Category Archives: Law

March 13, 2013 · 15:54

Conroy’s freedom of Speech

Conroy’s freedom of Speech

There have always been reasons to check out the front page banner of any newspaper. Some make us curious, some make us angry and some make us realise that the budgie cage needs cleaning. Whatever we think, we do tend to react to a banner.
So, like most people I also reacted. Now, personally I have a slightly less positive view on the Telegraph. So when a politician gets compared to Stalin, Jong-un, Mao Zedong and Castro, it tends to wake me up. My first thought being, now what is the media trying to get away with?

So I first took a little jump into what other media’s are stating and quoting. ABC quoted the following “He also announced plans to establish a new watchdog to ensure that media companies comply with independent journalism standards.”
In addition another newscast from ABC stated “The Federal Government has unveiled the long-awaited details of its proposal which enshrines media standards and tightens ownership regulation through an arms-length advocate to assess media mergers.”

This does not sound too bad, does it?

There is however opposition. ABC also mentioned the following “But independent MPs Andrew Wilkie and Rob Oakeshott have raised concerns about the laws. Mr Wilkie flagged the proposed public interest test for media ownership, saying the area is open to political interference.”

Both sides make clear arguments, yet, what is really at stake?

You see, from my point of view we need to do whatever we can so that we do not have to live and listen to the world according to Fairfax/Murdoch only. When there is a chance to keep the little ones in the field so that multiple views can be heard, the views we hear remain to be from a fair collection of voices.

For me there is another side that is not mentioned at present anywhere (or so at least it seems). Stronger self-regulations and stronger watchdogs were also clearly stated by Lord Justice Leveson. This issue is out far beyond the borders of Australia. The Leveson report is attacked by so many, yet this report shows how out of control the media is. Even though the report is focussed on the UK, there is a clear indication that the issue is playing FAR beyond those borders, and it is even an issue in nations NOT part of the Commonwealth where ‘Freedom of the press’ is nothing less than freedom to harass, freedom to stalk and freedom to display at the expense of everything and everyone for the need of profit and circulation. They however, refer to it as ‘the people have a right to know’.

The media seemed to be upset when the trials started, however I personally think that they seem to be more upset about the fact that they got found out mainly due to a trivial newscast in my humble opinion, than a ground breaking case of journalism.

Professor Ivor Gaber, professor of political journalism at City University London stated the following in his book ‘After Leveson’: “Many people have had much to say about the Leveson report, most of it pretty negative, but in his broad sweep of the relationship between the press and politicians, the good judge gets more right than wrong“.

As stated, the UK is in the middle of reforms halting and talks are breaking down at present. This was reported by the Guardian yesterday March 12th. So what is Senator Stephen Conroy about?
Well, first of all he is a politician and he is trying to get certain reforms in place. I would think that there is an Ego factor in place as well (let us not forget that he is a politician). If he pulls of certain reforms then not only will he look good to many many people. He will also be known as the man who was able to get reforms done, unlike his English counterparts, who are locked in a stalemate at present. So, I would say ‘Well done Stephen!’ at that point.

So is he a media dictator, or is he just in the way of a small group of upper level directors who need to fuel their altars devoted to money? That fair question is not really asked by the press is it?

He is quoted stating that the Australian people want the press to be held accountable. Is that so wrong? One side of the plans is to cut licensing fees in some instances so that the small players get a fair chance in this game. That part is supported by Independent senator Nick Xenophon. Xenophon mentioned in the same ABC story I quoted earlier that this part of the plan has merit. I reckon we can all agree that if the fees are too high, then the voice of Murdoch and Fairfax are all that remain at that point. This is NOT a good idea! Australians might agree that the small new players could bring us fresh artistic views in both news and media in general.

Consider the history of Oporto restaurant which was founded in 1986 by António Cerqueira. By media standards without the changes Conroy proposes, people like him might not exist in the future. We would be limited to Mac Donald and Hungry Jack. By giving smaller players a fair chance we get options, we will get to read and watch other opinions.

The plan of Conroy allows small media groups to reach a much larger audience in open honesty. That is one of his sides. So let us take a look at that. On the Department of broadband, Communication and Digital Economy the following issues were stated:

1. A press standards model which ensures strong self-regulation of the print and on-line news media.

2. The introduction of a Public Interest Test to ensure diversity considerations are taken into account for nationally significant media mergers and acquisitions.

3. Modernising the ABC and SBS charters to reflect their on-line and digital activities.

4. Supporting community television services following digital switchover by providing them a permanent allocation of a portion of Channel A.

5. Making permanent the 50% reduction in the licence fees paid by commercial television broadcasters, conditional on the broadcast of an additional 1460 hours of Australian content by 2015.

The first one is a good one. Giving the press some minimum standards cannot be a bad thing. He is NOT impeaching freedom of the press; he is basically stating that a minimum standard is required. In addition there is the part that the press would be held accountable. So when those ‘implied’ newsbytes, which call for rage and later are stated that they were ‘mis-communications’ might come to an end. I see this in the light of reading a newspaper and getting a much higher quality than a Facebook gossip byte. Is that a bad thing? In addition, do not forge that this is about self-regulation, not about government interference. Labor wants a real watchdog with teeth in place that monitors, not one that is government controlled. They want something better than a Chihuahua lapdog that yaps at time.

The second one is likely the one that keeps the big bosses of media awake for some time to come. This is about more than just the fear of big boys buying out the small ones and drown out smaller voices with the voice of the agenda of the big media owner. Make no mistake, that big media owner has an agenda. If you doubt that take a look at the front page of web search giant Yahoo. It is filled and almost drowning us with the Channel 7 views. Their branding, their ruling kitchen, their sunrise. Compare it to the American Yahoo page and see how small THAT American page is. Channel 7 is not the only one, make no mistake, they all do it in one form or another. When I personally interpret the second rule, I see a voice that states that diversity is always considered. This is to ensure that the smaller interest is never forgotten or ignored. Also, do not forget that no laws are broken here, the steps that Senator Conroy tries to implement is to make sure that the small voices are never lost.

The third one is the only one without a voice from me. I watch SBS, I seldom watch ABC, so I have no idea how out of touch their charter is. C’est la vie!

The fourth one is one I believe in. I never watch them, so why do I care? Because community is about just that, communities! There should be space for all, and to guarantee a space for them is just fair dinkum. Is that not the Australian way?

The fifth should be for us all, making it economically interesting for Australian content to be added to their channels. This is about more than just our voice. It will also grow the view of Australian arts. Australian made shows that might even grow our broadcasting interests on an international level.
If this drives us to get us new original drama that could equal shows like New Zealand’s achievement Top of the Lake, which by the way includes our own David Wenham and Thomas M. wright, as well as a respectable groups of high quality playing kiwi’s, then this is not a bad thing.
The fact that ABC pulled out of the funding here is a nice example (for whatever that reason was) and whether it was valid or not.

Now, I will be the first to admit that these issues should be looked at by more than just the mere blogger (like me). And in this regard I have very good company (as does Senator Conroy). We seem to be voicing the Clarion call of Lord Justice Leveson, who said pretty much the same thing and more (he did it in a document sized over 1900 pages). So that is where item’s one and two come from. Three is a local thing, so I will step over that one. Items 4 and 5 seem to be double edged. Not only do they imply to give strength and fair dinkum to the small fish. In addition it will give additional limit to the bigger boys. If they push diversity from within (whether it is for a discounted license fee or not), it will give a diversified voice and one that is not placed on the pedestal of other US/UK sitcoms. So people a lot wiser then me agree with me (OK, in honesty, I agree with them, but my ego requires a little nourishment at times), and the only ones out for the blood of Conroy seem to be those who dislike accountability.

Yet, is there validity from the other side? In all the articles that paint Senator Conroy in a not to favourable light, I actually found one voice that brought a decent point across. It was by Tom Morton at the Australian. (http://www.theaustralian.com.au/national-affairs/opinion/the-onus-of-the-media-is-to-adopt-decent-standards/story-e6frgd0x-1226297524636)

He has concerns and opposes certain views, but he does address a fear we hold. A journalist SHOULD be held accountable. That is perhaps the biggest fear we have. From what we have seen in the past, most journalists seem to be too shielded with the slogan ‘the people have a right to know’. The fact that most Journo’s seem to get away with murder (figuratively speaking) is why the people would be empowering the acts of Senator Stephen Conroy.

The funny part is that if the press (especially in the UK) had dealt with these issues themselves much stronger, then the current changes might never have had a chance and the British taxpayer could have saved themselves many millions on an extremely chunky sized report.

