Category Archives: Law

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).

Providing client data to foreign authorities constitutes a criminal offence.
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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Tagged as Bahrain, Bermuda, Cayman Islands, Dubai, Guernsey, Hervé Falciani, HSBC, Jeddah, Jersey, Lord Green, Peter Spence, RadioShack, Saudi Arabia, Sprint, Swiss private bank, Switzerland, the Cayman Islands, the Guardian, The Telegraph, United Arab Emirates

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 25^th 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 23^rd), 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 13^th 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 13^th 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 1^st 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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Tagged as A matter of Jurisprudence, Birchwood Knight, Chadbourne, Code of Practice, Deloitte, ENRON, Groceries Supply Code of Practice, Jaguar, Jonathan Lloyd, Ken Hanna, Price Waterfall Blooper, Price Waterhouse Coopers, Pricewaterhouse Coopers, PwC, Rebecca Shelley, Tesco, the Guardian, Vince Cable, Warren Buffett

January 29, 2015 · 21:21

Whinging from a desperate left

This is how I felt when both ‘We must stop Angela Merkel’s bullying – or let the forces of austerity win‘ by Owen Jones (at http://www.theguardian.com/commentisfree/2015/jan/28/syriza-merkel-economic-greece-europe) and ‘Bank of England governor attacks eurozone austerity‘ by Larry Elliott (at http://www.theguardian.com/business/2015/jan/28/bank-england-governor-attacks-eurozone-austerity) passed in front of me. It is a unique issue, the political left in league with the banks. It is likely to be a first. The left want the image of cost of living relief, which is a ludicrous fantasy to begin with and that fantasy seems to be all about getting to spend money. We have a similar ‘BS’ joke like this in Australia. That person is called Bill Shorten. You see, as I see it, the banks want ease so that this generation can get a few more millions in commissions before it all collapses.

Let’s take a look at the youthful Mr Oxford (Owen Jones). It starts with the opening premise: ‘Angela Merkel is the most monstrous western European leader of this generation‘. No, she is not! Let’s take a look at the past. Around 2009 Merkel stated that enough is enough. She introduced austerity measures and she sliced back on German spending by a lot. The German people were in pain, they all were. The consequence was that the debt had gone down by a lot, so when harder times came, Germany had shed some of its debt and as such, lower costs on interests and therefor the pain that followed in 2011 and 2012 was suddenly not as painful for the Germans at large. I remember seeing the news. The Dutch did not adhere to such notions, they were all in the mindset like ‘it will get better next year’, at that time the Dutch Finance minister was Wouter Bos. It would not be so good. To be honest, the pain the Dutch felt would not have been that extreme if they had tightened the belt from 2009 onwards as well, but they were all adhering to their ‘good news cycle’, whomever came next had to clean up the mess. It was not just the Dutch, the French, the Italian, the Spanish, as well as the United Kingdom, they all went overboard in spending trillions.

So when I read the deluded word by Owen Jones, it just makes me a little sad. the quote “The Greeks have rebelled against machine men – and women – and they are crying out for others to follow“, that sounds nice as an epitaph for Don Quixote as he marches against the next windmill (possibly a Dutch one), but the Greeks created their own mess. Their inadequacy to deal with corruption, tax collection and a host of other issues got THEMSELVES into the mess they have. Would it not be nice to clearly state that?

Then Own comes with “As Krugman notes, the troika – the IMF, European Central Bank and European commission – promoted “an economic fantasy”, for which the Greeks have paid. They projected that unemployment would peak at 15% in 2012, but it hurtled to over 25% instead“, which is a part I do agree with. There was an economic fantasy, because the austerity measures needed where on lethal levels which cannot be denied, how do the Greeks react? With a series of strikes and vandalism events which only got them into deeper water. A watery grave the Greeks had created for themselves. They now have a debt of well over 325 billion for a population of 11 million, so how wealthy are those 11 million Greeks? If not, where did that money go? The fact that Greek bonds are now at 9.85% should be an indication that Greece is now almost denied existence, it for the most, only has itself to blame, since 2009, how many Greeks actually went to court and to prison for what was done? Of the 2069 Greek accounts in Switzerland (as mentioned in a Greek magazine), who besides the journalist has appeared in court? It seems that making Germany the scapegoat for something the Greeks did themselves is absent of loads of logic.

Then we get another quote that is up for discussion: “Germany ploughed money into countries such as Greece and Spain – that’s the “magic” of deregulated markets – and in doing so “lent more than they could afford”. German banks and their political champions should have known this would end in disaster“, I disagree. Greece was given an option, but was also informed of the intense pressures that this causes. What did they do? Whinge and whine like faulty politicians with the spinal cord of a paperback, not a hardcover amongst them! Instead of going after tax dodgers and those who had made bad calls, to see what they could get back, they went into states of denial, like flaccid applications to a concrete wall, not a scratch was made and when the time was up, they again, whined for more cash, an idea given to them by Charles Dickens in his story Oliver Twist. Then suddenly miraculously, the crisis was over and suddenly they went back to the bond market for more. None of those events are in this article.

Last we get “The future of millions of Europeans – Greek, French, Spanish and British alike – will be bleak indeed. That is why a movement to defend the already ruined nation of Greece is so important. Defeated Germany benefited from debt relief in 1953, and we must demand that for Greece today“, how about the clarity that debt relief came and Greece did nothing, and now, they are whinging and whining (again) for more cash, less debt (through forgiving current debts). However, nobody is making any headway in aligning the justice system and the law to take care of those evading taxation. It will not be anywhere near enough, but it will be a clear signal that Greece is serious about taking a stance for resolving debt and fortifying its annual income. Oh and when the debt is forgiven? Who pays for that money not coming in? The IMF or divide the debt over all the EU nations, who are all beyond their maximum borrowing points? Perhaps option 2? Let the ‘Grexit’ commence and let’s see how the Drachma will leave the Greek people in a state so much worse. At that point the people will dream of those good old austerity times.

Let’s face it, it is not fair to the Greek people, not one bit, but I have seen enough BS in regards to blaming the Germans for what some Greeks did to Greece. If we look at 2013, the quote “The state collected less than half of the revenues it was due to receive last year as it appeared unable to ensure that taxes and fines found their way to its coffers, according to a State Audit Council report submitted in Parliament on Tuesday by its president, Ioannis Karavokyris“, this was an article from November 2013, almost 4 years after the mess they themselves created. (at http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_05/11/2013_526451), so as the Greeks drop the ball over and over again, who do they have to blame but themselves? So as I take my leave from Owen Jones, we look at the second Mr Oxford in this equation. With Owen I am willing to concede that he has his ideological heart in the right place, with Mr Smiley Smiley Canadian Mark Carney, former Governor of the Bank of Canada and the current Governor of the Bank of England, the gloves come off. So let’s introduce Marky Mark to the business end of a two by four in the shape of a keyboard!

It starts quite lovely, immediate of the bat with “Mark Carney says eurozone is caught in a debt trap and should ease hardline budget cuts just days after the Syriza election directly challenged policy“, just under the title. Why should we ease up? If we ease up after an election, the Greeks can forgo debt by having 12 elections over the next three years. It is the cost of doing business and as such, the Greeks themselves have not shown one iota of intent from 2009 onward (the lack of artful tax dodge prosecution could be regarded as evidence piece number one).

The second whopping ‘miss-statement’ might be seen in “Speaking in Dublin, Carney said the eurozone needed to ease its hardline budgetary policies and make rapid progress towards a fiscal union that would transfer resources from rich to poor countries“, when we see parts like ‘transfer resources from rich to poor countries‘, in my view (and in the view of some others), it reads like ‘as big business transfers corporate structures towards economic ailing areas. This was achieved through a subsidy structure that gave way to spreading business opportunity to less fortunate areas’. It also translates in the non-written text part of that statement as less tax liable options for big business, already far beyond normal wealth, move towards areas where labour laws are even less protective, optimising profits for big business.

So when he states as a bank governor the following “Carney made it clear that he thought the failure to complete the process of integration coupled with over-restrictive fiscal policies risked driving the 18-nation single currency area deeper into a debt trap“, which is not untrue, yet the part as a banker, that he does not mention is that he and his buddies profit greatly from spending sprees, if governments suddenly get a hold of their budgets, banks lose out a lot. This can be seen in the simplest way when we consider the Greek bonds. When that market opened up again (which should never have been allowed), the Greeks did not just add to their debt, someone in the banking world ended up with a 65 million euro bonus (in total) for selling these bonds, I am certain that the ‘wealth’ was spread around a little, but some of these financial people just cannot make ends meet on 350K a year, supporting a wife, kids, a Ferrari, a Ducati and two mistresses. You need that bond bonus to feel secure in your way of life as I see it. I wonder if the easing up has anything to do with meetings that places like Loomis Sayles ‘might’ have had with Natixis, perhaps Mr Carney attended a social event in such settings?

I agree with the premise we read in the quote “Since the financial crisis all major advanced economies have been in a debt trap where low growth deepens the burden of debt, prompting the private sector to cut spending further. Persistent economic weakness damages the extent to which economies can recover. Skills and capital atrophy“, I agree with that premise, yet this was a given already in 2011. I foresaw these events in 2012 and I read as bankers all over the place were hosting to ‘bright weather forecasting‘ whilst not taking the cautious steps that should have been taken. We can either state that politicians were too stupid to consider the dangers, or they were happy to leave the mess to those who followed (like Labour left hundreds of billions in debts to the Liberals in Australia), after that we see banks and the media in cycles of ‘bad news management’ slowly lowering expectation and forecasts, whilst the money had already been spend. So, yes Mr Carney, you state a good quote, it is just incredibly incomplete!

