Tag Archives: John Paulson

The academic colour

This goes back to me having a very young age and in those days we had a saying in chess: ‘white begins and black wins‘. It had nothing to do with race, it was that those in reaction have a benefit; we can play whilst considering in response what the opponent is doing. It is a mere tactic, some you win, some you lose, yet overall, I still believe that the one moving first is out on a limb until the game unfolds and as long as the player using black comprehends the moves that are set, that player has an advantage, the size of that advantage is how quickly white picks up on the countermoves by black.

Yet, I made the race connection and here it is: ‘Trump administration moves to rescind Obama-era guidance on race in admissions‘, the Washington Post headline (at https://www.washingtonpost.com/local/education/trump-administration-moves-to-rescind-obama-era-guidance-on-race-in-admissions/2018/07/03/78210e9e-7ed8-11e8-bb6b-c1cb691f1402_story.html) gives us a dangerous setting. The issue is the reasoning behind it is what matters. The quote starts us with: “rescind Obama-era guidance to colleges and universities on how they can use race in admissions decisions to promote diversity, according to an administration official“, yet I am not certain whether that is a good setting. You see I have had my share of tertiary education. I was lucky to some extent and I finished with three post graduate degrees, one a Master. I have lived in many places where diversity was the cornerstone of education and I expected that to be the norm, yet we all know that it is not.

If we look at the Pre-Obama era and take the sport players out of the consideration (Football and Basketball), the racial diversity is pretty much non-existent as I see it. Even now, if we look at American education and we take the top 30% we get a really skewed view of ‘educated Americans‘ it is seen even better when we look at the census. We see (at https://www.census.gov/prod/99pubs/99statab/sec04.pdf), the fact of educated people, and even if we realise that the percentages are all going up, the setting that in 1998 that 80% of those with high school were white and merely 50% was black, that is a number that matters, in a diversity given setting, they should be a lot closer together, not 30% apart. The Hispanic community is much closer to the white one, yet still trailing. When we look at the next step, those with 4 years (or more) of college, we see that Caucasians lead with 25%, that against Hispanics at roughly 12% and blacks at 10%, that is a problem, there is no level of equality. Any civilisation that truly embraces diversity and equality can see that these numbers are just wrong, and as such changes, many large changes are essential. Now, we can argue with the Obama setting, or find a way to improve it, not rescind it.

There is another setting that we see (at https://www.census.gov/content/dam/Census/library/publications/2016/demo/p20-578.pdf). It makes no sense to completely chew the report and mull over the entire spectre of data, yet the one that lighted up were those with advanced degrees. 8.2% Black and 12.1 were Caucasian, what was interesting that the Asian group is 21.4% surpassing all others. There is a change and we need to earn what that is, because here we have a shift in success. The numbers seem to add up more evenly (after 20 years) between black and white, yet the shift starts from Associate degree and later, that is where we see the numbers drop. Yet in all, how was this weighted? You see, the counts give us White with 168,420, Black with 25,420, and Asian with 12,331, so a setting so uneven is unsettling, because this implies that if there is weighting that it is too unbalanced. That issues grows even further when we see (at https://www.census.gov/prod/cen2010/briefs/c2010br-02.pdf), the setting “This report looks at our nation’s changing racial and ethnic diversity. It is part of a series that analyses population and housing data collected from the 2010 Census, and it provides a snapshot of race and Hispanic origin in the United States. Racial and ethnic population group distributions and growth at the national level and at lower levels of geography are presented” is one that I cannot agree with. We see in 2010 223,553,265 (72.4%) white, 38,929,319 (12.6%) black or African American and 14,674,252 (4.8%) is Asian. If we go from the (I admit a wrongful set assumption) that there is equality to some degree, that if we take the black population as part of the white population as comparison, there should be some equality between the educated and the ‘actual’ population (yes, it is shallow, I know), they should be close together, yet they are not, they are 2% apart and when you consider it reflects a total of 200,000 students (roughly rounded), the African Americans lose out on a few thousand completed education seats and that is actually a much larger issues than anyone realises.

