Tag Archives: Euro

The inferring line

We all see the news, we see what is implied and we wonder on what it means, at least that is what some of us do and the news is always sided to the part they want to illuminate, there is no evil or bad intentions there, it is the way the writer thinks, or the view that the writer has. We might agree, we might disagree, but the writer is entitled to the view they have, at least that is what I think, so when I see ‘Technology of Business’ in the BBC, I wonder about the ‘Business of Technology’, it is not merely the reversal of a phrase, behind it lingers the fact that a formula and solution are reversible, or in Market Research there is the unwritten law (well, perhaps, seemingly unwritten), that it cannot be reversed, as such when the factorial analyses goes in one direction, the opposite would be a discriminant analyses, if the factor is proven, the discriminant analyses should always fail, no exclusions to that, if both make it there is a connecting factor in play, not really a covariant. When you realise this, there is a much larger truth to be seen. SO in this I do not oppose ‘Have we become too reliant on Big Tech firms?’,
I merely wonder about the elements behind this. When I was working in the 90’s in IT, on the edge of IT, there was an unwritten law to steer clear of one another in Big tech, so to not get in each others fairway and maximise profits, as such we see the advantage that players like Google and Amazon have. They researched their part and they went their own way. I am merely looking at these two because Microsoft, IBM, Sun and a few others were overlapping and they had their own way of setting the stage. So there might be truth in “Big Tech firms have been getting even bigger during the pandemic and their success means they have plenty of funds to snap up other businesses”, yet the involved stage is a little larger than projected. So I do not disagree with people like Sandeep Vaheesan when they give us “All of them will be in the M&A [mergers and acquisitions] game if they’re not already. Start-ups are more likely to sell out during the pandemic when they might struggle to meet their obligations and the buyout looks especially attractive – the pandemic is speeding up the buyout date in some cases”, I am merely seeing that this stage was in play for much longer and now we might focus on what the larger players are gobbling up, yet this is not any difference from what has been going on for 20 years.

It is the way business works, the larger fish eats the smaller one. Adobe ate Macromedia (I still believe it is the other way round), Novel got wordperfect, Microsoft ate entire shoals of software makers and so on. And yes, the pandemic has an impact that is much larger and that is not on the buyer, also not on the seller.  Some were surprised to see Microsoft acquire the game Minecraft for $2,500,000,000. The seller was mostly not unhappy, he went from mama basement software developer, to nerd to multi billionaire.   It is the game developers dream to get that done and his game was addictive as hell (I know, because I have it on every console). Microsoft grew it even further with the direct ear of over 200,000,000 ears of needy gamers. It is marketing heaven for Microsoft, and that is before you realise just how much money is linked to the optional micro transactions.

At some point these firms need to rely on merging and acquisition to grow, it is merely the way it is, and sometimes nature hands these players a windfall (like the pandemic). I believe that we are not too reliant on big tech, I believe that we are in a holding pattern due to a lack of innovation, the innovators are out there yet they are not getting the visibility they need to push it along and that is a larger stage than we realise. You merely need to search ‘innovation’ on Google to realise that it is marketed and it is labelled, yet true innovation is the one element that defies labels and marketing, because I saw and learned that what a firm does not understand (in 1997) cannot be marketed, it cannot be sold, because its leaders are drawn to memo’s with bullet points and that is when you see firsthand how true innovation defies labels. It is a conclusion we have seen too often and lately a lot more often than we considered it.

Even when we see some brands giving a platform to the real innovators, it relies on someone recognising it and I agree that it is not a bad idea, but I also realise that if I do not see everything, then someone else is likely not to see it either. It is not a good thing, not a bad thing, it merely is and there big tech has its first problem, how to recognise it soon enough. Not everyone is a Steve Jobs, who was able to recognise 9innovation when it walked through its doors, Jeff Bezos et al is a different stock, a different breed, they made THEIR innovation, it does not mean that they can recognise it when it hits and there the true innovators have the challenge, on how to set their IP in a safe space where it can be recognised without them needing to set the stage of losing a lot of money hoping others will see it. It is the inferring line that they face and all innovators must face it, for the most they will rely on big tech who can afford to squander a purse of coins and not worry on how it hits them, it makes the game harder for innovators, but not impossible, they have options and on a global stage it does imply that these players will seek the largest beneficiary. When we see Huawei against Nokia and Ericsson we see that the two Scandinavian players have to set a wager holding a dead man’s hand, When we see Amazon, who is seen against its competitors Google Play, Apple play and so on, yet is it not interesting on how Alibaba and Ozone are not mentioned in plenty of places? Ozone particularly is not as big, but it is still a contender and in the stage of IP, where that patent is more important than most think it is. In this Alibaba has a larger benefit as it also delivers into Russia. The inferred line is thinner than we realise and there are more players, even as some ‘market’ them away into obscurity, you see when these players get the IP, they grow on a global scale and that is what is feared in the west and also by a player like Amazon, you see, they are the largest player and will remain so, but what happens when the dollar collapses? The way that this US administration goes about it, that setting is a lot more realistic than some are willing to admit and when the dollar goes, the Euro and the Yen will take massive hits, losses of 35% would be a good day.

Should you out that consider that the Financial Times (at https://www.ft.com/content/dbe16ce4-f154-4985-a210-279fa1f53e24, and them alone) gave almost 5 hour ago “Millions of digital banking customers unable to access their money after German group falls into insolvency”, consider that an impact like this should make the front page on pretty much EVERY paper in the west, yet the Guardian has NOTHING, and others are like that, something that hits millions is left unreported. So when we see a repetition of the Sony 2012 events (the Guardian was the reporter there), how much on innovation and how much innovation impact will not be reported on when it ends up in the hands of Alibaba and/or Ozone? How much marketing shielding will Amazon receive? The inferred line is something else as well, it shows where we are told not to look, when does true innovation actually do that? 

A line that is ignored by plenty of players is a line that might show actual danger, especially when its impacts our lives.

 

