Monthly Archives: February 2015

February 9, 2015 · 11:25

Questions that follow

Is it not an interesting day, for some Mondayitis is only just now setting in, for some the Mondayitis issue is just a ‘fab’ for others to avoid becoming active until Wednesday around after lunch time, and for another group, well, we never know what they are up to, so let’s ignore them for now. There is however a group that works 24:7 (please do not imply that those people are journo’s).

I am talking about the financial institutions, no matter how we oppose greed, it is the one motivator that will never stop being efficient in many walks of life. That consideration came to me as I read the article ‘HSBC’s response: ‘Standards of due diligence were significantly lower than today’‘ (at http://www.theguardian.com/business/2015/feb/08/hsbc-responds-revelations-misconduct-swiss-bank) this morning.

The article is to some extent a barrel full of laughs. Let’s have a look at some of the mentioned things. The fun already starts at the second sentence “Private banks, including HSBC’s Swiss private bank, assumed that responsibility for payment of taxes rested with individual clients“, you see the word ‘assumed’, in this case that translate to, the bank sets the responsibility so that it makes an ‘ass’ of ‘you’, banks do not work from the ‘me’ setting (ass-u-me). When was the last time when you received a letter from a bank (any bank for that matter) where the word assumption was used? Most banking contracts have two one-sided parts, what your responsibilities are and how you get charged the moment you make an error (like simply withdrawing a little too much). So are you giggling yet?

The next one is an interesting one for more than one reason “HSBC’s Swiss private bank has reduced its client base by almost 70% since 2007“. Yes it is interesting, because WHERE did those people go to? The fact that they moved away from HSBC is no indication that there was a sudden massive influx of taxpayers, was there? So was the exodus reported on? My bet is that this was not; the statement is likely to be ‘this account is no longer under our care‘. This hunt for tax evasion, sounds nice, but it also comes with a flaw, not that I oppose such hunts (I will forever be roughly $1,915,000 short from making that list), but did some of these ‘witch hunters’ realise that moving these funds would have a side effect? You see, it would all be good and fine if those accounts all resorted to their original nation getting properly taxed, but that is not the case is it? As these Status Quo places get upset the dynamics change, when the accounts can no longer be hidden on Bermuda, the Cayman Islands, Switzerland or Guernsey. How long until we see a new circle of banks, now in Bahrain, Dubai and Jeddah? Do not think this will not happen, because it already is happening (at http://www.thenational.ae/business/banking/dubai-islamic-bank-confident-on-loans-portfolio-thanks-to-record-profit), so as we are reading on how a bank voluntarily moved from 78 billion to 45 billion, I have to wonder on the impact of the sentence at the very end: “However, providing client data to foreign authorities would itself constitute a criminal offence under Swiss law“. This than gives rise to the question how these changes are enforced. More important, the sentence implies that providing client data to local authorities is an option, and what they do with it, is not covered here, but it is an interesting question to consider.

The second article, which also came from the Guardian discusses more HSBC issues in ‘HSBC files show how Swiss bank helped clients dodge taxes and hide millions‘ (at http://www.theguardian.com/business/2015/feb/08/hsbc-files-expose-swiss-bank-clients-dodge-taxes-hide-millions), so is this High School of Business Concealers a real bank? Well, that is a moral question not a scientific one. This is where we see more ways to get a case of the giggles. “The Swiss arm, the statement said, had not been fully integrated into HSBC after its purchase in 1999, allowing “significantly lower” standards of compliance and due diligence to persist“, so if we consider the leak by Hervé Falciani, which happened in 2007, considering the fact that the Swiss bank had been acquired in 1999, the simple question ‘Were banking executives allowed to sit on their hands for 8+ years?‘, the question might seem unfair, but no alignment in a bank that was until doing 78 billion seems very odd to me. It almost sounds like a trial in equity. “Yes, sir, I have washed my hands of everything and I have made very certain that I am not being kept in the loop for anything“, might make for interesting academic considerations, but so is the story of the Mayfair prostitute with her Hymen intact (the moral is that neither is realistic).

When you read on you will see the sentence “We have opened a company account for him based in Dubai“, so is the interest of HSBC moving towards additional banks? That question is not asked and should some consider asking Lord Green (who was group Chairman of HSBC in those days), they are unlikely to get any answer.

It is so interesting to see the HSBC onslaught all over the Guardian, but this is not just about that event. It is also nice to see how last weekend, Yahoo reported on how the Swiss Franc is boosting business in German brothels, so in the end at least one party is getting screwed (the question is who of course). Weirdly enough, the Telegraph has a passable view written by Peter Spence (yes, I am surprised too). The end has the quote that mattered in my view “What has happened in Switzerland might be a sideshow compared with larger global players, but is illustrative of a world in which central banks are increasingly looked to for answers“, I am not sure whether this is entirely correct. There is a difference between incorrect and wrong, and this one skates on two sides, you see, the mess, which I discussed in ‘A seesaw for three‘ (at https://lawlordtobe.com/2015/01/18/a-seesaw-for-three/) is still at the heart of this, there is a credit swap in play with many governments in play, it is a global dance act which includes the US, Japan and the bulk of the EEC nations, as tax havens are now under scrutiny, the people using them are looking for options, some will make a deal, but the larger part will be looking for an alternative, I reckon that the Swiss have been very aware with the move of those HSBC accounts and the question is not just where those 70% moved to, but who else will be moving sooner rather than later. When you consider that, we see the picture as it reshapes the issue. The Swiss are holding on for dear life and at some point the Franc will lose some of its value, but as this happens, we will also see a currency destabilisation. That part is seen (in my personal view) as Switzerland is no longer playing the ‘offset’ game for other loans, which means that the game will transfer to other shores, but which shores will they move to? That part is not a given, but when we see how new players are now willing to become a member of the banking secrets. The United Arab Emirates and Saudi Arabia would only need to adopt two rules in their banking laws (if they have not done so already).