I will not tell you what the reason is for the difference, because it takes someone a lot more clever than me to do that, but the data (even when not optimally used) should not add up to this. In equal measure I feel that I need to disagree with Roger Clegg, president of the Center for Equal Opportunity. We see: “He said it was appropriate for the administration to ditch policies that had encouraged schools to weigh race and ethnicity in deciding where students would be assigned or admitted. “Students should be able to go to a school without regard to their skin color or what country their ancestors came from,”“, I agree with the premise he states, yet we already see that the African American population are getting short changed for a few thousand higher education seats and we need to find out why that is happening, because if diversity can lead to academic salvation of a nation, we need to change the books and values most held for granted. This is seen in the Teacher Education Quarterly, Fall 2008 in the article by Rita Kohli called: ‘Breaking the Cycle of Racism in the Classroom: Critical Race Reflections from Future Teachers of Color‘, we see on page 178: “Eddie came up to us and asked, “Ms. Wright, I don’t got no lunch money, can I sit in your room and use the computer?” Ms. Wright was a seventh year White teacher who received a lot of respect for the high academic standards that she held students to at this underperforming school. Ms. Wright immediately responded, “I am not going to answer that question until you speak correctly. How can we say that in proper English?” We both looked at Eddie, waiting for him to rephrase his words, but instead he calmly replied, “Maybe not in your house, but in my house that is how we speak correctly.” Ms. Wright and I were both caught off guard and a little speechless, and Eddie just stood there un-phased, waiting for us to let him use the computer“, it is there that we see the reflection on “what I was not conscious of, until Eddie so confidently pointed it out, was that although differences exist in the structure of African American Language (AAL) and Standard American English (SAE), at this school, we were actually teaching a hierarchy of those differences (FairesConklin& Lourie, 1983)“. The article goes on regarding racial issues that are beyond my comprehension, as my life has been very different, yet this one setting where we see that the cards are already set against the African American population in a mere AAL versus SAE setting, these kids have not even made it to high school and they are already at an advantage, I cannot even perceive the disadvantages that the Native Americans face in such a setting. But that small setting can already impact thousands, thousands of students who could be the prospering African American minds that America desperately needs. Let me state it in a simplified way, the mere setting of AAL versus SAE would not prevent any African American becoming the next Mary Frances Berry, Stephen L. Carter, Patricia Hill Collins, Roland G. Fryer, Jr., or Rhonda Vonshay Sharpe. Hell, I’d be happy just to get another James Earl Jones so we get to enjoy a really good movie that is relying on zero special effects.

The issue is that in a true society, race is not the deciding factor. Or as I see it, when we look at the average year of a university we should get a racial setting that approaches the national population. That will never be true, because some are more driven to be successful than others. You merely need to see the Asian graduation numbers to see that some drives are inherent to family values and history. Yet, they should not be as unequal as we currently see them and that is why I am not on the side of Roger Clegg, even as he might be completely correct.

