Tag Archives: bloomberg

April 8, 2015 · 11:20

Is it illogical?

Today the news is all about Greece, not because they are getting it done, but because they are now less than 24 hours away from a 450 million euro invoice and whilst Prime Minister Tsipras stated that they have the cash to make the next payment (at http://www.bloomberg.com/news/articles/2015-04-04/greece-has-cash-to-make-imf-payment-next-week-minister-says), of course, that statement is now an issue as we wonder why Tsipras took the fast plane to Moscow.

In other news (at http://www.theguardian.com/world/2015/apr/06/varoufakis-extends-washington-charm-offensive-after-talks-with-lagarde), where ‘rock star’ Varoufakis is smiling all over the place. the quote “The hope is he will gain the support of Treasury officials in persuading lenders to cut Greece some slack” seems highly misplaced as the Greek elected officials have been sitting on their hands in feigned acts of ‘activity’. Yet the article shows two interesting quotes. The first one is “it has been openly critical of a German-dominated Europe pushing the country too hard on austerity and fearful of the effects that might have on European unity. A Grexit would spin the markets out of control. It is the last thing Washington wants“. It seems that the US might have issues with the German approach of reducing debt. You see, that hits the bottom dollar, the US can only partially recover if THEIR banks get the slice of the multi trillion dollar debt Europe has, once the debt goes down, their income slows down by a large margin.

The second part here is the market response to Grexit. Yes, the US has a fair point trying to limit that event, but this implies the following:

I had been correct for well over a year in my statements that a tumble of the Euro would massively hit the Dollar and the market.
The fact that the Greek exit, with 500 billion in debt has SUCH an impact, whilst the Greek economy makes up for less than 2% of the European economy implies that the European nations at large are borrowed up to the max and this first stone falling, gives us a domino effect that will wound the market for a longer time, which means the US holier-than-thou DOW will also feel the massive impact one way or another.

If economies at large are THIS dependent on that Dow Jones Index, then what failures are we going to see in addition to Greece?

The second quote that is interesting is: “Varoufakis, was scheduled to meet Nathan Sheets, US Treasury undersecretary for international affairs, two days before Tsipras heads to Moscow for talks with the Russian president, Vladimir Putin, on Wednesday“. This is interesting for the simple reason which is found in the question: Why?

You see, when we look at Nathan Sheets, the treasury page (at http://www.treasury.gov/press-center/press-releases/Pages/jl2640.aspx) gives us: “Sheets will lead Treasury’s Office of International Affairs, which protects and supports U.S. economic prosperity by strengthening the external environment for U.S. growth, preventing and mitigating global financial instability, and managing key global challenges“, so why was Varoufakis meeting Nathan Sheets? Is he not all up in arms to protect Greece from collapsing? Which might be the same goal both have, but that gives extra weight to second implication I mentioned, the Greek debt has far fetching consequences, so why would a flight to Russia have any positive result for Greece, it would suit Russia just fine to see the DOW tumble. So unless Greece is making a deal that includes the option of a Russian base on Greek grounds, we should consider the possibility of watching a linked smoke screen we see here.

That conclusion (the smoke screen) is given weight by the following quote we see in another Guardian article: “Mrs Lagarde … stressed that, in Greece’s case, the Fund is willing to show utmost flexibility in the way in which the government’s reforms and fiscal proposals will be evaluated“, as well as “It added that in separate meetings, US Treasury officials who also met Varoufakis expressed the willingness of the US government to play the role of an ‘honest broker’ in helping Greece to strike a deal with its lenders“.

The question becomes, flexibility in which direction? That question follows the ‘honest broker‘ offer from US treasury officials. If this was (very likely), the Nathan Sheets meeting, then we get a new issue, not just who gets the brokered deal and at which percentage, we now see a second instance where IMF and US needs meet hand in hand. Did we not see a similar evolution with Argentina? If that is so, then who is catering whom and how much will it cost the Greeks, when the actual full invoice is revealed after a massive black out through smoke screens, miscommunications and incomplete data. Yes, those are presumptions on my side, but when you recall the Argentinian debacle, where they were pushed towards vulture funds, after IMF help was denied through a request by the US, many press members did not properly follow up that part and no clear information was ever published, so are my assumptions that far out of bounds?

Now we get to the interesting part. You see, he Guardian has another piece by Phillip Inman titled ‘IMF needs to see the bigger picture – that debt can choke off growth‘ (at http://www.theguardian.com/business/2015/apr/07/imf-needs-to-see-the-bigger-picture-that-debt-can-choke-off-growth). Here we see the following parts that are a decent chunk of sizzling debate that we can charcoal grill in an instant. “Yet the remedies outlined by the IMF to counter the threat of persistent low growth in Britain and other developed world economies, as documented in that report, show that debt influences growth and in extremis can choke it off” as well as “the IMF says the world’s major economies risk a long period of low growth unless governments do more to overcome the after-effects of the financial crisis and the longer-term problem of ageing populations“.

I do not deny the correctness of the statements, but the statements are all extremely short sighted, especially when you consider that the people making the statements are on high 6-7 figure incomes. Let us not forget that these governments decided to get themselves in debt and that for well over a decade, no proper budget has been pushed through. It was Germany and Germany alone, that tightened their own belt by a lot and as such they have been enjoying lessened interest payments, which is now saving them billions each year. The second part is that ‘overcome the after-effects of the financial crisis’ is all about proper budgeting, which has gone amiss all over Europe (not just in Greece), in addition ‘longer-term problem of ageing populations‘ is not completely a valid concern as this had been known for well over a decade, which means that plans should have been in place for a long time.

Now we get to the interesting part. As governments on a global scale were so eager to be the bitch of large corporations, the involved governments painted themselves in a corner. Yet, the IMF is not innocent here either, I had a go on their numbers in 2013, when they had published ‘World Economic Outlook April 2013‘ (at http://www.imf.org/external/pubs/ft/weo/2013/01/pdf/text.pdf), where they stated that advanced economies would be performing at 1.2% in 2013 and 2.2% in 2014. I pretty much labelled the group behind that piece of ….paper ‘bonkers’, now we see “Looking forward, the IMF said potential growth in advanced economies was expected to increase slightly from an average of about 1.3% a year in the last six years to 1.6% until 2020, but not reach the 2.25% average seen between 2001 and 2007“, So this means I was right, my simple use of an abacus got me numbers more precise than they did with their ‘economists’ that they bunched like grapes in an analytics department. I did expect numbers to be a lot better in 2016, but that was based on the limited information I had, irresponsible elected officials did skew my numbers more in a negative way, silly me for having hope that elected officials would keep a level head in all this. Serves me right!

Yet, behind all this is a little more. It is the quote “But growth is not the only way to diminish or pay back debts. Cancelling them is another. Banks do it with their worst performing customers. Unfortunately for Greece, the IMF refuses to use the same criteria as Lloyds or RBS would when confronted by a failed business” that gets to me. As an assumed speculation this path is not a bad option, and any Journalist has my blessing to entertain such a thought in the proper context. But this article does not do that, it is left in the air at the end of an opinion piece, without proper merit. This makes me wonder why Phillip Inman economics correspondent added this. Just to give visibility to his book? I seriously doubt that, the statement in the air is the issue in this, perhaps like me he is postulating that the ‘forgiving’ of debts is what certain banks are hoping for, because it puts them in the clear and leaves the debt with the underwriting governments, a step Germany is opposing rigorously (and rightly so).

