Tag Archives: Ed Conway

February 1, 2023 · 14:02

Insecure Masturbation Fraternisers (IMF)

Yup, that is the slogan and to get there we need to take a little trip down memory lane before we get to the article that jogged my memories. You see, it all started on October 10th 2013 (at https://lawlordtobe.com/2013/10/10/economic-management-through-newscasts/) where I gave the readers “The same day I get the news on a diplomatic escalation in the Netherlands, sky News UK comes with an entirely different matter. Two elements seemed to be in play. The IMF suddenly lifted the economic growth for the UK by 1.4% for 2013 and for 1.9% for 2014. Those are numbers that are beyond remarkable. Sky News showed Olivier Blanchard the Chief economist of the IMF to make this statement. It was interesting that the IMF calls on Christine Lagarde to give the bad news and Olivier gets to give the good news. There was a shimmer of hope for realism as Ed Conway, economic Editor at Sky News was happy to not reject the notion that the IMF have been lousy forecasters in the past to say the least”, as well as “‘Suddenly’ there was good news, a week before the debt ceiling needs to be raided, whilst the US is still in shutdown mode. Let us not forget that Greece, who also suddenly had ‘good’ news last week is still beyond broke, in addition France and Italy are still not in good shape. The biggest issue is that the UK forecast, which was +0.6%, which was a pretty good achievement to +1.4%. That boils down to a miscalculation of almost $18 Billion! That is a massive miscalculation. There is no indication that such errors were made. Consider that the IMF had high criticism towards the tactics by Chancellor George Osborne, UK’s faithful exchequer.” Are you clued in at present. There is now an indicator that the IMF is nothing more than a political presentation tool to hand out lollies for others to look away as credit limits are increased. It is one of the reasons I went towards Brexit. After the speech by Marky Mark of the British bank (aka Mark Carney, a Canadian no less), I saw the dangers of staying in the EU. Mario Draghi was using a Credit card for trillions after the first trillion was a miss. Now, that happens, solutions are selected hoping it will set the outcome to another stage. There is no fault there, but then he does it again for another 2 trillion. Wasn’t it Albert Einstein that stated that only a lunatic will do the same thing twice hoping for a different outcome? And it wasn’t just me, others had reservations too. There was no outcry when Mario Draghi was shown to be a member of an exclusive bank group. So how much did his friends end up with catering to that debt. Consider that bank bonds have a registration fee and commission. So how much commission did these two dozen people get over three trillion? I can tell you that is would be up to 2%, implying that two dozen people ended up with $600,000,000, not a bad run. So why should the UK pay for that?

