Tag Archives: City AM

July 28, 2018 · 12:09

She was not ready

As subtlety goes, I am happy to throw it out of the window this morning (a lack of coffee does this to me). You see, when we get the situation that the guy states that it did not matter whether she was ready or not, mainly because it only costs him $50, regardless what comes (or is that who). You might wonder where this is going, this is not going there, we are talking about banking. It does not matter who you screw and how you screw people over, when ‘she’ is not ready (or willing), it potentially constitutes a crime and you can throw ‘potentially’, as I personally see it straight out of the window. So why are we not getting angry? Why are we confronted with ‘TSB plunges to £107.4m loss as bill for IT chaos reaches £176m‘ (at https://www.theguardian.com/business/2018/jul/27/tsb-plunges-to-107m-loss-as-bill-for-it-chaos-reaches-176m). When we see: “bank has resolved only a third of 135,403 complaints“, why is there not a front page leading with the CPS investigating issues at the TSB? When we are confronted with “The payouts that followed a botched IT transfer from its former parent Lloyds to the new owner, Sabadell, a Spanish bank, in April pushed TSB into a first-half loss of £107.4m, compared with a profit of £108.3m in the same period last year“, we see a dangerous setting and there is no investigation? When we see the Financial Times on June 22^nd 2018 (at https://www.ft.com/content/32749936-7561-11e8-aa31-31da4279a601), giving us the “customer of Bank of Scotland last month asked to withdraw £5,000 at her local branch in Leven, north of Edinburgh, the cashier thought the amount was unusual and asked her to speak to the branch manager. The pensioner explained that she needed the cash to pay workmen who had asked if she would like some half-price work on her driveway. Spotting a potential scam, the branch manager called the police, invoking a scheme that came into effect last year dubbed the “banking protocol”. Officers responded immediately and arrested six men at the customers’ house“, so in that case we go all out on 6 men, but we now see a setting where ‘135,403 complaints‘ are a potential issue involving many millions, and we are not looking deeper and setting the limelight on a level of negligence close to unique in banking. So what gives?

This does not come lightly, you see, when you take a scalpel to the quote: “The bank admitted that while it’s mobile app, online and telephone banking services are “much improved”, problems remain. The chief executive, Paul Pester, who defied calls to resign over the handling of the meltdown, said: “We’re making progress in resolving the service problems customers experienced following our IT migration and we will continue to work tirelessly until we have put things right.”“, we get the following:

The bank admitted that with its mobile app, problems remain.
The bank admitted that with its online banking services, problems remain.
The bank admitted that with its telephone banking services, problems remain.
The chief executive, Paul Pester has been called to resign over the handling of the meltdown.
We have been currently unable to resolve the service problems customers experienced.

Reread the previous quote and you can see that it is all there.

This setting does not merely impact some parts of the IT setting; it involves failure on the levels of

Documenting the changes required.
Verifying the document is accurate and confirmed form the UK and Spanish side
Presenting the required steps to the board members letting it be scrutinised
Analysing the migration test run and testing it for the setting of trial version against the live databases
Doing a small segment live run to test for optional missed failures
The QA report on the path to see if any issues were missed.

These are merely 6 steps in the most shallow of tests required to see if the changes would hold, yet in all this, with the setting of ‘135,403 complaints‘, there is a clear indication that more than just a few issues were missed.

It gets to be a larger issue with “Savings balances fell by nearly £1bn, while 26,000 account holders switched to other banks. Breaking down the £176m bill, TSB has so far paid £115.8m in direct customer redress, £30.7m to fix “operating defects” and £29.9m in lost income after it waived fees and charges to customers“, when I am confronted with ‘£30.7m to fix “operating defects”‘, we are confronted with a much larger issue than the 6 points show, It implies that the preparation and QA was close to completely missed. Even as we also see the implied £0.02 from TSB Marketing towards the Guardian, the truth of the presented “TSB said it remains one of the most financially secure banks in the UK and despite the highly publicised problems it had attracted 20,000 new customers“, you see, an actual secure bank does not lose £1,000 million, and neither does it stage the setting where 26,000 account holders do the ‘Nintendo Switch’ towards another bank. In addition, there is no verification for the quality of the implied ‘20,000 new customers‘, yet the loss of optional 26,000 loyal account holders might prove to be a much larger loss down the track. That is not given and the Guardian is not giving us those goods here (because we can accept that this loss is for now unknown).