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Strike a match

In Australia, an island with plenty of drought and as we go into the really nice and warm season, a match is not a thing we look fondly off, yet the strike of the match as we see it in France, where it is now uncomfortably cold is another matter. So is it ‘Strike a match!‘, or ‘Match a strike?‘, the strike called on regarding labour reforms could be the one that sets flame to that nation and set flame to whatever growth economy the French think they have. Reuters (at http://www.reuters.com/article/us-france-reform-protests/frances-cgt-calls-another-strike-against-labor-reform-others-refuse-idUSKBN1CE2CH) give us “the more moderate CFDT, now France’s biggest union, and the Force Ouvriere preferring negotiations” these two are starting to figure out that the long protected labour rights in France are to ancient. With a mobile workforce all over Europe, it will soon be about taxable products and services no matter where they are and as such France is pricing itself out of a market of workers, faster and faster. The weird part is that France has so much to offer, so the fact that the economy is barely reaching +2% for the longest time is less puzzling and is more and more about the uncertainty that the labour laws are bringing entrepreneurs. Now, I am all for protecting the workers over greedy corporations, yet the draconian shape that it has in France is stopping new waves from moving towards France. French publication ‘the Local‘ (at https://www.thelocal.fr/20171009/france-how-tuesdays-mass-public-sector-strikes-will-affect-you) is giving us “with particular reference to the pay freeze and rise in social security payments, plus the government’s controversial decision to dock pay for the first day of sick leave (jour de carence) to fight against absenteeism“, this implies that former president Hollande has been asleep at the wheel. The changes imposed are to some extent to top the coffers from taking too much of a hit and with minus 2.6 trillion Euro the French coffers need all the help they can get. In this, many newspapers are all about how the appeal of President Macron is wearing thin, yet the bulk of issues that we see in a few fields are ignored to a larger extent. So, when was the last time that a corporate CEO got time with a national ruler to discuss national taxation? Because that is exactly what Tim Cook CEO of Apple seems to have been doing in France. With one source giving us “So, when Tim Cook meets with French President Macron, the matter of taxes could make for an icy situation between the two men. Macron has said he wants to promote France as a place for tech companies to set up shop, but he has also been critical about the role internet companies, in particular, play in society. Macron has been pretty vocal lately about how France and other E.U. countries should close up the loopholes that Apple and other tech companies have been able to use to move their earnings around to more tax-friendly countries, such as Ireland and Luxembourg“, is it a first indication that the French economy is in a much worse shape than expected? The fact that Tim Cook is visiting Élysée Palace not because President Emmanuel Macron is buying his wife the new iMac Pro (an assumption from my side). I am not thinking the worst of the French president, but the issue is questionable, especially as Apple is about to open a massive site in the Battersea Power Station, so as Apple (as I personally see it) is trying to spend the money twice, once by spending it in London and the second time by getting tax deduction for the amount just spend in London so he can get a second building for free in Paris. We see too many people in charge giving in to large corporations too easy and too often. Mostly merely getting it done for their ego’s whilst they sell short the needy coffers of their own nation. They present it as the cost of doing business. Corporations like Apple can merely offer to go somewhere else and the politicians fold like wet paper backs, no hard backs amongst them. As Apple is now getting the news to invest in several nations, $10B for a plant in Wisconsin, $500M in China and as we now see (at http://appleinsider.com/articles/17/10/10/detente-possible-between-tim-cook-macron-over-apples-future-taxation-in-france-eu) “Macron’s staff report that past tax disputes weren’t discussed in any way, but Cook acknowledged a sea change in how companies should pay taxes specifically where they are earned, and not in one country to cover the entire EU” is just one side, so as we also see “Apple continues to deal with a ruling by the European Commission, which will force a $15 billion payment of back taxes to Ireland —when the Irish government gets the disbursing fund established. Ireland disputes the ruling, and says that Apple has paid all of its required taxes. The European Commission is suing Ireland for the lack of collection, and to force the issue“, an issue that has played for the longest time. And every time when I see that politicians are ‘offended’ by the lack of payments I wonder how they are selling the lack of their treasuries to the Irish people. Ireland must be the richest nation in the world when it regards a non-paid $15B as not an issue. So whilst public services are lowering in Ireland and as we see “Sinn Féin’s Finance Spokesperson Pearse Doherty said, however, that the government has failed spectacularly with today’s budget and suggested it was a lie to suggest you can cut taxes and solve the problem of the health and housing crises” (at http://www.irishexaminer.com/breakingnews/ireland/donohoe-defends-tax-cuts-despite-growing-pressures-on-public-services-809339.html) whilst there is an apparent issue with Apple’s outstanding $15 billion, we need to wonder on who the politicians are actually working for and who pays their income. Questions the media seems to walk away from. Yet this was not on Ireland, this is about France and the labour issues. It seems that Ireland and France are labour opposites. As Ireland is showing itself to be more flexible than a slinky in a hurricane, France is showing their flexibility to be zero degree Kelvin, which could remain detrimental to the financial growth of France in more than one way.

So as France is now huddled into a posing form of strikes all over the place, we see that emotions run high, so high that the French decided to release teargas, so that the people could cry over the matter. So as we see the news that 450.000 travelers are feeling the consequence of the French not agreeing with the labour overhaul, we need to consider how its impact is on the long term. You see everyone forgot about Marine Le Penn. After she was not elected, all the people thought they had evaded having to bite the bullet, yet in all this; the issue is not what had been surpassed, but what can haunt again. Instead of the media trying to figure out and illuminate what Front National had in store, with actual answers to how the issue could have been solved, the media bombards Macron again and again, the issue is not what happens when Macron fails. The issue is that when the dust settles, there would not be a long election, the labour parties would jump on the Le Penn bandwagon in a heartbeat leaving no options for France at all. The entire ‘Status Quo’ debate could quite literally blow up in their faces and when the next smear campaign starts, the people will in unity ignore the media to the largest degree. So as we see the nonstop battering of the strike and how bad Emmanuel Macron is doing, they are equally ignoring the fact that none of the other politicians have any better a clue or an idea on how to solve certain matters, which means that Front National is currently swimming free setting up whatever they want. Because the people might have shared some enthusiasm with some young sprout now President of France, but that trick only works once. In opposition, I doubt that Marine Le Pen has a clear path on how to fix the economy. The IMF is actually assisting her as we see Bloomberg with ‘Raising Taxes on the Rich Won’t Necessarily Curb Growth, IMF Says’ (at https://www.bloomberg.com/news/articles/2017-10-11/raising-taxes-on-rich-won-t-necessarily-curb-growth-imf-says), yet even as we see “The IMF report comes as governments in advanced economies face a backlash against the effects of globalization and technology. Voters from France to the U.K. have expressed frustration with what they perceive to be the unequal benefits of free trade and open borders”, the bandwagon that the IMF offers is equally a much larger problem. Even when we ignore the actions of Depardieu moving to Russia, the media has bungled the events for the largest degree. You see, as I mentioned before, whilst media is staring at the ‘super wealthy’ and giving rise to emotions of more inequality in an age where the people are pointed in the wrong direction by the media at large. Yet this group is a mere 330,000 souls large last year and less than half a million cannot supply the multiple billions (read: Trillion) that the treasury is already short of and the IMF knows this. This is the UK, in France, where less than 1% pay at the rate of 45%, we see an implied group of a little over half a million making it into that group. The reality that the IMF is selling is not realistic and everyone with spreadsheet skills can see that such a small group cannot address the trillions of debt that France has, so as we see that growth might not seem to e curbed, the issue is that the infrastructures are starting to collapse. In the UK the NHS is pretty much the most obvious example, but in all this France has a few issues of their own and none of it will be resolved until there is a fair setting of corporate taxation for the larger players who leech their zero tax vie Ireland and other options; options that the local shops can never rely on, which growth business inequality even more and a lot faster. Is it not weird that the IMF is in total denial through carefully phrased messages like “When it comes to corporate income taxes, the trend in lowering corporate tax rates is a pervasive trend overall in the last few decades. That is something which is often attributed to tax competition. There is, however, the interesting finding that this reduction in corporate tax rates has not been, in general, matched by a fall in corporate tax revenues”, which in my view means ‘corporate profit can be maximised through lesser taxation and increased production’, which is not for the corporations, but working a person to death whilst there is no quality healthcare is equally detrimental to the health of any nation. So how is that an option?

History has shown that again and again. This we see in the Guardian as it reported “Union leaders said they wanted to show a “profound disagreement” with the president’s plans to overhaul the state sector“, yet where will they go? That is the part the players are all ignoring and in this the media is one of the players. You see, we have seen quotes like “The main reason they voted for him was as a default, as a barrier against the risk of a Marine Le Pen fascist, far-right government“, yet when he does not deliver and as the failings of the left are stacking up. Where do you think the unions will go? They too require being ‘in power’ and they will align with anyone who gives them what they need to stay in power. The media has forgotten about that, or did they? That is the issue because the people at large are not in the know and when the bottle boiled over, they are in the ‘not caring’ team, which allows for a load of misinformation and the official media channels have lost the levels of reliability they need, they lost it the day after the election, especially when the failings started to show. So as the media blunders its way by blasting their current president, they forgot to notice that they have painted themselves in a corner. The question becomes: ‘Can it be fixed?‘ I am not certain, I actually do not know how some of the channels can regain the faith of their readers, that becomes the issue more and more and when that is too late, may Marianne symbol for the French people help them, because the others will not care and that is actually a lot more dangerous than any President Le Pen (should that ever happen).

