Tag Archives: bloomberg

Finger in a dike

We have all heard the story of the boy who stopped a flood by putting his finger in a dike; Robin Williams made a reference to it and women in comfortable shoes in the past (whatever that means). The story is known, the act sounds just too ridiculous, because any flood that can be stopped with a finger is one that will not amount to much flooding. Yet the story behind it is very different. You see, the story is about the dangerous Muskrats, who dig themselves boroughs in dikes. These boroughs have canals that can go for hundreds of feet and as the Muskrat population grows, the dikes and dams they are in could be damaged beyond normal repair and that is when the dangers start, because dikes are important in the Netherlands. A large part of it is vastly below sea level, meaning that such a loss could have impacted safe living in that place. Muskrats are also fierce fighters and feeders, meaning that as their population grows, the other animals become extinct. Even as that rat has a usual lifespan for a year, in that year it can reap damage that only people can match. So as we consider the damage a year brings, we need to now consider todays story in the Guardian (at https://www.theguardian.com/politics/2017/may/14/freedom-of-information-act-document-leaks-could-become-criminal), where we see: “criminalise passing on information discoverable under FOI requests“, so basically any news given, even when it can be obtained by an FOI request can become an issue that follows prosecution and even conviction? How is anyone allowed to pass this as law allowed in office, especially as he lives by the motto that was a Herman Brood hit (read: I’ll never be clever). There is a weighting here. I for one have spoken out against the non-accountability of the press. The one time they got scared (read: The Leveson enquiry), they started to scream foul and promise bettering themselves. A promise some of the press broke even before the ink of that promised dried. Yet there is in equal measure a need to keep the people correctly and decently informed. There is a need to get cybersecurity on a decent level and there is a need to hunt down hackers. In this places like Sony are feeling the brunt of hackers and until the authorities are willing to execute the parents (or children) of these hackers, depending of the age of the hacker in front of their eyes, they will not ever see the light and these issues will happen. In this, the entire whistle-blower thing is another hot potato and some politicians seem to think that the one will stop the other, which is even more delusional than my idea of executions to make a point. There is another side to all this that is linked. You see, in the military there is a strict need of secrecy. In that this Bradley Manning person is just a traitor who did not realise just how stupid he really was. The fact that he did not spend life in prison until death is another failing which has been covered by too many for too long and too often. Julian Assange is another matter. Basically he was a mere facilitator, we might seem to consider him a traitor but in the end he did not break any laws and the US knows this, they just have another need to address the ego of certain people. I see Snowden as a traitor, plain and simple. As we were misrepresented with a movie, a book and all kinds of stories, there is still the issue that things did not add up. The never did and never will. In this light a whistle-blower seems to be a very different needed person (I will get to that later).

The three names mentioned all have their own role to play in all this. In case of Manning, it is treason plain and simple, whomever got him off lightly did a stellar Law job, but in the end, he committed treason under war time conditions. Bloomberg (at https://www.bloomberg.com/view/articles/2013-08-02/bradley-manning-s-crime-is-smaller-than-treason) gives us the view of John Yoo, a legal expert, whose view I share: “His actions knowingly placed the lives of American soldiers, agents, and allies at grave risk. In the world of instant, world-wide communications and non-state terrorist groups, Manning committed the crime of aiding the enemy, and he is lucky to escape the death penalty“. As an operator, Manning had access to do his job and he abused the access he had endangering the lives of his ‘fellow’ soldiers. In this the less diplomatic view would be that he was more entitled to death by hanging than some of those executed at Nuremberg. So as we realise that Manning soon could have more rights than an optional member of the press is just a little too insane in my book. In all this, as we see that part in a little biased light, we need to realise that the press has a need to expose certain elements. Yet they too are biased and they are biased towards advertisers and stakeholders, which is why certain military documents are placed in a juicy sexy light, yet the issues of Microsoft, Sony and a few others that clearly food for thought for a generation of consumers seems to be misplaced. So how should we see the less responsible acts of the press in that light?

The second part is Snowden, again, as I see it a traitor, here the issue is severe on all sides, the Intelligence community failed miserably on several sides as one person has seemingly access to systems that should have been monitoring access on a few sides. I saw within two hours at least 3 issues for consideration of prosecution of certain heads of intelligence for mere gross negligence. The issues found with NSA contractor Harold Thomas Martin III just adds to the issues in Alphabet soup land. In this there would have been the need of a very different whistle blower, one that could have walked into the US supreme court stating that his nation is in serious danger giving evidence free from prosecution where an ‘uncle’ of the NSA walks into the office of Admiral Rogers (current director, not the director at that time) asking what the f**k he thinks he is doing on the farm. In a system that is about subterfuge and misdirection, those making errors are often chastised in unbalanced ways. As they are about deadlines and being flawless (which is a delusion all by itself) finding ways to clear issues, solve issues and give support in a place that is relying just a little too much on contractors is an essential need. In this the US is the most visible, but we can agree that the UK has its own demons, the most visible ones were in the 70’s, yet the cloud is now a dangerous place and in addition, I foresee that the near future will bring us more, because if a place like Sony cannot keep a lid on its data, do you actually believe that the cloud is secure? It is not, because some people were pushing too fast for a technology that has issues on several levels. As the cloud grows the customer is no longest charged per Gigabyte, but per Terabyte, so as the cost seems to be 0.1% of what was, they are all seeing the financial benefit and they are clearly ignoring the need to comprehends data sizes and what to put where. As the sales teams are giving nice presentations on security and no loss of data, they seem to be a little more silent on amount of data replicated somewhere else. Which in case of Intelligence is a bit of an issue under the best conditions. By the way that switch from GB to TB happened in the last 5 years alone, so this market is accelerated but in ways that seems to be a little too uncomfortable and I love tech and I embrace it whenever possible, so others should be a lot more mindful and worried than I am at present.

Last we get to Julian Assange, he is either loved or hated. I tried to remain in the balance of it as he basically broke no laws, but to shed the dirty laundry in the way he did was a little stupid. We read all the things on how certain stuff was removed and so on, but there is an issue. In all this we heard all the military stuff, yet when the mention and threats of bank presentations came, he went quiet and dark less than 48 hours later, so it seems that some issues are just not given to the people, especially certain facts that should have been brought out. Here we see another side of the whistle-blower. I get that certain events should not be allowed out, yet when I read: “We would expand the Freedom of Information act to stop ministers and departments from being able to block the publication of information they see as politically inconvenient“, which we get from Tom Brake, Liberal Democrat Foreign Affairs spokesperson. We see another part of the conversation, one that needs scrutiny on a few levels. The entire issue that a conviction is possible for releasing information that is readily available under the FOI is dodgy to say the least. There is a side in my that there should be a certain level of control on whistle-blowers, yet in that same light as we see too often that corporate whistle-blowers are refused the light of day by the press calls for questions marks on the earliest given Mondays of any week.

If the dike is to stop the people from drowning we need to make sure that the muskrat is stopped for various reasons, yet when that dike is also the road that facilitates for the shipment of toxic waste, we need to wonder what the basic need of that specific dike is. And that is before we see that the road facilitates for ‘Big Pharma’ to ship its medication, whilst the 1000’s of tonnes of pharmaceutical waste is left ignored, which is ignored by the media when Dr Who (read: World Health Organisation) is telling people that there is now a direct danger to newborns, with in India alone an estimated 56,000 deaths of newborns dying from resistant infections. So as we see very little of that in the news, what are those opposing the whistleblowing actions crying about? They themselves have become filters on what the people are allowed to learn about. Doesn’t that sound slightly too sanctimonious to you?

