Tag Archives: Greece

April 19, 2015 · 10:47

The economy of change

It is now three months to the day that I wrote ‘A seesaw for three‘, in there I spoke about the Swiss Franc and the changes they decided on. In that article you can read: “So the SNB decided to abandon the ceiling on the franc, in response, the spring-loaded franc shot higher“, makes perfect sense. Why should a nation with a relative low debt hold this much in risk? So now we get a new dance! “The SNB’s decision to suddenly go back on a previous policy it had claimed to be committed to will make markets think twice before taking the bank at its word“.

This was always the issue, why should nations with relative low debt pay for the short sightedness of the incapable? In addition, the claim ‘The SNB’s decision to suddenly go back on a previous policy‘ is also a loaded part, you see, as we see with Greece at present, it seems that policies are not being kept all over the field, even now there is an implied orchestration to let Greece ‘kinda’ of the hook. The words of Christine Lagarde for creditors to go ‘soft’ on Greece is not helping. Then there is the thought I offered with: “Perhaps the question that Katherine Burton (the writer) at Bloomberg should be asking is “How come such managed levels of foreign currency holdings were left out in the open to this extend, especially after the Cyprus issue”“.

The day before that one, I wrote ‘Year of the last Euro?‘ (17th January 2015), there I stated “previous administrations lived under some umbrella with the picture of a sun, which they took as an eternal summer! Instead of caution, they ignored basic rules and just went all out on a spending spree. Now that all the money is gone, the coffers are instead filled with ‘I OWE U’ notes. When every nation spends more than they are receiving, no one will have any money left, yet governments started to borrow to one another. So, those in debt were borrowing massive amounts to one another, even though no one had any money, is no one catching on?”

I saw the writing months ago, which is why I have been hammering on the Greek issue, it should not be prolonged, and there should be no ‘alternative‘ or a ‘continuation‘. Now we get the Guardian (at http://www.theguardian.com/business/2015/apr/18/us-interest-rates-rise-federal-reserve-market-crash), the subtitle ‘Janet Yellen’s decision will have global consequences – and the end of ultra-low rates could mean meltdown for indebted countries‘, whatever are you saying Mr Bond?

I have stated again and again that those in severe debt will feel the consequence at some point. Now we see the increased risk that interest rates will rise. Yet again we see dismissals, now from Olivier Blanchard. Was he not the one who came up with “Rethinking Macroeconomic Policy” (at http://www.imf.org/external/pubs/ft/spn/2010/spn1003.pdf)?

So are we witnessing the start of targeted inflation? The quote that Olivier makes “companies may have hedged their position, while investors and finance ministers were well prepared“, well, in that regard, my response is: ‘companies that are credit maxed are never hedging positions, an elemental truth at times and as for the preparation of investors we can argue that they are usually geared towards greed (relying on a 15% turnover in a 3% world) whilst in addition, finance ministers on a global scale have been pushing things forwards for a long time, relying on the sun returning the next morning. This approach works for a week, but after 157 weeks of clouds, those finance ministers tend to project sunshine from memory, forgetting the reality of the sun’. If you doubt this then consider the list of finance ministers who correctly kept their budget. I tell you now that this list has diminished to zero for some time now. Some even exceeded their budget shortage through managed bad news, a growing trend all over Europe.

In illustration the IMF wrote in regards to the possible financial crash “It highlighted how any shock can send investors fleeing; with only sellers in the market, the price keeps plunging until someone believes it has gone far enough and starts buying“, yes this is how the rich get to be even richer, my immediate concern is the dangers that superfunds and retirement funds are sitting as they might be facing another 15%-30% write off. I wonder how people feel about the consequence of their retirement funds collapsing again and now they will have to work until they are 75-80.

So, is this realistic? Am I in an evangelising ‘panic’ mode?

One might think this, but if you have followed my blog, I have consistently written over a period exceeding a year that the first need was to diminish government debts. It was the number one issue that had to be dealt with, nothing else mattered, because those without debt would get by and those in debt will get a massive invoice. Now we see that danger. So the initial quote that the Guardian had “higher interest rates in the world’s largest economy could come this year” is not just a fab, it is a reality that will push interest payments to new heights. Did Switzerland foresee this, or were they just too unhappy with the risk the Euro had? No matter what, their act seems to have been a good one and releasing the debts they were holding onto is now a second need.

There is a side that seems slightly offensive to me. When we consider “But while it is almost certain Turkey, Brazil, Russia and many others that have seen their businesses and governments borrow heavily in dollars to maintain their spending will suffer higher borrowing costs courtesy of Yellen“, is that true? Is it due to the courtesy of Yellen, or is it because the bulk of politicians cannot get a grasp on their spending spree?

Let’s face it, rates would never remain low and many are following the good news cycle that it will remain, that change is not good and as such, they forget that in their eyes rate rises are not realistic, but they do not control the algorithm. So here we all are, in a place where change is about to befall many, the outcome largely relies on your personal stability, which is a lot easier when your debts are down.

So where lies the economy of change in our favour? That is the true question that matter and I am not sure if I can answer that. I believe it to be dependent on corporations having a balanced realistic long term view. I am however uncertain to predict who those players are. Yet, if we take a look at British politics, we should consider the following; Ed Miliband states “Labour leader tells ‘one nation’ Conservatives he’s on the centre ground and will keep Britain at heart of EU”, how is that a reality? Then there is the quote “Miliband says the past 10 days of the campaign have seen the Tories become the “incredible party”, whose unfunded promises on everything from the NHS to transport and housing have turned them into the party of ‘funny money’“, so how does this relate to the economy of change?

Well, the simple matter is that Labour decided to spend 11.2 billion on an NHS IT system, that system never came, the money is gone and the NHS is weaker still. These are simple facts that you the reader can Google in any browser. There is housing progress, but not as much as many would like. In this time of change, Labour wants to spend more money, get the UK in deeper debt, now consider the US raising the interest by 0.5%, in regards to the 1.7 trillion in debt, that change could cost the tax payer an additional 8.5 billion, considering that the IMF claimed that the UK will be short 14 billion, adding to that will be a very dangerous act.

So will the economy of change require us to throw Greece out of the Euro? Will the change of interest topple France and Italy? There are too many factors, but there is certainty that the markets will be massively impacted once the percentage changes. Andy Burnham, the shadow health secretary, will come ‘He will cite figures in Health Education England’s (HEE) Workforce Plan for England 2015/16, which he says shows the service will be employing nearly 2,000 fewer nurses over the next four years – for reasons “mainly driven by affordability”’ This is a fact we cannot ignore, yet the fact that many sides are not willing to make the hard calls on certain NHS issues, does have an impact in all other quadrants, this includes nursing staff. So before Andy Burnham comes with the alleged plan that the NHS cannot survive another 5 years of David Cameron, perhaps Andy would like to look into his own party and find the plus 11 billion that they had spent on something that never came to be. I am certain that the cutting of nurses would not have been a reality if the 11 billion had not been lost to virtual plans that never became a reality.

The last of the pork pies can be found here: “Labour has set out a better plan to invest £2.5bn extra each year, on top of Tory spending plans, paid for by a mansion tax on homes worth £2m, to fund 20,000 more nurses and 8,000 more GPs.”, the current UK plan is at a deficit, so where is the 2.5 billion coming from? Mansion tax sounds nice in theory, but those places need maintenance too, which means plumbers, electricians and so on. Also, why keep on pounding the ‘wealthy’ places again and again? It is like the wealth tax. Stating on how the rich can afford more tax. The simple reality is, is that those making more than 1 million is only 6,000 people and roughly another 16,000 make £500,000 to £1 million. So how will you tax them? 60% addition? Where will you get the money to fund 28,000 health care workers? The idiocy of Labour as they make these claims is just too unwarranted. Now add to that the news from 7 hours ago that the interest rates could rise. Once they do, the deficit will grow even more.

So as we see these interactions of change, many of them not realistic, we need to realise that Austerity is here to stay for at least two more administrations, not because we want to, but because the increase of a mere 0.5% amounts to the bulk of all NHS costs, we might not survive a third increase, so we must fight now, so that we can all move forward sooner instead of never.

 

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April 18, 2015 · 10:11

And so it begins!

The ink from my WordPad app has not even dried from the articles a few days ago. And in the UK 5 hours ago we see the following events unfurl in the Guardian (at http://www.theguardian.com/business/2015/apr/17/imf-urges-eu-to-slim-down-its-demands-on-greece). The title is already glooming bad vibes as it states: ‘IMF urges EU to slim down its demands on Greece‘, so here is the first part.

Now we look at the quotes “The International Monetary Fund has urged EU negotiators to slim down their list of demands in debt talks with Greece amid fears that time is running out to reach a deal” as well as the statement by Yanis Varoufakis “There has never been a key date. We have to see everything in combination and cumulatively. On the 24th [April] there will not be a solution, there will be progress“. This is at the centre of deception, this is why Europe is about to face the harsh reality of the people having enough!

The realisation was already there two days ago when I ‘accused’ Mario Draghi of being either Reckless or incompetent. That call was very valid in light of the dangers that Greece faces. Now it becomes a viable thought that there was never any danger for Greece to begin with and they can play the game the way they like, because someone else is willing to play footsie with their inaction.

Now we get to the statement by the Chancellor George Osborne, who stated that one misstep in the Greek debt negotiations could return Europe to the ‘perilous state’ of 2011 and 2012. The problem here is not the negotiations, but the fact that Greece is unwilling to do anything. The statement of Yanis Varoufakis makes that a given. In addition, progress or not, if acceptable plans are not delivered by April 24th, they should not be allowed to get the 7.2 billion. But here is the kicker, that makes Grexit a direct reality and if we reiterate the words from Mario Draghi, that was never a consideration.

So here comes my predicament: “If the UK (Prime Minister David Cameron and the Chancellor of the Exchequer George Osborne) do not put the hammer down at this point, there is every indication that the British voters see this in the air of ‘more of the same’ and they would hand the dangers of a massive victory towards UKIP”. This is not just a simple party issue. The taxpayers of the United Kingdom at large will not accept the austerities they face, whilst the Greek politicians are playing with themselves in the shower not doing anything productive. People from all over Labour, Conservatives as well as the Liberal Democrats will then listen to the words of Nigel Farage when he can state with some pride: “I told you so!”, that movement will not be a small one and the orchestration we are likely to face between April 24th and May 5th will only push people towards UKIP faster. Should Mario Draghi, Christine Lagarde and Pierre Moscovici ignore this, then be certain that the cold turkey that is about to be served will not taste too good for them.

