Tag Archives: Darrell Huff

Working with Germany again?

This is the direct sentiment that came to mind. When I see ‘Boris Johnson should be jailed over Brexit claims, says ex-David Davis aide‘ (at https://www.theguardian.com/politics/2017/aug/09/brexit-political-party-james-chapman-david-davis) my initial thought was that someone did not like Boris Johnson. Now, that is fair enough. We all have loads of issues with one politician or another. The do not always serve our cup of tea and some politicians never will. It is merely the nature of things. So I started to read, as I was interested who had a go at the only politician in Britain who has a worse hairstyle than President Trump. So here we are looking at James Chapman and what this is about. The quote: “The former chief of staff to David Davis has said Brexit is a catastrophe“. My first question becomes ‘How so?

Let’s take a simple look.

So far Brexit has not even started, the Pro-EU cabinet members have often too much personal issues in this and there is no evidence at all that it is a catastrophe. We knew there would be hard times for all was never in doubt. Yet at present we are being downed by ‘fake news’, false reports drowning in fearmongering that usually have disaster headlines with the included word ‘could’.

When we look deeper into these articles we get emotions and the clear indications that they just don’t know. In my view James Chapman would be the kind of Englishman who would see in 1939 if ‘mutual coexistence‘ would be an option between Germany and England. Do you remember how that ended?

Now consider the top 10 headlines when I search for ‘Brexit’:

  1. Britain’s Brexit negotiators denied water by Brussels during divorce talks, civil servant claims
  2. No agreement in latest Scots-UK Brexit powers talks
  3. There are whispers in Whitehall about a ‘soft landing’ Brexit
  4. BREXIT BOOM: Surge in UK investment after EU exit as firms to spend less on European staff
  5. Courts will STILL be ruled by EU even AFTER Brexit, warns senior Tory MP
  6. Britain told to WAKE UP by ex-Irish minister who says fury over Brexit could BOIL OVER
  7. Brexit fears lead to hike in UK foreign currency accounts
  8. Bank of England warns Brexit will put strain on regulatory resources
  9. The Bank of England is reviewing more than 400 firms’ Brexit plans and there are ‘significant issues’
  10. Employers struggle to recruit staff as applications drop due to Brexit

So the reds are all what I would regard as utter (read: mostly) BS issues, dripped in what we should call stupefied emotions. And they are on both the pro and anti Brexit sides mind you. One of them is about ‘whispers‘, which is basically the jump to gossip as there are no facts, there are no resolutions and the people in Whitehall seem to be utterly clueless on what is happening. Part of that is shown even better when we consider Sky News with ‘Deloitte feels Whitehall thaw after Brexit memo sparked fury‘ (at http://news.sky.com/story/deloitte-feels-whitehall-thaw-after-brexit-memo-sparked-fury-10968774). So when we see “Sky News has learnt that Deloitte has in recent weeks begun participating in at least one central Government tender process“, in this the part ‘begun participating‘ implies that they were awaiting some sort of resolution, so they stopped participating, waiting for the dust to settle and now they feel a thaw? With: “The crisis in Deloitte’s relationship with the Government was sparked last November by a consultant working for the firm. His memo had not been commissioned by ministers or civil servants. It referred to a lack of Government preparation and “divisions with the Cabinet” over the Government’s Brexit priorities – ironically, both criticisms which have been levelled at Mrs May’s administration with increasing frequency in recent weeks.“, as well as “Deloitte’s memo prompted an apology from the global accountancy firm, saying: “This was a note intended primarily for internal audiences“, which as I personally see it was a blooper of the first rate and someone was upset with Deloitte. So it seems that someone’s memo, not the Brexit part was to blame in all this. The news is littered with these fearmongering acts all over the media.

Now the Orange headlines are basically emotional parts. First the Irish Prime Minister, you might remember how Ireland started to defend Apple regarding taxation not paid. So as we see its prime minister with the quote “Irish prime minister Leo Varadkar has signalled he is prepared to delay the ongoing Brexit talks unless he is satisfied with any post-Brexit agreement over the issue of the Irish border” that he is very willing to be an Irish pain in the ass on issues that have several unknowns, which means that there is no given answer. I am going with the part that someone elected as Prime Minister should be aware of that, or easier stated ‘he ain’t that stupid!‘, by the way, how is that €15 billion being spend? We can consider that the statement “I think it’s time that there’s an outbreak of common sense in London and that people who decide that solutions have to be looked at, all solutions have to be looked at and it’s particularly sensitive given the context on the island of Ireland“, is pretty valid, there is no denying it, yet when Ireland decided to set its nation up as a tax haven, how much consideration and information was given to the UK? The spring goes both ways Mr Roche, I admit that he is not wrong, yet he is playing a political game (one he is allowed to do mind you), and we need to acknowledge that the political game is about personal gain for Ireland (also a valid tactic), so let’s not blame Brexit for unknown quantities at present. There is one exception, with item number 7 we see that the media fears have moved people to shifted their accounts with currencies. The fact that we see spikes of 23% is one indication. You see, in the end the people will lose there, the banks will win no matter how it all goes. It takes one emotional article for the people to shift to the German Mark or the American Dollar, yet in this, unless you keep your eye on the ball 24:7 you basically end up losing in the end, the amount might be small, yet with the transfer fees and administration you will still take a hit. So as people shift to the Euro, whilst we saw 2 days ago in the Business Times “high debt burdens and aggressive valuations will conspire to crimp capital gains on European bonds this late in the global credit cycle” In addition there is the fact that several senior economic voices are now worried on the bond bubble and that it might burst, so as we realise that Mario Draghi has €2 trillion in junk bonds, what do you expect to happen to the Euro? Those who moved to the Euro face the risk (again, I state the risk) of losing 5%-10%, when you have a £2000 in your account, you basically withdrew £100-£200 and flushed it through the toilet. How will you feel when you face that? I believe that those not used to the currency market, shifting left to right face a few risks, yet the chance of actual gain tends to be too small for the effort. As i see it, the juice ain’t worth the squeeze.

The greens are partially (read: mostly) valid, they are news and as such we should not object, yet it is a mere 30% of a 90% trashed value of media, parts all are ignoring and too many people are getting dragged in the emotional tsunami of exploitative media. It is the Business Insider Australia article that is on point, and the only article in blue (at https://www.businessinsider.com.au/sam-woods-update-on-brexit-2017-8), filled with decent news and actual information. With “Woods said a cliff-edge Brexit would pose a risk to financial stability, and proposed a transition period” we see the need for some level of soft Brexit, which is fair enough. My question becomes on the term ‘risk to financial stability‘, just how much of a risk and what the impact could be, both the best and worst case scenario’s. If there was a speculated percentage to some degree (with clear warnings of speculation), that might not be too bad either. We see partially the obvious with “Brexit places “an extra burden” on the regulator’s resources“, which was always a given, yet not mentioning it is also folly. I particularly liked “And financial centres across the EU — including Frankfurt, Paris, Dublin, and Luxembourg — are battling to attract financial services work moving out of London as a result of Brexit as a result of expected legal changes that will make operating in the EU out of London tricky“. I like it because it is part of some sales cycle. They are preparing to move in on opportunity, which in the follow up gives rise to the emotional Irish article mentioned earlier. In this Ireland slices and cuts with both sides of the knife they wield. All valid and business like, yet it puts the emotional Irish outrage a little over the top, does it not? In the end, we do not know if it will even be an option, because there are litigation settings that the European Community ignored and never set in procedures and policies. Is that not equally dim, folly and stupid?

