Tag Archives: Forbes

September 14, 2014 · 22:26

The fear of creativity

It was not that long ago that I wrote the blog ‘Sandbox Games’. Now I learn that Microsoft has offered 2 billion for Mojang. 2 billion is not much when you say it fast, but the reality is that this is a massive amount of money, even with the ludicrous high taxation norm in Sweden, what is left with leave the man ‘Notch’ with an amazing amount of luxury time to come up with something new and unique. You see, visionaries like that cannot sit still. He might think he can, he might actually truly believe he can, but visionaries like Peter Molyneux, Richard Garriot and a few others never do. Now Swedish Markus Persson joins this group!

Some did not agree with my view given on September 5th, which is fine, but the facts seem to back me up. In the same story there was also an issue with subscriptions, and behold we see ‘World of Warcraft Loses 800,000 Subscribers in Three Months‘ (source: Gamespot), now let it be known that this fact was out before I wrote my blog, so I am not giving any weight to this. It is only my voice that claims that I did not see this until now. There is however another side in the article. It claims: “The company called the decline ‘seasonal’ and pointed out that the dip in subscribers was similar to what we saw in the second quarter of 2012, ahead of the release of World of Warcraft expansion Mists of Pandaria“, this is a fair enough answer for now, but overall Blizzard is not out of the woods yet, even though the nextgen versions of Diablo 3 are as wildly wanted as any other version they released, which makes for a quality long term dedicated relationship between Blizzard and their gaming fans. I feel the same way and hope on an additional Act 6, hopefully with the Necromancer and the Assassin.

There is another side to all this, at present several gamers are feeling the cold breath of Sony in several ways. First there is the change that only when online, can a person see his trophies, the port from PS3 to PS4 also came with losses, the gamers at large lost PlayStation Home, and it is such a coincidence that rumours from so many games places up to the days before the release of the PS4 have since gone quiet. Yet, recently Games industry dot biz gave us the following quote “Sony’s virtual world Home will close in Asia and Japan in March 2015, according to an announcement on the official Japanese site“. This has a few consequences down the road, because all you have bought, and all you buy now, will be utterly lost to you. So no more houses, no Harry Potter, no Hogwarts and a league of other items bought will at some point be lost.

We now see two issues:

  1. A console purchase might be temporary at best, and as this market evolved we see a move towards leasing, not buying games. I personally think that this is a dangerous development. We feel for that what we consider we own. Which means that this would enable places like Pirate Bay to grow vastly, even potentially in a exponential way, giving us a new issue, but mostly giving certain corporations new nightmares.
  2. The acquisition of Mojang (if it happens), could be the start of a new wave of indie developers (I really hope so). 99.8% will never have the visionary gene Mojang has, but those who do would soon be bought out and these amounts of money do tend to give the creativity gene the hyperactive status.

Finally I get to have a small go at Pirate Bay. I am no fan of theirs, if you like a movie, or soundtrack, you buy it! I have and lately I have not been able to, but that does not mean I am going all out with downloads. Yet, they could have other options; it seems to me that a large chunk of the population would not like certain steps to be taken to the public. IMPORTANT! Sony has not announced any changes outside of Asia/Japan, but is that such a far-fetched consideration?

I personally see these developments as dangerous for Microsoft/Sony. Yes they are NextGen, yet overall consider the success of Minecraft, people want a GOOD game, is that Google contraption (ouya) such a bad option? Ubisoft can go high-resolution all they want, but if people see their payments dwindle away, another issue will come knocking on their doors too. Ubisoft delivered, I think that it was partially because Watchdogs was new and on NextGen there was NOTHING, so there! Yet, this is not fair either. Yes, it has certain repetitiveness, not unlike the initial Assassins Creed, yet what came after (AC2 and AC2 brotherhood) was such an amazing leap forward, that it pardoned the mediocrity of AC Revelations and AC3 as they were to some degree ignored. This could also be the case for Watchdogs; whatever follows could set entirely new records (hopefully not dependable on cars all the time).

Because of my personal view of a failed Black Flag, I hold out for Unity at present, yet the initial views are a lot more interesting than any presentation of Black Flag EVER was. Yet, in Forbes magazine we see an additional view “If Far Cry 4 is anywhere as good as its predecessor”, and I agree. I kept away from Far Cry 3, for the mere reason that the original Far Cry on 360 was the worst game I played on that console, Far Cry 3 is not that. It had in my view a few issues, but nothing major. Far Cry 4 could set a new boundary and in gaming that is NEVER EVER a bad idea.

So where will gamers go to next? Well, that remains to be seen, but they tend to go where the games and the gaming value is. That part has been forgotten by both big boys Sony and Microsoft. Nintendo is picking up a little, yet the Google console could pick up a lot and they could do it a lot sooner too. Consider that a game like Minecraft can get any person to switch, now consider a treasure trove of great games, or even decently satisfying games. The CBM-64, Atari ST and CBM Amiga, three systems that have a league of quality history, that is even before we consider the early PC games, all waiting to be rediscovered by an entire generation of new players. With a system that can run it, independent developers who can re-engineer it and an eager audience ready to try and buy it.

System shock (1+2), Dungeon Master, Dungeon Keeper, Oidz, Eye of the Beholder, Ultima series, Wing Commander series and Lemmings (believe me, there will always be space for Lemmings). The list goes on and on. Giving it here will keep you needlessly busy for too many hours. I have played hundreds of them and I still smile thinking of some of them. If we could enjoy them in a system with 64Kb, why must we get pushed into impossible hardware requirements? Even today Fallout 3 and Oblivion have never lost their charm. Diablo 3 is another example, yes there is more graphics and resolution, yet both Diablo 1 and 2 have not lost their charm. It is clearly not just the resolution, but a basic form of gameplay that appeals to us.

As the gaming industry is pushing more and more to new micro transactional business models, it is within our grasp to push back and walk towards other solutions that is not about holding us ransom to a monthly fee. Yet, all is not fine there either. At present these monthly MMO’s are doing just fine, ESO (Elder Scrolls Online) with a little over 770,000 subscribers, millions of dollars come in on a monthly base, yet for how long? When the economy is good, many might not care, yet in the view of current developments, that revenue wire will become ever increasingly thinner, then what? At some point many will be forced to select 1-2 of their favourite games to continue, which leaves a gap soon enough, as the business model ‘fails’, or better stated, as the net income will not be in the area of acceptable numbers, what will these companies do then?

I stated it before, there is space if you change the premise of the player and change the options for play, be more fluidic. In my initial view it was a new mapping system, using established locations, but what else can be done? This is at the heart of many contemplations by gamers all over the world, this is partially (IMHO), because the new player tends to be smarter and is also more inclined to listen to their personal friends on social media, so 1-5 will drive the change of 25-100. It becomes a different issue, and if too many of these people are in the student budget ballpark, then the word ‘micro transactions’ will drive them away a lot faster. We will always have novelty moments with Unity (even though the main story line can be completed under 20 hours), Elder Scrolls Online, no one denies that, but the time that EVERYONE goes into the WOW mode is pretty much a given impossibility. I personally believe that WOW continues, not just because they are good (they are good, no one denies that), but the bulk continues because of the vested time they have on their characters. However, WOW is pretty much the only game that can rely on such a level of comfort, or make a claim anywhere near it.

I reckon that as No Man’s Sky develops, the eyes and ears will move more and more in that direction. The ‘promise’ of eternal gaming sandbox style is a lot more appealing than many realise, if you think I am wrong, then wonder why Microsoft is willing to pay 2 billion for a ‘basic’ looking game like Minecraft. Mojang got it just right and re-engineering a wannabe is a lot harder than shelling out 2 billion (Bill Gates likely found it in a jacket he brought to the dry cleaners).

This is the fear these larger players have, not that Minecraft is such a success, but the fear that 2-3 new indie developers have that one idea no one in the high income suits had thought of. Minecraft already represents a low billion and that is only at the start of nextgen gaming. As the game moves from system to system, that revenue will only increase, the secondary danger they fear is as the game is there on Nintendo and other consoles, the uniqueness of nextgen becomes smaller and smaller. A fear that only sounds more and more overwhelming as some regard the failure of Sims 4 and other established brands like Mass Effect are delayed until 2015, which could spell more consequences for the NextGen population, but none of this is new, so why come with this again?