They are already making changes to the timeline, as the statement was made 9 hours ago: “European Commissioner Pierre Moscovici has thrown down a challenge to Greece; you must produce a concrete set of reforms by May 11“, why the delay again? To make sure it comes AFTER the UK elections? No, time is up dear players!

You see, the UK is only step one, the tidal wave towards UKIP is nothing compared to the wave National Front and Marine Le Penn will gain under these conditions. Although the matter will not be as strong for the Dutch as their elections are not until 2018, the Dutch PVV would benefit the conditional game that some are playing now.

 

We see part of the fear in a response we saw less than 24 hours ago. One response is: “GREECE’S MAIN CREDITORS SAID TO BE UNWILLING TO ALLOW EURO EXIT You surprised? Natch they’d like their money back and pref the EU to sub it“, which is what we expected all along and the voters can reduce that risk by well over 7 billion by tossing Greece out of the Euro now. In addition we see the mention: “Greek FinMin Varoufakis: Draghi meeting lasted an hour, he said he wants a resolution soon to help #Greece grow“. Is that so?

Growth in Greece is pretty much not an option, when you have nothing left, you can only whether the storm by nailing down the hatches and let part of your crew (read the Greek population) drown. The fact that Tsipras has not done anything substantial since he got elected should be a clear indication, the entire rockstar Varoufakis tour going past every nation (in really nice hotels) has gotten the Greek people nothing more than ‘On the 24th [April] there will not be a solution, there will be progress‘ is at the heart of the matter. Billions (from rich Greeks) are safely out of Greece (read Swiss bank accounts) and those questioning that were thrown into court, no actions on previous administrations have been made and no setting to reduce the costs that the Greek government cannot pay for have been addressed. So tell me, why would anyone desire to keep Greece in the fold, when the first route Tsipras took was a trip to the Kremlin (you know, the people behind the Eastern Ukraine debacle)?

So what is in store for the UK? This is at the centre, because the ‘manage bad news’ cycles that we see from team Lagarde-Draghi will be fuelling the Farage engine more than anything else. It is not just that people are expecting Greece to be ‘saved’ again, it is done whilst those making loads of money are not held to account. By the way Mr Draghi, I hit on hard times and whilst I am doing anything possible. I am making little progress, so can you please deposit £650.000, which I will repay at 0.1% interest annual over 30 year. Seems only fair that you give the amount to people more responsible (especially me) than the Greek elected officials, ‘n’est-ce pas?‘ and ‘sans rancune‘ (after the deposit).

This gives me the next part in all this. When you take a look at the Guardian election page, it seems to me that apart from one piece by Stuart Heritage, the visibility of UKIP is almost none existent. The fear that the other parties have in regards to what UKIP could do is in my view decently staggering. In my personal view, I do not think that UKIP is the right solution for the UK, yet this is decided by voters and as 97.3% of that electorate is nowhere near my intellect and insight, the fact that these people will see it the same way is not a given, more important, when we consider the article by Stuart Heritage (at http://www.theguardian.com/politics/2015/apr/17/nigel-farage-was-the-only-winner-in-final-tv-election-debate), which we see in the quote “Calling out the assembled masses for being a bunch of hoity-toity pinkos, though? That’s madness. That’s suicide. That’s the political equivalent of a Blackmar-Diemer gambit. But Farage knew what he was doing. He knew he still had a MOAB in his back pocket. A showstopper. His very own Candle in the Wind. And so, just when it looked like events were spiralling out of his control, Farage pulled out his joker – the old “Foreigners with Aids are making British people die of cancer” line“, which did the trick, but now consider the following quote we are likely to read soon: “We, hardworking brits are paying for expensive Greek officials, we are paying the money they are spending in many irresponsible ways and we have no option but to accept their extravagant spending, even their own rich do not have to pay for anything there!” how long until the anger of these people demand change? Consider that according to the government 17% of all individuals are on an absolute low income (at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/325416/households-below-average-income-1994-1995-2012-2013.pdf), in addition, when we compare this in housing we see that 40% of those on relative low incomes are social rented sector tenants. This is a massive part of the UK that is struggling to get by and the banking wealth is very willing to let it all continue, so that those who made a really bad investment (read Greek bonds) will get their money’s worth. How do you think the British population will react in the coming week to the ‘be nice to the Greeks so that we can keep them in the Euro’ group? That is a massive electorate that UKIP can tap into and I feel certain that we will see this happen in the week leading to the election, so April 27th to May 5th as the Greeks will suddenly go into theatrical tragedy mode (read Tsipras and Varoufakis will stand in a ‘we are defeated‘ pose), who will buy it then? If UKIP does sweep the nation Christine Lagarde will have an entirely new danger to deal with, just because she was unable to muzzle the greed driven population trying to get more Greek money. The entire Greek comedy was mishandled from the very day they were allowed to go back to the market (by the way, I think I predicted that one correctly, so please deposit 2.1% of the 40 million in kickbacks the bond traders ended up with in commissions). This should take care of my bar bill for the period 2015-2019.

Yes, when we add it all up, the future looks grim and if team Cameron/Osborne (the team I support) do not bring out the big guns now, my initial prediction in 2013 (where I predicted that Labour and Conservatives ended up in opposition together) could come true. I need to find my application for running a popcorn and peanut stand in front of parliament, because the public bench will be so overcrowded that first year, giving me an interesting enterprising income (to pay back the loan from Mario Draghi), which is what Britain was all about in the first place, to be enterprising!

So, was I enterprising enough? Am I correct?

That part is at the heart of the matter. I do not know, but the dangers of this all happening is growing by the day, every day we see a new excuse on giving the Greeks more time is changing the game we face in both the UK and soon thereafter in France too. So the quote by Michael Gove ‘There will be no Conservative-UKIP deal after the general election, the Tory chief whip Michael Gove has said‘ could be very correct, because if the ECB and IMF do not change their tune, the winnings of UKIP could be large enough for UKIP not to need the Tories at all. But on the positive side, Nick Clegg will end up having a new political idol to follow, isn’t that nice?

 

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April 17, 2015 · 18:27

I read the news today, oh boy!

It was not today but, yesterday, all my troubles seemed so far away, this accountant is not here to stay, I hope we fear for yesterday!

It seems appropriate to use the words of the Beatles here. Even though many at times wonder whether London had remained British (it’s a foreign bankers thing), we all agree Liverpool is as British as it gets.

So, what brought this about? Well, it was another part in the Guardian (at http://www.theguardian.com/business/2015/apr/15/imf-forecast-uk-george-osborne-deficit-reduction-growth-fuel-tax). You see, I had an issue with all this right from the start. Perhaps you all remember how in April 2013, the IMF told Osborne to slow austerity and spend more, because that was good for the economy. George Osborne stood firm, ignored the IMF and he was right. Lowering debts as much as possible, tightening the belt was a solution. It was not a popular one, but behold, the UK economy went slightly better. So when we read ‘IMF forecast blows hole in George Osborne’s deficit reduction plan‘, I am faced with all kinds of doubts in the direction of the IMF. the subtitle gives us ‘Gloomy view on UK economy says government spending on welfare may need to be higher than Treasury plans, while lower tax receipts will undermine growth‘, two parts, the first part would be nice, because those on welfare are truly in a bad place. Yet, the UK treasury is less then empty, it is at minus 1.7 trillion and the dangers of Greece is adding fuel to that danger. Lower tax receipts do not undermine growth in my view, it starts spending to some extent and hopefully investments in business and staff to a better extent. Whether that is true remains to be seen, but raising tax receipts is definitely not going to work.

“The Washington-based organisation said the current prediction of a £7bn surplus in the last year of the next parliament would instead be a £7bn deficit” is an interesting quote! What was it based upon? You see, they imply an error of 14 billion, which is 1/3rd of the entire Defence spending. More apt, 14 billion is the budget of ‘protection’ for 2016, which covers: Police services, Fire-protection services, Law courts, Prisons, R&D Public order and safety, Public order and safety n.e.c., so how exactly can we see this 14 billion blowout? The quote “the IMF warned that its officials took a gloomier view of the UK’s growth prospects over the next five years” should be read carefully. Just like the initial mismanaged prediction the IMF made in 2013, what are they not telling us? Yes, we might ‘accept’ the harsh words from Christine Lagarde as given in another place where we read “The head of the IMF, Christine Lagarde, said delaying the payments would be an unprecedented action that would only make the situation worse“, in regards to the 1 billion Euro bill that Greece has to pay in the very very near future. Yet, Mario Draghi stated only a day earlier in regards to a Greek default “I don’t even want to contemplate that. And based on the Greek government leaders’ statements this option is not contemplated by themselves as well. So I’m not ready to discuss any possible situation like that“. So is Mario Draghi at this point utterly reckless or incompetent? There is clear indication that Greece cannot pay. Bonds for Greece are now set at well over 22%, which is almost unheard off, it also means that repackaging old debts could cost many billions extra. In addition we see the speculation from some economists “If Greece was unable to pay the IMF and is forced to default on payments to public sector staff, pensioners and welfare recipients, economists have speculated it may be forced to introduce capital controls to prevent a flight of funds out of the country“, so what do you mean prevent? Do you remember the Article by Kostas Vaxevanis? It was in 2012, where the journalist (not them tax evaders) was arrested for publishing that list of almost 2100 rich Greeks with well over 2 billion Euro in Swiss Bank accounts. This is less about money leaving and more about those who already filled their pockets (all Greeks) living somewhere else in luxury for a decade or two whilst Greece burns down.

So back to the British budget, yes when Greece defaults (which is a reality we could actually face) it will also hit the British budget. Consider the punch that Grexit will have on Italy and France, export to those two nations will lower considerably, their budgets will hit hard and anyone who financially supported Greece will now face the reality of losing out of that 300 billion means that the money comes from those underwriting those loans. Who and for how much I cannot tell at present, but it will be a distinguished list. So in all this, is the response from Mario Draghi reckless or incompetent? I let you decide!