  1. Providing client data to foreign authorities constitutes a criminal offence.
  2. Personal wealth can be declared via the bank, who will charge a fee of n% (where it is likely that n < 5).

After that, both the Oval office and Buckingham palace can kiss any chance of those taxable billions goodbye, which could spell a massive exodus from Bermuda, Cayman Islands, Guernsey and Jersey towards sandier shores, which will hurt the Commonwealth beyond expectations. All this started from the wrong viewpoint from the very beginning, the US became reckless on how it dealt with its 18 trillion in debt by going after non-taxed fortunes from American account holders, this drive (supported by many) started a new fire and now that the flames are getting higher, those avoiding taxation are moving to shores where not only is taxation an almost impossibility, it will also limit the other acts done by both the US and the EEC to keep their currencies high, which is an act that will backfire to some extent for a longer period of time.

Personally, I am all for holding the wealthy tax accountable; we all have to pay our taxation. Yet, at present, in this economy, we are now chasing those cars, whilst we have no parking lot, so even if one is caught, what to do with this person? The US, Greece, the UK and a few others should have seriously changed certain laws half a decade ago; this mess would not have been so complete. The fact that this hunt is so visible at present gives also pause for that what we do not see. Yes, we see that the US added 257,000 jobs in January, but how many are not shown as we also see that RadioShack is filing for bankruptcy this week with over 4,000 shops expected to close (2,000 went to sprint). A host of Shale gas companies will go the same way, whilst the mountain of companies going under in the oil and gas sector is a lot larger than many can fathom. These events have a clear bearing on the banks too. Shale gas operations, oil platforms, all these places will get hit and it will affect many banks who held onto debts with the certainty that black gold brought, now there is no blame here, yet the consequence of persecuting tax dodgers will also come with another negative boost as a league of them will move to the Arabian shores, when that happens, the little stability the Euro and the US dollar had, will go straight out of the window.

Here is the kicker, no matter how wrong the expression ‘let sleeping dogs lie’ is seen in light of the tax dodgers, we must wonder how much lower the coming negative financial waves would have been if the hunt for the tax dodgers would have been delayed. In the end, it was not a solution to not go after them, but the timing truly sucks. This situation translates to governments getting kicked in the head, just as they had just accidently stumbled through no fault of their own. Yet in all this, Greece has made ZERO clear steps in dealing with its own tax dodgers, so where to go next? More questions are to follow, but I am not sure if there will be ANY answers forthcoming as it seems that three parties have painted themselves in the corner, whilst the fourth was not in the room at all, in addition these four parties aren’t even clearly communicating with each other, their only goal is to meet their own needs whilst three cannot move and the fourth can’t get into the room, one would offer the thought that a mere pre teenager would have done a better job of it all. I am not sure if I could disagree.

 

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February 8, 2015 · 23:08

The next cyber wave

The news is almost two weeks old. There was no real reason to not look at it, I just missed the initial article. It happens! This is also at the heart of the issue on more than one level. Consider the quotes “The first 13-week programme for Cyber London (CyLon) will kick off in April, with a group of startups drawn from industries including defence, retail, telecoms and health services” and “On the one hand, the government is keen to invest in cyber-security startups: witness chancellor George Osborne’s announcement that GCHQ is investing “£3bn over nine years into developing the next stage of national cyber intelligence”“. So is this just about getting your fingers on a slice of this yummy slice of income? You see, this issue skates on problem that I (many others too) saw that Common Cyber Sense existed, but the bulk of companies treated it as an overhyped requirement. Yes, those managers were always so nervous when they got introduced to ‘costs’. I reckon that the Sony hack will remain the driving force for some time, in addition several business units are more and more in need for some better up to data encryption, so this cyber wave is getting some decent visibility. So as we look at the title ‘Cyber London aims to make the UK a launchpad for cyber-security startups‘ (at http://www.theguardian.com/technology/2015/jan/28/cyber-london-accelerator-cyber-security-startups).

There is no denying that the call of 9,000 million is a strong one, especially in this economy. More important, as more companies are gripped by a decent amount of fear regarding their own future, this event will be at the foundation of several longer running projects and corporations. There is of course question on what is real. That question becomes an issue when we see that even now, rumours still emerge on what happened in regards to who did the works on Sony and how it was done, especially in light that the article in Business Insider claims that the hackers still have access. The latter part will be speculated on by me later in this article.

For the most, the next cyber wave is a good thing, especially when thousands of data holders realise that their corporate future depends on keeping these systems decently safe. I use the term decently safe, because ‘complete’ safety is not something that is achievable, not on budget levels that many depend upon. Yes, security can be better and a lot of companies will invest, they will raise the threshold of many companies, yet will they raise it enough? That is at the foundation of what is about to come.