Now that we are all caught up (to some extent) it is time to look at the article (at https://www.bbc.co.uk/news/business-64452995) giving us ‘UK expected to be only major economy to shrink in 2023 – IMF’. Now I am not stating that this is not the case, it could be. Yet when we look to 2013 and later, the IMF has played the wrong spades in this game. So when I see words like ‘expected’ and ‘only major economy’ after it took the IMF and Creepy LaStrange (I think that was her name) a year to admit that they made an error of well over $18,000,000,000 I have issues with anything they claim. And when I see “The IMF said the economy will contract by 0.6% in 2023, rather than grow slightly as previously predicted” without clarity I have issues. The numbers could be true, but with the Russian clambake in the Ukraine, the Covid issues (especially in China), the labour shortages and a few other elements that influences the issues, we merely see  “Chancellor Jeremy Hunt said the UK outperformed many forecasts last year. But shadow chancellor Rachel Reeves said the figures showed the UK “lagging behind our peers”” and charts and numbers how bad the UK is doing, but the problem is that the IMF (or Insecure Masturbation Fraternisers) have been too much like a political tool. They proclaim that Russia is getting a positive boost this year but we do not see that it might be mainly woodworkers to create the  126,650 coffins for lost troops, so their economy is up, but who pays that bill? And in the stage of presentation my issue is that these people are all about ‘forcing’ the UK back into the EU so that their GDP can be added to their credit limit. The EU is running out of credit card space, it has been for a year and the UK revenue is essential to turn that about and people need to wake up to the unaccountable overspending the EU is doing. At present the EU debt is well over €12 trillion  with several nations having too much debt. We all know about Greece with over 193% of GDP, Italy surpassed 150% of GDP and Portugal surpassed 125%, Spain is almost at 120%, and France is at almost 115%. The credit limits have been reached and it does not bode well, so all hands on deck forcing the UK back into the EU, but the truth is that once the hardship is passed (which will take some time), the UK will become the power player and the EU will be reduced to a third world nation. So basically at present (a personal view) the German debt of 80% of GDP is the only economy keeping the EU standing. That is not enough and I spoke about that in the past (at https://lawlordtobe.com/2017/03/17/the-finality-of-french-freedom/) in ‘The finality of French freedom’ on the 7th of March 2017 where I wrote “Which is why France is a big deal, that whilst they represent one of four anchors keeping the Euro in place. With the British anchor removed, the stress on the three is intense, the Euro cannot continue with the remaining two anchors that is the desperate game Draghi is facing now. Weakness and non-decisions from 2012 onwards have caused this mess, and of course he is not done yet. As we see in Reuters, last Monday he stated “If non-high-tech companies adopt more innovative technology, that would provide a boost for European productivity“, speaking as the European Central Bank President last Monday, it that so? With what funds? Innovations requires money, such steps have a cost” here I compared the economy with a floating platform kept in place by 4 anchors. It used to be the UK, France, Germany and Italy. Now that the UK is gone, the platform is now in trouble as only the German anchor has any strength left. The economic sea is in turmoil and I already saw this in 2017. Then we got Covid and that stupid bear named Russia and now the economy is a problem, especially for the EU and when that breaks up, the US (Japan also) have no way to go but down and that is what they all fear, they can prolong this if they can bully the UK, but we have seen enough bullies. We all have had enough and that is why I chose Brexit. I could not predict Covid or Russia, but a next economic disaster is alway just past the horizon, there is always a next fire to put out and now the IMF wants to make matters look worse. As I see it, they need a whole range of better and more descriptive numbers. As it stands, at present I do not trust the IMF. Yes the UK could face another recession, but it will be nowhere as bad as the one the EU faces. In the end the UK is part of a Commonwealth and we all (Australia, Canada, India, New Zealand and the United Kingdom) need to united to face the headwinds of the coming storm, we owe it to each other with the acts of irresponsibility we do not owe the EU and we do not owe the US. The US has had over a quarter of a century to overhaul their tax laws. I made mention on this as early as in the age of President George H. W. Bush (1998) now 25 years ago. I say enough is enough and the IMF better give us a lot more and a lot clearer numbers than what we see in the BBC article. That is my personal point of view on the matter.

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October 17, 2013 · 16:16

A new third World continent

At the final moments we see the news that in the 11th hour an agreement had been reached. Should we be happy? For now many will be happy, for now the Financial industry is relaxing and happy that their rent is safe, but the stress will return soon as the next ceiling will be reached in another 18 weeks.

So what is wrong with the USA today?

It sounds all fun and games to blame either the Democrats or the Republicans, yet overall, both have some level of guilt. Yes, at present the Democrats are wearing the hoodie of blame and shame, but the Republicans are not without issues either.

Consider that the government has maxed out the USA credit card. They have until now REFUSED in any way to take responsibility for the utter irresponsible spending. No, taxing more will not solve anything. That story is old, stale and redundant. If America would like to be taken seriously ever again it would have to cut no less than $350 billion in 2014. So, NOT more taxation, but LESSEN spending. That means if all was equal that every American will get $1000 less in support, which means that it would not impact the top 3% of the nation, but the others will have to pay. This is not me supporting the rich, this is me placing ALL politicians in a limelight where every spend dollar will be shown in the spotlight.

The Democrat story will be that they have a solution, and if these people pay just a few dollars more than….. It is nothing less than utter Bullshit! (Pardon my French!) With a debt of 17,000 billion dollar, a budget drop of 350 billion would mean that the interest of the outstanding debt could not be paid for.

On the other side, the Republican side will have to stop this ludicrous boast of less taxation. That is not, cannot and will not be a solution (for at least a decade). The debt must go!

But there might be a solution with the UN. When America has  been diminished to a third world nation, then perhaps the UNDP will offer support to the USA. I know, the irony of it all, go figure!

I have remained in favour of the US remaining strong from day 1; however, the Democrats refused to step up to the plate to do what needed to be done. The Republicans had stepped up to the plate, but in hindsight, the result was almost nil and they have not endeared themselves to anyone.