Here we are not looking for the failing established brands (well not really), but the other side of the established makers, the indie developers are getting slowly but surely a new option to shine, as some issues by Sony and Microsoft have not been going forward, we see a growing interest of android development games. this we see (at http://techcrunch.com/2014/06/23/google-play-quarterly-app-revenue-more-than-doubled-over-past-year-thanks-to-games-freemium-apps/) where we see the title ‘Google Play Quarterly App Revenue More Than Doubled Over Past Year, Thanks To Games, Freemium Apps‘, now, I myself do not see my mobile as a gaming tool, but with the Chrome books and the Google ouya, we see a new player and his/her title is ‘gaming enabled’, a group that seems to have been forgotten by executives and gamers alike (myself partially included). Now look back at the games I mentioned earlier and now at the games that Rare developed for the N64. Games released between 1996 and 2003, some became the standard of excellent gaming. The N-64 original of Golden Eye is a lot better than the Wii remake and the Xbox had Time Splitters 3, but then they forgot to make a good compatible version for the 360. a host of games ignored, now ready for grabbing on low end consoles with the promise of great gaming, a premise the high end executives all forgot about.

This is a change in gaming that we had ignored!

We all seem to naturally want to move forward, but is such a step even affordable? Consider that there is a market going towards Christmas, many not able to scrap the coins together for Nextgen, yet the ouya with 3 games at $109 (the price of one nextgen game in Australia) is another matter. good business is where you find it (Robocop quote), that is a reality we have to face, the ‘better’ economy position for many is not getting released until past Q1 in 2015, so if you are an indie developer get used to creativity, because if you get that nice idea out into the open, there is a potential group of well over 100,000,000 gamers who cannot afford a nextgen system with an included game, especially if the android solution is set at 25%, it is an alternative to consider. A global population going the way of pragmatism, one good game is all they need.

This gets us back to my blog ‘The Toothless tiger‘, which I wrote last week (September 8th). I wrote “larger companies have been all about continuing a brand and less about the new idea, which makes indie developers the future (consider the massive success of Mojang with Minecraft), that is the streamline part all ignored“. I truly believe this, which makes the foundations of NextGen rather shaky as cash strapped developers will move towards an open android environment. It also gives us an interesting side effect. The larger players are so used to having the large pool of resources to drown in, that the limits of android will bring forth the old developers as they designed for Commodore and Atari. Games that are slim, sleek and possibly even decent bug free, which in turn gives waves of additional creativity. Will this come to pass? It seems a logical conclusion, but I am not sure. Personally I hope it will and I also hope we will see additional non-male developers, they can shine in this field just as easy as their male counterparts. Time will tell!

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September 8, 2014 · 20:41

The Toothless tiger

It is roughly 1,544,400 minutes since we saw this message “The newspaper and magazine industry today takes the first steps towards setting up the Independent Press Standards Organisation, the new regulator for the press called for by Lord Justice Leveson” (at http://www.newspapersoc.org.uk/08/jul/13/independent-press-standards-organisation, in July 2013).

So when I saw the words ‘press’, ‘regulator’ and ‘sham’ together in one sentence (at http://www.theguardian.com/media/2014/sep/07/victims-press-regulator-ipso-leveson ) I was not that overly surprised. Let’s not forget that the implied innuendo in regards to the press cleaning up its act was never a reality.

You see, after all that visibility, on March 25th we see the report from the Daily Telegraph with the headline “Flight MHG370 ‘suicide mission’“, was anyone even surprised that the press regards themselves ‘beyond the law’?

Yet, if we are to properly assess the situation, we must therefore also allow matters of defence. So what is the issue that bites us so much? The letters from the 30 victims of press intrusion stated to Sir Alan Moses the following (as stated in the article of the Guardian):

“By rejecting the majority of Lord Justice Leveson’s recommendations, the paymasters and controllers of Ipso are rejecting due process”

“In its current form, Ipso retains no credibility with us or with the wider British public.”

It furthermore states: “it was not truly independent, breaches of the industry code of practice would go unreported and unpunished, and there would be no effective and transparent investigation of serious or systematic wrongdoing“.

Now, after what happened in the hacking scandal, I am all for bashing the press, but let us all be honest, if we are to convict a group, let us do it for valid and preferably legal reasons.

About these pictures!

This all links to several issues that I wrote about in the past few days, Jennifer Lawrence and Kate Upton might be the most famous ones, but they are by no means to most important ones (I feel for these victims, but reality shows us bigger problems). Yes, there is an issue that links to Zoe Quinn and Anita Sarkeesian. If we go by the words of Reddit, we should use the quote “The site, which had an online forum named ‘The Fappening’, was one of the main places the hacked nudes were being posted and the website has now banned the page, six days after the photographs of the Hunger Games star first surfaced. It is thought the main reason bosses have finally pulled down the forum is NOT because of the J-Law snaps, but because photographs of Olympian McKayla Maroney which were also posted on the site are believed to show her underage.” which came from the Mirror. These places have been hiding behind the ‘innocent disseminator‘ flag for far too long. Their income is real and based upon bandwidth. If we want change, then perhaps forcing a tax bracket on bandwidth, especially with a bankrupt America, might be a novel way for debtors to get their coin back. Yet this is not about that. The fact that Jennifer Lawrence is now partially safe is only because another victim was a minor when the pictures were taken. This makes for a massively inhumane disaster and one that also affects the press. It is interesting that when we look at the name McKayla Maroney we see two events, both the hacked ‘under-dressed’ images as well as the Gamergate reference to Zoe Quinn and Anita Sarkeesian.

Vox Media stood alone

It is Vox (at http://www.vox.com) who seems to be on top of it, so we see one place, which might be regarded as ‘trivial’ by some covers the real issues that many ‘major’ papers have been ignoring all over the US and in places far beyond the US. You can read their words in depth at http://www.vox.com/2014/9/6/6111065/gamergate-explained-everybody-fighting. It is well worth reading; however, there are a few parts I do not agree with. Let’s go over those, for they are all linked.

Here is the first part: “If it was just to bring attention to Quinn’s personal life, that’s, as stated, already happened. And if it was to create better ethical disclosures in online journalism, that’s happening, too. The Escapist is drafting new guidelines, while Kotaku is now forbidding its writers from financially supporting independent designers on Patreon, a popular method for backing independent artists, unless the site’s writers need to donate to Patreon for coverage purposes (since many developers release material first to their Patreon backers). And Vox sister site Polygon requires disclosures of this sort of support“.

I do not agree for the following reasons:

  1. If we look at the press at large, Quinn’s plight is less than a hot drop on a plate. “Jennifer Lawrence”, “Nude” and “shoot” gives us 41 MILLION hits when we use all the keywords. “Zoe Quinn” gives us 70,000 hits with less than a dozen reputable sources (including Vox Media). So, I think we can safely say that visibility is not even close to being a factor there.
  2. Better ethical disclosures in online journalism? Sorry, but are they for real? Most of these writers have never seen a class in ethics, it is also likely that some of them cannot ever write ‘ethics’ correctly. That being said, many of them write for mere passion on games, their transgression of alleged ‘corruption’ usually goes no further then receiving the free game. How corrupt is that? In all this, my issue with Gamespot has almost forever been with the open sponsor Ubi-Soft. They are not hiding it, so that is good, but I seem to colour my faith to any Ubi-soft review. Overall the writers and makers like Carolyn Petit, Jess McDonell, Danny O’Dwyer, Justin Haywald, Chris Watters, Cam Robinson and Kevin VanOrd do an interesting job. Depending on their ‘preference’ of gaming we tend to favour a certain person, whilst not ‘liking’ another one. The sad news that some of these writers are leaving as Gamespot is changing should be sad news to all gamers.

Scoops

This all goes towards “forbidding its writers from financially supporting independent designers on Patreon“, why? Is the likely fact that reviewers would have the inside track on a game and by personally backing a developer they will have a scoop? Is that not what pretty much every newspaper does? If not, how about cancelling ALL advertisements from Microsoft, Sony, Nintendo and Adobe? How long until they are missing out on scoops? I think support should not hidden, but if I was still in the business I would be funding No Man’s Sky or Ultima Forever: Quest for the Avatar (I have been a lifelong Ultima fan), if it gives me a scoop days in advance of others, than so much the better. The question becomes is this truly about implied corruption or about mainstreaming a 100 billion dollar plus business? You see, the gaming groups was for a long time ignored (especially in the time I was involved)

True Scenario: “I went to the ‘Efficiency Beurs’ (a Dutch IT/Technology trade show) in the RAI in Amsterdam in the early 90’s (1991/1994), I forgot the exact time. Anyway, I was already deep into the gaming world and sound would be the next big issue. PS speakers were no good, Adlib was an option, SoundBlaster was the new kid and those with real money (read wealthy parents) there was the Roland card, which costed a fortune. This is the age when the PC was a wild market, CBM-64 and Atari were on a high and the PC was relying on blips and bleeps. So, I walk to the IBM representative and asked him on the new PS/2 PC’s and whether the soundcards in the growing gaming market was a field that IBM was looking at, as well as, whether IBM had considered adding a sound card to the PC-Private projects (which was a tax deductable PC scheme in the Netherlands). I was ‘walked off’ the stand with the response that IBM was for ‘professional’ use only. This same IBM is now advertising ‘Smarter Serious Games’ (at http://www-935.ibm.com/services/us/gbs/gaming/)“.