What is in my view decently clear is the prediction I made earlier, that Greece is playing Possum in the 11^th hour is coming to fruition, my issue becomes, why is the Greek population accepting this and why is there no proper investigations in lighting up all the sides on how previous Greek administrations accepted tons of debt without any decent exit plan. In my view, Antonis Samaras was sailing the only path that had the option of keeping the Greek population independent and proud, a plan that is certainly becoming less and less a reality under Tsipras, because no matter what happens next, whether it is feigned forgiven debt or any Russian deal, there will be consequences for the Greek population at large, an issue ignored by most players involved, especially their elected officials.

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Tagged as Argetina, bloomberg, Christine Lagarde, Dow Jones Index, Germany, Greece, IMF, Lloyds, Nathan Sheets, Philip Inman, RBS, treasury.gov, Tsipras, US Treasury, Vladimir Putin, Vroufakis, World Economic Outlook April 2013

February 20, 2015 · 23:07

2500 years later

Yes, it seems such a long time that Peisistratos, father of the Greek tragedy has been active, this was all voiced into life during one of the religious festivals for Dionysus. Is it such a mystery that a place of wine and a sad story is the frying fields where politicians feel most at home? This is at the foundation when we see another round for some Greek event. More talks (more wasting money on flights and expensive hotels), whilst the people have no clue, that they are being told another story. Like any good sad story, this too is in three parts, even though within the foundation, no one would have a clue on this. Now there is Prokopis Pavlopoulos, who got in place in 2015, before that there was Karolos Papoulias, who got his place in 2005 and before that there was Konstantinos Stephanopoulos who started in 1995. This is the foundation of the Trilogy.

You see, I discussed this before, the premise, not the links. First is an article I mentioned in my blog ‘Whinging from a desperate left‘ from January 29th (at https://lawlordtobe.com/2015/01/29/whinging-from-a-desperate-left/). The article by Prokopis Hatzinikolaou gives us “The state collected less than half of the revenues it was due to receive last year as it appeared unable to ensure that taxes and fines found their way to its coffers, according to a State Audit Council report submitted in Parliament on Tuesday by its president, Ioannis Karavokyris“, this means that the Greeks themselves are basically sinking their own ship. In one year, Greece has been unable to address the outstanding part which is a lot more than the settlement. It actually adds up to almost 16% of the ENTIRE Greek debt, so why should Germany play nice, as they are not at fault, they were not the reason and the latest puppet in Greek politics is not addressing the issue at all. Consider the image (at http://www.theguardian.com/business/live/2015/feb/17/greece-bailout-talks-europe-deal-live-updates), where Greece’s finance minister Yanis Varoufakis smiles like a clown, stares like a Vulture and casually stating that “an “honourable agreement” was within reach for Greece“, yet no mention that they will clean up their taxation system. Is anyone at this point catching on that a nation cannot survive if it is not collecting on its taxation? There is a nice PDF available at (http://ec.europa.eu/economy_finance/publications/publication12298_en.pdf) which shows part of the problem. Now in addition consider this report from 2008, than consider the article ‘Greek Bond Sale Tops $4 Billion in Return to Markets‘ (at http://www.bloomberg.com/news/articles/2014-04-10/greece-readies-bond-sale-as-athens-car-bomb-reminds-of-upheaval), so when we combine the tax information that we got from Prokopis Hatzinikolaou, we add the fact that the Greek tax system is faulty at best (a disaster at worst), how was it that Greece was even allowed to go back to the markets? So if we accept the wiki definition “A government bond is a bond issued by a national government, generally with a promise to pay periodic interest payments and to repay the face value on the maturity date“, how can bonds be sold if your tax system is not functioning, meaning that repayment is not an option (50% loss in taxation leaves you with nothing to manouvre with). So again I ask, why were they allowed back on market and more important, why are the bulk of the newspapers not looking into this side? An additional part I also mentioned in my blog was “Of the 2069 Greek accounts in Switzerland (as mentioned in a Greek magazine), who besides the journalist has appeared in court?” the Journalist was Kostas Vaxevanis, now we see in several papers, including the Times with the headline ‘Greece shreds files on tax cheating by rich and powerful‘. So as this has reported to have happened just before the January General elections, we could argue that in light of the loud non-mentioning of these events by both Finance Minister Yanis Varoufakis as well as Prime Minister Alexis Tsipras, as well as his three predecessors, that there is a lot wrong in Greece, the fact that the Greeks themselves are creating their own mess, why be nice? Are they not accountable for their own mess? So when we see the ominous text on what Germany will do, and how their 80 billion plus part could be lost, we must wonder whether it is not a lot safer just to cut Greece away. Lets face it, it will take forever to clear the current debt, they have no intent of actually cleaning up their mess and the rest of Europe might like a vacation spot where their coin gets them 400% more. Is it wrong to think so exploitative? No, not when the political parties are all about talk and none of them are about resolving issues. This is a side the papers seem to ignore as well. You see, debt deals and GDP promises and talks on ‘futures’ sounds all so sexy, to plainly report that a nation is beyond salvage because their political leaders will not bow to responsibilities whilst allegedly catering to the wealthy and the corrupt is just to plain and too direct.

So after 2500 years, the Greeks are reinventing their own creation called a tragedy, they are now however willing to put it all on the line, hoping that they get the same response ‘they are too big to fail’, but is that true? a nation with 11 million, no true exportable resources, what value do they have apart from beach front property? In addition, property that cannot be serviced as there is almost no infrastructure left. it was all sold on the bondmarket at 9.95%, not as bad as the 11% they had at the beginning of the month, but with tax collection at an all time low and no plans to do something about the 2069 accounts that Kostas Vaxevanis reported on, where does the Greek population think it can go to? We can see part of this from CNBC (at http://www.cnbc.com/id/102439432), where we see the headline ‘Worried depositors rush to pull cash out of Greek banks‘, when we see the quote “On Thursday, by mid-afternoon, deposits had shrunk by about 680 million euros (US $773 million)“, we must wonder whether we see the bank in a similar situation as we saw the Cypriot banks move to. So as funds go into banks, the deposits are lower and lower which means that the banks will not survive, or the ECB would have to up the financial support by a lot more, money Greece cannot pay back, so Germany is now in a place where accepting the 87 billion loss would not be the worst part in all this. So as we return to the old story of Diogenes of Sinope, the Greek that made poverty a virtue, yet in today’s world, the participating parties are devaluating all Greeks into a life of poverty, I wonder if the Greek population sees the virtue in that side. Will they react in Cynical philosophical rhetoric (founded by Diogenes of Sinope), or will they see the Irony, laugh it off and let the next politician take even more from them?

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Tagged as bloomberg, Diogenes of Sinope, Dionysus, ECB, Finance Minister Yanis Varoufakis, Germany, Greece, Greek debt, Greek economy, Greek tax system, Greek tragedy, Grexit, Ioannis Karavokyris, Karolos Papoulias, Konstantinos Stephanopoulos, Kostas Vaxevanis, Minister Yanis Varoufakis, Peisistratos, Prime Minister Alexis Tsipras, Prokopis Hatzinikolaou, Prokopis Pavlopoulos, the Guardian, The Times, Yanis Varoufakis

February 15, 2015 · 23:09

A coin with more than two sides

Let us take a look at two of many more sides. The first side is given in this article: Google’s Vint Cerf warns of ‘digital Dark Age’ (at http://www.bbc.com/news/science-environment-31450389). The initial quote is “Vint Cerf, a ‘father of the internet’, says he is worried that all the images and documents we have been saving on computers will eventually be lost“. This sounds nice, but is that not the same as we have had forever? If we did not take care of our old photographs and our old negatives, than those pictures would be lost forever, so how is that different?