The voiced speeches by the Democrats as they are shown on TV stations all over the world today seem to be in bad taste too. I will make an exception for Democrat Harry Reid from Nevada. He had been in the middle in of what might be called a ‘small hell’. If the Navy Seals are used to be between a rock and a hard place, then this man outclassed them to several degrees these last two weeks, as a Republican minded person I will admit to that. I will go further to say that should Harry Reid go for the oval office, then he stands a chance to convert a decent group of Republicans too. Values like respect and moral coming from Nevada? What a tangled web we see!

For many non-Americans it is not about the pure Democrat versus Republican fight, it has always been about the massive debt and the risk they push upon many other nations. It is even a case that the voice of many non-Americans should be heard. When a nation like America has so many corporations that operate their business outside of the USA and as such put hundreds of thousands of workers on the spot as their futures are linked to the status of the USA, then they must realise that accountability remains an international factor.

On Sky News there is a hilarious movie, shot in old fashioned silent movie style explaining the debt ceiling. It is fun to watch and it tells the story nicely (at http://news.sky.com/story/1155554/shutdown-senators-pass-bill-to-avert-default), I do however disagree with one part of it. At 1:53 Ed Conway states one part I do not agree with. “If America was to default, it is not because it cannot pay its bills. It is because their political system would not allow it“.

That is the part that has been my major issue!

It is what I disagree with. If we consider the T-Bill rate of 2.66 (as it was this morning), to get the 16,700 billion in debt, to pay it back, if it was all in T-bills, then the US had to pay an additional 444 billion dollars in ‘fees’. This seems very very little. However, this was not done in one day; it was over many many years. The problem is that as risk grows, the people will be offered a higher return, because if the debt cannot be paid, those bills will become null and void overnight. In the end, that money must be paid and overall, even though for now it is paid, the outstanding debt as it grows and grows, will mean that the chance of EVER paying it all back will become less and less. Consider that the following amounts are due: 2022: $1276B, 2021: $1228B, 2020: $1652B, 2019: $1885B, 2018: $1017B. So from 2018 onwards, the returns will have to be paid to those T-Bill owners. The amount will be in access of 1 Trillion dollars a year. Can anyone explain to me how that payment can be met 5 years in a row whilst the on average the collected annual taxation in 2013 will be an estimated $1.9 Trillion dollars? This means that from 2018 onwards 53% of all collected taxation will go to people owning T-bills. How unrealistic a goal is this?

This is part of the reality politicians ignore (as they will not be in office when it happens) and the people who gets settled with the bills will not have anything left.

Consider in addition that the Tax evasion bill has not been pushed into effect (which means the rich will continue to have additional tax shelters this year) and the Dodd-Frank Act is STILL not active, giving the financial sector too many non-accountable freedoms (which will make sense late on). If you want to know more about the Dodd-Frank Act, take a look at the next link, it has an interesting cheat sheet on the latter one. (at http://www.mofo.com/files/uploads/images/summarydoddfrankact.pdf). Morrison & Foerster is a global law firm. It might have been for internal use, so send them a thank you note if you download it. It is the easiest read in regards to this topic I have ever seen. They also have Patent and Trademark litigation, so I should send them my resume when I get my MIP after my next semester. Cool!

If you wonder about that reasoning after my strong voiced disgruntlement, then remember that the US is a great country. In my mind it was sold down the drain by politicians and exploiters. If we muzzle the first and neuter the second, the US could be a great nation quite quickly again, which would be good for Europe too. A win-win solution I say!

So why aren’t more people nervous about the entire deficit and debt ceiling? That is the part that does not make sense to me. Rolling over debts is a dangerous habit. The definition is clear enough, the dangers on adverse percentages is even more risky as politicians played 11th hour resolution makers. The second part is one that many more are ignoring. This is all based upon 100% of the due payments rolling over. What happens when another nation has a slightly stronger return? What happens when only 80% is sold? Is that such a hard concept? So at that point, where will the required $200B-$275B come from, additional raise of the debt ceiling? I have no actual facts to work from, so I do not know what the level of risk is, but consider that between 2018-2022 no less than $1T in investments are needed, and that the larger wallet friends (like the UK, FR, DE, IT and AUS) many of them at the maximum tapped out amount. How long until THEY (read governments) start the ‘swap’ game? Is that not how we lost most of what we had because we could not control the banks, now we let them advice on the same game, but now with full government budgets? So, we will not be looking at just a few trillion, when that game goes bust (and such a game always goes bust), the population will be stuck with a bill between $70T and $90T. How will we survive that?