So, these ‘losers’ (just to coin a phrase), who would not consider this industry for a long time are now trying to leech of a 100 billion dollar industry by ‘Simming’ (Sims joke) it on, so nice of IBM to join the party almost two decades late (they did however join the party decently before 2013). So now we get this escalation on several fields and interestingly enough all at the same time. Several approaches of wild growth is seen, personally I reckon this all truly took off in high gear in September 2013 when one game made one billion in only three days and passed the 2 billion mark this June making a videogame more successful then the most successful Hollywood production in history. Now nearly everyone wants to jump on board and it also seems to allow for a ‘wild growth’ of certain ‘elements’. IBM is not a party to this (they move in different circles), yet, those growing wildly on our shores hoping for their billion are learning hard and fast that gamers can easily spot the quality from the chaff and as such we see escalations. Whether we take Forbes article (at http://www.forbes.com/sites/erikkain/2012/03/21/gaming-the-system-how-a-gaming-journalist-lost-his-job-over-a-negative-review/) for granted or not, it seems that the name Sony and the possibility of pulling away advertisements apply in several corners (like the PS4 release and Terms of Service issues). So, to avoid ‘ethical’ issues, it seems to me that newspapers at large just ignored the plight of over 60 million customers and any link to ‘changes to the terms of service’. So how does this all link to ‘corruption’?

That is the part that seems to elude many, it is not ‘just’ about corruption, it is about alleged corruption with the writers (emphasis on alleged), implied corruption with their bosses in what they publish but more importantly what they DO NOT publish. The last part is on streamlining it all. If anything, GTA-V shows us that a billion plus revenue takes more than just a good game, it is about marketing and advertising, which shows now exactly the issue on visibility.

I am not alone with these views; some of them were discussed by Ashton Liu in her blog at http://rpgfanashton.tumblr.com/. She has an interesting view I had not considered. She writers “It has been no secret to the gaming community that many video game news sites have been employing increasingly extremist and reprehensible tactics to gain site hits and forward their ideology“. In that regard she seems on top of it all, I saw the harassment of Quinn and Sarkeesian as idiots who should go the way of the Dodo yesterday, if at all possible. Yet in her view, we are dealing with more than just blatant ‘ranters’, it is entirely possible that there is a corporate push behind it all. If we consider the actions by Sony and the market they need to ‘rule’ is that such a far-fetched statement? If people are willing to sell their souls for a niche market, what is Sony willing to do to remain the number one on the market, especially if you can motivate non-journalists (read non-accountable people) to speak out loudly?

What makes a Journalist?

It is a side, that until the article of Ashton Liu I had ignored. Ashton is like me, an ideologist, we seem to share a passion for RPG games and we are willing to put some time into sending the message of the Role Playing Game, hoping to introduce it to others. Yet, part of the view she offers seems incorrect, is this all about true gaming journalists? Many of them are not journalists at all, they do not have a degree in journalism, so let’s all agree that unless the person has a degree in Journalism that this person is just a games reviewer (I myself am a games reviewer), I have degrees in Law and IT, but not in Journalism, which makes me a non-journalist!

This is where the issues become (slightly) clear. Many are not journalists at all, so journalists are compared to ranters and outspoken ideologists, whilst not getting painted on grounds of evidence, which is almost slander (I said almost). We are all in need of more clarity, clarity I am asking for, whilst trying to remain clear, clarity Ashton is trying to give the readers and there are the additional thousands online, ranting all over the place. So what is a reader to believe?

Corporations

Perhaps that is the part we all forgot about? We seem to ignore the corporate site. Is that the background of those who remained with Gamespot? Is CBS changing the gaming area by starting to cut away the ‘non-professional’ staff? I do not know, I am asking this. I have no issue with any writer at Gamespot (even if they cater to games I never play), their passion has for a long time been without question, yet, if this streamlining requires the presence of education, not just knowledge, then those without Journalistic skills to be ‘relocated’ and not all end up within the CBS structure.

So as Ashton made the statement I disagreed with “These journalists behave terribly and browbeat anyone whose opinions don’t fall lock step with their own“, the question “which are the real journalists” come to mind. This is where we return to Leveson, the issues that IPSO is accused of and how this relates to Journalism.

IPSO is regarded as a toothless tiger (perhaps correctly so), yet as papers are more and more online and as we see more and more ‘contributions’ from critics and reviewers, we will see that their painting of a group ‘as ignored’ as stated by the phone hacking scandal victims, we see a corporate move by many newspapers that employ reviewers and critics who are likely non-members of the official Journalistic core, but in the online mash no one can really tell anymore. This is at the heart of several issues, next to the editors relying on people whose family name tends to be “well-placed sources within”; I wish I had a relative like that.

This all gets me to the only part of the Vox article that I have an issue with. It is not really an issue, it is more a disagreement. They stated “Because what #GamerGate is all about isn’t who is or isn’t a gamer, or what role the press should play. It’s about what games should be and who they should be for. And that’s worth a real discussion, not just a hash tag“. I think that anyone enjoying a game is in the smallest extent a gamer, and as his or her passion grows, so will the Gamer part of that person. I think it is MASSIVELY important the part the press plays and to some extent they need to be judged on what they publish and to some extent even more on what they ignore, not unlikely for favours from the advertisers. You see, what happens when it is no longer them, but also the stakeholders? Consider the stakeholders for projects of Ubi-Soft and Electronic Arts. The moment they start ruffling feathers on ‘their’ dividend and the press ‘obliges’ that is the true moment when we will no longer see whatever ails a gaming community. When it goes through a journalist we do end up with the smallest protection, but ‘small’ beats ‘none’ every time.

It is ‘what games are and who they are for‘ is as I agree an important discussion, yet the implied evidence at present gives little support that that true vision will come from #Gamergate, because anyone willing to develop a game, no matter what gender, what topic and what ethnicity of graphics we are presented with should be a reason for bias and/or discrimination. These are parts #Gamersgate seems to be ignoring.

Streamlining is also all about who owns the IP, that is the one part they all seem to ignore, if the future is about IP (Intellectual Property), then it is the novel idea that has the future of gaming fortune, which is all about streamlining in the eyes of EA, Ubi-soft and Sony (to name a few big companies in this field), you see, who owns the IP will continue and not unlike the flaccid economists of Wall Street, larger companies have been all about continuing a brand and less about the new idea, which makes indie developers the future (consider the massive success of Mojang with Minecraft), that is the streamline part all ignored. This is why I think it is important to protect them! This is seen in the slightly dangerous statement by Vox Media in the article as they state “Some argue that the focus on harassment distracts from the real issue, which is that indie game developers and the online gaming press have gotten too cozy“, is that true, or are the larger players realising that they passed the buck for too long and driving a wedge between the press and the Indie developer is essential to their survival as they try to ‘rekindle’ the press and push indie developers towards the ‘cheap’ deals where they can take over the IP. That part is at large ignored by most. If we look at 2014 we see a massive host of new versions of the same brand, whilst none of the truly new games are coming out in 2014. Splatoon, ignored by many is the new kid and so far it seems that it might largely drive sales for Nintendo. You see these larger houses have forgotten to cater to THEIR audience (not just bring a cool presentation about something not due for 15 months) and as such are under scrutiny facing an endangered future. When we see a headline like this ‘Battlefield 4 – It’s so bad, its actually funny!‘, they know that they are in trouble, no matter how much you pay marketing to focus on the small stuff and micro transactions, which some call ‘Blood Money‘. In my view this is partially the result of letting ‘Excel users’ anywhere near the gaming market and when these investments do not pan out panic will be the natural consequence.

Back to IPSO

Yet, this also reflects on IPSO, because is the story ignored not as irresponsible as calling a tragedy a suicide mission? I wonder if the two elements would have been anywhere near as extreme if IPSO had not been toothless. I cannot state this for America, but I am certain that many gaming issues would have been a lot more visible, which might have reduced the risk and abuse of both Quinn and Sarkeesian. If you do not believe the press to have any influence, then consider the Art ‘expose’ called “Fear Google“, which is exactly the method of News the Sun used to rely on for at least one page (a page 3 joke only the British understand), or as we could call it, how Rupert Murdoch got through his early years. So here we see the beginning of the future, as Jennifer will end up getting shown to the world in states of non-dressing, her stolen pictures are less likely to be stopped as they are not getting sold, even if sold, the chance of enough people getting convicted becomes a serious question.