The setting intensifies with “TSB was heavily criticised for its initially slow response to the crisis but has since hired 1,800 people and redeployed 700 staff internally to help stabilise its services“, so not only are people redeployed, 1,800 staff members need to be trained (I have done that for years, so I can already see the additional dangers not shown yet), there will be a learning curve, in addition the added stresses might make the chance of introducing new flaws and errors larger.

Even as TSB is for all settings decently adapt in shifting blame, with “On 22 April 2018 TSB moved from an IT system rented from Lloyds Banking Group to a new IT system provided by Sabis. As TSB outlined to the Treasury select committee in June, from internal investigations it appears that the design of the platform itself is robust but that the deployment on to the technical infrastructure led to many of the problems. TSB and Sabis therefore shifted the focus of the internal investigation towards the testing regime in Sabis and its providers“, the mere fact that a shift like that requires a shadow run of no less than 1 quarter, even if that means hiring 60 people trailing 6,000-10,000 accounts, that would have revealed a lot of the issues. So the evidence we see with ‘the deployment on to the technical infrastructure led to many of the problems‘, the 6 points mentioned earlier, the test runs and the shadow phase would have shown this. Now we have a, what I would personally regard as a setting of corporate negligence. You see, TSB cannot shift the blame, they are part of this and the proper testing was required on both sides. I would never want a CTO who had not been in the depth of the transfer from beginning to end, and if TSB had no proper CTO, continuing should not have been an option.

It gets even worse, when we see the Independent (at https://www.independent.co.uk/news/business/news/tsb-bank-losses-it-fiasco-cost-paul-pester-a8466856.html), who gives us “some reported being able to see other people’s financial details“, it’s a phishing hackers dream to get that far in any bank, for the bank to directly allow the viewing of this is just beyond normal comprehension. So as even the Independent is slightly soft on Paul Pester, they end with “The chief executive will not receive a £2m bonus he was due to collect for successful completion of the integration between TSB and its parent company Sabadell“, which would have been the straw that breaks the camel’s back. You see, the issue is larger than you think, when you consider the additional flaws that were revealed in publications going all the way back to February 2018. The Business Insider gave us the TSB goods on Crypto currency. So consider the IT failure and the setting of: “We don’t block payments for customers wishing to purchase crypto currencies when they use a TSB credit card or debit card, however we continue to monitor the use of crypto currencies and we will review our position on an ongoing basis“, which would have required additional testing on any system moving for one to the other, so additional tests were either not done, or not properly reported on. Now also consider the IBM report mention from June 2018. Here we see (at http://www.cityam.com/287976/ibm-report-suggests-tsb-testing-not-rigorous-enough-before), when we see: “Consultants from IBM told the embattled bank’s board that it had not seen evidence of the kind of testing it would expect of the risky migration process. The meltdown started on 22 April, when TSB had planned to complete a migration of its systems to a new system, away from a platform run by former owner Lloyds Banking Group“, as well as “IBM has not seen evidence of the application of a rigorous set of go-live criteria to prove production readiness,” according to the report, which was created as an update to the TSB board on 29 April, four days after IBM was hired and almost a week after the first signs of problems at the bank. IBM would expect “world class design rigour, test discipline, comprehensive operational proving” for a task of similar complexity and scale, the report said. However, the bank’s testing before the launch may have not given enough evidence to proceed, the report suggested. Previous examples have taken place over a longer time frame, with multiple trials, and did not attempt to migrate the entire customer base simultaneously“.

Now consider that the IBM report was given on April 29^th, yet the making of the report suggests that part of this visibility was there as early as March. When you consider these events, how come that the SFO and the CPS is not all over this? It will not matter whether there is a case in the end, their absence is a setting that shows that there is a much larger issue at the banks and TSB might not be alone, but merely the most visible and stupid player.

So even as the TSB hides behind the spokesperson giving us: “The IBM document contained a preliminary work plan with very early hypotheses based on observations to date, that were produced after only three days of engagement with TSB. The content is therefore now very much out of date”, really? My 6-point list took a mere 5 minutes, I am certain that IBM has a lot more than I have, and for the ‘out of date‘ part? 26,000 customers leaving and 135,403 complaints, shows that the issues is a lot larger than a trivialised IBM report.

So when I see: “nor were they a validated view of what went wrong or of the actions that have subsequently been taken. Without this context, this document could be misinterpreted to the detriment of TSB’s customers“, I would like to tell this spokesperson (who seems to not be named anywhere) that ‘actions that have subsequently been taken‘, are actions when it was already too late, they should have been prevented! In addition, with well over one hundred and thirty five thousand complaints, the detriment of TSB customers have been achieved by internal actions alone, the IBM report might merely show how stupid these yet to be presented documented actions have been.