Let us not forget that all those actions are taken in closed rooms with only a few insiders fully in the loop. If the next election causes reasoning for full disclosure on such events and only a referendum will allow for this, then the game will not just change fast, it will leave the USA on the outside looking in. A fact is that this risk grows almost exponentially each year the deficit is not dealt with. If Germany has been under pressure for the EU issues from Bernd Lucke and the UK from Nigel Farage from UKIP then we should expect additional players who will be fueling these fears. The upcoming price fight might not yet be the main event, but the debt ceiling issue that comes after the one on February 9th will be a main event and it will likely involve more players then just the US, several of them are unlikely to be one of the 18 Bernanke disciples.

So here we are, and only hours after Jill Treanor wrote her article ‘Financial Conduct Authority launches currency markets investigation‘ on the Guardian at http://www.theguardian.com/business/2013/oct/16/financial-conduct-authority-currency-markets-investigation-benchmarks.

This is a must to read!

Guardian’s Youthful Young City Editor, all complete with her own copy of SAS Miner plugged into her brain started today with “Suspicions that the vast global currency markets may have been rigged by major banks and traders has sparked the City regulator to launch a formal investigation into the £3tn a day market.”

This goes way further than just the LIBOR scandal. Earlier this year I had some doubts on all of this. My doubts were not on the interest part; my thoughts were that the main amount involved, which the percentages were based upon had also been tampered with in some way as well. I still expect my $1T bonus when that gets to be proven!

So what if the benchmark is not JUST the foundation, but part of more. You see, if we consider that governments have been involved in T-Bill Swaps, then the tradeable amount involved is not correct. More precisely, if the volume of T-Bill swaps is to the amount deficits go, then in which direction are the percentages rigged? It might accidentally involve the ‘accidental’ mentioned group of larger wallet friends. Now consider that Germany at present is the only one with an economy more on the stable and positive side then all the other players. So, would there be additional benefits for them in the long run? I actually do not know this (self-confessed lack of economic education), but the fact is that these issues go far beyond the banks themselves. Perhaps that is why the Dodd-Frank Act was never activated? It is just a thought.

So my advice for today, instead of long term investing your $5, this morning, have a pastry with your coffee, because at times there is nothing better than short term gratification and pastries will usually do the trick.

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October 10, 2013 · 00:47

Economic management through newscasts

When you think of the title, you might think that there is no real issue. You might think that certain events always take place and that the news covers it. However, when you monitor the news in several nations, you might see a different line of information.

So, let’s go through the motions and reveal that part that several did not consider, perhaps you should reconsider this in all sincerity.

The first red light was lit when I observed the Dutch news at the NOS. The message was innocent enough. The Dutch Bank has a new president. The man Klaas Knot was voiced on Dutch TV stating [translated] “although the numbers are not here yet, my feeling is telling me that we have passed the recession, and we are now at the start of economic recovery“.

In light of several numbers in the past that were in my personal view clear attempts to manage bad news, numbers that were used as proverbial straws to minimise actions are now surpassed that the economy is on recovery. As I stated before, we are more than a year away from that. So, why are people getting this news? The facts and numbers are a month away. Is it perhaps all about the US deficit ceiling? That 17 trillion dollar debt, oh what a feeling!

Klaas Knot is working from the information on growth from foreign nations. As they left the recession, the Dutch should follow. Another factor mentioned is that real estate prices are not falling any further. In that regard I wonder if that would be an actual possibility. If the houses fall any further, it would only mean that people stopped selling until the prices go up again. However, the NOS did report in summary that growth is not directly visible, especially considering that unemployment rates will go up further this year. I reckon that they might not improve until late second quarter 2014. There is also the actual growth to consider. I reckon that the growth in the first year is unlikely to grow beyond 0.5%, which would already be a good achievement.

So why do I without the economic degree oppose the president of the Dutch Bank who is likely to have a few economic degrees?