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March 10, 2013 · 18:04

Humanitarian Law v National security

HRA_MI5
The news has been on and off for a long time involving the Muslim Cleric Abu Qatada. Again yesterday as ‘another’ attempt to evict him has started. There is anger in both politics and the population on a person who is receiving a large amount of support, costs a bundle in legal fees and he is staying in a house paid by the UK government which is priced at half a million pounds. In this time and age of overbearing amounts of unemployed and poverty, those events are having a very negative effect on the population.
Yet, this cannot be about feelings and emotions. We cannot ignore them, but the balance requires us to take a look in the other extreme, namely the logical view.
I will ignore most rumours and classified information involving Qatada from before the arrest of October 2002, when he was taken to Belmarsh Prison. The reason that before that date most of it is all based on he said, she said and Lucy did (Lowdown Understanding of Circulator Younglings) as the Intelligence community is sometimes labelled by those who seem there is no need for the Intelligence community.
Yet, in this specific light is their view invalid?
Britain initially detained Abu Qatada in 2002 under anti-terror laws imposed in the wake of 9/11 but he was released under house arrest, sparking a ten-year battle to send him to Jordan. This would be the Anti-terrorism, Crime and Security Act 2001. On 16 December 2004 the Law Lords ruled that Section 23 was an issue, but under the terms of the Human Rights Act 1998 it remained in force. It has since been replaced by the Prevention of Terrorism Act 2005.
The BBC reported in their time line that in October 2002 Abu Qatada was Detained without charge. If we look at the ACSA 2001 act, then we should take a look at both sections 23 and 24.
S23 talks about detaining international terrorists, despite that his removal or departure from the UK is prevented. It is nice that S23(1)(b) mentions (or) a practical consideration. So the practical consideration allows for Abu Qatada to be detained.
S23(1) does refer to part (2), which requires provision paragraph 16 of schedule 2 of the Immigration Act of 1971 (c.77) as well as (and) paragraph 2 of Schedule 3 to that same act.
So we need to get to the immigration act. It is already interesting that they did not refer to the Immigration and Asylum Act 1999, which was released two years before that.
There it basically states that a person who may be required to submit to examination under paragraph 2 may be detained under the authority of an immigration officer pending a decision to give or refuse him leave to enter.
That paragraph reads literally:
(2) Where the Secretary of State may give directions for a person’s removal in accordance with sub-paragraph (1) above, he may instead give directions for his removal in accordance with arrangements to be made by the Secretary of State to any country or territory to which he could be removed under sub-paragraph (1).

Which then refers to proceedings, ejections and the Immigration Appeals act 1969.
I reckon the Clash had it down to a legal fine art when they wrote the lyrics ‘Should I stay or should I go!’
The more I read, the more I feel that the Anti-terrorism, Crime and Security Act 2001 was created a little too rash, but I am steering off course.
We get back to three parts.
1. HOW did he get here?
2. WHY was Abu Qatada arrested?
3. Why is this all taking so long?
Going back to 2002, he was held without being charged. This statement seems truthful as an immigration officer can do this; however, the things that follow are an issue. Why did this take until 2005? The Telegraph reported that he was freed in March 2005 on conditional bail. So can anyone explain to me how that takes 3 years? The Clash was spot on! Should he stay, or should he go! Was he a real threat?
1. He got here on a forged passport in 1993 and was given Asylum 9 months later.
The CPS (the UK version of the DPP) had the following information on their website:
Obtaining Leave by Deception – section 24A (1) Immigration Act 1971.
This offence came into force on 14 February 2000.
A person who is not a British Citizen commits this offence if by means which include deception by him:
a) he obtains or seeks to obtain leave to enter or remain in the United Kingdom; or
b) he secures or seeks to secure the avoidance, postponement or revocation of enforcement action against him.
In proving deception, direct evidence from the immigration official who was deceived should ordinarily be obtained. Further information regarding this element can be found in the legal guidance dealing with the dishonesty offences under Section 15 of the Theft Act 1968. See guidance on Theft.
In drafting a charge or indictment under this section, it will be necessary to elect whether the allegation is made under section 24A (1) (a) or (b) of the 1971 Act.
There may also be an offence under section 26 (1)(c) of the 1971 Act of making a false statement, return or representation to an immigration official in the commission of any offence under Section 24 of the 1971 Act. The Section 26 offences are explained below. The statutory defence under section 31 Immigration and Asylum Act 1999 applies to this offence.
This offence is an either-way offence and the maximum penalty on indictment is either a fine not exceeding the statutory maximum or imprisonment for a term not exceeding 2 years, or both.
The leading authority for sentencing is R v Nasir Ali [2002] 2 Cr. App. R. This case indicates that even where a guilty plea is entered, a sentence of 9 to 12 months imprisonment should be imposed. In terms of venue, these offences should ordinarily be dealt with in the Crown Court unless there is exceptional mitigation.
Important to know that His forged immigration feat in 1993, does not imply expulsion from the UK (no mention of that other than that he might face up to 2 years of Jail time. It seems he has done a lot more than that. Is this all about posturing?
I think it is a valid question. Yes, the man had ties, Yes, he had outspoken thoughts (thoughts I do NOT condone), but beyond that, has he actually committed a crime that warrants 10 years in Jail?
I am not speaking out for him, or condoning terrorism in ANY way. I am asking, what crimes did he commit? This is linked to part two of the three questions, and part three remains the same. Why is this taking so long? I cannot understand this part. Instead of closing it all down, Qatada is receiving thousands of pounds in Financial aid on many levels. It seems to me that on a political level many posturing acts are made and too many citizens are paying that bill.
In regards to the BBC quote by the PM Mr Cameron: “I am completely fed up with the fact this man is still at large in our country, he has no right to be there, we believe he’s a threat to our country“. As well as the claims as voiced on Sky News UK on March 9th “Theresa May has applied for permission to appeal against a decision to block the deportation of Jordanian terror suspect Abu Qatada”
My questions become, what on earth are they doing?
There are two reasons.
First is that MOST of these messes come with the trade of forged and illegal VISA papers! WHY is the immigration act not amended to include voiding residency if residency was obtained in any illegal way? There could be an exception if it can be proven that the person is seeking asylum from persecution. In addition, there would still a period of time between Residency and Citizenship to make additional checks. All this time wasted, all that money wasted!
The second reason is that the PM states that he has no right to be here. How so? Let us not forget that his entry was approved 6 years before the Americans had their 9/11. It seems that this case taken immensely out of proportions.
Now the other side! Was it taken out of proportions?
There is a government’s duty to react in defence and protection of its citizens. Let us be fair. MI-5 is not there to have fun and just sit around. They have goal and purpose. There seems to be a massive amount of ambiguity going on as well, especially in this case. Several European Judges claimed that Qatada is more than just a money man for Al-Qaeda. Either there is proof, and he is extradited or there is not. There is no legal twilight (as the Independent stated) in my mind. If there is evidence, then MI-5 must give it and stop playing around with security considerations (if they are at all involved at present), If there is no evidence, then cut him loose.

There are three branches wasting massive amount of tax payers costs. All founded in Ego (or so it seems). Why?
If we move towards IHL we can see that the first rule in this is ‘Persons outside of combat and those not taking part in hostilities shall be protected and treated humanely‘.
That rule seems to be simple enough.
So if we can agree on the premise that Spies and terrorists are only protected by the laws of war if the power which holds them is in a state of armed conflict or war and until they are found to be an unlawful combatant, then the solution seems so simple (I am infamously known to oversimplify issues).
Al-Qaeda is a terrorist organisation. It acted against the US and UK, so there is no issue. If there is evidence that Qatada was part of Al-Qaeda, then he is guilty and can be processed. As he was arrested again in more than one issue and involving transgressing the strict bail rules, then the question becomes. Is Qatada presently in violation of the Terrorism Act 2006? If so, process him, if not, let him go. Let us not forget that he can only be held up to 15 years according to Section 13 of that act.
This should follow a huge paragraph on the rules and regulations of extradition, but I will spare myself THAT agony for now. (Reading 4 acts on one day is quite enough).
Personally, from the news and information I wonder if we are not going too far on a binge to ‘assist’ the US in their witch-hunt for their terrorists. I am not arguing AGAINST their hunt for Al-Qaeda, but a lot of this evidence is way too thin, as mentioned by the Appeals Judge Sir John Mitting.
It’s not that there is a magical road to wander. It is process, rules of evidence and such (pesky law rules, according to some).
I wonder how Sir Jonathan Evans sees this all? If there is an abundance of political posturing, then at some point (sooner rather than later), the house of Lords might ask him, and likely will definitely ask the PM and the Home Secretary a few questions on this specific matter as this case spirals further out of control (by kind cooperation of the UK Media).
Getting back to the title
Common Law has grown on Humanitarian grounds and the rights of the individual.
The Common law system is based on previous court decisions. They are considered “law” with the same force of law as statutes. This has been going on for a few centuries. Common law courts have had the authority to make law where no legislative statute exists, and statutes mean what courts interpret them to mean. In this environment the UK, as well as Australia and especially Canada grew a justice system that respected the rights of the individuals and especially as all are innocent until proven guilty. The UK has not been without its issues like the IRA and the Ulster Brigade. It is only because of those events during the 70’s and 80’s that MI-5 grew to the strength that it was able to keep the UK relatively safe against attacks by Al-Qaeda. What most did not realise that 9/11 showed that the issue with terrorists is not just finding them, but prosecuting them, because of a ‘failed’ law system became a lot harder. I use the word ‘failed’ as Common Law had never dealt with situations like that, and neither had the US. The question becomes on how to deal with terrorists in Law. Common Law is to treat all alike. This is where the shoe no longer fits. A few require a different prosecution. This is not common Law; however these few have the desire to end the lives of many. Can the Law be allowed to continue to endanger the lives of many hundreds of its citizens as one is protected against draconian law needs?
Whether Abu Qatada is guilty or innocent, the issues that showed up during his extradition do leave us with a clear path of evidence. Several acts need to be revamped.
The valid question why this was never correctly done will remain on many minds for a long time to come.