So, when we read “Carney has been vocal in his support for the European Central Bank’s decision to start buying government and commercial debt in its own version of the quantitative easing programmes, but said the Frankfurt-based central bank was unable alone to eliminate the threat of a prolonged stagnation“, we see nothing wrong. It is to the smallest degree commendable, only to the smallest degree, because several governments had entered a state of overspending, followed by ‘bad news management’ an intertwined cycle that would undo whatever headway quantitative easing would bring. The need for greed will always win in the end, so those programs are just a fantasy, Greece has some evidence of that part too, as they were part in both sides of that game. Isn’t it nice when the bank plays player one, player two and acts as the bank in the middle. That part truly sucks if you are player three and four in a game of monopoly. If we see Germany as player 3, than who is player 4?

I’ll let you do the math there!

You see, the actual solution would have been to take a stronger position on IP rules and regulations. An approach to ease the path for the small innovator of newly designed products. As several IP sides were all about setting goals towards ‘business’ (read big business), they forgot that when we look at the period between the 50’s and the 70’s, innovation came from the small inventors. Nearly every economy starts stepwise from small players and small innovators. Today, the players are so focussed on the large amounts, they tend to focus on large players like Apple and Microsoft and they forget that these companies, for a larger part live of the premise of the Vulture cycle, you pick the carcass until the hunter shoots a new prey, then they wait until it is feeding time. Small innovators (like Markus Persson with Minecraft) have the actual idea, which a large company then buys for 2 billion plus. 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!

So when we see the final quote by Mark Carney “Carney said the eurozone’s unemployment rate of 11.5% was more than double that of the UK, but its fiscal deficit – the gap between tax revenues and spending – was only half the size of the UK’s. The eurozone, he said, should be using a “constructive” fiscal policy to support demand and mitigate the “tail risks of stagnation”“, we should wonder who he is catering to. As I saw it, the article was all about policies that are interesting for the boards of directors of the corporations, but the people will only be allowed the conceptual benefit on the tale end. Benefits that might have been a realistic form of support for treasuries all over Europe if they had done something actual to properly set up tax policies. Catering to big business stopped being constructive or lucrative for governments for half a decade now, how much longer will you take until you figure out that big business only caters to their own board of directors?

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January 28, 2015 · 23:42

Chapter 13

I have been aware of the story for almost a day now. To be honest, it took a little while to let things sink in. Also, my approach here is completely different from my other stories. This all is not a clear cut thing and I might be barking up all the wrong trees. The story ‘Argentinian government moves to dissolve domestic intelligence agency‘ (at http://www.theguardian.com/world/2015/jan/27/argentina-government-domestic-intelligence-agency-alberto-nisman) should be a wake-up call to many people. What you are about to read is not based on evidence, evidence that we see as quality facts that can be used to speculate on what actually happened. I am stating that none of the evidence is of any calibre at all, I am however using the events that I am aware of and as such, I see a different escalation, one that could be utterly wrong. I leave it up to the reader, I am just warning the reader at this point, to scrutinise my thoughts, as I do and do not accept the speculation on face value alone.

You see, for the most a population has little to no clue what their levels of protection are, until they are removed. Consider that we in Australia need to remain safe whilst someone decided that Australia will be a lot safer if the ASIO is disbanded. I can tell you now that this would be the worst idea in a long line of really bad ideas. If we go by the oldest book on this (the art of war), then at some point, the reader gets to chapter 13, which is all about espionage.

Today, we have a host of issues with spooks, but the one we ignore is that they are here to prevent issues. Yet now consider that these are used against us. However, be aware that spies can be used in any matter of ways, in addition, these groups do not just represent governments, at times large corporations employ them for similar reasons.

So as we look at the initial text, I will add the conversion to modern and technological approach

From the view of the Art of war, we get the following:

We employ the use of spies, of whom there are five classes:
- Local spies;
- inward spies;
- converted spies;
- doomed spies;
- Surviving spies.

There is a book; it is called ‘Broker, Trader, Lawyer, Spy: The Secret World of Corporate Espionage’ by Eamon Javers. It is not a bad read, more important, this current world has an evolved use of former intelligence officers (from many countries), some come from the redacted world of cutbacks in the US and some who privatised themselves. They use their spy craft to aid corporations in distinguishing weaker targets, preparing for cases and litigation in several legal areas and to aid in final trading decisions, as well as change the premise of trade agreements (or to destabilise them by interfering with costs and profit margins. For these options, they might choose to employ Local Spies and/or Inward spies.

In modern days, we will actually see the converted spy in several ways, whether this person is an informer through IT, a trader, or merchant. In the household form, see this person as one of your distributors, however, as he is getting his bonus from another source, he will tip the revenue scales in a minor way, you that you almost got the job, but almost getting the job is not the same as getting the job and you lose out on revenue. I can go on and give you examples of the last two types, but you get the picture!

So why is this event an issue at present?

Consider that Argentina, as it is in such a dire situation, that it needs to get its economy in a much better place. Now we look at the first quote “Argentina’s president announced a major shakeup of her country’s intelligence network on Monday in her most combative step yet to address the fallout from the death of prosecutor Alberto Nisman“. This sounds all fair and good, but is dissolving the intelligence agency a step that should be considered? Let’s not forget that Argentina has two enemies, the first one is big business. Big Business will always be an enemy of ANY government that prefers to give a fair deal to the people of its nations; the second is X, which is not the United Kingdom or the Commonwealth. Yes, there has been and there will remain a clear difference of opinion there, but that is a disagreement, not a statement for hostile acts.

When we look at what drove all this (at http://www.nytimes.com/2015/01/20/world/americas/alberto-nisman-found-dead-argentina-amia.html), we see the title, which gives us a first clue ‘Puzzling Death of a Prosecutor Grips Argentina‘. “From the moment 10 years ago when he was assigned to investigate the 1994 suicide bombing of a Jewish centre here that left 85 people dead, Mr Nisman, an even-keeled lawyer, became entangled in a labyrinthine plot that he traced to Iran and its militant Lebanese ally, Hezbollah“, in addition we get “explosive accusations that top Argentine officials, including President Cristina Fernández de Kirchner, had conspired with Iran to cover up responsibility for the bombing as part of a deal that would supply Iranian oil to Argentina“. You see, Argentina has a few issues all over the place, in addition, there is no denying that the people have never forgotten what happened in 1994, yet, and my deepest apologies to those who had lost loved ones, friends and people they knew, this event is not the highest priority for Argentina in their current dilemma, so why is there suddenly a revelation?

I am not entirely sure that any of these facts are true (pure speculation), when looking at the timeline, the events are off. Is it not convenient that Alberto Nisman ends up dead just after he accuses certain people from a case that is two decades old? Did he actually find evidence? Perhaps something was given, or left for him to find. Consider the implied involvement of Iran and its oil delivery, why would that now get distorted, just when oil is massively on the way down in price. So as we read: “He accused Hezbollah of having carried out the bombing and senior Iranian officials of having planned and financed it“, based on what evidence? This is not a case that has had nonstop attention; it was a specific case, a 20 year old one. How hard would it have been to insert scraps leaving to fictive evidence? In addition, Hezbollah has eagerly taken credit for their actions in the past, so why deny it now? I am not stating that they are innocent, but the fact that Hezbollah has a fading course of visibility, this claim would give them the ‘image’ they wanted to have.

The next part hits back to all the parts mentioned before. The person implied in this, now suddenly disbands one intelligence branch and creates a new one. Is this just a shifting label, or are the people getting replaced. I reckon in Argentine’s current predicament, to remove their intelligence branch for someone else is tactically bad (guess where all these officers would go to) and if it is just a sanitation of bad apples, the branch would not needed to be disband in one instance and created in a reformatted version the next.

All these elements are not adding up. Now, let us be fair, why would it make sense to me? I am not in Argentina, I have no clue what the reasoning is and why certain political steps are taken. So, consider this quote from the guardian “Cristina Fernández de Kirchner said she would support a bill to dissolve the existing structure – which employs more than 2,000 people – and replace it with a new federal intelligence agency“. When we add the following part “It follows a protracted struggle with the intelligence agency that has come to light after the suspicious death of Nisman, which the president blames on rogue spies who are trying to undermine her“, as well as ““We must start to work on a project to reform the Argentine intelligence system, in order to clear up a system that has not served national interests,” Fernández said“, so as we see the known facts, the president, who will be leaving office after two terms is now, 9 months until elections, shoveling over a massive anthill called the ‘Intelligence branch’? So, as we see the accusation of ‘rogue spies’, instead of cleaning house, they are resetting the entire branch? That does not seem like the best idea. Regardless whether there are rogue elements, it is likely that other connections remain hidden as it all goes into another form, which means that it could easily start again. The question on how Alberto Nisman died is still not settled with clarity, so if it was murder, than shuffling the intelligence branch seems an even less good idea.