So as we strike a match under the newspapers misstating our needs and matching the strike workers by educating on the dangers they are setting themselves up to, we might get some actual labour law evolution. President Macron is not wrong in the path he is taking. He is merely ignorant of the French population and their sentiment in certain matters. In that regard he has been a member of the Wall Street population a little too long, and regained his French feeling of solidarity much too short (as I personally see it). So this will not be resolved any day soon I reckon.

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Awaiting the next…

There is not a lot to do today, the French polling booths opened up 28 minutes ago, there is no certainty who will make it to the palace in Paris and I will not speculate at this time. In that regard, the shouting of ‘hacked’ by Emmanuel Macron seems shabby and shallow. In that same light, we see (what I regard to be) the the hilarious idiocy of Jeremy Corbyn with ‘We’ll fund spending by raising tax on £80,000 earners, says Labour’, which is a joke when you consider that it does not even get close to 20% of the spending spree he has in mind. The UK is in a state of hardship for now and that has always been a known fact. It is a hurdle that the right politicians can overcome and Jeremy Corbyn is showing again and again that he is not cut out for that position. The quotes “under the plans, 95% of taxpayers would be guaranteed no increases in their income tax during the next parliament” as well as “those earning above £80,000 should expect to pay more to enable improvements to the health service, education and other public services” show the level of lacking reality. Now, I have nothing against raising taxation just a little in high earner fields, yet that was to offset increasing the 0% tax bar so that those in low incomes would get just a little more. The improvements needed to health care alone will require billions, more than the tax increase allows for, which means that the UK Labour party is deceiving you. Would you vote for someone who actively and openly deceives you? You as UK voters, you should know this by now. In all this, these false promises from Labour UK is merely a clear sign that voting for them is voting for the downfall of the UK. UKIP is equally down, having no constituencies left and the lack of the charisma of Nigel Farage is a problem for them. Paul Nuttall is not getting it done, which is no bad reflection in him. He started as the underdog and with merely a Brexit, it is not enough. Farage was (even though everyone disagrees) a visionary, not the most diplomatically eloquent one, but a visionary none the less. Paul requires more than he has at present, more following, more issues to work with and these two are much harder to come by at present. The Lib Dems are not in a growing side either, but they already had a following and I will admit that Tim Farron did a lot better in this election than I gave him credit for. If he can connect to Theresa May and plead for essential parts of the Lib Dems message to become accepted by the Tories, he will actually have a game to play and if administered better than Nick Clegg did, he will have an advantage, one that surpasses the Labour party at present, which is saying a lot.

In all this, we have weeks to see the press give voice and give a swing to what these politicians are trying to say without sounding like Oliver Twist with ‘Can I have a little more please?

Whatever happens, it will not happen until Tuesday as Monday will all be about France and it will be about the next phase of France. In that regard I do believe that the outcome of the elections is merely a stage towards what will be opened at that time. No matter the win, a European referendum seems to be no longer avoidable. Macron is realising it and Marine Le Pen is merely waiting for Macron to screw up that one mistake is all that will be required.

That is the setting which we will see before the general elections and hen that happens it will impact the political actions in the UK. It all takes a turn when we look at the BBC with their reality Check, those claiming (read: Nick Clegg) that households would be £500 worse off is still not proven to be correct. If anything, they are 0.2% better off, yet there is a little over 6 months to go, so there is room for the end result to shift, yet by June this might be proven to be no longer a reality. It is those bog winded predictions that should be at the core of how we hold politicians accountable and in that regard Nick and Jeremy are not doing too well. Even as they hit out against Nigel Farage when he stated ‘I would much rather’, which is a preference and not a certainty, they themselves are all about ‘is likely to be’ which is actually also a prediction. It is the intonation of ‘it could be worse’ that counts. I have seen too much from certain people showing this path. It is the level of fear mongering for votes that really gets my goat.

Clegg was doing a similar thing less than 24 hours ago on how raising taxation would gain Sheffield £100 million (source: the Express). As I see it “by adding a penny onto every pound of income tax people pay. The tax, the Lib Dems say, would raise £103.7 million for Sheffield each year – £84 million for the NHS and £19.7 million for social care” the quote is merely wishful thinking, by raising taxation by even 1%, the lowest two groups could find themselves in near physical hardship, which now implies that the spike that the increase brings will result in NHS costs more than twice the amount they are gaining. By the way, that one percent addition, implies that Sheffield gets a little too much. When we get the numbers from HM Revenue & Customs, we see that in 2015 South Yorkshire the total taxation was a little over £2 billion, 1% of that is merely £20 million, so where is little Nicky getting the rest from? I am 100% certain that the quality of life in South Yorkshire did not go up by 500% in one year. Yorkshire pudding just does not give that level of taxable revenue. Which implies that Tim Farron has a problem by letting Nick Clegg babble all over the place. Perhaps Clegg was the Obi-Wan Kenobi of Jeremy Corbyn? In all this we see a need for clarity and getting the correct information to the voters, because any Clegg-Corbyn union will ruin the United Kingdom as I personally see it.

So what is next? What are we waiting for?

That is an actual issue, at times we can only wait until the results arrive and the UK will be awaiting what happens next. On this day, this Sunday, the UK will be reacting to what happens on the mainland. Even Greece is getting visibility by proclaiming to be the ally of Macron, so how are they valued at anything? Late last month we see how Greece is one target to make the debtor deal, whilst last week we see that the EU is trimming down the forecast for 2017 from 2.7% to merely 2%, in all this were the numbers adjusted? So after the deal, we get the bad news that the numbers were off by almost 26%, how is anything in Greece valued at all? (source: RTE).

So, those people who were off by well over 25% are all about engaging through the facilitation of a former French investment banker as President of France? In all this the UK will go forward in Brexit, because not doing so will have dire consequences. That risk is now coming from the US a they are trying to get the Financial Choice Act into place. So at the Guardian reported “If you want to buy a house, it will let salespeople push you into high-interest, high-fee loans because it increases their referral fees. On top of that, it makes it easier for realtors and mortgage lenders to sell you into closing services that they actually control – essentially giving themselves a kickback”, is just one of a few issues that give rise to the angers of more than the low income earners to become either a wage slave or homeless. You only need to have been there to know that you will do nearly anything to remain a wage slave. On the 15th of February of this year I wrote (at https://lawlordtobe.com/2017/02/15/pimping-the-united-states/): “If there is an upside, then it will be that the next financial event will have one enormous difference, the moment the US people see that their quality of life returns to a 2009 state, there will be 170-205 million people unanimously agreeing that the President of the United States is to be assassinated, moreover, when that angry mob runs to Washington, the army will not intervene as they will have been hit just as hard as well as their family members. So at that point the Secret Service will need to protect an idiot, whilst they have less than 1% of the ammunition required to stop that angry mob. Good luck to them I say!”, the Financial Choice Act might be the actual point that made my speculation a few months ago an actual reality. At that point we need no longer worry about either the IMF, Mario Draghi or the Euro. I reckon that once one of the players goes a little overboard for mere greed, the people will gut (quite literally) anyone working on Wall Street, at that point the people at the IMF will run for their lives, having no control over what happens next on the global market. Mario Draghi would essentially take the first flight into anonymity and the Euro would take a dive so steep that 10 EC members will take flight to their old currency overnight giving the UK and Sweden a large reason to smile for a few hours (they would still take a hit soon thereafter), pensions in Europe will become a thing of the past. Yes, this is speculation, yet when the financial services making a profit will over $150 billion a year needs more options for profit, I think we can all agree that the dangers of any future lost to the population at large will have dire consequences for anyone facilitating in that endeavour.