See here, the picture of an Agfa Instamatic. It is almost identical to the camera I had in the late 70’s. So, how will you get those negatives developed? Where to buy film? Most will not care about it, many have bought new camera’s, but where to print the negatives you have? Nowadays with digital images, almost any printer will print it, almost every system will show them. How is that different? So are the words of Vint Cerf anything else but a sales pitch for some new ‘forever’ saved option, likely one that Google will offer and not unlikely in a way that gives Google shared ownership. Is that under the current feelings of ‘data collection’ such a sceptical view to have?

Now, I will state, that not unlike those old prints, the owner has the responsibility to keep the images safe, just like in the old days. Even if the originals (the digital negatives) are lost, as long as a print still exists, the image remains, just like the old photographs. Yet, his quote “But as technology moves on, they risk being lost in the wake of an accelerating digital revolution” holds truth, because that is not unlike the 110mm film issue. So as long as you have a data option that survives, like the 110mm negative holder, you can always get another print. So, CDROM’s in a writable version came in the late 90’s, so we only started to have a backup option for 20 years, yet affordable digital images would still need several more years. Yes, that market has grown exponential and now, we see the application of Common Cyber Sense in another way. Now, people will get confronted with the need to back things up. As the Digital disc evolved, so has the quality of these solutions. Now the discs last a lot longer, so backing up the old discs on new discs does make a whole lot of sense, so there is a side that makes perfect sense, but is that enough?

That part is shown in the following quote: “’I worry a great deal about that,’ Mr Cerf told me. ’You and I are experiencing things like this. Old formats of documents that we’ve created or presentations may not be readable by the latest version of the software because backwards compatibility is not always guaranteed’“. This is at the heart of what Vincent Serf is getting to, so he is definitely onto something. How many of you can still access all the WordPerfect files you created in 1992? Who can still access their FRED applications and their Ashton Tate’s Framework solutions? That list is slowly and surely getting close to zero. This is what Vincent is getting to and there list the crux, because this would have gone beyond mere images and what we currently still access. Consider the Digital VAX/VMS systems, the collected data that spans decades from 1982 onwards. The IBM series one (those 64Mb mainframes with 10 9” floppies), so Vincent is perfectly correct (as a man with his experience would be), but what solution to use? Yes, his idea is perfectly sound, but the issues that follows is the one that I have to some degree an issue with, you see, sometimes things get lost, which has happened throughout history, would our lives have been better if the Library of Alexandria survived? Would it be better, or would there be more and more incriminations? There is no way to know, but the issue can be explained in another way. This is a myth I heard in school a long time ago. The story is that a person could ask whatever he wanted for a created chess game. He asked for a grain in the first square, two in the second square and so on. By the time the board was half way through, the person paying for it would owe the person 2,147,483,648 grain seeds and that is just half way through. Now think of today’s world, where we collect everything. Like the chess board we collect every part and this just increased the junk we collect and that at a premium price. So what to keep? That is the hard part, it is interesting to keep on the side that sometimes we need to allow to lose things, but Vincent has a case. Now we look at one of the last quotes: “’Plainly not,’ Vint Cerf laughed. ‘But I think it is amusing to imagine that it is the year 3000 and you’ve done a Google search. The X-ray snapshot we are trying to capture should be transportable from one place to another. So, I should be able to move it from the Google cloud to some other cloud, or move it into a machine I have’“. Yes, there is the sales pitch. “Google search” and “move it from the Google cloud“, so there we have it, the Google cloud! Still, even though there is a sales pitch in here, does that make it a bad approach? Are we better because we save EVERYTHING? That is at the heart of this little conundrum. Now, those having their data on the old Cray might consider their data worthy, so do many who had their data on UNIX mini’s, but now consider every Novell edition, every desktop, now, it will be arbitrary if people decide to take these steps, yet what happens when all data can be baked up like this, what happens when some start ‘offering’ this for ‘free’? Who then co-owns that data, those solutions? Is that such a crazy thought to have?

Here is the last part: “And that’s the key issue here – how do I ensure in the distant future that the standards are still known, and I can still interpret this carefully constructed X-ray snapshot?” This is the part that is interesting; his concept of Digital Vellum is an interesting one. Yet, how should we move forward on that? What happens when these snapshots link up, when they connect, perhaps even interact? There is no way of knowing; perhaps this would be the beginning of a new evolution of data. Is that such a weird concept? Perhaps that is where we need to look at other sides too. Consider our insight, into our memories, our ‘wisdom’ and our ability to filter and extrapolate. Is this solution a primal step from near ‘artificial-intelligence’ to possible cyber/digital intelligence? The question becomes, if intelligence is grown from memories, what do we create when we give it everything we ever collected? I have seen the stories, the way some people think that the dangers of an artificial intelligence is so dangerous. We might consider the thoughts from the ‘Cyberdyne’ stories (Terminator series), but in the end, what if the digital intelligence is the beginning of our legacy? What if we learn to preserve ourselves, without leaving a carbon footprint, without being the deadly blight on nature? At some point we will stop to exist, we die; it is a simple consequence of nature, but what happened, if our wisdom is preserved? Many come with stories and nightmares of the loss of identity, but what happens if we can store intelligence? What happens if the next century Albert Einstein would be there to help us create progress, inspire innovation for all time? Is that such a bad thing? Some of these questions are beyond my ability to answer but there is a dangerous dark side too, what happens when this becomes commercial Intellectual Property? I am all for IP, yet, should cloned intelligence become the property of anyone? I feel that I might be alive long enough to actually see that question go to court. I hope that those making that decision are a lot wiser than I currently feel.

This now gets me to story two, which also came from the BBC (at http://www.bbc.com/news/technology-31440978), the story here is ‘Cybersecurity: Tech firms urged to share data with US‘, which gave me the initial scepticism regarding the Vint Cerf story. So, I am not linking them perse, they are separate stories. The initial quote is “Private tech firms should share more information with government and with each other to tackle cybercrime, according to US President Barack Obama“, I do not disagree with this thought, however, there is a side to this that is not addressed. The given quote is “Senior Google, Yahoo and Facebook executives turned down invitations to the summit, held at Stanford University“, so is this about not sharing, or about keeping the data non-sharable. There is part that we see when we look at the quote “Mr Obama is backing the creation of information sharing and analysis organisations (ISAOs) to help firms and government share material on potential threats“, yes, if we consider that Snowden fellow there could be issue, but is that a valid path? You see, consider how some do NOT want the cyber threat to reduce for the largest extent, consider how many software ‘solutions’ are out there, for viruses, phishing attacks, identity theft and several other parts. There are two dangers, at one part we have a possible solution to theoretically start solving and decently diminish the danger, the other side is on how all that data gets linked, that part in the wrong hands is a lot more dangerous than many could imagine.