The issue that goes on is that these events are less and less an issue of rarity. The Times (at https://www.thetimes.co.uk/edition/news/600-tonnes-of-waste-dumped-under-road-dmttlzrkh), gives us, when you are subscripted, a view that “Up to 600 tonnes of household rubbish have been dumped under the A40 in Buckinghamshire, in one of Britain’s worst incidents of fly-tipping”, this is not some issue that is done with a simple truck, this took time and staff. This was deliberate and orchestrated. In this the whistle-blower would have been essential in dealing with such a crime, as it stands now, it made someone an easy £90,000 and the damage could end up being considerable larger and more expensive. It is anyone’s guess if the CPS will ever secure an arrest and conviction. So as we see the toxicity of the changes the UK and others could face. When we consider the final part “Thomas Hughes, the executive director of Article 19, said: “The Law Commission’s proposals would move the clock backwards, undoing improvements in the UK’s 1989 Official Secrets Acts, and setting a dangerous example of eroding freedom of expression protections, which may be copied by oppressive regimes globally”, we must ask what the devils own sugar did the Law Commission have in mind when these changes were proposed. By the way, the moment it gets adopted, there is every chance that any person with direct links to Wall Street will see other sides. This is what we get from the NY Post, “The Financial CHOICE Act 2.0, which passed the House Financial Services Committee last week, has provisions to keep corporate whistle-blowers involved in any wrongdoing from collecting awards. The act would also require the whistle-blower to try to stop violations from happening within their company — a stipulation that advocates fear would force employees to choose between being fired or not reporting anything at all”, we see this at http://nypost.com/2017/05/14/whistleblower-bill-sparks-fear-among-advocates/, so you tell me who this is all supposed to benefit. As I see it, we see a shift where those who have not are stronger and stronger segregated from those who have and those who continuously want to have. A mere adaption from the battle strategy segregation, isolation and assassination? Assassination needs not resolve in death, today we see how economic and financial death could at times be much worse than anything permanently offered, although the mothers in India might disagree on that. The question becomes where does the press truly stand, with informing the people or with the advertisers they rely on nowadays?

 

Leave a comment

Filed under Finance, IT, Law, Media, Military, Politics

Vive la what?

France decided, Emmanuel Macron is now the President of France. I will not shout some ‘hack’ issue. I believe that France made a choice, how well the choice is, is something that the President-elect of France will have to prove to be. Not the lame statistics on how young he is. The Guardian gives us some of the optional bad news (at https://www.theguardian.com/world/2017/may/07/theresa-may-congratulates-macron-on-victory-as-eu-breathes-sigh-of-relief) where we see: “Happy that the French have chosen a European future. Together for a stronger and fairer Europe.” No, they did not and your rhetoric only is a first piece of evidence that the EU and the ECB are considering a former investment banker to be the reason to play your games, forcing people deeper in debt and slowly turning the EU into something despicable. For the most, the article is fine. Today will be all about congratulating President Macron, whilst those shaking hands, calling the Palace or sending letters are desperately trying to get a few political punches in. That is part of the game, yet the dangers due to the greedy need of the USA is about to become actually dangerous. Marine Le Pen could have sunk those dangers, although it would come with other issues, there is no denying that. Yet the economic health is going to be a first, in that Crédit Agricole, BNP Paribas and Natixis would guard against that happening to France (after they take care of themselves and their needs), yet will it be enough? The quote that President Macron is giving now is: “I do consider that my mandate, the day after, will be at the same time to reform in depth the European Union and our European project,” Macron had told reporters, adding that if he were to allow the EU to continue to function as it was would be a “betrayal”. It sounds nice, but over time and especially as we watch delay after delay will we see if he is actually made of stern stuff. Time will tell and there is no way that it would be regarded as fair to see any initial headway until at least 10 days post forming his government. Yet there is a side we must take heed from. It is seen in the quote “he spoke out against a “tailormade approach where the British have the best of two worlds” creating “an incentive for others to leave and kill the European idea, which is based on shared responsibilities”“, this sounds nice, but responsibility also implies accountability, a side that has been absent from the EU and the ECB with ongoing lack of transparency for the longest time, in that Brexit remains a valid step.

So why do I seem to be freaking out?

That is partially true. Not because of Marine Le Pen not making it, which might have solved a few things. It is the part I mentioned yesterday with the Financial Choice Act. As a cheat sheet (at http://media.mofo.com/files/uploads/Images/SummaryDoddFrankAct.pdf)

shows us: “The Dodd-Frank Act creates the Financial Stability Oversight Council (“Council”) to oversee financial institutions“, that part is now effectively gutted from the Dodd-Frank Act. The damage goes a lot further, yet as I see it, the people in the White House have just enabled the situation that what happened in 2004 and 2008 can now happen again. When that happens the Euro will take a massive hit too. With Brexit part of that damage can be averted and in layman non diplomatic terms, we can state that as JP Morgan is getting the hell out of Brexit, the damage they could potentially cause in the near future will be on the books for the places that they go to or remain in.

One of the dangers is seen in the key principles of the Financial Choice Act. With ‘2. Every American, regardless of their circumstances, must have the opportunity to achieve financial independence;‘ we can read it in a few ways, one of them being that this is the sales pitch where the Greater Fool can invest in something, using funds that person does not have whilst endangering whatever financial future they thought they might have had. It basically opens a door to get some of the suckers’ bled dry fast. In addition with ‘3. Consumers must be vigorously protected from fraud and deception as well as the loss of economic liberty;‘, I do not see protection, I see a setting where basic protection is in place, yet as we have seen with the issue in 2008, the amount of people who lost it all whilst prosecution failed to protect the people and convict the ‘transgressors’ nearly 100% is just too stunning, and it is a lot more dangerous now as the global population has nowhere near any level of reserve of protection compared to the last time around. In addition, when larger firms start playing this game, they will drag whomever they passively claimed to protect (like retirement plans, like mortgages they held) with them.

There is another side which takes a little longer to explain. Yesterday someone tweeted an image I remembered when I grew up. You see it is all linked to what I was part of in the 80’s. I saw the application of segregation, isolation and assassination in a less nice way. It drew me back to my childhood, when I was introduced to practices by the Nazi’s in WW2 during my primary school history lessons. To identify the Jewish people, they were told to wear the Yellow Star of David. When I saw the image my thoughts started to align, unlike the puzzlement of the population at large in 1941-1943 as the star was made mandatory in several nations, the people were uncertain to the matter, with the exception of the Dutch underground who would not trust any German for even a millimetre, they were able to hide 25% of the Jews, so in the end well over 100,000 Jews were deported. From those only a little over 5,000 survived. The Dutch underground was able to keep close to 30,000 hidden, with well over 2/3rd surviving the war. Most people, would not learn of the actual fate of the deported Jews until much later, many remained in disbelief for many years after the end of WW2 in 1945. You see, it is that phase that I feel we are in now, we seem to be in disbelief as laws are past to give a sector of industry more leeway, whilst they (according to some sources) made 157 billion in profit and that is in the US for 2016. So you want to open the tap for a system that is less regulated, non-trustworthy and have shown in 2008 to embrace all greed at the expense of anyone else? How is that a good idea?

 

 

So what evidence is there?

Well, there is Senator Warren (Democrat for Massachusetts) who called it an ‘insult to families’, in addition we see “so that lobbyists can do the bidding of Wall Street“, which is still a political statement. When we see the partial part (at http://financialservices.house.gov/uploadedfiles/financial_choice_act-_executive_summary.pdf), we see “Provide an “off-ramp” from the post-Dodd-Frank supervisory regime and Basel III capital and liquidity standards for banking organizations that choose to maintain high levels of capital. Any banking organization that makes a qualifying capital election but fails to maintain the specified non-risk weighted leverage ratio will lose its regulatory relief” It is the very first bullet point and leaves me with the situation that banks have no right to relief when they take a certain path, yet they still get to gamble. I especially like the part in section 4. “Make all financial regulatory agencies subject to the REINS Act, bi-partisan commissions, and place them on the appropriations process so that Congress can exercise proper oversight.” Yet, the REINS Act only passed the Senate, yet is not law at present, in this it is called on to do what? If the Financial Choice Act is set into law before the REINS Act, the US will have a gap the size of the flipping Grand Canyon, in addition, from the McIver Institute we see the opposition from the Democrats with “The REINS bill is similar to legislation moving through congress, but with lower thresholds“, yes, that has proven to be a good idea in the past! Still it is a view of Democrats versus Republicans and it is a Republican government (House, Senate & White House), so wherever are the clear academic dangers? We get that from Mike Rothman, president of the North American Securities Administrators Association and Minnesota commissioner of commerce with “It is clearly evident that the changes contemplated by the bill would significantly undermine and compromise the ability of regulators to effectively enforce financial laws and regulations“, whilst the I saw the term “this voluntary state-federal collaborative framework“, so the collaboration is voluntary, not mandatory. In the last decade, when have we seen a proper level of protection in a voluntary state of any matter?

