Category Archives: Finance

March 27, 2014 · 20:31

Setting the stage

The Ukrainian escalation is slowly seeing some events, but not in a good way. We have seen several speeches as well as actions against certain heavy weight big wigs in-crowd at the Kremlin. Will these actions hold weight? Time will tell. I went over several facts in the blog article ‘Strongarm, Intimidate, Terrorise‘ which I published on March 18th. I also made a coalition mention in my blog article ‘Foreign and Domestic‘ on September 12th 2013, where I stated at the very end “that view might partially depend on the steps the growing New World Order coalition of Russia, China and India will take“. In the last two days we saw the following events.

1. India, Russia to sign deal for anti-tank ammunition (source: The Indian Express, et al) for $2.4B.
2. Crimea Crisis Pushes Russian Energy to China from Europe (source: Bloomberg) for $350B.
3. Private Chinese firm to buy 100 regional Sukhoi jets (source: Reuters, et al) for $3.5B.
4. ONGC, Russia’s Rosneft may join forces on oil flows (source: Reuters).

This is just in the last two days. So, yes, we might think that we are putting economic pressure on Putin, but are we?
The last mention is that if we persist, there is every chance that the cheaper gas meant for Europe could be redirected to the Indian consumer. That is exactly the fear I voiced in the story involving the Crimea (Strongarm, Intimidate, Terrorise). The Reuters article also states “Rosneft said it had also agreed with ONGC they may join forces in Rosneft’s yet-to-be built liquefied natural gas plant in the far east of Russia to the benefit of Indian consumers”, which implies that Russia will get additional Dineros (aka loads of money) to build that plant, or at least parts of it.
Europe basically has agreed to a spitting contest which could cost them. There are still moral sides to consider, both sides states that they are correct and Crimean’s who saw a loss of income for thousands of households and desperately tried to save them to remain with Russia. The Ukrainian top really did not think that part through (as I see it). Did they think that forcing Russia to Novorossiysk, leaving the Crimea without one of their biggest consumers would not have an impact? I still have questions on the legality of the ‘transfer’ from Ukraine to Russia of the Crimea region, but I do not have a proper view on the legitimacy of the referendum as such (from a pure legal point). The fact that this is what the Crimea people themselves want (for a massive part) is largely ignored by the press. I will state that the NOS at least tried to talk to a few of these people and many wanted to return to their Russian past (they were also very assertive in not letting others talk on their Ukrainian view).
So what will happen next? Let’s face it, 4 deals do not make for a Chinese, Indian and Russian summer party, but these are massive deals and this shows that the coalition growth I expected is now showing more rapid growth, likely because of the Ukrainian events. For me, I am a business man and as such, I have downloaded the Sukhoi S-100 PDF’s and see if I can start a trainings company to train the Chinese crews on using the flight and navigation instruments of the Sukhoi S-100 (just me trying to get creative). 100 planes mean at least 400 crews, which is 800 pilots and 400 engineers, so 1200 prospective trainees to train. At $750 a day, I could be employed for at least 3 years. So that might be an option as life in Sydney is pretty expensive. People might snipe at this thought, but consider the ego contest we see growing in west versus east. There is every indication that energy prices are likely to rise by unacceptable amounts soon enough. We see that governments are more and more selling off their healthcare and other services to meet budgets, which means more costs for the consumer soon enough. A step by the way for which a government cannot get faulted, but we the consumer still get to pay the bill.
As unemployment rates are still growing to the extent it does, we will have to look at alternatives. If we are willing to work hard, then it is not the worst idea to consider Russian companies like Sukhoi and Chinese companies like Huawei. The next wave is for those who are willing to put in the hours and as several businesses want to grow into several domestic markets, which they will one way or the other.
So getting out there and set the wave so you can be there at the beginning and get to the higher level of the pyramid when it grows above the others is never a bad idea.
Should you get questioned on basis of morality of choice then consider the powerbrokers of Wall Street who got millions after the 2008 crash, The events around Silvio Berlusconi (not the intimate ones), Karolos Papoulias, President of Greece who was in office when the Goldman Sachs creative accounting event was discovered. It is not the question whether he knew what was going on, as president the Euro will stop at his desk in the end. The Finance ministers over that period were Georgios Alogoskoufis, Yannis Papathanasiou and Giorgos Papakonstantinou. Giorgos Papakonstantinou was the person revealing what had happened before he took the office and negotiated the initial 110 billion Euro loan, which makes his acts the one of high moral fibre. The list goes on and on and on. So, consider that many high elected holier than thou politicians have often taken the coin road as this was not illegal or criminal, it is just the cost of doing business. When it comes to businesses there are even more questions. When we see the bad deal the people at Boeing got, as reported by several media outlets in January 2014 as well as the technical issues we see popping up with the Boeing 787 Dreamliner. We have been looking at American companies for too long, perhaps it is time to look at areas where the runner up is hungry to become the biggest one, as they could be the source of your next good meal. So several elements are slowly setting the economic stage for 2014 and 2015.
If your livelihood is in jeopardy, where will you look next?

 

Leave a comment

Filed under Finance, Law, Military, Politics

Tagged as , , , , , , , , , , , , , , ,

March 21, 2014 · 07:27

Growing the deficit?

I stumbled upon a small piece in the Guardian by Dean Baker (at http://www.theguardian.com/commentisfree/2013/feb/08/us-deficit-obama-grow) this morning. He wrote it in 2013, yet in light of several events this story still holds some visible issues, even though I completely disagree with it. It was however a nice piece to read. Dean Baker is the co-director of the Centre for Economic and Policy Research, which means that he has degrees in economy and I do not. So, why do I disagree?

This view comes through the following quotes. “First, the United States has large deficits because the collapse of the housing bubble sank the economy“. That in itself does not sound incorrect, yet when we look at the definition of ‘deficit’, we should accept this simple one: “The amount by which expenses exceed income or costs outstrip revenues“. So how is this housing bubble a US deficit problem? Houses are built through real-estate people, developers and such. So, there is a little truth in there. As these people made a huge loss, they would not be paying any taxation, which means the US is not getting money through taxation, which means that they get less money for their budget. So, in that regard we are all fine. The linked 2008 economic downfall was due to several idiots (or geniuses depending on your viewpoint) in Wall Street and Financial districts who were playing with all kinds of mortgage based hedge funds and in that way ‘lost’ about 8 trillion dollars, which comes down to devaluating 32 million houses from newly built to the instant value of $0. This comes down to the housing value of 27% of the US households became null and void with the instant snap of the fingers.

So, yes, we can agree that this impacts the deficit as taxation goes down, however should we consider that part of these events is because the US treasury failed completely? Consider that there was a recognised housing bubble at the time that Henry Paulson (who was at that time the big boss of the US treasury). The deficit grew to such an extent because the elements were not properly monitored. So in this view the quote “First, the United States has large deficits because the collapse of the housing bubble sank the economy” should be “The United States diminished its income as the US Treasury did not act preventive, proactive and in a timely fashion in regards to the housing bubble“.

The second quote we see by Dean Baker is “Second, if we had smaller deficits the main result would be slower growth and higher unemployment“. Well, that is one bubble we can pinch through. If taxable amounts increase deficit goes down, if expenditure goes down, then so does the deficit. Neither forces us into the view that this will result in higher unemployment rates, neither prove that there will be a slower growth.

This all depends on the application of the tools available. Yes, taxing extensively is a massive downturn, but is that the approach that should be taken? Am I against taxing the ultra-rich? That depends on the way taken. I do not think it is fair to just tax the rich, yet removing some of the tax shelters would be a very acceptable approach. Consider the following quote by the NY Times (at http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html)

“In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent“. This is less than people making $36,251 – $87,850, they pay 25%. So, there is a massive imbalance here, which leads to the approach that a smaller deficit could be gotten by properly addressing a flawed tax system.

This is where we get to the news of January, (at http://www.theguardian.com/world/2014/jan/04/bill-de-blasio-new-york-mayor-inaugurated), where a quote is given that reads like an incorrect act. “But the most controversial element is to extract an extra $530m (£323m) in taxes from those earning more than $500,000 a year to pay for universal pre-kindergarten education and after-school programmes“, so New York wants to get a little more cash. I have mixed feelings, yet I do understand this move when the top 1% of the people in New York makes up for 39% of all income. Those objecting to this better understand that the tax increase amounts to an annual rise of $973 for those making a million a year, which is less than the price of a coffee a day. My issue is the fact that tax deductions allow for millionaires and billionaires to pay 4% less than those on an average income, which adds up to massive amounts of dollars. Dealing with these factors will not slow growth, it will not lead to a higher employment rate, it will however allow for a smaller deficit as the US grows its collected income from tax donations.