Consider the given, you as a person, when you go to the bank, when you go to the realtor or the gym around the corner. How often have you seen in the ‘contract‘ you signed on the costs and responsibility you faced when you stopped being a member. They all have clauses you had to sign, equally so for your mobile, which tends to be the most expensive part to leave. Yet the high 6 figure income legal minds of the EU in Brussels, none of them had anything in play. All like some jurisprudential catholic marriage of eternity, all with the additional option to screw small boys and girls (read: individual tax payers), how interesting that none had the escape policies in place. We saw it as early as Greece and the EU and the media just emotionally babbled to us all. Now that Brexit is becoming a reality, now it is suddenly all mayhem and chaos wherever you try to get any news.

So we have 4 out of 10, with one exceptional part. That was me googling today. So as we are all drowned in emotion, we need to see two additional parts. Both ‘green’ articles with the subtitle ‘New study shows a the number of people available for new jobs is dwindling, leading to a push in pay for those already in work‘ we see two sides, one that employment is up and pay rise might not feel great (unless you receive it), yet that too constitutes the dangers of rising costs. I advocated even before the referendum that the UK should look at their Commonwealth brothers and sisters. It would have been easy for two years to have an open Commonwealth VISA, one that allows any Commonwealth citizen up to a year into the UK, with optional setting to enhance it, so whilst with that one employer you have a year, that can be extended to 2 years and then to 4 years after which you could automatically become a permanent resident and after that if desired citizen. As employment is essential, you have a taxpayer, not a drain. For job hoppers, there could be the option of residency if they have been with at least 3 employers for at least 2 years, so in the end they get the option after 9 years. The simplest solution and both the political and civil services just drained on some merit that was not even valid in the most virtual of situations. In this the entire NHS mess would never have been any valid emotional media on those so called 86,000 open vacancies. A solution thought of 4 years ago by me. Yet the MP’s are all about some outdated policy whilst trying to push the need for the one market EU link to not be cut, whilst even in those days enough evidence had been submitted that large corporations are the only actual winners in that one market facade. In addition the green articles have mentions like: “Last year’s Brexit vote has made it more difficult for employers to fill jobs with some EU nationals leaving the UK“, the fact might be true, but most of those people were scared away by exploitative media whilst that media knew that there was no given answers at that time? Several issues on immigration and the media, clearly given by .GOV.UK were ignored as setting the minds of the people at peace was not a given option for the exploitative media. So when we see the quotes from Kevin Green, chief executive of REC. We could consider that equally see that with “We can’t ignore the importance of our relationship with the EU to employers“, which gives us that he makes no mention of any Commonwealth options either. If you truly have problems finding people, you look to other places too. When the pond is not giving fish, you can try and try again, or look around to see where the next nearest pond is, or is that version of simplicity just too muddy for the chief executive of the REC?

In equal measure I question the part of “a study by Deloitte suggested 38 per cent of lower-skilled EU nationals are considering relocating away from UK businesses“, I question it as I wonder on the failing of the questionnaire as well as the data and the weights applied, the foundations of the weights and how the data was interpreted. For those doubting that they did anything wrong, questionable or set to the intent of not being clearly informative. Evidence can be found with ‘How to Lie with Statistics‘ by Darrell Huff. Also consider the first political application of results: ‘If the data does not match the needs, simply alter the question‘. So there are several considerations and solutions for the politicians actually trying to work a solution and not whatever personal angle they need to work by exposing emotional sides that were never part of anything. In the second there was the mention of the EU courts. So when we see “SENIOR TORY MP Dominic Grieve said the European Court of Justice (ECJ) will remain a “dominant presence” in UK courts after Brexit despite pledges to break free from its influence made by David Davis“, there is a truth in that. As Brexit is completed, there will remains legal links, yet, is that a bad part? There will be shifts, yet before the EU was ratified, there were legal parts that were already in agreement on both sides. Yet I question to some extent “The European Court of Justice is, in fact, going to continue to be a really dominant presence in our lives even though we no longer have any ability to appear in it“, if we are not an party of appearance, we have no connection to it. The UK will still be ruled by UK Common Law, there can be no question on that. We still have certain allegiances and also legal responsibilities as well as rights. So I question part of this article.

And the truth is seen with “What’s happened is when we leave the EU, the Government decided existing EU law would be incorporated into our own law. The legislation to be laid out in the autumn will lay out guidelines as to how this will operate“, which is part of the debate as it is not a given, or in finality. In addition, as Germany, the Netherlands and France have Civil Law, whilst the UK has Common Law, there will be an issue making things fit. In addition there is “He said it is “unclear” whether judges will be able to apply UK principles when interpreting legislation derived from European Union regulation“, so there is non-clarity, which makes this almost more an Orange than a Green article. Still, valid non emotional questions are asked, which was the foundation I employed towards the use of colours. The issues are actually stated in the Lisbon treaty. Yet, when we see certain parts, we see Article 249c, which gives us at [1] ‘Member States shall adopt all measures of national law necessary to implement legally binding Union acts‘, so this is to binding union acts, and as the UK would no longer be part of the union, it falls away. Yet the Lisbon treaty also gives Article 188J and at [2] we see ‘Humanitarian aid operations shall be conducted in compliance with the principles of international law and with the principles of impartiality, neutrality and non-discrimination‘, which is what UK law was already compliant with, so there are a few legal issues where it is specifically to the adherence of national law, yet which are the issue when the UK is no longer an EU member? The article does not bring that to light, does it?

We see loads of emotional sides, yet lacking the clarity to the degree that it should have had. In all this, the former political editor of the Daily mail is the person who wants to throw someone into jail? so when we revisit the Daily Mail with ‘Google, the terrorists friend‘, I wonder who should be in jail, and as for ‘a terror manual on how to use a car for mass murder‘, I wonder if they looked at the fact that every year 85,000 people in the UK are convicted of drink driving offences. With the toll of 940 killed and 3690 seriously wounded, whilst the UK has a ‘mere’ 90 killed by terrorists, so were terrorists the actual issue, or is exploitation of the terrorist word just better for circulation? I think that there isn’t any person who after being a Daily Mail employee has any business slinging mud after they were the facilitating bucket of mud themselves. That is merely my view on his matter and the fact that the bulk of these pro EU are still crying on the presented setting of £350 million, if that was the only issue, Brexit would NEVER ever have won, the EU has massive issues and it is time for people to stop burying their heads in the sand. I have exposed in several blogs the fact that several issues have never been dealt with whilst the people have been wealthily refunded for decades. The EU gravy train is one that no government can afford and those who enjoy the ride don’t want it to change. The media has equally been too silent on that matter for too long too.

In the end, the people want to return to some quality of life, a path the EU has not offered, has not achieved and will be unlikely to give (read: hand out) any day soon. In equal measure consider the writings of Neville Henderson, British Ambassador in Germany in 1938, so when he wrote “I suppose the chances of Hitler coming out at Nuremberg with what will amount to peace or what will amount to war (thunder there is sure to be) are about 50-50. I opt for the former. If I am right I do wish it might be possible to get at any rate the Times, Camrose, Beaverbrook Press etc. to write up Hitler as an apostle of Peace.“, can anyone remember how Hitler, the apostle of peace solved matters? In addition he wrote “We make a great mistake when our Press persists in abusing him. Let it abuse his evil advisers but give him a chance of being a good boy“, so how good was this ‘good boy‘, so how facilitating was the Press?

Daily Mail 1938Perhaps some remember the Daily Mail in 1938, as they warned the UK of aliens entering through the back door. With “The way stateless Jews from Germany are pouring in from every port is becoming an outrage” the Daily Mail decided to give verdict, yet in the end those who took that backdoor road were pretty much the only Jews left alive after Hitler’s European Tour 1939-1945. So as we see the driving need of revenue through circulation of emotion, we have to wonder what else we should former Daily Mail people stop from doing. We are being attacked on emotional levels from media that should have known better for decades.