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February 22, 2013 · 15:01

They’re consoles, but not as we know them!

Have you been looking forward to the Hype start of the PlayStation 4 yesterday? I was not. I did not waste time waiting for some stream to start with all the other people who were waiting to be the first to know. Millions of viewers and all were watching the same stream at the same time. I was not. Don’t get me wrong. I love games as much, if not more than the average player. But to quote Mr William Shatner in a very appropriate manner: ‘Get a life!’

So, when I looked at some of the details after the first wave, I had an option to sift through the information, and a few very scary thoughts were starting to form. The steps taken are very very appropriate (from the viewpoint by Sony), yet, we are about to get an entirely new wave of revenue driven groups, and before too long, it will cost you!
This might even more then you bargained for and there might be little to no chance to avoid it with all impending consequences. What am I talking about? Let me explain!

First the mundane stuff:

It is mentioned to have eight cores and an enhanced PC GPU. This system will work at speeds approaching 2 Teraflops. There is a lot more, but the issue is set in the next part I mention: “PS4 to include cloud and game live-streaming functionality; focus on social networking; global Gaikai network rollout.” (Source: Gamespot).

Am I just spouting out some facts? Perhaps, however, consider that managing multi core processor systems are a lot harder than most people realise. However, inserting code that accesses non-used, or less used processors is hard, but when active, they can remain undetected for a long time. Now add the thought that such malignant code is added through the DLC that is added to the game and we have a silent data screamer. This is the other less known side of anti-viral solutions. Data viruses are almost impossible to track, unless you track EVERY process, which slows down any system scanned.

Its opponent, the new XBox720 is still a question mark. There are loads of rumours, however, no real facts. It is however very likely that the Social Networking issue will be included. This is going to be the real problem.
This step was unavoidable.
Let’s face it, Facebook changed the world forever! However, if we take into account the shadier side of social networking (aka cyber criminals) then you might begin to realise that your goose could be cooked. We are not talking about an account that gets hacked. No, that would be too simple. For this part, we need to take an additional look back towards last October where insurers were mentioning that mentioning absences on social media might have consequences.
In December 2012 the insurance council of Australia made this quote: “The insurance industry is urging holidaymakers to keep their travel plans off social networking sites such as Facebook and Twitter to reduce the risk of burglary over Christmas”. This is actually late in the game as the British Insurance Age wrote this in June of 2012: “Social media-savvy young people could represent an emerging market for on-line risk insurance cover, according to research conducted by the Chartered Insurance Institute (CII)” So, here we can pretty much replace the words ‘emerging market’ for ‘additional costs’.

There has been the odd wild story on how a person tagged in a photo on Facebook through their smart-phone was enough for burglars to know that a house was empty. Now we add Social media to a gaming console? I could go for the kids and computers next, however, the bulk of gamers on systems like that are likely to be adults. Being adults does not mean that they are in ample supply of Common Cyber Sense. Let’s face it; loads of advanced users tend to lack such skills. In addition, we will now have to contend with consoles in need of Anti-Viral Software (to thwart Social media Cybercrime) and a league of other issues.
Let’s mention the issues that Sony had in the past with their hacked databases. Should we wait for the first time loads of credit cards go into some auto-donation mode? (With cybercriminals as the designated benefactor). I am not kidding! Yes, you will hear on the amount of safety Sony has, and the people will be perfectly safe. Spokespeople and Marketing spins will all make the case that we are all perfectly safe. So, let me remind you, or if you did not know inform you that in April 2011 the information of 77 million account holders were stolen from the Sony network. On May 4th of that year Sony confirmed that personal identifiable information was stolen.
Now they want to add their console to social media?
How long until the insurance company wants additional policies? How long until the insurance company decides that ‘it’ is not covered? Who will pay then? Sony? Or will they say “Oops! We so Sorry!” and leave you hanging with the consequences of the event.
I am not having a go at Sony here (even though it sounds like it).
There are several factors that should be seen as hazardous to the gaming health if those new console owners continue in an on-line/cloud gaming experience. First of all, cyber laws are shaky on several levels, especially when foreign criminals are involved (finding them is often a near impossibility). There is evidence on several levels that most of us are not ready for this level of integrated social media. Not because we do not want to, but because our systems can be invaded on many levels at several points. This is the consequence of evolution and people going to the edge of new technologies. At some point it becomes a clear that adding more and more is becoming counter-productive.
Then there is the part of additional revenue. Sony and Microsoft want all these sides to social media, for the simple reason that all that information is worth a massive amount of money. ‘free’ data, all there waiting to get scooped up by the container load. Would we get paid for this? Very likely not! How long until a non-adult gets to click ‘yes’ on an option so he/she gets it for free? Who is then liable when things go wrong? (When they go wrong, not if they go wrong!).
These are all the dangers of social media on the internet. Then finally there is their mention of Cloud gaming. Another new Hype that will be added for gamers. Yet, there are several levels of dangers. This is not just something I am claiming. Several exports on this field from data providers to the technology providers at Cisco make mention of this. They are warning us on levels of dangers when it comes to Cloud issues. So, the cloud, especially with data at rest will need several levels of monitoring and all this takes resources. So, how will we be charged for those? You can bet your house on the dangers that ‘free’ options there will come at a much higher price down the road and not unlike Facebook, should you stop gaming, then what will happen to the data?
The weird part is that most of these issues belong in medium to large sized companies with able IT coverage. Not in the average household where the IT expert is 11 and has a Nintendo 3DS!
Should you consider this and wonder how much time you have. Well, this console is to be released in 2013 and disaster could strike in 10 months, 10 days and 10 hours from now. Questions need to be asked, and those who protect the gamers (read citizens with a console) need to realise now that ALL data can be gotten to by cyber criminals, and in many commonwealth nations the law and the law enforcers are not up to scrap within that timeframe.
My biggest issue?
A device meant for entertainment is thrust into a grey area of legislation for the benefit of massive amounts of revenue. The moment our personal data goes somewhere else, those who enabled this in the first place will likely pass the buck to an area of non-accountability.

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February 13, 2013 · 00:33

Press legislation, or not?

It was not too long ago, that we heard all manner of harsh words and political contemplations on those bad bad bad press folks. All those phone hackers!

And yes, it did not take too long for parties to react and a long investigation started. It resulted in a report by the Honourable Lord Justice Leveson spanning around 2000 pages, making it a bigger work then the Lord of the Rings; yet, I guarantee it, not as entertaining to read. Many seem to agree with me. The issue however, is not the entertainment, but it was a serious look at the visibly failing ethicality of the press and it’s ‘assistants’.

Yet, it seems that the views from that report will be largely ignored. We await the release of a Royal charter for PRESS regulations in the coming week. So, how do we feel about this? The Guardian reported on the possible compromise by Labour. No matter where you stand as Labour, Tory or Independent. It is clear that there is a high issue. The PM mentioned the dangers on infringing free speech. Whether we see this as a compromise towards the press, or the ideological view is OUR view, and the view of the PM. We all fear dangers and threats to free speech and history proved that this fear is rightly so.
The issue more than team Murdoch getting caught with their fingers in the bugging cookie jar. It is about the standard and ethics of the journo’s that is the question. The evidence seems clear and overwhelming that as their papers need revenue to keep value, some were eager for money (read income) and had not too many issues throwing ethics straight into the Thames and have a free for all.

The questions then becomes, is the PM correct and should the charter suffice, OR is his honour correct and the need for legislation becomes paramount. His deputy Nick Clegg has been outspoken on the side of the Leveson report, and as such it is that the top players do not see eye to eye on this matter.

The question is whether it is a clear eye to eye, or that the involved parties (read people of the press) have lost the credibility and trust to continue the way they currently are. The issue we should not forget is that the true core of the press is a lot larger that most of us realise and most of them work hard, they keep ethics high and get published. Some break our hearts, dent our faith and crush our strength with the facts they report. So the report gives us another view. Can we actually ignore it all? Is that not wrong to those who kept the banner of Journalism high? Legislation would ensure THEIR good handling.