The third quote by Dean Baker was “Third, large projected long-term deficits are the result of a broken health care system, not reckless government ‘entitlement’ programs“. In my view it is both. I have a hard time speaking out against certain entitlements. Not because they exist, or should exist. The reason is that the 2008 crash left a massive population in an unfair position. A large group of people lost their house and homestead and these people had to be protected in some extended form. The fact that those who caused it walked away with amounts in that year would be beyond what the victims would earn in an entire lifetime is just obscene. Consider that in 2008, the year of the crash, Merrill Lynch handed out over 3 billion in bonuses (at http://www.forbes.com/2009/01/28/wall-street-bonuses-business-wall-street_0128_bonuses.html) and it happened just before they merged with the Bank of America. When we look at this all, we see entitlements, who largely impacted the US government due to what should be seen as high stakes poker games played by the commercial sector, which was loosely ignored by the US treasury. When we see the broken health care system, it seems that there is an issue there. We see the massive amounts of issues on all kinds of newscasts where we see that Obamacare will cost the people. Their premiums will double and in some cases triple. Now, on the side of the people there is outrage. I get that, but look at it from the other side. Does this mean that for decades, the people got medical care, whilst not getting properly charged for it? It is nice and easy to lash out at President Obama on this, but is this his fault? The actual costs, the investigations and as such the in-activities would play into the hand of President Obama. I might just casually ask whether the US treasury should have looked at this. Was this an area that had been ignored for way too long?

So in the end, Dean Baker makes one point that holds ground to some extent.

So why was I looking into this article 405 days (actually 4926 hours and 17 minutes) later? This is all due to an article that the NY Times published (at http://www.nytimes.com/2014/03/20/business/us-current-account-deficit-is-smallest-in-14-years.html). Let’s not get fooled here. This article is about trade deficit, not the US deficit or the US debt. The quote “Big gains in exports and overseas investment income narrowed the United States’ current-account deficit in the fourth quarter to the lowest level in 14 years“. So for one quarter they were only short a little north of 80 billion. It reads like when you have debt, flaunt it!

The valid question that you the reader might have is how the articles and the issues are linked. Well, they are not, but the issues of data behind them are. We are offered information by those who should give us clarity and information, yet, we have been ‘bamboozled’ for some time with an overly deep view in information, so the overview is gone for nearly all readers. When you want something to pass unseen, you just make sure that you give the people everything. It is something some researchers do. When the initial results lead to that one question, you just give them all 1247 result tables; there is a high chance that the certain question ends up not getting asked.

The last point to leave you with is the small issue that is playing thanks to some Ukrainian disagreements. How will these numbers impact when the acts of the EEC and the US will result in Russia closing the gas tap to Western Europe. As the Dutch NOS reported earlier this week, the Rotterdam Harbours are ready to switch and get their energy through the provision of liquid gas from the USA, the trade deficit will get smaller even still, yet the 20% hike the consumers in Europe face is something the people will only read about after the fact.

The US has a long way to go, with a national debt of well over 17,500 billion and a total debt of around 61,350 billion, being short by 80 billion seems like a pinch not worth mentioning, yet consider that the US is forecasting an total income of 3 trillion (before expenses), in 2013 the deficit ended up being $680 billion, which makes it unlikely that 2014 is a turning point for now, which means that the total deficit will grow for at least one more year. Then and only if severe cuts are found, it will still take up 70 years for the national debt to be gone, there is no way to predict how long the total debt of 61 trillion will take. So when you read all the upbeat articles on how there are three issues with the deficit remember, it will take 3 Generations (3G) to get rid of the national debt, the USA, now a 3G nation, how happy can anyone in the free world be for the foreseeable future?

 

Leave a comment

Filed under Finance, Media, Politics

Tagged as , , , , , , , , , , , , , , ,

March 18, 2014 · 06:14

Strongarm, Intimidate, Terrorise

As we see the news of sanctions hitting our eyes via the news on TV, the Newspapers and the internet, some will conclude that the third cold war is now officially starting. Yet, some might have the question within their minds ‘who has the moral high ground?’, or better yet, what brought these escalations about?

Now, I have missed the cold war, whether you stare through a sniper scope overlooking Lakhta air base in a video game, or those who needed to take another look at the Arkhangelsk naval base because they serviced the Typhoons (in 1983 a genuine bringer of nightmares to NATO). The Cold War was a war, but one with its own rules, regulations, needs and wants.

But is this the same as the first or the second cold war? The first cold war was in itself about a disagreements in Ideology, there was however another side to it all. This was basically a pissing contest between the Kremlin and the White House on who was trained better, tools were the best and who got away with the most. The 70’s as it was depicted by John Le Carre with ‘the Circus’ and the after the fact knowledge that several members at the top of MI-6 had a better knowledge of Russian then those living in Moscow. Even with that set back, I always felt that the NATO side was victorious! I missed most of it and did not get hit with events until 1982-1984.

This new cold war we are about to face is something different. This is a lot less about ideology and a lot more about the greed of a chosen few. Let us take a look at the Ukraine and the Crimea region. Most will not remember the original Crimean War, even though one of the most famous names in history had her origin there. It was Florence Nightingale; slightly less famous was Mary Seacole who also earned her a place in the history books. In those days the direct reason for the war that was there was all about religion, specifically on access of the holy places in what is now called Israel (an area that was in those days part of the Ottoman Empire). It is the one time that the Russian Navy got it hide tanned (not the best moment in Russian Naval History), even though it held out for a year, dealing with England, France and the Ottoman Empire was a cake that turned out to be slightly too large for them.

I think it is important to ‘trivialise’ that part. It should also be noted that Russia started this fight with the Ottoman Empire because Russia held that it had a right to protect the Orthodox Christians. These events are important, as those contained the darkest days for the Russian Navy.

Now when we go to today we have other issues to content with. Crimea has always been a cultural hot potato. It will take too long to explain the issues (and I am not an expert in that regard), there are several ties that were severed when Khrushchev placed it all within the border of the Ukraine; he never considered the idea that Ukraine would be anything but part of the ‘Russian brotherhood’.

It is the changes in the Ukraine that are at the centre of the Crimean escalation. As I see the Russian side, it seems to me that this would happen no matter what. The entire issue with the Black Sea navy has never been regarded positively by the Ukraine. The issues there have been going on for almost 7 years now, even though Ukraine has valid reasons for ‘demanding’ certain changes, it is a little far-fetched for Russia to accept the security of its Navy (the Black Sea Fleet) thought the Ukrainian security services. If America has any objections in that regard, then consider the issues several people had in the past with the ‘idiots’ patrolling and guarding at the US part of Soesterberg Air base, I had more than one issue with a few US guards, even though I was on the other side of the fence wearing a Dutch uniform.

So, we can agree that like the Americans, the Russians will not trust the guarding and protection of their defence forces by ‘outsiders’. This is one of the issues, which are at the very heart of this. The second one is one I discussed in an earlier blog named ‘Hot air for the Ukraine‘ on March 1st. The EEC is too much about adding new members and not about maintaining and setting a stable financial and economic platform. That part has been proven by many, but the issue goes wider (at http://www.imf.org/external/pubs/ft/survey/so/2014/car030514a.htm). The IMF is still finalising the fact finding mission and the amount needed for the Ukraine substantial. Another issue in this regard can be found at Reuters where we see the following quote “If the West wants Ukraine to align with them rather than Russia they will have to offer a carrot and the carrot could be better terms on the debt” (at http://www.reuters.com/article/2014/03/17/us-ukraine-crisis-debt-idUSBREA2G0E020140317)

And why does the west want this, Economic prosperity? Ukraine has a massive amount of debt! The only consequence many will initially see is that Ukrainians will suddenly relocate by droves of thousands to get that better future in the west (which is fair enough). That pressure gets added to the issues already dragging many down in Western Europe which are still unstable at present, so adding nations with bad budgets whilst the rest remains in a bad shape is just bad politics and bad judgement. Another view from the IMF can be seen in the Reuters article (at http://www.reuters.com/article/2014/02/25/us-ukraine-crisis-imf-idUSBREA1O1DT20140225)

“The IMF has consistently said that Ukraine’s economic policies would create unsustainable large external and fiscal imbalances. It has called on Kiev to cut its large fiscal deficit, phase out energy subsidies, strengthen the banking sector, and allow the exchange rate to fall. A freely floating hryvnia currency and higher domestic gas prices are unpopular steps previously rejected by the Kiev”

So they want money, but are unwilling to do what needs to be done? How is this in any way a good deal in any shape or form? I will grant that energy prices will always be unpopular, but this is all about a change where the government does not want change to begin with.