The beginning of the dangers are shown by the Consumerist, which took a look at version 2.0 of what many regard to be a travesty. In this we see:

  • Require the Consumer Financial Protection Bureau to get congressional approval before taking enforcement action against financial institutions
  • Restrict the Bureau’s ability to write rules regulating financial companies
  • Revoke the agency’s authority to restrict arbitration
  • Revoke the CFPB’s authority to conduct education campaigns
  • Prevent the Bureau from making public the complaints it collects from consumers in its Consumer Complaint Database

The one I had a stronger issue with is the one that tosses responsible spending around. The issue ‘Remove requirements under the Durbin Amendment that guided how much credit card networks could charge retailers for processing debit card transactions‘, so basically by charging stronger on debit cards, people will see a need to pay cash or force the credit card risk on people who for several reasons prefer not to do so. In addition the restrictions to arbitration will give leeway to Financial Institutions to avoid all kinds of courts as the victims (called consumers and investors in this case) any right to hold the financial institutions to account. It is rigging even stronger an unbalanced system. Marc Jarsulic, Vice President for Economic Policy at the Center for American Progress called this ‘a system that removes protections against taxpayer-funded bailouts, erodes consumer protections, and undercuts necessary tools to hold Wall Street accountable‘, which was already an issue at present making it a lot worse. It seems that the junior workers of 2008 are now in a place where they would prefer to fill their pockets before their luck runs out. The last bit is purely speculative from my side and it might take until 2020 until I am proven correct, yet at present 2 years is a long time to await the dangers of a greed driven system to get a little greedier. It is in that that segregation from the Euro will become essential soon enough, especially as there is no one muzzling the ECB and its crazy need to spend funds that they do not have and will not have for years to come. As for the news we see appear at present on Bloomberg shows my correctness from another side. At https://www.bloomberg.com/politics/articles/2017-05-07/a-reverse-trump-tax-plan-delivers-an-economic-miracle-in-sweden, we see how a reverse of the Trump ideal works a miracle in Sweden. Now, it sounds a little too good to be true and it is. You see, I am not against the principle that Sweden has, yet in Scandinavian terms, the Swedes are uncanny social. I once joked that a woman can get married, after a year she gets the bun in the oven and gets paid maternity leave. If she starts making buns non-stop, she will never work another day (as long as she gets pregnant immediately after giving birth), 20 years and 22 kids later, she still has an income, a sound and secure retirement fund with only one year of work. It is almost true and I admit far far fetched. Yet the social side of Sweden allows for this. Because that one person will be the utter outlier in any statistical graph. The Swedish solution works in a social educated country like Sweden. In America which fosters self-centeredness and greed, this system would be abused at the drop of any hat and the system would collapse. You see, Bloomberg does not mention, that unlike America, companies in Sweden do not shun taxation (IKEA seemingly being the exemption to that rule), which is also a huge difference. In addition, Swedish Civil Law has a sizeable extensive system of Administrative Law which would also contribute. As we see commerce in Sweden increase, the Swedes will automatically feel the brunt of that in a positive way (as I personally see it). Yet it is not all good and summer there, as Magdalena Andersson faces a vote of no confidence if certain changes are not stopped, or even more adamant, be rolled back to some degree.

It is this combined view that France is now seen as ‘Vive La what?’ It is very much on how certain banks and the ECB are called back to stop endangering the future of too many people, Quantative Easing be damned. It is in that environment that the Financial Choice Act is an upcoming danger as Wall Street gets to be in charge of how money flows, in what direction, risky or not. As for what happens between now and 202, I truly hope that I am wrong on every count, because the 2008 global losses which have been estimated to set around $15 Trillion could easily be doubled this time around. More important, as global national reserves are none existent, the impact will hit the consumers and retirees in ways that they cannot even fathom, it makes the hardship in Greece look like a cakewalk as I see it. I will happily be wrong, yet the visibility we already see at present sets me more likely than not correct, which is really scary, not just for me.

Oh and if you doubt me in this (which will remain forever valid), why have we seen massive levels of misinformation from papers with ‘NO ONE wants to risk GREXIT’ Economist says Greece bailout will go ahead to SAVE Eurozone’ (source: The Express), whilst we know that you cannot be set out of the Euro or Eurozone involuntary, and ‘saving Eurozone’ is a little strong is it not? Or the Daily Mail that gives us that Brexit is a gift to the Greeks. This is not merely a point of view, certain sources are adamant to misdirect the focus of the people, if the Euro was such a gift from the gods, misdirection would not have been needed, would it?

 

Leave a comment

Filed under Finance, Law, Media, Politics

Prospecting black gold

There has been news all over the world, some news is good, some less so and at times we cannot see whether news is good, bad or irrelevant. To see the dangers, or perhaps the opportunity of what is what we need to look back to 2014, and start that issue with a quote from the Marvel Movie: Age of Ultron. The quote originally from Tony Stark was: “As I always say, keep your friends rich, and your enemies rich, and then find out which is which“, it is a reference to the arms industry and the benefit of mutual escalation. Keep this in mind when you consider the article in the Independent (at http://www.independent.co.uk/news/business/news/royal-mail-float-scandal-how-hedge-funds-cleaned-up-9303674.html), the title gives us the immediate threat with ‘Royal Mail float scandal: how hedge funds cleaned up‘, and “Speculators were allowed to buy £150m of shares despite Vince Cable’s pledge to favour long-term investors“, I omitted the claim that it was all due to the postman. That person usually rings twice, especially when Jessica Lange is around. Yet the heart of the matter, like in the movie, is not in the ‘boner’ or the ‘bonee’, it is the aftermath that matters. You see, the gem is seen in the local prosecutor and his ploy to get to the truth by going after one side, yet it is Cora’s Lawyer Katz who stops the evidence to get to the prosecutor, which nullifies whatever was attempted. So consider the part we see in the Independent: “around 20 per cent of the shares it had allocated to 16 preferred investors had gone to hedge funds and other short-term investors. This would equate to around £150m of Royal Mail shares – 13 per cent of the entire stock sold by the Government. The companies bought in at the float price of 330p a share. The shares shot up within seconds of trading, eventually peaking within weeks at more than 600p, allowing the hedge funds to bank vast profits at the taxpayers’ expense“, now consider also that this is a reflection of ‘£150m of Royal Mail shares‘. A system that has issues and allows for ‘deal sweeteners‘, now when you see this, and knowing that the bulk of hedge funds managers seem to get away with murder, consider the arrival of Aramco, better stated, the Financial Times headline ‘The $2tn Saudi Aramco question‘, which is now squarely an issue of titanic proportions (intentional pun towards the sinking dinghy). First things first, you see, this is not a fuel vendor like Shell, or a social media company like Facebook, this is the Privatised Saudi oil company that is larger than the sum of Shell, Facebook, Apple and Google. It is a 2 trillion dollar company, now consider the danger of the floating dangers of something like that, hedge funds managers can clean up and those who do will be set for a decadent life, for the rest of their lives. The dangers of something this big is pretty astounding and the fact that it could happen is not that small. You see, the dangers increases as we consider certain facts. NASDAQ gives us: “OPEC agreed in November last year to curb its output by about 1.2 million barrels per day between January and June“, that is because the stocks are a little higher than expected. This happens, oil will always fluctuate, now consider in the US alone there are 32 oil fired power plants. Production is down (for now) and the moment the first heatwave gets to the US, we see a massive spike in power requirements and 32 of those power makers require fossil fuel. In this I am only mentioning the USA, there has been power issues on a global scale, which is always going to be the case, but one of the largest providers towards the demand is going public and that is what speculators really like, because if the supply & demand need is not properly managed, we see an increase option towards fluctuation. Those speculators only need to get lucky once and the mess would be unrepairable.

The Financial Times gives us some of the goods with: “Privatising Aramco is the first step in rebalancing the economy. By disentangling the company, which accounts for more than two-thirds of government revenues, from the state, Prince Mohammed hopes to make Riyadh less oil-reliant, while providing capital for investment in new industries, ranging from technology, where it is pumping $45bn into the SoftBank Vision Fund, to mining. The privatisation of its national champion is crucial to this process” (at https://www.ft.com/content/7ed59bee-163b-11e7-b0c1-37e417ee6c76), but the heart is seen in: “That is even without looking at the question of how much oil actually lies beneath the desert kingdom’s sands“, when we consider that the oil gains in the North sea is slowing down and this is a signal seen in several places, the fact that at some point (in past, present or future) that something similar will happen to the Aramco goods is a certain fact, it is the when that cannot be anticipated. In addition, going public means that you need to be commercial, when it is government no one really cares, but in the public sector the trend must forever be upwards, so when will we see a similar float in Aramco when the numbers are not as great? It has been an utter certainty that nearly all companies go through, some did it calculated knowing they would kill the numbers within a quarter, some hoping they would kill the numbers and some did it whilst they were desperate for a miracle. Yet floating they went. How much of a $2 trillion dollar company in stock value will tumble when that happens?