There is one additional part in this, and even as we see it as a sign for some crucifixions on banking levels, yet the given Financial Times in May that gives us ‘TSB turned down help from Lloyds during IT failure‘, with the additional “Lloyds had made an open-ended offer to use its own expertise to help TSB, but TSB declined. TSB has since recruited a team from technology group IBM to help it identify and fix the problems“, we see a path that TSB could validly have taken, yet to not include the one provider with years of experience on the TSB account and system usage seems not too great a decision. In addition, we see this (at https://www.ft.com/content/7159ae84-5798-11e8-b8b2-d6ceb45fa9d0), yet what we equally need to consider is that with “TSB’s new system was unable to cope with the volume of customers when it went live“, we see another failure, something that comes with the preparation before things transfers, the entire data load and bandwidth requirement that the new systems require to have, In my personal view it needs to be the current load +50%, not merely because customers tend to get nervous when ‘a new system‘ comes into play, the fact that there are moments when peaks come play (like Christmas shopping), systems tend to get tested to the max, not in April when no one has anything special in mind. In addition, it seems that TSB is relying again and again on ‘Our teams have continued to work around the clock‘, so how long until those teams get a burnout? The same excuse is reused for months now, so either they have been paying triple rates to staff members, or TSB ends up not even being close to a legal setting where they can walk away from anything. That view is seen in the Guardian the April edition, where we saw “Sabadell was warned in 2015 that its ambitious plan was high risk and that it was likely to cost far more than the £450m Lloyds was contributing to the effort. “It is not overly generous as a budget for that scale of migration,” John Harvie, a director of the global consultancy firm Protiviti, told the Financial Times in July 2015. But the Proteo system was designed in 2000 specifically to handle mergers such as that of TSB into the Spanish group, and Sabadell pressed ahead” that part alone should have been the setting where the board of TSB would have required to be up in arms every step of the way. So who were the board members, and which of them have actual IT, Technology and data quality experience? Is that not the weirdest question to ask when we are confronted with crash issues that should have been clearly identified in the preparation and identification phase of a project like this?

So whilst you are lulled to sleep with: ‘we will continue to work tirelessly until we have put things right‘, continue to think what else a bank could lose, or publicly propagate that impacts your life. In the end, the damage is not over and when we see the imbalance not be resolved, IBM might actually end up advising that for now, the return move towards Lloyd’s will be the only remaining sane act in play. How much more is that going to cost both TSB and Sabadell?

A setting that took a mere 5 minutes to see and I haven’t even had my first cup of coffee yet.

In the end, how ready was the bank? It seems not very ready, not ready at all.