The issue that the PM fairly raises is that legislation would be more complicated and create a vehicle for politicians in the future to impose regulation and obligations on the press. I would like to add to that, that this is only the tip of the iceberg. Even if I ignored the fear he voices on limiting freedom of the press down the road there is an actual impasse. We would all feel divided between the two sides. They are both fair sides.

What stopped me from hailing the move towards legislation is what i had been reading lately involving several economic issues. Could legislation be used as a shelter for economic manipulation? How long until these matters get intertwined and there is such lack of legal clarity that a hedge fund gets ‘misquoted’ and the blame is pushed unto the press with all the, messages of ‘oops’ and reference to an honest miscommunication.

This comes from the NY times 9th July 2012 “Bank Scandal Turns Spotlight to Regulators”

That belief, some regulators say, stemmed from a “miscommunication,” rather than instructions from Mr Tucker. The bank also never explicitly told regulators that it was reporting false interest rates that amounted to manipulation, according to regulatory documents.

So, if this was taken as truth, then we see here an example how media regulation would just complicate matter. What if ‘them’ is a financial reporter, or just anyone in the press picking up a nice piece of news? For that matter, if I got a $1 for every mention of miscommunication I heard over the last 20 years, and if that rule only applied to people who were senior manager of higher then I would buy an island like Guernsey (or the Falkland’s with an additional free Frigate).

From those sides, and views I would see that the PM (alas) has a point. On his side is also Adrian Jeakings, president of the UK Newspaper society. He too believes that the industry is capable of policing the press. That part I wish to oppose. You see, they will play nice, they will be quiet and humble and so on, but how long until the 1,000,000 pound fine will be diminished, because it will only hurt more then it will do good? How long until some of them will transgress to the point that they should be criminally charged? At that point a QC will come into the court mentioning ‘honest mistake’, ‘my client is truly sorry and remorseful’ and so on.
This prospect moves me straight back into Camp Leveson (to coin a phrase). There is no doubt. Some of us will go one way, some the other way. No matter how we feel, we are not indifferent.

Perhaps reading the Royal charter when released will help us to clear our heads and accept that charter, or push us into demanding legislation. I do know that we have not seen the end of this any day soon.

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February 10, 2013 · 01:14

The Italian menace?

The Italian menace?

Just when you thought it was safe to think of any kind of future again, the abyss opens up right in front of you and your savings are again in danger.

The first topic of discussion as presented by the Dutch NOS was of course the European budgets. To a budget of 960 billion, the Dutch contribute 6 billion and they got a one billion dollar discount. Yes, this seems to be the Marks and Spencers approach to budgeting. Now, they seem to be happy, and I am not sure how to feel. It does however give a clear picture that the Dutch, always visible as a high player, are anything but that big. When you are profiles as a larger player and their contribution is less than a tenth of 1 per cent, that it means that they are not that big a player at all (or so it seems).
So, the Dutch politicians are going home with a satisfied feeling until the end of the decade. So how is this impacting? It is what followed that could become the real worry. It is a newscast of the return of Mr Berlusconi. Yes! He is returning to Italian politics with elections less than 3 weeks away. Does he have a chance? Not sure and not really my worry to be honest.

What is interesting is how he pulls people in with his dreams of giving back the real estate taxation of 2012. So, if that is done then Italy would be withdrawing from their promise to get their budget and deficit under control. If that happens, then what is next for Europe?
The bigger issue is that this might be a clear indication that Goldman Sachs is back and actively trying to meet their share in the Game of Greed.
They seem to be a clear controlling and influential party with most European governments. Forbes already reported this as a ‘danger’. They did mention the Monte dei Paschi banking scandal as part of their news cast as well. They also remained soft in their ideas of nations no longer being governable. I am less subtle. From my viewpoint I am willing to contemplate the opinion that the European governments are about to become the bank’s bitches with Goldman Sachs leading them the way to population enslavement. I agree, the thought is a little strong!

You see, there is method to my madness, or my madness is methodical (either way works). So, let us take a look at how I got to that conclusion.

In the Dutch newscast on this, as well as in Forbes and as well as mentioned in other sources “Berlusconi, who said he won’t seek the executive position but rather prefers to become Finance Minister, has seduced the masses saying he will repeal a property tax imposed by Monti, returning about €4 billion ($5.4 billion) to the people by refunding taxpayers’ 2012 payments” so with all the shortages, they add to the non-debt resolving side. We can debate whether it is the right or the wrong thing to do. In my view it is an Italian choice and it is their right to choose. Whether right or wrong, it is however interesting that Berlusconi seeks the Finance Ministers position. With him being a connection to Goldman Sachs as a (former) international advisor? It also means that the Italian deficit will be upped by another 5.4 billion dollars. This implies that Italy is less interested in getting their deficit down.

My issue is that according to the numbers Goldman Sachs is one of the banks retaining their gains these last years. I have nothing against that as I do have a capitalistic side. There is however a realistic side to profit, and many greed driven organisations seem to remain very unrealistic. With the ties he had/has, and the rules of the game so unaltered. I worry about what will happen to the Italian debt during the next government term.

Here is the link between this all. This was discussed by the Independent. “What price the new democracy? Goldman Sachs conquers Europe”. In there they made the following statement: “Instead what you have in Europe is a shared world-view among the policy elite and the bankers, a shared set of goals and mutual reinforcement of illusions.” (Nov 18th 2011). I could not have said it any better.

Now we get to the juicy part. Should Berlusconi get elected, and then we will suddenly read on how certain realignments of bad banks will be needed? There will be a change, and of course Goldman Sachs will get their share. It is all nice and legal. No matter how they react, whether Europe breaks apart, whether the costs will once again be set into other places. We are looking at an additional total debt increase of half a trillion dollars (across the EEC) and Goldman Sachs will get their share. So why are the European legislations not dealing with this clearly visible weak flaw?

Now, here is where I get to go on thin ice. The conspiracy theorist in me might think that this is what the power players from the US had in mind from the beginning. From their point of view governments are obsolete! Especially when these governments are getting in the way of highly desired profits, commissions and personal wealth goals.

Politicians seem to get pushed into an ego trip (in some cases they are simply with their backs against a wall). They do not cover their budgets and get the back of these strong players to get visibility and media to do the things that should be investigated and questioned on many levels. The Dutch SNS was a clear example. However other banks and acting parties should not be forgotten. The ABN/Amro Bank was one of these banks that required nationalisation. They are linked in all this with connections to the Royal Bank of Scotland (who was having a nice go at acquiring ABN/AMRO). And again here comes Goldman Sachs around the corner, having a nice juicy finger in all of these matters. They were in an investigation regarding Collateralized Debt Obligation (CDO) traders. They were not guilty, as some people forgot to disclose certain matters. However, the LA Times reported this on October 12th 2010: “Hedge fund operator John Paulson a key player in SEC case against Goldman Sachs. His firm made $15 billion in 2007 by betting that Americans would default on their home loans in droves.” From my point of view, that is not all they betted against.

Why am I so against Goldman Sachs? The issue is not Goldman Sachs; they are not breaking any law. It is the politicians that walk away with golden futures, creating bad banks and leaving the population to work of the debt through taxation, a population left with forever less and less. Soon this can no longer remain affordable and Italy seems likely the next one moving into this direction. This is where banks and large corporations become in charge and we get to work past retirement ages to fill the need of their greed. This is a need that is eternal and will never be satisfied. If you doubt me, then look at the list of nations that was able to keep their budget. It seems that only Belgium made their budget, and that might only have been because they were without a parliament racking up cost for the most of 2011. They even celebrated their new parliament after a record 541 days without a parliament on December 11th 2011. So that would definitely helped in keeping the cost down.

So back to the headline I started with “The Italian menace?”
Is it Silvio Berlusconi the menace? Possibly! If he continues on a path that does not stop the rising debts.
Is Italy the menace? Possibly! If they do not get a handle on their debts. In this case I mean a solution where they pay for their massive overspending from more than the last decade, mostly under Silvio Berlusconi.
Will the Italian menace end the EEC? Likely! If debts keep on rising, and as insurmountable debts are taken as write off’s against retirement funds and national treasuries. It is not impossible that Italy becomes the straw that breaks the camel’s back. Should you consider that this could never happen, then think again. The same was said about the SNS bank and that puppy is now a nationalised one (but it seems that for now it is not house broken).

This has happened again and again. This is not just about the banks. Politicians are also to blame. For that I would like to mention papers like “Investing in Greece: an Olympic opportunity”. It came from Costas Bakouris in 2001. The thoughts were all fair enough. However, how much came to happen? How much money did come in?

Most facts point towards the information that the Olympics cost double from what was budgeted and out of the amount approaching 10 billion a lot less then budgeted came in.
There was the article called “Business and investment prospects strong after Olympic Games triumph” Which was released after the games of 2004. In December 2004, through the newspaper USA Today. It was published in December 2004. The interesting part of the second story is that there was no name attached to it. So what was THAT source?