The weird part is that Frexit will actually increase the dangers to the Financial Choice Act to become a reality, because that is the way greed tends to go. Those wanting it are already massively rich and they will not care about the 98.4% of the population that they hurt to such an extent. So as we contemplate Brexit, Frexit, Swedone, Withdrawsaw, Czech-out, Donegary and any other fashion word for countries leaving the Euro (oh, I forgot about Beljump and Nexit), the US in their lack of foresight is about to give rise to financial fears to the global market at large. I will dig deeper into the Financial Choice Act in the near future.

 

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Omphalos and its syndrome

This syndrome comes from the references of Delphi and the ‘navel of the world’, which is what Delphi was regarded as. Nowadays, we see Omphalos syndrome as the misguided belief that a place of geopolitical power and currency is the most important place in the world.

I believe that to be no longer correct, I believe that it has been ‘converted’ into something slightly more generic. I believe that it should be seen as ‘the misguided believe that its choice of management and achievement of profit are the most important in the world’. Let’s take a look at a few examples.

 

A is for Apple

‘Apple apologises over Error 53 and issues fix for bricked iPhones’ (at http://www.theguardian.com/technology/2016/feb/19/error-53-apple-issues-fix-bricked-iphones) shows the first example. The entire error53 mess is a direct example. It goes on to the core that we now see “Apple has released a fix for users affected by “Error 53”, a software issue that rendered useless iPhones that had had their home buttons replaced by third parties“, The initial response “At the time Apple said that Error 53 was a security feature to protect customers” reads like a joke. The mere alternative that was open was that any non-Apple certified method meant the wiping of data would have been enough. It took me 5 minutes to come up with that solution. A mere auto wipe of all data. No we have to read quotes like “Apple has apologised for Error 53 and said customers who paid for an out-of-warranty replacement for their phone should contact AppleCare about reimbursement” as well as “Solving Error 53 does not re-enable Touch ID, as a third-party replacement of the home button could potentially allow unauthorised access to a locked phone by modifying the fingerprint sensor“. It would have been the simplest of solutions to go through the re-enabling system again. All these simple solutions, all because apple wanted to enforce the repairs of their phones to what they consider to be THEIR allowed service repair shops. An application of greed, to maximise profits, not the openness of what was once the Apple OS X through a Unix open source system, but the mere stranglehold of a greed driven corporation. It was brought to light by several articles in the Guardian and an initial customer service based solution comes “after widespread publicity and the Californian tech giant being served with a class action lawsuit over in the US and attention from a competition watchdog in Australia“, I wonder how many IOS people will start considering Android now.

 

E is for Eisai

This event is taking us back a fair bit, around 2000 Eisai came with its Alzheimer’s drug Aricept (donepezil). The fact that profits grow by 100% might not be the biggest thing on the planet. Yes when the LA Times (at http://articles.latimes.com/2012/mar/22/health/la-he-aricept-fda-20120323) reported “FDA officials should not have allowed it, the authors said, because the clinical studies Eisai offered in support of its application did not meet standards the agency itself had laid out“, in addition we see “it failed to yield the improvements that the FDA had set as a condition of approval“, in all this a clear investigation did not take place. It is still allowed, mainly because it is FDA approved. We see in other sources the claims like “Further, the higher dose was not superior on either of the pre-specified secondary outcome measures, which, as the FDA medical reviewer pointed out, argues that the cognitive difference was not meaningful“, which we get from the FDA Center for Drug Evauation and Research. Application number 022568: medical review. Aricept 23 mg tablets. (at www.accessdata.fda.gov/drugsatfda_docs/nda/2010/022568Orig1s000MedR.pdf), when we consider the source http://www.nhs.uk/news/2015/10October/Pages/Cheap-Alzheimers-drug-may-help-keep-people-out-of-care-homes.aspx, where we get the quote “a year’s worth of donepezil costs around £21 a year, compared with a year’s worth of care home costs – estimated to be between £30,732 and £34,424 a year. If the results of the study were replicated at a population level, this could save the NHS a considerable sum of money“.

This is where we see another version of Omphalos syndrome, “the misguided believe that my version of cost cutting is the best in the world“, at this point, we should investigate the players and consider whether a case for criminal endangerment exists. The fact that sources have shown ‘evidence’ as per 2007 gives rise to a failed system, not just the NHS, but the leeway for pharmaceuticals as, from the given reports failed to yield the improvements that the FDA had set as a condition of approval, making the question why on earth was it approved at all and why are certain diseases used for marketing a cash cow, more important why is the NHS not loudly and outspoken dealing with this? Especially as www.NHS.UK is involved in promoting articles in favour of Aricept (donepezil).

 

I is for Insight Enterprises

This is a side that rests with Omphalos, yet in all this it is in equal measure a situation we must accept. Insight Enterprises did nothing wrong, it made a choice, it’s governing body stated ‘this is the best path, this is the golden solution’, we must accept that any governing body, being it corporate or governmental will be ‘smitten’ with Omphalos Syndrome. So as Microsoft changed the partner program in 2014, Insight Enterprises saw the filling of its corporate coffers trickle down to zero. (at http://www.crn.com/news/channel-programs/300079674/insight-enterprises-absorbs-another-hit-after-microsoft-partner-program-changes.htm). We can debate the mess Insight Enterprises received, the near simple answer is that Microsoft had to change programs, any large corporations will do that. Any program they offer and device tends to be ‘fluidic’ over time. Yet when we see the quote “The changes also affected Microsoft’s Licensing Solution Providers, like Tempe, Ariz.-based Insight, which are the only partners Microsoft allows to sell licensing agreements to large corporations“, which is now showing another side. Does this make Microsoft narcissistically selfish or just plain sociopathic? You see all narcissists are selfish, but not all selfish corporations are narcissistically in nature (which is proven as greed we put the greedy in front of a mirrors), yet in all this, is this a sociopathic side in Microsoft? Well, that is a debate for another day as the entire Omphalos topic would soon get too murky.

 

O is for Omphalos

As shown in the last example, we tend to see Omphalos in a bad light. Which is not all correct either. On the other side we can take Bill Gates and his Omphalosian approach to IT. This got us DOS and later Windows. On the far side of the scale of limiting, there is the view of the truly visionary, but that view needs a start. Here the Omphalos syndrome works in another way. As I see it, we can accuse Bill Gates, Steve Jobs and Larry Ellison on that list. Yet, we only did that AFTER they became successful, the not so successful are usually never heard of again.

In this world today, the foundation of ‘the most important place in the world’ is less and less applicable, it becomes a world of solutions, an amalgamation of aggregated values (the European Economic Community being a nice example). Yet the foundation of how to go about it was done in a very Omphalosian way. Especially when we consider the past blogs on how only self-proclaimed departures were the option. Which is exactly where Brexit is now. As Brexit gains momentum we see that the Omphalosian solution was the most dangerous here, it took one of the smallest nations (Greece) to push their non-accountability for the entire EEC to be in turmoil, with now a decent chance of collapsing the EEC as well as the Euro as a coin. Even as the United Kingdom is not on the Euro, France is and a Brexit will soon push for an additional Frexit. In that regard, the Financial Times quoted Florian Philippot who stated “the idea of challenging greater EU integration had become “taboo” in Europe. “The more we talk about it, the more people will vote against it,” he said” (at http://www.ft.com/cms/s/0/58f9cc98-ce51-11e5-92a1-c5e23ef99c77.html#axzz40fDAW3BL). This is yet another side of Omphalos, actually two sides. The foundation of Omphalos is based on one view, if that view does not evolve or alters as time goes by, that view becomes less and less actual. The view becomes an act of obstruction at best and debilitating at worst.