The next part of the issue with the article is one that is an issue for me as well. The quote “Earlier this week the IMF warned that the UK’s stellar growth was due to slow from 2.7% this year to 2.3% in 2016. A judgment on the likelihood of a messy outcome to the election was behind that forecast, which it said would have knock-on effects for several years to come“. There is truth in it! You see, it should not matter too much, but the one party that could change it is UKIP. I guarantee you that if Greece gets any leniency whilst they have not done one thing to remain credible, there will be a push towards UKIP in a way we have never seen before. The people are angry! They have been cut to below a minimum and at the same time, the Greeks get to toss around 300 billion, unaccountable in any way. Timing is an issue here and I believe it had another part to play. If UKIP gets the infusion because others are going soft on Greece in the 25th hour, it will also push the power Marine Le Penn (France) needed. At that moment the push for National Front could result in a landslide victory, which means that the two largest players will walk away from the Euro, this pushes Germany as well, because it must protect itself. The fallout will be legendary.

First I must warn you that the last part is a personal view, so you should look at where you live and whether my vision has any reality, but if so, consider what would happen and how much it hurts your future!

But back to Britain we go! Those elements have an impact and that is why they had to be mentioned, but the reasoning of the IMF projecting it all 14 billion lower is still and issue. They were wrong before, but are they wrong now? Are they factoring in Greece? The IMF looks further, but now includes greenhouse gas emissions. It is stating a needed change (to some extent) to counter lower taxation due to collapsed oil prices into raised taxation based on energy usage. I am not sure if there is a case here, if the lower oil prices gets people moving, preferably into jobs, that that would also spike the Tax coffers as welfare goes down and taxable income increases. Pushing people into high energy bills is not a solution, especially if that stops a workforce from becoming mobile. So, I have issues with this article on several sides.

Beyond the budget, the first duty will be to lower to total debt. It will be a hard road and it will mean ongoing austerity, but if now, consider how Greece could be a factor in toppling the governments of France and Italy as their debt is maxed out, we must walk away from the walk softly approach, we must battle the debts if we want to come out on top, which relates again to the IMF and some of their statements, who are they representing stronger with their ‘status quo’ message? Japan? US? Or their own chance to survive?

The question there is too complex for me to see a solution in, but there is clarity that the first duty of the Commonwealth will be to get our budgets right and to get rid of the debts we have. Germany already showed the evidence a few years ago, now the Commonwealth must follow!

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April 10, 2015 · 22:09

An exceptional pound of flesh

Two articles hit my eyes as I took a small break from my midterm exam. When you dig into the: who, what, when, where how and why of Patent Systems, your sanity prevails if you take a small break every 2-3 hours. It is just the only sane and safe way to avoid getting stuck on the same page.

The two articles were ‘Cuba seeks foreign investment as it shores up increased diplomatic ties‘ (at http://www.theguardian.com/world/2015/apr/10/cuba-seeks-foreign-investment-as-it-shores-up-increased-diplomatic-ties) and ‘Pound volatile amid general election uncertainty‘ (at http://www.theguardian.com/business/2015/apr/10/pound-volatile-amid-general-election-uncertainty), there is no real relationship in these matters, or is there?

First, let’s take the last part first as to get it all out of the way. The end gives us: “Investors were also positive on Greece’s payment of a €450m (£325m) debt to the International Monetary Fund on Thursday“. Why? Let’s not forget, this payment is nothing more than 1/3rd of a billion against outstanding HUNDREDS OF BILLIONS, so why are investors relieved? Greece has not presented any decent acceptable plan and the visit from Tsipras to Moscow to rattle some cages will count against him sooner rather than later. In addition I would like to call attention to the ‘altered’ view from Christine Lagarde as she mentioned “developed and emerging economies still suffering the after-effects of the 2008 crash must collaborate better to avoid an era of low growth”, which reads like a detour, an extra train stop on the track where the distance between recession of true growth seems to be increasing, not decreasing or remain stable. Apart from the fact that Greece only has 5 days left to present their plan (at http://www.bbc.com/news/business-32229793), the one part everyone simply ignores is that after they get the money, then what? If these newly elected officials will not push through and re-debate the issue again, the Eurozone is down another seven billion euro plus, then what? Will Greece become a vulture funds target? Will we see newly created carefully phrased denials on what will never be? That one part can be found in the quote “Without new money it will struggle to renew €2.4bn in treasury bonds due to mature in the middle of April, or pay back another €0.8B to the IMF on 12 May“, so consider that Greece might be unable to pay back 770 Million Euro on May 12th (decently likely scenario), what else can they no longer pay? Let’s not forget that the 12th of May payment makes up for 0.25% of the debt, the interest would be is a lot more than that, so how will any ‘investor’ choice pay out? Are you people awake now? So, I dealt with Greece! Now to the linked other parts!

You see, the link to England will become apparent soon enough, when we consider the quote “Analysts have warned that the pound could have further to fall as financial markets react to uncertainty created by the closest general election for more than 20 years” l, we have to wonder how reserved these analysts truly are, a stable growing economy is scaring them? I agree that the plans from Ed Miliband are decently ludicrous, bus in the end, if elected, he must do what is best for the nation (which means that he would have to vote for David Cameron, hawk! Hawk! Hawk!). In all seriousness though, a close call or not, there is something wrong with the statement Michael Hewson makes: “The pound has started to come under some pressure in recent days as the prospect of political gridlock“, whilst the market is positive as Greece pays back less than a percent of its debt, this whilst it is clear that Greece has no funds left. How is that dimensionality rational in any way, shape or form? That is, unless you take into account the part that the Guardian is not mentioning. If the market is truly worried on what happens when Nigel Farage comes out on top, or ends up with too much of a gain, then the united front that Farage and Le Penn would show, would truly be a concern to investors, because those two have had enough of the entire Eurozone issue on several levels and Greece only worsened their resolve (meaning that both are more eager to pursue the end of their EEC membership. a nightmare scenario for markets on a near global base.

Now, the markets also made the following ‘claim’: “Currency traders have also been unsettled by signs of weakness in Britain’s manufacturing sector. Production figures are due out on Friday morning“, this is fair enough, you see, manufacturing is an issue and it is not that strong in the UK or in many other places for that matter. Yet, two hours ago, the following was reported: “UK industrial output is weaker than expected: it edged up 0.1% in February, vs expectations of a 0.4% gain, while manufacturing met City forecasts with a 0.4% rise. Industrial production is the wider measure, which comprises manufacturing, mining and utilities“, so manufacturing met the expectations, so why the hesitation? I am not making any assumptions here, but I am wondering on how much certain markets assume that met expectations were supposed to be exceeded. Especially in a European mess that is still all over the place. It is almost like the markets will not tolerate any bad news, is this linked to some views on US bubbles (housing for one) that could burst before June 30th? This is a question, not an assumption or an implied issue. but the question should be asked in a very clear way and certain parties should answer it in very clear ways too, because at present, when you see some journalists report on economy, they quickly move all over the field, pretending to draw a picture, whilst the sketch we end up seeing is that of something we did not ask and it leaves many with too many questions. Did I oversimplify the matter again?

So now we get to the true path in all this, the link between the Pound and Cuba. Some might know them, some do not, but I remember the Cuban Fleet Freight Services (Cuflet). I reckon that looking into options with Cuba via Cuflet could spell good times for several players, if manufacturing options are found in emerging markets, why not see what offers could be made and found there. The Dutch could gain a headway by looking into the Bicycle market, engineering projects, the issue is clarity. When we consider the article ‘Navigating Complexity in foresight: Lessons from the UK future of Manufacturing Project‘ (at https://ec.europa.eu/jrc/sites/default/files/fta2014-t1practice_52.pdf), I personally am willing to get a few giggles from the futility that figure one shows (2008, Popper’s foresight Diamond). I do not disagree with the image of with the elements of creativity, interaction, evidence and expertise brings, but in the end Manufacturing is about what one has and the other one needs. So elements like Viability, opportunity, economy and shipping brings us the need for what can be manufactured, what could be sold and what is to be delivered. So when I read the conclusion on page 11, where we see “The high level of complexity of manufacturing systems and the diversity of forces acting on them make anticipating future configurations , challenges and opportunities particularly difficult. Manufacturing foresight needs to deal with multiple units of analyses, assimilate a variety of evidence at different levels of disaggregation from a variety of sources and integrate diverse stakeholder’s perspectives“. A view from academics from Cambridge as well the government office for science.

So let’s break that down in something we all can understand.

  1. Good business is where you find it. (Robocop, 1987), which gives us opportunity
  2. Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage to move in the opposite direction (Ernst F. Schumacher), which gives us a handle on complexity in regards to manufacturing systems (the reason to avoid complexity whenever possible).
  3. We have to choose between a global market driven only by calculations of short-term profit, and one which has a human face (Kofi Annan), which gets us to the economic side.

We have been so blinded looking at those who only seek short term maximised personal gain, that we forget the satisfaction that can be gotten from a long term goal where both sides make gains and interact with their economy in a profitable way, without denying the other party their goals. Here we see the option for both the UK and Cuba. It is not a given, it is not a guarantee, but an option, an opportunity to consider. It is the one side of Warren Buffett I do (partially) admire, he thinks long term (in case of Tesco, not long term enough), but overall the long term side will always pay off, which is the path we should walk, which is of course not the path that the bulk of hedge funds operators want us to consider and as too many listen to those people, we end up having a problem. So as we look at the pound of flesh that could give us a sterling reward, we tend to ignore that part for the fake glory of short term boosts. Yet, if we see Lidl and Aldi where we clearly see exactly that this longer term approach will keep them afloat, unlike their competitors, which is the issue at hand!

Because in the end, the conclusion quote from the academic article gives us the massive anchor that they did not properly dimensionalise ‘assimilate a variety of evidence at different levels of disaggregation from a variety of sources and integrate diverse stakeholders perspectives‘, too often the data presented from the view of the stakeholder cannot be trusted. Whether it is the weight applied to the source, the way the question was formulated and set into the data collective, or the methodology of analytics that was pursued afterwards. It was a painted view from a person with a goal and a presented image, that ‘presented’ image tends to colour all connected evidence, which gives us a view of many games as they are played, but in all this, we all make the same mistake, we compare presented results and statistical results, whilst the individual sources are often too unknown, which is truly a bad an unexceptional path to walk.