Even though the Olympics are a unique event, the financial consequences are real and high. Yet, there were no visible budget cuts and massive cuts were required. But wait, here is super hero/villain Goldman Sachs to help with the presentation of it all.

The Olympics were the most visible, but not the only one. This is what Felix Salmon wrote for Reuters on February 9th 2010 (exactly 2 years ago). “It’s a bit depressing that EU member states are behaving in this silly way, refusing to come clean on their real finances. But so long as they’re providing the demand for clever capital-markets operations like these, you can be sure that the investment bankers at Goldman and many other investment banks will be lining up to show them ways of hiding reality from Eurostat in Luxembourg.”

In that time, banks wrote cheques for investment events no one could cover. This is clearly shown in the case of the Dutch SNS. And the fun does not stop here. The article “ABN Amro hiring spree targets Asian private wealth” 29 January, 2013 Written by Elliott Holley shows that they are hiring again, with at least 1 person from Goldman Sachs. It is interesting how this small circle gets to go everywhere.

Goldman Sachs does not seem to have broken any laws. Politicians all over Europe seem to have changed very little, and they seem to all extremely willing to get into bed with Goldman Sachs, their ‘golden’ solution. National politics does not seem to regulate banks to the degree that is needed and some governments do not seem to properly regulate themselves either.

When we look at the 2011 EEC numbers we see the following: the largest government deficits in percentage of GDP were recorded in Ireland (-13.1%), Greece (-9.1%), Spain (-8.5%), the United Kingdom (-8.3%). Whilst the Government debt kept on going up and was set at 10 421 987 million Euro, which boils down to 82.5 (% of GDP). (Source: Eurostat News release 62/2012 – 23 April 2012)
They also show that Even though the GDP was set to become negatively in 2012, it had been forecast slightly positive in 2013. There is no proof of that, and whatever taxation was acquired in 2012, Berlusconi wants to hand that back to the people. Consider these numbers. Now add three facts to this equation.

1. The LIBOR scandal (see previous blog) shows how within the UK the percentages had been tweaked. This means that the percentages were incorrect. Now consider that the LIBOR is based on 4 times the planets GDP (adding up to 300 trillion $ as mentioned in several articles).

2. The GDP is the market value of all the final goods and services produced within in a country in a given time period. We have seen how people are without work. Economies are shrinking and services are lost to families all over the EEC. So how does that number keep on going up?

3. The European Economic Forecast, Economic and Financial Affairs (Spring 2012) document shows a picture again way too optimistic. In several nations it seemed to predict that 2013 was a year when things would be turning up. There is NO sign that this is happening. The belts are tightening in nearly all European nations. In addition, when we consider the SNS Property moving into Bad banks, we see that the current need for business property is diminishing due to lack of revenues. From my point of view it implies that the mentioned government debt at 82.5% of GDP (2011) could be as high as 90% of GDP. If that is true, then the overall percentages will hit all harder as the interest rates for government debts should be higher, and their credit ratings might be lower as a consequence.

Now consider that should the debt grow and their rating goes one level down, then that nation might have to pay a percentage on their debt. With governments owning hundreds of billions, an example means that a debt of $300B, if the interest is only 1% that would come down to an annual payment of 3,000 million, just to keep it stable. That means every person pays between 50 and 300 dollars to pay the interest. EVERY PERSON! Now consider that this is not a real problem for most people, however Consider that in Spain 24% has no job, that means that this amount will be paid by 75% of the population with income, so they pay more now. Then consider that the debt needs to go away.

We cannot trust banks as LIBOR shows. The EEC papers show them to think of them in a better state then they are, and the presented numbers are debatable. And as shown from several sources Goldman Sachs is connected to nearly every stage, somehow in some non-criminal way.

So two years later (after the claim by Felix Salmon), where are we now and what bad news is yet to come?

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February 7, 2013 · 15:11

Banks, eunuchs of a new congregation

The times are still all over the place. As I finished the 5th part of my previous story, the stories from SkyTV UK and the news by the Dutch NOS started to hit my TV. The thoughts I had on issues that are currently playing out are nowhere near done. I get the distinct feeling that this is far from over. It is almost that there is a voice whispering in the ear of Dutch Finance minister Jeroen Dijsselbloem. The whispers seem to be about the Bad Bank and the whispers could involve Goldman Sachs. There is no doubt that this man knows his stuff. He got his finance papers in Wageningen, a renowned and highly respected Dutch University. There is however more at play. I know it is a personal feeling and I am not an economy graduate, so there are plenty who can run circles around me in this regard.
The first part is that this idea comes from Goldman Sachs. Is it wrong to call a spade a spade as the expression goes? This firm together with the Lehman Brothers were the massive cause of something that had us reeling in 2008, and this is not over, not by a long shot. THAT damage will take decades to overcome. No amount of fancy bookkeeping can brush this under any size of carpet. This is however not about emotions. That path will never ever give any solution. My issues remain clinical (or at least I am trying to keep them that way).
Consider the banks are all allowed to get all their failings into a small rejectable corporation. These costs should be paid by the failed implementers. Not the government, not the taxpayer. The bank must pay for their blunders!
If this continues as it currently seems to be going, then we get a legal situation where high risk bad ideas can just be written off the books and straight onto the taxpayers list of to pay, whilst those responsible will ever show improvement. Those people will just keep on playing high risk games. That had been shown already. This thought was also mentioned by Rolfe Winkler at the New York Daily News. How is it even possible that a company that seems to have been one of the major reasons for the financial meltdown be regarded, or even ALLOWED to make any continued presence?
Wherever I looked Spain, Netherlands, Ireland, and perhaps even more places. Goldman Sachs keeps on being named as a primary advisor. How many bad banks are there in America?
Let’s take a clinical jump into health care. Would the Dutch Minister of healthcare Mrs Edith Schippers consider someone for a position? You see, I know a person (well, kind of). Brilliant physician (so they say), over a decade of medical research experience and deep knowledge of improving the physical best in all of us. His name is Dr. Mengele. Would she please consider him as the new Surgeon General?
Are people feeling ‘slightly’ sick at this particular moment? So if a transgressor of THAT magnitude is so offensive, can ministers not understand that we have a massive amount of resistance against parties like Goldman Sachs and Lehman Brothers? Some things should just not be considered. This is not emotion, this is common sense. If groups like that can debunk a generation, why trust them again?
Again I say, this is not emotion, this is common sense. My reasoning is simple. When a board member moves into such a power position, that person will surround himself/herself with the golden boys and girl that made for this to happen. It is an evolutionary step. The board member rewarded is also the golden boy/girl reward. The top of the pyramid moved to the direct vicinity of that power circle. And they would have moved a few people into their vicinity too. So whatever was done to that board of directors did not stop when they left. We are looking at a minimum of two additional circles of power, some moved up, some moved away and some stayed. But the way of thinking of those who left remained in place. That is the real danger. This could happen again!

My fears are voiced in much better way by Professor Julia Black from the London School of economics in a paper from January 2011 “The financial crisis revealed weaknesses in regulation which went far deeper than organisational structure. The new legislation alone cannot provide the solutions – but it will be an important tool for guiding the future conduct of regulators, as well as determining the name of the institution for which they will work” (Black, J, ‘Breaking up is hard to do’, 2011).
So these weaknesses go deeper than just the casual parts. This is partially visible in an article in the Guardian written by Alan Travis on October 2nd 2012 (“Labour will introduce new laws against dishonest bankers, Cooper to say”). It is interesting that this happens more than a year after the paper by Professor Black and more than 3 years after the Banking Act 2009 (I reckon they could not delay it any longer). In the article Cooper says: “Cooper says that the public looked at what had happened and had seen no real sign of people being held to account.” This was Yvette Cooper MP, the current UK Shadow Home Secretary.

Really?

Many had that feeling since 2008 when retirement funds when to the local latrine and haven’t been heard of since. For me there are a few additional issues.

1. Can this happen in Australia? (Some might say No, we are not like that, but how clearly is this set in legislation?) We should find and test this BEFORE the Australian public is presented with a multi-billion dollar write off.
2. The UK has the Fraud Act 2006 (originally part of the Theft Act). The problem here is that the word ‘Dishonest’ is a factor in each of the variations of Fraud. That has the issue that the events that lead the 2008 meltdown were not illegal. When we look at the Banking Act 2009, the criminal links are not really there. More important, since its release there have been no additions, alterations or amendments to stop the bad credit ‘solutions’ the US banks employed. So it seems to me that proper protection is still not in place. This means that the impression remains with me that the financial top can continue to get their monthly shares of luxury items, real estate and yachts. It seems that this area is not filled with loopholes; it remains nothing less than an open gate. Beyond that is the statement of Martin Wheatley in regards to LIBOR and that this had been happening since 1991 is an indication of the remaining dangers. So how safe am I in Australia from our banks playing this game?
3. Which solutions and papers can we trust? Many of them are all about concepts, approaches and possible ideas. And nearly all of them are pleading against regulators, regulations and stricter control. It seems to me that those papers are all from financial experts who want a solution without hindering their need for freedom of movement. This is in the heart of my fears.