Now we get to the good stuff, namely intimidate and terrorise. These are basically synonyms for strongarming, and now it is the west doing this. Sky News reported that more sanctions are in place (at http://news.sky.com/story/1227143/ukraine-sanctions-target-putin-aides)

So basically, individuals are now targeted for alleged involvement of government actions. Is this even legal? It is interesting that these events are calling for sanctions. Consider that in the US one in seven lives below the poverty line. Now also consider the events as we saw the hard working people at Wal-Mart getting hit financially, needing food stamps and needing government support, whilst the owners are multi billionaires. Unless the Honorable African American in charge in the White House (aka President Barack Obama) is a coward, I hereby officially demand and he should officially call for similar sanctions which are to be placed against the members of the Walton family! I understand that sanctions are a tactical choice, yet to ignore your home base, whilst going after a few individuals (whose guilt is still officially in question) is nothing less than a joke. The fact that the advisors are hit with sanctions, yet, the person in charge (President Putin) is not getting any sanctions makes the joke even more pathetic.

Another issue we should not ignore is that the bulk of the people in Crimea WANT to be part of Russia. Now, that would never be my personal choice and I believe it is the choice of many non-Crimean not to go that path, but the idea that their choice is not the choice of the USA and the EEC and therefor rejected is a laughing matter, where is THEIR freedom of choice? In opposition, I do have an issue with the legality of that part too. I do acknowledge that Crimea is part of the Ukraine, yet the Ukraine is ‘only’ 72 years old. The issues we now see in Belgium as that nations is likely to split into two parts, whilst that nations is a lot older then the Ukraine is not causing this level of concern (mainly because it hasn’t happened yet). In my view, it seems a lot more legal if Crimea became independent. Consider the immediate consequence of that act. If the referendum is regarded as illegal, what will happen and what will the reaction be as referendums are called over the next 3 years as parties decide to secede from the EEC/Euro, as these requests are called for by Nigel Farage (UKIP/UK), Geert Wilders (PVV/NL) and Marine Le Penn (FN/FR). Will we suddenly see calls for illegality by the USA and the IMF? Consider that, because these steps are likely to push the EEC and therefor the USA over the edge of bankruptcy.

As a ‘supporter’ of the cold wars, tactically the entire escalation works nicely for NATO. If Ukraine does enter the EEC, then it comes with a nice ‘free’ naval base in a perfectly placed tactical position, with direct striking capabilities on several Russian fronts (still surprised that Russia is so against it?).

My issue remains that the power players in this game are all motivated by greed. You do not give out 35 billion unless you get 70-135 billion in return. The Ukraine does not have such economic prospects in any near future. Consider in addition that once this happens, the cheap gas deal that the Ukraine currently has will then is also be null and void, which means that the people in the Ukraine will have to content with an energy price hike of at least 20%. Look at your own heating bills (especially in the UK). How does it feel to pay 20% more?

The last side to the Ukraine is one that will hit all Europeans (and Americans). Please do not take my word for that, the paper was written by Anna Yemelianova and is called ‘A Diagnosis of Corruption in Ukraine‘ (at http://www.againstcorruption.eu/wp-content/uploads/2012/09/WP-14-Diagnosis-of-Corruption-in-Ukraine-new.pdf). You see, the big business boffins currently whispering into the ears of government officials in the west tend to ignore issues that do not cause THEM any grief, but those who pay their taxes and small businesses alike will get to deal with this to some degree in one way or another. From the very beginning of that paper where we see “Ukraine is a country is with wide scale and systemic corruption which makes a crucial influence on the economic, political, social and other spheres of public life“, it will be clear that whatever you pump into their economy, a percentage will end up with a man like Semion Yudkovich Mogilevich, a man who should be regarded as one of the most powerful men (some state the most powerful man) in the history of the Russian Mafia. Consider the end of the report where it states “21% of respondents in Ukraine reported paying a bribe in the past 12 months according to Transparency International Global Corruption Barometer 2009“.

This gives a clear indication, I might even state, this is in my personal view clear evidence that the numbers reported towards the IMF in regards to the economic support is underestimated by at least 30%. I will be bold enough to take my view one step further. When the Russian powerbase walks away, the floodgates that minimised some of this form of damage will be gone completely. It is a side that so many ignore, yet, when people in the News in the UK and the Netherlands read about these ‘Romanian gangs’, take heed for what happens when the Ukraine is added to the mix. These events are easily ignored by the power players as they remain out of reach, but the rest of the people in those area’s (99.98443213% roughly) will become a target one way or another.

Am I against the Ukraine joining the EEC? No, as I stated, it is about the freedom of choice. I do however have several reservations on why certain elements want to Ukraine to become part of the EEC no matter the cost. They have certain intentions and the press seems to be taking extreme care not to go anywhere near that part of the equation.

So who is strongarming, who is intimidating and who is terrorising? Three answers that call for a name, an entity or an organisation. So who exactly are the players and why are we seeing way too little on certain sides in the press?

 

Leave a comment

Filed under Finance, Law, Media, Military, Politics

Tagged as , , , , , , , , , , , , , , , , , , , , , ,

March 14, 2014 · 13:14

Yesterday’s news, today’s politics

This is the initial view I had when the NOS reported on a debate in the chambers on a case that had occurred 14 years ago (at http://nos.nl/artikel/622822-teevendebat-loopt-met-sisser-af.html). In the first 7 seconds I was hit by two questions that my mind raised

  1. Does this have any current bearings?
  2. Why, is the person who was involved not part of the proceedings?

Let’s take a look at what happened.

In 2000 Fred Teeven, who was the District Attorney at that time made a deal with Drug criminal Cees H. a deal which ended the criminal with a nice pay check, no taxation and no prison. The tax office knew nothing of the deal and this case was given a prompt wave of visibility.

This is pretty much it. There were additional loops of misinformation on how this was all about 5-6 million, which was countered that the total amount was 2 million (750,000 of this amount was kept by the Dutch government as a settlement fee).

This all got started by the current Dutch opposition. This entire case shows the same level of nonsense that Australia is currently getting from the Labor party. All wind and no real case (Australian Labor left huge bills, no resolutions and no prospects), not unlike the Dutch opposition they are crying like little girls because they are not at the governing table. They squandered by in-fighting and now they are all on the sidelines.

Why am I having this debatable point of view?

This is always a good question. This all started for whatever reason with a case that is 14 years old. Seems like an initial way to be a whiny little politician, whoever started this). Yet, that is not the whole truth either. When we consider the source (at http://nieuwsuur.nl/onderwerp/622023-geheime-witwasdeal-teeven-en-crimineel.html) other facts come to light. Here we see “Als je naar de richtlijn kijkt waarin duidelijk staat dat er afstemming moet plaatsvinden met de Belastingdienst” this was stated by the Dutch Professor Zwemmer from the Faculty of Law of the University of Amsterdam (translated: “If you look at the guidelines, it is clearly stated that an adjusted view is set together with the taxation services”, which might contradict the statement, yet, a guideline is not set in stone. what does the law state?

The case was when Article 20b of Dutch Criminal Law allowed for it. That legal option of making deals with criminals was scrapped in 2001, but the article was in active in 2000.

There is another side to this. When we consider the following paragraph from Nieuwsuur, we see the following: “Advocaat Jan-Hein Kuijpers bevestigt vanavond in Nieuwsuur dat de deal volgens alle afspraken is uitgevoerd. Omdat Kuijpers zelf niet van witwassen beschuldigd wilde worden, moest het geld via een justitie-rekening verlopen. Kuijpers: ‘Ik had voorgesteld en ook wel bedongen dat het geld uit het buitenland eerst naar justitie zou gaan en dan naar die vriend van mijn cliënt, waardoor het spierwit was. Sowieso, of het nou wel of geen drugsgeld was of zwart geld of grijs geld of wat dan ook.’ Uiteindelijk is er een bedrag van tussen de vijf en zes miljoen gulden daadwerkelijk via deze constructie overgemaakt, bevestigt Kuijpers“.

(Translated) “Lawyer Jan-Hein Kuipers confirmed in Nieuwsuur that the deal had been processed according to the accepted arrangement. As Kuipers wanted to avoid accusations of laundering, the money would be processed through an account of the Justice department. Kuipers: ‘I had proposed and stipulated that the funds from abroad would first go to the Justice department, after that to my client’s friend, making the funds snowy white. Whether it was drugs money or not, whether it was black money or grey or whatever’. In the end an amount between 5 and 6 million was transferred via this construction, confirms Kuipers“.