I predict that these startups are all about consultancy and some will offer products, some on safety and some on encryption. Encryption will be the next big thing, the question becomes how will encryption be properly managed? There are plenty of people who enthusiastically encrypt files and after that forget the password. So what then, all data lost? So, you see that clever solutions are needed, which will bring forth a new wave of solutions, new barriers and new bottlenecks. I wonder if these new startup firms have considered a trainings division, not one that is all about ‘their’ solutions and ‘their’ products, but all about raising proper awareness for Common Cyber Sense.

Training that is meant to give long term knowledge to people working at a firm as well as setting a proper initiation of knowledge with these companies, so that a wave of change will not start a rollercoaster of people jumping from firm to firm, a risk many companies will predict to hit them.

Now it is time for some speculation. I have been thinking on how Sony was hit. I came up with a possible idea on New Year’s Eve. When I wrote this part: “In my view of Occam’s razor, the insider part is much more apt”, my mind started to wander on how it was done.

Speculation on the Sony Hack

The inside story is on the hack of Sony, yes, there was a hack at some point, but, in my view, that is not what actually happened. a destruction was started, but that is not what started it, that is how it all ended. When I did my CCNA (2011), I had the initial idea. You see, hacking is about data at rest, so what happens when the hack is done when data is in motion? That part is often not considered, because it seemingly unmanageable, but is it? You see, when you buy the Cisco books on CCNA you get all the wisdom you need, Cisco is truly very thorough. It shows how packages are build, how frames are made and all in great detail. That wisdom can be bought with a mere $110 for two books.  Now we get to the good stuff, how hard is it to reengineer the frames into packages and after that into the actual data? Nearly all details are in these CCNA books. Now, managing hardware is different, you need some decent skills, more than I have, but the foundation of what is needed is all in the Cisco IOS. The hack would need to achieve two things.

  1. The frame that is send needed to be duplicated and ‘stored’.
  2. The ‘stored’ data needs to be transmitted without causing reason to look into spikes.

I think that ‘hackers’ have created a new level (as I mentioned before). I think that Cisco IOS was invisibly patched, patched, so that every package would be stored on the memory card in the router, in addition, the system would be set to move 2% during the day to an alternative location, at night, that percentage would be higher, like 3-5%. So overnight, most of the data would arrive at its secondary location. Normally CCNP technologists with years of experience will look into these matters, now look and investigate how many companies ACTUALLY employ CCNP or CCSI certified people. To do this, you would need one insider, someone in IT, one person to switch the compact flash card, stating 64Mb (if they still have any in existence) and put the sticker on a 512Gb Compact Flash card. Easy peasy! More important, who would ACTUALLY check the memory card for what was on it? The Cisco people will look at the startup file and only that one. The rest is easily hidden, over time the data is transferred, in the worst case, the culprit would only need to restart the routers and all activity would be completely hidden, until the coast is clear, afterwards the memory cards would be switched (if needed) and no trace of what happened would ever be there. What gave me the idea? Well I wondered about something similar, but most importantly, when I did my CCNA, the routers had 64Mb cards, I was amazed, because these suckers are no longer made, go to any shop and I would be surprised if you can even find any compact flash card smaller than 16Gb. Consider a place where Gb’s of data could be hidden under the eyes of everyone, especially as Cisco IOS has never been about file systems.

When the job was finished, the virus could be released damaging whatever they can, when cleanup starts, every aspect would be reset and wiped, whatever the culprit might have forgotten, the cleaning team might wipe.

So this is my speculation on how it was done, more importantly, it gives credibility to the claims that the hacks are still going on and the fact that no one has a clue how data was transferred, consider that this event was brokered over weeks, not in one instance, who else is getting their data syphoned? More importantly have these people involved in this next cyber wave considered this speculated path of transgression? If not, how safe would these systems end up being?

Let’s not forget that this was no easy feat. The system had to be re-programmed to some extent, no matter how enabling Cisco IOS is, this required top notch patches, which means that it required a CCSI or higher to get it done, more important would be the syphoning of the data in such a way that there would be no visible spike waking any eager beaver to prove themselves. That would require spiffy programming. Remember! This is all speculation; there is no evidence that this is what happened.

Yes, it is speculation and it might not be true, but at least I am not pointing the finger at a military force that still does artillery calculations with an abacus (another assumption on my side).

There are a few issues that remain, I think upping corporate awareness of Common Cyber Sense makes all the sense in the world, I reckon that the entire Cyber Security event in London is essential and it is good to have it in the Commonwealth. This industry will be at the foundation of growth when the economy picks up, having the UK play a centre role is good strategy and if it does evolve in the strongest way, a global financial node with improved cyber protection will lead to more business and possible even better business opportunities. This event also gives weight and view to my writing on January 29th and a few other occasions “As small innovators are given space to proceed and as larger players are denied blocking patents to force amalgamation of the true visionary into their moulding process that is the moment when economies will truly move forward. That is how you get forward momentum!“, this is something I have stated on several occasions and I truly believe that this will be the starting pulse to a stronger economy. It seems that the event creators Alex van Someren of Amadeus Capital Partners, Grace Cassy and Jonathan Luff of Epsilon Advisory Partners, and advisors Jon Bradford of startup accelerator TechStars and Eileen Burbridge of venture capital firm Passion Capital are on such a path. No matter how it is started, they are likely to get a first leg up as these startups will truly move forward. As the event stated: ‘No equity taken’, but it seems to me that on the receiving end of implementing working solutions, finder’s fees and linked contracts could be very very profitable and let’s face it, any surfer will tell you that being at the beginning of the wave gives you the best ride of all.