There are leagues of papers that proclaim ideas. An example is “CRISIS MANAGEMENT AND BANK RESOLUTION QUO VADIS, EUROPE?” written by Dr Barbara Jeanne Attinger. In the conclusions section of page 47 she writes: “National special resolution regimes are capable of addressing the characteristics of credit institutions at national level. The UK regime is exemplary in this respect, as it provides an effective toolbox for bank resolution”.
We might ask her about the LIBOR issues; that in itself does not invalidate her thoughts and approach to the Banking dilemma at heart. Stronger than that, her presentation on 29th January 2013 in Copenhagen reads direct, to the point, clear and pretty brilliant. I do not need to need a finance degree to read between the lines that this is a possible approach to a solution. The part I am missing starts to be visible when get to the resolution in the context of a banking union. She mentions this and focusses on the third pillar.

• Single supervisory mechanism
• Integrated resolution framework
• Common system for deposit protection

The first pillar is about the supervisory mechanism. From my point of view I see the specific need for a fourth pillar, which would require alignment over several nations (not all have the same acts, rules and legislations when it comes to banks).
My thoughts would go towards:

• Single supervisory mechanism
• Integrated resolution framework
• Common system for deposit protection
• Acts of Accountability for Banks and Financial Institutions

I have seen several papers that rely on a solution without regulations. There is no way to tell who’s right here (my lack of Financial degrees gives them the advantage), yet the fact has been shown that Banks cannot be trusted, and the LIMOS scandal just adds a bucket load to that belief.
The acts need to go further than the Fraud Act and the Banking act combined. It must clearly outlaw certain acts. It must also limit rewards. The utter need for a ruling that bad bank approaches are no longer rewarded. More important, any form of reward within financial institutions should be lessened by the amount moved to a bad bank, or bad investment write-off. Something they will not want, however, consider the fact that people end up with margin profits with swapping papers. That should no longer be rewarded.
The high risk use of Interest-Rate Hedging Products (IRHP) are reported to dent their net earnings prospects in the short- to medium-term. (Quote from the Guardian) Well, if it is impeding net profits, then it should not be rewarded in any way shape or form. You want to run risks, fine, but then the bank does it risking their own capital and own finances. What are the chances the banks agree to such measures?
There is an additional issue. This is the current instalments of Goldman Sachs creativity called Bad Banks. This is nothing to attack them on, as they do not seem to be doing anything wrong or illegal. However, I feel that this escape hatch will cause a lot more damage in the short and medium term than anything else. Even long term these Bad Banks are to be seen as issues. The required change would be that until resolved, no less than 5% of annual banking revenues MUST be transferred to the bad banks from the banks that had to be created because of their actions. In additions, the commission-able revenue must be based on the remaining profits AFTER funds are transferred into the Bad Bank. The need for this is shown as the Netherlands are already reporting the need for more and more financial assistance as Bad Bank properties are placed in financial duress. So SNS can just wave it off and sail to the future? It reads like the good old British days of Wine and Jousting: “Peasant Population Taxation! For a long lasting rule of Fun and Frolic”
The next issue goes beyond this. The Bad Bank might be taken care of in some way. Perhaps McKinsey & Company picks it up. Perhaps Moret & Young takes a creative accounting dip in that pool. The LIBOR scandal is however more than just an issue at hand, it will be a debilitating complication, allowing several parties to start muddy the water, leaving a solution hanging until sometime down the track, and at present no protection seems to be in place, and none to look forward to in the short term.

I reckon the current scandals show that this is not even the end of the beginning!

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February 6, 2013 · 17:56

It hurts every time, but we love it

So, in this fifth part, we will have a little look at the UK banks that were hit lately. This is a progression from previous parts. Not because they were linked (they might be, but I gave no deeper look at that). The important reason is that the banks are doing more than setting a trend. This is all a continuation when banks became more then service providing organisation. They became profit driven. Instead of the normal profit of continuation it became driven to the optional profit of speculation. Even though most banks would argue that this is the way to go, the Netherlands showed how their banks lost to the amount of 40 billion Euros. This pretty much covers more their current deficit. There is also the continuation of thought on the decision makers. How can we be allowed to sit down and see how a group of less than 100 took decisions that would cripple a nation on narrated limitations like ‘miscommunications’, ‘blunders’ and sheer incompetence? More astounding is that following the acts, some decided to look at advices from corporations losing utter fortunes (Source: Telegraaf, 31st October 2012).

This is not just about the fact that we are dependent on a very small group of people. We are confronted that they are just people, with needs and dark desires. A group having ‘ideal’ dreams and writing checks a lot larger than their ego could ever cover.

So what to do?

Let’s take a look at three groups.
The Bank of Scotland, The Lloyds banking group (of which the Bank of Scotland is now a part) and Barclays.

In 2012 the LIBOR scandal got a hold of many (London InterBank Offered Rate), There were accusations and proof was given. As LIBOR affects the US market and it was seen as a violation of American law. The UK version of the Telegraph reported that the chancellor had made it clear that any financial penalty imposed by American regulators must be paid for by bankers, and not the taxpayer. (Source: The Telegraph).

From my side the first thought was that it might be nice if the US cleans up its own side first. I wonder how much money they reclaimed from upper management at Lehman Brothers? Interesting is the information, that those upper level ‘demons’ (aka members of the board of directors) got overall half a billion dollars in bonuses. How much was reclaimed? An example of this is Erin Callan (former CFO Lehman Brothers) who did get a nice payout and if I can believe the NY Times a new husband and moved to a high position with Credit Suisse. Now the next is really important. SHE BROKE NO LAWS! (As far as we know). Also, there does not seem to be any evidence of any kind that she lied. She has been portrayed as a ‘girl’ who was in over her head. That is hard for me to comment on, but it does raise certain questions. There seems to be a board of directors who seem to play the multi-billion dollar game like it is a round of Parcheesi. To debunk a trillion dollar company and then walk away with half a billion should result in more than just global questions. That part is important as at the end there were dealings with Barclays who had a small non illegal windfall. Now business is business, yet it does show that a certain game that was played in the US seems to be played in the UK to the extent that is now the LIBOR scandal.

 

How does this link to the Netherlands and the UK?

Well, look at the reports on how percentage bases are calculated and how it reflects not on ACTUAL debt, but based on how these debts relate to Gross National Product and how these things influence the DOW. So it is in the interest for all to keep certain numbers high. Especially for the greed driven! This is the real problem from my train of thought. Considering what I wrote over the last weeks means that the Greedy need the DOW index to move higher and higher. Yet, all the numbers give me an indication, especially when we see a global depression that those numbers should not go up the way they do. It feels to me that other factors are influencing it all. The US with the fiscal cliff (Fiscal Abyss seems more accurate). Many EEC nations are in massive debt, and then hit with waves of unemployment, higher costs, declining standard of living and no direct prospect that this will improve. People are not spending the way they did. The housing market is breaking down in several nations and so on.

So consider the next nightmare. If the DOW index drops 4,000 points to 10,000. What then? Too many people seem to ignore parts, others want to control parts and those in charge want to rule, so when it does collapse, they maintain whilst none survive.

This same view seems to be happening now in the UK. The controlling of percentages to LIBOR is only a first. A lot of these reports like the one the BBC showed in August 2012 mentioned that this system must change. This was spoken by Martin Wheatley of the Financial Services Authority. He also mentioned discrepancies going back to 1991. This means that some level of manipulation has been going on for over 20 years. So is this about ACTUAL justice, or is it that the US had become SO desperate for as strong as a hand as possible that they pulled a Benedict Arnold against their own banking ‘buddies’. For the UK readers, Benedict Arnold is the American version of Edward Devenney.

Another party in LIBOR is Barclays. They dealt in services that rely on LIBOR, by intentional misrepresenting information they got better deals and therefor more profits. The problem is that using Derivatives in this way and the involved banks’ lending money to each other it becomes a musical chair exercise in passing pieces of paper from one bank to the other. From my viewpoint it could be seen as adding funny money to the internal till and amassing profits from something that was not there. And as they moved hand to hand, they kept the margin of profit that LIBOR offers.

So the following step is reforming this. The UK government seems to be happy to accept all upgrades that Martin Wheatley suggested. However, Reuters reported on the 28th of September 2012 that these changes would add volatility to the short term markets. They also reported that the FSA (the place Martin Wheatley is from) mentions that this standard is too entrenched to replace. It seems that banks on a global scale are too afraid to rock any boat. Is it a fear that their united spread sheets are altered to remove their layer of manipulating? If that is so then their powers would soon be diminished. It seems clear to me that markets are manipulated on several levels and those in charge are in no mood to change any of it. That situation becomes a lot more volatile when you consider the US debt of 17 trillion dollars in addition to the Fiscal Abyss. Those two, when a change is set might mean that the US could be bankrupted overnight.