The following quote adds to the worry: “Government cannot do this alone. But the fact is that the private sector can’t do it alone either because its government that often has the latest information on new threats” My issue is that this should not in the hands of any private part, it could be seen as the execution of the premise ‘absolute power corrupts absolutely’, those who face that lesson will not have an option. I would see a solution if there was collaboration between NSA, GCHQ, DGSE and a select few more. Reasoning? Cybercrimes have a distinct impact on national income and also national tax donations. They have all the drive to get it resolved. I have less faith in private companies, their allegiance is to profit, their board of directors and more profit. This is the issue as they will do what they need, someone falls on a sword and many get extremely wealthy, the data goes everywhere and many become exploitable, classifiable and re-sellable. I have been in data for decades, I think that governments can do what needs to be done, and it is time to change the cycle of re-iterated profit. Governments have made themselves the bitch of the private industries, the three mentioned initially is not enough, consider the quote down the line “Facebook, Yahoo, Google and Microsoft have all sent less senior executives to the conference“, so why was Microsoft not mentioned earlier? What is going on? The interesting part is that Bloomberg mentions Microsoft several times, the BBC article just twice. It is clear that something needs to be done on several levels, but it takes a different scope and a different approach, I feel decently certain that keeping the private touch out of this will be essential, for the reason that private companies have a mere commercial scope. I feel uncertain that this approach will work, it has not worked for a long time; I have seen ego and political play and personal reasoning interfere with results, in more than one nation. Whatever is done, it needs to be done, it needs to be done a lot faster than many consider and even though taking the politician out of a government seems to be impossible, we need to make sure that an approach is considered that does not allow for political exploitation, but how to get that done is another matter entirely.

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Tagged as Agfa, Ashton Tate, BBC, bloomberg, Common Cyber Sense, Cyberdyne, Cybersecurity, DGSE, Digital VAX/VMS, Digital Vellum, Facebook, GCHQ, google, Google cloud, Google search, ISAO, Library of Alexandria, Microsoft, NSA, President Barack Obama, Terminator series, UNIX, Vincent Serf, Vint Cerf, Yahoo

January 18, 2015 · 22:37

A seesaw for three

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

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

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

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

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

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

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

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

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

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

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

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

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

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

December 12, 2014 · 11:44

Is it all Greek to you?

Let’s take a look at the issues!

First there is Bloomberg who on April 11th headlined ‘Greek Bond Sale Tops $4 Billion in Return to Markets’ (at http://www.bloomberg.com/news/2014-04-10/greece-readies-bond-sale-as-athens-car-bomb-reminds-of-upheaval.html), a nation with 11 million have notched up their debt by hundreds of billions, no options at present to repay it and again they are allowed to push new bonds into the market.

My first issue: I want to see a list of names of people that allowed for this. There will be no excuse, no non-clarity; they are to be presented by a panel of economists explaining the rationale for this and it should be presented live! (I wonder how long it will be until we hear ‘carefully phrased denials on lack of clarity‘ in regards to who drove this).

I already gave my view on May 18th on my article ‘Are we getting played?‘ (at https://lawlordtobe.com/2014/05/18/are-we-getting-played/), where I stated: “The investor relies on information like credit ratings (from places like S&P and Moody for example) to make an assessment on how realistic the investment is. The fact that almost a month later the quote ‘Greek lenders are likely to face large losses over the next two years’ is seen, gives rise to the question whether any upgrade to the credit rating was valid“.

It seems clear to me that Greece is unable to manage its economy, its debts and its options to repay the debts. Can we please have a vote whether Greek economic affairs should as per January 1^st 2015 be managed by either Germany or Turkey (Turkey is not that great an idea, that’s just me being mean)? It seems clear to me, for a long time now, that pouring money into a hole, whilst people keep digging themselves deeper will not result in any resolution. There has been clear evidence of gross negligence for over a decade; as such other measures will be required.

The Bloomberg article states: “Greece today took one more decisive step toward exiting the crisis,” Samaras said. “International markets are now expressing in the most undoubted way possible their confidence in the Greek economy”, I state that this is not the case, Greece is nothing more than an upgraded vulture option, todays information clearly sees this, let’s just be clear, this is just a little over 6 months AFTER that so called vote of confidence.

The second part we see with “The government and European Union predict that the Greek economy will expand 0.6 percent in 2014 after six consecutive years of contraction that has cost about a quarter of the nation’s economic output and sent the unemployment rate surging” I believe we are being intentionally misinformed here. If we look at http://www.tradingeconomics.com/greece/gdp-growth-annual, we see that this year Greece’s GDP annual growth rate is growing by 1.9%, a growth of 1.5% in a year, whilst this nation is in such disarray, such debts and such levels of unemployment, there is, what I see to be an intentional attempt to misinform people. The standards used are no longer applicable. With a little over 1 out of 4 without a job, this nation is a mess; numbers are withheld, or misrepresented, not unlike the entire Goldman Sachs issue in 2010. If you doubt my word against that of those economic ‘boffins’, then look at today’s news.

We see ‘Grexit fears send Greek bonds and shares sliding‘, which the Guardian stated 10 hours ago. The quote “The Greek stock market is plunging to new depths, after the prime minister issued dire warnings of chaos ahead if his party were ejected from power“, as well as “Greek Prime Minister Antonis Samaras on Thursday accused opposition SYRIZA of bringing back Grexit fears and sending a message to the markets not to lend to the country by declaring its sovereign debt unsustainable“. By the way, in my view, the debt was never sustainable. When we consider 300 billion, over 11 million, we see that every Greek needs to bring 27,300 to the table, one out of four has no job, so that costs extra, as well as bring the cost per working Greek now to a little over 33,000. If the average Greek brings home a little less than 10,000, you can see that they come up short by a lot. By the way at 5%, the interest to be brought in would be 20% of a Greek income, whilst at present Greece cannot even properly budget its nations. So, as we look at these numbers, can anyone explain how Greece considers its debt to be sustainable?

Those who allowed Greece to fall in this deep hole should be made public and named, and we are talking Greek names here. Someone signed up for unrealistic debts, misrepresented presentations and the Greek government presented it. The Greek people have a right to know who were behind this titanic blunder. The fact that Austerity measures are not kept and the system is not cleaned up only helps to make a case that Greece should not be allowed to continue to be part of the EEC, because at present they are not in a small measure, the risk, which they could now enable the Euro to collapse completely.

If we consider the reasoning of a quickened election by PM Samaras and the message “Athens exchange has now tumbled by 7%, meaning it has shed 20% of its value since Samaras decided to accelerate the presidential election to next week“, we should wonder why this change is now being made. There are conjectures in play too (partially by me at this point). When we consider another (non proven source, at http://www.zerohedge.com/category/tags/greece), we see ‘Greece Suffers Biggest 3-Day Crash In 27 Years‘, here we see the quote “Did we just get a glimpse of the ugly reality hiding behind the veil of status-quo-maintaining central-bank-sponsored manipulation?“, I have written similar thoughts, but mine were not founded on economic knowledge, just on the data I looked at. One response there was “Central bankers have lied to a false prosperity and zero interest rates as if there is no risk remaining“, which is in line of what I have noticed with economies all over the EEC, I call it ‘managed bad news‘, which seems more apt, but when we see a 20% crater in what is laughingly called ‘Greek valued bonds’, my euphemism of carefully cautious labelling can be thrown out of the front door and perhaps it should be called ‘intentional manipulation for the profit of a few‘. Proving that part takes a little more time, yet those behind the curtain will not be held to account in any way, shape or form and legislating these events seems to be a large ‘No No!’ as well.

So where to look?