First of all, I am willing to doubt my view, however, after we have seen the Dutch predicaments as they cannot find the ability to cut 6 billion and as they struggle with minority groups to get anything done at present in that pesky regard of cut-backs. In addition, on July 11th I wrote a blog on the Dutch pension system and how they would cut 3 billion a year (in ‘Boosting Pensions’), that did not pass the Dutch First Room comparable to the House of Lords in the UK). The only question remains whether those 3 billion were part of the 6 billion euro package or not. If not then fine, if yes, then matters blow up in many faces. However, not to go for the worst scenario, the cut backs do mean that at present the purchasing power of Dutch citizens will decline more, so economic growth will remain out of the people’s reach until 2015. That does not mean that Klaas Knot is wrong, I do however belief that this optimism is linked to another event and should be slightly less optimistic.

The odd thing was that Klaas Knot was stating towards NOS news that it was important for political Netherlands to quickly come to an agreement on controlling government finances, also for 2014. That was a weird quote to be placed as a statement and not in answer to a direct question. So was he aiming for the budget agreements, opening the fountain of Dutch pension accounts or both? The latter seem to be in my mind. However, the NOS newsroom phrased that this was about the 6 billion in cut backs. Yet, if this is a play to get things rolling, it is good that it was followed by the statement from the Prime Minister to not get too optimistic. So why were we seeing these two parts?

The second red light did not become visible until the day after. The same day I get the news on a diplomatic escalation in the Netherlands, sky News UK comes with an entirely different matter. Two elements seemed to be in play. The IMF suddenly lifted the economic growth for the UK by 1.4% for 2013 and for 1.9% for 2014. Those are numbers that are beyond remarkable. Sky News showed Olivier Blanchard the Chief economist of the IMF to make this statement. It was interesting that the IMF calls on Christine Lagarde to give the bad news and Olivier gets to give the good news. There was a shimmer of hope for realism as Ed Conway, economic Editor at Sky News was happy to not reject the notion that the IMF have been lousy forecasters in the past to say the least.

In my view these two red lights are all about managing bad news. This is the preamble to the rising risk that if the US debt ceiling is not raised, we would end up receiving a spill of utter recession that will go on for a long spell. ‘Suddenly’ there was good news, a week before the debt ceiling needs to be raided, whilst the US is still in shutdown mode. Let us not forget that Greece, who also suddenly had ‘good’ news last week is still beyond broke, in addition France and Italy are still not in good shape. The biggest issue is that the UK forecast, which was +0.6%, which was a pretty good achievement to +1.4%. That boils down to a miscalculation of almost $18 Billion! That is a massive miscalculation. There is no indication that such errors were made. Consider that the IMF had high criticism towards the tactics by Chancellor George Osborne, UK’s faithful exchequer.

Three sudden good news moments are too much for just some level of chance. This reeks more and more towards managing impending moments of Doom. In that same newscast President Obama kept on chastising the Republicans. Yet, also to my surprise, several players in the media are giving little or no visibility to the republican side of things. The Democrats are so willing to raise debts again and again, yet the overspending as it is could sink us all and no one seems to be reacting to that part.

So is this raising of credit rates just so that a paper loan for the US can be parked on top of the 2 Trillion dollar debt the UK has? That part is speculation on my side, but it is clear that the recession is nowhere near solved until mid-2014 and only after that will we see decent levels of recovery. In that regard I do consider that those who are managing these numbers are playing a very dangerous game, I admit that this last part is my personal view, but I reckon that many in the UK, Netherlands and Greece can clearly see that improvements are pure speculative and there is no evidence that it will actually happen before 2015 (if they are lucky). The Greek situation was partially confirmed that Greece will need another 10-11 billion Euro bailout mid-2014, as reported by Jennifer Rankin (at http://www.theguardian.com/business/2013/sep/13/greek-bailout-back-on-agenda-as-eurozone-finance-ministers-meet-live), so a nation that is in recovery still needs 1000 euro for every Greek?

The reality of this global game will not be known for another week, but in the mindset of a Lemming it is likely that the quality of life we used to know, for now, only remains in the mind of the terminally ill and only if they do not expect to live past June 2014.

I sincerely hope I am wrong in this case, but the numbers are to some extent there, it seems to me that when coming to some conclusions the weighted events are considered. This is not an abnormal thing to do, however when we deal with several outliers in data, the weighted results tend to throw away those numbers and as such the bad news is never a correct, which does the trick for some, but it leaves Joe Public with a nasty long term invoice at the end of the journey.

 

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