 

Any claim that this will never happen is slightly moot. Here we now get back to the Netherlands where the same was claimed of the SNS Bank. It is now nationalised. Many nations should now be contemplating massive change to remove the power of banks as we can no longer afford THEIR life style.

It is interesting that the UK is under such scrutiny by the US, yet the US is nowhere near on cleaning its own banks (in my humble opinion). This does not mean that nothing should be done. And it does not mean that they should not have done anything. There is however the question on how those could be improved (as I have asked myself and on my blog in several situations).

So we get to the Lloyds banking group. In January 2013, 8 people were charged connected to a $55,000,000 corruption scandal. (Source: AP). This is not the only issue. Ian Fraser, an award winning Journalist, who reported amongst others for the BBC and Thomson Reuters has a lot more on his blog http://www.ianfraser.org. If anyone wants to question his education? Well the man was ‘shaped’ by St. Andrews (the University, not the Saint), which means he should be regarded as a member of the highest echelon in his profession. In addition, when we look at the board of directors of the banks we mentioned earlier, then we see more than just casual links. Some of them had positions at Citigroup, the FSA, The Royal Bank of Scotland, the US Treasury, JP Morgan Chase, International Swaps and Derivatives Association (ISDA) and more. This seems to remain a very small inner circle in-crowd.

It is clear that a lot more has happened and even more is happening. This is not even the complete story, but we have clear evidence spanning 2 continents that several nations have a collection of banks where it is all about the profit. Looking at the ‘blunders’ where they were willing to bet the house on all of it. So I feel that clear, visible and vocal oversight of these parties is a given essential need!

Please consider this last part. The UK banks involved in regard to the corruption case and the LIBOR scandal consists of 4 of the 5 large UK banks. It sounds harsh however this implies 80% of the UK banks have prosecutable issues. This is more than a scary statistic. I would take a guess that these 4 banks are controlled by boards of directors and they would add up to less than 75 persons. What happens when they in the same fashion as the Dutch SNS agree that ‘blunders’ were made? Could the UK survive a hit that large? More important will be the question whether the results also impact their siblings Canada and Australia?

Several questions and I expect that no clear answers will be forthcoming (any day soon). A political step could be in the form of carefully phrased denials and years of closed door meetings.

For me the conclusion from what I have seen over the last few weeks is that oversight is a must, there should be a clear list of definitions that the financial world must openly agree on and that there must be an open list of those involved in those standards.

As I close this final part of my reflections, the hope is that you enjoyed these five blogs.

These series were my thoughts on the Financial Banking Blunders as set in:

  • Greed and the lack of common sense.
  • Time for another collapse.
  • The future of greed.
  • A solution by annexing greed?
  • It hurts every time, but we love it.

I will try to take an evolving look at banking laws in a future blog.

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January 30, 2013 · 18:54

Time for another collapse

We have all seen the state of matters on many nations. Including Australia loads of nations are in a massive downturn. America keeps on spending money they do not have. Spain is fighting a massive wall of unemployed (over 24%). Greece is fighting just about everything from no longer payable debts and unemployment figures to phantoms of their past. In addition to this France, Italy and Ireland have issues with both debts and people somewhat not working. Last but not least, the Dutch economy is at a low and they are about to change the current Monarch. Add to this the referendum that is at the heart of the UK, will they remain in the EEC. All these are questions that hold matters that stop an upturn of their economy. These are bleak times indeed.

So can anyone explain to me that the Dow keeps rising? (Seriously, I am not an economist!)

Apart from a dip around January 8th there is no real upturn in the US. They have their issues around budgets, around 7.8% in America does not have a job, their export is not what it needs to be and it seems that their numbers are not what they appear to be. Citing a newscast where the following was stated “The US unemployment rate falls to 7.7% thanks to the reduction in the labour force.” So from that we could consider that yes, there are less unemployed, those people did not get a job, they became pensioners. What other misrepresentations are they making? Now, let’s be honest. They are not doing anything wrong, not just because it is done by all, but because they are clinically speaking the truth. Yet, considering these truths, the question remains. Why is the Dow Index going up and up and up?

Are we about to get hit with a 3000 point drop, and if so, who’s wealth will fall away, the banks and bankers or the retirement funds? It feels like America has adopted a Japanese way. The way of the ‘Yes’ people! Hai!

Americans shy away from bad news. They go play Possum, they ignore, they reject. There is no fight for improvement, there is no middle ground. It is only Victory or Apathy, and victory is a term used often and mostly never deserved. Lately we see messages like this: “Just one hour before midnight on New Year’s Day, the U.S. House of Representatives approved a one-year renewal of federally-funded Emergency Unemployment Compensation (EUC)”. Decisions of the 11th hour! Even issues on the fiscal gap are deadlocked. Moving forward is not just hard to do, it seems impossible to some to make the hard calls. If they like victory stories that much, they should take a look at Germany. Just so that readers are up to speed, let’s take a little walk on the historical side.

June 7th 2010 “The German government on Monday announced plans to reduce spending by €80 billion ($95.7 billion) by 2014 in the largest package of cuts since World War II” (Source: Die Spiegel)

There was a lot of commotion. Several nations called it overreaction, some called it nonsense. In an IEX article on Macro economy they all mentioned how Germany is such a worry. They even quoted George Soros as a source of it as he spoke at a University in Berlin. How irresponsible these cut backs were. Yet, now Germany has a strong economy, much stronger than anyone else in Europe. I wonder if they saw through the Megalomania of George Soros. It had been advocated by people like Glenn Beck for a while. It seems to me that on a planet of debt, those who own money, those who are in the favour of banks would be in charge of the planet. It is one way of making governments flaccid to your actions; they desperately need what you could spend in their country.

Yet, I am digressing from the issue, which remains the Dow index. Germany remains the only one who fought back these debts with success. It stands to reason that the Dow should not be this strong. Consider that the Dow is fully called “The Dow Jones Industrial Average”. Now consider the unemployment levels which is up and the spending ability which is down. Both elements are off on a global scale.

So how come that this index keeps on rising? What artificial flavours are added?

Now consider that the debt of most nations is based upon Gross National Product (GNP), now consider this falls, which means that the debt quickly rises as per example below.

GNP = $1B, debt is set at 3%, which means that the actual debt is $30M.

Now consider that next year, the GNP is only $700M, which means with a debt of $30M the debt is now 4.28%. This is far more than their agreed and allowed margins of debt. Is this why the Dow is rising? To keep debt percentages low? Also consider that most debts are not millions, but often billions, and in one case many trillions.

You might wonder. Does this matter? Yes, it does for two reasons.

1. The same applied to people with debts in the US. And then in 2004-2008 one in six in the US lost their houses as their spread sheets stated an overly large debt. Why should this not apply to governments? Why are they not accountable for their actions (or better inactions).

2. We seem to be getting that ‘we are still OK’ message, while the impression seems to be that some people are cooking the books (or slightly more precise, they seem to be cooking the percentages).

So the question becomes when it happens (not if it happens) that Dow number slices down to 10,000 or less, who is kept holding the bag?

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January 27, 2013 · 23:12

Is Ignorance now a valid defence strategy?

I must admit, that the case link that passed me on twitter had my in all states of confusion and amazement. The issue is that an 18 year old Muslim boy had ‘consensual’ sexual intercourse with a 13 year old girl. (Something we tend to refer to as paedophilia). Judge Michael Stokes decided to give the boy a 2 year suspended sentence.

The article was on the UK Daily mail, and I decided to take another look, yet, not much luck. Most other papers haven’t touched it yet, or will not touch it at all. Even Sky News UK seems to remain silent on the matter.

Let’s take a first look with legal eyes.
This was not a situation involving consent!

The Crimes Act 1900 (Australia) States in Section 61HA (4)

A person does not consent to sexual intercourse:

(a) If the person does not have the capacity to consent to the sexual intercourse, including because of age or cognitive incapacity, or

So, because of age, we have negation of consent.
This could now falls under Section 61I, Sexual assault

Any person who has sexual intercourse with another person without the consent of the other person and who knows that the other person does not consent to the sexual intercourse is liable to imprisonment for 14 years.

However, the ‘AND’ is massively needed, this did not seem to be the case here.  So, there was NO sexual assault.
But, this situation is captured in Section 66C Sexual intercourse—child between 10 and 16

(1) Child between 10 and 14
Any person who has sexual intercourse with another person who is of or above the age of 10 years and under the age of 14 years is liable to imprisonment for 16 years.

So, he would get an additional 2 years in wonderful penitentiary Hilton. This would be an open shut case if we read the Crimes Act, however, in CTM v R [2008] HCA 25 where a suspended term of 18 months was delivered. There the facts were not the same. However, in this case the accused was under the honest believe and on reasonable grounds that the victim was over 16. (And not the age of 15 as she turned out to be). This scenario does not play the same way in the UK (Where they call this part the Sexual Offences act 2003).