The new Monopoly game

Do you remember playing monopoly? Did you ever play it? I grew up loving it. I am not some realtor, some real estate dreamer beyond the dream of having my own place. Most of us are like that. Just the time when I was young and the family played that game, or plying it with a couple of friends. I ended up having several versions, including the replica original with coins, in a wooden box, just a cool thing to have. So when we consider this game, as the prices of the streets were shown in those days; we knew that blue was the highest an always out of our reach. I lived in a green property for some time, so life felt good, yet today, Yellow, Red, Orange, Purple and light blue are no longer in my view of affordability, in the best case, I might be able to get one of the brown coloured properties. This is how the market changed in a mere 22 years. From an optional 80% of the map to a mere 2 out of 16, that is all that was left to me. So when I read ‘Total UK wealth tops £10tn thanks to City and property boom‘ by Larry Elliott (at https://www.theguardian.com/business/2017/aug/08/total-uk-wealth-city-property-homes-inequality-saving), I just had to laugh. I understand that he might be trying to have a sense of humour about it. Yet when we see “A booming City and rising house prices provided a double boost to Britons holding assets in 2016 as they pushed the nation’s wealth through the £10tn mark, according to a new survey“, the question becomes: ‘How much of that is NOT owned by foreign investors?‘ Is that a weird question or what? Even as we see “Since the better off held a greater proportion of these assets, 40% of the gains of rising share and bond prices went to the richest 5% of households“, is ‘households’ correct or should it read clients represented by British law and accountancy firms, representing foreign interests in the UK? With “The £3.9tn increase in the value of residential property and financial assets owned by UK residents represented a 59% rise, whereas prices rose by 39% and gross household income was up 37%“, we see again the ‘UK resident‘ part and when we take a look at the government (at http://www.ukimmigration.com/investor/uk_investor_visa.htm), we see that basically any person investing in any property (as the London bulk is well over £1 million, the threshold for foreign investors is reached), which beckons the call, when we start digging into UK residents versus UK citizens, how will this all end? Lloyds shows even more sense of humour with “Lloyds said its figure excluded non-residential property and assets held by charities and other non-profit institutions“, which clearly includes all the foreign investors and they are always in it for the profit. It is the final part that gives the new consideration “However, a continued low mortgage rate environment, combined with an ongoing shortage of properties for sale, should help continue to support house prices over the coming months“. This now gives the premise, have the current and previous governments been guilty of betraying the British people by setting the stage of ‘ongoing shortage of properties for sale‘, in this we see the historic part that former Prime minister Margaret Thatcher was the last of the prime ministers giving a rising and clear need for social housing. We see this in the 2015 article from the BBC (at http://www.bbc.com/news/uk-14380936) where the amount of social housing went up in the beginning of her ‘reign’ to the highest ever recorded surpassing 150,000 right-to-buy, it took a small dive and in 1987 it got back to around 140,000, after she was succeeded in 1990, social housing took a steep dive to below 50,000 and from there it just went down and down. At the end of the labour reign in 2010 it was at the lowest stage ever, only now is there a small increase visible in that graph. Yet in the BBC article we also see a problem, even as it compares to 1918 where owner occupied is a mere 23%, the 2012-2013 part where 65% is owner occupied is as I call it ‘misrepresented‘ at 65%, because how much of that is empty and what part is foreign invested? You see, plenty of places in London are not offered for rent, but for lease, so who is the owner in that case and where does this fit in that graph? If we add the privately rented, we see that socially rented is a mere 16% (way higher than 1918), yet as we see the Thatcher numbers, who got the people there and how were the people kept out of affordable housing by not making that available. In Australia it might be as bad as the valid people in NSW housing are on the lists for a time in excess of 6 years. So how is that a solution to solving housing issues? And let’s not forget, when the housing is set and forced to become a larger contributor to social (read affordable) housing, what then remains of this ‘£10tn UK wealth‘ housing side? The fact that both sides of the political isle have been in denial and remiss to get any of that solved and Jeremy Corbyn claims to have a solution by pushing the UK in even deeper debt, deeper by the better part of a trillion pounds. So how does that help anyone?

Now, we might accept and understand that life in London is never affordable ever again, yet the political isles must equally accept that this change could constitute an infrastructure collapse. This gets us to some old news. In August 2014 we saw (at https://www.theguardian.com/news/datablog/2014/aug/07/london-gets-24-times-as-much-infrastructure-north-east-england) the mention ‘London gets 24 times as much spent on infrastructure per resident than north-east England‘ which is a nice title, yet the dangers are shown soon thereafter. With “more than half of that total was down to the decommissioning of the Sellafield nuclear plant in Cumbria – necessary, doubtless, but hardly an infrastructure ‘improvement’ as most people would understand it” we see only part of the danger. The quote “New analysis of public infrastructure spending by IPPR North lays bare the gap between how much capital expenditure there is in the capital than the rest of England” shows another part, yet the actual issue is not what is spent, but what is required to get something done. When we paraphrase it into “analysis of public infrastructure spending by IPPR North lays bare the gap between how much is required for the same amount of work in London compared to the rest of England” we see the dangers, when the infrastructure maintenance is 2400% of the rest of the UK, there is a danger, yet is it the correct one? In February this year, we see a partial repetition of the old Guardian article, yet with updated numbers it shows (at https://www.theguardian.com/uk-news/2017/feb/20/more-than-half-uk-investment-in-transport-is-in-london-says-study) that London requires 50% of all the funds. In all this we are not given any reliable numbers, because in all this I do not see the comparison of £ per mile of rail serviced. Consider that London has 20 times the amounts of rail that most places have and he London rail when stretched can get a person from Waterloo station to Glasgow five times over (OK, slight exaggeration). Yet the message should be clear. As the infrastructure has less options with in addition less people being anywhere near it, the city of London is facing all levels of collapse. Another part was shown on July 17^th in the Independent. The title ‘More than half a million social homes in England do not meet basic health and safety standards‘ is the first indication that social housing and infrastructure are beyond collapsing. With quotes like ‘almost one in seven of all social homes in England‘ are below standards, we see a dangerous escalation. So in this we see a mention of 224,000 houses where the most dangerous safety hazards (category one) is seen. It includes “exposed wiring, overloaded electricity sockets, dangerous boilers, leaking roofs, vermin infestations or inadequate security“, yes, the right and proper place to get your partner pregnant and start a family, would you not agree?