I can also state with some certainty that doing all this, whilst Argentina is still in treacherous economic waters, having a reliable intelligence branch is pretty essential. Yet, this gives us the part, is it reliable? Latin American nations have been accused more often implied accused seen as a harsh, possibly corrupt group of power brokers. If that is the case, cleaning the intelligence foundations make a lot more sense than ‘just’ relabeling it. If we accept the last quote “her tussle with the spy agency has so far led to increased surveillance powers for the army“, we must consider more than one path. Was this step deliberate, or was it orchestrated? You would think that both answers are the same, but they are not. In the first case we see the consequence of shifting powers, which grows the military oversight, in the other situation it was always about setting military oversight and this was being orchestrated by reshaping the intelligence branch into a Federal Intelligence Agency. The question then becomes, if this is a step towards the ‘FIA’, why was it done in this way? Consider the espionage part in the beginning. Venezuela is in a very bad state and until the hedge funds issues are completely resolved, having an active intelligence branch at your disposal seems pretty essential as well. Let’s not forget the reference to the book in the beginning, under these conditions, there could be profit for both Uruguay and Paraguay, Chili is also a player in this case. As the intelligence branch falters, it also means that economic and corporate advantages could be gained at the expense of Argentinian margins, that whilst the hedge funds vulture issue remains unresolved. All this leads to the question what has actually been happening, it seems decently clear (in my personal view) that the reference to the Jewish centre was not a cause for accusation, but likely a diversion. So, why were certain allegations made, more important, why is the accused president not receiving a lot more opposition and vocal complaints?

We won’t know what is actually in lay, perhaps for some time, but when this article gets more space, at that point, I will follow up on this story, hopefully all loaded with verified facts.

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Tagged as Alberto Nisman, Argentina, Art of war, ASIO, Australia, big business, Broker, Chili, Cristina Fernández de Kirchner, Eamon Javers, espionage, Federal Intelligence Agency, Hezbollah, Intelligence, intelligence agency, intelligence branch, Iran, Lawyer, NY Times, Paraguay, Spy: The Secret World of Corporate Espionage, the Guardian, Trader, Uruguay, Venezuela

January 26, 2015 · 23:54

Double standards, no resolve (part 2)

Part two is not about Greece or the Greeks, it is about what has been behind several parts for a long time now. Yet, the visibility of certain events is now forcing another large change to the surface. First let us look at the events as we see them in the Guardian (at http://www.theguardian.com/technology/2015/jan/25/wikileaks-google-staff-emails-us-government).

The title ‘WikiLeaks demands answers after Google hands staff emails to US government‘ calls for a few thoughts, but I think you should consider a few quotes and then reconsider how you feel. The first one is “Google revealed to WikiLeaks on Christmas Eve – a traditionally quiet news period – that it had responded to a Justice Department order to hand over a catch-all dragnet of digital data including all emails and IP addresses relating to the three staffers“. The second one is “Harrison, who also heads the Courage Foundation, told the Guardian she was distressed by the thought of government officials gaining access to her private emails” and then we get “The investigation followed WikiLeaks’ publication, initially in participation with international news organisations including the Guardian, of hundreds of thousands of US secrets that had been passed to the organisation by the army private Chelsea Manning“. So this was specific! Let us not forget that this person (Manning) should be regarded as guilty of treason! This is nothing less than an intelligence analyst going beyond rogue! Manning was a simple E-1 private with no comprehension of the complexity of wars, especially the war the US found itself in, a theatre that is hard to grasp for some of the brightest generals (you know these highly educated, passed their middle age point individuals with a few decades of military experience, in the US seen wearing stars on their shoulders). No, Manning decided on the safety of hundreds if not thousands of lives. In addition US diplomatic efforts were thrown out of the window, setting economic options back for up to a decade, if not longer.

So when we see the response by investigative editor Sarah Harrison “Knowing that the FBI read the words I wrote to console my mother over a death in the family makes me feel sick“, seems a little hollow. For one the FBI does not care about her mommy, two, what did you expect to happen when you access unauthorised data to the size, scope and extent as Manning had transmitted?

I think Harrison is overreacting, if we accept chapter 13 in the Art of war, both the spy and the receiver of information should have been put to death. Is it not a good thing that it was merely investigated by the FBI?

Yet, there is a side that many are ignoring; many do so in an unintentional way, mainly because it tends to not hit us in any way. For that we need to take a step back to Forbes 2013 (at http://www.forbes.com/sites/robertwood/2013/08/06/excuse-me-apple-google-starbucks-h-p-irs-wants-to-tax-stateless-income/), here we see the following parts: “U.S. companies are said to have more than $1.5 trillion sitting offshore. Most claim that they must keep the money there to avoid the taxes they would face by bringing it back to the U.S.“, “the money at stake is enormous. Plus, the companies involved have treasure troves of cash for many war chests. Big and protracted battles seem inevitable. Still, some big companies may be in for battles that are even larger than they think. They may even need to think different” and “The OECD plan claims that companies like Apple and Google avoid billions in taxes. The G20 is made up of 19 leading world economies plus the European Union. It too has voiced support for a fundamental reassessment of the rules on taxing multinationals“. These thoughts all sound nice, but there is an additional element to all this. You see, as I stated more than once, currency is slowly on the way out (loosely approached). The nations that are left with manageable debt are now slowly but surely diminishing to zero. Greece may be the first one, but at minus 18 trillion, the US is the clearest one to end up with nothing, especially as those large US firms have become stateless. You see, now we get to the good part, the new currency will be IP, but here is the kicker, most (including me) seemed to forget that IP is more than Patents and Trade Marks, it includes data! Now we get to the nice stuff, you see, Google adhered to a situation, Twitter and a few others did not, or at least in a delayed way, but the new currency will include massive amounts of data and many players are now catching on that data is at the core a stateless, virtual and duplicable currency. No matter how Sony called its hack attack, does it now look a little clearer that those having a copy of that data are preparing for more than just a data dump? This is what McKinsey & Company had to say in August 2014 “Indeed, the analytics performed by actuaries are critically important to an insurer’s continued existence and profitability“, as well as “While the impetus to invest in analytics has never been greater for insurance companies, the challenges of capturing business value should not be underestimated. Technology, as everyone knows, changes much faster than people. The key for insurers is to motivate their highly skilled experts to adopt the newest tools and use them with creativity, confidence, and consistency” and finally there is “The proliferation of third-party data sources is reducing insurers’ dependence on internal data. Digital “data exhaust” from social media and multimedia, smartphones, computers, and other consumer and industrial devices—used within privacy guidelines and assuring anonymity—has become a rich source for behavioural insights for insurance companies, as it has for virtually all businesses. Recently, the release of previously unavailable or inaccessible public-sector data has greatly expanded potential sources of third-party data“. Yes, it sounds nice that there is public-sector data, but the one part no mentioned is how the analytics is not driven by those, but ascertained through private-sector data fields. You see the data that Sony had on its employees and on the actions of 70 million customers is a lot more insightful when you link it to medical records. Consider how much profit a company gets if it could ascertain more precisely the risk 7 million of its own customers are. If the connection of medical (obesity) and the gamer data of one person results in a $12 per month surcharge, what happens when we see the US having an obesity rating of around 32%? Now we have 70 million accounts and their gaming behaviour. So if we do the following math 32% of 70 million (falsely assuming that they were all American gamers), then we now get the number of people confronted with a $144 a year additive. So in one swoop, this data set gives way to an additional $3.2 billion for insurance fees. Data is going to be that simply applied sooner than you think. With the cloud being forever virtual (as one would think), people forget that a personal space is linked to a real location (wherever that drive is), but what when the data set is beyond massively huge? What if it is spread over several locations? How do we think then? You see Stateless data is not a new concept, but until recently it was never a realistic concept. It is interesting how tax dodging makes engineers a lot more creative.

At the foundation of all this is not the Wikileaks part, that part just illuminates the nutty side of data. Consider the amounts you as the reader had shared in the last 72 hours via Facebook, LinkedIn, SnapChat, Instagram and such. You freely distributed that, you gave up your privacy rights for whatever you openly published. Now consider that whatever you shared got collected. Several people were on vacation (so someone knows that their house is empty and possible unguarded), some revealed that they were sick (health data) and some revealed other details like parties attended and such.

Now the empty house is the most direct one, but not the most important one. Consider the times you updated your status that you were at home with the flu, or something else. Under normal conditions you just had a sickie, or perhaps another way. Now consider that someone now automatically collects the times you were sick, how does that affect your premium? How will your health cycle be analysed if you are shown to have attended 15-30, or even 50-100 parties a year? How long until this shows as detrimental on your health chart? Weirdly enough not having that does not lower your premium, but there is every evidence that doing it will increase your premium.

Do you think that this is over the top?

Then see the following (at http://www.qbe.com.au/Personal/Home/Managing-Your-Risk/Insurance.html). Here we see “Importantly, reducing the likelihood of making a claim helps protect your No Claim Bonus, helping to keep the cost of your insurance premium down“, which has been a truth for a long time. Yet when we consider the mention ‘Don’t alert people you are going away (including on social networking sites)‘. How long until someone combines the two? At reputation.com we see the following “Life insurance companies are increasingly turning to the Internet to determine a potential customer’s risk“, so if you like extreme sports, you might pay for that passion in other ways too. In addition, the one most disturbing was “Donating to charitable causes is a noble gesture, but if you show too great an interest in any particular medical-focused cause, say breast cancer research or prostate cancer awareness, it might indicate to insurance companies that you’re at a higher risk for certain illnesses“, that gives a possible (implied, but not proven), connection that your social responsibility comes at an insurance price. Did you consider that? And this is not starting this year, or next year. Some of these events started no later than 2010.