 

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April 8, 2015 · 11:20

Is it illogical?

Today the news is all about Greece, not because they are getting it done, but because they are now less than 24 hours away from a 450 million euro invoice and whilst Prime Minister Tsipras stated that they have the cash to make the next payment (at http://www.bloomberg.com/news/articles/2015-04-04/greece-has-cash-to-make-imf-payment-next-week-minister-says), of course, that statement is now an issue as we wonder why Tsipras took the fast plane to Moscow.

In other news (at http://www.theguardian.com/world/2015/apr/06/varoufakis-extends-washington-charm-offensive-after-talks-with-lagarde), where ‘rock star’ Varoufakis is smiling all over the place. the quote “The hope is he will gain the support of Treasury officials in persuading lenders to cut Greece some slack” seems highly misplaced as the Greek elected officials have been sitting on their hands in feigned acts of ‘activity’. Yet the article shows two interesting quotes. The first one is “it has been openly critical of a German-dominated Europe pushing the country too hard on austerity and fearful of the effects that might have on European unity. A Grexit would spin the markets out of control. It is the last thing Washington wants“. It seems that the US might have issues with the German approach of reducing debt. You see, that hits the bottom dollar, the US can only partially recover if THEIR banks get the slice of the multi trillion dollar debt Europe has, once the debt goes down, their income slows down by a large margin.

The second part here is the market response to Grexit. Yes, the US has a fair point trying to limit that event, but this implies the following:

  1. I had been correct for well over a year in my statements that a tumble of the Euro would massively hit the Dollar and the market.
  2. The fact that the Greek exit, with 500 billion in debt has SUCH an impact, whilst the Greek economy makes up for less than 2% of the European economy implies that the European nations at large are borrowed up to the max and this first stone falling, gives us a domino effect that will wound the market for a longer time, which means the US holier-than-thou DOW will also feel the massive impact one way or another.

If economies at large are THIS dependent on that Dow Jones Index, then what failures are we going to see in addition to Greece?

The second quote that is interesting is: “Varoufakis, was scheduled to meet Nathan Sheets, US Treasury undersecretary for international affairs, two days before Tsipras heads to Moscow for talks with the Russian president, Vladimir Putin, on Wednesday“. This is interesting for the simple reason which is found in the question: Why?

You see, when we look at Nathan Sheets, the treasury page (at http://www.treasury.gov/press-center/press-releases/Pages/jl2640.aspx) gives us: “Sheets will lead Treasury’s Office of International Affairs, which protects and supports U.S. economic prosperity by strengthening the external environment for U.S. growth, preventing and mitigating global financial instability, and managing key global challenges“, so why was Varoufakis meeting Nathan Sheets? Is he not all up in arms to protect Greece from collapsing? Which might be the same goal both have, but that gives extra weight to second implication I mentioned, the Greek debt has far fetching consequences, so why would a flight to Russia have any positive result for Greece, it would suit Russia just fine to see the DOW tumble. So unless Greece is making a deal that includes the option of a Russian base on Greek grounds, we should consider the possibility of watching a linked smoke screen we see here.

That conclusion (the smoke screen) is given weight by the following quote we see in another Guardian article: “Mrs Lagarde … stressed that, in Greece’s case, the Fund is willing to show utmost flexibility in the way in which the government’s reforms and fiscal proposals will be evaluated“, as well as “It added that in separate meetings, US Treasury officials who also met Varoufakis expressed the willingness of the US government to play the role of an ‘honest broker’ in helping Greece to strike a deal with its lenders“.

The question becomes, flexibility in which direction? That question follows the ‘honest broker‘ offer from US treasury officials. If this was (very likely), the Nathan Sheets meeting, then we get a new issue, not just who gets the brokered deal and at which percentage, we now see a second instance where IMF and US needs meet hand in hand. Did we not see a similar evolution with Argentina? If that is so, then who is catering whom and how much will it cost the Greeks, when the actual full invoice is revealed after a massive black out through smoke screens, miscommunications and incomplete data. Yes, those are presumptions on my side, but when you recall the Argentinian debacle, where they were pushed towards vulture funds, after IMF help was denied through a request by the US, many press members did not properly follow up that part and no clear information was ever published, so are my assumptions that far out of bounds?

Now we get to the interesting part. You see, he Guardian has another piece by Phillip Inman titled ‘IMF needs to see the bigger picture – that debt can choke off growth‘ (at http://www.theguardian.com/business/2015/apr/07/imf-needs-to-see-the-bigger-picture-that-debt-can-choke-off-growth). Here we see the following parts that are a decent chunk of sizzling debate that we can charcoal grill in an instant. “Yet the remedies outlined by the IMF to counter the threat of persistent low growth in Britain and other developed world economies, as documented in that report, show that debt influences growth and in extremis can choke it off” as well as “the IMF says the world’s major economies risk a long period of low growth unless governments do more to overcome the after-effects of the financial crisis and the longer-term problem of ageing populations“.

I do not deny the correctness of the statements, but the statements are all extremely short sighted, especially when you consider that the people making the statements are on high 6-7 figure incomes. Let us not forget that these governments decided to get themselves in debt and that for well over a decade, no proper budget has been pushed through. It was Germany and Germany alone, that tightened their own belt by a lot and as such they have been enjoying lessened interest payments, which is now saving them billions each year. The second part is that ‘overcome the after-effects of the financial crisis’ is all about proper budgeting, which has gone amiss all over Europe (not just in Greece), in addition ‘longer-term problem of ageing populations‘ is not completely a valid concern as this had been known for well over a decade, which means that plans should have been in place for a long time.

Now we get to the interesting part. As governments on a global scale were so eager to be the bitch of large corporations, the involved governments painted themselves in a corner. Yet, the IMF is not innocent here either, I had a go on their numbers in 2013, when they had published ‘World Economic Outlook April 2013‘ (at http://www.imf.org/external/pubs/ft/weo/2013/01/pdf/text.pdf), where they stated that advanced economies would be performing at 1.2% in 2013 and 2.2% in 2014. I pretty much labelled the group behind that piece of ….paper ‘bonkers’, now we see “Looking forward, the IMF said potential growth in advanced economies was expected to increase slightly from an average of about 1.3% a year in the last six years to 1.6% until 2020, but not reach the 2.25% average seen between 2001 and 2007“, So this means I was right, my simple use of an abacus got me numbers more precise than they did with their ‘economists’ that they bunched like grapes in an analytics department. I did expect numbers to be a lot better in 2016, but that was based on the limited information I had, irresponsible elected officials did skew my numbers more in a negative way, silly me for having hope that elected officials would keep a level head in all this. Serves me right!

Yet, behind all this is a little more. It is the quote “But growth is not the only way to diminish or pay back debts. Cancelling them is another. Banks do it with their worst performing customers. Unfortunately for Greece, the IMF refuses to use the same criteria as Lloyds or RBS would when confronted by a failed business” that gets to me. As an assumed speculation this path is not a bad option, and any Journalist has my blessing to entertain such a thought in the proper context. But this article does not do that, it is left in the air at the end of an opinion piece, without proper merit. This makes me wonder why Phillip Inman economics correspondent added this. Just to give visibility to his book? I seriously doubt that, the statement in the air is the issue in this, perhaps like me he is postulating that the ‘forgiving’ of debts is what certain banks are hoping for, because it puts them in the clear and leaves the debt with the underwriting governments, a step Germany is opposing rigorously (and rightly so).

What is in my view decently clear is the prediction I made earlier, that Greece is playing Possum in the 11th hour is coming to fruition, my issue becomes, why is the Greek population accepting this and why is there no proper investigations in lighting up all the sides on how previous Greek administrations accepted tons of debt without any decent exit plan. In my view, Antonis Samaras was sailing the only path that had the option of keeping the Greek population independent and proud, a plan that is certainly becoming less and less a reality under Tsipras, because no matter what happens next, whether it is feigned forgiven debt or any Russian deal, there will be consequences for the Greek population at large, an issue ignored by most players involved, especially their elected officials.

 

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April 5, 2015 · 20:29

The Labour Manifesto

Ed Miliband presented his Manifesto Res Rei. In light of what we here in Australia laughingly refer to as ‘the Labour party’, it seemed like a good idea to take a closer look at the speech. The full speech can be seen here http://labourlist.org/2015/03/miliband-launches-labours-business-manifesto-full-speech-text/.

So let’s take a dip into the claims pool.

‘Playing by the rules and paying the taxes that support our public services’, Really Mr. Miliband? So how will you solve the issues involving Apple, Google, Amazon et al? What measures are currently in play, what measures did Labour in its previous governing term put into play. I say naught!

The second part is found soon thereafter ‘With a government that balances the books, invests in infrastructure and works with you to improve skills and open up more competitive markets‘. The Tories are trying to get the books balanced, which means austerity. Labour had a massive hand in giving the UK that debt, so we can offer that Labour has no ability to balance books and the investment that they talk about will drive the UK into deeper debt.

Then the story changes a little and Ed Miliband goes into waffle mode. We see ‘despite the odds‘, ‘too many obstacles‘, ‘the lack of certainty about the long term‘ and my favourite: ‘Our productivity gap is at its highest level for nearly a quarter of a century‘. That last one is full of fun, because what is it based on? Weighted numbers, a lack of insight or the added anchor of virtual corporations?

Now he gets to the promise: “So we’ll balance the books and cut the deficit every year“, yes, how will you do that by investing and balancing the books at the same time? The current debt spring is loaded, because the UK has to come up 23 billion every year to pay the interest of the current deficit, so good luck with that statement, you do remember that your predecessor was cause to a massive slide in debt Mr. Miliband?

‘The struggle to find the workforce they need‘, which sounds nice in theory, but many corporations hire young unexperienced people to get away with what some want to slide under that table, when we see the issue where Ross Etherson, who admitted 21 counts of making or supplying articles for use in fraud, cost the NHS more than £37,000, Isleworth Crown Court heard, we clearly see that there are other issues at play, when we take the info from the BBC at http://www.bbc.com/news/10604117, we see that unemployment has steadily dropped under the Tory government. Now, I will in all fairness state that labour was confronted with the 2008 problems, but that mess was not properly dealt with under labour either. The mess left from their debacle 1997-2010 is still getting cleaned up half a decade later.