So the plain truth is that the UK will get out of the valley of bad quality of life, they will in addition grow faster when they left the EU and I believe that the EU will have to deal with multiple trillions of Euros in junk bonds, it will slow the EU economy down for a much longer time. It will not make it an easy push for the UK, that was never going to be the case, yet in the end, I feel certain that the £ will be the strongest of currencies once more. It is when are showing to win, how many papers will become the ‘turncoats’ shielding certain MP’s from the political emotional games they played together by relying on misinformation? Or will they show us how they used the writings of Darrell Huff to get their personal view across?

 

I personally hope that we get to ask them those questions sooner rather than later!

 

Leave a comment

Filed under Finance, Law, Media, Politics

The excuse from a failed politician

The NHS has been in the news more than once as it is an important issue. It is today’s article in the Guardian that is a much bigger issue than most people will realise. Let’s take a look at the issue. The title ‘NHS would be put under threat by Brexit, says Jeremy Hunt‘ (at http://www.theguardian.com/politics/2016/mar/26/nhs-under-threat-from-brexit) is only the beginning.

To show you part of this we need to look at this part by part. The first part is shown at the very beginning “The National Health Service will face budget cuts, falling standards and an exodus of overseas doctors and nurses if the UK leaves the European Union, health secretary Jeremy Hunt has said“, which gets my initial response ‘Let me play the worlds tiniest violin for you Jeremy! Why don’t you consider an alternative job like in a taxi or perhaps become a barber, it’s just a suggestion!

Is my response to harsh? In this light, which should always be considered, we need to state the following:

  1. The NHS will always face budget cuts, Brexit is not a factor in that reality. Remember that the NHS works off the UK national budget, which is under pressure to say the least, the EU donation not being the smallest expense in all this.
  2. Failing standards if Brexit happens. This might be the most ludicrous reasoning. Ludicrous because standards are either being met or not and at present from several sources they are not being met, the EU seems to be setting unrealistic high requirements in some cases, requirements that many nations are failing, it should be about British standards, they should be the highest and they should be met, EU be damned (and all that).
  3. An exodus of overseas doctors and nurses when Brexit happens. This could have been an issue, but it was clearly stated in my blog ‘The News shows its limit of English‘ (at https://lawlordtobe.com/2015/06/22/the-news-shows-its-limit-of-english/), where I showed how both Sky News and the Guardian were basically fucking up and creating unneeded panic. That article called ‘New immigration rules will cost the NHS millions, warns nursing union‘ showed the lack of investigation by both news sources as the UK government had published clearly in section 79E ‘is expected to demonstrate that he is being paid either at or above the appropriate rate for the job, as stated in the Codes of Practice in Appendix J‘, the nurses are clearly mentioned and the expected income as set out in the charter.

As I see it, I had to explain that to the press in my article on June 22nd 2015, so why would Jeremy Hunt state option C? In his defence, some people might be nervous if the UK leaves the EEC, yet a British passport is one of the most revered ones on the planet. So any non-EU medical employee would do a lot to gain that status and the UK government has done its share of keeping these highly qualified people interested in staying in the UK. So tell me, why is Jeremy giving us part C?

He actually gives us a decent answer through “Hunt argues that, with the NHS budget already under huge pressure, funding levels can only be maintained if the British economy remains strong“, it is only partially an acceptable answer as the NHS has been a mess for almost half a decade now, so these issues had been known, even if Brexit is an additional element, the danger of Brexit had been a fact for at least 6 months, that is, the chance of it becoming a reality, so the consequences of diminished economy has been an element for almost a decade. Even as the UK had been fortunate, the dangers of a receding economy have been a danger for the larger extent and when we realise that other EU nations have not been this fortunate, we should see that part in the light of ‘Jeremy hunt has had an economic advantage until now’. Not being ready for that risk is clearly a failing of health secretary Jeremy Hunt (as I personally see it).

After that he then kicks in his own windows when we read “He cites a series of economic surveys, including from the CBI as evidence of the adverse impact of an exit on the UK economy“, the CBI survey, which was an absolute joke, as shown in ‘Is the truth out there?‘ (At https://lawlordtobe.com/2016/03/21/is-the-truth-out-there/), it makes for a decent read and shows how the CBI survey could be seen as another chapter from one of the most famous books in statistics called ‘How to Lie with Statistics‘ by Darrell Huff, a 1954 publications that shows us never to ignore the classics.

The quote: “Hunt suggests that progress the government is making in employing 11,000 extra doctors and 12,000 more nurses will be threatened and warns of the “damage caused by losing some of the 100,000 skilled EU workers who work in our health and social care system”. Some could leave because of uncertainties over visas and residence permits, he suggests“, which again I consider to be a load of (the word starts with a ‘B’ and ends with ‘locks’). There shouldn’t be any uncertainties on visas or residency permits and offering that even as a suggestion makes (again, in my personal opinion), Jeremy Hunt unqualified for his present position. It is his job to create calm and take stress away, not to introduce additional stresses to an area where he already failed, in addition to these points I am raising, personally, as a conservative. I believe that there are questions on Brexit and to be against Brexit might be the party line, but there are too many questions regarding the European Community, there are conservatives who seem to support Brexit. For one there is Lord Chancellor Secretary of State for Justice Michael Gove, who gave his reasons at http://www.independent.co.uk/news/uk/politics/eu-referendum-michael-goves-full-statement-on-why-he-is-backing-brexit-a6886221.html, that part is not up for discussion. The only quote in all this is “The EU is an institution rooted in the past and is proving incapable of reforming to meet the big technological, demographic and economic challenges of our time“, which applies to the NHS because it is facing both technological and economic challenges already. The Labour party bungled the option to get part of the technological solution implemented that could have helped the NHS (perhaps you remember the loss of roughly £11.2 billion in NHS IT restructuring).

My issue in all this is that (again, as I personally see it) Jeremy Hunt is not much of a visionary, which means that as expected, he will follow the party line as any governing body needs to adhere to. Yet in all this, scaremongering is the wrong approach. We need to be the enlightened party, the leaders that give rise to inspiration by properly informing the people. The growing problem for the Conservatives is that like Michael Gove, more will see that the EU has stopped being a solution. Many will not be as eloquent as Michael was in his essay, as printed by the Independent. This does not matter if we are united in finding a solution. My big worry is that scaremongering is a dangerous tactic. It is also the wrong one to make for the reason that enlightening the audience creates trust, needlessly scaring them will only drive part of our party towards UKIP (or Labour), a choice that is a lot more dangerous! To govern one must be elected and the view given at present is not that encouraging.

Stephen Dorrell, the former health secretary and ex-chairman of the Commons health select committee gave us this “EU research programmes and single market legislation have greatly strengthened European cooperation in this area with substantial benefits for both healthcare and employment in the UK. It is a simple fact that Brexit would put all this at risk“, which we might see (initially), as a fair enough statement. Yet in my view, the information could be regarded as incomplete (read: speculative view). You see, when we consider Stephen Dorrell, Healthcare and Public Sector Senior Adviser to KPMG in the UK (at https://home.kpmg.com/uk/en/home/contacts/d/stephen-dorrell.html), we need to consider what KPMG could lose, apart from the NHS £1 Billion revenue solution, as one might phrase it. When we re-consider the info the Guardian gave, which is correct in the view that NHS funds will find cutbacks, KPMG has a clear danger that it will reflect on their 10 figure deal, all in pounds and a lot less on medical staff. This gives an additional weight to the view that Stephen Dorrell did not give all the information, because there is a lot more, not on the hands of Stephen Dorrell or in the hands of him mind you, but in the hands of his friends (read: associates), possibly with KPMG who are realising that Brexit will impact their juicy pharmaceutical profits, with a growing chance that India could move more and more into the UK pouch of generic medication and the expenditure cutback solutions they bring. Now, reader be warned, there is a fair bit of speculation here (the part about India), that speculation is partially because I think there are long term solutions here for the Commonwealth at large, partially because it seems to me that I (and the public at large) have had enough of fat cats (especially pharmaceuticals) avoiding taxation to the degree they have whilst selling overpriced solutions, that are being re-patented again and again.