Let’s see what 2015 brings us, startups tend to be not too boring. Not unlike startups, so will be more waves of speculations on how Sony was hacked, the US government will likely continue on how North Korea was involved and at the centre of it all.

 

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February 6, 2015 · 23:49

How much for just the planet?

This is at the core of what is currently wrong. It is however a serious view that we all must face and we have to face it sooner rather than later. This train of thought started a while ago. I initially saw it on TV, the ‘movie’ was called ‘AFTERMATH, Population Zero‘.

It was a fascinating view to behold. The story is purely fictive; it was all based on the premise that from one moment to the other the global population would suddenly vanish. What would be the consequence? (at https://www.youtube.com/watch?v=sUqHECc5rPo&index=28&list=WL)

It is well worth watching it. So if you have seen the movie the next part will make a little more sense. You see, it is all linked to a few items that have been all over social media and the internet in general since late 2009. It was raised again in February 2013 with the story ‘Nestlé’s Peter Brabeck: our attitude towards water needs to change‘ (at http://www.theguardian.com/sustainable-business/nestle-peter-brabeck-attitude-water-change-stewardship). I once made a prediction that we have 8 generations left, a concept that was not even conceivable when I was in primary school. Yet, now it is a reality that the older generation no longer needs to worry about, but our children will feel the brunt of that idea and it will become a reality for our grandchildren. The article gives us the following: “We’re talking about running out of oil; well it happens that we have 120 years of proven oil reserves“. That could be the case, I made a simple calculation half a decade ago, the calculation gave me the approximation that the amount of crude oil used could fill a cube of 15 by 15 by 15 miles, well over 75% had been used in the last two decades. So, yes, it is extremely likely that we have 120 years of oil left, but the ‘proven’ part is not a guarantee, the growth of oil needed, especially if the price keeps on going down, as fuel becomes cheaper, more people will be willing to drive longer to get a decent job, making the population at large a lot more mobile than ever before. Also, as oil becomes cheaper and cheaper, some will stop delivering and wait for better times. That is not a given reality, but it is a possible one. Yet, the idea that oil will run out in no more than 100 years is not too far-fetched either. The second part is an issue for me “we have 240 years of proven gas reserves” If that was so, than the rush for ‘shale gas’ would not have been so strong. The rush for fracking is not a view that comes from a 240 year reserve; it comes (as I see it) from a proven reserve that is a lot less than 240 years. Then there is coal. Yes, there might be a longer reserve in stock, but with coal comes pollution and lots of it.

It is the last part that gives the most fear “we have thousands of years of proven Uranium reserves and we are running out of water today“. It is all about the water. When we look at water, we see that the planet is 70% water, yet only 2% of that amount is good for consumption. Water is running low, there is no denying that, the issue linked here it that the planet has 7.2 billion people this implies that no less than 12 billion litres of water will be needed EVERY DAY to sustain a population. Several sources give the following: “At the moment, around 1% of the world’s population are dependent on desalinated water to meet their daily needs, but by 2025, the UN expects 14% of the world’s population to be encountering water scarcity” (at http://www.globalwaterintel.com/desalination-industry-enjoys-growth-spurt-scarcity-starts-bite/), so as we see the cost of drinking water to go through the roof within the next decade, the approach of Nestle makes perfect sense, although the implication is not a humane one. All these events give now more and more way to the story Make Room! Make Room! by Harry Harrison, a story written in 1966, it would propel Charlton Heston even further as the story became the foundation for Soylent Green as detective Frank Thorn. The movie is nothing like the story, which was about overpopulation, however Harry Harrison, passed away on August 15th, 2012. As I see it, he likely passed away with the knowledge that both his story and the movie based upon it could become a reality. The story ends with “The story concludes with the Times Square screen announcing that “Census says United States had biggest year ever, end-of-the-century, 344 million citizens”“, consider that the current US population is almost 319 million, that is not so far from the expected number in the book (which was set in 1999), Harry Harrison seems to be off by only 2 decades. The movie gives us another need. The movie is about the unaffordability of food and water, the movie is set in 2022, now we have a ball game. Now we get close to what reality is showing. If water is set to become a product for those who can afford it, then water becomes a luxury, no longer a basic right. This is at the foundation of what Nestle is trying to achieve. As politicians are hiding behind the ‘security’ of desalinisation, we must admit that this will shift the timeline, but the massive need for water to be produced will bring with it an increasing need for a fuel source. Which one? Oil? Coal? Consider that over the next decade the need of growth of desalinisation also implies a growing need for power. The power needed to fuel the need of that what was once regarded as a basic right and plentiful available, an implied growth of 1400% over a decade. Suddenly that 120 year oil reserve does not look that clearly set, does it?