And these are the circumstances where the acts were valid and not criminal at all (see UK Mail), I am not making any Tesco assumptions here, because the damage in that case will be devastating to the London Stock Exchange. One firm representing close to 70% of its entire market, there would be no London Stock Exchange after such a disaster. Bloomberg gives us the second tier of risks and dangers with ‘Saudi Aramco Cuts Oil Pricing for Europe Where Russia Dominates‘ (at https://www.bloomberg.com/news/articles/2017-04-05/saudi-aramco-lowers-some-crude-pricing-for-asia-raises-for-u-s), a market that Russia already dominates. What would happen if let’s say 3 days after going public, Russia decides to slash their prices for a short time? How would the market react? Not just to Aramco having to follow, but the forecasted annual numbers then take a dive, at who’s expense? Consider that the European market is ‘ruled’ by Russia and Norway, together they make up for 50% of that market and the Saudi part is smaller than Norway and 80% of that 50% market is just Russia. So they can influence the market a fair bit. You see, Bloomberg gives us “There is a risk price wars may resume in Europe, raising the possibility the output cut agreement won’t be extended to the second half of this year“, meaning that in the second half Russia could flood the markets and the streets with black gold. That impact would be felt all over the stock market. There is one part that I am uncertain on. You see, it reads like a small and insignificant part. The quote: “Aramco will tweak the benchmark it uses in the region to make it easier for crude buyers to hedge their purchases” seems small, but consider that hedging is done by a few hundred buyers for up to 25,000 barrels. It seems like nothing, but with 179 buyers it is almost a week worth of crude oil, now the ‘stock is full‘ issue becomes a larger one, because this is a level of fluctuation on stock levels that would impact on the stock prices, the mere stock is full a few weeks ago had a $3 impact (or 4.6%), that becomes a little more than insignificant. Now, I could be wrong here as I am not in the oil, yet you see that this is a concern when it impacts a $2T invested interest by more than just hedge funds managers.

The last part comes from the Guardian. In Jan 2016 they stated “Saudi Aramco is likely to be worth well over $1tn (£685bn)“, this is important as we do not see 1.2 or 1.5 trillion, so this given number implies that in a year Saudi Aramco grow by more than 40%, the exact number cannot be determined. Other media stated that Aramco had grown to 2 trillion last year, but none have given enough evidence to state which number is the reliable one. That too impacts this new market, especially the initial dangers of floating a stock. Yesterday (at https://www.theguardian.com/business/2017/apr/05/theresa-may-lse-saudi-aramco-uk-london-stock-exchange-oil) we see: ‘May and LSE chief woo Saudi ministers for $2tn Aramco listing‘, here we see: “Xavier Rolet, has launched a charm offensive in Riyadh to woo Saudi ministers with the prospect of London hosting the upcoming flotation of Saudi state oil company Aramco, which is likely to be the largest of all time“, the word ‘flotation‘ is given and the danger is now out and about, in clear view of all. So as the UK government is trying to appease Khalid Al-Falih, energy minister of Saudi Arabia (and CEO of Aramco), as well as Yasir al-Rumayyan, the director of the Saudi public investment fund – a sovereign wealth fund, I have to wonder where the Rothschild’s are, because there is no way in heaven or hell that the Rothschild family would be absent of a 5% of a $2T company option and not be a player in something with the ROI of billions, especially after the losses they had with Kurdistan and Africa. They have skin in the game now, and they need a victory in this field, their ego demands it from themselves!

In all this the final part given in the Guardian must not be overlooked, because the quote “Downing Street announced on Monday it had drawn up plans with Riyadh to boost support for Saudi’s much-vaunted Vision 2030 strategic plan for diversifying the Saudi economy to decrease its over-reliance on oil, spearheaded by the deputy crown prince, Mohammed bin Salman, who met May on Tuesday“, as this now offers the level of revenue to fund the ability to become the largest 5G player in the middle east, with options to diversify into Europe, the far East and America. It is perhaps the first time in history that a public company would shoot to a top position in mobile communication, ready to set the market and their values in a few ways on a global scale. For the simple reason that moving into technology and not go for the new tech that will determine the fate of the large mobile and telecom players between 2019 and 2027 seems extremely short-sighted.

 

Leave a comment

Filed under Finance, IT, Media, Politics

Dangerous levels of extinction

Bloomberg reported Yesterday that Nicola ‘Sturgeon Sticks with Timing for Scottish Independence Referendum‘ (at https://www.bloomberg.com/news/articles/2017-04-01/sturgeon-sticks-with-timing-for-scottish-independence-referendum), which is a little odd after the previous one not so long ago. As I stated in earlier blogs, I am not against Scottish independence, I think that at the earliest point, Scotland should seek independence. Yet at this point it is not a good idea. The situation has not changed for Scotland, at present their budget is already 11% short and that is with the inclusion of decreasing oil revenues. This means that within 10 years there will be additional problems for Scotland. And this is only the start of their troubles. You see RTE reported only 12 hours ago ‘Spain would not ‘initially’ block Scotland from joining the EU after Brexit‘, the catchword is ‘initially‘, we see the quote “any part of the United Kingdom that becomes a state and wants to join the EU will have to apply. And follow the steps that are stipulated“, this is the part that matters. Basically until Scotland is truly independent there is every chance that Spain would object, and that is just one of the 27 nations. After that when Scotland is independent, the initiation into the EU would start, which could take up another 5 years, perhaps even more. That is the part Scotland faces, so Scotland is facing the consequence of independence, growing a ‘national‘ debt and after that we see the issue that Scotland would be debt driven and getting into the EU, a triple banking issue (debt, interest and inflation levels), all levels that Scotland would need to overcome.

For example, try googling Scotland and economy and see what you get. What economic achievements did Scotland have gained in the last two years? The Financial Times gives us a part I actually do not agree with (at https://www.ft.com/content/7c6f8ca8-0807-11e7-97d1-5e720a26771b) ‘The economic case for an independent Scotland rests on the EU‘, to that the Scottish response should be: ‘the dog’s bollocks they are!‘ In this Scotland needs to grow an economy, so far, as long as Nicola Sturgeon has been in power, not too much has been gained in that department. I am certain that there are options, I even mentioned one in April 2015, (at https://lawlordtobe.com/2015/04/05/the-labour-manifesto/) where I write “I am still reasonably certain that Indian generic medication could grow all over Europe if they have a foothold in Scotland, which allows easy access to places all over Europe“, so which Scottish politician had actually made any headway into looking beyond the EU, its ECB with big debt credit cards? Because when the credit card stops, Scotland will be in levels of hardship they have not seen before for the longest of times. At that point, who will the Prime Minister be when that happens and where will that person lay the blame?

In the end that is a Scotland that has no chance to build any future at all. How is that a good idea?

So as we see that Scotland is focusing on the USA with the added quote from Bloomberg “She also noted her political differences with President Donald Trump, who owns golf resorts in Scotland. During the election campaign, the Scottish government stripped Trump of his role as business ambassador for the country“, which sounds nice, but how did she fare with Corporate America? Scotland might be open for business, but where is the interest in Scotland? How about the Far East? How could Scotland become a hub for places like Indonesia, India, Pakistan and China? With Beef as an export, why not benefit by creating a European Halal Trade centre in Scotland? With ferries leading to Norway and a growing Muslim population, there are options, it only requires the right politician to open certain doors. I am not saying this is a solution, I am merely showing that options are there, the right people only need to look into the right direction. Because, as I see it, relying on the USA and ECB grants will not work, not whilst Europe is in the state it currently is. With Italy set to grow no more than 0.9%, its position is weaker than France and its youth unemployment still stands at 38%, implying that Italy’s infrastructure will remain under harsh levels of duress for several more years. The quote “Italy’s chronically low growth, low inflation and gigantic public debt burden (133% of GDP) make a potentially deadly trio” gives us even more to worry about (source: the economist), with the UK having triggered Article 50, France elections still having the consequence of a Frexit signal and Italy under the duress it is in, the European Union will only have Germany to be the large positive impact player on its economy and that one is not faring too well either. So this is the moment Nicola Sturgeon want to enter the EU whilst going independent? It is not just a bad plan, with a non-closing budget she will be drowning Scotland into debt and this debt will grow and grow leaving Scotland with no options for any future at all.

Yet we could go with the definition of Sturgeon that she is honouring. I cannot state whether this is the same for both Prime Ministers and fish, yet the International Union for Conservation of Nature gave us: “According to the IUCN, over 85% of sturgeon species are classified as at ‘risk of extinction’“, which is a large group that Nicola Sturgeon seems to be happy to join, the sad part is that she would like the whole of Scotland to join her in this, which is really not a good idea, or fair on the population of Scotland.