The list of misinformation appears to be growing and I am trying to offer resistance, because my party should be better than that! After all, we aren’t the Labour party!

 

Leave a comment

Filed under Finance, IT, Media, Politics

Rated into immorality

Can anyone explain something weird to me? The news is given (at http://www.theguardian.com/technology/2014/nov/14/twitter-given-junk-credit-rating) to impress upon us a combination of values and steps that are beyond immoral. Consider the tweet, tweet twitter engine. I use it almost every day, it is the one unbiased part where we can follow events, people and companies so that we keep up to date, small messages that bring the actual information. A company that had a massive idea, is making money, when we see the quote “Jim Prosser, a spokesman for Twitter, pointed to S&P’s own words as comment: “Twitter will continue to experience very strong growth and not encounter a significant increase in competitive pressure.”“, we see issues, but is anyone seeing the question behind it? Then we see the one little gem hidden in all the text “The rating is unsolicited“, is this part of the issue? You see, as we look at companies, their revenue, their profit and some might consider their contribution, so as we look at it why is S&P suddenly decided ‘Twitter given junk credit rating‘? It seems to me that there is an economic shift going on. As companies are doing well, they are now getting downgraded for not meeting the expectations of some analysts.

Yet, where is this world going to?

Consider the application of morale (a word not found in a financiers dictionary) and reasoning for my thought train at present is the following: ‘Forex-rigging investigation: George Osborne gives full backing to SFO‘ (at http://www.theguardian.com/business/2014/nov/14/forex-rigging-investigation-george-osborne-sfo). Libor, Forex, Tesco and there is absolutely ZERO indication that this is just it. At the edge of reason we see the quote ‘Because I don’t want you to see any of my wobbly bits‘, which sounds ample and applicable as the financial district of happily ‘screw everyone over‘, it is all about the wobbly bits, according to Bridget Jones!

Consider the Forex articles. The second one is http://www.reuters.com/article/2014/11/14/us-banks-forex-crime-idUSKCN0IY0LV20141114. The issue is not just the events, the quote “Royal Bank of Scotland, HSBC, JP Morgan, Citigroup, Bank of America Corp and UBS were hit with penalties. Barclays is still in talks with authorities over a settlement“, which not just how far the issue has overstepped, but the issue is where banking laws are falling short, short to the extent that we have in access of half a decade. The issues continued after the banking collapse as the financial population continued to be nothing more than an eager courtesan to the bonus they so crave. The end result is a malignant decay of morals, standards and all this now (as I personally see it) on the standards as the poor are left with less than none, so Standards & Poor it is!

We now get back to what I regard to be a new level of exploited levelling. Consider the hidden simplicity that Libor held; now consider that debt ratings Moody’s, S&P, Fitch and the relative newbie Egan-Jones decide on ratings. Combine ‘how to lie with statistics‘ (a famous book by Darrell Huff) and the need to manipulate the market for 23 billionaires and we see the light of junk status made Twitter in a whole new light. Consider the basic state of an economy. A company sells, makes profit and pays taxes, a nation flourishes! This is a naive (remember my non-economic degree?) approach towards the worlds cloud of business. Investors, shareholders, analysts and raters are a cog within a machine of cogs. Yet this inner circular machine is different. It inflates, malleably changes and coaches towards a change that seems to be intent on syphoning and draining virtual cash flows into a different premise of profit, which is then turned to actual money. In an age of debts that go beyond the total of all treasuries, virtual numbers that have little to no foundation. The foundations and the levels they have been compromised towards are of a dimension we never imagined possible. Consider that the big banks have been fined in excess of 2.3 billion (at http://www.forbes.com/sites/halahtouryalai/2013/12/04/big-banks-fined-2-3b-over-illegal-libor-cartels-more-fines-on-the-way/), I wrote about it in ‘60% confiscated and counting in Cyprus!‘, on April 1st 2013, yet do not think this article to be a joke. I stated “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“, several people laughed out loud then, yet now consider not just Libor, but the audited events of Tesco, the $5.3 trillion market of Forex and the fact that morality might be found in a church, but as we see the evidence, morality is not found in banks and financial institutions, where will it end?

With the Twitter events that question becomes more debatable and the impact that rating companies now impress upon profit turning companies have. Is it just about profit, or about the stated ‘anticipated statement of profit’? As certain ‘analysts’ claim that events are not exceeded, stock becomes junk, waves are created and as such, the welfare of companies are tweaked into a state of artificially changed state, some are inflated, some deflated, but always towards the claim of raters and analysts. The bottom line set towards an algorithm. Consider these states as we have seen not just the change of Tesco, but the events as they also gave way of downgraded profits with Sainsbury, which was not so vocally seen before that day in September. Interactions on many levels, based upon foundations that no one seems to question. Consider how the expectations were set by ‘analysts’ based upon data given to them and data available to them, now consider how Tesco had a quarter of a billion inflated and how the Pricewaterhouse Cooper auditors were ignorant of the inflated condition, now consider how Analysts used that element in predicting waves, the raters predicted and set the value and they are now setting the anticipation of investors and shareholders, an artificial pool with tidal wave creating capacity, and the two elements that have the ability to set the power and size of the waves. So how is your view of financial morality now? Consider the final part in this story. When we consider a story on Fortune titled ‘Twitter is junk, while Alibaba is class, ratings agencies say‘ (at http://fortune.com/2014/11/14/twitter-is-junk-while-alibaba-is-class-ratings-agencies-say/), why is that? Twitter is still holding its own, is it perhaps that the waves of Alibaba can be more easily influenced? Companies valued at the ability where the waves can be decided by the financial cogs, the stability of Twitter is less interesting to them, so they make way for whoever can aid in creating the waves these financial people want. (The last part you read is all speculation on my side), yet speculation or not, when we see the waves of Libor and Forex, are my thoughts so far out of bounds? How Twitter making millions is downgraded, how Tesco, beyond the inflated profits, still made a billion, it’s downgrade of 90% seems excessive beyond punishment, but Tesco is not a good example (because of their own internal manipulation), Consider the Fortune quote “And the fact that Alibaba is 90% dependent on a home market that is slowing, while acknowledged as a risk, doesn’t seem to scare the agencies“, it does not scare them, or it appeals the dependency of Alibaba to make certain decisions down the line? There is a side that seems ignored by all, I personally still have a hard time believing that (as my calculation went in ‘Price Waterfall Blooper‘ on October 25th) the price for 199 auditors could not find two events of inflation of each well over 100 million. Are my suspicions in regards to manipulations that far-fetched?

I wonder how long it will take for the law to catch up, for the Department of Public Prosecutions (DPP) or Crown Prosecuting Services (CPS) to get a handle on these events and deter these actions to such a degree. There should be additional questions as the raters are all American, in light of their shortfall that approaches 18 trillion at present. It seems that the US has no options, no solution and no resolution strategy, yet we see that the big four give ratings are all American. The last part is not an accusation in any way, yet the fact that the Auditors need new oversight, especially in the light of American auditing firm Pricewaterhouse Cooper as they will face questions regarding Tesco. As the 4 largest auditors include UK and Netherlands, why are there only American raters (of the proportions of the large 4)? With the risk of manipulation, should there not be a British and even a French or a Dutch rating service? Let’s not forget that PwC faces possible investigation, not because they are more likely than not guilty, but because their innocence needs to be proven beyond any doubt, especially in light of the amount of companies audited by them as well as the issue of 199 auditors (as I calculated them) not finding anything. When we consider the length of time that PwC has had Tesco as a customer, yet, these are two separate issues, there is no inkling of suspicion that auditors are part of any manipulation, yet the auditor’s data is essential to such steps.