This all was nothing but to pave the way for that what comes next. You see, there are several sides to Google and Facebook. They are all about bandwidth and several nations are now seeing that even though Facebook is too large, there is a clear path that data is currency, so how long until we see a growth of radicalisation through localisation? This is not radicalisation in the violent way, but in the opposite way. You should see radicalisation of data, attained by washing all the data markers in local server environments. You can’t wash all the markers, but you can make access to it a lot less available. This is the fear Google (possibly Facebook too) has had for some time. As these privacy acts, that data acts and data collection rights of the US grew in a need for compliance, people become falsely fearful of what is dangerous and what is not. The US government ascertaining whether you are a terrorist is not a danger. An insurance company upping your fees by $150 through collected data is a direct danger (to your cost of living). Now we see the link as it gets us to the first story that included Greece.

There will soon be a higher need for localised connected providers. Localised forms of Hushmail (www.hushmail.com), where the people get encrypted mail accounts that can be accessed online, through the web. How long until mobile users will select encrypted android apps, that do not connect to Google, but to local Hushmail providers. We still have the internet, but it will now go through national portals. The fact that Sony happened was only a matter of time. The fact that people now want that there data comes with actual privacy is a growing wave. The Wikileaks issue was the most visible and the most harmless one (for us citizens at least). The world is changing a lot faster than last year and many are now getting clued in that the things of value have not been guarded in the right way.

We will soon see new options on cheaper internet, cheaper mobiles and on package deals, this is what was skated around when this so called IP hearing was going on. Yet, when we look at an earlier statement by Mr Turnbull, in regards to IP, who said at the time. “It is very, very, very difficult if not impossible for someone that is just selling connectivity, just providing bandwidth to then be monitoring what people are doing“.

This is at the heart of the problem, they live of bandwidth, because bandwidth implies data, and the more used, the more data collected, which leads to the better their lives are. This is why they do not want monitoring. I am fairly certain that as their bandwidth falls away, as people move to localised solutions, which remain at the core local, these providers will ‘suddenly’ opt in a ‘possible’ solution. Only at the end of the tether will an industrial give in. Oddly enough, with fear of privacy and the dangers of insurance exploitation on the rise that tether will end up a sudden two inches shorter and now those providers will have to share that what they never had to share before.

Greece has changed the way they play the game; now perhaps we can change the game that is played and make a first monumental change for all!

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Tagged as analytics, Apple, Art of war, Chelsea Manning, Facebook, FBI, Forbes, G20, google, Hushmail, Instagram, insurance companies, insurance costs, LinkedIn, McKinsey & Company, Mr Turnbull, OECD, Sarah Harrison, SnapChat, Sony, stateless tax, the Guardian, WikiLeaks

January 26, 2015 · 21:19

Double standards, no resolve (part 1)

This is at the heart of two matters that are at play. The mere notion that change will do anything definite is just a laughing matter. Yet, it is not laughter at the people trying to do this; it is about the next two cogs of grinding that will halt it all. The first issue is Greece. There had been little doubt on Alexis Tsipras winning this, I was holding my breath in favour of Antonis Samaras winning, but it was never overly realistic. The problem is what will happen now. The direct issue is that none have been able to deal with Greek corruption in any way, shape or form. The fact that Kostas Vaxevanis and not those dodging Greek taxation ended up in a courtroom in 2013 is still additional cause for concern. Can we agree that as Greece has not been able to do ANYTHING about the mounting debts from 2009 onwards, a massive change must be made! It goes hand in hand with the quote we see in the Guardian “Priti Patel, Conservative MP in Westminster, just told Sky News that Greece’s economic problems are “a stark reminder that we should never join the euro”“, I will take it one step further, if Alexis Tsipras is not massively careful on what he does next, the downward curve (curve, not spiral) of the Euro will only fuel both British UKIP and French Front Nationale even further, it could also force the German people to feel pressure to leave the Euro in a failing attempt to bolster their diminished fortunes. It is a failing notion because no matter what happens next, those under the Euro will take a hard hit over the next 2 weeks, whatever bolstering will happen, it will only aid the super wealthy and only short term as they recap their non-tied down wealth as I personally see it.

The biggest issue remains corruption and tax evasion in Greece, no matter who comes next, without dealing with those two elements is simply selling a fairy tail (pun intended) to the Greek voters. This is at the heart of Zoe Williams piece that I disagree with (at http://www.theguardian.com/commentisfree/2015/jan/25/syriza-uk-left-labour), the title is already a bit of an issue for me ‘Syriza stood up to the money men – the UK left must do the same‘, which money men are you referring to Zoe? The artful tax dodgers, who are partly to blame for the entire mess, yet no one has the cajones (or any jurisprudential power) to actually prosecute? Or are they the people holding the debts? Let’s not forget that governments got ‘assistance’ under the strict rule of austerity, a promise never kept, because none of these politicians will do anything about them Greek artful tax dodgers.

There is also another side, the fact that less than 2100 Greeks have this much money in unpaid tax debts seems simply ludicrous to me (the Kostas Vaxevanis list of 2100 naughty Greeks), so I wonder how much spending should have been cut for over half a decade, so again we get to Alexis Tsipras, who would need to cut massive spending, for the mere reason that there is no money coming into the coffers. Yet, within the article Zoe wrote, there is a gem, it is out there in the open and it has been there for a long time: “Ukip is often saying something similar to the Greens: business interests aren’t everything. That’s a reality that the majority feels, but that you never hear described; that’s how the Greens overtook the Liberal Democrats, while all eyes were on Ukip“, when we see ‘business interests aren’t everything‘ we need to realise that this is not just corporate greed, it is a majority of corporate greed signs that have been rampant on a global scale. The issue of a 15% board of director’s wealth growth in a 2% margin world; how was that ever a sustainable situation? It is also the deadly option Alexis Tsipras might opt for. As Greece becomes a possible tax shelter ‘for a fee’, to allow for closed bank account details under limited donation of revenue (all for the people approach) where we see the next waves. Global corporations will love the coming step (if it happens), a non-accountable 0.3% tax account, each coming with its own island. It will anger the American IRS (and State Department) to no extent, it will drive the IMF into entirely new problems and the rest of Europe will see a shift of fund flows. This is all assumption (read speculation) on my side, but it could work for Greece, for a very short time. I reckon that this step, if taken, might have one massive obstacle, that would be assuring that another Kostas Vaxevanis list never surfaces, so when you see any announcement on the new Apple iOlympian or the new Google Nexus ‘Theíos’, then you know that Greece will be embracing new tax free shores. The question now is not, what is the solution, but what options are actually open?

We can accept the statement from Professor Christopher Pissarides from the London School of Economics “Greece’s debt pile is simply too high for the country to return to growth and services its borrowing”, in addition, we can accept the words of Yanis Varoufakis MP “Grexit is not on the cards, we will not go to Brussels in a spirit of confrontation. There is plenty of room for mutual benefit”, this all sounds fine, but if no one is actually actively dealing with the list of 2100 of Kostas Vaxevanis you tend to not have that many options, which means you need a decently strict austerity regime, the one issue that got them elected by disposing of.

What is the option of change?

Well, with my law education, I do have another path for Greece, yet, it is an uneven path, but it could be a long term salvation if it works. Now, feel free to object to the notion and if you are a law professional, than those remarks will be met with my personal investigation. So here is the premise!

Issue: The levels of corruption within Greece are beyond several layers of acceptability. We all acknowledge, that any nation will have a level of corruption, however, what can be done to stem the tide in a novel way.

Solution: As the current legal system is in such disarray, the mess will evolve from bad to worse. We might state that it had gone from worse to unsustainable, so what if we change the premise altogether? What if the new Greece will implement a new legal system from a common law system? Instead of making their civil law more draconian, with of course the added danger of more loop holes, what if Greece evolved into a Common Law nation? It will still be based upon Greek constitution and Greek values, but will come with a few centuries of English jurisprudential evolution. The benefit is that it does not need to happen overnight, but can be structured to deal with the tax laws and criminal law (corruption, fraud and such) first. You see, if there is no faith in the Greek courts, would it not make sense to evolve the justice system (this is a choice of words; this does not indicate that a civil law system is less evolved than a common law system).

It seems that the evolving flexibility of common law is exactly what Greece needs, no matter how good the law is regarded now in Greece; it has failed a nation and its people. This is at the unspoken heart of several issues. There is ample concern on such changes too; the big issue is that no matter how the Greeks feel at present, there is enough concern that Alexis Tsipras is not the new hope, he will be their last hope, because if no solution grows now, Greece will be finished, that much is clear. The reported word from several nations, in many publications is all about reforms. Greek journalist Nick Malkoutzis from the Kathimerini English Edition stated today “Syriza’s top priority should be to reform the justice system, the civil service and the tax-collection operations, to show Eurozone allies he is serious”. He is one of many voices stating issues in this direction. Yet, reforming a justice system is also wrought with the dangers they get when new legislation is passed. It sounds good in theory, but such reforms tend to be time consuming ones and that is one element Greece no longer has. It has been sustaining on borrowed time too long and those holding the debt papers are out of patience (loss of profit will do that to these people). So will common law be good or bad for Greece? I personally do not know, but the current system is not working and so far, the failed system has not been overhauled or tested since the 2009 collapse, which makes the issue more pressing, so as Alexis Tsipras claims it is turning a page, will it be for better or for a lot worse for Greece and for the Greek people. Only time will tell.

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Tagged as Alexis Tsipras, Antonis Samaras, Apple, Civil Law, Common Law, Conservative MP Westminster, France, Front Nationale, google, Greece, Greek constitution, IMF, Kathimerini, Kostas Vaxevanis, London School of Economics, Nick Malkoutzis, Priti Patel, Professor Christopher Pissarides, SYRIZA, UK, UKIP, Yanis Varoufakis MP, Zoe Williams

January 25, 2015 · 23:50

That what is ignored!