This all leaves me with a few questions. What on earth is a Lawyer doing spilling the beans to this extent on a talk show? As well as the fact that we have two sides to the amount, was it two million, or 5 to 6 million? If we accept what Nieuwsuur mentioned: “Vervolgens zal het OM het geld via een rekening van het Openbaar Ministerie ‘terstond aan H.’ overmaken. En dat alles onder de expliciete voorwaarde van ‘volstrekte geheimhouding’ waarbij ook ‘de nationale en/of internationale Belastingdiensten en/of Fiscale autoriteiten’ niets van de deal mogen weten”

(Translated) “After that the Public Ministry will transfer the money via an account of the Public Ministry ‘swiftly to H.’ all this under explicit conditions of ‘complete secrecy’, whilst keeping the national and international tax offices unaware of the deal”

So, again, why is this Lawyer Kuipers singing like a canary on a talk show? Even more questionable is how international tax offices are kept in the dark, whilst they knew that the money came from non-Dutch accounts. It seems weird that international tax evasion could be part of this deal in 2000.

We can waste time on whether these events were all known or not and whether this was all legally arranged or not. It is a 14 year old case and the facts could have been checked before the House of Representatives booked overtime which might cost the taxpayers even more. I am not debating whether it was right or wrong to proceed, but in the view I have, this was another goose chase by the opposition to bring embarrassment to Minister Opstelten (who is the current minister of justice and Security) as well as secretary Teeven of Justice and Security, who was the District Attorney in those days and would not have been politically responsible anyway (which answered the second question I initially had).

I remain on the fence, even though I still see this (to some extent) as an exercise from the prissy opposition, the questions remain valid. Yet, what was the point to take a case, which could have been easily defended in the House of Representatives to begin with. What was the end game and why is there a discrepancy between 2 and 5-6 million?

That last part is still an issue of some debate. There are additional questions that rise when we consider the Dutch article (at http://www.vn.nl/Archief/Justitie/Artikel-Justitie/Teeven-sloot-al-in-1998-deal-met-Cees-H..htm), which gives a lot more validity for the opposition to call for a debate in the Dutch version of the House of Representatives, yet the fact that this is coming to light 14 years later is also quite weird. That side is shown to some extent when we look at the last lines of the article “Dat alles is weliswaar geen sluitend bewijs dat Cees H. nog steeds in criminele zaken zit, maar bij justitie kijken ze in ieder geval met argusogen naar de handel van de beroepscrimineel. En dat plaatst de ‘gift’ van Fred Teeven uit 2000 toch in een vreemd daglicht“.
(Translated) “Al this does not lead to evidence that Cees H. is still criminally active, but the Justice department is looking with an eagles eye towards the wheeling and dealing of this professional criminal, which places the ‘gift’ from Fred Teeven in 2000 in a strange daylight”

When we look back at this, then we see a seldom seen application on the cost of doing business. The talkative lawyer (who seemed to forget the meaning of complete secrecy), the muddy view on the exact amounts of money involved (the difference between 60,000 and 20,000 bills of 100) and in rear sight the time passed before certain people started to ask questions. Consider that all but the heaviest category of crime can still be prosecuted (5th category), other crimes would have passed the prosecutable expiry date, in that light, why bring this case forward?

For political points against a District Attorney who, according to the issues, had acted within his scope of abilities? Nieuwsuur does report an issue in the way the deal was pushed through after the fact (2 months after the fact) and the signature came from Ben Swagerman, who is in the Dutch version of the House of Lords and he is the head of corporate security of the Royal Dutch Airlines (KLM). I do agree, that certain questions should be asked, yet, they should have been asked at least 6 years ago, not now. At this point there are several points that imply that this was about something else, not just about this case. So will the Dutch audience get treated to a second round of ‘sudden revelations‘ in a later episode of the program Nieuwsuur?
Time will tell, but when they do, I will take another look at this case.

 

Leave a comment

Filed under Finance, Law, Politics

Tagged as , , , , , , , , , , ,

March 12, 2014 · 17:18

Who runs America?

This is a question that has been in the back of my mind for some time. When we consider the economic events from 2008 onwards and how slow (almost 2 administrations) it has taken for any economic legislation to take shape for the (at present) ineffective halting of moving tax dollars off shore. Even now, several economic boffins are slowly and casually mentioning that current measures are not going far enough.

The entire issue took a new foothold as we see the Ukrainian events unfold. We see how some politicians are acting so….outspokenly against certain acts. Now, I am not speaking out against these people, I believe in the freedom of speech and as such, we need to hear all sides. The issue was shown the most visible in the UK when some stated on how economic sanctions against Russia would be taken, like getting gas from a different source.

It was at that point when I saw just how hollow their boasts were. In my view those politicians would soon be dragged to a separate room where several high powered industrials would add these politicians to the Christian choir of ‘Mare Castratum’, see this as a slightly more efficient form of gagging a politician.

Why this view?

Consider that politicians would make that rash decision and also consider the fact that in the UK (amongst most EEC nations), the energy prices are way above normal. So in a place where like the US, 1 in 7 lives below the poverty line, where these people can hardly pay their bills, get confronted with a 10%-15% raise on energy bills. What do you expect to happen?

I expect something similar to happen in the US, as I see it there are two elements in play here. The first is the claim (at http://www.skynews.com.au/world/article.aspx?id=957624)

The two quotes are “The Senate on Tuesday expressed its support for Ukraine by passing strongly worded resolutions, using tough language against Russia and urging it be suspended from the Group of 8 world powers.” and “The House of Representatives also passed a resolution to condemn what House Speaker John Boehner called ‘Russia’s hostile acts of aggression’”

I understand the second quote and I reckon that House Speaker John Boehner was quite correct to pass such a resolution. It is the first one that is an issue, I understand that governments want to stand in support of the Ukraine, there is no way that any objection to that is valid, consider however what the G8 stands for. If we accept the following ‘G8 nations comprise 50.1% of 2012 global nominal GDP‘, then without Russia, will the G8 be a valid office of existence and what to do to keep its validity? Replace it with China?

That part would make sense as in many ways, the Chinese economy would be much more interesting to America then Russia is for the mere fact that China imports almost 3 times more than Russia does (based on 2012 numbers). Yet, if this happens, then what will be the long term consequences? Consider that the Ukraine is in an even less prosperous situation then most EEC countries. Now consider the information (at http://www.forbes.com/sites/kenrapoza/2014/03/05/in-ukraine-crisis-russias-natural-gas-tactics-could-backfire/), basically the Ukraine was getting gas at a 36% discount. If that fell away, then what will the Ukraine do? The quote seen here “The UK National Balancing Point (NBP) futures for natural gas jumped nearly 10% to $10.28 per MMBtu, according to Bloomberg. Prices have since moderated as the political situation appears to be calming down” gives validity to my claims of the energy prices; if futures would take that must a blast, then I reckon the people could face a charge at nearly twice that percentage. There was a side in all this that I had not reckoned on. When we see the quote “The U.S. wants to become a large LNG exporter later this decade and a portion of that would be bound for Europe” we see two dangers. The first is that this is not just government, but this is definitely a ‘Big Business’ push. Yet, consider the amount of customers could be the issue as the amount needed would far outstrip what could be delivered. That part is implied in the Dutch article (at https://decorrespondent.nl/299/eerst-het-gas-dan-de-moraal/32952491-c7e501ab) called ‘Eerst het gas, dan de moraal‘, which could be loosely translated and paraphrased as: “Business before morality“, which is basically at the heart of all these events. The article states that the Russian pipeline is supplying well over 26 million households, which is well over twice the size of California (in households). There should be no illusions that Gazprom has its powerful claws firmly in the EEC.

Let’s make sure that I am not stating that the politicians are acting purely or mostly out of economic reasons. I am to a lesser extent implying that it is possible that the Natural Gas lobbyists in Washington have been speaking with politicians over a lunch or two (which is how things are done in the US and UK). That latter part was discussed in the Guardian in October 2013, as UK Labour leader Ed Miliband mentioned that these lobby groups are not getting the proper levels of scrutiny (at http://www.theguardian.com/politics/2013/oct/07/energy-firm-lobbyists-scrutiny-ed-miliband). So it is IMHO Big Business that is the second danger element in these cases. If the politicians represent the people, yet big business has the funds, ability and know-how to override the views of the people, then what use are the people at the end of all this?