I also need to raise the issue that we see with: “Harvard University’s use of race in admissions has come under scrutiny in a federal lawsuit that alleges the school has discriminated against Asian Americans. Separately, the Justice Department is conducting its own civil rights investigation of Harvard admissions. The university denies wrongdoing and says its methods — weighing race and ethnicity as one factor among many in a review of an applicant’s background and credentials — conform to decades of settled law“. I do not think that there is anything that Harvard is likely to have done wrong, I merely think that the system has stopped working correctly and we need to see if another mould might do the trick in getting it right, yet the setting of ‘weighing race and ethnicity ‘ might be the wrong path. You see, weighing is dangerous, even if we use it to set towards a path of minimum inclusion, which is a good thing, most tend to see it as a reference line to exclusion, which is a lot more dangerous. The old setting that has been going around for the longest time is ‘will that person succeed’, ‘will that person contribute’, ‘will this not be a failure’. The third is important, as it highlights my issue with a place like Ubisoft for the longest of time. To set the stage of something not being a failure is also the stage of creating mediocrity, for those who are not willing to put it all out, they will never create something truly exceptional. In gaming those are the games that are that are scoring 97% or higher. You merely have to look at the track record of Ubisoft to see that I am correct. The next group of upcoming billionaires are not created in Wall Street, they come from the streets and high schools; they figured out on how the next generation of technology (5G) can be harnessed in productive ways, the will start something new, whilst those around them will try to copy and mimic that creativity. We forgot all about the creative arts, the one side that does not rely on AAL versus SAE, it relies on vision and that matters, because vision allows to create that what does not yet exist and growing that group with academic skills is all that matters, giving them the comprehension of tools and concepts is what allows them to link one to the other and that is where trillions are created. I came up with three systems not by pushing the boundaries further, but by inverting the process. We do not need someone who solves the next small clever iteration, we have thousands of that, we optionally need the one solving the puzzle of CELL(150) (or is that CELL(182)?), it cannot be created here, but when you figure out where it could be found, you solve two other puzzles and that is where we need to look.

We don’t need another John Paulson; we need another James Edward Allchin. As data speeds go up, the systems that need to store are becoming the bottle neck in all this, and whilst everyone smiles and points at the cloud, we will see some people losing the plot, and some sales figures will point at the Cisco QoS: Congestion Management Configuration Guide. We will see clever articles on “control congestion by determining the order in which packets are sent out an interface based on priorities assigned to those packets. Congestion management entails the creation of queues“, it all sounds so easy and so logical. Yet the truth is that most have no clue. You see, 3 billion people using the peak of 5G (2024-2027) will impose  levies of congestion on nearly all systems; some cannot even keep up now (a jab at Australia’s NBN). It is very serious matter and even as all the players are in the dark. So, someone, who was into painting night skies would optionally get into astrology and whilst that person decided to paint a starry night outside Lambert Montana, the thought: ‘What if I stored it that way?‘ came to that persons mind and then considered the storage that mother had in the kitchen and things start falling together. It would never have worked in any other way, sometimes the biggest fluke is actually the brainwave that solves a lot more than we ever considered.

Exceptional solutions are not grown or trained, they come from people with vision and growing those people into levels of comprehension towards analytical and critical thinking is what gets the golden eggs that change everything. True wealth is not following or being better, true wealth is being first and pushing the boundaries for everyone else. Mark Zuckerberg might be the clearest example, but he is not the only one. And when we consider that some of the solutions were seen as early as the 70’s with the benefits of VAX/VMS whilst the connection of one with the setting 5D optical data storage and now replace that ‘contact lens’ for a hollow cylinder where the inside writes and the outside reads and you’ll end up with a storage system that offers no less than 250 Petabyte, has a half-life of well over  an eon and is 75,000 times faster than anything found in the Pentagon (at present or in the next decade). You merely need to reset the mind to not adhere to the current rules of any proclaimed captain of industry (especially the self-proclaimed ones). And whilst you laugh on the CP/M part, consider that it was equal to anything else and was merely surpassed by IBM because they relied on business sense and marketing, not on technological advantage. Oh, and whilst you giggle on VAX/VMS, it had full 64-bit addressing around 21 years before Microsoft, it also had version control and decent security at least a decade before Microsoft or their Windows 95 version had a decent setting towards security, so looking back at what the ‘old guys’ offered is never the worst idea.

So when we change the given and make 5G the weakest link in speed, we will finally get to the hardware that will give us a true advantage, although I merely want it so that I can call Sundar Pichai, telling him that the Bristlecone processor is the slowest link in my computer system and I need a quicker chip so that I can enjoy a nice game of Pong, because that is how weirdly warped my sense of humour is at times.