Where is the solution?

Not sure if I know of one, laws can be made draconian to give much harsher sentence to the transgressors, but the issue is not the transgressors, the issue is that these ‘manipulators’ have by definition of law not broken any rules. Yes, we see the fines of Libor and soon Forex, these transgressions are seemingly clear, but what of the raters and the analysts? The issues of data are at the foundation here. That what is raw data and how it becomes processed data is now at the centre of it all. That what is construed to be the creator of waves through analysts, raters and auditors; Auditors collecting the data, analysts to manipulate (which is what they might see as a simple application of personal preference and weighting) and raters to set the pace for investors and shareholders.

So tell me, how wrong is MY view and why have these influential cogs not been dealt with through legislation?

 

Leave a comment

Filed under Finance, Law, Media, Politics

Memory lane is a freeway

What do you do when you need to look better then you should? Well, the obvious reason some might grasp as is ‘to lie’. So how do you lie whilst remaining truthful? Well, here we get to grasp at the one of the smallest books with the power of a titan. It is called ‘How to lie with statistics‘ and it was the masterwork by Darrell Huff in 1954.

This book has never lost its charm, not even after 60 years of evolving news and economy, it still packs a wallop!

Let’s take a look!

The Dutch bank Rabo told us the following “Despite a downturn in the first quarter of this year, Dutch GDP volume is expected to grow in 2014 by ½%, largely due to a recovery in exports and investments. In 2015 economic growth is expected to accelerate slightly to 1½%, fuelled by a real rise in private consumption” (at https://www.rabobank.com/en/press/search/2014/20140612-Rabobank-Dutch-economy-continues-cautious-recovery.html). You know, this reads somewhat familiar. Ah yes! I remember now, it was May 15th 2013, and my blog called ‘A noun of non-profit‘ had something about the Dutch economy.

Where I wrote the following in addition to the information of the Dutch NOS: “The Dutch NOS reported the prediction that even though the Dutch economy will shrink another 0.5%, they do predict a growth of 1.1% next year. I personally join the group “Oh ye of little faith!” on that one and if they are able to get the economy up to 0.2% positive in 2014 than they would have achieved quite the small miracle

Guess what! A year later it turns out I was less confident by a mere 0.2%, whilst they were overconfident by 0.7%. Now consider that I am NO economist, but I saw the rain and the worry. So were these economists informing the Dutch NOS, brilliantly on the dumb side, or was this an event of managing bad news? I actually do not know and I personally think that this is one of many events where the placer of ‘news’ was not based upon ‘realism’ but on keeping moral high no matter what the numbers are.

Is this fair?

I actually will hold out the ‘do not know!‘ sign. Looking at murky numbers is at times more an art then a science and today’s prophet is tomorrow’s ‘pussy with balls of dough’. Is that even a valid expression? You see, I do believe that we WERE heading in the right direction, but now we get two new players on the market. Actually we get 4 new players in two teams. The first team is Team Anglican with in the South Corner the one, the only the true champion of the British Empire ‘England!’ (Please say it loudly in style of Michael Buffer) and in the North corner, the new contender for the global market ‘Scotland!’ (Repeat Michael Buffer voice). This duo is now at odds and at this point, independence of Scotland is still not a fact. In this era, under these conditions, I remain a ‘stronger together‘ person, not because I am against Scottish independence, but because team 2 and a few other factors could drag down both Scotland and England, especially once they are divided, which is a really bad thing. We as Australians would come to the rescue of both, if at all possible, but our economic gravitas, especially as the previous labour government had spent 627 billion it did not have, we too are bleeding and not in the best condition for any economic price fight.

Team two is the main event and the big potato (no, it’s not Ireland). It is team USA and team Japan. Together they have overspent their coffers by a whopping 28 trillion, yes readers, these two are down 28,000 billion, which exceeds the budgets of both the Commonwealth and the EEC with an uncomfortable margin to boot. So, even if we consider the dead drop of that amount, consider that they need 280 billion per percent per year just to pay the interest on this. This means that every person in the US and Japan need to come up with $636 per person per year, per percent that means if the Us and Japan need to borrow at over 1%, every person in these two nations need to deposit $1272 each year from their net income, in America over 12% lives in poverty, which means that up to 25% of the nation has absolutely no way of making that payment. This is not a new song, it is a song, me, myself, I and many others have been trying to bring forward to the people at large. As we are all trying to survive, no one seems to be listening and the wealthy apparently do not (need to) care. This makes for a dangerous precedent because as we look at the truth of the matter, we see that team two is in such dire economic danger that the entire economic map will be redrawn soon enough. Weirdly enough, the team one issues will give additional pains to both team two and the rest of the world, whilst other events are not helping either.

You see, what can we do? This is at the heart of the matter. I try not to be the one just complaining and then leave it to others, even though I am not sure that my methods would work, it seems that my predictions have been a whole lot more accurate than those from economists making 7 figures (I personally believe I am due a $750,000 bonus, where to send the bill to though?).

Although I see USA as a strong (disregarding their deficit) option, we need to take hard actions, especially as their pharmaceutical (and several other industries) have been, in what I personally regard, a state of mindless infancy. If the TPP (Trans Pacific Partnership) does not come through, which I personally hope it does not, then the USA would need to change strategies in massive ways, and that is beside several other companies on the list of 30 that Americans keep their faith on high (aka the Dow Jones Index).

But we are not even close to the issues, mainly because this is not some anti-America rhetoric. Truly I am not against America, but against the change some executives want that nation to be, a nation that is no longer one for all Americans, but one where your return on investment and consumer spending decides whether you are allowed to live or not.

Europe as stated is still in a dire mess for several reasons. You see, there are elections in Sweden tomorrow, and for some reason, this is making many non-Swedes nervous. I did not get this at first, because I have lived there, I witnessed them and as elections go, they are as timid as you might think them to be. Watching submarines race underwater from the shoreline is a lot more exciting than the Swedish elections, so what gives?

Well, the first jolt of nervousness can be gotten from the Guardian (at http://www.theguardian.com/world/2014/sep/11/swedish-elections-cracks-showing-nordic-model).

When we see Sweden, we focus on quotes like “it was Sweden that offered answers, having resolved its own debt mess a generation earlier. It is the only EU country that has lower public debt now than in 2006“, which shows Swedish Pragmatism is not confined to the furniture you buy at IKEA. When we think of the family bonds within Sweden (family is always seemed to be a Swedish trademark), we see “The care sector also suffered a privatisation scandal in 2011, when the Dagens Nyheter newspaper reported that an elderly care centre in Koppargården, run by the private company Carema, was catastrophically neglecting its customers, allegedly weighing their diapers to see if they could be used for longer, thus ensuring maximum usage and lower costs” so it seems that the care of the elderly does not have the safety of a Volvo, not to mention “Complaints about poor service and frequent delays on the high-speed train between Malmö and Stockholm also swung the mood against rail privatisation of the railways“. It seems like there is plenty under the covers that is not just upsetting the Swedes.

So how does this all link up?