In the second part, we have forever seen the Omphalos syndrome in its power core on the scope of government (read: Communistic), in that view we forgot that it is corporations with their view on the ‘only’ solution that is now impacting the lives of people in several (read: many) nations. In that same view we see that the old approach to currency is no longer the same. Most values are too dependent on independent views of static organisations and their push for changed industrialisations. How come that the value of a coin is now directly impacted by places like Dow Jones index, Nasdaq, Standards and Poor, the IMF, the ECB and so on? Governments allowed themselves to be directly be valued from what is perceived to be an ‘independent’ side. This is the other part that drives Brexit and other plans to no longer be part of anything. There is a near global consensus that these sources can no longer be trusted. That their view is to some extent ‘Greed Incarnate’.

As I see it, there is no true independence anymore. When we read that Eagle Capital Management Invests $293000 and that J. W. Burns & Company Has $533000 invested in in SPDR Dow Jones Industrial Average ETF (DIA). When the index itself is invested on, the expectations of improved value must be met, where does that leave us?

 

U is for You!

Even when we see the old and the new versions of the Omphalos syndrome, we need to realise that what once seen as short-sighted and limited is now not so limiting. It remains (as I personally see it) as short-sighted as it ever was (only in the rarest of occasions is it visionary), but now, the impact is no longer limited to one government, now its short-sighted impact is nearly global. It hits parties in many nations and it does not stop there. You see in a governmental approach it is ‘set’ to be what is best for its citizens and in case of the EEC it is what a group of nations see. Now consider the application from corporations that impacts governments on a global scale, offices of standards that impact the dangers to lives on a global scale as it does not enforce its own given values. How can we be aligned to a limiting view that could cost us our lives and our choice of living?

So as you consider ‘the misguided believe that its choice of management and achievement of profit are the most important in the world’ also strongly consider what it will cost you, not now, but down the track.

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A seesaw for three

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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The Cat and the Bacon

I have written about the economy on several occasions, I always proclaimed that it was pure insight as I saw it and that I do not have a degree in economy, I am an analyst. Yet today these borders of non-knowledge might get stretched a little further than previously shown. Today is all about the Euro!

I personally never believed it to be a good idea. We saw how all these politicians were proclaiming on how ‘good’ it was for the economy. Was it? You see, it might not matter for the bakery on the corner, the grocer next door or the butcher across the street. It matters to the giants of industry and how it benefits there bottom line, the extra coin for the members of the board, not for the people in the stores, that image tended to be a virtual one, it virtually did not matter at all!

I saw how the change of coin, from the Dutch guilder, things suddenly seemed to be 50% cheaper (2 guilders equalled one euro), but the math is easily made there. What those people experienced that buying a chicken on the market was 6 guilders, it became 3 euro’s, but then what? In a little less than 4 years that chicken from the same dealer ended up being 6 Euro’s. An annual 25% hike in prices. The chicken example is a little extreme and many articles did not raise that quickly. Some will mention the issues of milk in the Netherlands, but that is an issue much more complex and the Euro itself is only a small fragment there.

So, could I be wrong?

That is centre in this debate. I could be wrong, but it is very likely that we are all looking into the wrong direction. It would be nice to blame places like Greece, and they are definitely having an effect, yet the issue is not the EEC, it is more and more pointing towards America. You see, we are all in a bad shape, no one is denying that, yet in American, things have not gotten any better for a long time. Let’s face it, some people are now shooting at the police for fun, or for reasons of aggravation and despair. The people in America are suffering in many ways, but the all holier than DOW keeps on rising in addition, their currency is massively on the up, which under the issues showing, seems a little too good to be true, it an assumption, but is it fair and correct?

That remains to be seen, when we look at the Guardian, we see (at http://www.theguardian.com/business/2015/jan/08/euro-dollar-1999-levels-deflation-oil), the following: “Recent data for the Eurozone has proved weak, with inflation falling and unemployment rising. Italy remains in recession while France has seen consumer and business confidence wane. Only Spain and Germany among the major economies have appeared to gain in strength, though Berlin has failed to kick-start GDP growth and Spain still suffers from an unemployment rate of 25%“, these are facts, they are not in denial, but where are the results of the UK (which were not great)? You see, these facts are true, but there is more to consider (besides Greece dragging the EU down). What about Sweden and the Netherlands? Not the greatest economies compared to the big 4, but still sizeable ones, we can admit that they are all struggling, yet the fact that we see a ‘propagated’ booming economy in America needs to be addressed too.

Who statistically has a job?

When we consider an article in Forbes last August, where we see “My friend and the waitress are victims of a massive but hidden problem called underemployment. Watching falling unemployment numbers being reported at 6.2%, down from nearly 10% four years earlier, is simply misleading“, attached to a headline ‘Tackling The Real Unemployment Rate: 12.6%‘ (at http://www.forbes.com/sites/louisefron/2014/08/20/tackling-the-real-unemployment-rate-12-6/), we get to see the picture that the people are living, Wall Street is ignoring and  the current administration of the US is misrepresenting. So is the Euro doing this bad, or is it dragged down by a misrepresenting nation carrying a 17 trillion dollar debt? By the way, did we not see something similar with Tesco and a few hundred millions misrepresented? How did THAT turn out?

When we see this quote in Forbes we see the real danger “741,000 discouraged workers – workers not currently looking for work because they believe no jobs are available for them – are included within the list of marginally attached people. Another 7.5 million were not considered unemployed because they were employed part-time for economic reasons. Those people are also called involuntary part-time workers – working part-time because their hours were cut back or because they were unable to secure a full-time job“. The danger is twofold, how many of the 741,000 are over 50? It seems that companies, especially those with younger, inexperienced executives are afraid to hire people with skills and know how. In regards to the 7.5 million part time workers, does that include those Wal-Mart people, who need to rely on food stamps and all kinds of other support systems? I am not debating their need, more that the owners each walked away with well over a billion in 2013, whilst its staff was on governmental food stamps. How does that ‘boom’ your economy? It almost reads like ‘gangbang’ for your buck whilst the governmental administration bends over, a lack of fairness on more than one front, one could state!

Booking a balance!

You see, the unbalance goes a lot further, the US as a nation can float its currency, this is not a bad thing, normally every nations does it to some extent, to weather a really bad time, so that business and consumer is not hit with weird spikes, it is an issue that has happened for a long time and it will continue to happen, yet the Euro does not have this privilege, these economies are set to what is done in Bruxelles (Brussels), and as such, it is likely impacted by spikes to some extent. However, as their currency is spiking downwards against the Dollar, which seems to be decently overvalued, we get a new danger that the drag will continue, whilst no one seems to be looking and the bubbled version of the US Dollar. So is my non-economic view correct, right or wrong? Yes, there are three options, because, what is correct may still not be right.