Now we get to the fishy side of it all: ‘It is a partnership for a purpose. We will give you control of the money for apprenticeships and in exchange we will say that any firm that gets a major government contract will have to provide apprenticeships to the next generation‘. How is this even realistic? Giving control of the money means that all kinds of accounting irregularities are likely to surface, then what? And in regards to ‘major government contract‘ and ‘provide apprenticeships to the next generation‘, how is that not discrimination towards the current aging workforce? In addition, we see that there are situations where apprenticeships are not a solution in the first place, which is just the reality. Consider a new frigate that is getting build with 500 engineers and 10 apprentices on the job, how many delays and what security breaches could the new frigate face? So not apply this rule to all fields? That is just a mess waiting to explode in the faces of those proclaiming it to be a solution.

Then we get (after another wave of waffling by Ed Miliband) ‘the priority for business tax cuts‘, yes, that has always been a good idea, especially as Google and Apple seem to pay 0.1% in taxation. How about infrastructure? Ah, that is next, where we see: ‘That’s why we’ll follow the recommendation of Sir John Armitt and set up a new independent National Infrastructure Commission‘, yes, spending more money on something that will not prove to be a solution, whilst the UK is down a trillion, so at this point, after we saw tax cut and infrastructure and invest, let us remember the earlier promise “So we’ll balance the books and cut the deficit every year“, which I see as:

  1. No balancing the books
  2. Increasing, not decreasing the deficit.

Now we get to the ideological part, which Ed Miliband is of course entitled to: “There could be nothing worse for our country or for our great exporting businesses than playing political games with our membership of the EU“. that is partially true, yet as the EU is unable to muzzle Greece with their flim flam rock band approach of not dealing with their debt and whilst several players are now willing to push Greece into deeper debt, both the UK and Germany need to realise that Greece is getting their credit for nothing and their luxuries at the expense of the other EU nations. How long until it is just safer to let the rest of the EU drown in their inactions against Greece? Which by the way has every likelihood of pushing both Italy and France over their maximum debt threshold, which has massive implications for any member remaining within the EU, all because no one was willing or able to stop Greece?

Now we get back to part of the speech that is an issue ‘Two years of uncertainty in which businesses will not be able to plan for the future‘, how about the fact that most of Europe in a denied recession, due to massive debt dealing is not the way to get any level of certainty? In the Netherlands, unemployment is at 7.2%, In Belgium it is 8.5% and in France it is at 10.4%, so when we look at what business options there are in Europe, we will see a cold turkey that comes home to voluntarily roost in the oven at 190 degrees, because the crispy warmth is loads better than the cold outside, even if the turkey is about to get eaten in the process.

If there is ONE business plan, that that would be the one, where the UK gets by for now, trying to grow, but most importantly is reducing the debt it has, so it does not have to fork out +20 billion in interest to banks for money the Labour party had spent.

So as he goes on reminding us on ‘We need to be a country that rescues our NHS with more doctors and nurses‘, yes, we all remember the NHS 12 billion computer scheme, that did not go too well for all parties involved, perhaps listening to others would have helped the Labour party heaps, but that was in those days never an option, so why trust them now? so the phrase ‘Not what we have seen over the last five years where the NHS slides into crisis‘ is a little misplaced as it was Labour who did messed up 12 billion, an amount that could have kept loads of nurses into jobs and grown the NHS. It was not meant to be!

So when we see the following quote: ‘To carry on with a Conservative plan based on the idea that as long as the richest and most powerful succeed, everyone else will be OK, or a Labour plan, a better plan, that says it is only when working people succeed that Britain succeeds‘

We ought to consider another option. To cut drastically on medical services for those on drug and alcohol based events. These people only get treatment if they can pay in advance for treatment.

Let’s take on the binge drinking issue heads on!

Those who fail the first two parts are thrown into a drunk tank like in the old days. If they die, well that is just too bad, we can blame the parents, we can rejoice on a growing number of available housing (the deceased do not need them) and the nations has even more jobs available and the cost of the NHS goes down.

Now, it will be fair if you disagree with me on this and I admit that this step is hugely inhumane, but consider: these people cost the society 21 billion on an annual base, which includes the 3.5 billion to the NHS. To protect the victims of their crime and violence, they will be remanded into prisons/work houses. So, you see, production will be better off if we change that workforce too!

Yes, I agree it is inhumane, but why must the people at large suffer for those who think that the rules do not apply to them? I have no issue with these people receiving treatment, however, if you are so willing to binge yourself for £39-£69, you can either fork out the £78 for treatment, or sleep it of in a drunk tank, either way, we reduce spending on NHS, which helps towards the actual spending balance Labour is actively ignoring.

So as I ended the look at the Speech of Ed Miliband, I must conclude that it reads political and in addition, decently devoid of realism. Which is a shame, because UK Business is in dire need of realism, which means the solution will come from somewhere else.

Which now gets us to part two of this event. It seems that Nicola Sturgeon is all about getting Labour into No10. It sounds nice, but how is the Scottish National Party any help there? Now, it is fair that they feel a lot more comfortable with their future if Labour is in charge. It is a valid call to make and it is theirs to make it to begin with. Yet, we must not forget the issues that Scotland is already short 11% on their budgets and with oil prices the way they are, their independent future is a lot less certain. This is a shame and I mean that. I was all in favour of Scotland attracting all kinds of Businesses from all over the Commonwealth to grow their economic footprint. I am still reasonably certain that Indian generic medication could grow all over Europe if they have a foothold in Scotland, which allows easy access to places all over Europe. With Oil being a problem and not a solution, other fields must be tackled to grow Scottish interest and the Labour party is nowhere near able to help Scotland there. If we revisit the issue of balancing the books, it will take less than 6 months for Ed Miliband to find way to move business out of Scotland, just to make his side look better, I wonder if Nicola Sturgeon is realising the trap she is setting herself up for.

So if we look at the Guardian article, which is less than 24 hours old, we see ‘Scotland’s SNP revolution terrifies the main parties’ (at http://www.theguardian.com/commentisfree/2015/apr/05/scotland-snp-revolution-terrifies-main-parties), which is an interesting light to see after the Labour-SNP link. There is one debatable quote that caught my eyes was: “Underpinning these analyses is a barely concealed narrative of contempt, which says they will all come to their senses when they realise there will be no land of milk and honey in a Scotland under the absolute control of the SNP“, this is fair enough, but I do not think that this is due to the SNP, I firmly believe that independence too late saved Scotland, if Scotland had been independent whilst the oil prices went into the basement, the damage would have been unimaginable. I remain in faith that growing business in England and Scotland is the only solution, it will be important for both (mostly Scotland) to look at fields they had not considered before. The Indian generic medicine growth is only one branch. The open remoteness (hence securable locations) Scotland has to offer, could spell interesting times for any manufacturing option that does not require the pressure of London, with added benefit of the lower costs that Scotland brings. Consider the Ferry from Scotland to the Netherlands, opening additional paths of revenue. Scotland can grow options, it is just the question whether the Labour party is truly a solution here.

So as we all get to ponder the choices the voters face for England and Scotland, I do hope that they will all look seriously at these flimsy speeches that rattle on all sides. This applies to all parties, not just Labour!

 

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March 21, 2015 · 12:27

This is not Sparta!

You might not realise it, but many of us have a Greek side in us. The gamers are all about ‘This is Sparta!’ as they slay their opponents Gerard Butler style (a Scotsman no less) in Diablo 3, more than a few of them would also consider becoming the consort of Lena Headey (Queen Gorgo), a woman who might be twice their age, but still looks better than the average 25 year old photo model. Some with a more academic approach will be confronted with the Socratic Method as they get through another Uni class. Some will love it, some will hate it. It seems there are no people in the middle ground here. Doctors still recite the Hippocratic Oath and we could argue that Prudence which comes from Phronesis, a Greek word, which got introduced by some old Greek with a beard. I remember the speech, this old guy suddenly making a speech, roughly 334BC, I was watching the Panathenaic Games and suddenly he starts deliberating (at himself) in a most bombastic voice. The man starts ‘ranting’ about something called Nicomachean Ethics, nice, but not while ‘I am watching a game!’ Someone told me his name was Aristotle. I reckon the fab never caught on. Let’s face it, public speakers and the virtue of practical thought, it will never catch on, I reckon. Guess what! It has been 2345 years and I was right! Take this Tsipras fellow, as I see it, he continues a long line of public speakers void of practical wisdom.

That we see in ‘Greece financial crisis: EU offers funds in return for urgent reforms‘ (at http://www.theguardian.com/business/2015/mar/20/greece-financial-crisis-eu-offers-funds-in-return-for-urgent-reforms). You see, this Alexis Tsipras has been in office almost 2 months now and as we can read in the article, he has nothing to show for it. He was supposed to show reform, he now has 10 days and the photo as printed shows away hiding his mouth behind his first. Is it agony, frustration, defiance? Is it all just theatre? The BBC with ‘Greece to draft new reform plan within days – EU leaders‘ (at http://www.bbc.com/news/world-europe-31963952), which shows a ‘smiling’ Tsipras with the quote “Greece has agreed to come up with a new reform plan within days to secure the additional bailout funds required to prevent bankruptcy“, read those words carefully. It does not state, ‘will finalise’, or ‘will complete the current draft’, it states ‘to come up with a new reform plan’. So when we see the quote “I think that all the sides confirmed their intention to try to do their best to overcome the difficulties of the Greek economy as soon as possible“, I feel slightly miffed. You see Tsipras is all about the blame game. In one part, he has every right to be so, because the mess was not initially of his making. He did get into the elections as he saw he could ‘play’ the voters and now it is crunch time, he cannot deliver, because whatever defiant act he will attempt will cost the people of Greece dearly. As I see it, he’ll end up doing exactly what Antonis Samaras was doing, I wonder if that constitutes election fraud? Promising something, not doing it and doing what the opposition was doing all along. As I saw it (yes, a personal view), Antonis Samaras was a fine politician trying to decently play a really crappy hand that he got dealt. You see, in this regard, none of them have done anything  about holding to response the previous administrations that tailored the deal, that spend money an entire next generation did not have, not to mention the artful tax dodgers, none of that was as I see it done! I reckon that Tsipras would only have to arrest Kostas Vaxevanis to show that he is no better than any of the other previously elected politicians.