Well, if we look at the news CNBC gave us on November 19^th, we see “Yields this week have not reached the 9 percent level hit in mid-October when negative sentiment surrounding Greece spread to global markets. However, rising debt yields do highlight that the country’s economic woes are far from over, with a crucial deadline in early December looming large on the horizon” (at http://www.cnbc.com/id/102198319), we also see the following quote “The country managed to exit recession this year and post a positive gross domestic product (GDP) figure last week, but political wrangling has continued nonetheless“, so ‘manage to post a positive…‘, positive by what standards, as well as the part ‘managed’, managed how? Through manufacturing or through manufacturing the books (aka cooking them) with possible assistance from Goldman Sachs or a like-minded institution? The lack of clarity as well as the lack of clear numbers give pause to consider how bad an idea it was to let them back onto the bond market last April.

The final part we get from the Guardian (at http://www.theguardian.com/business/live/2014/dec/11/russia-central-bank-interest-rate-hike-ecb-loans-live#block-54899bc7e4b09dc257b7f1fe), where we see “The 10-year Greek bond is now yielding over 9%, up from 8.7% last night. And the three year bond is now yielding more than 10%, as nervous investors demand a bigger premium for holding debt that matures sooner“, so from a mere 5% to almost 11%, doubling the dividends, is ‘sponsored manipulation‘ THAT far-fetched? I want to see names of those behind the curtains, they are no Wizard of Oz, they are what used to be called the ‘Gnomes of Zurich‘, yet in this day and age, they are virtual, and none of them reside in Zurich, that’s just too old school.

In the end where it their (and our) money, in the form of dividend going to?

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Tagged as Antonis Samaras, Are we getting played, bloomberg, CNBC, EEC, Gnomes of Zurich, Goldman Sachs, Greece, Greek, Greek economy, Grexit, lawlordtobe, Moody, PM Samaras, S&P, SYRIZA, the Guardian, zerohedge.com

October 10, 2014 · 09:54

Billion dollar blame

Some do it quick, some do it with conviction, some take a life time and some don’t experience it at all. You might want to guess on what naughtiness I am talking about. It is simple negative profit in a firm. Some seem clear, some are to be expected and some are just plain ignorant.

We could rephrase them as the alphabet, like A is for Airline that’s lost in the queue; B is for banks, who lost more than a few. But then, that nursery rhyme would get boring real quick. The issue is not Tesco, not as we read in Bloomberg: ‘Bank of America Lost $2.7 Billion in a Maze of Accounting‘, it is simple overreaching. First the car industry, now the mobile industry is getting hammered. It would be fine to just blame Apple, who does have a stake in this, but in the end the true culprit is what I call ‘lack of vision‘.

Sony is downgrading its profits to far below zero. It is projecting a loss of 2,140,000,000 at the end of the current financial year. So we are talking about a loss so big, I personally believe is that those ‘idea-illogicals’ are still with their heads in the pre-recession era, they keep on believing that the old ways still work. Guess what! That time is gone, the financial institutions and banks changed that game forever.

The electronics empire initially forecast a $466 million net loss by the end of the current financial year, but has now informed investors that the projected loss has been revised to $2.14 billion. That is the budget for a small nation, so how is Sony still around? Well, that is not about that part of the equation, but it is an interesting question to consider for the future. The biggest issue is with their mobiles and we should wonder how they are currently surviving. I have nothing against Sony mobiles, I have had Nokia mobiles, I have Sony mobiles and mobiles from Ericsson and currently I use a Motorola. The entire mobile market is plummeting, Apple is doing fine, but overall they are likely to see a peaking of profits too.

Why?

Well, like those in the car industry, the people behind them are just not too clued in. They listen to ‘experts’, ‘analysts’ and from there they think that they comprehend their customers. They get market research, get 1000-2000 responses, weigh the hell out of the data and they consider that they have the knowledge.

Guess what, it does not work that way!

True investigation takes more, takes longer and takes actual preparation. Some half-baked set-up, which is quickly designed on Monday, live on Tuesday, data collected up to Thursday and reporting on Friday can work for some parts to get a general idea, but in the end, you will not get the ACTUAL wisdom you need. And guess what, it is not just Sony doing this; there are a few other larger players. Apple, Alcatel, BenQ, HTC, Motorola, Nokia, Samsung, Siemens and Sony Ericsson et all. All of them have several models; most of them are not that cheap.

To this I add two facts. The first one is the economy. It has been 10 years when the 2004 crash came, that hit many people, then the 2008 crash that turned a massive amount of people over the brink of poverty. In that decade the consumer lost close to 21% of purchasing powers. In that decade, the bulk of all people lost a job, or was retrenched at least once, was forced to live on a frozen income, whilst prices of food and housing kept rising and many are not dealing with their debt, so that part is also hanging round their necks as an anchor. The consumer markets ignored that part and now they see the fallout, a fallout that could have been clear to them for at least 3 years, so the writing is not just on the wall, it is a massive neon billboard that was ignored by those who should not have done this (at http://www.cnet.com/au/news/sony-forecasts-2-1-billion-loss-this-year-due-to-its-smartphone-business/)

There is additional ‘evidence’, which is seen here in the quote “The Company blamed the ‘competitive environment of the mobile business.’ Sony has been hammered by competition and an inability to find distributors in key markets such as the US“, I consider that to be a statement of falsehood. Why?

Well, that is always the real question. Consider the list I gave earlier. Siemens has lost a large share, Ericsson lost it as it united with Sony (the company in question), Alcatel was never the largest party in this and neither is Siemens. Huawei is relatively new and several smaller ones do not make the list any more (like NEC), so overall Sony should have consolidated its visibility, but it did not and neither did Nokia. Apple, Samsung and HTC grew, yet overall Sony should not have lost THAT amount, which means that there is more. I blame the over flooding and iterative consumer model as one reason, such a model cannot be sustained if you cannot grow the customer base and that part is currently diminishing and will keep on diminishing for another 2 years. We can no longer afford a new mobile or car every year, in all honesty, we never could, but that part is mainly the result from the pushed idea of ‘ego’ and peer pressure.

The second quote that gives the ‘frying pan’ and ‘the fire’ expression is: “While its Xperia Z3 flagship is making its way into the US through T-Mobile“, many consumers have had enough of being held over a barrel by telecom providers, the ‘new’ mobile is less and less an incentive to hold on to a solution, that side only works for business customers and they too are shopping in the margins. The final quote is “companies such as Google and Microsoft are laying out plans to broaden their reach into the emerging markets with more affordable smartphones“, that group is now targeting the ACTUAL consumers that are available. Huawei had an advantage there, but they are quickly losing that advantage as they emulate Samsung and HTC more and more.

You see, in this day and age, mobile makers have been pressing the ‘exclusivity’ option just a little too long and now the towers break down. You do not have to believe it, but not unlike the car industry, we do not need 7 models with 22 configurations. That image is created by advertisers, finding people telling you that ‘choice’ is all about ‘individuality’ whilst they try to sell that same package to millions; it is a fake concept as I see it. Yes, we want some choice, but the consumer driven industry took that way over the top. That same issue we have seen in mobiles for some time now and the bigger players, coming with half a dozen models are now finding that they are selling ‘hot’ cakes from a fridge in a place where there is no electricity. So why the ridiculous amounts of ‘add-ons’?

Apple avoided most of the issues by having one phone in 3-4 options, where memory was the choice. We do not need 8-12 models, having one phone, which does most, would suffice. Then we get the issue with price, smaller models cost some, or need a ‘contract’, in my eyes it is an interaction of pimping and harlotry for customers, but who is who is not clear to the consumer. Consider that many do not have $800 for a phone, yes we get options for cheaper, but many providers offer a lot less at that point, whilst a generic cheaper phone would be the solution to many, brands are ego pushing the more expensive models at any given opportunity. Although Huawei seemed to have nailed the market, they seem to slowly start making the same error the others are making. Consider that Huawei offered a 4G phone for less than half the price (unlocked and free of contract) than many other providers, so why would we pay twice the price?