Consider, that the Euro nations are not doing so well, which is true after all, that fact does not make the dollar better does it? It is correct that the dollar looks better because the Yen and the Euro looks less good, but the economy in America is not booming, if it were, we would see a lot more people gainfully employed without the need for government support, you see, here we get to the matter on what is correct and what is right. If the US is having a virtual boom, we are judging the US on merits of misrepresentation, which by the way might not be illegal, but should an economy not be held to its cost as well? The US debt is still increasing; the people (a large amount) are not paid to a level of being self-sufficient. We see an economy that had made the thirteen amendment in 1865, there we see “Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction“, in 1867 the US got the Peonage Act of 1867, where Congress abolished “the holding of any person to service or labor under the system known as peonage”, as well as specifically banning “the voluntary or involuntary service or labor of any persons as peons, in liquidation of any debt or obligation, or otherwise”, now this all sounds pretty clear, and having a job is not this, but when a population is forced to work for scraps, whilst still requiring food stamps, it seems that we now have an issue. no one is a slave, but under the conditions where the very rich grow their fortune at well over 30%, whilst those on average grow less than 2%, we should clearly see that the balance of fair play is no longer anywhere in sight. I am not against making profit, it is a capitalistic form that has merit, yet when we see six members of a family, each making a 9 figure number, whilst the 1% of America it employs makes less than the line of poverty, we need to ask serious questions. In addition, as we see a group where they deal in articles that are from questionable sources (at http://www.theguardian.com/global-development/2014/jun/10/supermarket-prawns-thailand-produced-slave-labour), where the quote “A six-month investigation has established that large numbers of men bought and sold like animals and held against their will on fishing boats off Thailand are integral to the production of prawns (commonly called shrimp in the US) sold in leading supermarkets around the world, including the top four global retailers: Walmart, Carrefour, Costco and Tesco“, we are confronted with a governmental issue, where it allows for profit at expense of its own industries in Louisiana, Alabama and Mississippi. We can acknowledge that the oil spills have been detrimental to the health of the industry, but when the big players get their goods overseas, how can any economy recover, especially as these overseas players (as implied by the Guardian), can rely on profits through slave labour. This goes further than just the shrimps, other food items or clothing. It shows a disconnection from the people, you see economies are more than just behemoths, we could see them as parasitic in nature, which sounds wrong, but is actually very correct. The retailer lives off the people, but can only do so if the people can spent. It is a symbiotic relationship; it requires the host to remain alive. Large businesses have forgotten about that, they focus on where the profit is, not on the required equilibrium, so as places like India grew form a third world market into a super economy.

Cycles of equilibrium

The people outsourcing, seem to forget that its own population is every bit as important, so as that group falter, so will businesses slowly but surely. As we see that cycle progress, is it not strange that the US Economy remains booming? A nation with many people unemployed; even more people in a state of poverty; 15% in poverty, this gets us a little more than one in seven in poverty, meaning that big business is now relying on revenue based on the remaining 5 out of 7. It looks nice in a statistical model, but as the overall quality of life goes down, that group of 5 will dwindle down too, when that happens, the economy will falter in new unprecedented ways, leaving the only option that a few people walk away with all the money they can carry to their own island and the rest is left without anything. This can be read as misrepresentation as well, but is it far-fetched? that part is not a given until we see an actual economy that truly improves, which means that the poverty line descents, people will start having a liveable income, that will give rise to shops needed and more jobs created and all that opts for the US national debt to go down by a lot, something that this administration has not achieved, more important, it might take 2-3 administrations for that debt to be addressed in any way, shape or form, which only fuels the wealth of banks and financial players. If it is addressed too quickly, the poverty line could soar far further then 21%, giving an instant crises in the US that goes beyond the imaginations of many and will be one nightmare Wall street did not foresee to this extent. Yet how would that affect the Euro? Well in two ways, as the US people will become more and more desperate for jobs, suddenly the economy looks even better on our grass, but it is an ‘economy’ for the wealthy living, the rest will see a further drop in living conditions (an assumption on my side)

So as big business ties the cat to the bacon (meaning: opportunity knocks), we must wonder how these elements call for a booming economy as an economy is reliant on people spending money, buying items and none remain to do just that.

You see, there seems to be a fluctuation on what an economy is (seriously!).

The first one we see is: “the state of a country or region in terms of the production and consumption of goods and services and the supply of money“, which is what we all believe it to be, yet the second meaning “careful management of available resources“, which we can take as “offering good value for money” and “a financial saving” last there is “the cheapest class of air or rail travel“. Weird or not, they all apply. I got them straight from the Google dictionary.

Now when we mash them we get: “the National state in terms of the production, the cheapest way possible, whilst advocating good value for money, whilst ensuring the highest efficiency in regards to managing our available resources, whilst optimising consumption of goods and services, ensuring the best supply of money through contribution“. Does that not sound very familiar? You see, it seems like a booming economy, if you are getting the money. The consumer is left with the option, whilst not guaranteeing a pool where such sufficient income can be maintained, almost a death pool of discontinued certainty.

So, how did we move away from the Euro? Well, I actually did not, you see, these elements have been a factor with American companies all over Europe, now consider how much taxation they did not have to make due to tax havens and specific invoicing? You see, a government is depending on its coffers to be filled so that there is a growth and continuation of an economy, whilst these corporations are now stating that this inherent side of the symbiotic relationship was not theirs to care for. Now we see and a loss of balance as well as a first glance on how dislodging an economy can have long lasting effects. As the Euro has less ‘floatation’ options and as some unbalanced it even further, we now see no options on the Euro side, whilst the Dollar has legal options to float its currency, unbalancing the amount further, the upped representation does the rest!

Blame Game

Now, it is important to see that I am NOT blaming the dollar for the Euro, yet it must be said that those behind the Dollar (businesses) have presented themselves overly good, so there is a secondary effect, whilst we see more and more often a changing scale of what is to be reported on. Let us be clear, several EEC nations have done this in the past, but the balance is now changing further and further, giving no one a clear view of what is real, we see presentations that are all a little out of whack, so as Europe starts its plan of credit easing, we will see the numbers jump, yet in what direction cannot be predicted (not by me at least), because, if investors walk away ‘en mass’, no credit easing will do any trick, if you doubt that then look at India, is it not weird that NTT DoCoMo / TaTa, the big winner of 2013/2014 suddenly wanted to dump its one billion share? Is it not strange that in this ‘booming’ economy, all are looking on the inside? Is a booming economy not about growth? So as we ‘see’ a growing economy, is that not (usually) a sign of growth? So why are the mobile providers T-Mobile, AT&T, Sprint and Verizon all steering clear of the Indian market that is seemingly up for grabs?

So is the US economy booming, or is it going boom-boom?

 

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Billion Euro Fine

It seems that the Dutch government has painted itself in a corner. The parties involved are now back into all levels of talks to find a situation where a majority can be found that can live with the situation. This means that there is every chance that the 6 Billion Euro in cut backs will not be met. This means that an additional Billion Euro in fines will go to the Dutch treasury. So, is this a continuing level of evidence that the Dutch administration had been handing out funds it could not pay for in the end?

There is no excuse that can validly be used.

In the first degree, there is no excuse to use the economy or the recession. There are in my mind clear levels of visibility that there had been levels of ‘bad news management’. I had voiced my concerns on several occasions that the economy was nowhere near what was ‘predicted’ by the CBS. I was proven correct on more than one occasion and that whilst I have no advanced mathematics degree. It makes one wonder how those high priced calculators get to their numbers, doesn’t it?

When Germany started to tighten its belt from 2009 onwards, too many were on that horse of optimism where many stated that such rigorous cut backs were not needed. Now, four years later the cutbacks required are a lot more then would have been and that bill cannot be paid. On all sides minorities cry out that the cut backs on one side and/or tax increases on the other side are not proportional and that these actions will not benefit the economy.

I expect one more jolt of bad news and certain parties will stand up opening the retirement funds for the benefit of now. Which means that the economy will now need to rely on a jolt of ‘annexed funds’! Why am I stating this? I see these funds as the ownership of those now working. Whether you start or whether you are at the end of your working life. The funds of you and me are used to steer away from the actual issue of a parliament not able to control its spending. There are additional issues linked to this.