I feel a little on edge at present. You see, there are certain things that are just not done. The entire case that is set against Prince Andrew is such an event. I dealt with several issues in my blog called ‘As we judge morality‘ a little over two weeks ago.

Yet as some of these ‘claims’ are set in print again and again, especially the Daily Mail and the Telegraph, should we consider prosecuting Paul Michael Dacre (Daily Mail) and Ian MacGregor (the Telegraph) for libel?

Here is my reasoning, as I went through the Defamation Act 2013:

In section 4 (Publication on matter of public interest), we see in subsection 1:
It is a defence to an action for defamation for the defendant to show that
(a) the statement complained of was, or formed part of, a statement on a matter of public interest; and
(b) the defendant reasonably believed that publishing the statement complained of was in the public interest.

So far so good, we can all agree that published statements of members of the Royal family are indeed public interest. However, is it at (b) where we see ‘reasonably believed‘, as I stated in the previous article ‘As we judge morality‘, I came to serious doubts to some regard of these events as I looked into the PDF of what I believe to be the original affidavit from the Palm beach Police Department. In that regard, none of the papers had picked up the pace and the fact that it took me less than 10 minutes to find then Detective Joe Recarey. None of the papers seem to be clued in at all. Even the Guardian, who remained devoid of innuendo (at http://www.theguardian.com/uk-news/2015/jan/23/prince-andrew-lawyers-sex-questions-court), did work on this story and as such Alan Rushbridger, as editor of the Guardian should consider the choices he made, especially the choice he did made by not doing them (which is his prerogative of course).

Now I get back to the previously mentioned section 4. Is it that far a jump that to use the defence regarding ‘publication on matter of public interest‘ that the journalistic party has a responsibility to decently investigate the claims it is printing? So now we get to the Joe Racarey part, by NOT properly investigating the claims, can we now get to the part that these negations nullify the defence in section 4 that the press might seem to rely on? This now means that there is a possible case of libel that the press could have to answer to? That negation is found in the part ‘reasonably believed‘, as there was no proper investigation, there can be no reasonable belief as I see it. So now, the press would need to rely on the defences as seen in sections 2 and 3.

Section 2 is about ‘substantially true’, most important is subsection 3, where we see ‘If one or more of the imputations is not shown to be substantially true, the defence under this section does not fail if, having regard to the imputations which are shown to be substantially true, the imputations which are not shown to be substantially true do not seriously harm the claimant’s reputation‘

So, the defence holds, but only if those that were not substantially true did not harm the claimant’s reputation. I reckon that the accusation in itself is already showing to be damaging beyond belief, which takes care of section 2 and section 3 is about ‘honest opinion’, this is not an opinion piece, this is about an allegation that will be considered a serious crime if proven correctly. So as I personally see it, there is no defence left for defamation should such charges be brought against certain tabloids.

Let’s look at the following quotes: ““I had sex with him three times, including one orgy,” Roberts claims in her affidavit” from the Guardian. Now this is pure reporting, I still believe that in the light of a few articles, the Guardian should have gone a lot further digging before getting on the ‘gossip’ gravy train (even though we clearly accept that reporting is not regarded as gossip), the reasoning of the person making the claim needs to be above a certain level, that part is still not proven. My issue is not with the Guardian in this case, although showing support for the Royal family by digging a little better would not have been the worst idea.

With the Daily Mail it is a different kind of fish. We get a photo with quote “‘On chummy terms’: The Duke of York takes a stroll with disgraced financier Jeffrey Epstein in New York” (at http://www.dailymail.co.uk/news/article-2597308/The-bombshell-court-document-claims-Prince-Andrew-knew-billionaire-friends-abuse-age-girls.html), yet they are adamant of not mentioning when the photo was taken. You see, an actual journalist would mention when it was taken, not imply all with an added picture. In their defence, they also wrote “There is, however, no suggestion that the Duke was involved in any form of sexual exploitation” in that same article. The quote “Miss Roberts alleges she and the royal had sex when she was aged around 17, still a minor under US law in some states” (at http://www.dailymail.co.uk/news/article-2921490/Prince-Andrew-appears-public-Davos-time-emerged-called-swear-oath-innocent-sex-claims.html) gives us more. Yes, it is ‘alleges’, yet not unlike the Guardian they could have done their homework a little better before adding the articles as they had been added. It is my personal view (so feel free to consider that choice, not to just add articles as is, especially when the allegations involve members of the Royal family. I am not stating not to print them; I am stating that a high(er) level of investigative quality would have gone a long way towards giving the audience the quality article that they are entitled to.

The Telegraph has not faltered in remaining massively below expectations either. “It was his ongoing friendship with convicted sex offender Jeffrey Epstein, an American financier, that saw him forced to step down as the UK’s trade envoy in 2011” (at http://www.telegraph.co.uk/news/uknews/theroyalfamily/11364822/Judith-Woods-Prince-Andrew-was-pitch-perfect-for-a-change.html). Whenever there is any mention we see the following by-line ‘Prince Andrew Duke of York’s reputation has already been tainted by his association with the disgraced American financier‘, with each time EXACTLY the same photograph in several papers, all devoid of the mention WHEN that photograph was taken. How tabloids are willing to misinform you for the mere need of circulation!

So what should be done?

Well, I am all about the freedom of the press, but not when it comes to non-accountability. Here is also the problem; the press is in this case as they report on events, not accountable and there would be no case, but in my view, should there be a case? Let us not forget that the circumstances as given in more than one regard. Not that this was reported on, but that the press did not take extra efforts to investigate what could have been investigated. The earlier mentioned detective is only one of several options. When a royal is on some trip, his calendar tends to be filled and usual in company of others. There is no denying he had met Virginia Roberts, but were they ever actually in private areas? Now, the yes and no of that is of course what one person or what the other person states, my issue has a few other directions.

The first part is seen in the Daily Mail (at http://www.dailymail.co.uk/news/article-2896075/Prince-Andrew-flies-skiing-holiday-tell-Queen-s-innocent-underage-sex-allegations-does-immunity-deal-government.html), you see the quote “But today Mr Roberts retracted his claim. In a statement sent to MailOnline, he said: ‘I want to clear up that many years ago Virginia stated to me she was to meet the Queen’s son Prince Andrew and not the Queen herself. I’m sorry for any misunderstanding.’” Can anyone explain to me how a father (or mother for that matter) would allow their child to travel unaccompanied? No matter if that person would have been her Majesty the Queen herself, you do not let your child travel alone! If someone was there in any position as chaperone, then there should be a record of this. In addition, so much travel as a minor, on what passport? Where an on what dates did this person pass through customs with a passport?

Last there is the following statement “Epstein, a long-term friend of Andrew, was jailed for 13 months in 2008 for soliciting girls for under-age prostitution. The pair remained friends and were seen together in 2011 after Epstein’s release”. You see, this is stated in more than one form in several places, but was Epstein a long-term friend? Most of us want to be friendly with billionaires, but that does not make such a connection one of friends. When searching through boatload of pages, that part has not been illuminated for one iota (I admit that I might have missed it), but the fact that no one is clearly telling us about that ‘so-called’ friendship is decently worrying. Then we get the ‘seen together in 2011’, there could be several valid reasons. Yes, it is not ideal, but let us not forget the fact that Epstein remains a billionaire! We can speculate all we want, but why did they meet? Was this ever clearly reported on? Was Prince Andrew asked? Epstein has been investing in many philanthropically flavoured endeavours, so the chance that Epstein meets with people of fame and/or royalty is a lot more likely. Should this make us uneasy? Absolutely, but can it be avoided? Not sure! By the way, they do not look too chummy in the photograph!

However, going back over the previous part, there is actually in the Daily Mail (at http://www.dailymail.co.uk/news/article-2905218/Prince-Andrew-admits-s-foolish-friendship-paedophile-billionaire-Jeffrey-Epstein.html), the following “The Duke had previously said he had made an ‘error of judgement’ when he was snapped strolling through New York’s Central Park in 2011 with Epstein following his release from jail”, yet there is no mention why they met (still it is not a good situation to be in), also there was “expressing his regret for the ill-advised friendship”, which gives us enough that the previous statement is seemingly all correct. Still the issue remains, as I see it, that the papers should have done a lot more by giving clarity to the events.

Yet when we look at CNN (at http://edition.cnn.com/2015/01/05/europe/prince-andrew-sex-abuse-allegations/), we see that the CNN article has a massive amount of information regarding the accusations and how Alan Dershowitz responded to them. The fact that we get the quote: “Dershowitz offered to waive the statute of limitations and “any immunity.”” Gives added light to the case. If this is proven, not only could her claim be regarded as useless, valueless and foundation less. There would be in addition severe consequences for her legal team. Alan Dershowitz has decided to counter claim those events by having the attorneys for Virginia Roberts to be removed from the role of attorneys. If that is maintained we get the new part, how to deal with the press.

Now we get to the part that has been an issue all along. You see, the press have gotten away with way too much for a long time. As such, if the clear evidence is set against Virginia Roberts, it will be our turn!

You see, I still have an issue with the press to a certain extent, they have played too many games and they still regard them as captains of the fate of others for the ever growing need of more revenue. When proven that the Duke of York was indeed innocent we can change the future, we can finally hold the press to values. It is my belief that once the Duke is proven to be innocent, the people in the UK will possibly unite for a referendum DEMANDING that the full Leveson report is implemented. No space for journalists crying like little bitches on how the freedom of the press is such a valued commodity. As I see it, they threw away the concept quality reporting some time ago. With the Leveson report fully implemented, the press will have no option but to actually create quality journalism, or be held accountable for 8 figure penalties for every transgression made. It will be a brand new day! I wonder if Hugh Grant considered this (perhaps he did) and it could be a new round for that what was ‘hacked off’.