Let’s not forget that many providers are no longer delivering a reliable mobile. If it has android than it is likely that the phone is forcing Google search down our throats, whilst forcing people to store all data on a Google account, so that they can copy the data. Apparently there is a way to switch that off, but the result is implied to be so disgustingly customer unfriendly, that we are starting to wonder whether criminal charges are in order. Now, my Motorola suddenly got ‘enhanced’ buttons at the bottom, where it seems that there is a software overlaid button that FORCES me to Google search. How was that MY choice?

So, in the age of data, the market will soon belong to the mobile maker that will respect the customer and BY DEFAULT, let the person choose what they want to do with their data, photos and other smart phone parts. This is all linked, because where confidence dwindles, people are less likely to choose a smart phone and more likely to go back to the old days of the Nokia 1100 (with silver LCD screen, offering voice and SMS only, oh and it avoided bank security for a little while).

It is my firm believe that if big boys like Sony, Nokia and others want to turn their market around, they will need to take time to ACTUALLY learn their customers’ needs and not force corporate choice as customer wishes down the throats of these consumers. For example, instead of 19 Nokia Lumia models make 4 with one extra landscape option. If you only need 5 models, you can simplify the process, down production costs, distribution complications and get a better return. It is just a crazy thought, but what do I know. I thought that the Lumia was gorgeous, but I am not paying $935 for a phone, not in this age of theft and pickpockets, especially as phone insurances are getting less and less affordable. Sony should consider that same idea. Do you think Apple was lazy? 2 phone models, each with three memory options, which means two models each with three memory chip options. NO! Apple foresaw the complicated BS that others face and as such they have more than a small corner in the market. This is odd as the main component for a phone is its battery and Sony has always had superior battery technology, so Sony should have been the number one choice, but alas, that is not the case, so why do we see a contender with a superior key part run a market at minus 2000 million? Beats me, but someone is clearly asleep at the wheel.

Of course, I admit that I am oversimplifying the entire issue, but am I so wrong? I do not think so. I will admit that I missed a few issues in this, but as Sony is at minus a lot and others have a dwindling market, I feel that I am onto something. I am also certain that people have had enough of data collection and these mobile players to use their consumers as off the books revenue piggy banks, the first one to change the wheel on that process might end up owning the market. For those who would ‘ignore’ that path, remember that no matter how ‘valuable’ that data seems to be, once the customers walk away, you end up without data and without people using your product. Sony has the option to bounce back, but that window of opportunity is small and quickly getting smaller as Google and Microsoft are tapping into their own worlds. Sony might have not have that many options left and they forgot the one lesson Miyamoto Musashi instilled upon them almost 450 years ago: “If you do not control the enemy, the enemy will control you”, they forgot this lesson as well as the fact that ego is as much an enemy as an actual opponent, especially as ego is not regarded as an enemy until it strikes after which it gets named Hinan!

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Tagged as Alcatel, Apple, BenQ, bloomberg, CNET, go rin no sho, google, HTC, Huawei, Microsoft, Miyamoto Musashi, Mobiles, Motorola, Nokia, Samsung, Siemens, Sony, Sony Ericsson, T-Mobile, Xperia Z3

August 1, 2014 · 12:12

Talking the Walk

Yes, today is an interesting day, in a time when we all have a notion of democracy; we must all wonder how much of a democracy is left. You see the freedom of choice and the choice in options means that the freedom given is also an inherent acceptance of accountability? If we make a small sidestep at this point, then I would like to take a step towards the Media Ethics as stated at mediaethicsmagazine.com.

There in the fall of 2008, T.L. Glasser and J.S. Ettema wrote an interesting article called ‘A Philosophy of Accountability for Journalism’, it is a good article to read and well worth reading (at http://www.mediaethicsmagazine.com/index.php/browse-back-issues/135-fall-2008/3639324-a-philosophy-of-accountability-for-journalism).

The initial line, as in any good academic article is right at the beginning, when we read “The problem of ethics in journalism, we want to argue, is not the inability of journalists to know right from wrong but their inability to talk articulately and reflectively about it“. I from the my viewpoint, for the point of view that many has seen as we see the ‘junk’ articles from Murdoch publications hit us is that the point given reads to many of us (roughly 99.32443% of them non-journalists) see the second phrased as “their inability to avoid accountability by speculate on the words of seemingly non-existent sources they will never reveal“.
What we get is gossip, branded as journalism, a speculative piece where no accountability will ever be required. This is for a lot of people at the heart of the need that the Leveson report would address, which is why Journalists in many nations, especially in the UK as a trade that had lost its integrity to many.
This is however not about the article, yet, I am mentioning it as the article is an excellent piece of work and the article actually is to some extent shows the moral compass within all of us. There is however one more quote that I will not go into now, but it has bearing on what comes next “which reminds us that discourse ethics does not involve a marketplace process which aggregates individual interests but a deliberative process which brings into existence common or shared interests“.

This is about today, the first day of a new day of default for Argentina (at http://www.theguardian.com/world/2014/jul/31/argentina-government-defiant-debt-default-axel-kicillof). We seem to have been all about the banks and their evil practices. I know, because I have been one of them. The question becomes, what happens when you accept doing business with a loan shark? I wrote about it in my blog ‘Changing the rules of Democracy‘ on July 27th.

When the IMF wanted to restructure debts in 2003, USA as stated stopped the IMF; I want to know the EXACT reasons why. Perhaps they are valid, perhaps not! I also reflected on the fact that someone went to the Vulture funds and signed a deal. What was that deal exactly and who signed it. You see, Argentina is not blameless here; at some point, there is a knock on the door and at that point, the bailiff will want his coin, which is pretty much what was settled in court.

The Guardian article raises a point through the following quote “Economists at the Washington-based Centre for Economic and Policy Research called on the US Congress to intervene, warning in a letter that Griesa’s decision to uphold the holdout investors claim could cause ‘unnecessary economic damage to the international financial system, as well as to US economic interests’“.

You see, in all fairness, is that acceptable? If a system is brought and evolves devoid of accountability, how can we ever get a better world? I have pressed for accountability on many sides. On the side of Journalism as I embrace the full Leveson report, on the side of the banks as their soulless acts have diminished the value of millions of account holders, yet here in this case, are they not on the morally higher ground? No matter how despicable Vulture funds might be regarded as, these people offered a deal on conditions of risk because no bank wanted them, or in the case of Argentina, as the USA seemingly prevented the IMF offering a deal.
Now, when the deal is due, the client requesting the deal is not willing to make payment. So, as the facts are shown, I have to be (alas) n the side of the vulture fund, who offered the deal. If not, then I myself must abandon the premise of accountability, which is pretty much not an option.
If we accept the implications of communicative rationality in the sphere of moral insight and normative validity as the setting for discourse ethics, then I would like to change it (mold it) into the following statement: “If we accept the implications of agreed contract terms of rationality in the sphere of moral choices and normative acceptance of a loan” then we are getting to the part why I added the Journalism article on accountability for journalism.
This I now link to the quote I mentioned from the Guardian article. This is the cost of doing business! Sometimes you win, sometimes you do not, but to go out in response to change the game, because there is a cost, then we have a new problem. Do not misunderstand me, if there is some kind of a bail-out deal, then that is fine, but it would be understandable if it comes at a cost, more important, it might have been avoided all together if the 2003 IMF deal had gone through, so why was the 2003 deal stopped?