This all goes a few steps further than just the energy groups. I started all this with a mention of economic sanctions. So how does this connect? Well, it does not directly connect, yet the elements all have their political influence. Consider the needs of Apple in Russia (at http://appleinsider.com/articles/14/03/07/russias-megafon-deal-with-apple-inc-guarantees-sales-of-750k-iphones-over-3-years). This was less than a week ago. So we consider the value of a little over 20,000 iPhones a month for the next three years and we should expect that this sparks the sale of iPad and iPod and other Apple articles. Do you think that the members in charge of Apple are hindered by morality? They have parked billions in taxable dollars away from the collecting hands of the IRS (and other taxing governments). The commission these people get from their deals in Russia will not stop them in any way. Whether there will be some ‘illusive’ distributor in India, Japan or China will not matter, the show (read sale) will go on. The same could be said for Dell. You think that they stop selling to Russia and leave their market share to ASUS? I think not! These are just two examples of the dozens of massively large companies doing business with Russian one form or another, not just from the USA, but also from Europe. In that same regard, there is not export without import, so as we see the boasts of economic sanctions to Russia by politicians, remember that when we see that when Russians show off their latest Apple gadgets on TV, the question ‘who runs America?‘ should remain firmly on your mind. In the end you should also remember that the entire situation is a lot more complex then I make it out to be.

As we focus on ‘Business before Morality‘ then remember the bills most of you have in your drawer still awaiting payment. We are nearly all of us overdue to the smallest or a larger extent and as some are more fortunate not to be one of the seven people living below poverty, consider that most of us are in the same place where 45% of us are, most of these people are all a little below getting by, which comes down to one step from a total nightmare life.

I am not stating it is a good place or an acceptable place; it is merely a realistic place. It is in this realistic place the question gets the volume it needs to have: ‘Who runs America?‘

 

Leave a comment

Filed under Finance, Politics

Tagged as , , , , , , , , , , , , , , , , , , ,

March 4, 2014 · 13:09

What goes up…..

The next blog has been bumped to the next blog, mainly because Sky News was kind enough to show the snivelling cry story (me now playing the world’s smallest violin), by the ACTU secretary Dave Oliver, yes, the text in the background ‘join for a better future‘ reads nice, but the story he is giving is intentional misdirection. Holden and Toyota did not leave overnight (which was discussed in my blog on February 12th called ‘The last Australian car‘), this was planned for a long time, as such, what he now calls ‘the opposition’ was at the centre of this entire mess.

When we hear statements like ‘everything is on the table‘ then that person is already deceiving us all. So let’s take a look at some of the things stated at http://www.skynews.com.au/businessnews/article.aspx?id=955273.

“Qantas has asked the government to change the Qantas Sale Act to allow more foreign investment arguing the strings attached hampered its ability to compete on a level playing field with its rivals“, which makes me wonder how this remains an Australian icon to begin with.

“Some aviation analysts argue the best option for Qantas would be to split the company into three separate companies: domestic, international and ancillary services such as the Frequent Flyer program and freight“, which reads a lot like the ‘bad bank’ solutions we have seen all over the global financial sector, which in the end leaves the taxpayers with an unfair bill.

The Australian gave us (at http://www.theaustralian.com.au/business/aviation/pm-failing-australian-workers-on-qantas-actu/story-e6frg95x-1226844413018) the following statements.

the headline is already a first “PM failing Australian workers on Qantas: ACTU“, this is followed by “How did it get to the stage where our Prime Minister won’t even stick up for Australian jobs?” and “Australian unions will meet with Qantas CEO Alan Joyce this week to seek a commitment to minimise job losses, following the airline’s announcement last week it would slash 5000 jobs“.

So, let’s take a look at this all. From the first moment, with all due respect, This Dave Oliver comes across as a man born not too bright and he stopped evolving after birth. Why is this my personal view? You see, one should always keep an eye out for the reasoning. Without that, we have nothing but noise.

First the income side as it was reported by the Herald Sun last September 7th (at http://www.heraldsun.com.au/business/qantas-freezes-pay-of-chief-executive-alan-joyce-but-offers-him-1m-in-bonuses-and-shares/story-fni0dcne-1226713613053), where we see the following: “Mr Joyce’s base salary for the year to June remained unchanged at $2.109 million. But a cash bonus of $775,200 and $387,000 worth of deferred share payments bumped the total remuneration package up to $3.3 million for the year. Mr Joyce gave up his bonus the previous year when Qantas reported its first annual loss since privatisation. The airline, which last week reported a wafer-thin full-year net profit of $6 million, said a general freeze on executive management pay would apply over the coming year“.

So basically, an airline, this large, reports (according to the Herald Sun), a full year Net profit, twice the amount the CEO made in a year. So, the income of the CEO was 50% of the NET profit. This was in the era of labor and this is not inviting any clear statements of outrage or disgust? Let us not forget that the tier of high executives would have been less, but still substantial, which in my view becomes that the Net profit of Qantas was in 2013 a lot less than the income of the board of directors alone. which makes us wonder on how 7 high executives are save whilst 5000 jobs are forsaken to other areas. The positive news was 11 days before the Liberals came into office, and within three months, Qantas analysts ‘suddenly’ misplaced (or lost) a quarter of a billion dollars, how convenient. So Mr Dave Oliver, why do you not stop crying and take a long gander towards this obnoxious fact?

It is not the job of the government to provide for free slave labor (through financial incentives to big business for keeping jobs), mainly because this is Australia!

This all takes another tumble when we see the news (at http://www.news.com.au/travel/travel-updates/qantas-to-cut-1000-jobs-as-ceo-alan-joyce-takes-pay-cut/story-e6frfq80-1226775800430), where we see the following “Mr Joyce’s $3.3 million pay will be cut by at least 38 per cent this financial year because of the airline’s poor performance – which would leave him with a $2 million pay packet” this was on December 5th 2013, in less than three months they went from plus 6 million to: “Qantas said it expected to report an underlying before tax loss of $250-300 million for the first half of the 2013-14 financial year“, which gives us two points at this precise moment. The first is that in my view, the September report was feigned positivity as we were set up for the bad news blows. When you go from +6 million to minus three hundred million you better believe that we the readers and we the workers are getting played. So at this point Mr ACTU, would you like to please change your view from Australian Icon to Australian joke? When a company makes this fast a tumble, there is clear mis-management, mis-representation and mis-organisation, whilst the labor government was run by Miss-NotAllThatInformed (in those day referred to as ‘prime minister’). So whilst Dave Oliver is presenting under the veil of violins speaks out for all those poor poor workers, he should better realise and change his tune to make it sure that this was bungled by labor, for big business and 5000 workers are about to pay a hefty price for such levels of negligence.

So what about Tony Abbott?

Should a government give out a debt guarantee, whilst there is a decent amount of clear evidence that this money could be lost overnight? It is not for the Australian tax payers to lose this amount of money whilst the Qantas top will walk away with millions and with new foreign investors there is still a likely chance that many jobs will go overseas (why else would they invest in the first place). It is also the case that in that same news message (from December 5th) that former Qantas Group Chief Economist Tony Webber left the message that it was too late to help the ailing airline. Is he correct? I am not sure, but I feel certain that he would know a lot more of the Qantas finances then either the ACTU, the ATO or the other interested parties in forcing the hand of government to sign a debt guarantee. The fact that Tony Webber is now managing director of Webber Quantitative Consulting and Associate Professor at the University of Sydney Business School, gives more weight to the value of his statements then the feigned spoken outrage from some of the other players (even if he is not a UTS professor) ;-).

This situation as we ‘suddenly’ see the Qantas debacle was not grown overnight. This has been a failing business dimension for well over a year, because $300,000,000 is not lost overnight, it had to have been known for some time.

 

Leave a comment

Filed under Finance, Media, Politics

Tagged as , , , , , , , , , , , , ,

March 1, 2014 · 18:05

Hot air for the Ukraine

That was the first thought I had when I saw the news from several angles, when we consider the responses from Chuck Hagel, John Kerry, Viktor Yanukovych and a few others. The Americans were (as expected) all about keeping an eye on what Russia does. My first question could be ‘then what?‘.