I believe that the people have had enough of a certain journalistically based approach to what is true, good and ethical. The people to a larger extent still have not forgiven the loss of Lady Diana Spencer due to paparazzi (some still consider her to have been murdered through the acts of paparazzi). If these hurtful events against Prince Andrew turn out to be false, I feel certain that enough people can be rallied to force a referendum on implementing the full Leveson report. Let us not forget the headline ‘MH370 suicide mission’, whilst no evidence was ever recovered proving that headline. In the end Epstein might face additional scrutiny, whether they proceed whilst successfully avoiding a situation of double jeopardy remains an issue. Yet, in all this, Virginia Roberts will have as new problem, if Alan Dershowitz can actually bring evidence to make his case, the life of Virginia Roberts will end, because being a victim is one thing, failing prove it and then having to live through evidence proving the opposite is true, will give additional worry to the press in several forms.

This might blow over for some, but for the press this case could soon be the stuff of nightmares, it could have been avoided by properly digging deeper into the story, which is what a journalist was supposed to do to begin with.

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Tagged as Alan Dershowitz, Alan Rushbridger, As we judge morality, CNN, Daily Mail, Defamation Act 2013, Detective Joe Recarey, Duke of York, Hacked off, Hugh Grant, Ian MacGregor, Jeff Epstein, Jeffrey Epstein, Lady Diana spencer, Palm beach Police Department, Paul Michael Dacre, Prince Andrew, Telegraph, Virginia Roberts

January 23, 2015 · 12:17

The danger topic

That is at the centre for me today. I have had a little dry spell, for some reason; I could not get the words coming from my fingers in a balanced way. Not sure if it was the news, or if it was the lack of news. Even as we are slowly strolling to new escalations when Israel was going after Hezbollah and got a free upgrade to a dead Iranian General. Just as I am still not convinced it was North Korea to begin with (that Sony event). We see additional escalations, escalations that are moving the prying eyes away from many small fields that are now on the verge of making rather large changes to all of us.

First there is Greece, we see an escalation of more and more ‘giving in’, all these professors, all about forgiving debt. Yet, when will we see the Greek officials in prison? When will we see ACTUAL prosecution of corruption? It is like a group of people, who keep on feeding the junk money for the train home, knowing it is spend on drugs, booze and perhaps a few hookers (I mean ladies with flexible morals). When we consider the Guardian (at http://www.theguardian.com/business/2015/jan/21/eurozone-exit-greek-grexit-germany-france), it seems to me that some statements like “Today a Grexit would weaken German and French banks, and cost the German government up to €77bn and the International Monetary Fund a slug of its loans, but would be unlikely to frighten global markets or undermine the 14-year-old currency bloc“, as well as “The Bruegal Institute in Brussels is not the only think-tank to believe the estimated €250bn cost of a Grexit, while covered by the bailout funds, would cripple the Eurozone and delay recovery for a decade“, give the taste that people need to avoid the Greek exit, but is that not at the foundation of the junk needing a fix? Those in power desperately want to stay in power. I am not talking about Greek politics, they want to skate on emotion and fairness, whilst not prosecuting, or holding to account those who were responsible for the current situation and it is about to get decently worse. You see, as America is close to hitting another debt ceiling, we will either see the raising of debt, or a reshuffle of numbers so that the debt will ‘conveniently’ seem like less. It is not just America, even though 18 trillion takes the cake and the icing. We need to look with the harsh light at the decisions the Europeans (through Italy) are now showing a new race. At The Bruegal Institute in Brussels is not the only think-tank to believe the estimated €250bn cost of a Grexit, while covered by the bailout funds, would cripple the Eurozone and delay recovery for a decade we now see that the ECB is about to spend 1.1 trillion for bonds. When we see “The Frankfurt-based bank will use electronically created money to buy the bonds of Eurozone governments – quantitative easing – to try to boost confidence, push up inflation and drive down the value of the single currency, helping to increase exports and kick-start growth“, can we agree that when an economy needs a trillion dollar kick-start, that the patient is not sick, it died and it is not going to live long, no matter how much money you pump into its cadaver shaped foundation. You see, we all need a little boost every now and then, but 1 trillion is not a little boost, it is the setting of a massive debt, whilst getting the continued revenue for those who are already well beyond rich. The last is not entirely fair or correct, but consider these statements we see all over the place that the richest 1% will own well over 50% of the planet by 2016. Yet we need to pump more virtual cash on the population? This is not just the continuation of a bad idea, it seems that the bulk of the governments are not holding themselves or others to account. So as we see “Today the ECB has finally arrived as a truly ‘European’ Central Bank. It has acted against political opposition to deliver what is by most measures an ambitious programme of quantitative easing,” he said. “The ECB has finally, if belatedly, done its part. Now it’s time for the Eurozone to relax the fiscal constraint“, we also see the dangers that the debt will change the curve of debt release for a lot longer, whilst the taxpayer deals with the debt of ‘spending’ now, the people will not see true new jobs, or longer term employment. So how is this ‘easing’ a good thing for anything else than the non-accountability of the governments connected? This gets me to the second part, some state that it is fiscal constraint, can in equal measure not be stated that this is for temporary fictive fiscal restraint? It is just a point of view. If we see Fiscal constraint as: ‘a reasonable comparison of planned expenditures to expected revenues‘ and Fiscal restraint as ‘Fiscal restraint is used to reduce inflationary pressures. The strategy is to shift the aggregate demand curve to the left with budget cuts or tax hikes‘. So as we see the mention “push up inflation and drive down the value of the single currency“, why was the mention Fiscal constraint and not ‘fiscal restraint’? Perhaps it is as easy as two sides of the same coin, but the guardian does not elaborate on both sides at all. This might have a valid reason, but should the audience not get a ‘better’ picture, especially as an additional trillion in fictive currency gets added to the market. This all calls into additional account the Swiss actions of last week, perhaps they saw what was likely to happen and they are very concerned for the consequences of these implementations. In addition, the acts of the usually ‘extremus sobrium’ Swiss should pause us to question a few matters.

Now I am not talking some conspiracy theory, but the fact that we usually get confronted with some high end decision and we the people are left with the invoice, should the papers at large not educate us? And with that I mean educate us a lot further beyond the ‘column’ and a copy and paste part? Again the last part is not fair and not correct, but the information part is massively missing. Again, me is not of being an economist (bad grammar intentional), but that I share with a massive part of the audience of those reading a newspaper.

So now we get to the part of German Chancellor Merkel (at http://www.theguardian.com/world/2015/jan/22/angela-merkel-greece-debts-german-world-economic-forum-davos), I wholeheartedly agree with the quote “it must take responsibility for its debts, as the country heads into crunch elections that could reignite the Eurozone debt crisis“, we gave support again and again (in the way of extra funds), whilst again and again we see the Greek demand to be held non-accountable for it all. We see the need for the Greeks to renegotiate their loans, and payments, whilst striking with the decent regularity of someone getting new clothes. Now, I am not having a go at the Greek population, they have been handed a raw deal, but let us not forget, this raw deal was given to them by their ‘fellow’ Greeks. So, it seems that the anger at others is a simple variation of the blame game. It is an understandable one, but still not the correct actions as I personally see it.

So as we move towards whatever option we could get to, the ‘notion’ of a World Bank Chief making a climate action plea, is not a bad one, but fixing the economy before spending a ton on infrastructure, a massive amount that is not bringing Europeans any ‘debt relief’ seems a little beyond proportions. It is almost like reading on how we need new trousers, whilst the bank has cancelled all our bank cards and our pockets are empty. This is not an exaggerated example. The debts in Europe are for a significant side way beyond proportions.

Consider the following quotes: “Tsipras wants Athens to be forgiven some debts to cut the cost of repayments. This would allow Greece a partial default while staying inside the euro. Brussels has said this is naive politics, if only because Ireland and Portugal, which also have mountainous debts with the EU, would ask for the same” and “Zsolt Darvas, one of the institute’s economists said: “I am convinced that Greece will need new funding from European partners, but its volume should be a few dozen billion euros, say €20bn-€30bn”

So not only are the Greek introduced to more stories by ‘Mother Goose’ Tsipras and in addition they will need another infusion of a few dozen billions. So, that comes to well over $2000 for every Greek. What is this money used for? Paying debts? Paying more interest bills? The latter now shows the link between the richest 1% and their unequal growth. In my view it is the foundations and settings for legalising slave labour. How will the Greek population EVER get out of debt?

Which gets us to the final quotes from the Guardian: “A newly minted drachma would be low enough to attract holidaymakers, but without the investment in new hotels, the industry could barely cope. Likewise, investment in new industries would be unlikely unless Tsipras can honour his pledge to root out corruption, something that has eluded the right-wing New Democracy party“, the Greeks cannot rely on tourism as is, especially when they return on the Drachme and that will be valued at 35,000 Drachma to the Euro (just voicing a fictive exchange), and without removing the current implied levels of corruption there is no solution other than the fact that loads of these cash incentives will go towards those who need not benefit and the Greek population gets even less options.

So as we look at these dangers as it will hit Greece and the rest of Europe, one must wonder why these people remain on the spending horse knowing it has not made a decent difference and knowing that added debts will delay economic fortune for additional decades. How is this ever going to be a solution?