 

Leave a comment

Filed under Finance, Media, Politics

Decoupling Draghi is hard to do

Like a bad disengaging train, we see more and more how the Euro has become a dangerous place to be. I have pointed the finger at Mario Draghi more than once. He is not the only reason mind you, but he is a massive one. As I see it, a facilitator towards the Status Quo of a coin no one wants. Europeans see how their retirement is devaluating itself, others see a coin they do not trust, they do not like it, and to be honest they do not know why, but the numbers do not add up. Wall Street loves it, as they can leverage iteration after iteration of floating values as they can reset the currency seesaw, but over a dozen nations in Europe cannot, their hands are tied. It gets even worse in the near future if Japan is any indication to go by. Min Jeong Lee and Yuko Takeo from Bloomberg (at https://www.bloomberg.com/news/articles/2017-03-27/escape-route-eludes-japan-stocks-still-hostage-to-u-s-sentiment) are showing you the prelude to the disaster that Europeans could possibly face within 24 months. The first statement is already showing u the issues that Europe will face soon enough: “Japan’s stock market is again showing itself handcuffed to U.S. growth prospects and its own currency“, In that same sense Europe will soon enough be depending on US growth prospects and the massive debt that Mario Draghi is pushing onto the Euro nations. Now, we need to realise two elemental parts:

  1. Europe is not that deep in debt, but the holes that Mario Draghi is creating is already having an impact. “Big bond funds are becoming increasingly reluctant to lend to the euro zone’s weakest members, looking past a crowded electoral calendar to an eventual winding down of the European Central Bank’s ultra-loose monetary policy” (source: Reuters), with the personal change, setting ‘European Central Bank’s ultra-loose monetary policy‘ into ‘irresponsible spending‘. As the time frame goes, Brexit and Frexit might be just in time to avoid a noose for the United Kingdom and France, but for many smaller EU nations it is too late, they have lost economic control and they are now the mere vassals (read: unchained into slavery) to do the bidding of the ECB. Is that what Euro nations signed up for?
  2. Japan has its own way of dealing with the debt and economy and many fear it was never a good plan, but as they skated the edge of the abyss for over a decade people have become insensitive to the impending doom, that is not a good thing, it is merely a Japanese thing.

FXStreet (at https://www.fxstreet.com/analysis/catalyst-for-chaos-201703271520) gives us the two elements. “The BOJ has an inflation target of 2%. If Mr. Kuroda ever has the temerity to end his bond-buying scheme, borrowing costs in this bankrupt nation, which has a total debt to GDP ratio of around 600%, would have to abruptly surge over 200 basis points just to keep even with the central bank’s inflation target” as well as “If the ECB were to seriously commit to ending its QE program, fixed income investors and speculators would panic to get ahead of the removal of Draghi’s bids; and Bund yields could surge well above the rate of inflation in a very short period of time“, which shows the removal of control and the implied fact (read: implied) that Mario Draghi has no intentions of ending his QE plan. Because the devastation that the surge of Bund yields would come with a hefty invoice, one that none of the EU nations can pay, this includes the big 4. Isn’t it nice that FXStreet and other trader and broker sites are actually starting to realise that what I have been warning people against for well over 2 years? I am not the ‘prognosticator of prognosticators‘ (Punxsutawney Phil has that title), mine was merely the conservative approach to the use of a modern abacus (read: Excel) with the application of common sense. Those who were claiming me to be wrong, (a fair amount of them) are now facing their own ridicule as they hide behind slogans like ‘changes in the economy‘, ‘a mere miscommunication‘ and my favourite ‘as we trusted the analysts‘, that is my favourite as it is based on the governmental forecast numbers that have not been anywhere near correct for well over a decade in well over a dozen European nations.

So as we go back to the Bloomberg part we now see: “as a chorus rises among analysts who think they see sufficient improvement in Japan’s domestic economy for the nation’s equities to unlock themselves from the exchange rate. Before last week, the yen and Topix were both up about 3 percent this year“. Yet not long thereafter we see “After Monday’s drop, the Topix is within one and a half percentage points of erasing its gain for 2017“, so before Q1 of 2017 is done, we see that the prospective gain of 2017 is all wiped out. This does not mean that there is no room for improvement, ye the fact that Bloomberg sees Japan as the 7th worst return of the 24 developed markets implies that Japan could potentially end dead last in 2017, music to the ears of the Chinese I reckon. In that same trend I disagree with Soichiro Monji, general manager at Daiwa SB Investments Ltd, as he makes the observation “Investors should focus on fundamentals like the economy and corporate earnings“, perhaps he remembers that somewhat popular kitchen course ‘How to cook the books‘, the news made some reports and comments on Toshiba and Olympus attending those artsy classes. Or perhaps the honourable Soichiro Monji remembers Nikko Cordial Corp. which is now part of the Citigroup Inc. and no longer in the hands of the honourable Junichi Arimura who was never proven to be involved, the proven guilty party is set to Hajime Yamamoto. As the pressures for these corporations go up, the dangers of ‘fraud’ (read: unintentional misrepresentation of a company’s position) will remains a danger and will also increase the impact it has on the Japanese economic forecasts. And this impact is also felt by those into the retirement system as it lost $50 billion less than a year ago. If we accept the realistic return of $2.5 billion, which fuels nearly 30% of the elderly, that is a big chunk to lose, in addition, in 8 years’ time 24 percent of gross domestic product will go straight to welfare, which is a mighty chink out of a budget that they cannot even get close to now, the Japanese debts are too high and Europe is slowly yet surely steering in the same direction.

There is one more element in all this, Toshiba is now ‘demanding’ that its US Nuclear unit (Westinghouse) to file for bankruptcy within the next 24 hours. This is not just cutting losses, this is a move to set losses where they need to be before the financial year ends (so basically all of Westinghouse and some of Toshiba losses (within legal limits of course) in Westinghouse. This gives us the consideration that Toshiba is having a disastrous year and fancy bookkeeping is in order to keep the stakeholders and stockholders happy at the upcoming reporting waves and meetings. This on top of the Fraud that happened earlier, this fits with last week headline ‘Toshiba ponders asset sales as it fights to stay alive‘, the question is what will be sold in addition to Westinghouse, because shedding the losses alone will not do the trick, they need to sell something with profit too. Nikkei Asia Review reported: “If Toshiba fail to win the bourse’s confidence, Toshiba shares will be delisted“, Now, bad places are bad places, yet when a 6.5 trillion yen company gets delisted, it will have an effect and not just a few small ripples. For some of the consumers this will be a golden year, you will face an optional sale of 65” Toshiba displays with possibly 70% off (everything must go, yes really!) Yet, as I stated earlier, they are in a state of clever bookkeeping (not a crime), the question becomes will the holders of stock and stake accept this? I have no idea, but what is decently clear is that the impact will be felt in both the US and Europe, yet not to the degree Japan will feel it.

These are just a few of the elements as they are brought to light that Draghi’s irresponsible spending is becoming more and more of an anchor, one with a noose around the necks of the European governments. In all this it was not a week ago that the Irish independent reported ‘Banks grab €233bn in free ECB loans as Draghi warns on profits‘, with the added quote “Yesterday, ECB president Mario Draghi signalled time is running out for banks to get their house in order“. So, consider the quote. Basically, whilst the ECB knows that the banks do not have their shit in a row, they still got their hands on a quarter of a trillion Euros? How is that not irresponsible? And free loans? When did any person get a free loan? For banks it is even an act, rasher than ever before as they tend to not be held accountable. All this comes with the additional quote “The banking sector’s capacity to fully support the euro area’s recovery is curtailed by its low profitability“,  so we know that the profitability is low, which was not a surprise, it affects recovery and yes, Mario Draghi dumps Europe in even deeper debt. Are you still on the path to support his irresponsible spending?