This would be a fair question as we have seen what happens when ‘the line gets crossed‘ as President Obama mentioned. Basically nothing happened in the end. There will be rattling of sabres and after that people create some diplomatic summit in a luxury place and in the end nothing really changes. If you doubt that, then ask the Syrians. In the end President Assad needed time and time he got and plenty of it. In that regard consider last week’s NY Times (at http://www.nytimes.com/2014/02/23/world/middleeast/un-orders-both-sides-in-syria-to-allow-humanitarian-aid.html), so after several weeks the peace talks ended in failure. Be honest, was there ever a decent chance of a good outcome? This was all about delaying for President Assad, and as such he seems to have won. So, what will happen to the Ukraine?

The Ukraine is not like that, I know, but in the end, does that matter? The US is too weak, it has no reserves left, in addition, there is a growing pile of evidence that big business, not the politicians or the legislative branch are in charge of what happens in America. Feel free to doubt me, but consider the largest employer Wal-Mart. Consider that the owners are multi billionaires and that their staff members need food stamps and financial support just to survive. Did you hear me? This is not about the unemployed, but the workers who still need that level of support and the taxpayer gets those bills, not the employer. This is in my mind a level of clear evidence that the politicians as well as the legislative branch of the US government have failed its citizens. So, they are going to mess with Russia, just as the military has announced massive cuts and downsize plans? Who is kidding who here?

Now on the honourable representative players in this game called John Kerry and Chuck Hagel. I am not attacking them. They are representing their government, but are they speaking their mind and heart? They likely are and they are not happy about any of the issues currently rising, but they are unlikely able to make a true impact at present. You cannot spend money from a budget that is no longer there. Basically, as this administration was idle for over three years to tackle big business, to tackle spending habits and to hunt down tax evaders, the economic trinity at large, the US is pretty much bankrupt, which means they cannot pay for the fuel to make the war engine go forward. It will run out of fuel before it can truly engage a theatre of upcoming war. It is not a good thing, but it is what it is, so at this time it pretty much sucks to be the US Secretary of Defence!

But this is not just about America, many might ‘like’ this US bashing, but that is not what this is. Consider the words of Peter Stano “Peter Stano, Spokesperson for European Neighbourhood Policy Commissioner Stefan Fule, stated the European Commission (EC)’s ‘door remains open’ for Ukraine. The EC’s policy is very open, transparent and predictable, he said. The EC’s offer is tabled, he continued further. The EC offers highly important EU neighbours the opportunity to come closer to the EU with political association and economic integration, he explained“

Consider the NY Times from January 2nd 2014 (at http://www.nytimes.com/2014/01/02/business/international/the-euro-adds-latvia-but-further-growth-is-uncertain.html) “Those include achieving a deficit of 3 percent of gross domestic product and keeping debt to 60 percent of the annual gross domestic product.” This is about its newest member Latvia. You can read two parts here; one is to lower the deficit to 3%, which might be a good achievement. Yet at http://www.kase.gov.lv/uploaded_files/2010/SSD/news_release_2014-A-0109_011.pdf we see the mention “R&I believes that real GDP will continue to grow around 4% on the back of a recovery in the European economy.“

Really, who is buttering who’s bread and where (more important, who owns the butter to begin with). This is a massive amount of iterated bad news management I am appalled that the PRESS is not more active in finding out the ‘real’ truth here. Consider a 2013 report from the EC (at http://ec.europa.eu/economy_finance/publications/european_economy/2013/pdf/ee3_en.pdf) and consider that the numbers on page 47 is up to 2011. So, the 2012 numbers are not even there for a 2013 report. This is all about marketing, all about as they state “Overall, a broad-based look at underlying factors suggests that sufficiently strong conditions are in place for Latvia to be able to maintain a robust and sustainable convergence path in the medium term“, which makes this 55 page paper a sales pitch.

How is this connected?

That is the question isn’t it! It is not about Latvia, or the Ukraine. This is about the EEC and their approach to ‘some kind of a future‘. This is all good, but these events are about setting economic prosperity for a few EEC bigwigs. As they add members, as deficits are still not met in several nations and debts keep on rising, the taxpayers will soon face a harsh reality and it is a bigger one than they bargained for. On my side, there is also a view. Am I comparing apples to pears?
Yes, to some extent I am. The issue is that the EEC is not a vendor of apples or pears, they are dealing in fruit and we all get thrown into the same trog. Russia seems adamant that the Ukraine does not enter the same trog. It prefers its own trog to the EEC one, which might looks nicer but has the same stale grub in the end.

So when we see the sabre rattling from both sides, make sure that you all realise that this is not about the Ukrainians, their choices their future. It is for the Ukrainians, but the other parties are engaging for one reason, their economies! It is about the economic futures of others. Will this all bring prosperity to the Ukraine and its people? Not until the EEC and America end up with a much better economy, which require these governments (all of them) to get their budgets in order. Until then they are showing themselves as some sort of hedge fund dealers. You might remember how that ended up in 2004 and 2008. Now, it is no longer about de-valuated pieces of paper, now it will all be about people and whoever will be the ‘last’ nation left standing. We need to get out of that rat race and real quickly too!

That part becomes more and more visible when we see the latest from Sky News “Russia is ready to help Ukraine as it seeks to stave off economic collapse, US Secretary of State John Kerry says after talking with his Russian counterpart” (at http://www.skynews.com.au/world/article.aspx?id=954470). In addition “Ukraine owes $US13 billion in state debt payments this year – a massive sum in a country where state reserves have shrunk to less than $US18 billion” gives some level of evidence to my views. Another government had been spending money they never had to begin with. When smaller economies fall over, how long until the larger ones take a tumble (especially as they add on new in deficit grown members), because if these issues do not change that will be the clear terminal result, no matter what sales pitch a hedge fund call centre operator calls you with.

In that regard there is an interesting paper at http://www.project-bridge.eu/datoteke/Actions2012/BRIDGE-ANALYSIS%20OF%20THE%20EU-UKRAINE%20RELATIONS.pdf. Denys Kuzmin and Iryna Maksymenko wrote an interesting piece in 2012. Not sure how much I can agree with (as I was never an economic), but it reads like this is all about a possible future for the Ukraine, not about keeping the EEC alive. That side is getting less and less likely, as we see the growing influence from Nigel Farage, Marie Le-Penn, Bernd Lucke and Geert Wilders in their respective governments. Whatever will happen after that will have long term consequences for all the EEC players, even though many ignore these dangers, the dangers will not go away any day soon because that is the consequence of a weak economy, the people choose and currently they are very afraid for their personal futures. So is Ukraine better off with Russia or with the EEC? I actually have no idea, but consider that Russian Commerce is currently buying up commerce all over Europe like for example the Dutch Jeweller ‘Siebel’. The chips are not just changing hands, they are now moving out of local owner’s hands into the hands of foreign corporations. I am not talking about the big boys, they have been in some international hands for a long time, we are now talking about smaller shops where all the moms and pops go.  Consider that these places are no longer held by some oil sheik (like large portions of London), or certain American multi-national groups. Now Russian companies are moving in (through legal methods) and taking control. Who would have guessed this event 10 years ago? Perhaps it is time to ignore these high boasting Wall Street analysts, it is time for actual data, not have baked forecasts to take control of budget goals and government expenditures.

For those wondering about the hot air reference in the title, this is a reference to the windy city of Chicago. The windy city was not about the fresh Canadian air, but about their politicians (filled with hot air). The escalating issue as they are shown in the Ukraine is now in my view all about politicians and spokespeople. For the last 8 years politicians sat on their hands and spokespeople did whatever they could to divert the eyes of politicians, politicians for governments, spokespeople for economic interested parties. If you doubt my words then look at Darfur, Bagdad, Nigeria and Syria, all colossal failures. The politicians failed, grabbing for some ‘sanction solution’ that has never actually worked. Now their credibility of strength is gone. Big Business has been pushing for the lowest and cheapest option for so long; it has made the rich richer, the poor with less, whilst the rich avoid taxation by the billions and after half a decade they are still not dealt with, whilst many taxation coffers are less than empty. Consider the words of Mariana Chilton, an associate professor at Drexel University’s School of Public Health: “If they wanted to address poverty and hunger in this country, then they would pay a living wage, and they would make sure that their workers had good benefits and good family leave for when families have children, etcetera” (at http://www.theguardian.com/sustainable-business/business-solution-war-on-poverty-lyndon-johnson)

These two groups talk to all but they do not really communicate. In the end, when it all falls over they only have themselves to blame and end up blaming everyone except themselves, whilst at the same time they will leave the taxpayer with the cost of it all.

In the end, Russia can do to Ukraine (read Crimea region) whatever it likes, because the west currently has no real actionable options left.

 

Leave a comment

Filed under Finance, Media, Military, Politics

Tagged as , , , , , , , , , , , , , , , , , , , , , , , , ,

February 23, 2014 · 15:54

Is it a scam?