#RealtimeIsJustTooSlow

 

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Just before the joke

 

That is how I feel at this time, after a week of hospital, the first thing I did (actually the first thing I did was to get a bacon and egg roll, which I missed beyond life), was to take a look whether that Greek (Tsipras) had gotten a clue and a few vowels. So as I look at the Guardian (at http://www.theguardian.com/business/live/2015/mar/31/euro-falls-greek-progress-unemployment-inflation-live-updates), one of the initial views I get is: “Samaras says Tsipras imagined he’d get money without terms but ended up getting terms without money“, which is very apt. It was a statement by @MacroPolis_gr (Twitter id). It is interesting that I made similar views 10 days ago, just slightly less poetic. Just above that we get: “He pledged to end the ‘pillaging’ of the middle classes, and revealed that a new clampdown on unpaid taxes had already delivered €100m. But his speech lacked clear details about the reform plan that Greece is putting together in negotiations with its creditors over the last few days“, moreover, 100 Million is just a joke in the sight of what is required and it seems clear that many parties are not willing to give a single Drachma to help Greece out at present. Theatrics and fake images are no longer enough, in addition, the 10 days of absence shows that not only is there a lack of progress, the words of Jeremy Cook take us one step further: “On every agenda item of what the austerity and bailout program needs, Greece disagrees. The program calls for a VAT increase on the tourism sector, the Greek government has said no. Pension reform has been shot down and public sector wages will remain protected“, so there is no decrease in spending, no increase in taxation and the cost remain untouched. There is a clear need that something has to give, and Tsipras as the spokesperson seems to be steering towards the Euro collapse, whilst he could be suddenly play ‘possum’ in the last 5 minutes of the deal stating: ‘what would you like?‘, at that part, is he relying on the initial ‘too big to fail‘ part as I had predicted it, or is he willing to be the first one to collapse it all? At that point, when 85% of the 8 million retirement funds dwindle down below 70% of value, who will be blamed? The Germans (as they seem to do), the troika group, or are the Greeks willing to consider that electing Tsipras was a massive mistake in a long line of huge mistakes? So as we see more razzle dazzle misrepresentation from Tsipras as he claims to remain within 1.5% shortage of GDP, the question becomes…. how?

That answer is not given in any way shape or form.

When we see the quote from Mark Mobius “Templeton’s #MarkMobius tells the Greek press ‘Greece will stay in the euro zone. The stock market is cheap and we are buyers.’“, in my view this means ‘As long as I am making profit in other markets seeing Greece leave the Eurozone will be detrimental to my bottom line, which is profit‘. Is my view wrong? Am I not seeing right, or are we facing iterations of cadaver devouring? You see, the bond of a place that will not pay back is a worthless bond, so why give such a place billions. You see, in my view if these ‘moguls’ are so iteratively happy on Greece remaining in the Eurozone, let them pay Greece from their profits. They only need 5 billion for now, but guess what, it seems that those ‘investors’ are just like all other investors, unwilling to pay for the bag of potatoes, which is no longer worth the potatoes. That gives us the issue, Greece willing to play, but not pay, investors very willing to pay, but not play. You see investors (they call themselves grown-ups) have no sense of humour, especially when their profit is in danger. So here we are looking into the mouth of the claimants, Tsipras and Mobius, all just playing the tune to their needs and the Greeks are just about to get marginalised in the scheme of things.