I understand and I do not disagree that the Argentine government is stopping it all and taking the ‘default’ path, yet, that too will come at a cost. Accountability should prevail here too. Is it for the better or for the worst? That is a discussion that is speculated upon, but for now it is one that comes without a clear answer. So, I cannot, without clearly more evidence to agree with cabinet chief minister Jorge Capitanich here. You see, who signed for this all in 2003? It is the inherent consequence of governing. The bill is pushed forward, it is a dangerous game that the US is currently excelling at and so if you wonder on why I care about another deal for 1.5 billion dollars, it is mainly because this paves the way for America when it defaults on their 18,000 billion loans, then what?

When we see people hide behind statements like ‘too big to fail‘, you should also consider the fallout when things go wrong. Consider what once happened to the Dutch SNS bank and is now happening to the Argentinian economy, both impacts were felt in large ways and they are not even anywhere near the scale of the debt the US and Japan have. And as we mentioned Japan, is that not the fear many brokers have? If we see the text from Moody’s (at https://www.moodys.com/research/Moodys-Japanese-RMBS-and-ABS-default-rate-declined-in-April–PR_302652).

Someone or something seems to be pushing Japan along, holding them on the safe side for now. Yet, this economic high-wire act is nowhere near done and it is a long walk to go for now. When we read “For CMBS deals, Moody’s outlook for the next 6-12 months is negative, as it will be difficult to refinance defaulted loans with high loan-to-value ratios“, so as refinance is now getting harder and harder, consider the US bonds. Part of the US debt is also the ‘Interest Expense on the Debt Outstanding’ (at http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm), this is set for 2014 (up to October) to be almost $355 billion dollars. This is just the interest. At Bloomberg we see “The government will reduce net sales by $250 billion from the $1.2 trillion of bills, notes and bonds issued in fiscal 2012 ended Sept. 30“, this is clearly incomplete, as there is not mention of WHEN these bonds mature, but the overall sell of bonds will hit the US at some point. If we consider the CNS headline “$2,472,542,000,000: Record Taxation Through August; Deficit Still $755B“, so taxes are coming in, they are not enough as the deficit is around 30%, now consider that the due interest is going to be 15%-20% (because two months are currently not known) of all collected taxation. When the bonds are due, how much larger will the debt become?
I have mentioned it many times, but now as we see the reaction of fear as Argentina defaults, we cannot continue without seeing the threat and fear of Japan from defaulting, which will clearly push the US over the edge of that abyss too.

Here is where the issue becomes the dangers we fear. We seem to always mention that those who talk the talk should be walking the walk too. This has not been done by large by many, so now we talk the walk but no one is really accountable, making for a massively dangerous situation. If you even consider thinking that there is no danger here, try calling a Syrian hospital by telephone and ask them how they are doing. It might open your eyes really quick.

If we are to walk the walk then Argentina will default and we have a new situation, yet the unnamed danger is that ‘some’ deal will find its way, which is great for the Argentinian people, yet it also impacts the cost of doing business for all the other players. Have you consider the costs that this will bring everyone else?

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Tagged as A Philosophy of Accountability for Journalism, accountability, Argentina, bloomberg, cabinet chief minister Jorge Capitanich, democracy, IMF, J.S. Ettema, Jorge Capitanich, Leveson, Moody, Syria, T.L. Glasser, the Guardian, UK, US Congress, USA, Vulture Funds

June 8, 2014 · 10:13

17 or 70 trillion?

Even though we see so many ‘stories’ on how well the US is doing, we must ask ourselves on what value these numbers are trying to convince us of.

The thoughts I am about to phrase started a little after the following had been released (at http://blogs.marketwatch.com/capitolreport/2014/06/06/standard-poors-is-concerned-about-the-u-s-debt-burden/). “Standard & Poor’s Ratings Services put out research Friday confirming the AA+ rating of the U.S.“, so the US has dropped a notch on the credibility scale. This in itself should not be a reason for direct concern. The one part that does worry is that S&P was the only one doing this. The other part we should notice is the quote “The federal debt was $16.1 trillion at the end of fiscal year 2012, according to the Government Accountability office.” why are we not seeing a 2013 number, which according to some is over 17 trillion? How interesting is it to see the numbers game whilst the numbers quoted are not up to date?

The next part is the article from Bloomberg on April 29th 2014. Here we see the following “The drop in net marketable debt will be $78 billion in the April-June period, $38 billion more than the pay down projected three months ago, with an end-of-June cash balance of $130 billion, the Treasury said today in Washington. The improvement will be short lived — net borrowing of $169 billion is projected next quarter, with $130 billion in cash Sept. 30^th“. Can anyone see the issue I have with this? The debt of well over 17,000 billion is getting met with a quarterly pay down of less than 0.4588%. How is this progress and even though we see that the US still has a high credit score, is the likelihood of a continued credit score even realistic?

That part can be seen in the Market watch quote “We believe that renewed debate over the debt ceiling could resume after the midterm elections in November 2014 under certain scenarios. While we expect the discussions about the debt ceiling to be ultimately resolved as they have been, we still see risks that these debates entail.” So, not only is there no solution to the current debt levels, the chance of any serious solutions occurring within this current administration is close to zero, which means that the next administration will inherit a debt closer to 20 trillion. I do find the headline about ‘US debt level concerns‘ hilarious. Many with me had raised these dangers for well over 2 years and now as the game is up, some are ‘raising’ concerns, whilst those in charge and those on the watchdogs of economy had long known that any level of lowering the debt had been a mere myth for over 2 years.

There are of course other views. One is from Chad Stone who wrote in US News (at http://www.usnews.com/opinion/economic-intelligence/2014/05/16/too-much-deficit-and-debt-reduction-too-soon-will-wreck-the-recovery) “now about $17.5 trillion, found on the ‘debt clocks’ that are so popular with debt hysterics. Gross debt (and its close cousin, ‘debt subject to limit’) is debt held by the public plus debt internal to the government“. This is fair enough, yet there is no information, not even any indication when this debt will start to lower. There is another side to consider. When we look at the IRS data book (at http://www.irs.gov/pub/irs-soi/13databk.pdf), consider that the IRS collected a net value of taxation of 2.4 trillion dollars. A slightly more accurate number is 2,490 billion.

When we consider all the numbers thrown at us, like the ‘% of the GDP’ and so on, even if we accept that the 17 trillion dollars debt is held on multiple level, compared to what the IRS collects, we see a number that reflects the tax collected, compared to the total debt. The US gets through taxation a mere 14% of where the debt is at. How is any of that realistic? So, the total collected taxation, before any other cost is taken into account (like paying government staff and utilities), it only amounts to 14%, after all that is done 0.1% is left if the US government gets a fitting budget (something that has not been achieved since president Clinton was in office).

My issue is not just with the US debt levels, it is also about the ‘blasé’ approach economists are throwing at the people stating that things are not that bad and that it will all work out. That part is a figment of THEIR imagination, because for things to resolve, actions must be taken and none are getting taken at present (or in the near future for that matter). My biggest issue with the Article of Chad Stone is seen at the end. His quote “Lowering the debt ratio comes at a cost, not only risking the recovery if it’s done too fast but also in burdening businesses and households with larger spending cuts, higher taxes or both to stabilize the debt ratio“. There is truth in that statement, yet the issue that the money should have NEVER been spent is an issue that is ignored. The culprits of this dangerous endeavour are not named, not held accountable and many of them walked away with millions in bonuses.