This is indeed the question, on one side we see the worry of privatisation (which is really a common sense issue), because if someone wants to do it ‘better’ by taking it away from the government, then evidence of decades has shown us that this person is in it for the cash, which means the goal is to get it done cheaper, which gets us to ‘it will never ever be done better‘. At times I do not even comprehend how a population accepts such a fabricated story. But there is more (there always is, isn’t there). All this seems to impact on a European scale. Why? Sweden is not that big, as stated it is lowering debt. It is not a G-20 nation (only as an EEC member, yet not a Euro Zone), so why is there such a massive push here? They are in 7th position representing a mere 3% of the EEC in regards to the GDP, so this should not be such an issue, should it?

This is where it gets a little dicey, especially by the standards I try to keep. If we consider a player like Coface (Coface began to diversify internationally in 1992. Currently, the Group has global capabilities to support its clients’ growth in their home markets and with their exports by offering them credit insurance services tailored to their needs. Source: Coface Website). They stated the following in regards to Sweden.

The country is returning to dynamic growth in 2014, as household consumption will strengthen in response to higher disposable income, thanks to the fiscal stimulus in the context of an election year. Unemployment affected 8% of the economically active population in 2013 and is expected to fall slightly in 2014, in particular because of new jobs created in the public sector“, here we see the two united: ‘particular because of new jobs created in the public sector‘ and the rejection of privatisation. So is Sweden a risk or is this about setting the continuing trend of ‘investment’ which is now holds the taste of ‘exploitation for profit‘. This is at the core of the issues. The world at large is perpetuating a scandalous system that has no limit, will not discipline itself and the larger players will not stop overextending their reach. It is like an elastic band that can double in size and has been stretched long beyond its safety limits for half a decade, stretching more and more each year, increasing risk and danger each week. Sweden is a lovely place and it looks magical around Christmas, yet it should not have the economic impact that some give it. Is Coface the right instance? Well, that is less for me to say as these ‘risk assessors’ at times all seem the same. I did however notice that their CFO looked aged as a teenager, which made me a little nervous. Especially when you see the massive exposure Coface enjoys on an international level.

So why are they in this article? You see, Coface is part of Natixis and Natixis manages the public guaranties granted by the French Government. Yet, Natixis is not just a player, it is a financial Behemoth. Bernard Oppetit who is also chairman of Centauris Capital is on the board there. Who was visible in the past as Swedish Telecom Giant Tele2 was fending of Dutch Versatel. These facts are mere unrelated facts (or so it seems), yet there seems to be an almost incestuous relationship between some of these Hedge funds and Sweden (amongst others). How direct is Nataxis or its subsidiaries connected to some of these privatisations? The water is too murky for me to see, but it seems that Hedge funds have a three degree separation between them and pretty much any government is more than a worry. Nataxis has direct links all over America and has an office in almost every Commonwealth nation (apart from New Zealand and the West Indies). So here we see the first steps into memory lane.

There was a link with SNS Reaal as we see the following “The 5-year Note has a total size of € 1.6 billion and carries a coupon of 3.5%. The Note was issued to a widely spread range of national and international investors. Lead managers were Citi, JP Morgan Securities Ltd., Natixis, Rabobank en UniCredit (HVB)“, the bank that could not fail was before it was nationalised has links to Natixis. When I looked into SNS, I never noticed how deep some connections went, until last night I was not even aware of how far the reach of Natixis goes. Now consider the powers of their board “Any acquisition of a stake in another company or increases in equity investments, other investments, divestments (or the creation of a joint venture) by Natixis or one of its significant subsidiaries representing more than €150 million” as well as “Any transfers, mergers or demergers in which Natixis is involved” (source: Natixis website). So is this the first we see of the larger funds, now squeezing out the remaining coin of the smaller places, because if that is so, we only have to wait and see when Natixis opens offices in the West-Indies and/or New Zealand, because that might be an indicator that the other exploitation wells have truly run dry (a personal, and possibly wrong assumption).

It is of course likely that the true economists (me is not one of them), are laughing in regards to my naiveté, yet who else knew and how is a direct subsidiary of Natixis, setting the credit score and advice for customers, supporting them and securing their transactions by protecting them against the risk of their clients defaulting. As they themselves state it, whilst their ‘big momma’ Natixis, with an impact beyond belief has a vested interest. I would state that ‘incestuous’ does not even close cover the issue.

This is not a jump from whatever to Natixis, this memory highway, as some might recall the issues on the Royal Bank of Scotland, which I also took a look at. When we consider the news from the BBC (at http://www.bbc.co.uk/news/mobile/business-15212476), we see another view where Natixis has links. The quote “Natixis assumes the following percentage writedowns (or “marks”) on Greek, Irish, Portuguese, Italian and Spanish debt, respectively: 70%, 40%, 40%, 20% and 20%. And then it assumes the banks would need to preserve a core tier one ratio of either 7% or 8% on these stressed scenarios by the end of 2012“, Is the writing on the wall or have we all (including me) ignored a tier of economy, or better stated a commissioned golden lining of profit as certain ‘providers’ remained behind the screens. “You take in greed from the customer and charge them all twice” (sing this line in the tune of Harry Nilsson ‘You put the lime in the coconut‘) and you charge the others in the morning.

Memory lane turns out to be more than just a freeway, as we are limited to walking down this road, the financial advisors and stakeholders are driving back and forth whilst limiting the views we have and the governments involved seem to be driven to not be too revealing on where the money is coming from. It is important to know that all this, whilst true is devoid of any crime, devoid of illegal transactions and possibly even devoid of misrepresentation, yet as I see it a massive misleading amount of presentation towards an audience of taxpayers. So what will happen in Sweden? I do not know, they seem to have an election in less than 24 hours and I find it interesting that it could have an impact. Another vote is soon thereafter on Scotland, which will have an economic impact too. My worry is why the impact is so far beyond the borders of the involved parties, which gives wonder to global statements in the trend of ‘Economic policies in isolation won’t lead to growth in Europe‘. I definitely feel uncertain to oppose such a view, but when we consider players like Natixis, is it perhaps possible that economic isolation leads to a few less dangers? Especially in Europe that issue should be deeper investigated by people who do not have a stake in the game. The writer of the piece I gave was Dr Bryony Hoskins. From what I read, I would categorise her as ‘a really smart cookie’. Yet one of her points is “Encourage collaboration and partnerships between different types of organisations, such as schools, local authorities, youth groups, charities and businesses“, I do not disagree with the generic view, but when we see the involvement on a ‘guiding’ behemoth like Natixis, is there not the danger of government enabling business to push for other long term changes that only serves the business and no one else? With assets well over 300 billion, this player has loads of pushing space, the question is: are they actually pushing?

There is of course the other side, is it fair to blame Natixis for anything (I have not been blaming them)? For example, if we watch all these computers around us with viruses and they are all Windows PC’s, can we state that Microsoft is making viruses? This is at the heart of it all, having your fingers in every pie, could give the thought that any bad pie was because of the fingers, we forget to look at who is making the pies. Yet as we see changes happening in Sweden and as hedge funds and retirement funds are going together, perhaps enabling one another, how dangerous is the stable view of Sweden at present? These searches led me to the attached document named “http___doc.morningstar.com_document_183a66452941e059812946b714604784.pdf”. I do not pretend to understand it. But the risk of ‘5’, when we consider retirement funds and ‘NSIO-OFM1403A’, would give me a reason to worry. LET ME BE CLEAR! I am not an economist!

I added the documents (at the end), so that perhaps those who do know, will know better.