There in Section 9 it states:

(i) B is under 16 and A does not reasonably believe that B is 16 or over, or

This is different. Yet, it should not matter as the accused knew the age, but did not know that the act was illegal. If we go by Section 9 (2) he would again be entitled to a government paid stay at Hilton Penitentiary for no longer than 14 years.

So is ignorance bliss?

This is only part one of the entire play. The second part is all about the following sentence : ”Earlier the court heard how Rashid had ‘little experience of women’ due to his education at an Islamic school in the UK, which cannot be named for legal reasons.”

If we look at The Sex Discrimination Act 1975 (SDA) which makes it illegal to discriminate on grounds of sex or marital status, and applies equally to women and men. Then we get two issues. One, the accused was guilty of discrimination (we will for now ignore the fact that he was genuinely not aware of this). The actual issue is that these values are allegedly propagated by this Islamic School. This is only one side, and we should await the official response of the school. However, the verdict has already been passed in the case of Mr Rashid.

So, is there another issue to prosecute? If the school was indeed guilty of this, then even though the accused should be convicted with more than a suspended sentence, it does give weight to this verdict where he only got a suspended sentence, and the school themselves should ALSO be held accountable for the transgressed events and as such another look should be taken in regards to Muslim school in the UK (actually, pretty much everywhere in the commonwealth). This is not me speaking against Muslim religion. We should all be aware that Christianity has had its own demons when it came to assigning equal values to women. There is however an issue with the fact that we embrace (or seem to embrace) equality. It seems from the information that the Muslim School does not seem to do that, and as such, it should be considered that these schools would have no business in any non-Muslim nation.

The end result is that a Muslim abuser who ‘didn’t know’ that sex with a girl of 13 was illegal is spared jail.

His honour ruled that putting this man into jail would do more bad then good. It is a hard call, especially as many want to side against a Muslim. Yet, he seems to have acted within his Muslim morals. I find it hard to convict him. I have fewer issues with a hard lash at this Muslim school, for the simple reason that this is managed by adults. THEY know (or should know) the law in the UK, especially in regards to matters of discrimination. To voice against the value of women should not be allowed anywhere within in the Commonwealth.

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January 12, 2013 · 09:32

Greed and the lack of common sense

We have seen the adverse effect of greed for some time now. Going back to 2004, we saw the moves that financial institutions made, and during those days, and in the aftermath of 2008, we saw how a chosen few walked away with hundreds of millions of dollars, whilst at the same time, leaving flocks of people beyond destitute.

The fact that this is still happening in 2013, gives way to a collection of requirements that seems to be non-considered by too many people who should be in charge of protecting the population. Why do governments remain in a state of enabling this level of unacceptable transgressions?

Let’s take a look at the events that are making my blood pressure dangerously rise (again).

On the 10th January a non-formal claim was made by Dutch businessman, Ronald Ras, related to the “Mosa Trajectum” golf resort near Murcia in southeast Spain. The claim is OVER half a billion dollar. Should this pass through then this bank will require serious levels and financial amounts of support. The bank claims that Mr. Ras owes the bank in excess of 165 million dollars. So this could be all ignored as a simple situation (he states versus they state, you know the legal drill).

The issue that makes this event escalating is that this bank received a billion dollars of aid in 2008 during the height of the financial crisis. This bank is also due to announce its restructuring plan which would scrap a massive amount of jobs (a mention of 750 scrapped jobs was mentioned by UK Reuters). In addition to this, the Dutch bank and insurance group SNS Reaal is considering a so-called “bad bank” option so they can push their bad ‘property idea’s’ into a different bank and bookkeep it out of existence. Shouldn’t people go to jail for ideas like that?

Actually, that is not what this is about, but the background is relevant to all of this.

What is interesting and what is the issue, are the amounts just this one bank requires. If we add only these two issues together, then we get to 1.5 billion dollars (2 out of how many issues?). Compared to the population of the Netherlands, the required assistance comes down to $1000 per citizen. So this one bank needs more funding than the entire population can afford. This is the 4th bank in size and their needs have become a fair size of the national debt. How can this even be allowed? Take into consideration that almost a third of the nation makes less than 20,000 euro’s a year, so their share of $1000, will be more than 20% of the taxes they pay. If you look at those parts, then it is clear that the Netherlands is growing deeper and deeper into a hole that no budget can close.

On the other side you should consider the luxury property issue that someone is trying to get done in another nation. It took me almost a year to get one mortgage deal for $50000 within that country, and then it was only possible with almost impossible conditions and guarantees. This ‘person’ gets hundreds of millions and no one installed a proper legal engine to make sure the bank does not get hurt by some of their decision makers?

How does allowing this even compute? In all fairness, the bank did make the statement that this claim has no foundation. Still, how does it get this far? Perhaps we should take another look at the bank too?

So let’s take a clearer look at the issues one part at a time.

1. Someone has an idea for a real estate project worth gold course and as such he gets the financing arranged.
So this first point means that the bank has drawn up agreements, contracts and set up clear lines of credit, as well as the rights and duties of the person who they are lending the money to.

So if this first point is clear, then there is a clear path, and all what happened today on the news is just hot air, with no foundation (the Bank stated January 10th that there is no foundation for the claim).

2. The people behind all this are setting up a good quality sales team (or they should be), all with clear targets. I need to mention here that these targets should be achievable. Under these conditions there is no excuse for sudden financial breakdowns. As we all know, these breakdowns did not affect many in the financial institutions as they walked away with a golden handshake worth mega millions.

Now here is the first issue. I did some digging into their visibility.

–          Their web presence is extremely low, and if there is any that is valid, it is not that visible. THEIR FIRST BIG MISTAKE! I was going over 3 sites, they all showed a lack of professionalism, it is limited in languages (Spanish and English only) and the places they offer are between 1.2 and 1.5 million euro’s. It is interesting that the group who could afford anything like this is less than 0.01% of the Dutch population. So this is an exclusive project that over 99% cannot afford. Now, even if you consider this in European terms. This is a place only less than a handful can afford, and those people rarely all want to live together.

–          If we consider this as a pure resort for vacations, renting/leasing a time shared, or just on a hotel based foundation, then this plan calls in even more questions, as there was little or no infrastructure. This reminds me of the tourist approaches we saw during the 90’s. There were loads of what they would call a time share option, most of them went sour and plenty of people got left holding a bag without value.

So if these two points did not call in questions, then look at the next:

I looked at:

–          http://mosatrajectum.com/venta/
–          http://www.mosatrajectumproperty.com/

These places are all about that project, and I personally find them not that professional (considering the price of the houses), not well conceived, error prone when it comes to the languages and lacking in other ways too. If a faltering sales system is the cause of a failed project then these two links could be regarded as strong indicators that this all failed for many more reasons, not just the economy.

Several of them should be considered as failings of project managers. 1.3 million Euro houses are not realistic. Even before the economic crash it would be unrealistic for many people. It becomes even less interesting when this is all build in a place where there is nothing. I personally see this as the idea of someone seeing their pupils change to euro signs and greed took over (really quickly). Even after the failings of the world economy, this project could have survived if this would have been properly aligned to any kind of realistic market. Yet, even though over the last 2 years the group of Spanish unemployed was OVER 20%, overall spending was down a lot more (not just in Spain), nothing seems to have been done, and now there is a claim? This I deduce from these sites, and searching through several other sites, not making decent mention of this real estate location.

From the data I have now, I would side with the bank, but questions should be asked on all levels. Especially considering America had their Freddie Mac and Fanny Mae issues in 2008, and this plan seems a lot less stable then the huhu idea’s Mac and Mae were having.

So how did the bank fail?

Not sure if call it a fail, but if we look at several of their projects, some that are unaffordable, questions on how these projects are such losses. It is even more important to look at how the numbers are accepted into starting some of these projects to begin with. If some of these places are more decently priced (even considering a minor loss) then it could have drawn prospective buyers and even at a loss, a nation of taxpayers would not be called to pay the bill of over greedy individuals not setting a realistic goal. Consider the Spanish resort example. As the information of the village, even when English is selected most of its information comes in Spanish, I would think the bank, or better its account holder should have kept a better eye on this. This is 100 million plus at the start, so keeping an eye on your investment is always a good idea. If we consider a current projected cost amount of 250,000,000, and divide this by 3100 houses/apartments currently projected, then each house would be less than 100.000. If we consider the costs involved then this solution is a whole new idea.

Should the developers complain? Of course not! They failed, pure and simple. The bank moves in, confiscates the lot and sells as needed. Is that what the developer wants? No! He wants his profit, his ego. It seems to me that for such a reward he should have succeeded. This is not the only project that bares scrutiny. If we consider some of the other building scandals that the Netherlands have faced, then I wonder why these levels of over pricings and overinflated values are not better investigated.

We are looking at a new approach of banks to write of overpricing and bad ideas. Why push this to the taxpayers? These groups are getting too much protection all over the place. The Netherlands are just one example. The US example of Freddie Mac and Fannie May are even more unacceptable.

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