We are however nowhere near the end of this debacle. The articles give another view on the matter. An article was published in 2013 stating an entirely different matter of debt. The REAL total debt is set at 70 trillion (at http://www.foxnews.com/politics/2013/08/15/california-economist-says-real-us-debt-70-trillion-not-16-trillion-government/). The quote that matters is “Hamilton believes the government is miscalculating what it owes by leaving out certain unfunded liabilities that include government loan guarantees, deposit insurance, and actions taken by the Federal Reserve as well as the cost of other government trust funds. Factoring in those figures brings the total amount the government owes to a staggering $70 trillion”

Now we are off to an entirely different race, this only gets worse if we take the Bloomberg article into account from March 2014, which headlines as ‘Debt Exceeds $100 Trillion as Governments Binge‘ (at http://www.bloomberg.com/news/2014-03-10/debt-exceeds-100-trillion-as-governments-binge.html). Make sure you realise that this last article is about global debt and not about US debt.

This was already on my scope for another reason, but I will return to that shortly. I need to return to the Fox News article where it stated the view of Professor Hamilton, an economics professor from San Diego. The reason for this is because I try to stay fair and balanced (statement plagiarised from Fox News) and as such, as I found additional views from the professor, it is only fair that I mention that too. This all is linked to a paper he published in 2013 (at http://econweb.ucsd.edu/~jhamilton/Cato_paper.pdf), it is the starting quote “This paper examines the growth of federal liabilities that are not included in the officially reported numbers” which should grab your attention. Yes, we are talking about ‘off’ the book liabilities, which should make us all wonder whether ANY government should be allowed to be part of liabilities that are not on the books to begin with. If our job is to stem the tide of irresponsible spending, then keeping things ‘off the books‘ as the ‘kids’ seem to state, should not be allowed under any condition. If we look at the quote that was found in the Econ browser by professor Hamilton, we see “Similar calculations from the trustees reports for Medicare report Medicare’s net unfunded liabilities for current program participants to be $27.6 trillion. For more details see Table 4 and the accompanying discussion in my paper.” The floor should open to an entirely different debate and soon. I think it is high time that these events are properly mapped out and as such ALL governments need to adhere to a different level of ‘accounting’. Their books can no longer remain silent in regards to unfunded liabilities. Is it any wonder books are not in order in a massive amount of nations?

This now grabs back to other observations I made and more important the small revelation my data implied. On March 22^nd 2013 I wrote the blog article ‘60% confiscated and counting in Cyprus!‘, here I quoted “If this is what frightens the US, then consider the consequences of a system like LIBOR being manipulated through the total value of trade. If that would have been off by 11.2%. Out of $1000T (UK and US combined) then that difference would be $112T“, I implied to some extent that not only were the percentages messed with, I had some reason to believe that someone had messed with the total trade value that LIBOR represents. Perhaps my mistake (to some extent) was thinking that it was ‘just’ manipulation. In my defence, I came up with these findings before Professor Hamilton had finished his paper, so as a non-economist I was slightly in the dark to begin with. Consider that some politicians could be overspending, whilst using the options of unfunded liabilities within LIBOR to excuse themselves for accountability? What will other governments say, when such events are brought to light (if that would be happening). More important, if my number was closer to the truth then many considered, the global economy is playing high stakes poker with debts twice the size then most realise and our cost of living is based partially upon the irresponsible spending of both Washington and Wall-Street. How are the people ever to get a fair shake at a happy life, when a group of no more than 3000 people have been spending the dreams and futures of well over 1 billion people? Most do not realise that this goes way past the borders of the US, if there is indeed an established group editing the total value of trade considering the manipulation of the LIBOR percentage, the established setting of unfunded liabilities, as well as the breaking up on loans as they might occur. For this example, I would like to point you towards www.lsta.org/WorkArea/DownloadAsset.aspx?id=2480, here we see a paper from Credit Suisse made by Julia Kingston in August 2006. The next part is just pure supposition on my side. Look at slide 35, here we see a term loan set in three parts. What happened when something falls over in 2 or 4 months? How many parts when Wall Street made its 8 trillion bungle was not written off? Is my consideration that the TOTAL LIBOR trade value has a massive amount of ‘entries’ that had remained hoping it would turn for the better? We have seen a multitude of financial advisors playing just such a card on many levels in the 2008-2011 periods. My question now becomes, was my implied 11.2% just the tip of the iceberg?

I am not claiming, nor do I pretend to have the actual answer here, My issue, as it was in the past is that ‘proclaimed’ Journalists sitting in the top newspapers have not taken a hard look at some elements. It is nice for them that Reuters does much of their work for them and many aspire, but will never come close to people like Paul Mason, Robert Peston or Deborah Hargreaves. Yet, how deep did they dig into LIBOR? Also linked (especially with the Guardian) was the claims that Jullian Assange made in regards to banking, they were never followed up (or so it seems), not even by the Guardian as far as I could tell. Consider the article the Guardian had on February 10^th 2011 (at http://www.theguardian.com/media/2011/feb/10/julian-assange-wikileaks-book-claims). The quote “Asked about the ostensibly sensational bank leaks Assange keeps suggesting he is ready to release, Domscheit-Berg said the only banking documents he knew WikiLeaks had were ‘totally unspectacular’ is at the heart of this”. When it was ‘just’ about the US military there was some upheaval (especially by the US), yet when banking issues were raise (slightly mentioned in the Forbes interview in November 2010 at http://www.forbes.com/sites/andygreenberg/2010/11/29/wikileaks-julian-assange-wants-to-spill-your-corporate-secrets/). The interview gives us the following “Will we? Yes. We have one related to a bank coming up, that’s a mega leak. It’s not as big a scale as the Iraq material, but it’s either tens or hundreds of thousands of documents depending on how you define it. Is it a U.S. bank? Yes, it’s a U.S. bank. One that still exists? Yes, a big U.S. bank.”

After this the hunt for Jullian Assange really takes on additional energy. I have no idea what he found, or if it is even related, the issue is that there is a recorded atmosphere of unaccountability within the banks (on a global scale) which must stop, if not, not only will governments be allowed to continue in irresponsible ways, but the additional ‘myth‘ that banks and governments apply checks and balances need to be thrown out of the nearest window. A last quote from the Forbes interview is every bit as important “We’re still investigating. All I can say is: it’s clear there were unethical practices, but it’s too early to suggest there’s criminality. We have to be careful about applying criminal labels to people until we’re very sure.”

This is the part I had written about for some time, it was not just that the issue with Goldman Sachs imploded the financial industry; it was the issue that they, in black letter law, basically had not broken any laws. The people lost well over 8 trillion and no crime was committed even though their money was basically gambled away. It is that part, especially in the LIBOR sight, as well as the issue raised by Professor Hamilton in regards to unfunded liabilities. No laws are broken, but we are all kept in the dark in regards to the debts inflicted upon us, which in itself is a massive wrong.

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Tagged as BBC, bloomberg, Credit Suisse, Deborah Hargreaves, Econ Browser, Forbes, Foxnews, government, Government Accountability office, IRS, James Hamilton, Julia Kingston, Jullian Assange, LIBOR, market watch, Paul Mason, Professor Hamilton, Robert Peston, San Diego, the Guardian, UCSD, unfunded liabilities, US News

March 27, 2014 · 20:31

Setting the stage

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

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

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

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February 14, 2014 · 18:11

A senseless merger?

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

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

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

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

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

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

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

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

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