Even as we now see that the Grenfell disaster is a first step in looking into cladding, they all seem to forget that the cladding was done to appease the houses around Grenfell, in addition, the other failures and dangers are basically the non-cladding issues, so the mess is a lot bigger. when we consider the quote “Local authorities have a legal duty to act if a category one hazard is discovered, but hundreds of thousands are going unreported or ignored” we see a much clearer situation where government and city council members could be held accountable towards the transgression of ‘reckless endangerment‘ of lives, so in all this, what is the CPS doing? Has the Crown Prosecution Services made any start on taking a look at this, because these 244,000 houses would in theory represent 300,000 people working to some degree for the London Infrastructure, being it the underground, busses or other civil offices, if even 10% falls away, what happens then? How much pressure, increased costs and non-functional infrastructure remains for London at that point? It seems that the City of London has no way of dealing with such dangerous terms. As I see it, Lord Mayor Sadiq Khan has his work cut out for him. We should all agree that he did not cause this, but he can equally agree that it is on his plate at present and his success will be weighed against his ability to lower that danger and remove the hazards within his largely leased London city.

So as we look at the wealth boom, how exactly is it benefiting the UK and specifically London? As London becomes less and less affordable, as its ‘status’ as premium investment location continues, we might soon see a London that even the tourists can no longer afford. This is not a danger at present with the dropping pound against the Euro, so London is a great place to visit for Europeans. Yet the reality is that this benefit is merely short term, the dangers as the UK turns its economy around, which they will for certain, gives dangers that the dangers I predict are merely 5 years away. When that happens the tourism part will drop, not by a small part, but by a phenomenal amount (In my speculative view well over 20%), so whoever is investing now needs to get that part back in 4 years, they might be facing deadly competition for the few remaining tourists after that. The Time in 2015 talked about the tourism bubble and set it to greed, I think that it is not merely greed; in all this the infrastructure that is dangerously close to a collapse would be a much larger contributing item in all this. So as we see that the infrastructure is in a dangerous place, we need to wonder how the UK government will be addressing this. It is not like it is not a clearly visible issue. It is merely one of several critical issues that the UK faces. Yet in this, the housing part is also the contributing factor for other sides of infrastructure as well. We saw 3 weeks ago that the NHS has 86,000 posts vacant. Not only can they not be filled, even if there was a person available, the reality is that for nurses life in London has become largely unaffordable, which hits social housing as well as infrastructure, a clear visible item known for the better part of 3 years. As a conservative I would be willing to blame my political party, yet the BBC chart clearly shows that as the conservatives came back into office the social housing curve was moving back up (to the smallest degree). Now, there is part that was done by the previous labour government, but only to an even smaller degree. In this I will end with an article that the Business insider has in 2015, in it we see the minimum income per area, when we take a look is that only the cheapest place was affordable for NHS nurses, 54 miles from the hospital, anything nearer would require double the income they presently have, some places are forever out of their reach. Even whilst I know of some places in Swiss Cottage, Southwark and West Brompton, it is shy of the 86,000 places, it will not even give aid to 1%, or 860 places to live in. So, as some people are shrugging at the £10tn wealth value, or the imaginative issue that the NHS problem will solve itself. We need to realise that a few of these issues were interconnected and have been for many years. In this Labour and Conservatives are both to blame, they achieved nothing in stopping, or decently reducing the danger. So when you look at the Monopoly board consider the 22 places and which of these streets you cannot afford a place to live in. So how was this UK wealth any help in resolving the quality of life for those not in the top 5% wealth part, which amounts 98.85% of the UK population, foreign investors excluded.

Consider that side when the next rent is due, and more important, even as all the papers are shouting about rent drops, in the end, the rental price is merely increasing slower for now. With the rent being on average set to £1,500, the 12 month increase is set between £22 and £35 a month depending on your condition, so when you consider that if these people are lucky, their pay increase ended up being up to £61 a month, we see that the increase only takes care of the rent, it will not hold water to take care of the increased price of groceries or heating, so the outlook for the British tenant will be gloomy this Christmas. And before you start blaming Brexit, it would not have mattered one bit. If anyone tells you different, as I personally see it, they would be lying to you.