I am not, but as I am no longer in Europe, there is not much I get to do, the only disaster for me is that I have worked the bulk of my life there and I have seen that my pension is down by will over 60%, 40% in devaluation and 20% due to an increased and uncorrected cost of living. So when the debt bomb blows, very likely before 2019, I will ended have worked pretty much my entire life, with no pension remaining. Perhaps the arts can intervene? Would it be an optional economic success if Joss Whedon launches ‘Betty the banker slayer’? #Justsaying

 

 

1 Comment

Filed under Finance, Media, Politics

The finality of French freedom

Even as the world is looking at the Dutch elections, we see initially that the biggest fear in the Netherlands is gone. Geert Wilders is still number 2, yet the VVD (People’s Party for Freedom and Democracy) did not lose as many seats as initially expected. This is good for the current Prime Minister, yet not as good for Geert Wilders as other parties had vowed not to work with him, no matter how many seats they got. Well, the initial numbers are out and now we see that the Netherlands will have some tough times. To get the next Cabinet to work they will need 4 parties, which becomes a small issue. The easiest alliance would be involving the CU (Christian Union), yet any medical ethical issue would cause concern on a few levels (the usual suspects like the pill, abortion, prolife issues). The second option is with the Green Left party (GroenLinks), which is predominantly youth driven, here the VVD will have some issues and there seems to be a level of unwillingness to work together. Now, the first option gives only one seat in majority, the second option gives a little more space to breath, but neither is a great match, both are decent matches. The Dutch labour party has been decimated. It went from 38 seats to 9 seats (Source: Volkskrant). They will need a serious amount of time to lick their wounds. No matter how this all fares. If Geert Wilders can keep his cool, he would keep a few options down the track. Here it is anyone’s guess what will happen next. I predicted that there would be no going around the PVV, yet I was proven wrong. Green Left grew a lot stronger and the VVD kept a few more seats than most predicted, so there is that too. Yet, with this situation, Nexit has basically become a non-issue, it is off the board for the Netherlands, so as that certainty becomes a reality we see that Mario Draghi wasted not even a second to give the French people his demands and ultimatum. In  the Express (at http://www.express.co.uk/finance/city/777170/Euro-irrevocable-ECB-draghi-Le-Pen-Frexit-vote-warning), we see the headline “‘The Euro is IRREVOCABLE’ Euro Bank chief fires warning at Le Pen over Frexit vote promise“, so if we would be a lot less diplomatic than we ought to be, we would state ‘Mr Looney Tunes has decided to be a slamming tactical in his claims‘. The two published facts given are “The ECB chief insisted the Front National leader was not a threat to the euro’s future, which he said was a measure of solidarity among members. His comments come after Ms Le Pen’s promise to call a vote over France’s membership of the monetary union if she wins the election in May“, You see, with smaller members pushing pressure Draghi had no chance at all, now, he has a few more options by trying to persuade the system players with “a measure of solidarity among members“, which I can counter with ‘perhaps spending the trillion you did not have was perhaps not the best idea?’ In that we can agree, we can disagree, but we all know that no matter the direction, it was a pretty dangerous step to take. It is the next two parts that are the cause of issues: “Market worries over the presidential race have increased as polls charted the rising popularity of the right-wing candidate, with France’s borrowing costs jumping, while the euro suffers sell-offs. In an apparent shot at the right-wing candidate, Mr Draghi today dismissed fears of the breakdown of the currency as ‘unrealistic’“.

Is that so? If that actually was the case, he would not have needed to reinforce it, didn’t he?

So the two parts are ‘with France’s borrowing costs jumping, while the euro suffers sell-offs‘ and ‘the breakdown of the currency as “unrealistic”‘, no, it is only unrealistic as only Brexit is coming and until now, we have seen levels of misrepresentation and downright corporate ‘blackmail’ to anyone not singing the false tune Mario Draghi is giving us. Last week there was some economic recovery, but the sharp sell-off that had been visible is still a factor, that whilst the Dutch Nexit was never a true reality, we all knew that. France is another matter, the French has not seen decent economic days, for at least two administrations, which is why France is a big deal, that whilst they represent one of four anchors keeping the Euro in place. With the British anchor removed, the stress on the three is intense, the Euro cannot continue with the remaining two anchors that is the desperate game Draghi is facing now. Weakness and non-decisions from 2012 onwards have caused this mess, and of course he is not done yet. As we see in Reuters, last Monday he stated “If non-high-tech companies adopt more innovative technology, that would provide a boost for European productivity“, speaking as the European Central Bank President last Monday, it that so? With what funds? Innovations requires money, such steps have a cost. To get into deeper debt without the true prospect of revenue and incomes is too dangerous a game to play for too many companies. Many who think in such short-sighted ways will not survive the next fiscal year. In all this, it all hangs on how the elections are going in France. Mario Draghi might be voicing ‘a measure of solidarity among members‘ but the people behind the French member have been in a bad place for too long. In this there is even more pressure growing from Italy. Bloomberg gives us ‘production declines after rising for three straight months‘ as well as ‘Unemployment unexpectedly rose to 11.9% in fourth quarter‘, more important, the production loss is the biggest one in 5 years and pretty much nullifies the last two months of growth. That whilst we see a growth in unemployment. It is in this light that France should consider its options. That is, in equal light should reflect on whom they need to support in an election that will have a massive impact on the course that France will take into the future seas of turmoil. Steering towards the new elected President. What is equally disturbing is that the French political lines are changing, to a much larger degree than ever before, for reasons that are actually slightly unsettling.

The question becomes why?

You see, French Senator Jean-Baptiste Lemoyne is now endorsing Emmanuel Macron, we knew that François Fillon is pretty much on his way out and François Hollande never had a chance; so is this an act to enforce any party that is not Front National? Consider that question, it is now no longer for some to support the net best candidate and the best winner. No, there are now signs that certain power players will unite in backing whomever is most likely to stop Marine Le Pen. Certain plays have become this dangerous, not for what she is, who she is and what she stands for. No, certain members seem to fear and not embrace economic change. The Status Quo is everything. In equal measure, Macron has won the endorsements of those abandoning Benoit Hamon. Some press have even resorted to headlines like: ‘Hamon plans radical departure from EU ‘blabla’, some parties are now extremely worried, especially as the Status Quo groups could lose their Billion Euro gravy train. This is almost a unique situation where we witness the change of approach towards the need of individual economic momentum, which now trumps the electing the need for the good of France (I am not stating or implying which politician represents that).

My evidence?

There are several pieces in the more respectable news carriers. In this case a first is the Financial Times (at https://www.ft.com/content/cbf9a59c-04a1-11e7-aa5b-6bb07f5c8e12), who gives us: “Fifteen years on, however, the anti-far right “republican front” to stop the FN appears to be crumbling“, which is only an indication. The chart that they present in that article gives a very nice indication of the splitting of votes. The strong push from Fillon and Hamon towards Macron is almost unheard of. The abstention group is however still large enough to make an impact, yet the shift from 24.5% to 60.5% is also a little more than amazing. Such landslide victories are so rare, that seeing it twice in a row is no longer a mere coincidence. In this Mario Draghi could actually end up being the contributor to the success of Marine Le Pen. As he proclaims the quotes I used earlier, the large group that currently represents the younger voter that currently seems to be set in Emmanuel Macron camp at present, could realise between now and voting day that the words of Mario Draghi are hollow at best and that his ‘proclamation’ will be replaced hours after the election by apologies and words of hardship whilst claims of better economic times cannot be fortified or made into any level of reality on any way shape or form.

In that light, is it not weird that an investment banker who has never been elected to political office, is at present not a projected frontrunner, is forecasted to carry an optional 60% for round two? That isn’t just unheard of, it is a statistical anomaly and in the political field, such landslide levels are a no-no to say the least, especially twice in a row. Someone is buttering the electoral sandwiches in new unheard ways. Now, France or not, we can agree that extreme vote options like Marine Le Pen tends to sway a decent amount of people to go towards ‘anyone but this one‘, yet the numbers at which this is happening at is just too weird. In this we see that both Bloomberg and Citigroup are playing their own little game, especially as the collapse of the Euro would be devastating to those involved. At https://www.bloomberg.com/news/articles/2017-03-15/le-pen-win-would-wipe-out-25-from-french-bank-shares-citi-says, we see ‘Le Pen Win Would Wipe Out 25% From French Bank Shares, Citi Says‘, which is really intense and I wonder what evidence they can present, especially after these players got it so massively wrong after the Brexit vote. So the first quote “A victory for Marine Le Pen in France’s presidential elections would cripple the country’s banking stocks, says Citigroup Inc” is one that cannot be countered easily, yet when we see the graphics on that page, we also get: “The analysts predict declines of 30 percent and 34 percent for Credit Agricole SA and Natixis SA, respectively“, there it is, everyone’s favourite French government banker (Natixis) would lose 34% value, which would send anyone reeling, but in this case as the information as I presented them in my blog articles over the last two years, this drop would be impacting long term plans and Natixis does have a decent amount of fingers in all sorts of government pies. And the quote “Even though Le Pen’s policy plans threaten to shake up the country’s banking system, financial institutions including Credit Agricole, Societe Generale and Axa SA have avoided contact with her team“, which is also really weird, would you not try to talk to a candidate and even if they are all in the mindset that her approach is wrong, the veritable truth is actually in a direction on a path that is 180 degrees from shown. A dialogue trying to understand her path and showing the evidence to other directions and perhaps even alternative ways for both to get what they want.