This shows my earlier statement, your children will see the shift (a decade from now), your grandchildren will see the need and the pressure on the cost of living. To survive they will need an income for rent, water and fuel as a major expense of their income. A reality we luckily might not face and over all this we see not Nestle, but we see Financial Institutions as the anchor killing us. That part is seen in the article ‘PwC chief misled us over Luxembourg tax avoidance schemes, claim MPs‘ (at http://www.theguardian.com/business/2015/feb/06/pricewaterhousecoopers-boss-kevin-nicholson-misled-mps). How did I get to that part?

Consider the following three quotes “The Guardian’s investigation into PwC’s activities in Luxembourg was made possible by the leak of thousands of pages of confidential tax rulings secured by the accountancy firm, which found their way to the ICIJ“, and then there is “But PwC Luxembourg remains furious at what it calls the “theft” of its documents. Criminal charges have been brought against two former PwC staff members after it complained to prosecutors” and last there is ““Shire has arranged its affairs so that interest payments on intra-company loans reduce significantly its overall tax liabilities … The ‘substance’ of Shire’s business in Luxembourg, used to justify these arrangements, consists of two people … One of Shire’s Luxembourg based staff holds 41 directorships of other companies”“. So, the link here is sizeable reduced taxability. So as these taxations are not achieved, how will desalinisation plants be built? On another credit card? Who pays for that bill and how will that affect the price of water and the subsequent additional taxation?

The final view is given from a Canadian site called Global Research. the quote is “His statements are important to review as we continue to see the world around us become reshaped into a more mechanized environment in order to stave off that pitiless Nature to which he refers” (at http://www.globalresearch.ca/the-privatisation-of-water-nestle-denies-that-water-is-a-fundamental-human-right/5332238). The fact that we let our lives be ruled by politicians who seem to put their own needs first is a massive blow to our chance to survive in an age of humanity. That part is seen as the bulk of nations cannot keep a budget and the overwhelming need that is greed based. So as nations have even less tax revenue, more costs and a slowly but surely growing number of unaffordable needs, we see an escalation into chaos and extremism.

The way we live allows for the approach of Nestle which turns a bad James Bond premise into a reality. The political approach of ‘shove it forward’ will be cast upon our grandchildren, turning their lives into one of working, so that they have a possibility of life. Until we change many ways of our lives and until we change the acts that we consider to be acceptable, we will only end up getting by with less, whilst food, drinks and luxury is left to less than 5% of the population. As time goes buy (pun intended), we see a change of interpretation, we will see politicians to be extensions for whatever, proclaiming on what is ‘actual’ a right and what is not.

So how does the title ‘How much for just the planet?’ and the movie ‘AFTERMATH, Population Zero’ make sense? Consider what is made extinct on a weekly basis for well over a decade? The movie shows that the planet will repair itself over a millennium, so how will the path of our world change if we are willing to get rid of 92% of our global population and impose a stringent rule of population control through birth control? An idea launched in 1966, whilst also demanding existence through sustainable energy. For now, everyone will shoot, scream and give all kinds of emotional response how such inhumanity should not be allowed, which is fair enough, but as Nestle gets a grip on what we regarded as a basic right. So, the emotion of a population will push it forward and will force our grandchildren to make a ruling on getting rid of 95% of the population, very political and what seems to be humanely decent, is in actuality one of the most inhumane acts ever, because this is all for the most due to a cowardly, non-acting generation that started with our fathers, ourselves and our children. A reality ignored within 3 generations, fuelled by greed of big-business and by the acts of all others by playing possum or burying their heads in the sand. Consider that the US consumes 50 billion eggs and 8 billion of chickens each year. They only represent 5% of the global population and this is not including the need for Fish, Meat and vegetables. So how much food is needed and how soon will it run out, because the one part everyone ignores is that meat products are created using water and food.

So, are these thoughts so far reached? Perhaps the next invention is only a year away, an invention that will change everything. This is the hope too many have whilst our lives are no longer driven by innovation, but through iteration for the need of maximising profits. That approach is nice for a boardroom and their needs, but it does not drive forward true technological advancement, that part will slow down more and more. No matter how much we want some cheap and easy solution that does not offend anyone, the chance of finding it becomes less and less likely. Bad News management from governments and big-business alike as well as derived profit through non-taxability from Big-Business, whilst governments are vying for their manufacturing plants and offering too many subsidies offsetting the cost of a labour force. In this environment these governments need to unsuccessfully balance a budget and soon, if the numbers hold true, find ways to produce the one element most never had to produce before, a basic substance always available. I let you work out the math, feel free to be slightly less happy after reading this, but also remember it only takes one mind to come up with that golden idea that will sustain a nation. This has been proven in several cases, for the Dutch Gerard Philips and Frederik Philips stand out, in Sweden there was Lars Magnus Ericsson, Henry Ford in the US and the list goes on a little longer, they shaped industries that would span generations. I have no idea who will be the next name that changes the way we think and live, but as we see the facts, that person better come sooner rather than later.