Now, you might want to conclude that I am just imagining things and that would as always be fair (never just accept the word of anyone), yet in my view as stated before things do not add up, in the last light as Greece is under so much pressure, we see a Prime Minister showing close to zero effort in obtaining that what is essential for the current continuation of Greece, yet he does not seem to take any clear effort to truly fight for his nation (as I see it). Yet, consider the other information when we look at the data as I presented it roughly 10 days ago, we saw the Australian Financial review reporting: “The country’s cash shortfall is projected to hit 3.5 billion euros in March, according to Bloomberg calculations based on 2015 budget figures“. If that is true the the shortfall is already a fact and the news on the BBC (at http://www.bbc.com/news/business-32113699), quoting: “The reforms are needed to unlock a new tranche of bailout cash for Greece, which could run out of money in weeks“, is that so? In addition, when we look at Reuters (at http://www.reuters.com/article/2015/03/24/us-eurozone-greece-cash-exclusive-idUSKBN0MK1PT20150324), which is a week old, states in the title ‘Greece to run out of cash by April 20 without fresh aid – source‘, the quote “Greece will run out of money by April 20 unless it receives fresh aid from creditors, a source familiar with the familiar with the matter told Reuters on Tuesday” is fair enough and the article is a week old, yet it seems that one states shortfall as per today, out of cash within 3 weeks. It seems to me that several parties are already dragging their feet and dragging the point of no return as far forward as possible, yet the ones needing to get things done are dragging their heels too, so how is any of it a good idea?

This dragging thing is all the rage amongst economic players. The BBC gives us “Mr Varoufakis said that tensions between the two countries ‘must stop’, adding: ‘Only then can Greece, with support of its partners, focus on implementing effective reforms and growth-orientated policy strategies’“, no no no! The tension does not need to stop, Greece only needs to stop blaming Germany and get on with it. There was no debilitating ‘tension’ there is only a group of debilitated Greek officials who are not doing what they are supposed to do. The additional quote: “However, the reforms as initially proposed do not appear to have been specific enough to win the approval of the lenders, formerly known as the ‘troika’“, shows that Greece has been dragging its heels, as specific plans were clearly required, so what game are the players Tsipras and Varoufakis playing?

Is that such a weird question to have?

When we see ‘To Vima’ (at http://www.tovima.gr/en/article/?aid=690574), we see the following: “Mr. Tsipras called for the opposition parties to support the government’s efforts in the current negotiations with the country’s creditors and partners. The Prime Minister outlined his government’s “red lines” and argued that he would not accept any further pension and wage cut, or the implementation of any recessionary measures. Mr. Tsipras further stated that he would not accept the deregulation of collective dismissals, any increase of the VAT in food or medicine, nor would he agree to the further “selling off” of public assets“. I personally agree with selling off public assets, that makes sense, if Greece is to move forward at any stage, selling of its assets will only mean that thy will make money for the new owners. The no recessionary measures is a boast that cannot be continued, either they do it now, to a strong extent, or the Drachma will force it onto the entire population beyond its debilitating extent.

Yet what could be done?

That is the question when we see the Financial Times from two days ago (at http://www.ft.com/cms/s/0/a45d78e2-d627-11e4-b3e7-00144feab7de.html), here we see: “Without fresh funding, Athens risks running out of cash before meeting a €450m loan payment due to the International Monetary Fund next week. The credit rating agency Fitch downgraded Greece late on Friday to a “substantial credit risk”, citing “uncertain prospects of timely disbursement from official institutions”“, now we have ourselves a ball game.

So, this gives the clear insight that Greece is already short by half a billion long before the 20th April deadline. The article shows a few more gems and you should definitely read it. I especially like the Greek officials and their ‘hope’ for a partial disbursement off the $7.2 Billion which could tide Athens over until they would be able to reach what they call ‘a full deal’. Is it not nice on how they make no steps in any direction and still they want cash?

So as we look at the Greek expressions we see the old time favourite “I’ve lost my eggs and baskets”, meaning in this case, I have no money and I cannot fathom why not. You see, the situation turned into “a whore’s fencepost“, which implies that things only get out of hand when it is more than a brothel’s walk away.