We can safely say that there is a group of toothless tigers, law partially became toothless as it catered to business enterprise and as we see more and more ‘free’ services we see an abundance of innocent dissemination that no one seems to be able to stop, ‘oh yes’, for some reason many were ‘suddenly’, within hours, able to stop the film where a Journalist ‘suddenly’ lost his head. It seems that ‘sudden’ acts are at times possible, so why this entire system is not better regulated is to be perfectly honest beyond me, but you better realise that someone is making loads of money, not just the hacker (read: thief) that got a hold of the pictures.

 

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July 8, 2014 · 10:04

To be deleted!

I stumbled upon an article by Kevin McKenna that was an interesting read. It was published last Sunday (at http://www.theguardian.com/commentisfree/2014/jul/05/google-right-to-be-forgotten-kevin-mckennas-own-confessions). The headline caught me at first stating “Don’t hide your dark side from Google. Much better to tell all“, which works out really well for Google, but what about the person? In his ‘journey’ as a starting Facebook user, this quote seems the strongest “And I realise with mounting horror that this is how real people with normal lives interact with each other and that it is I who am out of step once more. So I fear I may soon have to conclude my Facebook experiment before I alienate that dwindling band of those who still regard me with some fondness“, but as I see it, the article never ever goes anywhere near the issue why people want things to go away. The reference “we discovered that prominent people are beginning to deploy some arcane European privacy legislation to force Google to ‘forget’ about their historical misdemeanours“, sounds funny enough, but is that it? The following reference “American financier Stan O’Neal who helped drive his bank to ruination in 2007 were ‘deleted’“.

This sounds all fun, but is Google paying Kevin for this article? You see, Mr McKenna does not get within one mile of the actual issues, the dangers that Social media brought upon us all (many were likely never a consideration when Mark Zuckerberg came up with the idea to begin with).

We get the following from Forbes “But there’s another good reason for checking out a candidate’s Facebook page before inviting them in for an interview: it may be a fairly accurate reflection of how good they’ll be at the job” (at http://www.forbes.com/sites/kashmirhill/2012/03/05/facebook-can-tell-you-if-a-person-is-worth-hiring/). Here is the kicker: the workplace is riddled with people not really that great in sizing other people up, a fair chunk of them in HR and upper management. I have been around for a long time, and these people look at ‘presentation’. I have met my share of managers with ‘fuck all’ (pardon my French) idea of what actually needs to be done, like most sales people they will have a nice PowerPoint, and when reality hits, they will dump it on the people who will end up doing the actual job, which often enough is not them. In addition, we see recruiters who have no idea how to be a recruiter. I used to have one that never had anything for me and actually send ME the resume of others asking if I had a job for them. Really? These people will seek you out on Facebook and judge you for what YOUR FRIENDS will post on your page?

Mr McKenna has spent absolutely no words in that regard. To those youthful young undergrad recipients, Facebook could at this point be nothing less than a career death sentence; even if those around them know that those people will work their asses off getting it all done. That part is never on Facebook and they lost out on a job. Better stated: that corporation lost out on a person who would have been one of the best Returns On Investment EVER!

CNet adds a little more (at http://www.cnet.com/au/news/facebookers-beware-that-silly-update-can-cost-you-a-job/), here we see the headline “Study shows that companies have rejected 1 in 10 people between ages 16 and 34 because of something the person shared on social media“. CNet has graphics too, so check it out. It goes in the same direction as Forbes, but there is one quote that I have heard about, but never experienced, or met anyone who directly experienced it “In January, six states officially made it illegal for employers to ask their workers for passwords to their social media accounts“.

These people should reply with the fact that many agreements state the following “You must not reveal your password and must take reasonable steps to keep your password confidential and secure“, the very fact that personal privacy is transgressed to this degree is questionable, or is it?

In USA Today (and many other papers) we see the statement “Burglars use social media to target homes” (at http://www.usatoday.com/story/tech/columnist/komando/2014/01/03/social-media-identity-theft-home-videos/4248601/). It is not a new ploy, it has been around a little longer than that, but what is new is the linked approach that is slowly becoming visible.

Although at present, no ACTUAL events are currently documented, other than from the less reputable journalistic sources (Daily Mail and the Telegraph). There is more and more talk on how social media will influence your insurance claims. If you tweet your events, as might your children whilst on Vacation in a place ‘far away’, your local homestead might be missing several pricey items when you get home. Burglars keep their eyes on those who boast travel. It only takes one jealous school ‘friend’ for the parents to miss out on TV, Jewellery, computers and so forth. There is more and more talks on how insurance policies might not cover it in the near future and that mandatory alarm systems as well as spectacular premium rises are linked to these events.

So there is a massive need from many people to be forgotten all over the place!

A more long term consequence tells us (at http://healthissocial.com/healthcare-social-media-ethics/the-healthcare-insurance-impact-of-your-social-media-graph/), that social media goes so much further than that. As a data miner I have always seen this, but many are only now seeing the dangers. This article voices is perfectly by stating the following two thoughts:

“What if health insurance companies realized that with whom you associate may correlate to your health and thus risk?” and “What if your online behaviour indicated (directly or indirectly) your health behaviour – either psychiatric or otherwise?“, so not only could your health care cost spike, in some cases you might not be able to get coverage as you are considered too much of a risk factor. So a person’s unadulterated need, to speak out ‘Suicidal and standing on the edge‘, might in light of their upcoming ‘healthcare premium to be’, seriously consider taking that one final step at that point.

There is one quote I saw that covers the dangers of Social Media that we should all mind “Behind every successful student , there is a deactivated Facebook account“. The issue for us all is that there is genuine truth in that statement (or status). Not because of what the student does, but because of what others do with the data and with the image incorrectly reflected. In one account I took a look at his page had references to ‘Hash Brownies’ and ‘Funky mushrooms on his bacon and egg roll this morning’. The man is a Vegan with an utter dislike for chocolate (I tend to get his chockies around Easter). So, will he see his premium rise by insurances in the future? Because SOMEONE said so?

So Mr McKenna, The ‘right to be forgotten on Google’ is not a strange concept at all, in this day and age it might be the next essential thing if we are to move forward in an affordable way.Because at this point, there is every indication that our cost of living could quite soon be linked to social media data. The worst thing is that mined data just is, and what is taken for ‘granted’ often never is, that is the one part that no cleaning pass in data mining can provide for, whoever claims it can, is in my view clearly lying.

 

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June 8, 2014 · 10:13

17 or 70 trillion?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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March 21, 2014 · 07:27

Growing the deficit?

I stumbled upon a small piece in the Guardian by Dean Baker (at http://www.theguardian.com/commentisfree/2013/feb/08/us-deficit-obama-grow) this morning. He wrote it in 2013, yet in light of several events this story still holds some visible issues, even though I completely disagree with it. It was however a nice piece to read. Dean Baker is the co-director of the Centre for Economic and Policy Research, which means that he has degrees in economy and I do not. So, why do I disagree?

This view comes through the following quotes. “First, the United States has large deficits because the collapse of the housing bubble sank the economy“. That in itself does not sound incorrect, yet when we look at the definition of ‘deficit’, we should accept this simple one: “The amount by which expenses exceed income or costs outstrip revenues“. So how is this housing bubble a US deficit problem? Houses are built through real-estate people, developers and such. So, there is a little truth in there. As these people made a huge loss, they would not be paying any taxation, which means the US is not getting money through taxation, which means that they get less money for their budget. So, in that regard we are all fine. The linked 2008 economic downfall was due to several idiots (or geniuses depending on your viewpoint) in Wall Street and Financial districts who were playing with all kinds of mortgage based hedge funds and in that way ‘lost’ about 8 trillion dollars, which comes down to devaluating 32 million houses from newly built to the instant value of $0. This comes down to the housing value of 27% of the US households became null and void with the instant snap of the fingers.

So, yes, we can agree that this impacts the deficit as taxation goes down, however should we consider that part of these events is because the US treasury failed completely? Consider that there was a recognised housing bubble at the time that Henry Paulson (who was at that time the big boss of the US treasury). The deficit grew to such an extent because the elements were not properly monitored. So in this view the quote “First, the United States has large deficits because the collapse of the housing bubble sank the economy” should be “The United States diminished its income as the US Treasury did not act preventive, proactive and in a timely fashion in regards to the housing bubble“.

The second quote we see by Dean Baker is “Second, if we had smaller deficits the main result would be slower growth and higher unemployment“. Well, that is one bubble we can pinch through. If taxable amounts increase deficit goes down, if expenditure goes down, then so does the deficit. Neither forces us into the view that this will result in higher unemployment rates, neither prove that there will be a slower growth.