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February 6, 2015 · 00:14

A basket full of trash

Have you ever had this? I am not talking about the Christmas or the hospital basket. No, I am talking about those ‘greeting’ baskets you get. One of these: ‘welcome new member’ baskets. You accept them with a smile, whilst you know you are getting a bag full of goodies that have value that is close to zero. Now we get these baskets from book clubs and other longer term commitment places, none of this is a big mystery to many people, because at some point, we all get confronted with this basket. Now, let’s change the game a little, now we consider the same basket, but in this case we don’t look at some two bit online retail vendor, now we look at Price Waterhouse Coopers.

That part is seen in the Guardian as per today. Let me refresh you on some of the facts, for that I will take you back to my blog from October 25th 2014 called ‘Price Waterfall Blooper‘. In there I wrote the following “Consider that PwC had (a reported by the Guardian in an earlier blog) last year; PwC was paid £10.4m by Tesco for its auditing services and a further £3.6m for other consultancy work (a newer version at http://www.theguardian.com/commentisfree/2014/oct/23/guardian-view-tesco-auditing-debacle-pwc-systemic-shambles)“. Now when we add today’s information, information I quite honestly never considered: “The Groceries Code Adjudicator, Christine Tacon, announced the move, saying she had formed a “reasonable suspicion” that the retailer has breached the Groceries Supply Code of Practice“. Now, let’s take a quick look at this so called ‘code of practice’. First of all, the information is found here: https://www.gov.uk/government/publications/groceries-supply-code-of-practice. The fact that this is on a dot Gov dot UK site should indicate that this is the serious stuff. So this code of conduct states at 4.1 PART 4—PRICES AND PAYMENTS, the following: 5. No delay in Payments and at 9. We see Limited circumstances for Payments as a condition of being a Supplier. This is just two of a long list of a code of conduct. The reason to mention these two is the question that follows. ‘How come the auditor was not aware of these facts?’. These are not just simple facts, they are codes of conduct, and can someone please explain to me how this is not raised by the firm charging close to 14 million pounds for one year of work? There are two other parties who are about to see the limelight. Party one is the Press. You see, I was following part of this since last year October, yet, I do not remember seeing the press being awake on these facts. I have a decent excuse living on the other side of the planet and the fact that these elements are not part of my Master of Intellectual Property education, yet the press, Pricewaterhouse Coopers as well as whatever legal aid is out there in UK farmland, it seems to me that too many people were not paying attention at all. There is actually a third side to this. I missed it initially, but when you look at the Guardian on October 23rd (at http://www.theguardian.com/business/2014/oct/23/tesco-black-day-profits-down-92), we see the following: “Tesco claimed that the rogue accounting practices – which relate to how the supermarket banks payments from suppliers – dated back at least two years“. Now consider again the government side that states ‘Guidance Groceries Supply Code of Practice, Published 4 August 2009’, so the statement and the fact that there was a code of conduct out for half a decade, did no one consider that there were additional issues that might rise?

Who on earth is running PwC in London? More important, what on earth is mentoring these wannabe’s? I have good right to speak in this manner. This took me 5 minutes to figure out when I got wind of this small fact, the fact that PwC, the Press and others were not all over this from day one is a little too weird for words. Consider the people that quickly left Tesco when the water got slightly too uncomfortable. Should they have known? I’ll let you answer this question for yourself, but now also consider that the auditors did not make mention in reports on some of these parts, they DEFINITELY should have known about the codes of conduct for the simple reason that part of this is linked to the pesky rules regarding payments and so on. What else did these people miss? More important, consider the date I mentioned (October 23rd), now consider the Deloitte report, was this part in that report? If not, consider that they had to check on these ‘miscalculations’, as we see the mention ‘rogue accounting practices‘ and ‘payments from suppliers‘, did no one consider looking under rock number two? Granted that Deloitte did not get much time, but as we see that suppliers were part of the mix, did no one mention the question ‘What about the Groceries Supply Code of Practice? Do we need to consider any issues there?‘ Did that question seriously not come up?

Now consider my blog from October 13th called ‘A matter of Jurisprudence‘, there I wrote the following “company secretary Jonathan Lloyd, who advises the board on legal and governance issues, had resigned and was serving out his notice until March 2015”, the second one “Ken Hanna, chairman of Tesco’s audit committee, is also set to step aside as a non-executive director as the company’s chairman reshuffles his management team”, which was shown from several sources. Now consider the fact that we see Jonathan on legal issues and Ken as part of the audit committee, they should have known about the ‘Groceries Supply Code of Practice’, which now gives an entirely different light into their departures. So was PwC completely in the dark about this? If the answer is yes, then my next question should be ‘why are they allowed to be auditors?’ Is that such a weird question to ask? It is a code of practice, not a fraternity paper on how to score, so I reckon, especially as it has financial sides, the auditors should have taken a look, moreover, Deloitte should (they might) have reported on this. The fact that the press is only now revealing these events calls for additional questions, but their fumbling is not part of this article, the fumbling of accountancy firms a lot more, for the mere reason that the code states at 5. “A Retailer must pay a Supplier for Groceries delivered to that Retailer’s specification in accordance with the relevant Supply Agreement, and, in any case, within a reasonable time after the date of the Supplier’s invoice“, which should have been part of the financial checks, can we all agree on that part?