But we must not forget that there are other players on the horizon too. That part seems to be a lot clearer when we see the response from Mark Mobius. When we look at some other quotes like from CNBC, we see “Amid the turmoil, hedge fund managers are again eyeing Greece for bargain shopping, but the political uncertainty has kept them from aggressively investing there“, so hedge funds are all about the stability, yet these ‘stable funds’ require clarity of profit, that much can be ascertained from Paulson and Co. So as we see the quote “Paulson, which manages $17.8 billion overall, still holds longstanding equity positions in two major Greek banks, Piraeus Bank and Alpha, according to recent investor materials“, we can only guess on how large the ACTUAL amounts are. All that at what percentage? 6%, 7% or even more percent? That interest needs to come from somewhere, so as the Greeks think that they move forward by 2019, the truth seems to be that they are taking care of interest and principle of whatever is out there right now. So as we question the claim by Mark Mobius, my questioning his statement comes in part from this “Alden’s main fund fell 9.6 percent in January thanks in part to losing Greek positions, according to the person“, so if shares are so cheap, why did Alden still lost close to what amounts to well over 150 million? 9.6% of 1.7 billion is a lot more then I will ever make in my life, so why was Mark Mobius so blasé? What is he fishing for and what are the current Greek officials not telling the people that voted them in?

 

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The Italian menace?

The Italian menace?

Just when you thought it was safe to think of any kind of future again, the abyss opens up right in front of you and your savings are again in danger.

The first topic of discussion as presented by the Dutch NOS was of course the European budgets. To a budget of 960 billion, the Dutch contribute 6 billion and they got a one billion dollar discount. Yes, this seems to be the Marks and Spencers approach to budgeting. Now, they seem to be happy, and I am not sure how to feel. It does however give a clear picture that the Dutch, always visible as a high player, are anything but that big. When you are profiles as a larger player and their contribution is less than a tenth of 1 per cent, that it means that they are not that big a player at all (or so it seems).
So, the Dutch politicians are going home with a satisfied feeling until the end of the decade. So how is this impacting? It is what followed that could become the real worry. It is a newscast of the return of Mr Berlusconi. Yes! He is returning to Italian politics with elections less than 3 weeks away. Does he have a chance? Not sure and not really my worry to be honest.

What is interesting is how he pulls people in with his dreams of giving back the real estate taxation of 2012. So, if that is done then Italy would be withdrawing from their promise to get their budget and deficit under control. If that happens, then what is next for Europe?
The bigger issue is that this might be a clear indication that Goldman Sachs is back and actively trying to meet their share in the Game of Greed.
They seem to be a clear controlling and influential party with most European governments. Forbes already reported this as a ‘danger’. They did mention the Monte dei Paschi banking scandal as part of their news cast as well. They also remained soft in their ideas of nations no longer being governable. I am less subtle. From my viewpoint I am willing to contemplate the opinion that the European governments are about to become the bank’s bitches with Goldman Sachs leading them the way to population enslavement. I agree, the thought is a little strong!

You see, there is method to my madness, or my madness is methodical (either way works). So, let us take a look at how I got to that conclusion.

In the Dutch newscast on this, as well as in Forbes and as well as mentioned in other sources “Berlusconi, who said he won’t seek the executive position but rather prefers to become Finance Minister, has seduced the masses saying he will repeal a property tax imposed by Monti, returning about €4 billion ($5.4 billion) to the people by refunding taxpayers’ 2012 payments” so with all the shortages, they add to the non-debt resolving side. We can debate whether it is the right or the wrong thing to do. In my view it is an Italian choice and it is their right to choose. Whether right or wrong, it is however interesting that Berlusconi seeks the Finance Ministers position. With him being a connection to Goldman Sachs as a (former) international advisor? It also means that the Italian deficit will be upped by another 5.4 billion dollars. This implies that Italy is less interested in getting their deficit down.

My issue is that according to the numbers Goldman Sachs is one of the banks retaining their gains these last years. I have nothing against that as I do have a capitalistic side. There is however a realistic side to profit, and many greed driven organisations seem to remain very unrealistic. With the ties he had/has, and the rules of the game so unaltered. I worry about what will happen to the Italian debt during the next government term.