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Tagged as Bruegal Institute, Chancellor Merkel, ECB, European Central Bank, Eurozone debt crisis, fiscal constraint, fiscal restraint, Greece, Greek officials, Greek politics, Grexit, International Monetary Fund, Mario Draghi, quantitative easing, Swiss, Switzerland, the Guardian, Tsipras, Zsolt Darvas

January 18, 2015 · 22:37

A seesaw for three

I have heard many things in my life, there was a motorcyclist with a lack of discipline for speed run straight into Bus 70 in Rotterdam (the Netherlands), the consequence is that his brain got tactiled by his motor helmet; neither him nor his helmet was able to overcome the pressure of driving into the side of a bus at full speed. There was a girl jogging on the train tracks, her jogging in the rhythm of the music, she never heard the train whistle, the train was not able to slow down in time, she did not go faster, the girl lost the encounter, the train did not suffer injury!

All this relates to the item at hand, when we consider the seesaw (many child joyed at the mystery of that temporary conundrum) we see that it is a simple game of equilibrium. I push, my partner goes down, my partner pushes, I go down; there is little mystery in this exercise. So, what happens when we have a third player? When we have a double up on either side, that side goes down until that sides kicks off again, the bigger the difference the harder the action. However, there is a second version, in that version party number three is in the centre, on the seesaw axis, there this party defines the balance. That game seems nice, but it is no longer a game, the gamers at the end of the seesaw seem to get nullified playing. This is how I see what happened in the last 48 hours.

The most interesting source in this case is a site called ‘Quartz’ (at http://qz.com/327410/absolutely-everything-you-need-to-understand-what-happened-to-the-swiss-franc-this-week/), with this quote being the most interesting one “Because it was creating new francs and using them to buy euros, the SNB’s currency holdings exploded. This is hugely important. In the United States, the Fed is buying the safest financial instrument in the world, US government bonds. It can hold those bonds until they mature and be virtually assured it will be paid back. The SNB, on the other hand, is acquiring a giant pile of currencies that can whipsaw in value, potentially exposing the bank to large losses“, it is interesting for two reasons. First of all there is this part: ‘the safest financial instrument in the world, US government bonds‘ and there is ‘The SNB is acquiring a giant pile of currencies that can whipsaw in value, exposing the bank to large losses‘. I took a few unessential words out of the second quote. What we get is with one, that the illusion that US government bonds are the safest. With a president unable to control its spending, the US is about to start new wars, setting them back billions, the Dow Jones Index is trusted less and less, whilst in addition more sources are stating that a stock market crash will happen any day now (at http://www.moneynews.com/MKTNews/Market-Collapse-Finance-Stocks/2013/03/01/id/492699/). I have no value on moneynews.com, what they show looks nice, but charts can be explained in more than one way and what is ‘disastrous’ to some, can be explained away by others. I have had similar thoughts on the changes to the markets, but not based on these charts.

So as the stock market would collapse, the dollar would take a massive dive. The Dollar is about to take a dive because it is so intertwined with the Euro in many ways, so as the Euro takes a tumble, so will that mighty ‘safe’ dollar (not to mention the 18 trillion of debt). So now we get the second issue, if the danger to the SNB (Swiss National Bank) is so volatile, why take any risk at all. You see, the Americans (some not too bright) went after all these rich billionaires hiding their funds outside of the US. So the Swiss always played along, because if push came to shove, they had American billions, perhaps even a thousand of them (trillion dollar joke), which means that the risk was relatively small. As America hunted down these artful tax dodgers, those Americans struck deals and took away their cash, so why should the Swiss take any risk for the irresponsible spenders on end of the seesaw? It’s like there is one European on one side, two Americans on the other side and Switzerland was on the axial holding the mess in balance. Now, the axle player stops playing and we get this mess.

So when we see “The bank’s foreign currency holdings have grown to about 75% of GDP” and “So the SNB decided to abandon the ceiling on the franc, in response, the spring-loaded franc shot higher“, makes perfect sense. Why should a nation with a relative low debt hold this much in risk? So now we get a new dance! “The SNB’s decision to suddenly go back on a previous policy it had claimed to be committed to will make markets think twice before taking the bank at its word. That’ll make monetary policy tougher to carry out in the future” shows two sides, one is he term ‘previous policy’. That sounds pretty nice that Switzerland is shown as ‘the bad guy’, yet, is that true? Policy is one thing, but it requires accountability on the other side, for the Franc with a ceiling is one thing, the fact that the roof might be made from papier mâché during a blizzard is not good news if you are Swiss in nature, the ceiling issues requires actions from all involved players. Especially when the foreign currency holdings of Switzerland is set at roughly 75% of GDP (going by the numbers QZ is showing), if you doubt this, then I ask you to remember that small place called Cyprus, when that went pear shaped, the Cypriots were left holding an empty bag (a little under 2 years ago). I am not at all surprised that the Swiss want a better option for themselves and getting out whilst they can is not the worst idea. The last part is seen in this quote: “five years after the worst of the global financial crisis and Great Recession, the world still seems to be tip-toeing toward a deflationary vortex. It will take serious political efforts from governments and central banks to move against the tide. The ECB finally shows signs of joining the fight, which is a good thing. But the SNB’s decision suggests that some governments are giving up and just letting the current carry them away“, this I need to do in the following parts:

‘It will take serious political efforts from governments and central banks to move against the tide‘, America has not kept their debt in check (as well as the ‘big’ Euro 4), it is still growing with a change of the guard (US presidential re-election) as well as the fact that another US debt ceiling is reached within the next 8 weeks. Add to that the Euro taking a few extra hits, this all adds up to a massive risk to Switzerland.
‘The SNB’s decision suggests that some governments are giving up and just letting the current carry them away‘, this is the killer. The currency effort of not maintaining its value is implied as the Euro goes down (implied, not a given), in addition we see the Greek news ‘Inside its smoke-filled HQ, the far-left party is making plans to defy the EU over Greece’s debt and abolish draconian austerity measures imposed to shore up the euro‘ (at http://www.theguardian.com/world/2015/jan/17/greek-elections-syriza-europe-eurozone-alexis-tsipras), so next week, if this becomes an issue, the Euro takes another big bashing because the Greeks could not contain themselves or the debt that they had created (their governments), so now the other players must pay for the short-sightedness of the Greeks. Why are there not more political parties very outspoken in this regard? I mean with the debt at hand, your private island could be a nice future (I’ll take ownership of Paros for 499 Euro)!

These elements are all in play, yet no one considered the effect of the risks. That empty headedness (as I personally see it), this part becomes visible when we look at ‘Swiss Franc Trade Is Said to Wipe Out Everest’s Main Fund‘ (at http://www.bloomberg.com/news/2015-01-17/swiss-franc-trade-is-said-to-wipe-out-everest-s-main-fund.html). This is all interesting, especially “Everest Capital’s Global Fund had about $830 million in assets as of the end of December, according to a client report. The Miami-based firm, which specializes in emerging markets, still manages seven funds with about $2.2 billion in assets. The global fund, the firm’s oldest, was betting the Swiss franc would decline“. Did we not see this before (was it in 2004 or 2008)?

When we consider the additional “The SNB’s decision to end its three-year policy of capping the franc at 1.20 a euro triggered losses at Citigroup Inc., Deutsche Bank AG and Barclays Plc as well as hedge funds and mutual funds“, which is due to the line ‘including a wager that the Swiss franc would fall‘. So if that is the case then several people made a very ‘dumb’ wager. The question becomes ‘did they make a bad wager, or was this orchestrated’?

There is no way for me to prove that there was any intent (I am not saying there was any orchestration, only asking on the chance of it). Yet, does this not represent another case of putting a few billion eggs in one basket? Yes, I agree that the statement “The franc surged as much as 41 percent versus the euro on Jan. 15, the biggest gain on record, and climbed more than 15 percent against all of the more than 150 currencies tracked by Bloomberg”, consider when we see the light of the seesaw, and the 75% of GDP that the SNB holds in foreign currency. When it makes this leap against the said 150 currencies, how much discipline are some currency controllers not showing in light of the earlier quote ‘some governments are giving up and just letting the current carry them away‘. Perhaps the question that Katherine Burton (the writer) at Bloomberg should be asking is “How come such managed levels of foreign currency holdings were left out in the open to this extend, especially after the Cyprus issue” is a question that should have run with every front page on the planet (at least 4 weeks ago), so it is not just the SNB that is now getting the spotlight, my questions becomes, which decision makers are now hiding in the shadows for allowing such levels of risk. It seems to me that a ‘policy’ is a poor excuse when people frown on the SNB, whilst not asking how it was allowed these levels of foreign holdings in the first place.

So when we look at the Guardian ‘Swiss currency crisis claims casualties across the world‘ (at http://www.theguardian.com/business/2015/jan/16/west-ham-sponsor-alpari-swiss-currency-crisis) “This has resulted in the majority of clients sustaining losses that have exceeded their account equity. Where a client cannot cover this loss, it is passed on to us”, so how many were ‘gambling’ that the Swiss Franc would take a dive and why did no one foresee this risk (when you bet the house and all your belongings on a ‘safe’ bet, you only have yourself to thank for moving to a carton box). The last statement sounds a little crass, but we saw this before then hedge funds took a dive, so why is there a lack of these checks and balances? Yet there is more, the Guardian has two more quotes that show the dangers here “We are very different to Alpari, which was designed for people who want to speculate” and “But I’m surprised they went bust so quickly. Ultimately, they should be able to go back to the client to recover the money they lost” which is the part I expected initially. When we see these levels of speculation, the question becomes, who was checking the window for icebergs ahead?