And as we take a better look at this basket (have you figured it out yet), we see that the players were in a lot deeper than initially suggested. This cesto, has harboured information, misinformation and above all else, a lack of illumination of the facts as is. First there is Tesco themselves, the latest information shines a harsh light on several members who have vacated their office, in addition there is the case I made on October 13th in my blog ‘A matter of Jurisprudence‘, where I mentioned one person (Rebecca Shelley) who would have been at the centre. The mention on the Birchwood Knight site was “As part of her corporate affairs role, Rebecca will be responsible for government and media relations, investor relations, internal communications and corporate social responsibility“. Rebecca’s job hits ‘government relations’ and ‘social responsibility’. How come that this ‘Groceries Supply Code of Practice’ remained so below the radar?

So when we see months of reporting and we see the lack of mention of this so called ‘code of practice’ we also see the mention in today’s article “Business secretary Vince Cable said: “This is an historic day for the groceries code adjudicator and shows we have created a regulator that has real teeth“. Who is this Vince Cable catering for? You see, if this statement had been given before December 1st 2014, then there might have been a case, at present the act of mentioning it months after going live is just another presentation of a sad story on how some people could be seen by many others as some parties remaining silent hoping to make a bundle down the track.

So I reckon that Tesco will have to sweat the small stuff for some time to come, however, the more we get to see at present, the less clean the image of PwC seems to be. In the case of PwC it will become a case that is worrying on several levels. Not only are the looking for hardship over what was done, as per now it seems that PwC will be scrutinised for the things they did not do, not properly oversee or missed altogether, as per today it sucks to be the senior account holder of the Tesco account, because the fallout will continue for a decently long time to come.

So as we see the basket (also known as a cesto) filled with the trash of information, wrongful acts and none acts, can we all agree that we got a whole lot of nothing, an act that will have severe repercussions and not just legal ones! Does anyone remember this Warren Buffett fellow and how he lost 2 billion in value? If we combine what we have seen so far and add the part that I discussed in October regarding the Chadbourne papers, I can repeat that quote: “that directors of companies must make certain disclosure statements in the directors’ reports. This applies not only to information which the officer actually knew of but also information he would have known about if he had conducted a reasonable enquiry. However, the provision goes further and requires the director to confirm that, so far as the director is aware, there is no relevant audit information of which the company’s auditors are unaware”. This now brings an entirely different light to the Groceries Supply Code of Practice, moreover, it could be suggested that Warren Buffett now has a clear case in legally reclaiming his losses, consider that the US has the Sarbanes–Oxley Act, after Enron, which took care of the power players real fast. The UK has the Corporate Governance Code. I reckon that it is not too far-fetched that Mr Warren Buffett could be offered a deal for his lost two billion. If so Warren, remember this poor blogger and I feel so much better getting to work in a new Jaguar XK, in British racing green of course.

 

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February 3, 2015 · 10:17

How it should be

I have had my issues with the latest released games. No quality previews, no quality exams, just after released reviews. In that regard Gamespot has lost a lot of respect in the eyes of many gamers. An example is Dying Light released on January 27th (Digital copy) and reviewed by Kevin VanOrd on January 30th, 2015. It is at present debatable what value Gamespot has left for the gamers at large.

In opposition to this is the review by ‘the RadBrad’ Published on December 10th 2014 (at https://www.youtube.com/watch?v=RLHR5smxbsc).

To be honest I have never been too much for Zombie games and Zombie movies. I have seen a few good ones, but it was never my cup of tea. Why tell you this part? Because this game, as far as shown by RadBrad blew me away! This game looks beyond awesome. The graphics are smooth and it looks pretty detailed. When I took a second slow look, there were a few little ‘glitch’ like parts, but they were minimal. The graphics in the houses and rooms were top notch. This was the PC edition, so I am curious regarding the PS4 edition, time will tell. The video is a must if you are interested in this game. So now I get to the second issue. Kevin rated the game 7 out of 10 with as one bad mark ‘Too many missions are either boring, frustrating, or just plain bad‘. The first hour video (by Radbrad) shows a clear intro on how to play the game, which was pretty amazing. So, the question becomes how this game was just set to 7/10 (partially questioning Kevin’s reasoning). The game is very open world, but still scripted into missions, all in Zombie style. The approach is not unlike several RPG games, now in a modern setting. Here I get my first issue, Infamous: Second son, a game that started good, but then declined in many ways gets a rating higher than this game. So far this game is all full on great, so let’s take another look at the game. When I looked at the smooth Gamespot view, I did see the critique given, there is however an issue, these glitches seem to be PC glitches, were the consoles not compared? That is all a factor, especially as PC, Xbox One and PS4 are all separate consumer markets. YouTube also had a review by Playstation Access (at https://www.youtube.com/watch?v=0AyhZyOMX6A), showing that the PC version had superior graphics, yet the PS4 version still looked really good. So as such, it seems that Dying Light is a different challenge for those into RPG’s and a passion for watching the waking dead, Dying Light seem to successfully combine the two.

Now for the timeline, what was shown by RadBrad, which was not a finished version showed a lot more quality than the Gamespot version. There is of course a difference, Gamespot covers quickly in 5 minutes, what RadBrad takes an hour to show, which gives you a better overall view, but of course, seeing the actual first 2 missions are at that point a massive spoiler. Considering that the first two missions are all about getting the feel of the game, it is not a biggie.