We are all curious by nature. Some facts we want to see, some facts we want to read about, some make us search what is behind it all. This is our natural status to question things. It is our natural way marketing has relied on for decades and it has worked in many ways for all forms of events.

One of the most successful marketing ploys I have ever seen came from the early 80’s. Somehow over the term of a few months in bus booths and on outside walls we would see the spray painted term ‘Penguin Park’. No one had any idea and we all wanted to know what it was. We all started to ask questions and it went viral without needing the internet (which was still a DARPA concept at that time). The buzz was all over the place and within 5 months we found out. A Dutch DJ named Tjarda Leegsma had an idea, he made sure there was a buzz and when his nightclub ‘Penguin Park‘ opened, there was a massive queue to get into his place. That queue would remain for many months when it started. It was the coolest place to be. The music was the hottest, the drinks were the coldest and a Rotterdam night club legend was born. A clear marketing triumph!

Now, many rely on the internet. In this case I am looking at the smoke that is forming around a site called ‘GetMoreIncome’. Here we see a known approach. It is all about implying issues like ‘what you could’, what your lifestyle could be and so on. But do they deliver? That is the entire question, isn’t it?

Unlike an organisation called AMWAY, we get other questions. When you look for AMWAY information, the issue becomes clear soon enough. The internet is riddled with examples. AMWAY is basically a perfectly legal ‘pyramid’ scheme. The people behind it were sort of brilliant. The more people you know and attract, the bigger your discount bonus (read commission becomes). They are not into some quick expensive sales part. It is the one thing we all need: Household articles. The cleaning chemicals are stated to be good, the nutrition bars do not seem to be too bad, so a multibillion dollar industry is here to stay and all can get a few coins out of it. The verdict is out there, most (over 93%) will never get rich, but they end up having lower shopping bills. Is that a bad thing? I think not.

So what about this ‘GetMoreIncome’?

That is indeed the question. When searching Google and other sources, we see many blogs, and they all seem to be some marketing hit towards and in support of this ‘GetMoreIncome’ and NONE OF THEM give you any clear information. I found two that showed a little more, but there too it was all about carefully phrased mentions. This GetMoreIncome should be regarded (as others state) as an MLM approach (not unlike AMWAY). Yet there is a difference. When we see the quote on their site, which is also all over FOXTEL, we see a problem, the quote “I have been thrilled with the results, having made over $15,000 per month for the past 6 months”, sounds nice, but at what cost? Is that including the dozens of hours of phone costs? You see, the website gives NO information at al. It requires you to register and give your details.

This all becomes interesting when we take the quote by the ACCC “No matter how a business communicates with you—whether it’s through advertising, packaging, online, logos, endorsements or a sales pitch—you have the right to receive accurate and truthful messages about the products and services you buy.”

The little problem as I see it is that you have to sign up to get any type of information. If this is all online and through TV, I say that in my mind, their website has a distinct obligation to clearly inform you online. This becomes a worry especially as there is no clear information anywhere. No mention on who is behind it, who is involved, we get absolutely nothing, just quotes and innuendo.

I also like the implied ploy (read sarcasm). When we see the quote: “I was a former CEO. I left the corporate world behind and have been able to replace my executive income working from home.” Is this the stated person who was in the news as: “a judge in the Reykjavik District Court sentenced, the former CEO of Glitnir Bank, to nine months in prison in December 2012” (at http://www.businessweek.com/articles/2013-09-12/iceland-prosecutor-investigates-convicts-bankers-for-financial-crimes) Can you tell, because I cannot. That is the issue with small impersonal quotes; it makes perfect sense that this person needs a work from home income. But is it the same person? How many are on that $12,000 a month income? No one seems to know and no one seems to be looking into it.

In this age of bad economy, when all are looking for a way to make a buck and to make ends meet. There needs to be a level of protection against exploitation. That part seems to have gone missing. If you doubt me (which is always fair enough), then check your own browser. When we seek AMWAY, we see SMH, The Australian. They all had their articles on AMWAY. Some agree with the approach, some do not. Their stance does not matter. AMWAY is not ‘hiding’ in any way (they even have a Wiki page online). When we look at ‘GetMoreIncome’ we see quite the opposite. The papers are not asking any questions, they do not seem to have looked into it in any way. There is no visibility. My question becomes Why not? When someone has the budget to advertise to this extent on FOXTEL we can grasp that this might involve substantial funds. Yet no one seems to be looking into it, get precise information and whatever you find on the web is either a hidden advertisement or a ‘hidden’ promo clip on YouTube.

When a website is all about “do not call us, we’ll mail you!” there is reason for concern, the fact that those who should look into matters like these, don’t seem to be doing so is a bigger worry still.

Leave a comment

Filed under Finance, IT, Media

Tagged as , , , , , , , , , ,

February 19, 2014 · 20:45

The bad and the worse

I have had several views in many directions, but two issues are rising that require us to take a critical look at us. Some will agree, some will disagree and many will not know where they stand in these two issues. The first is again about labour, both work and politics.

Of course, it does not help when Bill shorten starts to ‘rant’ on the issues that hit many. The first issue is Alcoa. It is an Aluminum smelter. The first quote is “Aluminium manufacturer Alcoa has contradicted federal government claims that the carbon tax led to the decision to shut the company’s Point Henry smelter and two rolling mills in Geelong and western Sydney” (at http://www.smh.com.au/federal-politics/political-news/alcoa-contradicts-joe-hockey-on-reasons-for-smelter-shutdown-20140218-32yir.html)

In addition we see the quote from Bill Shorten where is said “It’s clear that a global oversupply of aluminium, dramatically falling aluminum prices and a high Australian dollar made the continuation of these operations impossible” he said.

Shall we take a small step back to the 12th of February 2013 where we see the following quote (at http://www.businessspectator.com.au/news/2013/2/12/resources-and-energy/alcoa-vic-pass-carbon-tax-liability-federal-govt)

“The plan addresses a long-standing issue whereby decades-old agreements between Alcoa and the state government included guarantees of cheap power that left Victoria holding the responsibility for the carbon tax due to an inability to pass on those costs to the aluminum giant.” as well as “Under the deals, the state will pay an increased power price and pass most of that through to Alcoa.”

So, taxation is up, power costs are up and prices are down. Mr Shorten needs to take a hard look at his own party and the shortages of his own Labor government where we see that these issues were known for over a year. The fact that Labor decides to park the issue until after the election means he now needs to remain quiet. Yes, it will be an issue, but for him to nag like a little girl is what happens when his predecessors decided to ignore the issue. The liberals warned about the dangers of the carbon tax, the people were hit massively hard by the carbon tax and now hell is to pay and in my view, the Labor party better foot that bill real quick. This is however not the first instance. In Feb 2012 a similar newscast was made by the Australian. The quote “ALCOA says a carbon tax will make life harder for the company as it reviews the future of its Victorian smelter and the jobs of up to 600 workers.” (at http://www.theaustralian.com.au/archive/national-affairs/tony-abbott-seeks-to-blame-threat-to-alcoa-smelter-jobs-on-carbon-tax/story-fn99tjf2-1226265695323), So Labor was aware for almost 2 years in their reign that the Carbon tax would have a definite influence.

The last line of that article by the Business spectator states “If we got all that right, it is no skin off Alcoa’s nose, is it? But it does take a significant burden off the Victorian taxpayer.” Well, see the result! It was apparently more than just skin of the nose of Alcoa and as such it becomes a different kind of burden on the taxpayers.

The final quote from the Business Spectator article was the one the article started with “Aluminium giant Alcoa and the Victorian state government have designed a complicated set of deals intended to place the liability for rising power costs onto the federal government, according to The Australian Financial Review.” So an American Company is deciding that the rising risk of higher power costs should be carried by our government? Alcoa reported (at http://www.alcoa.com/australia/en/news/releases/2014_01_09_4Q_Earnings.asp) on January 2014 the following:

Revenue of $23.0 billion whilst reporting a Net loss of $2.3 billion, or $2.14 per share

Let us not forget that this was a better result than 2012, so Labor KNEW that there were several issues here. When you ‘service’ an American corporation who loses well over 2 billion whilst reporting revenue at 23 billion, there are issues plain and simple. I can agree with some that there claim made by Joe Hockey is not completely accurate (in regards to the carbon tax being the reason), but there is no doubt that at a 2.3 billion dollar loss, the carbon tax might have been the proverbial straw that broke the American Smelter Camel’s back!