You see my emotion here is because I love Greece (Specifically Crete), I feel pain as I see that it is driven into the ground by elected officials, it is largely done so through inactions, which makes it even worse. It is sloth in its most profound form, not just spiritual and emotional apathy, it is done through additional decisive inaction. A form of treason of the worst kind. Almost like the captain of a ship who now INTENTIONALLY goes towards an iceberg expecting the iceberg to get out of the way. It reminds me of an advertisement where the captain of a cruiser (USS Montana) who decided to play chicken with a lighthouse (at https://www.youtube.com/watch?v=sYsdUgEgJrY), yet in this case it is not a person being handed ‘incomplete’ or ‘incorrect’ information. In this case we all know the object in front of the good ship Hellenic Republic and its captain(s) have not taken the measures they should have. This is how the news is reading to me. What should have been done is a list of continuing meetings non-stop with all parties. The Greeks were given a play, theatre of a mediocre level and soon they will not be left with any options. As I personally see it, politics of its very worst kind.

All this now reflects in a bad way, especially if we take the word of the NOS (Dutch News). Here we see “‘De verwachting was dat het goed zou komen’, zegt de Rabobank-econoom. ‘Maar het probleem is dat de Grieken steeds hun beloftes breken. Ze proberen steeds opnieuw over de voorwaarden te onderhandelen’” “‘The expectations were that everything would be fine’ said the Rabobank economist, ‘but the problem is that the Greeks break their promises and then try to renegotiate their deal again and again’{translated}” as well as “We zijn wel gewend van de Europese politiek dat oplossingen pas gevonden worden als we bijna in de afgrond stappen” “We are used that European politics will find a solution as we are about to step into the abyss {translated}”.

This all directly reflects back to the days of the SNS-bank debacle ‘too big to fail‘. It seems that Tsipras is taking the ‘let’s take this over the abyss, so I can blame someone else‘ approach. Not the most subtle path of the blame game, but a blame game tactic none the less. When did we see any serious step to address reform from Greece? It seems to me that the ‘let’s be nice one more time to Greece‘ is counted upon, yet no clear and decisive act from the Greek elected officials is coming. So as the possible mark of bankrupt is looming no more than 2 weeks away, did the Greek population consider that if the government is out of money, how much money is actually available at a bank? When the run on the bank starts, how quickly are those coffers empty and where will the people get cash to pay for the average need like food, water and electricity?

That part seems not addressed in any way!

Actually it is (at http://www.afr.com/news/world/greek-coffers-running-on-empty-bring-accident-threat-closer-20150320-1m3nym), the Australian Financial Review is not the only Financial Review paper, so there will be more, but for the most, we see little about this little part: “While Mr Tsipras isn’t saying what’s left in the bank, he acknowledges Greece is facing ‘liquidity pressure’. The country’s cash shortfall is projected to hit 3.5 billion euros in March“. So even if that part might be ‘virtual’ to some extent, how much money is actually available to banks? That part might be seen when we consider “The Bank of Greece has plugged cash shortfalls by tapping the reserves of other public sector entities, including pension funds, hospitals, and universities“, as well as “The Bank of Greece and the European Central Bank won’t report official cash outflows for January until the end of the month. But sources in the Greek banking sector have told Greek newspapers that as much as 25 billion euros (US $28.4 billion) have left Greek banks since the end of December“, which comes from http://www.cnbc.com/id/102439432. So in two weeks, how will things get paid for?

That is a question Greeks (the population at large) should be asking, because when the money is gone, how will they address the bills with the cash of their savings whilst the banks had pushed them in possible other none profit making endeavours? At least, if things really collapse, we can always opt ‘at least it was due to a radical left vision’, in the past (read 70’s), the radical left visions gave way in Italy to Brigate Rosse and in Germany to the Rote Armee Fraktion. Their economy was never this desperate, so I wonder what the Greeks will come up with, I am however sure that it will be blamed on the Germans (again).

In my view, I wonder, was I correct two years ago? Could an independent Crete have created at least a partial economic growth? Would Crete have been better off in a state of independence? I do not proclaim to have the evidence, but I feel that my feeling back then was spot on. Now the rest of Greece could drag down this island against their will.

It seems very unfair, but then in the politics of Tsipras (and that of politicians at large), fairness never had anything to do with it.

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March 16, 2015 · 01:10

In fear of the future

As elections draw near, we see an everlasting image of what was, what could be and what is. The last of the issues is then rejected in two directions. As the Tories will go from what is into what could be, we will see labour into the mesh of what was and what did not happen. They are elements we saw coming a mile away (at http://www.theguardian.com/politics/2015/mar/14/osborne-budget-speech-economy-growth-deficit).

War is constant!
The political face of warfare never changes!

Both true, both unconditionally an issue in this day and age.

You see, the one trillion in debt is bogging down the UK and the Commonwealth as a whole. We need to bring it down, yet when we see the more likely response as it is given in the Guardian: “Deficit reduction has been much slower than Osborne forecast five years ago. In his first budget, in June 2010, the chancellor predicted that he would need to borrow £37bn in 2014-5” and “that tax receipts would cover day-to-day government spending. The actual figure will be almost three times that“. Both are right, both are staring down the wrong rabbit hole! If we accept the generic statement that the UK faces a £43 billion interest bill every year, which is more than the spending of Defence, are we catching on? Bankers end up with a 43 billion payout, which is certain money, no risk and all very much fuelling a banking bonus. The interest is just a little shy of 50% of the allowance for Education. Getting rid of the debt must remain the highest priority. Apart from most of us regarding the interest bill as an issue, it is nothing compared to what happens if the budget is not properly managed. Yes, it sounds so nice that we see the quote “Vince Cable has warned that George Osborne has no room in next Wednesday’s budget for a substantial pre-election giveaway, but acknowledged that there was some headroom in the public finances for modest tax cuts or an increase in public spending” (at http://www.theguardian.com/politics/2015/mar/13/vince-cable-osborne-budget-no-room-pre-election-bonanza), but regard the Guardian image (at http://www.theguardian.com/news/datablog/2014/mar/21/budget-2014-tax-spending-visualised#img-1). Here we see that borrowing was still needed, at the amount of £84 billion, which means that the debt is not diminishing. At the same time, the Eurozone decided to go on a one trillion spending spree, which will hit the UK (as part of the EU) sooner rather than later, which is part of the problem too, because these spending sprees are only working for a drive of the people towards Ukip. To be honest, I am not sure if the premise has changed. I remained on the fence considering that leaving the EEC was too dangerous, but as we see irresponsibility and non-accountability (the sad comedy of a threesome involving a Greek, a credit card and a banker) is now fuelling a stronger drive towards Ukip, Whilst political Europe is wording bad management clauses and whilst they have no real solution, we see deeper dive into debt. The UK MUST AT ALL COST prevent this nightmare. It seems all too clear that Germany is now also ready to leave the Eurozone. Perhaps not the politicians in an outspoken way, but the German people seem to have had enough. Of all the crazy rock bands that Europe has, the Greek one, with at the microphone Alexis Tsipras, the drums are played by Panos Kammenos and as ever in style of Greek theatrics, the Bass is played by Yanis Varoufakis. The name of this band is Aite and it remains to be seen how long the band will remain in existence. You see, instead of addressing failures, the players of this band entered the blame game. A game played by many, yet always only illustrating their own lack of commitment.

In that we see a link to the UK, the UK, its MP’s and those in charge with a title of that what is (like Chancellor of the Exchequer), this person cannot relax, because if it was needed to borrow £84 billion, that means that the words of Vince Cable were poorly chosen, because there was never any headroom. Even if there had been no borrowing, the headroom was not there, the debt must go down, the faster it goes down, the better everyone will feel and the more the government can do for the People of the United Kingdom.

It is just that simple and yes, we will all feel the pain for many more years, because previous governments had not taken control of its spending. Now that the invoice is way past due, the bulk of politicians are all about pushing it forward about pushing away that what should have been dealt with by a responsible person (read a person elected into office). The Tories are trying to get that done and they have also faced backlashes and setbacks. No one can deny that, but the debt must be dealt with.

The issue is seen here: “The Lib Dems have been pressing for a further rise in the £10,000 a year personal tax allowance – the sum before which any income tax is paid – in an effort to press home his party’s ownership of the single biggest tax reform of the parliament. The allowance is already projected to rise to £10,600 from April. Every £100 annual increase in the personal allowance costs £500m. The alternative will be to align national insurance with the personal tax allowance, a measure favoured in the past by Cable as doing more to help those on low pay“. In view, I am willing to consider this as an essential option, but if we are to move forward, it should only be allowed in a balanced budget approach. So, helping those on low pay is fine, but only if we change Basic rate to 21% and higher rate to 42%, which means that above the £10,600, the basic income goes up by a maximum of £318 and in addition, high income get an additional maximum of £836. This allows us a balanced budget. If you wonder why not the highest toll? Well, they also get the 1% of the base and the 2% of high anyway, that group is dwindling down and to seek even more to that smaller group seems a little unfair (the non-bankers that is). The second premise here is that this extra collected fee can ONLY be used to balance out the lost revenue from the basic rate group that had their annual income between £10,000 and £13,000 per annum. The rest of the collected tax MUST go towards lowering the debt. If we can believe the 2014 article by the Guardian, this will hit 6000 people, which means that it only raise a few millions, so taxing the rich has always seemed like and always remains a hilarious act of pointlessness. It is the 1% from the basic rate that will truly make a difference. It will drive the debt down faster, it will lower the interest bill which will help lower the debt even more.

It is basic calculus, an abacus can give you the information and politicians at large have just been skimming the sidelines towards the premise of confusion. If you doubt these words (always a fair notion), than ask Vince Cable to clearly explain where he found the headroom to manoeuvre!

The only big issue I have with George Osborne at this point is the voiced idea “We will ease back on austerity while sticking to our deficit-cutting target“. The article states against this “Even after a trim, Osborne’s cuts programme will still look drastic. Labour will argue that he is taking too much of a risk with economic growth and jeopardising essential public services“, in my view, easing austerity remains dangerous, the fact that the interest bill exceeds defence spending should be a massive red flag over everyone’s budget. On a global scale, bankers grow rich whilst sleeping through the bad cycle, how is this ever a good idea? Sticking to deficit cutting remains a goal, but you endanger this premise by ‘easing’. That is not a premise or a guess, it is a mathematical certainty. Whomever is telling you a different story is (as I see it) lying to you. My evidence? The 1 trillion debt, which resulted in total into £43 billion in annual interest bills and still there were £84 billion in additional loans. Total fo5r last year would be £127 billion in money going somewhere else.