Yet as we have seen, certain players are in the Segregation, Isolation and Assassination mode. Which is me stating that some shady solutions which are usually limited to HVT’s are now optionally tactics in which the larger corporations will engage to keep their status quo, this is nothing new, but it has never been this outspokenly clear before, there is that much at stake for them. Even if it is merely political assassination, Fillon is already crying those words and the setting towards the investment banker Emmanuel Macron is now clearly visible. I reckon that in this regard, the switch by French Senator Jean-Baptiste Lemoyne came slightly too soon, too soon as an increasing amount of voters are now wondering why the change, because such a shift would not have been needed until after the first round. As I personally see it, French Senator Jean-Baptiste Lemoyne used himself to create a momentum towards Emmanuel Macron, an act that will only create more momentum over time. This I see as the second piece of evidence that this time, the elections are about something a little more unsettling. I wonder if the French people see it in the same light.

In the Bloomberg article we see the included wrong vision too. As you see “losing the May 7 runoff against more business-friendly leaders such as Francois Fillon and Emmanuel Macron” gives us the ‘implied‘ fairness of two candidates, yet at present, two days after this, we see that Fillon got gutted, not surviving on his present 19.5% setting (3rd place), he gets to be the chance for Macron to solidify the pole position.

Citi is currently doing to France what several UK players did to anyone supporting Brexit, the question becomes: ‘Will the French voter realise this in time?

More important for Marine Le Pen will be whether this would realign those who are now predicted to go the Macron way. Time will tell and when we start seeing accusations in 2018, 2019 on how big business is influencing French votes, you better realise now that the warning signs have been all over the place and the non-intervention seems to be relying on the press and a select group of financial power players. By the way, it does not stop there, it goes on in several direction. Now, I do not feel inclined to prove them all wrong, it would make this merely a ‘he said-she said’ debate, what you should consider is the final part that Bloomberg gives us, “the analysts predict” is in the middle. You see, predictions require models, they require data and a few more little titbits that make up for the forecasting models. This model has to deal with two elements it cannot correct for as it has never happened before. First is the fact that President Hollande is currently the least favourite French president in modern history, and soon to be the only one term President in French modern history, so one of the data outliers is based on a premise that had never happened before, the second part is the ‘forecast’ that an politician, never elected in public office before becomes the person growing to over 60% in one round, as I see it, another prediction that is not a given. Are you getting the image? Whatever forecast we are introduced to will be a lot less accurate as several elements in play have never seen the light of day ever before. As such, there are serious questions in play on any prediction given in this election, no matter in which direction it goes.

I personally believe that Marine Le Pen is not the given loser (with 60% opposition), there are a few elements in play, but in equal measure I do not believe that Emmanuel Macron will be the given winner to the degree forecasted either. In the end, we will leave it to the French People to decide who will go to the Élysée Palace, not the banks, not the lenders and not any collection of ‘storage and media clowns’. All these proclaimers are for the most, all on the gravy train of globalisation (the Macron side), a term that has been filling the French with disgust for the longest time and the last 10 years have not been kind on any positive feeling of globalisation. Still, in the end the French will need to remain a little pragmatic, which does not mean surrendering to Globalisation, yet in equal measure there is uncertainty on how France will deal with Frexit, unlike the UK, they are directly tied to Belgium, Germany, Switzerland, Italy and Spain, so there are a few more practical considerations for France. I believe it can be done, but it is up to the French to select the referendum to leave the EEC and the Euro. We can forecast all we like, but if there is one thing the Dutch election have taught us, is that these matters are not black and white and that the outcome is currently getting bounced on the waves of identity and economy, two elements that never worked well together.

 

Leave a comment

Filed under Finance, Law, Media, Politics

How the Franks make France

It is possibly one of the first times that the entire world is keeping their eyes on France and on its elections. The situation as seen in France has not happened since Charles de Gaulle. France in a state of massive changes, changes that are essential if it wants to have any options of shedding the massive debt it has and restructure the options of owning a stronger economy. The question becomes, who will be the enabler in that regard. The BBC shows us (at http://www.bbc.com/news/world-europe-39038685) how 5 charts will explain the elections. The first shows the growth of Front National, the party of Marine Le Pen. The quote “Opinion polls currently suggest Marine Le Pen would be defeated in the second round by Emmanuel Macron. Without the backing of a traditional political party, the former economy minister, who has never held an elected office, is standing as a centrist candidate” is in the central place here. She might be front runner now, but there is the real issue that Marine Le Pen is seen as too much of an extremist. Even as part of her strength is seen in the second chart where we see how unemployment rates have sky rocketed under President Hollande and that level of dissatisfaction has been an enabling factor for Marine Le Pen. The 4th chart is also a Le Pen indicator. As France has been hit multiple times, the people started to listen to the logic of Marine Le Pen and as such all drove straight towards the far right. That is the way of things. The 5th one is less of a positive influence, but it is an influence none the less. As the amount of asylums are given increase, the rejection of the social path of France will increase and that too works for Marine Le Pen. In all this, the consequence is equally a positive part for Macron. Emmanuel Macron is making strong headway and to many French, the preferred choice. Yet, Emmanuel Macron has never held office, which counts against him, as an economist he does have an edge, but that would only work if his policies had resulted in jobs, which was not the case. The reality, or better stated, the stronger reality is that for those under 25, 1 out of 4 does not have a job and that is where Marine Le Pen is getting a growing traction. No matter how the French here on how important social issues are, the reality of no work translates to hunger and uncertainty. In addition, Hollande has data in play that shows that the high point of his economy was a year ago and decline is already showing, this translates to even more people moving from the left towards the centre and the right side of the isle, all moving towards Macron and Le Pen. With the UK showing a growing economy whilst Brexit is starting is also pushing the people to listen to Marine Le Pen and that is the reality that will continue, yet will it translate to enough votes? There is the uncertainty and I predicted that it was a reality France was facing. A reality I have claimed for over 2 years now and so far I have been proven correct. However, this does not take Emmanuel Macron out of the race. There the reality is that anyone feeling too uncertain regarding the more right wing Marine Le Pen that voter might hesitate and decide on Macron instead, a choice that is logical yet untested and unproven. It is the unproven part that the French also realise, so Marine Le Pen stays in the race. The one factor that matters is Benoit Hamon. Now, he might not be the front runner and he will not amount to serious opposition of large numbers, but the one part that still matters is whether he can get enough votes to make the 50% impossible for Marine Le Pen, that is now the game that plays, the others are not able to do anything serious to that extent. It is now starting to be merely a race between Macron and Le Pen, Hamon would enable the situation that a second round would be essential, which now takes us to May and that opens the field again, in that regard, Marine Le Pen needs to be really clever on how she plays the game. In addition, she needs to be clever on how to oppose or diffuse any situation that the anti Le Pen press is pushing onto her.

The NY Times (at https://www.nytimes.com/2017/03/07/opinion/france-braces-for-the-now-possible-impossible.html) is now stating ‘France Braces for the Now-Possible Impossible‘, which only shows that they are either two years late to the party, or they just did not care before. Sylvie Kauffmann talks a good article, but she misses when she states “This is a French campaign like no other. All the political patterns established since 1958, when the present Constitution was adopted, have come apart. The National Front has been a fixture of national politics for 40 years, but never before has its presidential candidate been a consistent front-runner. Today, none of Ms. Le Pen’s opponents doubt that she will get to the second round; in fact, they are not even fighting her. They are fighting among themselves to win second place on April 23, to have a chance to beat her in the runoff“, she is not stating anything incorrect or wrong, it is the one additional fact that is important. This is also the first time in modern history that a current president is not seeking re-election, which she does mention on the side. The scandals we saw and the consecutive “François Fillon, a conservative former prime minister who is now the Republican candidate, has stopped campaigning” is another part of the sliding numbers to go in other directions, yet, will they go towards Marine Le Pen. A smaller influence is the Dutch elections. The Farage-Le Pen-Wilders triangle is pretty famous. Yet in all this the US is now an influence, because with every claim that President Trump is making, the people are confronted with a connection to each of these three and a reason why not to make the same mistake the US has made, with ludicrous claim after ludicrous claim, the Republican win is now hurting the right side vote in both France and the Netherlands, but will the shift be enough? Those matters are not known and are even less predictable.