For the most, my biggest issue is that RadBrad covered better and more in depth almost 6 weeks before Gamespot could be bothered to do so. I do not care about the reasoning, they are supposed to be the big boys, and all sponsored up by Ubisoft no less, so the delay and lack of view is not excusable. I am not attacking Kevin on the review, glitches and issues. They are his view (and he is entitled to them), and in the movie he clearly shows the glitches. It is so interesting that the consumer was denied this insight with Assassins Creed Unity until after the game was released in the shops. Dying Light will arrive in stores in 3 weeks; the digital copy is available now (for those who cannot wait).

So, how should things be?

That is at the core, when I was a reviewer; I had access to games usually 3-4 weeks before release. In a few instances that gap was a lot less, but it did not happen too often.

Should we allow for reshaped originality?

That is the question that is linked to all this as new markets are starting to open up. It seems that Sony is finally seeing the light. Perhaps better is the fact that they are seeing the light they initially ignored and now, a year later we are slowly seeing ‘new’ versions appear, new version of previously released games. This is not a bad thing or an issue. Is borderlands 2 any less original now on the PS4 when it was released on the 360/PS3 over a year ago? The game was amazing fun and will give loads of pleasure to the new additions on nextgen systems. The linked issue to all this, is how it will be reviewed. Even it is a transfer, even if it is a combination of the game and DLC parts, will it be properly looked at?

The next step reviewers should investigate is what I would call a ‘redundancy level’ of gaming. To ‘accommodate’ the marketing divisions to optimise their path, some companies have done away with massive levels of quality control. Halo: The Master Chief Collection, Far Cry 4, Assassins Creed Unity, GTA5 and the list seems to go on, all have the same problem, when you buy the game, you are again forced online to download a day one patch, many of them well over 1Gb. It seems that for the most offline play is a thing of the past. Sony and Microsoft needed their data and they will take whatever path they need to get it. So is the last part true, or is it a path that is only in my imagination? For Halo that patch was not 1Gb, it was 20Gb, which means that for some the patch represents no less than 30% of their download bandwidth, which also makes it over 10% of the total hard drive space of the Xbox One, a little excessive, isn’t it? In addition, when looking at the Gamespot review (at http://www.gamespot.com/reviews/halo-the-master-chief-collection-review/1900-6415958/), we see that not only was the review done 4 days after release, but the day one patch issue (the mandatory 20Gb download) did not get any mention, yes, the game did not get a decent rating (6 out of 10 is not that good), but when looking at the ‘bad’ points, the mention of the day one patch is blatantly not there either. So whether we like a revamp of a game, it seems that reviewers need to up their game by a fair bit, a side Gamespot has not been on par with.

These events all link to another issue, which is now getting more and more negative visibility to the audience at large. That negative view only became stronger when Sony got hacked again, and even though not deserved, Microsoft is getting hit by this negative paint to some degree as well. It seems a little too simple to call this ‘conspiracy theory’, yet from their own site we get “Collection and use of your information by Sony Online Services is governed by the SNEA Privacy Policy, which can be found here: http://www.qriocity.com/us/en/legal-privacy“. The link throws you to a generic page where we see a menu and no privacy policy. How interesting such an oversight, whilst this was a direct link, perhaps the privacy policy was removed? In addition, no matter how much we protect our system, no matter how strong our passwords were, the fact that at Sony we find the following: “We do not require that website visitors reveal any personally identifying information in order to gain general access to our websites. However, visitors who do not wish to, or are not allowed by law to share personally identifying information, may not be able to access certain areas of our websites, participate in certain activities, or make a purchase from the PlayStation®Shop“, which is nice, because that is where the patches seem to be, so again, your data is collected, which is than downloaded because of failing security measures and shared with the world. This also has influence on gaming as such, the fact that a less than acceptable version is sold, means that the gamer is not getting value for money. No matter how great the update is, we need to be online and lose time downloading the patch and installing it, with all the additional loss of hard drive space.

This is however not about data collection, but there was a reason for the mention. As we go to ‘reshaping originality’ and ‘how things should be’, we see that even though PS4 started a relaunch with ‘The last of Us‘, which was the last gem on PS3, it is not close to being the only one. The Russian based game Metro is another ‘re’-launch. The question then becomes, will the reviewer take their time to take a proper look at these games? We have seen lack of reviewing with true new titles, how much more lacking will a relaunched title be?

Time will tell, but there is definitely a little less time as gamers are less and less positive about the quality of the latest launches, I also suspect that as the ball is fumbled in both places (reviewer and game maker) that people are less inclined to buy and more inclined to get to a place like Pirate Bay to get the goods and properly test the game, however, there will be a definite drop in revenue for the game maker here. They partially only have themselves to blame, because this has happened before! We saw similar steps when the CBM-64 and Atari-800 were out and even more issues in the time of the Commodore Amiga and Atari-ST. The consumer demands a decent quality game and they want it when it is released (a global thing), not 6 months later on a local market. The second issue has been successfully fought in the past, and it is not as bad as it used to be, but as digital copy and physical copy are too far apart in price and release dates, people will resort to other means, the fact that digital copies tend to be well over 40% more expensive in Australia then in other places is another matter that is angering the gamers and as such, the move towards a place like Pirate Bay is slow, but also slowly but surely is getting a lot more profound.

So how should things be?

 

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