Here is the link between this all. This was discussed by the Independent. “What price the new democracy? Goldman Sachs conquers Europe”. In there they made the following statement: “Instead what you have in Europe is a shared world-view among the policy elite and the bankers, a shared set of goals and mutual reinforcement of illusions.” (Nov 18th 2011). I could not have said it any better.

Now we get to the juicy part. Should Berlusconi get elected, and then we will suddenly read on how certain realignments of bad banks will be needed? There will be a change, and of course Goldman Sachs will get their share. It is all nice and legal. No matter how they react, whether Europe breaks apart, whether the costs will once again be set into other places. We are looking at an additional total debt increase of half a trillion dollars (across the EEC) and Goldman Sachs will get their share. So why are the European legislations not dealing with this clearly visible weak flaw?

Now, here is where I get to go on thin ice. The conspiracy theorist in me might think that this is what the power players from the US had in mind from the beginning. From their point of view governments are obsolete! Especially when these governments are getting in the way of highly desired profits, commissions and personal wealth goals.

Politicians seem to get pushed into an ego trip (in some cases they are simply with their backs against a wall). They do not cover their budgets and get the back of these strong players to get visibility and media to do the things that should be investigated and questioned on many levels. The Dutch SNS was a clear example. However other banks and acting parties should not be forgotten. The ABN/Amro Bank was one of these banks that required nationalisation. They are linked in all this with connections to the Royal Bank of Scotland (who was having a nice go at acquiring ABN/AMRO). And again here comes Goldman Sachs around the corner, having a nice juicy finger in all of these matters. They were in an investigation regarding Collateralized Debt Obligation (CDO) traders. They were not guilty, as some people forgot to disclose certain matters. However, the LA Times reported this on October 12th 2010: “Hedge fund operator John Paulson a key player in SEC case against Goldman Sachs. His firm made $15 billion in 2007 by betting that Americans would default on their home loans in droves.” From my point of view, that is not all they betted against.

Why am I so against Goldman Sachs? The issue is not Goldman Sachs; they are not breaking any law. It is the politicians that walk away with golden futures, creating bad banks and leaving the population to work of the debt through taxation, a population left with forever less and less. Soon this can no longer remain affordable and Italy seems likely the next one moving into this direction. This is where banks and large corporations become in charge and we get to work past retirement ages to fill the need of their greed. This is a need that is eternal and will never be satisfied. If you doubt me, then look at the list of nations that was able to keep their budget. It seems that only Belgium made their budget, and that might only have been because they were without a parliament racking up cost for the most of 2011. They even celebrated their new parliament after a record 541 days without a parliament on December 11th 2011. So that would definitely helped in keeping the cost down.

So back to the headline I started with “The Italian menace?”
Is it Silvio Berlusconi the menace? Possibly! If he continues on a path that does not stop the rising debts.
Is Italy the menace? Possibly! If they do not get a handle on their debts. In this case I mean a solution where they pay for their massive overspending from more than the last decade, mostly under Silvio Berlusconi.
Will the Italian menace end the EEC? Likely! If debts keep on rising, and as insurmountable debts are taken as write off’s against retirement funds and national treasuries. It is not impossible that Italy becomes the straw that breaks the camel’s back. Should you consider that this could never happen, then think again. The same was said about the SNS bank and that puppy is now a nationalised one (but it seems that for now it is not house broken).

This has happened again and again. This is not just about the banks. Politicians are also to blame. For that I would like to mention papers like “Investing in Greece: an Olympic opportunity”. It came from Costas Bakouris in 2001. The thoughts were all fair enough. However, how much came to happen? How much money did come in?

Most facts point towards the information that the Olympics cost double from what was budgeted and out of the amount approaching 10 billion a lot less then budgeted came in.
There was the article called “Business and investment prospects strong after Olympic Games triumph” Which was released after the games of 2004. In December 2004, through the newspaper USA Today. It was published in December 2004. The interesting part of the second story is that there was no name attached to it. So what was THAT source?