The people in Britain are seeing a new Monopoly board. Where you start with £800 and passing start gets you a mere £100, in addition add 15% to every street in the first 5 turns and add another 15% for the rest of the game. The final changes are 40% more due for any station and set utilities to 15 times rolled, regardless if it is one or both owned. Now we get a slightly more realistic version of the game as we live it today, so how far would you get in that version of the game? I might want to add that we would need to add 4 pubs, one for each side and treat them like the stations, yet the amount due is 10 times the rolled dice. It seems that our childhood monopoly is the one we still think we live at times, even as we never had any ambitions to own hotels, we always expected to get one house in one street sometimes in our lives; the reality is that this is no longer an expected reality. The reality is now that whomever owns and keeps a place, leaving that to the children is the only guarantee that they have any future at all in the UK, a reality that was not due to Brexit, but due to a government having other commitments, one that was to spending too much whilst not having any backup in place, it is the reality all in the UK face until well over 2040. I still believe that the conservative path to diminish the debt is the only way out and when we consider the news about the £40 billion divorce bill, that is not too weird, because at present Mario Draghi is spending 150% of that every month and getting out now seems to be a lot safer than being around when that collapses, or is that explodes into the faces of EU citizens? Most disagree with me on that, loads of them with economic degrees and that is fine. As I see it, the people all over are in denial of previous debts made and seem to imply that it is not for them to solve, so at your banks when you borrow £2500 every month to pay for things like rent, do you think that you will not have to pay any of it back? Do you think that financial institutions are that philanthropically minded? So as City AM announced on July 17^th “Eurozone inflation fell in June, the European Commission today confirmed, easing pressure on the European Central Bank (ECB) to start tightening monetary policy at its next announcement on Thursday”, yet a week later we see “Draghi struck a dovish tone at the meeting in Frankfurt, with no firm date given to an announcement on the future of the quantitative easing programme, but investors were not convinced”, which we got on Friday July 21^st. So as the spenders are all in denial on several levels, we see that their impact could be a disaster for London when that hits, I have stated in personal belief that getting out of that mess sooner would be essential for the UK. A mere week ago we saw (at https://www.bloomberg.com/news/articles/2017-08-03/big-investors-losing-faith-in-europe-s-ecb-fuelled-junk-rally). Now we see the first mention, not of QE, but the mentioning of ‘ECB-Fuelled Junk Rally’, Bloomberg is now speaking almost the same parts that I have advocated against for many months. With the quote “Deutsche Asset Management has reduced holdings of European junk bonds in its 100 billion euro ($106 billion) multi-asset portfolios and JPMorgan Asset Management says investors should brace for a tough second half. BlackRock Inc. says risks for European credit are tilted to the downside and Nataxis SA recommends dialing back high-yield debt exposure” the large players seem to accept (read: come to the conclusion) the dangers I warned for, for many months, this is a dangers that Brexit should avoid. So, as some players are trying to delay it all, so that the UK gets part of that additional 2 trillion (as I see it).

These matters are connected, you see, when those players try to escape the sewers they will seek other parts that give rise to returns on investment that avoids their downfall, this is where the Monopoly game comes in. Because the reality is that this mentioned UK wealth of £10tn could be the escape hatch they need, yet in that the dangers to the infrastructure would only increase, I might be wrong in that view, yet it is merely my view. So feel free to disagree, providing you do not cry when I am proven correct yet again.

About that glass of water

As we see Brexit make the cover pages again, the Guardian gives us ‘UK caves in to EU demand to agree divorce bill before trade talks‘ (at https://www.theguardian.com/politics/2017/jun/19/uk-caves-in-to-eu-demand-to-agree-divorce-bill-before-trade-talks). There are a few issues here and it is not on what is decided on. You see “capitulated to key European demands for a phased approach to Brexit talks, agreeing to park discussions on free trade until they have thrashed out the cost of the multibillion-euro UK divorce settlement” is fair enough. It can be debated in several ways, yet in honesty, as we see the issues that the ECB have pushed upon the UK and the payments the UK have made, it can be clearly stated that the 60,000,000,000 Euro a month that Mario Draghi has been dishing out every month will go to the Euro nations MINUS the United Kingdom. If there is a divorce settlement, the impossibility of the ECB petulant child is a spending tantrum the United Kingdom should be set away from, for the mere reason that it is up to the other parents to contain the credit spending spree engaging youngster.