This all depends on the application of the tools available. Yes, taxing extensively is a massive downturn, but is that the approach that should be taken? Am I against taxing the ultra-rich? That depends on the way taken. I do not think it is fair to just tax the rich, yet removing some of the tax shelters would be a very acceptable approach. Consider the following quote by the NY Times (at http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html)

“In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent“. This is less than people making $36,251 – $87,850, they pay 25%. So, there is a massive imbalance here, which leads to the approach that a smaller deficit could be gotten by properly addressing a flawed tax system.

This is where we get to the news of January, (at http://www.theguardian.com/world/2014/jan/04/bill-de-blasio-new-york-mayor-inaugurated), where a quote is given that reads like an incorrect act. “But the most controversial element is to extract an extra $530m (£323m) in taxes from those earning more than $500,000 a year to pay for universal pre-kindergarten education and after-school programmes“, so New York wants to get a little more cash. I have mixed feelings, yet I do understand this move when the top 1% of the people in New York makes up for 39% of all income. Those objecting to this better understand that the tax increase amounts to an annual rise of $973 for those making a million a year, which is less than the price of a coffee a day. My issue is the fact that tax deductions allow for millionaires and billionaires to pay 4% less than those on an average income, which adds up to massive amounts of dollars. Dealing with these factors will not slow growth, it will not lead to a higher employment rate, it will however allow for a smaller deficit as the US grows its collected income from tax donations.

The third quote by Dean Baker was “Third, large projected long-term deficits are the result of a broken health care system, not reckless government ‘entitlement’ programs“. In my view it is both. I have a hard time speaking out against certain entitlements. Not because they exist, or should exist. The reason is that the 2008 crash left a massive population in an unfair position. A large group of people lost their house and homestead and these people had to be protected in some extended form. The fact that those who caused it walked away with amounts in that year would be beyond what the victims would earn in an entire lifetime is just obscene. Consider that in 2008, the year of the crash, Merrill Lynch handed out over 3 billion in bonuses (at http://www.forbes.com/2009/01/28/wall-street-bonuses-business-wall-street_0128_bonuses.html) and it happened just before they merged with the Bank of America. When we look at this all, we see entitlements, who largely impacted the US government due to what should be seen as high stakes poker games played by the commercial sector, which was loosely ignored by the US treasury. When we see the broken health care system, it seems that there is an issue there. We see the massive amounts of issues on all kinds of newscasts where we see that Obamacare will cost the people. Their premiums will double and in some cases triple. Now, on the side of the people there is outrage. I get that, but look at it from the other side. Does this mean that for decades, the people got medical care, whilst not getting properly charged for it? It is nice and easy to lash out at President Obama on this, but is this his fault? The actual costs, the investigations and as such the in-activities would play into the hand of President Obama. I might just casually ask whether the US treasury should have looked at this. Was this an area that had been ignored for way too long?

So in the end, Dean Baker makes one point that holds ground to some extent.

So why was I looking into this article 405 days (actually 4926 hours and 17 minutes) later? This is all due to an article that the NY Times published (at http://www.nytimes.com/2014/03/20/business/us-current-account-deficit-is-smallest-in-14-years.html). Let’s not get fooled here. This article is about trade deficit, not the US deficit or the US debt. The quote “Big gains in exports and overseas investment income narrowed the United States’ current-account deficit in the fourth quarter to the lowest level in 14 years“. So for one quarter they were only short a little north of 80 billion. It reads like when you have debt, flaunt it!

The valid question that you the reader might have is how the articles and the issues are linked. Well, they are not, but the issues of data behind them are. We are offered information by those who should give us clarity and information, yet, we have been ‘bamboozled’ for some time with an overly deep view in information, so the overview is gone for nearly all readers. When you want something to pass unseen, you just make sure that you give the people everything. It is something some researchers do. When the initial results lead to that one question, you just give them all 1247 result tables; there is a high chance that the certain question ends up not getting asked.

The last point to leave you with is the small issue that is playing thanks to some Ukrainian disagreements. How will these numbers impact when the acts of the EEC and the US will result in Russia closing the gas tap to Western Europe. As the Dutch NOS reported earlier this week, the Rotterdam Harbours are ready to switch and get their energy through the provision of liquid gas from the USA, the trade deficit will get smaller even still, yet the 20% hike the consumers in Europe face is something the people will only read about after the fact.

The US has a long way to go, with a national debt of well over 17,500 billion and a total debt of around 61,350 billion, being short by 80 billion seems like a pinch not worth mentioning, yet consider that the US is forecasting an total income of 3 trillion (before expenses), in 2013 the deficit ended up being $680 billion, which makes it unlikely that 2014 is a turning point for now, which means that the total deficit will grow for at least one more year. Then and only if severe cuts are found, it will still take up 70 years for the national debt to be gone, there is no way to predict how long the total debt of 61 trillion will take. So when you read all the upbeat articles on how there are three issues with the deficit remember, it will take 3 Generations (3G) to get rid of the national debt, the USA, now a 3G nation, how happy can anyone in the free world be for the foreseeable future?

 

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March 12, 2014 · 17:18

Who runs America?

This is a question that has been in the back of my mind for some time. When we consider the economic events from 2008 onwards and how slow (almost 2 administrations) it has taken for any economic legislation to take shape for the (at present) ineffective halting of moving tax dollars off shore. Even now, several economic boffins are slowly and casually mentioning that current measures are not going far enough.

The entire issue took a new foothold as we see the Ukrainian events unfold. We see how some politicians are acting so….outspokenly against certain acts. Now, I am not speaking out against these people, I believe in the freedom of speech and as such, we need to hear all sides. The issue was shown the most visible in the UK when some stated on how economic sanctions against Russia would be taken, like getting gas from a different source.

It was at that point when I saw just how hollow their boasts were. In my view those politicians would soon be dragged to a separate room where several high powered industrials would add these politicians to the Christian choir of ‘Mare Castratum’, see this as a slightly more efficient form of gagging a politician.

Why this view?

Consider that politicians would make that rash decision and also consider the fact that in the UK (amongst most EEC nations), the energy prices are way above normal. So in a place where like the US, 1 in 7 lives below the poverty line, where these people can hardly pay their bills, get confronted with a 10%-15% raise on energy bills. What do you expect to happen?

I expect something similar to happen in the US, as I see it there are two elements in play here. The first is the claim (at http://www.skynews.com.au/world/article.aspx?id=957624)

The two quotes are “The Senate on Tuesday expressed its support for Ukraine by passing strongly worded resolutions, using tough language against Russia and urging it be suspended from the Group of 8 world powers.” and “The House of Representatives also passed a resolution to condemn what House Speaker John Boehner called ‘Russia’s hostile acts of aggression’”

I understand the second quote and I reckon that House Speaker John Boehner was quite correct to pass such a resolution. It is the first one that is an issue, I understand that governments want to stand in support of the Ukraine, there is no way that any objection to that is valid, consider however what the G8 stands for. If we accept the following ‘G8 nations comprise 50.1% of 2012 global nominal GDP‘, then without Russia, will the G8 be a valid office of existence and what to do to keep its validity? Replace it with China?

That part would make sense as in many ways, the Chinese economy would be much more interesting to America then Russia is for the mere fact that China imports almost 3 times more than Russia does (based on 2012 numbers). Yet, if this happens, then what will be the long term consequences? Consider that the Ukraine is in an even less prosperous situation then most EEC countries. Now consider the information (at http://www.forbes.com/sites/kenrapoza/2014/03/05/in-ukraine-crisis-russias-natural-gas-tactics-could-backfire/), basically the Ukraine was getting gas at a 36% discount. If that fell away, then what will the Ukraine do? The quote seen here “The UK National Balancing Point (NBP) futures for natural gas jumped nearly 10% to $10.28 per MMBtu, according to Bloomberg. Prices have since moderated as the political situation appears to be calming down” gives validity to my claims of the energy prices; if futures would take that must a blast, then I reckon the people could face a charge at nearly twice that percentage. There was a side in all this that I had not reckoned on. When we see the quote “The U.S. wants to become a large LNG exporter later this decade and a portion of that would be bound for Europe” we see two dangers. The first is that this is not just government, but this is definitely a ‘Big Business’ push. Yet, consider the amount of customers could be the issue as the amount needed would far outstrip what could be delivered. That part is implied in the Dutch article (at https://decorrespondent.nl/299/eerst-het-gas-dan-de-moraal/32952491-c7e501ab) called ‘Eerst het gas, dan de moraal‘, which could be loosely translated and paraphrased as: “Business before morality“, which is basically at the heart of all these events. The article states that the Russian pipeline is supplying well over 26 million households, which is well over twice the size of California (in households). There should be no illusions that Gazprom has its powerful claws firmly in the EEC.