Finally there is one quote at the beginning, which I steered around. The quote “Shares in FXCM slumped 40% ahead of a formal announcement about its future after it admitted it faced $225m of losses“, should keep you thinking. Consider the question, that one currency jump could have this drastic an effect on Forex Capital Markets, the online Foreign exchange market broker based in the US. So, even though this could happen, the fact that it did, seems to be a nightmare for several players. All this and then we see the most astounding part in Forbes (at http://www.forbes.com/sites/timworstall/2015/01/17/this-is-just-too-lovely-about-fxcm-just-too-lovely-for-words/). Here we see “It’s not entirely obvious that those higher margin requirements would have saved FXCM but still, that is fun, isn’t it? They lobbied against the rules that would have protected them“, if you read the article, you get the whole picture (I was not willing to use three entire paragraphs there), so the need for ‘better’ margins pretty much costed them the farm in the last few days and even though Forex might survive, we need to take a harsh look at the ‘gambling’ that has happened, not just because of the gamblers, but the entire ‘policy’ part from the SNB does not sit well with me. With Cyprus 2 years ago, this issue should never have been allowed to exist in the first place, so before we start blaming and lynching Swiss people, let’s make sure that we get a complete list of all the currencies and the values that Switzerland was holding on 75% of their GDP, because we should be asking those involved parties a few questions on irresponsible parking such amounts.

Tim Worstall wrote the gem in Forbes, but neither him or those who set out the parts in Bloomberg and the Guardian are looking at the bigger picture (as I personally see it), as this economy was playing a game of seesaw, how did these adult players not realise that the person on the axial (SNB) was going to lose interest being at risk on the axle, whilst the other two sides were having the joys and benefits of controlled up and down movements.

The evidence as I see it is a simple as watching children play in the playground, the axle position of the seesaw is not the favourite place to be, not even for a short time!

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Tagged as Alexis Tsipras, Alpari, Barclays Plc, bloomberg, Citigroup Inc., Cyprus, Deutsche Bank AG, Euro, Eurozone, Everest Capital, Forbes, FXCM, Greece, Greek national debt, Katherine Burton, Moneynews, moneynews.com, Quartz, qz.com, seesaw, SNB, Swiss Franc, Swiss National Bank, Switzerland, the Guardian, Tim Worstall, US government bonds

January 17, 2015 · 10:52

Pussy versus Tiger

This was my first assessment when I looked at the Guardian regarding the article ‘Barack Obama and David Cameron fail to see eye to eye on surveillance‘. (at http://www.theguardian.com/us-news/2015/jan/16/barack-obama-david-cameron-surveillance-terrorists). As we see America slump more and more into the weak excuse it is on an empty wallet, it must have been quite the surprise for Prime Minister David Cameron, to go to the ‘leader’ of the free world, hoping for a decent lamb chop (which you actually can only get in either Australia or New Zealand) and he ends up having dinner with someone who prefers Purina as a meal.

You see, I am not buying his ‘civil liberty’ approach for one second. In an age where Google is demanding more and more privileges to access your mobile data, where Google search gets transparently pushed into your android phone on top of your functions. In that era HE is proclaiming ‘civil liberties’?

Where we see Facebook where we would have to consent to allow access to our religious beliefs and that of our friends for access to a game. What is this, ‘Gaming for Catholics’? Here we see discord on what is needed to keep the citizens safe?

I particularly like this part “As Cameron warned the internet giants that they must do more to ensure they do not become platforms for terrorist communications, the US president said he welcomed the way in which civil liberties groups hold them to account by tapping them on the shoulder“, tapping on the shoulder? Yes, with Bing, Google, Amazon and Yahoo all in America, he definitely wants the power of collection to be ‘unhindered’ for now. There is of course the thought that President Obama has no control and it is Google and Microsoft telling Congress how it will be for now, which means unmonitored access.

That part is also a requirement to keep the financial sector running uncontrolled until it is too late (a point which might have passed already).

So, is this all rambling? Let us look into the evidence!

The first part comes from the Trans-Atlantic Consumer Dialogue (at http://www.consumersinternational.org/media/1396104/tacd-resolution-on-data-flows-in-the-transatlantic-trade-and-investmemt-partnership.pdf), an organisation not too visible, but it is loaded with high profile participants (at http://tacd.org/about-tacd/whos-who/), the PDF had nothing really new to tell me, but this part is important “The actual extent of these data collection practices, whether they were lawful, or the range of activities involving companies such as Google, Facebook, and Yahoo are still unclear. Until the new US and EU joint group of experts tasked with examining privacy in the light of the National Security Agency’s PRISM Internet data program and related disclosures makes a report to the respective governments and the public, it would be unwise for the negotiators to address data and e-commerce-related trade matters at all. The public on both sides of the Atlantic deserves a full and frank discussion of what actually transpired, and what policies or safeguards should be required as a consequence“. Even though we were confronted with the Snowden fiasco, the massive part that is kept silent is what non governments are collecting, they have been collecting data every second, of every minute of every key press you made these last few years. Data that is valued, without oversight. So ‘yes’, as I see it, the President (or the Democratic Party) is very likely getting told that with oversight, the fat checks will disappear.

This is at the heart of the matter, David Cameron (and several others) needs to keep their civilians safe, whilst as I see it, America is about the bottom dollar at the expense of everyone’s safety. Should you doubt the latter part then consider the next bit “US trade policy requires radical reform, not only to the flawed certification process, but also to the secrecy of trade negotiations in general, the lack of accountability to the public, and Fast Track proposals that insulate trade agreements even from the scrutiny of Congress itself“, which we get from Electronic Frontiers Australia. So, as we see the push for ‘free trade’, how can there be ‘free trade’ without civil liberty? It seems that in the US ‘free trade’ is synonymous with corporate trade, specifically the corporate trade of big business. So as we see that areas are drowning in corporate oversight (by the corporations), we see the term ‘civil liberties’ being cast in a voice to keep big business out of oversight. So, how does your Purina taste today Mr President?

Now the intelligent person will state, what has one thing to do with the other? How did we get from some data discussion to the TPP? This would indeed be a decent question and my answer is that it is all linked. You see, the big data collectors can only continue if it is unhindered by policy. Google’s fortune comes from the data of millions each day. So once the data starts getting holes as the rights of those from the UK, the Netherlands, Sweden, Germany and Australia are set to boundaries, the collected data will show holes, which means the value goes down by a lot. Over 30% of the internet has business, which lands roughly 40% of ALL profits in the hands of US firms. I am precise in my statement here, US Firms! Not US government or the IRS, just US firms who will syphon billions via Ireland and like-minded places where taxability is at 0.1% (or some other ridiculously low number). If this oversight changes, so will the profits dwindle to a much lower percentage, now suddenly it will be a fair game for internet companies on a global scale, which is NOT what the US wants at all.

When we consider “The prime minister adopted a harder stance on the need for big internet companies such as Facebook and Twitter to do more to cooperate with the surveillance of terror suspects“, that fear will hit many and suddenly there are more holes in the collected data, downgrading businesses, the economy and heaven forbid, the DOW Jones Index, hence kitty goes into ‘UCLA’ mode.

But many in Europe are now a lot more awake, the events in Paris did that, when an actual terror attack hits a place like Paris, people suddenly notice and their fear for their safety spring into action, which is counter-productive for these US firms (as the terror attack is not happening in the US), corporate greed takes a front seat on what needs to happen, all under the guise of ‘civil liberty’.

As the president came with “In a sign of the concern in the US at the threat posed by extremists in Europe and in Syria and Iran, the president said disfranchised Muslims were one of the greatest challenges faced by Europe. “It is important for Europe not to respond with a hammer with law enforcement,” Obama said at a press conference with Cameron as he contrasted the way in which US Muslims had integrated and regarded themselves as wholly American“, really? How did Americans react on September 12^th 2001? They couldn’t get the DHS started fast enough! In addition, let’s take a look at the Guardian in 2012 (at http://www.theguardian.com/commentisfree/2012/dec/29/fbi-coordinated-crackdown-occupy), ‘Revealed: how the FBI coordinated the crackdown on Occupy‘. It seems that ‘civil liberties’ are not an issue, when profit (read: banks) are in play. If we accept the quote “The document – reproduced here in an easily searchable format – shows a terrifying network of coordinated DHS, FBI, police, regional fusion center, and private-sector activity so completely merged into one another that the monstrous whole is, in fact, one entity: in some cases, bearing a single name, the Domestic Security Alliance Council. And it reveals this merged entity to have one centrally planned, locally executed mission. The documents, in short, show the cops and DHS working for and with banks to target, arrest, and politically disable peaceful American citizens“, now apart from the Snowden issue, I regard the Guardian to be a good paper, this gives a clear view that ‘civil liberties’ is not an issue in the view of profit and in the view of those depending on thus stated profit.

So here we see the clearer view of Kitty (Oval Office) versus Tiger (10 Downing Street). David Cameron needs to get a handle on the terror fear which goes a lot further then ‘commercial interests’, he needs to actually address and deal with these fears, hence the need for data. In this matter he had to speak to the President, let’s face it, getting GCHQ to download Exabyte’s of data (whilst permission is pending), without a meeting first is just bad form. On the other hand we could ask that data set from North Korea, apparently that is where the top hackers are today (according to US officials).

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