So as the article makes reference to that half-filled glass, let’s take another look at the options.

The optimist is stating that Brexit will only have used 50% of the opportunities. This is debated as we see that not just governments, but banks and financial institutions are all about keeping the EU inclusive and forever growing so that it can be milked more efficiently.

To support this view, from last year (Nov 2016) we got this part: “Rome has argued that the tight fiscal measures are stifling some economies and should be loosened to allow EU members to invest more money in order to boost growth. This stance has set Italy, Greece and other southern European countries on a collision course with Germany and other northern European member states, who have warned that increasing public spending and subsequently, public debt, is a risky proposition for a bloc still suffering the effects of the 2008 global financial crisis“, so as we have seen, these investments have for the most not made any impact. Italy showed a deficit of 2.4% ($45B), France -3.4% ($84B), Spain -4.5% ($55B), Poland -2.4% ($11B), Belgium -2.6% ($12B), Denmark -.9% ($2B), these are merely the annual 2016 numbers. The list goes on and apart form 1-2 none can keep a correct budget, and they have not been able to do so for well over a decade. In addition there is the 60 billion a month EU spending spree. It seems that the opportunities will be limited to banks.

The pessimist states that Brexit comes with 50% additional fees. Part of that was raised by little old me through the overspending of Mario Draghi. The EU has a debt that is now surpassing 12 trillion Euro, which is including the 1.7 trillion of the UK at present, so the UK, one of the 4 large EU economies is merely 14% of that. The other three (Germany, France and Italy) each have a debt almost 50% larger than the UK. These 4 represent 80% of the EU debt. There is no containing this level of irresponsibility, and getting out was from my point of view the best option. The benefit is that the UK could end its austerity in 5-10 years if proper steps are taken. The EU will be in deep debt for a very long time after that and the smaller nations are realising this and that is why they were complaining so loudly (as I personally see it).

The opportunist drank the Brexit cocktail. This is seen in the growing partnerships, the Netherlands has kicked it off by sharing ‘UK and Netherlands sign defence cooperation agreement‘, it increases defence and security when we consider the Ferry services between the two nations, in addition, the countries will also share personnel and work towards a UK-Netherlands Amphibious Force. This should also bring additional opportunities to the Dutch as the have the most modern navy in the world, a military branch an Island like the UK could benefit from. In addition, the overall high levels of technology in the Netherlands would give additional benefits to cyber security operations. GCHQ has skills that the Dutch AIVD would love to get a better grip on, an option that should become available in this defence cooperation (source: http://www.army-technology.com).

The practical politician does not see that Brexit is half good or half bad, he or she puts them together and both are true. Yes, that is one way of looking at it. The issue is not the political view, it is that the view that they offer is on a sliding scale of change, and it always change towards the need of the politician, which is at times nowhere near the recorded metrics. Sean Whelan, the economics correspondent for RTE gives us “The good news is that almost a third of Irish exports to the UK would face no tariff whatsoever. The bad news is those products (and this report is all about products) are almost entirely produced by the foreign multinational sector – in particular, the pharmaceutical industry“, leave that situation to politicians to evolve into personal ‘opportunity’, is in not interesting that we haven’t seen this element before? All the scaremongering and the ‘one benefit’ will be for the large corporations. Is it not weird that only they seem to have a leg up on the benefit range?

So when we talk about the Brexit glass, we get more and more views and more and more pointed news that gives us a scary story. The reality is that in all this, I stumbled on 2 positive developments, directions I pleaded for as early as late 2015. So as we now see the evolution of nations working together, we might get additional proof on the economy.

That part was initially given by City AM, where we see “UK economy will grow by 1.7 per cent this year, faster than the previously forecast expansion of 1.6 per cent, according to the Institute of Chartered Accountants (ICAEW)“, which sounds good, yet the UK is not out of the fire. When we also read “Michael Izza, ICAEW chief executive, said: “I would like to see the new government put business and the economy at the top of its agenda, doing more to create a climate of optimism and certainty which will help build confidence“. This is more of the banter we have seen too often, that is given by me in such a statement as the UK has no coffers to invest with. This has been the issue all along, as the previous labour government went all out on spending, we are in a stage of culling these debts, so as we see ‘need for investment’, we better realise that Labour wasted £11.2 billion that went straight down the drain. It will take some time to overcome this in addition to the deficit and the debts. It’s not rocket science and relying on the forecasts as they have been wrong by too much all over Europe, we need to consider which sources to trust. A mere reality of what came before and also a reality as Brexit will have an impact; there was never any denying that. It is just that from my point of view, the UK recovery would be faster outside of, than within the EU. That part has already been shown to some degree, to some mind you, not to the full extent. We can only speculate on that part until Brexit is final.