The final issue is the crackdown on tax evasion, these politicians all talk and talk, but this could have been settled in the simplest of ways 2 years ago, perhaps even longer. It only requires one simple change to be accepted ALL OVER EUROPE, in all EEC nations. That one line is: “A company is taxable at the point of purchase by the consumer“, the buyer is the point of purchase, he/she buys an item, it does not matter WHERE the sales server is, by forcing locality in taxation we now see a fair dinkum approach; where the consumer spends that nation also sees taxation. I wonder how quick the Americans will now protest. They have played a long game of possum and now as we act, they will suddenly fear a drop in economic revenue as it all shifts in the true directions of where the money had gone. The change is so simple, is it not weird that those European Big Wigs could not, or would not consider such implementation? It will not make friendly faces in Ireland, but at least many will see a fair adjusted sales taxation approach.

Now we get back to the linked items, Germany is at the centre of changes that will impact the UK. I kept an eye on Bernd Lucke in the past as he was trying to drive Germany out of the Euro and the Eurozone. It was laughed of as a non-issue on more than one occasion. Now we see that Hamburg 2015 is a game changer, you might think that +6.1% is nothing, it seems low against the SPD with 45%, but the AFD now has seats where it did not have them before, also as the SPD is no longer a majority party, the game now changes in Germany for many people. The German people have had enough, the events of last month whilst a nation with a mere 2% of the Eurozone GDP is an affront to many people, especially as Greece is not cleaning up its act. This matter will soon shift in stronger ways. Linked to this is the victory Front National booked in 2015. They won the first round in the by-election. Something also quite unheard of, but not by me as I have seen the premise change all over Europe. Now as we see escalations, whilst the damage that uncertainty brings in regards to the UK total debt is seen in the growth of Ukip (at http://www.theguardian.com/uk-news/2015/mar/07/ukip-100-second-places-may-election-nigel-farage). Now we see the title ‘Ukip on track for 100-plus second places across England‘. I believe the Greek issues will drive a walk towards the Nigel Farage party even stronger. And to more than a lesser degree it can be seen a result through the actions of Greece. Bringing up WW2 reparations was (as I see it) the worst they could have done. You see, we all have issues in that regard, but they are counterproductive. As I see it, the Germans still owe my grandfather a Bicycle (Dutch cultural joke), but that device will not do anything for any economy, now even my own and I guarantee you, the bike did not cost anywhere near €162B, even as special a bike as my grandfather had in 1943.

So I am in fear of future, because these escalations are mostly all due to non-accountability. As Greece shows the self-confidence and pride that seems to be self-destructive, we see this element of Aite the Greek band I mentioned earlier, named after the Greek goddess of folly, ruin and delusion, leading to the downfall of all Greeks in the end. Feel free to doubt my words, but only today did we see this in Reuters (at http://www.reuters.com/article/2015/03/14/eurozone-greece-italy-idUSL6N0WG08S20150314), Italy is now making clear that Grexit will not represent a risk for Italy. The Greeks allowed for a game of chance once too often, now we see: “a Greek exit would be ‘very negative’ but he was confident a solution would be found. EU executives warned on Friday that Greece abandoning the euro could lead to ‘catastrophe’“. One dark cloud does not make for Grexit, but Europe at large seems to have its fill of Greece and not facing consequences of THEIR actions. Does the Greek population realise the dangers and the hardship the Drachma will bring? The rich of Greece will get by, I reckon the rest as all savings are diminished by exchange rates a lot less so.

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February 20, 2015 · 23:07

2500 years later

Yes, it seems such a long time that Peisistratos, father of the Greek tragedy has been active, this was all voiced into life during one of the religious festivals for Dionysus. Is it such a mystery that a place of wine and a sad story is the frying fields where politicians feel most at home? This is at the foundation when we see another round for some Greek event. More talks (more wasting money on flights and expensive hotels), whilst the people have no clue, that they are being told another story. Like any good sad story, this too is in three parts, even though within the foundation, no one would have a clue on this. Now there is Prokopis Pavlopoulos, who got in place in 2015, before that there was Karolos Papoulias, who got his place in 2005 and before that there was Konstantinos Stephanopoulos who started in 1995. This is the foundation of the Trilogy.

You see, I discussed this before, the premise, not the links. First is an article I mentioned in my blog ‘Whinging from a desperate left‘ from January 29th (at https://lawlordtobe.com/2015/01/29/whinging-from-a-desperate-left/). The article by Prokopis Hatzinikolaou gives us “The state collected less than half of the revenues it was due to receive last year as it appeared unable to ensure that taxes and fines found their way to its coffers, according to a State Audit Council report submitted in Parliament on Tuesday by its president, Ioannis Karavokyris“, this means that the Greeks themselves are basically sinking their own ship. In one year, Greece has been unable to address the outstanding part which is a lot more than the settlement. It actually adds up to almost 16% of the ENTIRE Greek debt, so why should Germany play nice, as they are not at fault, they were not the reason and the latest puppet in Greek politics is not addressing the issue at all. Consider the image (at http://www.theguardian.com/business/live/2015/feb/17/greece-bailout-talks-europe-deal-live-updates), where Greece’s finance minister Yanis Varoufakis smiles like a clown, stares like a Vulture and casually stating that “an “honourable agreement” was within reach for Greece“, yet no mention that they will clean up their taxation system. Is anyone at this point catching on that a nation cannot survive if it is not collecting on its taxation? There is a nice PDF available at (http://ec.europa.eu/economy_finance/publications/publication12298_en.pdf) which shows part of the problem. Now in addition consider this report from 2008, than consider the article ‘Greek Bond Sale Tops $4 Billion in Return to Markets‘ (at http://www.bloomberg.com/news/articles/2014-04-10/greece-readies-bond-sale-as-athens-car-bomb-reminds-of-upheaval), so when we combine the tax information that we got from Prokopis Hatzinikolaou, we add the fact that the Greek tax system is faulty at best (a disaster at worst), how was it that Greece was even allowed to go back to the markets? So if we accept the wiki definition “A government bond is a bond issued by a national government, generally with a promise to pay periodic interest payments and to repay the face value on the maturity date“, how can bonds be sold if your tax system is not functioning, meaning that repayment is not an option (50% loss in taxation leaves you with nothing to manouvre with). So again I ask, why were they allowed back on market and more important, why are the bulk of the newspapers not looking into this side? An additional part I also mentioned in my blog was “Of the 2069 Greek accounts in Switzerland (as mentioned in a Greek magazine), who besides the journalist has appeared in court?” the Journalist was Kostas Vaxevanis, now we see in several papers, including the Times with the headline ‘Greece shreds files on tax cheating by rich and powerful‘. So as this has reported to have happened just before the January General elections, we could argue that in light of the loud non-mentioning of these events by both Finance Minister Yanis Varoufakis as well as Prime Minister Alexis Tsipras, as well as his three predecessors, that there is a lot wrong in Greece, the fact that the Greeks themselves are creating their own mess, why be nice? Are they not accountable for their own mess? So when we see the ominous text on what Germany will do, and how their 80 billion plus part could be lost, we must wonder whether it is not a lot safer just to cut Greece away. Lets face it, it will take forever to clear the current debt, they have no intent of actually cleaning up their mess and the rest of Europe might like a vacation spot where their coin gets them 400% more. Is it wrong to think so exploitative? No, not when the political parties are all about talk and none of them are about resolving issues. This is a side the papers seem to ignore as well. You see, debt deals and GDP promises and talks on ‘futures’ sounds all so sexy, to plainly report that a nation is beyond salvage because their political leaders will not bow to responsibilities whilst allegedly catering to the wealthy and the corrupt is just to plain and too direct.

So after 2500 years, the Greeks are reinventing their own creation called a tragedy, they are now however willing to put it all on the line, hoping that they get the same response ‘they are too big to fail’, but is that true? a nation with 11 million, no true exportable resources, what value do they have apart from beach front property? In addition, property that cannot be serviced as there is almost no infrastructure left. it was all sold on the bondmarket at 9.95%, not as bad as the 11% they had at the beginning of the month, but with tax collection at an all time low and no plans to do something about the 2069 accounts that Kostas Vaxevanis reported on, where does the Greek population think it can go to? We can see part of this from CNBC (at http://www.cnbc.com/id/102439432), where we see the headline ‘Worried depositors rush to pull cash out of Greek banks‘, when we see the quote “On Thursday, by mid-afternoon, deposits had shrunk by about 680 million euros (US $773 million)“, we must wonder whether we see the bank in a similar situation as we saw the Cypriot banks move to. So as funds go into banks, the deposits are lower and lower which means that the banks will not survive, or the ECB would have to up the financial support by a lot more, money Greece cannot pay back, so Germany is now in a place where accepting the 87 billion loss would not be the worst part in all this. So as we return to the old story of Diogenes of Sinope, the Greek that made poverty a virtue, yet in today’s world, the participating parties are devaluating all Greeks into a life of poverty, I wonder if the Greek population sees the virtue in that side. Will they react in Cynical philosophical rhetoric (founded by Diogenes of Sinope), or will they see the Irony, laugh it off and let the next politician take even more from them?

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January 29, 2015 · 21:21

Whinging from a desperate left

This is how I felt when both ‘We must stop Angela Merkel’s bullying – or let the forces of austerity win‘ by Owen Jones (at http://www.theguardian.com/commentisfree/2015/jan/28/syriza-merkel-economic-greece-europe) and ‘Bank of England governor attacks eurozone austerity‘ by Larry Elliott (at http://www.theguardian.com/business/2015/jan/28/bank-england-governor-attacks-eurozone-austerity) passed in front of me. It is a unique issue, the political left in league with the banks. It is likely to be a first. The left want the image of cost of living relief, which is a ludicrous fantasy to begin with and that fantasy seems to be all about getting to spend money. We have a similar ‘BS’ joke like this in Australia. That person is called Bill Shorten. You see, as I see it, the banks want ease so that this generation can get a few more millions in commissions before it all collapses.

