions about money than we really are.

BREAKING NEWS: Dietary Supplement caused nearly 100 hepatitis cases

An outbreak of nearly 100 cases of hepatitis in Hawaii was pinpointed to be caused by one dietary supplement.  

But that's not the scary part. This is: 

Because the FDA regulates supplements only after they come to market, companies are not required to prove that their products are safe and effective before marketing them.

"This really points to the fact that there's no safety testing … before a new ingredient shows up in a supplement in the United States," Cohen said. "Guess who's the experimental animal — the consumer."

livescience.com

So if you are taking one such dietary supplement, one that's brand new and never tested...

You may want to reevaluate that risk.

Esp. when it is based on junk science or even worse bogosities.

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• The FDA Says a Dallas-Made Bodybuilding Supplement May Be Causing Hepatitis
• MLM Absurdities: The "Big Placebo" industry that markets nutritional supplement woo
• More Hilarious Woo Endorsements: Having a Chiropractor as your "Chief Science Officer"

BREAKING NEWS: SEC is apparently well aware of TelexFree, according to court filings

When SEC subpoenaed "Stephen Huntsman", a potential conspirator in the WCM ponzi scheme which SEC recently obtained a total bank freeze on, SEC lawyers asked Huntsman what is his relation to TelexFree (if any), and he replied he had none, though he did admit to be employed by Phil Ming Xu of WCM ponzi and related entities.

This means SEC is well aware of TelexFree as a potential scam. Expect action on the Federal level soon.

Thanks to PatrickPretty for spotting this
http://patrickpretty.com/2014/04/04/telexfrees-name-appears-in-federal-court-filings-in-the-secs-pyramid-and-ponzi-case-against-wcm777/

Scam Psychology: Charlie Munger on How You Screw Up: Part 3 of 6

Charlie Munger (Photo credit: Wikipedia)

You may have heard of Charlie Munger. But if you haven't, you should have heard of his partner: Warren Buffet, one of the 5 richest man in the world.  In 1995, Charlie Munger gave a speech at Harvard... about how people misjudge things. Here's my personal interpretation of his lessons, as applied to network marketing. You can read the full speech.  Please also check out the previous sections 1-4, and 5-8

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In the speech given at Harvard in 1995, Charlie Munger identified what he called "24 standard causes of human misjudgment." What he really meant is "24 reasons why you screw up".  Here is 9 through 12

9) Failure to Recognize Contrast Bias

Contrast bias is simple to explain... If I give you one item and ask you to rate it, you will give your honest opinion. However, if I have you rate that item, plus an HORRIBLE item, that original item will be rated higher, on the average, because there's a contrasting item.

Here's a simple experiment by Professor Cialdini. Two buckets of water, one quite cold, one quite hot (neither will actually harm). Volunteers are asked to put one hand in hot water and one hand in cold water for 5-10 seconds. Then both are removed and placed in the same bucket of water. The hand what was in hot water now feels cold, and the hand what was in cold water now feels warm/hot, but they are feeling the SAME bucket of water. It's the contrast that makes the water feel hot or cold.

And this experience shows up everywhere. It's often recommended in some pickup artistry books that you bring along an ugly friend or two to make yourself look better. This is the same idea: contrast.

A somewhat anecdotal and apocryphal real estate sales technique if you want to get rid of a not-so-good property is you show the prospects two really awful properties, have them go tsk-tsk and shake their head, then you take them to this "better" property, and they'll probably bite.

On the flip side, without a contrast or a measure against a neutral background (control group), you may not be aware of creeping changes. This can be termed "anti-contrast bias".

Then there's the "boiled frog" urban legend, where the claim is if you put a frog in a pot of water, but you cook it VERY VERY slowly, the frog will never jump out. It's not true, but it's an interesting legend and illustrates this point. You can "creep" in changes and if the movement is small enough it may escape notice.

So beware of this being used on you... Either a special contrast example is used to make a position to look better or worse than it really is... this coercing a bias, or someone tried to "creep" in some changes and rely on your momentum bias to say nothing.

BREAKING NEWS: TelexFree Sheeple Turned Lion, "occupied" TelexFree until police showed up

According to various Youtube videos, all published today, a bunch of Telexfree sheeple apparently grew spines and decided to occupy Telexfree office, much like they did a few weeks ago, when Steve Labriola basically told them to leave, and back then they did. This time they won't take no for an answer, and Labriola apparently was not able to control the crowd. Police was called and there was no violence, but basically all TelexFree folks hid in the backoffice and left police, outside, who told people to get organized, and hire a lawyer, and complain to attorney general and state senators and reps and congresspeople.

Thanks for BehindMLM for the coverage, where you can also see the videos.

This is how sheeple no longer be sheeple, folks... by asking real questions and demand real answers, instead of PR fluff.

Related articles

• Bad Propaganda: How TelexFree just made a liar out of itself... and all if its affiliates
• Scam Absurdities: What Sann Rodrigues of TelexFree do NOT want you to know about his past
• BREAKING NEWS: TelexFree cancels recruitment seminar on Jersey
• TelexFree just gotten even more bizarre... to the observers