Even though the Olympics are a unique event, the financial consequences are real and high. Yet, there were no visible budget cuts and massive cuts were required. But wait, here is super hero/villain Goldman Sachs to help with the presentation of it all.

The Olympics were the most visible, but not the only one. This is what Felix Salmon wrote for Reuters on February 9th 2010 (exactly 2 years ago). “It’s a bit depressing that EU member states are behaving in this silly way, refusing to come clean on their real finances. But so long as they’re providing the demand for clever capital-markets operations like these, you can be sure that the investment bankers at Goldman and many other investment banks will be lining up to show them ways of hiding reality from Eurostat in Luxembourg.

In that time, banks wrote cheques for investment events no one could cover. This is clearly shown in the case of the Dutch SNS. And the fun does not stop here. The article “ABN Amro hiring spree targets Asian private wealth” 29 January, 2013 Written by Elliott Holley shows that they are hiring again, with at least 1 person from Goldman Sachs. It is interesting how this small circle gets to go everywhere.

Goldman Sachs does not seem to have broken any laws. Politicians all over Europe seem to have changed very little, and they seem to all extremely willing to get into bed with Goldman Sachs, their ‘golden’ solution. National politics does not seem to regulate banks to the degree that is needed and some governments do not seem to properly regulate themselves either.

When we look at the 2011 EEC numbers we see the following: the largest government deficits in percentage of GDP were recorded in Ireland (-13.1%), Greece (-9.1%), Spain (-8.5%), the United Kingdom (-8.3%). Whilst the Government debt kept on going up and was set at 10 421 987 million Euro, which boils down to 82.5 (% of GDP). (Source: Eurostat News release 62/2012 – 23 April 2012)
They also show that Even though the GDP was set to become negatively in 2012, it had been forecast slightly positive in 2013. There is no proof of that, and whatever taxation was acquired in 2012, Berlusconi wants to hand that back to the people. Consider these numbers. Now add three facts to this equation.

1. The LIBOR scandal (see previous blog) shows how within the UK the percentages had been tweaked. This means that the percentages were incorrect. Now consider that the LIBOR is based on 4 times the planets GDP (adding up to 300 trillion $ as mentioned in several articles).

2. The GDP is the market value of all the final goods and services produced within in a country in a given time period. We have seen how people are without work. Economies are shrinking and services are lost to families all over the EEC. So how does that number keep on going up?

3. The European Economic Forecast, Economic and Financial Affairs (Spring 2012) document shows a picture again way too optimistic. In several nations it seemed to predict that 2013 was a year when things would be turning up. There is NO sign that this is happening. The belts are tightening in nearly all European nations. In addition, when we consider the SNS Property moving into Bad banks, we see that the current need for business property is diminishing due to lack of revenues. From my point of view it implies that the mentioned government debt at 82.5% of GDP (2011) could be as high as 90% of GDP. If that is true, then the overall percentages will hit all harder as the interest rates for government debts should be higher, and their credit ratings might be lower as a consequence.

Now consider that should the debt grow and their rating goes one level down, then that nation might have to pay a percentage on their debt. With governments owning hundreds of billions, an example means that a debt of $300B, if the interest is only 1% that would come down to an annual payment of 3,000 million, just to keep it stable. That means every person pays between 50 and 300 dollars to pay the interest. EVERY PERSON! Now consider that this is not a real problem for most people, however Consider that in Spain 24% has no job, that means that this amount will be paid by 75% of the population with income, so they pay more now. Then consider that the debt needs to go away.

We cannot trust banks as LIBOR shows. The EEC papers show them to think of them in a better state then they are, and the presented numbers are debatable. And as shown from several sources Goldman Sachs is connected to nearly every stage, somehow in some non-criminal way.

So two years later (after the claim by Felix Salmon), where are we now and what bad news is yet to come?

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