Let’s make sure that I am not stating that the politicians are acting purely or mostly out of economic reasons. I am to a lesser extent implying that it is possible that the Natural Gas lobbyists in Washington have been speaking with politicians over a lunch or two (which is how things are done in the US and UK). That latter part was discussed in the Guardian in October 2013, as UK Labour leader Ed Miliband mentioned that these lobby groups are not getting the proper levels of scrutiny (at http://www.theguardian.com/politics/2013/oct/07/energy-firm-lobbyists-scrutiny-ed-miliband). So it is IMHO Big Business that is the second danger element in these cases. If the politicians represent the people, yet big business has the funds, ability and know-how to override the views of the people, then what use are the people at the end of all this?

This all goes a few steps further than just the energy groups. I started all this with a mention of economic sanctions. So how does this connect? Well, it does not directly connect, yet the elements all have their political influence. Consider the needs of Apple in Russia (at http://appleinsider.com/articles/14/03/07/russias-megafon-deal-with-apple-inc-guarantees-sales-of-750k-iphones-over-3-years). This was less than a week ago. So we consider the value of a little over 20,000 iPhones a month for the next three years and we should expect that this sparks the sale of iPad and iPod and other Apple articles. Do you think that the members in charge of Apple are hindered by morality? They have parked billions in taxable dollars away from the collecting hands of the IRS (and other taxing governments). The commission these people get from their deals in Russia will not stop them in any way. Whether there will be some ‘illusive’ distributor in India, Japan or China will not matter, the show (read sale) will go on. The same could be said for Dell. You think that they stop selling to Russia and leave their market share to ASUS? I think not! These are just two examples of the dozens of massively large companies doing business with Russian one form or another, not just from the USA, but also from Europe. In that same regard, there is not export without import, so as we see the boasts of economic sanctions to Russia by politicians, remember that when we see that when Russians show off their latest Apple gadgets on TV, the question ‘who runs America?‘ should remain firmly on your mind. In the end you should also remember that the entire situation is a lot more complex then I make it out to be.

As we focus on ‘Business before Morality‘ then remember the bills most of you have in your drawer still awaiting payment. We are nearly all of us overdue to the smallest or a larger extent and as some are more fortunate not to be one of the seven people living below poverty, consider that most of us are in the same place where 45% of us are, most of these people are all a little below getting by, which comes down to one step from a total nightmare life.

I am not stating it is a good place or an acceptable place; it is merely a realistic place. It is in this realistic place the question gets the volume it needs to have: ‘Who runs America?‘

 

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January 28, 2014 · 20:42

For free or for naught?

It is less than a day after I wrote the previous blog ‘The danger ahead’, now I read in the Guardian (at http://www.theguardian.com/world/2014/jan/27/nsa-gchq-smartphone-app-angry-birds-personal-data) that the quote I made in yesterday’s blog “Speed and disregard of proper development has allowed for open access to many computers and devices, which allows for almost complete collection and stored and such storage can only be done by just a few. This open level of availability allows the NSA and GCHQ (amongst others) to collect open source intelligence, hoping to gain the upper hand in the war on terror.“, which is close to what the Guardian reported, as well as what is currently shown on Sky News!

At this point, I am looking at a few issues and the more I look at the data that the press is stating, the more I see that Edward Snowden is more than just a traitor. He claims being a victim in a German TV interview (at http://www.dw.de/wanted-dead-by-us-officials-snowden-tells-german-tv/a-17388431), where he speaks the fear that he is being targeted for long term sleep therapy (aka ‘terminal sleep’).

The ‘problem’ is that the issue is not just Snowden. The more I look into the breaches, the more I look into a possible functional approach on the way the NSA server parks (plural) are set up, the more I am convinced that not only was Edward Snowden not alone in this all, I feel some level of certainty that this person might still be in the NSA, endangering both NSA and GCHQ as well as other allied monitoring agencies.

The humongous amount of ‘revelations’ that are claimed in the name of Snowden do two things. First of all it turns Benedict Arnold in a stumbling saint (I just had to wash my mouth with soap for making such a claim). Linked to this is the fact that the many dozens of operations as his ‘revelations’ seem to touch on would have been on at least a dozen of servers (as projects are spread around). The fact that NSA uses an upgraded edition of SE-LINUX means that a system with logs and mandatory access control cannot get transferred to such a degree. The fact that IT and security monitors it all, as well that he was civilian contractor means that his name should have popped up a dozen times. Even if he used other accounts, the logs should have triggered alerts all over the field when they were scanned through solutions not unlike a program like Palantir Government.

The claims I am making are growing in reliability with every ‘revelation’ that is being made. There is however another side that is now the consequence of all these whingers and whiners about ‘their privacy‘ (at http://www.theguardian.com/world/2014/jan/27/tech-giants-white-house-deal-surveillance-customer-data). We now enter a field where it is important to realise that the new situation could be regarded as a danger.

It is linked to a previous newscast where President Obama was considering moving telephony data out of government hands (at http://www.washingtonpost.com/blogs/the-switch/wp/2014/01/23/government-privacy-board-members-say-shifting-nsa-data-to-third-parties-is-a-bad-idea/)

As stated before, this is a really bad idea. Consider that criminals, if enough money is in play, can use places like HSBC to launder their money (I am not talking about forgetting your wallet whilst washing your jeans), but the idea that commercial enterprises can get away with these events for just a 5 week fee (at http://www.forbes.com/sites/afontevecchia/2012/07/16/hsbc-helped-terrorists-iran-mexican-drug-cartels-launder-money-senate-report-says/, as well as http://uk.reuters.com/article/2014/01/23/uk-standardbank-fine-idUKBREA0M0LF20140123) is a lot more dangerous than many realise. Handing data storage out of government hands is just too dangerous. I am steering away from the issue whether the monitoring program should go on or stop. The intelligence community needs to do what it needs to do. Leaving that data with third parties is just not an option. The worst case scenario would see the US government paying out billions if any data leading to a registered IP ends up in ‘other’ hands. Once that evidence is ever given, the US would lose whatever credibility they ever thought they had.

At this point the title can be used as a joke. What is the difference between for free and for naught? Someone got rich for free, the US got rich for naught! That would end up being the reality of a project that was meant to map levels of global terrorism. This joke only gets stronger when we see another ‘view of shock’, but now from Google CLO David Drummond (at http://www.bbc.co.uk/news/world-25911266). It is hard to state against his view, or the premise of the company. These carefully pronounced statements from legal eagles are to be expected from many firms for some time to come. There is however a commercial positive view (at http://www.bbc.co.uk/news/technology-25914731). Here we see how entrepreneurs in makeup and clothing are showing options to avoid detection. In more than one instance it is stated to be metal based, so standing next to airport detectors should be fun soon enough. I wonder how much more would get checked when the boxers or briefs are also metal based.

So whether we get entertainment for free or fashion for naught will be discussed by many soon enough, the main fact remains. If we want to remain safe, then data needs to be collected. It is not for free, or for naught. It is for the simple reason that the world is filled with bad people; some will go any distance to hurt as many as they can. Our governments have a duty to keep us safe, it is only fair that they are given the tools, the methods and the opportunity to do so.

This does get us to the final part (or final side) to these events. This morning, the Guardian (at http://www.theguardian.com/world/2014/jan/28/microsoft-rules-out-back-door-access-to-mps-electronic-communications) reported on backdoor access allegations. The quote “Both Ludlam and South Australian independent senator Nick Xenophon have been concerned about the security of Australian parliamentary communications since the Prism surveillance program was first revealed by National Security Agency contractor-turned-whistleblower Edward Snowden.” gives the information that was the part of all this. So again we see more resources squandered in regards to Snowden. Do not get me wrong, the question by both Ludlam and Xenophon is fair enough and as such it should be looked at. Whoever wants access to certain information, which might always be the case, could consider Intruding a system, which, unless you are a real expert is getting harder and harder, as it should be.

Yet, capturing and copying frames sent over a router system makes a lot more sense. You just capture it all and decrypt it later. Now, most people will not have the ability to do this, but consider the amount of elements to get this all from user1 to user2 via server X. If you think that this is highly encrypted hard to achieve effort, then think again. The more common the method used, the easier it is to read into it. So, there is a level of entertainment as we see leagues of technicians concentrate on the door of the bank vault, whilst in reality one of the walls is missing.  To give you another example, we take a look at a paper by Daehyun Strobel, Benedikt Driessen, Timo Kasper et al (at https://eprint.iacr.org/2013/598.pdf). As we look at the quote “Despite the fact that nowadays strong and well-analyzed cryptographic primitives are available for a large variety of applications, very weak cryptographic algorithms are still widely deployed in real products all over the world.” This relates to the IT issue as, we might have secure servers and powerful password rules, but files are send from one computer to another via the ‘internet’, which goes via a router system (no matter how you twist or turn it). So, as someone gets to any router on the track and wireshark’s the traffic, the stream can be rebuilt. From there the hacker still faces a few obstacles, but you better believe that above a certain skill level, this data can be retrieved. So what exactly are we all crying about?