So no matter how we relate this to a glass, how it is seen. The glass merely is. It is the consequence of long term European injustice. Their convoluted presentation, where big business gets a free pass again and again, not tax accountability of any kind. By allowing the EC gravy trains to be running smooth they also sunk their own options of long term survival.

Yet, the gravy train is ignored. So when I refer to the Times (at https://www.thetimes.co.uk/edition/news/kinnocks-on-the-brussels-gravy-train-xcxbdkx6r) with reference to June 2016, here we see: “The former Labour leader was responsible for transport and then became a vice-president with responsibility for administrative reform. By the time he left in 2004 Lord Kinnock was earning £163,453 a year alongside a housing allowance and an entertainment budget. He received a payment of nearly £273,000 on leaving office. He has an EU pension thought to be worth more than £60,000 per year alongside the pension he receives for…” and we have not looked at the other 750 members! Still think that I lost my marbles, or are you seeing a spending spree above the 60 billion Euro a month that is too ludicrous to consider?

By trivializing this I am not making it any better, talking about glasses and water, but it aids you to consider that within the European community, the consideration of water can be whatever they want it to be, which means that transparency is pretty much gone. Is that not the first requirement of the European Community? Is Brexit still such a bad idea? This is supported by the Financial Times as they published in May 2017 (at https://www.ft.com/content/7d1eea08-3be8-11e7-ac89-b01cc67cfeec), the article ‘Call for transparency on ECB corporate bond buying‘, now it is important to consider that nothing wrong was done (as far as we can tell), yet when we see ‘MEPs want to dispel any concerns of benefits to small group of favoured companies‘, the question becomes, why was this not done from day 1? The quote “So far, about €75bn of corporate bonds has been bought as part of QE, a small part of the €1.8tn that the ECB has spent overall. Most is spent on bonds issued by Eurozone governments” gives view that it is not a massive amount compared to the complete spending spree, yet €75B is massive, 0.001% of that could secure my financial future, settle my bills have a decent house to live in, so it adds up to a lot, fast! Still the article shows a concern and that is why I went there. The quote “While the actual amounts are not disclosed, the ECB has explained that it buys proportionally to outstanding issues, and market capitalisation provides a weighting.“, yet weighting depends on factors, which factors and how are they applied? Invariable, weighting is done to either ‘regress to the centre’, as a means to present it as an accepted part (by whom is still the question), or to obscure the view of the amount of outliers in the balance of the matter, neither of these is a good thing. In addition, the request “disclose greater detail on this programme’s operating guidelines, in order to explain to citizens how the corporate bonds are being selected“, is a worry as there could be a unbalanced support to corporations with bonds and in addition, the mention “Another request from the MEPs is that other central banks follow the lead of Germany’s Bundesbank in publishing the names of companies with bonds, rather than just the ISIN number, a code used to identify them on the financial markets” gives out that hiding behind an ISIN number gives weight to other issues too. Part of this is in the attached PDF ‘a proceeding under Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the EEA Agreement‘ attached here, where several issues are shown, the quote ‘by requiring European financial firms and data vendors to pay licensing fees for their use‘. So not only is the EC hiding behind these numbers, but there is an additional fee? Well, apparently that was negated to some extent and that agreement ended in 2016, so are there fee’s now, all issues of non-transparency. All these issues chipping away the assumed ‘premise’ towards the ‘validity of existence’ of the EC and even the ECB.

So when we talk about the glass it is not just the size, not about the water that is in it, but the fact that the glass is too opaque in many instances, the fact that some members have known the lack of transparency and in this we see a system that seems to have been intentionally hiding behind non-transparency. If there is one part that proves it, than it is the existence of Grexit and Brexit and more over the time it took for these politicians to give clarity on how proceedings were supposed to go and how the media left the people in the dark on the actual issues. All that, with the confusion we see as the EC seems to be in the dark on how to deal with an exiting nation gives more worries than confidence, because the actions and threats shown is not that of some economic alliance, it is the foundation of some tyranny where the freedom of choice becomes the burden of blackmail, threats and intentional miscommunication.

I’ll let you decide on how much you enjoy being blackmailed and threatened and where the freedom of choice remains in all of that.

Commission decision COMP39.592

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