A Dutch blogsite called http://huizenmarkt.blog.nl from Juul Dijkhuis stated “De huizenprijzen zijn inderdaad kunstmatig hoog gehouden, maar mede hierdoor zijn de economische zorgen in Nederland ook kleiner dan bij de ons omringende landen. De gevolgen van een flinke daling kunnen namelijk groot zijn.

[translated]: The house prices are indeed kept high through artificial means, because of this the economic worries are not as high as those for the surrounding nations. The consequences of a sizeable reduction in value could be severe

This is just the first one I found and this statement does not stand alone in this matter. This article came from 2011, after the crash and in the timespan when bad news management (as I see it) was already in place. So consider the issue that the Dutch are not dealing with one issue on economy, but on additional issues in that same year we see SNS Reaal Property Finance, which is no longer here, was already dealing with minus a quarter of a billion for 2011. The Dutch site Calcasa (www.calcasa.nl), which is an independent technology firm, specialised in property value assessment reported in 2012 that in 2011 Dutch property value went down by 17 billion. As stated residential (-1.3%), offices (-1.9%), shops (-5.9%) en corporate spaces (-3.5%)
(At: http://www.calcasa.nl/nl/over-calcasa/nieuws/detail/kwartaalbericht-waarde-nederlands-vastgoed-met-17-miljard-afgenomen-in-2011/105).

So was this just another form of ‘bad news’ management? There is a lack of clarity here, yet consider that already in 2011 we see that different separate branches are trying to keep the good view, and from all indications the government did not intervene, did not (so it seems) openly correct the events. As stated, events that would have impacted the Dutch population in more than one way.

In support we see issues that are linked, but from another side altogether. If we look back to 2011 and if we look at the minister of Education, culture and Science, the honourable Mariëtte Bussemaker We see the following:

In de brief aan de Tweede Kamer «Meer dan kwaliteit: een nieuwe visie op cultuurbeleid» van 10 juni 2011 (Kamerstuk 32 820, nr. 1) wordt aangekondigd dat het kabinet wil onderzoeken of het mogelijk en wenselijk is het eigendom van de gebouwen van de rijksmusea aan deze instellingen over te dragen.

[Paraphrased] House document 32 820 nr 1, Parliament will investigate whether it is possible and desirable to transfer ownership of states museums could be transferred to the institutions that occupy them” This is fair enough, yet in that same document the next part gives us part of the light.

DTZ Zadelhoff heeft voor het vastgoed van de vier door Deloitte onderzochte Rijksmusea de taxatiewaarde onafhankelijk vastgesteld (waarde in het vrije economisch verkeer). Daaruit blijkt dat er een aanzienlijk verschil bestaat tussen de (hogere) boekwaarde van de vier musea op de balans van de Rgd enerzijds en de (lagere) marktwaarde van het vastgoed anderzijds (circa 25%). Dit verschil, dat voor een belangrijk deel kan worden verklaard door bewuste keuzes in het verleden voor maatschappelijke investeringen in een stabiele museale omgeving, kan zich openbaren wanneer er besloten wordt tot overdracht van het eigendom aan de Rijksmusea.

[Paraphrased] Zadelhoff has ascertained an independent value of four the investigated state museums by Deloitte. From there we found that there is a difference approaching 25% between the free economic value and the value in the books. The booked value is a lot higher than the actual market value. The difference, which can be explained through choices in the past of social inclined investments, could become visible when these properties are transferred.

So when we look at the links, then we see a government that is already visibly aware that there is, what I deem to be a surreal over valuation of properties. It could be that the values are actually a lot lower than what the books incline them to be. How far does this stretch? Because, if that is true and it had been known, then certain measure would have had to be taken long before July 2012. If actions were not made, then we see that the economy, linked to the value of a nation gives us a different percentage. So which additional levels of management are in play? (I actually do not know). But it seems to me that the more issues are linked, the more the evidence indicates that non-acts are beyond acceptable. Those parties now bickering over scraps to avoid hunger are either ignoring or not mentioning that the scraps will not make up for a meal to begin with. So instead of finding solutions, we witness debates (read bickering), where the result of the conversation will not be solution no matter how much a party gives in, which means that the only treasure left are the retirement funds, or more aptly put, the family silver!

That will result in the situation where all are left with less, whilst the political parties seem to remain in cycles of ‘bad news management’. When we look at the annual reports of some of these museums we see the text “De stichting beoordeelt op iedere balansdatum of er aanwijzingen zijn dat een De stichting beoordeelt op iedere balansdatum of er aanwijzingen zijn dat een vast actief aan een bijzondere waardevermindering onderhevig kan zijn.

[Paraphrased] the foundation decides on every balance date, whether indications exist that a fixed-asset is linked to a value decrease” so was it? From the parliamentary paper we saw mention that at least 4 have this issue. Was this indicated, or are we now dealing with a time zone issue where the moments of report and ‘enlightenment’ of value reduction seem to miss one another?”

Again, I actually do not know, yet we do not see too much information in this regard. So the active question of linked values are an issue not to ignore, especially if the value had gone too far down, the consequence is that cutting back 6 billion, an amount they are not able to manage now, would not have been enough. This is important to know, because there are two elements not illustrated. The Dutch government place its economy in the European rankings in the top 5 (I reckon it is within the top 10) (at http://www.rijksoverheid.nl/nieuws/2013/03/26/nederland-in-top-5-slimste-economieen-van-europa.html), in addition, the Dutch Newspaper ‘Trouw’ stated last February (at http://www.trouw.nl/tr/nl/4504/Economie/article/detail/3399005/2013/02/23/Triple-A-natie-Nederland-vergeleken-met-Groot-Brittannie-het-land-zonder-AAA.dhtml) that the Dutch economy is in a decent place, yet it also illustrates that the debt would rise until 2018, whilst at that point the UK debt would already be lowering. So why is this important?

Well, if this is about a percentage of the GDP, then the Dutch treasures, which includes its Gross investment and ‘net additions to capital assets’ plus ‘investments in inventories’. So, what happens then the net additions to Capital assets becomes an increasing negative number? Net fixed capital formation is linked to depreciation (and loss of value). It seems to me that if the net value of its treasures become increasingly large, then the mentioned 25% lowering would be disastrous. Especially when we see that investments toward these areas do nothing to increase net value that is linked to the GDP. The view is heavily coloured as the initial paper was only on 4 buildings, yet if we see and accept the levels of bad news management that has been in play, what else is intervening with the correct value of the GDP?

So as this (for now) is about the realistic upcoming 1.2 billion Euro additional fine the Dutch will face if they cannot keep their budget (at http://www.trouw.nl/tr/nl/4500/Politiek/article/detail/3516791/2013/09/26/Moet-Nederland-straks-echt-1-2-miljard-in-Brussel-afrekenen.dhtml), what other information is currently missing?

What if the Dutch need to face a revaluation of their GDP and of the elements of information that are now being ‘managed’, what will the consequence be of such a new valuation? Will the Dutch cutbacks be as severe, or worse in 2014?

What ‘managed’ information will people learn about after the retirement funds are drained?

The views I gave are important beyond the Dutch borders as well. It is a ‘sauce for the goose, sauce for the gander’ approach. From my point of view Dutch parliament is not evil, or corrupt, or criminal (there is a massive spot called grey area though). So, when these issues are detected with the Dutch, then it is important to know that others might be doing exactly the same, to some degree. The UK opposition system makes this situation unlikely but not impossible. The underlying similar dangers would then be coming from both France AND Italy (both in the economic top 5 and higher than the Netherlands). We all know that the waters of the Euro are murky. These matters might illustrate that they are also a lot less safe than we imagined them and if we accept that whatever happens in each of these nations hits all of them as it impacts the Euro, we could see this as a sign that the European economic troubles are far from over. When we have to take into account issues that were non-issues before, once this all comes out, how much damage will the Euro suffer?