 

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December 27, 2013 · 20:53

Internet Privacy?

There was an interesting article in the Guardian yesterday that caught my attention today. It is an article by Haroon Siddique. It deals with the view voiced by High Court Judge Navi Pillay (at http://www.theguardian.com/world/2013/dec/26/un-navi-pillay-internet-privacy).

I am not opposing her view, yet there are a few sides that the article was not touching on. The first quote is “Pillay has been asked by the UN to prepare a report on protection of the right to privacy” Now, I am not opposing privacy, yet it must be clear that there must be a clear separation between privacy and anonymity.

The enormous growth in trolling, online bullying and identity theft also come with a new set of responsibilities. Even though privacy might be a valid side, the anonymity that people abuse (many millions on a daily basis) must also be dealt with. In addition, there are still issues with the ‘issues’ that had been claimed by Snowden. I see the press advocating his ‘truths’ on several fields, yet the actual evidence is not shown. Let me be clear, there is no issue with the claim of mass surveillance, which has been established via several sources. The issue is that a percentage of his claims do not seem to have been scrutinized to the extent that it should have been. It is my personal view that the Guardian (and others) have been placed several articles, yet beyond “according to the documents leaked by Snowden” there has been no concrete and visible validation of the shown facts.

The next part is the quote “to protest against the routine interception of data by governments around the world” the fact that Facebook and Co are routinely doing the same to sell it on to marketeers is not a worry for anyone. There is actually more to this, today the article shown (at http://www.theguardian.com/media/2013/dec/27/snapchat-may-be-exposed-hackers) shows an additional side to the dangers of mass media from social media.

“SnapChat has a feature where it will grab all the numbers from your address book, upload them to their server” and these issues are not dealt with? The second part can be a huge issue involving a possible start of identity theft and other forms of abuse, but they all seem to scream for ice cream! Like a horror movie they all focus on the sound, but no one seems to be looking at the actual picture. People are ‘duped’ by the millions to just go with the next hype, but it seems that no one (especially in media and social media oversight) is looking at the quality of the next hype.

It becomes even more disturbing when we see the next part “The group says they approached SnapChat almost four months ago to flag the vulnerability, but never received a response, so they decided to release the full details of their findings on Christmas Day.”

So this has been going on for months?

So many people are screaming for ‘privacy’ and the fear that the government can see things. Yet, these same dopey’s (to coin a phrase) are not up in arms about commercial exploitation?
They do not seem to care that the damage from that part will be so much higher. It boils down to the fact that the people are worried about the government paper cut, whilst hype dependent social media tools like SnapChat seem to be dumping their customers on a guillotine, go figure!

The bigger issue is that other ‘hypes’ had been hit as well in the past. So, it seems that when it is free, data protection does not seem to be an issue to many people. Concluding from this there are two sides and it is not about the choice of the individual. On the one side people condone their exploitation, which means they have no need for privacy and on the other side; they seem very concerned with what the government sees. This in my view is not fear of privacy either, it is just imagined fear. In the second degree we see yet another side; there we see employers browsing through all kinds of social media before hiring a person (at http://www.forbes.com/sites/jacquelynsmith/2013/04/16/how-social-media-can-help-or-hurt-your-job-search/), which means that you could possibly lose your chance on that job depending on what they see.

So what privacy are people actually expecting on the internet?

 

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October 3, 2013 · 21:50

The numbers we ignore?

Today is another day that the US government is in shutdown mode. This is not Episode 8 from season 5 of the West Wing by Aaron Sorkin (brilliant man). This is reality!

There is polarisation on many levels and even though we want to blame one side as we stand on the other side, there is a deadly reality playing out in the corridors of power. The Democrats refuse to cut their spending; the Republicans will not play soft or compromising. Today we see the Guardian with “Obama meets bank chiefs as economists warn of ‘deep and dark recession’” at http://www.theguardian.com/business/2013/oct/02/obama-bank-chiefs-economist-deep-recession. As we look at a few facts quoted “President Obama met bank executives including Goldman Sachs chief Lloyd Blankfein“. The firm that helped many lose their house. I admit that this is unfair towards Mr Lloyd Blankfein, but the sentiment behind it stays in valid form (I will get to that later on).

“A looming battle over the nation’s $16.7tn debt ceiling. Treasury secretary Jack Lew has warned that the US could default on its debts if the limit is not raised soon.”

The second part is why the republicans are not budging. The Democrats are raising and spending and leaving it all to the next one in office. There is enough evidence to state that it is likely that the Republicans will return to the White house. In that regard, they have ZERO interest in cleaning up the Democrat mess, which will take several administrations. The fact, that the Democrats are not willing to cut their spending, whilst they spend a lot more than their budget allows. It is almost hilarious how things are spun. They claim it is all about affordable healthcare, whilst this option is increasing the debt by $100 billion a year. Now, it there was money coming in on the other side, there might be some level of case, but that is not happening. This current administration has added over 5 trillion dollars in debt during his first term. That is an overspending by 3.4 billion dollars a day. With Obama care this will be even more. Now, this administration inherited a sour deal. The economy had collapsed; there were issues with some financial crash in Wall Street and so on. Yet, the debt he has added to in one term is a lot more than Bush added in two terms. (So both sides have some of the blame). The republicans are not blameless, but they will not accept the continued addition of debt which is currently getting pushed. The US national debt is now well over 100% of its GDP. This is the part many seem to ignore. So if all taxation (which is only 26.9% of the GDP) is used to pay for the loan, then it will take 4 years to get rid of their debt. That works ONLY if the US government pays no wages, fixes nothing, builds nothing, buys nothing and heals no one. So for 4 years Americans must make due with nothing at all. This is not a realistic approach, I admit that! So you can only use to pay what you have left, however the government has been spending 120%-145% of the money they received and with Obama Care spending will increase. America is currently, in my humble opinion bankrupt!

Do you doubt this? This would be a fair enough position to take, consider any company being allowed to spend 120% of their annual revenue. How long until any bank will close the tap? In addition, there should be overall outrage that a company would work 100% of the time just to pay the bank. There is 0% job security in that regard, for if the annual +5%-+15% cannot be made, they will cut the costs that are not desired. In that scenario there will be no healthcare of any kind, because the sick do not contribute to the future of profit. That dangerous situation currently exists!

The article by the Guardian has more “But he warned that would be nothing compared to the Pandora’s box that would be opened if no deal on the debt ceiling was done before 17 October deadline. Congress must agree to raise the US’s $16.7tn debt ceiling by that date or risk being unable to meet its obligations.”

That is the crux! The total debt will increase and the republicans will not stand for that. My earlier comparison to get rid of the debt in 4 years is not realistic, I said that. Only if spending is lower than American income can the debt be lowered. It will take more than 3 generations to get that done. Some disagreed with that number. This is fair enough. Yet, let us make a small calculation.

$17T is $17,000B. The interest due would be $340B (it is actually higher at http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm, but it is about the example).

If we believe the census (as shown in my Blog ‘Biased Journalism on USA shutdown?‘) then the interest due is 13% of ALL collected taxation. How can ANYTHING get done after the interest is paid? And that is only interest, no decrease of the actual loan. So consider that all amenities, support and expenditure of the US must decrease by at least 16% to get this done. How can that ever be a realistic situation? This is why the Republicans are not budging. The more important issue is that the Democrats knew this. They knew that the train would stop and they ignored this. Not unlike in the Netherlands where everyone stated that the SNS Bank was too big to fail, the Dutch government nationalised the bank. Why the Dutch as an example? Well, they are in some similar predicament. They are not able to lower spending. They need to cut an additional 6 billion whilst their GDP was 700 billion last year. If they cannot cut 1%, how will the US ever deal with their debt? There have been words on corporate taxation left right and centre, yet what they are not mentioning is the issue that the UK has seen this year. Big business, like Google has been pushing their own booked revenue to other places. This quote from Bloomberg “Google’s chairman says he is ‘proud’ of the way his company avoids paying taxes ”It’s called capitalism,” Eric Schmidt told Bloomberg in a…” So, whatever money the US treasury has coming in, it is not from the big boys of business. They have the right accountants and tax lawyers. So here we get back to Goldman Sachs chief Lloyd Blankfein.