We should however not just blame Bill Shorten (even if some feel that this is a more comfortable choice). The Honourable Kim Carr (seen in newscasts bearing a slightly less waxed chin then Bill Shorten) has been in both the foreground and background in more than one occasion. So it is only fair we take his actions in account as well. If we consider my blog article ‘The last Australian car‘ from February 12th we see a few more angles that gives worries to the Labor side of it all, especially in light of the quote “writer Judith Sloan brings a case that Australia has subsidised almost $1900 per vehicle produced.” I mentioned. Is it a good deal when we see these costs and support numbers go out? If we take $2,000 subsidy per car and if we consider that Toyota made 100,000 cars last year, we see the costing of $200 million a year in subsidies, which is a lot more than what the workers would cost every year. So, no matter how good it looks, $200 million is way too large a bill to just handover to a car giant. Is there an alternative? Perhaps the Dutch alternative where VDL Nedcar, who was initially in the news in 2012 with the headline “Mitsubishi Motors to sell NedCar plant for 1 euro to VDL” was the beginning of a new plant, completely refitted for 24 hours a day automated manufacturing. They are now starting to build the new MINI Hatch as per this summer. Is there an opportunity for Australia? Yes!
With an upcoming customer base of 22 million (deserted by Ford, Holden and Toyota), VDL Nedcar might see Australia as the opportunity of a lifetime.

It is however not just the car industry. Sky News is just now showing another iteration of job losses in Victoria (at http://www.theguardian.com/world/2014/feb/19/victoria-promised-federal-funds-as-alcoa-shutdown-adds-to-job-losses), so as Sky News and the Guardian shows us, what I would see as the hollow words of Bill shorten were he states “Spend the money this year, then you can save hundreds of jobs, you can keep excellent world-class naval construction skills in this country.”

Yes, Labor is all about SPENDING money! Let us not forget that the treasurer has been presenting the massive bill that Labor left Australia. The National debt went from 58 billion in 2007 to 257 billion in 2013, all under Labor. So perhaps the irritating quote by Labor leader Bill Shorten on “Tony Abbott and photo opportunities” should change. He should ask how his own party had been spending money they never had in the first place. When we see the $200 million in slave labour bonus (oops, I meant subsidy) for Toyota we have to wonder how long until we are all at the mercy of whoever owns these debt markers (most likely the banks). Labor does not get to nag on the cost of living whilst overspending a little over $11,000 per Australian resident. So when we hear another whinge by Bill Shorten on the deficit, consider that his party had been spending it, making it all a lot harder for many Australians in the upcoming time-span 2014-2016.

The issue of the car makers as well as Alcoa were already known issues in the Labor era and shouting now, whilst not securing these markets (which was in all honesty not a realistic option) is just plain wrong.

In addition there is one strong factor, which has been a known weakness was not dealt with in the Labor era either. It is the energy shortage, which is at the heart of several factors (especially Alcoa). If we accept the ABC transcript (at http://www.abc.net.au/7.30/content/2006/s1796094.htm), then it is only fair that we point part of this blame at the Liberals as well. The issue was known since 2006 (even though Labor got to power in 2007). From several texts, I myself come to the conclusion that something had to be started in 2005, which was not done. Labor ignored it for 2 whole terms making the issue just a lot harder and now the Liberals MUST address this issue. If you are wondering how correct or how wrong I am than just take a look at your Australian energy bill. My bills have grown, whilst remaining a stable user, by over 100% in less than 6 years. This makes it a hike of over 16% a year. In addition, the carbon tax really pushed up the prices. Focusing on cheaper energy would have made a real difference for all parties concerned. In addition, this is not a local issue, it is not a national issue, but it is almost a global issue. The same issue can be seen in the Netherlands, the United Kingdom (very clearly), as well as America. So, it is nice to keep making cars and Aluminum, but if it is not financially viable, the tax payer ends up footing the bill no matter which road we take. So, the dollar, our work conditions and other factors will always remain an issue, but if energy prices are not solved, the one part that will drain any options we might have had. Consider the Business Spectator quote “Point Henry alone represents almost 7 per cent of Victoria’s annual electricity consumption“, so one plant needs THAT much? How could this issue have been ignored for almost 3 administrations? I see that there is a manufacturing issue in Australia, but if the energy prices are not dealt with, we will see a national shift from bad to worse.

Perhaps this will be the moment of innovation; perhaps we should focus on other areas. It only takes one innovator to come with that golden idea that brings income (not costs) to our states. I just hope that politicians on both sides of the aisle will listen to that person.

 

Leave a comment

Filed under Finance, Media, Politics

Tagged as , , , , , , , , , , , , , , , ,

February 14, 2014 · 18:11

A senseless merger?

OK, as stated in earlier blogs, I am not an economist; I do not have any degree in economy! Yet, the information that passed my eyes less than 2 hours before has me slightly baffled. I feel happy that this all is happening in the US and not anywhere in the Commonwealth, yet, the issues as presented makes me wonder when this will hit the Commonwealth borders.

The issue is that Comcast has decided to buy Time Warner Cable. (at http://news.sky.com/story/1210921/comcast-to-buy-time-warner-cable-for-45bn) This is not a huge thing, we are in a civilisation where the hyena and vulture rules, hence mergers happen a dime a dozen and many of them before most have had a chance to enjoy their first coffee. Comcast has 21 million viewers and they are acquiring Time Warner with 11 million viewers. This all seems to make sense. Now for the kicker! This deal will cost Comcast $45 billion dollars. Are we all awake now?

So, 45,000 million divided by 11 gives us a little more than $4000 per viewer. When you consider that Cable TV is set at an average of $30 a month, it could take 133 months just to break even (providing this is all borrowed at 0%, which it is never). So there might be a price hike for all 32 million users of that cable solution.

This is not a chance to become the large bully, as they were described by a consumer group, but you must admit that this is about a lot more than just ‘adding’ new customers. Oh and by the way, this is happening less than three years after Comcast bought NBC for a little less than $14 billion. (at http://www.bloomberg.com/news/2011-01-18/comcast-nbc-universal-deal-said-to-be-near-u-s-fcc-approval.html)

The Washington Post has an interesting mention, which was not found at Sky News “It’s worth remembering that Comcast limits how much data its customers are able to stream from the Internet, while Time Warner offers unlimited Internet plans.” (at http://www.washingtonpost.com/business/technology/comcast-time-warner-to-merge-what-happens-to-my-service/2014/02/13/b285f81e-94b4-11e3-83b9-1f024193bb84_story.html), so there are a few more kinks that the customer base might face as the merger goes through.

This all goes far beyond just Cable TV. It involves 30,000 community Wi-Fi spots (amongst several other elements); this entire picture becomes a lot more ‘interesting’ if we take the merger of Comcast and NBC in 2011. This is not just about TV; it is about digital media on an unparalleled level. The merger stipulates the 33 million cable users, yet, does that give a real view of the picture? In the first regard the 45 billion seems ludicrous, yet when we consider community Wi-Fi, broadband (or better stated digital media and networking), it becomes an entirely different picture, especially when we consider the following information from Reuters (at http://www.reuters.com/article/2013/12/02/comcast-ondemand-idUSL2N0JC1S120131202). Now we get an entirely different picture. If we consider this quote “The new technology is meant to give TV networks a way to earn ad dollars from earlier episodes. Currently, most advertisers only pay for ads watched live or within three days after a show airs. That could change if Comcast’s technology, which it developed in partnership with Nielsen, is widely adopted.” and add the following case study (at http://www.sierratechno.com/sites/default/files/Turning%20Data%20into%20Customer%20Insights%20for%20Comcast%20Cable_0.pdf) we now get another view. This is about data, plain and simple, when we consider the value of collected big data in long term planning, having a data warehouse filled with the acts of 33 million people, the 45 billion dollar deal is a steal at twice the price.

It is in my humble opinion really funny to see all these people nag, complain and cry on what the NSA is alleged to be doing, whilst at the same time, their cable provider seems to be tagging them with a ‘value’ price tag for marketing, sales and identification. So what is the cable value of a customer at Hunts point, the Bronx (ZIP:  10474)?

So it seems that Comcast is getting their value on several fields, yet I am still in the dark why Americans are so against the NSA trying to find the people endangering their citizens, whilst giving big business more than twice the powers that many bargained for. It seems that this is not a senseless merger at all, yet do both consumer groups realise the powers their cable provider (slash phone, slash internet provider) ends up with?

 

Leave a comment

Filed under Finance, IT, Media

Tagged as , , , , , , , , , ,