Let’s take a look at the youthful Mr Oxford (Owen Jones). It starts with the opening premise: ‘Angela Merkel is the most monstrous western European leader of this generation‘. No, she is not! Let’s take a look at the past. Around 2009 Merkel stated that enough is enough. She introduced austerity measures and she sliced back on German spending by a lot. The German people were in pain, they all were. The consequence was that the debt had gone down by a lot, so when harder times came, Germany had shed some of its debt and as such, lower costs on interests and therefor the pain that followed in 2011 and 2012 was suddenly not as painful for the Germans at large. I remember seeing the news. The Dutch did not adhere to such notions, they were all in the mindset like ‘it will get better next year’, at that time the Dutch Finance minister was Wouter Bos. It would not be so good. To be honest, the pain the Dutch felt would not have been that extreme if they had tightened the belt from 2009 onwards as well, but they were all adhering to their ‘good news cycle’, whomever came next had to clean up the mess. It was not just the Dutch, the French, the Italian, the Spanish, as well as the United Kingdom, they all went overboard in spending trillions.

So when I read the deluded word by Owen Jones, it just makes me a little sad. the quote “The Greeks have rebelled against machine men – and women – and they are crying out for others to follow“, that sounds nice as an epitaph for Don Quixote as he marches against the next windmill (possibly a Dutch one), but the Greeks created their own mess. Their inadequacy to deal with corruption, tax collection and a host of other issues got THEMSELVES into the mess they have. Would it not be nice to clearly state that?

Then Own comes with “As Krugman notes, the troika – the IMF, European Central Bank and European commission – promoted “an economic fantasy”, for which the Greeks have paid. They projected that unemployment would peak at 15% in 2012, but it hurtled to over 25% instead“, which is a part I do agree with. There was an economic fantasy, because the austerity measures needed where on lethal levels which cannot be denied, how do the Greeks react? With a series of strikes and vandalism events which only got them into deeper water. A watery grave the Greeks had created for themselves. They now have a debt of well over 325 billion for a population of 11 million, so how wealthy are those 11 million Greeks? If not, where did that money go? The fact that Greek bonds are now at 9.85% should be an indication that Greece is now almost denied existence, it for the most, only has itself to blame, since 2009, how many Greeks actually went to court and to prison for what was done? Of the 2069 Greek accounts in Switzerland (as mentioned in a Greek magazine), who besides the journalist has appeared in court? It seems that making Germany the scapegoat for something the Greeks did themselves is absent of loads of logic.

Then we get another quote that is up for discussion: “Germany ploughed money into countries such as Greece and Spain – that’s the “magic” of deregulated markets – and in doing so “lent more than they could afford”. German banks and their political champions should have known this would end in disaster“, I disagree. Greece was given an option, but was also informed of the intense pressures that this causes. What did they do? Whinge and whine like faulty politicians with the spinal cord of a paperback, not a hardcover amongst them! Instead of going after tax dodgers and those who had made bad calls, to see what they could get back, they went into states of denial, like flaccid applications to a concrete wall, not a scratch was made and when the time was up, they again, whined for more cash, an idea given to them by Charles Dickens in his story Oliver Twist. Then suddenly miraculously, the crisis was over and suddenly they went back to the bond market for more. None of those events are in this article.

Last we get “The future of millions of Europeans – Greek, French, Spanish and British alike – will be bleak indeed. That is why a movement to defend the already ruined nation of Greece is so important. Defeated Germany benefited from debt relief in 1953, and we must demand that for Greece today“, how about the clarity that debt relief came and Greece did nothing, and now, they are whinging and whining (again) for more cash, less debt (through forgiving current debts). However, nobody is making any headway in aligning the justice system and the law to take care of those evading taxation. It will not be anywhere near enough, but it will be a clear signal that Greece is serious about taking a stance for resolving debt and fortifying its annual income. Oh and when the debt is forgiven? Who pays for that money not coming in? The IMF or divide the debt over all the EU nations, who are all beyond their maximum borrowing points? Perhaps option 2? Let the ‘Grexit’ commence and let’s see how the Drachma will leave the Greek people in a state so much worse. At that point the people will dream of those good old austerity times.

Let’s face it, it is not fair to the Greek people, not one bit, but I have seen enough BS in regards to blaming the Germans for what some Greeks did to Greece. If we look at 2013, the quote “The state collected less than half of the revenues it was due to receive last year as it appeared unable to ensure that taxes and fines found their way to its coffers, according to a State Audit Council report submitted in Parliament on Tuesday by its president, Ioannis Karavokyris“, this was an article from November 2013, almost 4 years after the mess they themselves created. (at http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_05/11/2013_526451), so as the Greeks drop the ball over and over again, who do they have to blame but themselves? So as I take my leave from Owen Jones, we look at the second Mr Oxford in this equation. With Owen I am willing to concede that he has his ideological heart in the right place, with Mr Smiley Smiley Canadian Mark Carney, former Governor of the Bank of Canada and the current Governor of the Bank of England, the gloves come off. So let’s introduce Marky Mark to the business end of a two by four in the shape of a keyboard!

It starts quite lovely, immediate of the bat with “Mark Carney says eurozone is caught in a debt trap and should ease hardline budget cuts just days after the Syriza election directly challenged policy“, just under the title. Why should we ease up? If we ease up after an election, the Greeks can forgo debt by having 12 elections over the next three years. It is the cost of doing business and as such, the Greeks themselves have not shown one iota of intent from 2009 onward (the lack of artful tax dodge prosecution could be regarded as evidence piece number one).

The second whopping ‘miss-statement’ might be seen in “Speaking in Dublin, Carney said the eurozone needed to ease its hardline budgetary policies and make rapid progress towards a fiscal union that would transfer resources from rich to poor countries“, when we see parts like ‘transfer resources from rich to poor countries‘, in my view (and in the view of some others), it reads like ‘as big business transfers corporate structures towards economic ailing areas. This was achieved through a subsidy structure that gave way to spreading business opportunity to less fortunate areas’. It also translates in the non-written text part of that statement as less tax liable options for big business, already far beyond normal wealth, move towards areas where labour laws are even less protective, optimising profits for big business.

So when he states as a bank governor the following “Carney made it clear that he thought the failure to complete the process of integration coupled with over-restrictive fiscal policies risked driving the 18-nation single currency area deeper into a debt trap“, which is not untrue, yet the part as a banker, that he does not mention is that he and his buddies profit greatly from spending sprees, if governments suddenly get a hold of their budgets, banks lose out a lot. This can be seen in the simplest way when we consider the Greek bonds. When that market opened up again (which should never have been allowed), the Greeks did not just add to their debt, someone in the banking world ended up with a 65 million euro bonus (in total) for selling these bonds, I am certain that the ‘wealth’ was spread around a little, but some of these financial people just cannot make ends meet on 350K a year, supporting a wife, kids, a Ferrari, a Ducati and two mistresses. You need that bond bonus to feel secure in your way of life as I see it. I wonder if the easing up has anything to do with meetings that places like Loomis Sayles ‘might’ have had with Natixis, perhaps Mr Carney attended a social event in such settings?

I agree with the premise we read in the quote “Since the financial crisis all major advanced economies have been in a debt trap where low growth deepens the burden of debt, prompting the private sector to cut spending further. Persistent economic weakness damages the extent to which economies can recover. Skills and capital atrophy“, I agree with that premise, yet this was a given already in 2011. I foresaw these events in 2012 and I read as bankers all over the place were hosting to ‘bright weather forecasting‘ whilst not taking the cautious steps that should have been taken. We can either state that politicians were too stupid to consider the dangers, or they were happy to leave the mess to those who followed (like Labour left hundreds of billions in debts to the Liberals in Australia), after that we see banks and the media in cycles of ‘bad news management’ slowly lowering expectation and forecasts, whilst the money had already been spend. So, yes Mr Carney, you state a good quote, it is just incredibly incomplete!

So, when we read “Carney has been vocal in his support for the European Central Bank’s decision to start buying government and commercial debt in its own version of the quantitative easing programmes, but said the Frankfurt-based central bank was unable alone to eliminate the threat of a prolonged stagnation“, we see nothing wrong. It is to the smallest degree commendable, only to the smallest degree, because several governments had entered a state of overspending, followed by ‘bad news management’ an intertwined cycle that would undo whatever headway quantitative easing would bring. The need for greed will always win in the end, so those programs are just a fantasy, Greece has some evidence of that part too, as they were part in both sides of that game. Isn’t it nice when the bank plays player one, player two and acts as the bank in the middle. That part truly sucks if you are player three and four in a game of monopoly. If we see Germany as player 3, than who is player 4?

I’ll let you do the math there!

You see, the actual solution would have been to take a stronger position on IP rules and regulations. An approach to ease the path for the small innovator of newly designed products. As several IP sides were all about setting goals towards ‘business’ (read big business), they forgot that when we look at the period between the 50’s and the 70’s, innovation came from the small inventors. Nearly every economy starts stepwise from small players and small innovators. Today, the players are so focussed on the large amounts, they tend to focus on large players like Apple and Microsoft and they forget that these companies, for a larger part live of the premise of the Vulture cycle, you pick the carcass until the hunter shoots a new prey, then they wait until it is feeding time. Small innovators (like Markus Persson with Minecraft) have the actual idea, which a large company then buys for 2 billion plus. As small innovators are given space to proceed and as larger players are denied blocking patents to force amalgamation of the true visionary into their moulding process that is the moment when economies will truly move forward. That is how you get forward momentum!

So when we see the final quote by Mark Carney “Carney said the eurozone’s unemployment rate of 11.5% was more than double that of the UK, but its fiscal deficit – the gap between tax revenues and spending – was only half the size of the UK’s. The eurozone, he said, should be using a “constructive” fiscal policy to support demand and mitigate the “tail risks of stagnation”“, we should wonder who he is catering to. As I saw it, the article was all about policies that are interesting for the boards of directors of the corporations, but the people will only be allowed the conceptual benefit on the tale end. Benefits that might have been a realistic form of support for treasuries all over Europe if they had done something actual to properly set up tax policies. Catering to big business stopped being constructive or lucrative for governments for half a decade now, how much longer will you take until you figure out that big business only caters to their own board of directors?

 

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