When we see the acts of Google and how Goldman Sachs was involved in the Greek issues, people would wonder whether they (Goldman Sachs and the US government) are not working together in the same way. If so, then there are more questions on the entire setting of the article the Guardian published (from the link at the beginning). There is no way that someone like Mr Blankfein is not aware what the big boys of industry in America are doing. When we read in places like Forbes that Google is not alone in these acts, but that companies like Apple are doing the same thing, then raising a debt ceiling whilst the captains of industry are not paying anywhere near the tax they ‘should’ then we must ask other questions. All this becomes even more hilarious when we consider the information from the Financial Standard on July 15th (at http://www.financialstandard.com.au/news/view/33335431) where it is stated that “US delays tax avoidance law by 6 months“. So the big boys in that initial Guardian Article are all about gloom and doom, whilst the US treasury seems to be missing out on taxation by not acting on Tax evasion (which is actually not a crime at present). So they want to borrow more, but will not put in place legislation that would lessen the dangers of paying the due interest. That last part is shown in Forbes article last month by Steve Denning. (At http://www.forbes.com/sites/stevedenning/2013/09/12/alan-blinder-six-reasons-why-another-financial-crisis-is-still-inevitable/)

  1. Dodd-Frank Act of 2010 hasn’t been implemented.
  2. The $5 trillion banking assets in derivatives are still off-balance sheet and unregulated
  3. The rating agencies are “still hired and paid by the very companies whose securities they rate.”
  4. The Volcker Rule forbidding proprietary trading by banks has not been implementedAnd I add;
  5. US tax avoidance laws not implemented.

From these parts we could come to the conclusion that the Obama administration has failed the American people almost completely, whilst unable to get spending under control.

American politics is a lot more complex, so there are other factors, but it seems to me that Steve Denning is showing us several dangers that are currently not stopped. So when, not if, they happen, the people as they walk away with nothing left, can wonder how that expensive affordable healthcare is helping whilst they have no house, no job and no food.

It is a sad day for many people, because in the end, not only America seems to be unable to control their budgets, they are only, for now the most visible one.

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March 11, 2013 · 13:23

Start making sense

I have been tossing and turning for most of the night. Something has been bothering me all day, and as it seems most of the night. You see, the Dutch NOS reported on Saturday 9th of March an interesting footnote in their newscast. They suddenly had this short part on the news on how this is possible. (Source: NOS http://nos.nl/artikel/482586-record-op-record-voor-dow-jones.html)

This is interesting, as I asked pretty much the same questions in an earlier blog called “It hurts every time, but we love it”, which I published on Feb 6th, so slightly more than a month earlier. The Dow index is currently at 14,397 (which was a 2007 record). The issue is that we had the crash of 2008; one in six in the US lost their house. So, the economy is not in a good place. There was also the mention in their radio cast (English and Dutch). They seemed to focus on two parts. First was the fact that Economic recovery is gotten through revenue recovery without staffing (so 5 do the work of 10, and they are happy to have a job). Second is that the Dow is based on only 30 companies. Yet, when we look at the number I wonder what game is being played as I look at a 2 year index graph. This graph is Stellar. My issue is twofold. One I am NOT an economist, but a data miner. Second is that the given ‘excuse’ feels wrong. Especially given that the news had this production line backdrop of cars, and none of the 30 seems to be in the car industry. So why not present this with a pharmaceutical backdrop?

So let us take a look at some of these Dow Jones Index companies.

1. Bank of America. A bank, and after 2008, we could wonder in what state it is in. This quote comes from Forbes and was written by Halah Touryalai, one of the Forbes Writers “No bank knows that better than Bank of America which has agreed to pay a jaw-dropping $42 billion, settling credit and mortgage-related legal battles in just the last three years“.

OK, if we take that into consideration, then seems a little weird that their stock graph has the same shape as that of the DOW. (As one of the 30, it would make sense that the graphs are shaped similar, however, such confidence after such a legal fee settlement bill?)

2. JP Morgan Chase. Another Bank! It had two more dips then BofA, yet overall it is in an upwards movement as well. It was also mentioned in the same Forbes article as before on settlement fees, but those fees were a lot lower. The Bank of America had to chew on 66% of the total settlement fees by itself, so for the other 5 big banks, the damage was relatively small in that regard. However, In April and May 2012 they had lost more than six billion dollars on derivative trades that had gone bad. There was a report of 9 billion in total, which also involved Bruno Iksil for part of the mentioned amount, he is also known as ‘the London Whale’. The numbers and the names vary when we look at UK and US papers, but overall they pretty much tell the same story. It is interesting that JP seemed to bounce back within 6 months to stock values higher than before the June 4th 2012 dip. Last on my list is Boeing. It is a giant, but we have all heard of the 787 issues and it’s now named ‘Nightmare liner’. The issue is all about batteries, yet the news from January as reported by Reuters : The new production forecast raised some eyebrows. Russell Solomon at Moody’s Investors Service was forecasting 100 787 deliveries and said Boeing’s forecast of more than 60 was “significantly weaker than we had expected.” Interesting that what analysts expect and what the vibe says Boeing will be delivering is off by almost 40%. Suddenly NOT meeting expectations has almost no impact? 40% less on a firm the size of Boeing should have a very visible effect (imho).

Now the DJI is about 27 other companies and there are only two banks in it. It is also a fact that these banks work with securities and values in the hundreds of billions, so are my concerns just a storm in a teacup?

It is a valid question, and I also ask myself this question. Let us take a look at the two following thoughts.

1. US debt. It is set at 16.6 TRILLION dollars. The total US debt is a lot higher. That one is $59.1 TRILLION.
Can anyone even imagine those numbers? Now consider that someone has that kind of money. To be honest is that really true? Is there a group of nations with that level of wealth? the only nation capable of owning that much is one with an abundance of oil, so basically the United Arab Emirates (UAE) is the only one that wealthy. Either the US is labelled UAE-west, or my thoughts are not that correct in this instance. So perhaps I am wrong (I will be the first one to admit that).
We know that most value trades are now done digital. It is the only way for the market to move such amounts of wealth. However, who checks this?

I have seen my share of digital forms of miscommunication by loads of people in several fields. Often they seem connected to the corporate headquarters of Bloated, Botched, Bungled and Baboon. An always newly formed enterprise, coming to a local public stock market near you. Consider that this is done on the electronic super highway. Now consider that Hackers come at a dozen a dime and greed is eternal, these last two are given facts. Also realise that ANY system can be gotten at. DARPA and the NSA proved that more than once.

The valid question loudly remains: “Who truly checks the validity of trade and the numbers they are traded at?”

2. LIBOR scandal. I wrote about it, the news has talked about it in abundance. Last week in an article by Mark Scott in the NY Times on March 5th the following was stated “The review published by the Financial Services Authority, the country’s regulator, said there had not been a major failure of oversight by local authorities, but it added that officials had become too focused on containing the financial crisis to analyse information connected with the potential rate-rigging”

This is a fair enough statement (it did seem shallow in relation to the handed fines), and them be hefty fines, so why are these two events related? Well, in my mind there are two parts of the LIBOR that were in play. From my point of view there are two variables that might be played with. The first one we know. It is the interest rate; the second one is the bigger issue. You see, those percentages are linked to a total sum of $350 trillion in UK registered derivatives. That is 20 times the US national debt. If people play with one, there is every reason to suspect that they might have played with the other. So again, who controls those totals that are being traded in? If derivatives include hedge funds, swaps and forward rate agreements then we should be worried. Consider as well that the US Bank for International Settlements holds almost twice the value the UK seems to be registering.

So, we are now confronted with just in excess of 1000 TRILLION dollars. How can this even be monitored? Now let us add one more part. The US LIBOR rate is set by 18 banks. The two banks in the DJI are members. Are we all on the same page now? The third bank (Citi) is to be given a fine in regards to percentage ‘tweaking’. According to Reuters, later this year, a new set of settlements will be ‘delivered’. In their publication of March 8th by Kirstin Ridley and Philipp Halstrick it states that: “Deutsche, Citi and JPM are the banks named in regulatory circles as those candidates near the next settlements,” said the second source. So now we have both a DJI member and libor member in this illustrious ‘donation’ scheme. What else is at play?

What if the total value is not correct? What if they did not just play with the percentages, but the total package of the trade able amount? Let’s just take a fictive 5%. Mainly because I feel not so comfortable with the value they say they have and in part because I cannot even comprehend that much, as we get above the $200 trillion range. So, if 5% is taken off the total amount of over $1000 Trillion, would mean that we might all be devaluated by a total of 50 trillion dollars. That comes down to $8400 for every citizen on the planet. Did we sign up for that invoice?

It might be just be me (and I can happily live with that notion), but can bankers and financial corporations be allowed to continue on this track? We have seen clear evidence that those places cannot be trusted with even a small speckle of such amounts. Even though they NEVER broke any laws initially, LIBOR shows that some are very willing to do that. With the US on the edge of bankruptcy (or on the wrong side of a fiscal abyss), with the financial industry in such disarray, what can be done?

So when this all falls over (not if it falls over), what will we be left with?

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