So why am I here then? It seems to be silly, stupid and all other sorts of not bright in a place that I do not understand. The fact that a relative small nation like Sweden could have such stretching consequences on the market was beyond me, yet if I look at the Natixis annual report (at http://ngam.natixis.com/docs/812/834/AF58-1213.pdf), I am confronted with another question. “If one cog in the machine changes direction, what happens to the financial numbers of a behemoth like Natixis?” I am not stating that they are ‘hurt’ in any way. It might be less than a pinprick, but the fact that this company has stakes in all commodities and every large bank that had been slapped around in the last few years; it does make me wonder in light of the issues we faced in 2008. “What happens when a hedge fund bets on a nation failing?” is that such a leap? Only last month several made millions, betting against Banco Espírito Santo. Is my thought really that far from reality? Apparently not! George Soros is already doing this, betting on the collapse of the US stock and he put 2 billion where his mouth was, so was I right all along (at http://www.washingtontimes.com/news/2014/aug/18/george-soros-bets-2b-plus-stock-market-collapse-in/)?

http___doc.morningstar.com_document_183a66452941e059812946b71460478414_355_NSI_Bond_b9aeb, 14_355_NSI_Bond_b3c0c

Leave a comment

Filed under Finance, Politics

RBS of the Clan Goldman Sachs?

Well today the light shines a little brighter. As I was watching Sky News, I now see a stronger and more enthusiastic run to get these bankers under some kind of rational control. Will it work? Time will tell, however there is a start, and it might not take long until a strong voice could stem the tide of greed to a small extent.

We are however nowhere near a good solution. Mr Osborne (the Chancellor of the Exchequer) is about to take a page from a legally valid solution to divide the bank into 2 parts, a good and a bad bank. Yes, Mr Osborne, that will really help to take these billions of bad debt and add them to the tax payer’s burden! Not really a solution, is it?

To add other news moments that the UK economy is out of intensive care is not just wrong; it is a bad insight close to that of the Titanic playing chicken with an iceberg. No, I stand corrected. This decision is worse. You see, the Titanic had a few survivors; this approach might leave people alive, but destitute for a very long time.

So yes, there is a chance that the Royal Bank of Scotland will join Clan Goldman Sachs.

The idea of shares, making public and so on are ideas. I am not in favour of them, but perhaps Mr Osborne does not have a choice. You know, it is unfair for me to just complain, lay blame and not have a solution. What could be done is to keep the RBS nationalised, and remain an operating bank. Do a proper bank job by giving out small loans, do banking functions for those with jobs and create jobs. Also, the money that the RBS bank makes is used to pay off the debts, the bad loans and even create tax fortunes this way. Why not?

It is not like the banks at present are doing anywhere near a decent job.

The so called stated fact that the economy is in a better shape by stating: “Nothing better signals Britain’s move from rescue to recovery than the fact that we can start to plan for our exit from Government share ownership to private ownership.” is in my view horribly wrong. The fact that the UK is not in the red at present is just fortunate (and at less than 0.5%). The fact that most of Europe is down and there is no realistic view that this will improve within 18-24 months is not realistic. I read the claims that some made over the last two years. Good news was always bad news in the end and results had to be corrected downwards every single time. To rely on that a belief that the UK is now in a stage of recovery is in my humble opinion a case of really bad judgement.

How about playing it safe? Instead of quickly selling the good bank so that irresponsible banks can continue to endanger the lives of too many, hold on to it, make it stronger and get it into a shape where it is worth a lot more than it is now.

The current ‘noise’ that bankers are being chased for criminal charges are nice claims to make, yet the true culprits did what they did, and they never broke the law. Until the law changes, they are out of reach. The small fry we do get to prosecute will get nowhere near the punishment that is due. It is best reflected by Paul Moore, former head of Risk, HBOS. “The banking crises drove 100.000.000 people into poverty“. He is correct, what was done should be criminal and those involved require insane levels of punishment. Yet, as I reflected earlier, that will not happen. Lawyer Sidney Myers seems to be in agreement (or more precisely, I am in agreement with him). Mr Myers is not just a somebody in this field. As the head of Berwin, Leighton and Paisner this man wield a formidable legal cricket bat. It would make Colin Cowdrey instantly humble. Mr Sidney Myers is listed as one of the top 500 lawyers, this in a field that has over 120.000 practising lawyers, so we are in well informed top tier company.

To get a person convicted is near impossible. Getting the group convicted must proof all guilty, neither seems to be a realistic possibility at present. So we need to see a legal overhaul that changes the game, and selling of Lloyds and the RBS before that moment is in my humble opinion not a good idea. Sir George Mathewson, former CEO of the RBS has that same view (in regards to the legal prosecuting). He did however state an interesting line. “Where the information is made clear to the board and the shareholders” this comes to collected responsibility. The interesting part is what information? To get a clue on that, we should look at a book called ‘how to lie with statistics‘ written by Darrell Huff in 1954. It is a gem, an eye opener and it actually shows today’s problems. If we react to numbers and if numbers are ‘not incorrectly’ tweaked, then how is managed risk not anything less than misrepresented risk?

The bulk of data miners will look at profitability, but profitability of whom and how?

Uniting the views of Paul Moore and Darell Huff gives us part of this problem. Separate the data miner from the board of directors and we create a Star Chamber situation that lacks accountability for the simple reason that no laws can be proven to be broken. That danger, until countered gives reason for the now nationalised banks to remain as they are. SNS Reaal in the Netherlands is in that same scope. Until legal secure measures are firmly in place, protecting the taxpayer from irresponsible risks, other banks should not be allowed to continue, especially AFTER they move part of their failures into a bad bank.

The idea that the PM David Cameron has mentioned about selling the RBS at a loss is just not an option in my view. They should continue in the setting they are now, offering financial solutions to the UK citizens at lowest base +1% could over time turn the RBS and Lloyds into banks that are no longer in the red. Other banks have no reason and right to complain. They have been making customer services nearly impossible. To get a grip on that, take a look at The Netherlands where getting a mortgage reads like a tale no less imaginary then ‘the Hobbit’. As banks have been banking on higher levels of return on investments, smaller businesses and individuals suffered. They have no issue with credit cards as they charge 11-12%, however getting a mortgage seems to be a lot harder. So as customers come to the rescue of the RBS as they switch credit cards for 6-7% which will aid the government to get RBS back on their feet and even add some coinage into the treasury’s coffers (with a 1 trillion deficit), this could be a possible good solution. Are there any banks complaining? Well, that is the way the cookie crumbles. It is time for them to face the consequences of unadulterated greed.

The issue of holding bonuses for 10 years does sound nice in theory, however, how about appellant case HQ09X04007 and HQ09X05230. A case settled in the Court of Appeal by Lord Justice Elias and Lord Justice Beatson? A case where 104 members, were due their 50 million Euro in bonuses.

In that case I found this: “Bonus awards for all front and middle office employees who received a letter in December stating their provisional award, which was subject to Dresdner Kleinwort’s financial performance targets, will be cut by 90% pro rata to the stated provisional amount.

However their contract had this little hidden gem “It is common ground that all the claimants, including the three whose employment agreements did not contain any provision with regard to payment of a discretionary bonus, Messrs Sacre, Honeywood and Daley, had a contractual entitlement to be considered for the award of a discretionary bonus.” (Source: Case note)

How soon will that case get quoted in another court case to get a bonus freed up? Some miscommunication through contracts where no one is accountable, yet the bonus is immediately payable? Another option could be that these senior members will start playing musical chairs with friendly banks, switching each year all protecting one another stopgapping large bonuses on an annual basis (in their favour of course).

So how long until we get some level of miscommunication going on? If we accept the journal of Ronald Green from 1993 ‘Shareholders as Stakeholders: Changing Metaphors of Corporate Governance‘ and if we accept that banks and financial institutions fall in that category, then their responsibility is to profit, not to accountability, which means that their acts will focus on non-accountability to endure ruling of profitability. The latter part would be my take on the works of Milton Friedman.

There is the crux. Until serious changes are made to separate the banks, the profit in regards to  stakeholders and shareholders, whilst increasing a banks social responsibility, the cut-throat business they now do and the taxpayer currently pays for will continue.