What is at this point a certainty is that in the end Marine Le Pen will be one of two parties that can be voted for, yet there is enough doubt to see that there will be a round in May, the matter will just be how will the people see this than and how far off is that 50%, because if the call is too close to that, the smallest fluctuation could change the game. Now with the 17% of Fillon in the air and the 15% of Hamon under discussion, there is the smallest chance that a slice of that will go towards Marine Le Pen actually that is certain, yet how much will go her way? If the split is even, there is now the largest chance that 23% will divide between Macron and Le Pen, setting Le Pen at 39%. I feel that Hamon will lose, but I very much doubt if he falls below 10% and that would be the best case scenario for Hamon, there is a chance that Hamon will get a few of the Fillon numbers, but I feel certain that he will lose traction within his own ranks. With 1 in 4 people under 25 not having a job, the alleged fake job that he gave his wife is not sitting well with a large part of the voters who were already looking at Le Pen and are now utterly unlikely to select anyone left of centre which works very nicely for Le Pen, but there is still a steady group that has no love for the right, so those votes will go somewhere else, or better stated these people will vote anyone but Le Pen, which could benefit Hamon to the smaller degree and Macron to a larger degree. so as those impacts are seen, there is now a serious chance that Le Pen would grow from 39% to 42%-46% and that is where the issue starts, she is now way too close to 50% and even as it is unlikely that she gets to that point passing 50%, it is not impossible and that is where the game changes by a lot, because if she gets there, she would potentially be in the strongest position to make a lot more radical changes. Like Trump, her examples would drive the Frexit start and that will be the start of the nightmare for both the US and Japan, the Euro collapsing will drive a market fear of unbridled proportions, one that cannot be countered by the players involved, which will have a disastrous effect on the global economy. CNBC has been giving voice to several dangers, which includes rate hikes (which is off the table the moment Frexit starts), Beijing is another factor, but if properly set would actually create stability and less uncertainty. It is the utterly unbelievable part that the Financial Tribune is giving us. They proclaimed that the global economy is expected to grow 3.5% in 2018, which sounds nice, but unrealistic. You see, the changes that are essential to growth are in the wrong corners as I personally see them. If Frexit starts than the contractions in Europe will start an escalating drop, making a global economy growth of 1.5%-2% decently unlikely. Frexit is the first cornerstone, the Brexit escalation that comes, or will drive the change is another part. These two will now push Italy and Germany in very different directions making the Euro no longer a feasible currency, especially as Mario Draghi was kind enough to spend a 13 figure number onto an economy that would not hike or set in motion to the degree that was essential. So as we see the quote “Its forecasts remained broadly unchanged from its November report, however, both the US and the eurozone saw minor downgrades“, we see it without the mention that this happened even as the UK economy went upwards. Market volatility is actually the smallest influence for now, but that will change before the end of the year. So as we see the dangers of a recession slam in either Q2 or Q3, we will see it with the realisation that the forecast given by the Financial tribune was not that realistic, just prophesising on sunny weather with a few small clouds whilst we see storms on Eastern and Southern shores, and there is no way to pierce the fog from the remaining directions, a dark fog that seems unable to have any sunshine. All that and two additional dangers remain unexplored. That is given not in who gets into power, but the danger that no matter who goes into power, the new players will be inexperienced in many ways; that too will stagnate any positive move from the economy. The only bright spot is that in Germany there are differences growing, especially as Alternativ fur Deutschland has started rounds of infighting, the final straw of anti-Europe will not be in any position to move into that direction, the question then becomes what will Italy do? Even as Merkel is facing a much stronger SPD, that election will not come until 4-5 months after France, which means that Frexit, if called for would also impact the German grounds of choice. In addition we see more waves of ‘Grexit’ news on the need for cutting Greece lose. Which is not an option in EEC laws, and I am surprised that the PRESS has not caught on yet (especially as they played that fake card twice already). All these elements are in play and they will together result in a global economic growth of less than 2%, especially if the European economy contracts a little too much and that is decently certain to happen.

A rollercoaster economy that is about to be started by the modern version of the Franks that make up the French population. In this the trend is as I see it no longer about some united fake region, it is about growing nationalism and national pride, because that will also grow an economy. We all forgot about that (me, myself and I included). You see, there might be open borders, there might be free travel, but as we forgot in which place we were we also forgot on what made that place great. The beers of Belgium, the cheeses and wines from France. Some might claim that this is not true, but it is and we lost sight of it. Because we only value that what requires effort, a reality we have always faced, we just forgot about it and the larger companies had a better time by offering us something mediocre and unhealthily cheap, something that fitted too many of us. I personally believe that this is most clearly seen in the gaming industry, which is why I recognised the flaw in myself early on.

The good thing about all this is that as national pride grows in all the nations, we will see a drastic improvement of appeal and quality, I believe that the smaller places will now have the option to grow and that will drive the economies. So as Carrefour and Auchan end up talking to a new group of suppliers, France will witness a shift in economy, not one that maximises the bonus of larger provider of goods, but enables deliveries from smaller players and they do not have the board sizes that some of the current players have, so it actually will end up driving the economy. It sounds crazy and weird, but I believe this path to be the first drive of growth.

That would benefit the economic numbers of France enormously and it will also push other nations into reinvestigating the options for growth. The Financial Times show part of this (at https://www.ft.com/content/6de52a3a-aca4-11e6-9cb3-bb8207902122), yet this growth is mainly due to other factors. John Ellis, retail & consumer partner at PwC, gives us an interesting point here: “Over the next few months, the way in which retailers deal with cost headwinds, particularly the impact of foreign exchange on product prices, will be crucial for consumers’ future spending patterns.

He is correct in that way, however, I also believe that as people will seek more and more local solutions (read: deals) it will actually drive the local economies stronger in an upwards direction, and in that, I am predicting that the same will happen in France. The second part he is not giving us is that the individual currencies will allow national governments to float their currency ever so slightly to avoid massive negative impacts, something that was not an option under the Euro. So another tool will be handed to the French as they restore the imbalance that their economy has faced for well over a decade. I do not believe it will be the measure towards success, it merely avoids the chance of failure, which is also a driving force in any economy.

Now, feel free to completely disagree with me, which will always remain a valid view. Yet when we see the impact of positivity that segregation has and if Marine Le Pen cashes in on this, than we will see a second step in the European economy that will stop the Euro. As we end with that coin, did anyone tally how many European officials are no longer required? How much did they cost? A gravy train that was riding the slopes of Europe at the expense of taxpayers, whilst for the larger extent not having any positive national impact. We are talking of a group that exceeds 32500 people. So how much was that costing on a monthly basis? 751 MEP members were getting a monthly pre-tax salary of €8,484.05. That’s already 6.3 million a month, so how much for the other 31,750 employees? Let’s not forget that this is a monthly expense. So I reckon that the sweet reality is that there will be a positive impact on budgets. Now these costs are not going away immediately, but I think I am making a clear point that national costings will change.

France is about to start a wave of changes, or better stated, there is a real change that massive changes will commence, but in the end, we will have no certainties before the elections are over and until France makes a claim and voices the intent to exit the EEC, there is no certainty that there will be actual change, because the Euro could survive without the UK, but not if the economy contracts, in that case several options will go straight out the window for several European nations, especially those in the EEC. Mario Draghi has made sure of that. You see, when we accept Bloomberg view (at https://www.bloomberg.com/news/articles/2017-03-08/draghi-s-caution-on-inflation-signals-ecb-stimulus-stays-for-now), where we see “The rate remains stuck below 1 percent, but what’s worse is that the trend has consistently pointed down in the euro’s 18-year history, suggesting structural weaknesses may be at play” a weakness I mentioned (in a different way) in several earlier blogs, is now getting more and more to the forefront. Bloomberg also gives us “the measure that excludes volatile components such as food and energy” gives us that in a dangerously low setting volatile products will still have an impact. The additional “After policy makers’ preferred gauge of future price developments approached levels of below but close to 2 percent at the end of last year — signalling the ECB’s goal was in sight — it’s now on the wane once more” gives more and more strength to my prediction of economic contractions, which now also gives a view that any prediction of a global economic growth of 3.5% in 2018 is getting less and less realistic. so as we see positive forecasts from several sources, we need to be careful on who we will believe, because like several nations stated in earlier years, the forecast of today will soon be shown to be overly optimistic one quarter later, which is after the ‘predictors’ got some of the players to unwisely spend what they should not have been spending. A game that has been played for too long, it is the national push that gives for change and more important, it gives for a push by people who can be held accountable and can at that point be incarcerated, which tends to make certain forecasters a lot more cautious and it will give us an actual realistic economy to work with. It might not be great and in the beginning it will also not be good, but it will be mending and growing, which is what the people want and need. In that we have to voice with certainty that we do not give a fuck on what large corporations want or desire to get them their bonuses, we have had way too much of that for too long.

Leave a comment

Filed under Finance, Media, Politics