Tag Archives: G8

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?

 

Leave a comment

Filed under Finance, Politics

G8 on a bicycle ride

Today, like most days, it is good to get this little jolt of inspiration by Dutch news bringer NOS (www.nos.nl). They illustrated a specific situation where the banks are failing. Whether it is intentional, short sighted or lack of whatever they claim. Banks are not doing their jobs. They have turned into commercial enterprises at the expense of everyone.

We all know that money is tight. We do not have anything to spend, and when I see something interestingly innovative that it could better both consumer and economy then it becomes a matter of public scrutiny, whether some should be allowed to continue the way they are and the way they are clearly not properly doing ‘their’ business.

Of course, the reality is that the Spanish banks are pretty much utterly bankrupt. So if a bank is described as “the connection between customers that have capital deficits and customers with capital surpluses.” So what should we think when the bank itself has come to severe deficit.

When a bank is subject to regulations, guidelines and requirements, I wonder if some should be allowed to call themselves banks. In addition, I am starting to have a few serious concerns in regards to these regulations and guidelines at present. If banks are supposed to have a decent foundation of reserves, the notion that a good idea failing moving towards to a profitable niche should raise questions.

A step requiring no more than 3 million Euro! This bounced as banks seemed to have ‘other’ priorities. When banks that seem to have billions vested in something and according to Basel III are required certain reserves. What on earth is going on?

Consider that a bank has EVERY cent levied in one way or another in a nation with over 25% unemployment rate; I would say that something seems to be wrong in my book. It should be considered that these banks are serving a population group by letting them skate on dangerous thin ice, which is how I see it. Of course the opposing view might be very true. It might be an idea that the banks see as a not so profitable one. Yet, the fact that this design is getting international interest seems to give weight to the designers view, not the banks view.

So what caused all this?

I grew up in the Netherlands, a nation that used to have a massive national monopoly on bicycles. Bicycles were almost 1:1 for every person living in that country. Cars were still a rarity. Today, places like Amsterdam, Leiden and Rotterdam rely on bicycle (especially the student population). I remember having to go 9 kilometres every day to school. So that was a daily 18 Km ride! Those were the days! So, even though I’ve resided in places like London and Sydney, where the rider of a bicycle has less of a chance then Bambi in a deer hunt, I remain optimistic towards the needs of bicycles on a global scale.

In addition, we could consider places like France, Belgium, Italy, Sweden, Germany, Denmark and several other places to realise that finding an investment like a novel version of the bicycle into a new era is a massive thing. The chance for an investor of getting a possible corner in the market with 3 million Euro should wake up those who have cash. Seeing it could also infuse the economy of Spain, then that investment seems a lot less like a gamble. I would like to add, that if I had the money I would run to that opportunity.

So, here we are!

A Spaniard called Eduard Sentis has come up with something so innovative it is hard to grasp that no one came up with it. He calls it the Urbike. When we think of bicycles, then we should consider the downsides. For me over history that has been two parts. The first is the danger of flat tires. Eduard gave an old idea new breath with a solid tyre, so no punctures ever. The second is that the chain of the bike can get dislodged. No problems, Eduard added a bicycle version of a shaft drive. So the two downsides I lived with are gone. It even comes with a navigator that is seriously rain and shockproof. (http://www.designboom.com/design/urbikes-by-eduard-sentis/)

This is innovation where no one had looked to for some time, or perhaps they did and the timing was off.

Why would people buy a bicycle? Consider that cars become more and more expensive, fuel prices go up and when you live against a wave of mounting costs then the old way could be the best way to get anywhere. Many will come up with excuses not to consider the car, but then, be honest! Do you really need a car to get bread and milk from the grocer? Do you really need to get to friends nearby in cars?

All that waste of money and then consider all those online options you get from those insurers after answering a ‘few’ questions. For the most you do not ever ask that much detail from the person you have intimate sex with, question after question! NOT ONE gave me a simple answer. They will claim that answers are not that simple. A bicycle is simple. You sit on it and drive. You should get some insurance, but it should be nowhere near the cost of a car insurance.

We seem to ignore in many places the fact that we all could use the workout a bicycle gives us. If all these governments are so into healthy living, the impossibility of Eduard Sentis not getting any funding is becoming more and more of a puzzle, one that might yield massive earnings down the line. I agree that this is always a gamble, but timing is presently on his side.

So is this about the bicycle or the bank? I think both need to be looked at. I think financial groups are now moving into margins where almost none are left. If the Royal Banks of Scotland had close to 40 Billion Euros revenue in 2012 (not all of that profit mind you), and they are in ‘decent serious financial predicaments’ then other banks should doing reasonably well. 3 million should hardly show up with the possible future revenues in store. You see, that is part of the question. What do we know about those margins they should have?

So an amazing innovation gives visibility to failing banks seem to be in question. The fact that the bicycle was offered to the Danes as they were not able to get funding in Spain only intensifies the outstanding question. The banks with the reserves they should have; the transparency in banking that should be and their status at present. Who is minding the store and are we getting the whole picture or are they too managing bad news over a long period of time?