 

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The Euro in intensive care?

It is always nice to see that the NOS news will not stop to give me the inspiration I need on a gruelling Monday morning. We have all heard on the image of the Euro, the need for bail outs left, right and centre and the impression that the events do not seem to worry too many people. Yet, perhaps this look on the matter at hand from the financial industry and their ‘beneficiaries’ are overly too not worried. What most seemed to have forgotten is that any government (especially in Western Europe) is dependent on voters and the way they think, or more precisely the way they fear!

With a possible new political party, leaning slightly to the right (or better stated slightly conservative) a new option will have arrived with one specific agenda. The intention to move Germany away from the Euro currency. In itself it is perhaps not the immediate worry. Consider that Western Europe was on a route to real or feigned restoration, which does require Germany to weather the storm as it was (I am not ignoring the work France did on this either). It was the immense amount of self-austerity that Germany performed on itself that made them the strongest economy at present.

The issue is the new party! Even if this new party gets a firm foothold, it does not mean that Chancellor Merkel is in danger as yet. The predictions are that this new party stands to get up to 24% of the votes (presently at maximum). So the Chancellor is still in a comfortable pace for now. There is however the issue that not much more is allowed to go wrong at present as this could change the game as is with Chancellor Merkel to become the loser in the next election.

Why is this so important?
Anyone who tries to trivialise this is clearly of their rocker (and out of their mind too). This event, should it take place is huge and the impact it will have is pretty much beyond what anyone can imagine.

Consider two scenarios.

In the first scenario we look at the one that had been an issue a few times in the past. This was the situation where those countries unable to pull their weight would be cast out of the Euro. Merkel united with the others to prevent this in the past. Greece was number one on that list, but at present Spain might actually end up getting added to that list, so there is a lot at stake and the new party might change all that.

The second one is the one that is most concerning to all non-Germans. If the new party gets the strong voice, and this chance is not that far-fetched at present, then there is a chance that they will move to remove Germany from the Euro and moves straight back into the Deutschmark.

There will be many voices on how this will never happen, and then carefully phrased denials on how the Euro is in serious danger. Make no mistake; they will be leading you on. The bulk of all Euro countries are in deficit. Most have NO concrete plan on recovery (they all claim it will happen, yet the events are against them). They all claim that they have which they obfuscate by overenthusiastic information on economic recovery NEXT year. Too many parties are in assumption mode and too few in a state of pragmatist optimism. I do not pretend to be the expert. I am not some PhD with the knowledge of economic events. I am a data miner. I have looked at data in many forms for most of my life. From this point I looked at data and no matter how complex some parties make it all out to be, some simple rules always apply.

First event to take into consideration is that America seems to be printing more and more money on a daily basis. Printed money, which does not seem to be set against anything tangible especially, taking into account a massive 17 trillion dollar debt. Funny enough Germany did something similar in the 1920’s. I remember it because I used to have one of those fünfhundert tausend Deutsch Mark bills (DM 500,000) which is now valued at less than $5. So is this where America is headed? No! I doubt that it will get THAT bad, yet a bankrupt America would be the definite death nail in the coffin now known as ‘the Euro’.

A second fact in this equation is the economical drop in several nations. The Netherlands, Italy, France are all in a not so good financial position. A nice little footnote to this is that the Dutch TV (NOS) reported that the Netherlands would see a more then 2% increase in their economy for 2014 on March 3rd 2013. Yet on the Dutch government site   (http://www.cpb.nl/persbericht/3213019/zwakke-groei-economie-door-achterblijven-consumptie) on 13th of March (10 days after my blog doubted that in my article ‘march Hare of Government’) it now states the increase to be only 1%. I still think it is slightly too high, but whatever, I had made my point. France is also toning down their near future predicaments for their economy. For now only Germany seems to have some reasonable strength (in the short foreseeable term). This is relative as it cannot pull the weight of Italy, France and the Netherlands. Should Germany pull out then the Euro will have a definite problem on several levels.

Before you consider calling Germany names consider that the Euro can only survive if ALL pull their weight. Most of the nation’s overspending the way have been doing for some time is not that. As stated in earlier blogs. When you overspend for well over a decade, at some point the invoice is due and too many are ignoring that little fact. So don’t blame Germany, blame your respective governments. If you have any doubts on that, look at how Cyprus needed 10 billion, an island with barely a million people living there. That is only one island. Several nations are in much higher debts. Granted is that they are not reliant on 80% of their GDP coming from the banks and financial industries.

So the Euro and the issues they might be getting.

It would be very incorrect to say that it is all about the value of the German Mark, yet this is not that incorrect. If you have a soccer team and you lose your star player, will that team survive? Yes, it usually does! However, in most cases that team will not end up as high because of the loss of their star player. When that team is pulled by 1-2 players a lesser result is usually the case. The issue becomes will that team continue on the same level (division) as the other teams. My thought is that this is not the case. That new German party does have a valid point. The other nations could survive if those weaker players are no longer there. What will happen in the immediate response is one from the markets and it will not be a positive one.

We are now left with two thoughts.

1. Should this direction be avoided?
I do not have a direct answer. Let us face it. The chance of Greece or Cyprus EVER paying back their debts is pretty much out of the question. There are off course the additional nations Spain and Ireland. What about them? So far they are coping, but consider that the economy will remain weak until at least the end of 2014. There is no true answer of what to do in that case. Throw out more and more nations? Will the Euro become a factor analyses under the leave-one-out approach? This seems a cold and very logical approach to deal with this matter. Have we loathed ourselves to such an affect that nations are now under the scrutiny of a spread sheet approach?

2. If we embrace this path what is the use of the Euro?
I personally still see the Euro as the means for America to do away with all these different currencies and have a nice go at corporate Europe by moving in with all their options and less as a solution to unite Europe. This is a personal feeling in this matter and the evidence seen in the last three years are clear that European unity is a nice theory and that is all it remained. A theory! If there was true unity then budgets would be kept in check on a European scale. Yet the Euro nations seem to remain a place of PowerPoint global and expedite ‘the local needs’ as it ever was. No matter what we read in the papers and propagated by all kinds of interested parties. The issues in play are kept in a vicious circle.

I wonder whether this is what the banks envisioned from the very beginning, a debt driven society that leaves them out of the equation to do whatever they wanted. This is how we get back to this new German party. Their most prominent speaker was Bernd Lucke, a professor of Macroeconomics from the University of Hamburg. Is he wrong? He definitely knows more about economy than I ever will, but so are the experts who are on the other side of that equation. So where should we stand? It was Bernd Lucke who mentioned in a German magazine ‘Spiegel’ (German for Mirror) in 2011 that all these collapses would end up in the German lap for an amount of 180 billion Euro. That is almost 2200 Euro for each German citizen. And it seems that so far his vision is slowly becoming reality. If someone has to pay 2200 for damages they never made, or issues they never ordered. Would you not get upset with that?

Governments do not seem to accept accountability, Banks and financial institutions are given free reigns to do for the most, whatever they like and the population end up having to pay for it all. How long until we have had enough? This is where the German population is at now. So when people start talking in a trivialising way consider your personal financial situation. Consider paying 2200 Euro for something that is not your fault, not your order and add to this that there is no guarantee that it will not happen again next year. Now consider that the amount is on average 15% of a Germans pre taxation annual income. With German economy losing strength not unlike other European countries, ask yourself how many Germans will consider an alternative to the vision of Merkel?

My views?

Europe should stick together, but there is a clear valid worry that leaving the bill to be paid by a few without clear regulations on what some are allowed to do is just not realistic. It is the present German fear and it is shared by too many people in Germany.

 

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