 

Leave a comment

Filed under Finance, Law, Media

The allegiance of Economists

If we are dependent on the future of the US and Europe, then we should require and should be given access to dependable numbers. I think we can all agree that certain predictions are hard to get, because we should all be able to agree on the fact that it is a lot harder then we bargained for.

Yet, if we look at the numbers before and after then good news is never as good as predicted and bad news is worse than they thought.

This can be seen in several fields, but nowhere as visible as today when the expected unemployment rate of Spain, which was expected to get as high as 26.5% has now surpassed 27.2%. We could consider that being off by 0.7% is not that bad, but these people are used to work in increments of a tenth of a percent, which mean they were off 7 times. On a population of 47.2 million this means that they ‘forgot’ about slightly more than 330,000 people. That is the size of Utrecht (Netherlands), Leicester (UK), Bonn (Germany), Nice (France), Bari (Italy) or Tarragona (Spain). That is not a small miscalculation at all. These cities are reasonable large by most definitions. In the US the closest city would be Santa Ana in California, currently ranked number 57 by size in the US.

Everyone awake at present? This is important, as both the politicians and all that press buzz comes from these kinds of predictions by economists. I am not stating that it is simple or easy. It is however the case that these people often cost a hell of a lot and many claim that they are needed. Yet, overall we see a collection of ‘miscalculations’ in a time where every budget is slashed from point X to the basement.

Another example was a prediction made by the Dutch CPB (Central Planning Desk). This document was made in 2010; please take that into consideration when looking at these numbers. It is expected that the further the future prediction goes, the more likely that a deviation is to be expected.

Unemployment rate was to decline from 6.5% in 2011 to 5.25% in 2015.
Consumer purchasing power was to increase annually by 0.25%.
The Government budget deficit would decline from 4.9% in 2011 to 2.9% in 2015.

We will take a look at later predictions, but I think it looks clear that none of these predictions panned out to be close to correct.

Interesting are the following statements on unemployment rates “De werkloosheid daalt van 6½% in 2011 naar 5¼% in 2015” This was in the initial document dated March 2010 as I wrote previously. Yet the second document, which was published in September 2011 writes “Naar verwachting daalt de werkloosheid in 2011 en 2012 niet verder en komt deze uit op gemiddeld 4¼% van de beroepsbevolking in beide jaren“.

[Translation]
The unemploymancy is not expected to decrease in 2011 and 2012 and this would amount to 4¼% of the professional population in both years.

So, we would think that this looks good. A much lower result then predicted which is good.

Yet the NOS (Dutch news broadcasting services) reported on the 16th of August 2012 that the unemployment rate had risen in July 2012 to 6½%. This shows not only the inaccuracy of the prediction; it also shows that predictions that go beyond 1 year in the current economic climate is not that reliable an act.

So what is the issue at hand?

When we read about all those cut backs, all those measures where we see a decline in legal aid, healthcare and a league of other needs now or soon no longer an option, should we be wasting large amounts of money on a document which seems to be a political presentation? We could even come to the conclusion that it has little value beyond its need as a political presentation.

In a day and age where the bulk of Europe is under such scrutiny of reducing cost, spending large amounts, resources and other additional costs on these debatable statistics should be regarded a little less then it currently is.

If you want to know a little more, then you should take a serious look at a book written by Darrell Huff. It was called ‘How to lie with statistics‘. It was initially written in 1954, and it saw the light of day again in 1991. It is an actual gem of much amazement! The book is really thin, so it will not take long to read it, but those pages offer a lot more insight then many books I have seen since then.

Darrell Huff, (1991) How to Lie with Statistics Penguin; New Ed edition, ISBN 0-14-013629-0

In 2010 Coen de Bruijn wrote a new book with plenty of examples. The book is thicker, yet remains light and amusing to read and as far as I know at present only available in Dutch, which is a shame as I feel certain that this book would be appreciated by both students and professionals all over the world. ‘Van tofu krijg je geheugenverlies‘ (translation: Tofu leads to memory loss). It has loads of examples where statistics were (mis)used, some quite unintentional I should add.

We should also look at these documents on the CPB. There is no evidence whatsoever that there was an intentional misrepresentation, yet, when we see the results and the effect as many newscasts all over the world use these numbers which results to either lull its population to sleep, or to soften the blows of bad news are things that should be regarded in some form.

Why should you care?

This is not just a Dutch issue. This issue is global! Too many use their national numbers in newscasts and live by these predicted percentages, whilst in reality they are in no way a representation of the facts. Even considering that most are nothing more than predictions and should not be regarded as factual, it seems that when the discussion moves to cutting back, too many nations seem to be focussing on the wrong presentations. It is actually quite fun (and I swear a complete coincidence) that only 5 hours after I started to work on today’s blog that Dutch newsgroup NOS announced a new director of the Dutch CPB. The new director will be Laura van Geest (who was formerly involved with the setting of the Dutch government budget). She was chosen by the same group that investigated the Dutch bank crises (Commission de Wit).

So back to these cut backs and more!

It is not just about cut backs and austerity. Spain is having riot issues and Greece is not in a state that much better. Harriet Alexander from the Telegraph commented in her piece on Greece holding a fire sale (source: http://www.telegraph.co.uk/news/worldnews/europe/greece/10007606/Greeces-great-fire-sale.html).
This was a story that also made the news in the newspaper the Guardian by Rupert Neate. This also includes the Greek Embassy in London, so that place alone should take care of 0.000010714% of their debt (roughly). This means they only need 94,000 places of equal value to break even. The percentage should indicate that these acts are less than a drop of water on a hot plate. So instead of growing an option of income, it seems to show that the Greek government is bailing out, leaving a nation in utter bankruptcy and deserting its citizens.

I understand that they want to do something, yet what I am seeing is nothing less than a short term vision. When all is gone, when all possible ways of revenue, resources and incomes are gone, what is left? There are still the gold reserves for now, however when (or if) Spain, Cyprus and Italy sells theirs, what of value will be left?

It is time for governments to realise that they had given too much power to the industry and they are not getting them back unless they invoke a new way of thinking. If these companies continue to use a method of blatant outsourcing and under-pricing many for a tax reduced driven revenue that benefit just a dozen people, then it is time to change the game so that it is fair to its OWN citizens. My reasoning here is that their approach has even less morality then that of a mercenary, yet they claim to be the value to ‘that’ nation.

When we look at such overwhelming numbers of debt and unemployment rate, then we have an increasing responsibility to deal with that. Yes, in the first degree the governments need to get their budgets under control. They must more openly report the bad news and not sugar-coat it for whichever government is in office. It is also time to get back on the horse and wagon of in-sourcing! Consider the fact that too many companies are getting their Jeans, sport shoes and mobile phones from sweat shops and low cost places like Indonesia, Bangla Dash, China and a few alternatives, only to save a few dollars (of course per 100,000 units this results in a hefty saving). Yet on the other side those nations have hundreds of thousands without a job, and THAT bill is not with those companies. Even if they would only transfer 10% of these markets, we would see a decent reduction in unemployment rates and we see a local gain in trade. These are all good and essential things for Europe. The danger of not doing so would just set the end date of nations like Spain and Greece. In case you think that this will not happen, then think again. These economists will state on how things will turn for the better, and after they are proven wrong, then an excuse reasoning will surface and they walk on. Yet in the meantime a few with serious cash would have bought up areas of Greece and Spain for less than 10 cents on the dollar. Oldest rule in the book: “In confusion there is profit!”
Let us take the shown evidence that many placed online, so it is visible to all; let us all realise that WE hold our futures by work in actuality and they in debatable prediction do not.

Leave a comment

Filed under Finance, Media