So here we are, the G8 has started and their message is trade and transparency (well these two mattered here to me).  Considering that India and China are also attending that summit, then the question should be, how did a project like Urbike not get any funding for bringing transparent international trade. It’s not like the 200 billion in bad debts in Spain will go anywhere. If Santander can pledge 840 million towards bad banks, in a place where the toxic assets have swallowed 38 billion (Sareb), spending 3 million (less than 0.0001%) towards something that could propel trade and economy seems to be a good thing.  I wonder if that will come up during the G8, or will it in the end be another vessel to move into a Syrian discussion. Perhaps weapons trade has a better return on investment? (It seems to work for Russia)

As we move into the latter half of another year, too many eyes are averted to a growing amount of toxic bank moves. A cost that is very likely to get left with taxpayers in the end.

It seems that we are all taken on a bicycle ride, a bicycle that got never any funding to begin with.

Leave a comment

Filed under Finance, Politics

Values of a debatable side

OK, it is 23:30 at the moment and I am finding out the hard way that life in a hospital as a patient can be different from your daily life in the corporate world with fluent internet and then some, go figure!
So when I initially listened last weekend to a few newscasts in regards to a team of devoted UK MP’s I was not completely on the ball. Yes, they were having a go at the dude from Google, but alas, it was not the price fight we might have seen when some have a go at Lawrence Ellison, and the MP’s go home crying like Charlie Brown after an encounter with Lucy.

So there they are, Amazon, Google and their margins of non-taxation. Those MP’s dressed like bankers and charging like Don Quixote.
It is almost like a new disney ‘fairy-tail’. The pot calling the kettle brokered. Is it not a little on the hypocritical side, that AFTER they bail out RBS, when RBS reports a 2 billion loss, that personal ‘acquaintances’ still go home with a bonus total of almost 400 million? That was not stopped was it?
But Amazon and Google, after they did everything legal (not unlike the bankers of a fat-cat persuasion), and used exactly those correct steps in their order processing that now certain MP’s cry Havoc and slip-up the dog of stores.

This situation does bring back memories of my previous blog where I accuse members of the EU thinking too local in certain cases, this tax front reads the same way. Now, if you think that I will advocate one version of taxation for the EU, then think again. That is just not realistic! That is like putting 22 toddlers in one room, asking them to all select the same piece of chocolate, good luck with that one!
Yet, the idea to streamline certain forms of taxation to ease businesses in an optional situation where web stores will have equal rules, rights and burdens is not that bad. Of course not all EU nations have the same powerful internet, so more issues will arise.

In the end, is it about web stores and taxations? Let’s face it, a political grilling that was senseless and pointless to begin with? And let us not forget, no legal transgressions seem to have been made (if I am incorrect, then this blog WILL be updated). It is also interesting that the chair person of the committee Margaret Hodge, and her family connection to Stemcor seems to be in the same class of fishing pond. How revealing! What was that about a pot and kettle I mentioned earlier? By the way a special thanks to Helia Ibrahimi of the Telegraph who had several of these facts before I did (4G in a hospital is not that realistic, hence my delays).

Yes, it seems that a elevated level of lesser taxation does exist, like an additional income support class for billionaires. Hoo-de-la-lay, as Prince John would say (Copyright: Disney).

So looking at these issues, and these facts, then what is this really about? Will this be the kick-off for a ‘simpler’ tax system? (like billionaires do not get enough deductibles as is). Is this about uniting into one tax system? The latter part would be a nice idea, however with many EU nations in desperate shape to get revenue, not realistic. There is also the slight humorous thought of PM Cameron calling Dublin asking them to do him a favour and not process Google’s non taxable issues there. What are the odds that Irish laughter will reach the shores of Sydney? #JustSaying

Make no mistake, there is more going on here. Do not be fooled to think that this is just visibility. The honourable Margaret Hodge for Barking is one clever cookie. She has been around for a long time and when it comes to the disciples of Machiavelli, she is up there with the league players, which beckons the thought what is this the start of?
The only part that comes to mind is that this is a two edged sword. On one side this is only partially about the tax lessening that Google, Amazon, a few others and the family firm (Stemcor) are enjoying. This might be in one part, a nice little jab to raise the topic of raised taxation during the G8. Consider the issues that the EU needs revenue, now consider that 1% of something remains better then nothing, and that plays nice to the Stemcor business family too, All these EU items play in her/labours favour. If David Cameron does nothing, he will look weak, any act by the PM will economically hit back and gives chance for an overwhelming victory for labour next election. The UKIP issues do not help much either, but at least in that part they are not on the side of labour.

Still, whatever pressure is applied to increase the billionaires tax bill, Westminster must be careful not to be too harsh with their ‘scare’ tactics. Scotland is only 725 km to the North and Stemcor already has an office there.

Leave a comment

Filed under Finance, Media, Politics