Tag Archives: Kostas Vaxevanis

July 3, 2015 · 00:31

Let’s dance (part 2)

I promised to get back to the game of Finance, to some it is called 50 shades of Greece, to some it is called the work of Atë, yet I see it as the result of a cloud of Stupidity, Inactions and Desolation. Without massive changes Greece will end up without any future left.

This is not some prediction, because the nation is bankrupt, or in default or even in a bad place. You see, whatever ‘promise’ that comes from any of the banks, power players or politicians, throwing money at something that is inert and unproductive is just waisted money. The Juncker speech of three days ago (at http://europa.eu/rapid/press-release_SPEECH-15-5274_en.htm), gives us all those politically correct words, with the quote “And a deal could also have ensured that we, the Commission, could go ahead with a package for a ‘new start for jobs and growth’ package of 35 billion euro to help the Greek economy get back on track“, so that sounds nice, but that is not even close to the factual issue as I see it. If we include the overdue payments (yes, plural), we see that before the end of the year, Greece faces 2 payments of the ECB at 6.7 billion Euro. The IMF has coming 4 times 300 million Euro, plus 2 sets of 600 million Euro and 2 sets of 500 million Euro, in addition, there is the 1.5 billion Euro overdue and the 750 million Euro shifted payment, which Greece paid for using the IMF emergency funds. You all forgot about that last one did you not? Which makes for 5.65 billion, so these two players are due 12.35 billion Euro before the end of the year alone. In addition there are 10 treasury bills maturing with a total of 15.1 billion, the last one is an issue, you see if Greece is very very very lucky, those owners would be ‘willing’ to roll them over, if not, the max damage will be 27.5 billion in before the end of 2015. That is just expenses with NOTHING paid for and the interest due on the loans has not been taken into account either. The important part is, is the fact that over 50% of that debt is an unknown, because who exactly owns these Greek bonds? To whom is payment due? These are the events that Greece already has and I have mentioned them before, so why mention them again. Well, these facts are important to consider, because what Juncker calls ‘new start for jobs and growth’ is nice, but what will the politicians use is for? This fund covers 80% of the outstanding payments and ZERO towards reducing debt.

So how will the Greek economy get back on track? That is the killer question, because there is no given path. Greece has very little to export, it has relied on services for too long and there is no real resolution there. I personally will not trust rock star Varoufakis (a valid feeling as he has not propelled Greece forward in 6 months). A man of all smiles and no substance. His blog (at http://yanisvaroufakis.eu/2015/07/01/why-we-recommend-a-no-in-the-referendum-in-6-short-bullet-points/) gives us 6 short bullet points, yet as a professor of economy from the University of Athens, he gives us plenty of disturbing afterthoughts.

1a. refused to reduce our un-payable public debt
1b. insisted that it should be repaid ‘parametrically’ by the weakest members of our society, their children and their grandchildren.

My view?

1a. Why? Even though previous elected officials spend it, you still get to pay for it. You accepted the responsibility of office, which include a maximised credit card.
1b. Nope! It just needed to be paid in some way, again, as a result from previous elected officials.

So point one, being 2 points can be seen as a failure because Syriza did not do the following:

  1. Immediately start the investigation on prosecution of previous officials (which might be a farce trial, but it would have given the proper presentation that Greece is truly making a change, his smiley smiley rock star presentation missed the mark by a lot, with the added danger that Jean-Claude Juncker might not have any sense of rhythm or blues, making the act a double miss.
  2. Instigate a serious overhaul of the Greek tax system, mainly taxability and tax collection. Even if it was still underway today, if started in February it would have given a clear signal to those holding onto 7 billion plus, that this elected Greek government was a Greek government that wanted to create a true future for the Greek people. The stress of the last week would never have happened.
  3. Instigate prosecution of tax evaders, not just a sham trial of a man named Leonidas Bobolas (which is actually a cool name to have), that 1.9 million euro bill did not last long did it? How about placing Kostas Vaxevanis in the limelight and giving the clear message that tax evasion is now a thing of the past. Greece could have started to annex these back taxes, many nations would be on the side of Greece here (France and Italy most enthusiastically), in addition, giving the tax evaders an option to pay back tax +20% within a week, or back tax +150% when accounts needed to get frozen, misreporting would come at an additional 200% of misreported outstanding taxation. At this point Syriza would become the most popular band ever. In a group of 11 million, these 2045 people do not add statistically to number of Greeks and after the culling of outstanding taxation the debt might be a smidge lower, showing again that Syriza wanted a better Greece.

NONE of these actions had been taken by Greece in any visible way. So, Ο καθηγητής Βαρουφάκης missed the boat in point one already.

I am skipping point two!

  1. The Euro group had previously (November 2012) conceded that the debt ought to be restructured but is refusing to commit to a debt restructure.

My view? It could have been a fair point if Greece would have shown any economic evolution as mentioned in the three points (by me earlier), restructuring is pointless if the machine is not getting the overhaul it requires. I have stated before and now that in all this previous administrations have been key in the failure of the Greek economy. Not just because the Greek economy collapsed, but what was done to repair it all? What concrete actions were made between 2010 and 2015 to restart the economy? This is a much harder question to pose, because it intersects on what could have done and what should have done. Which is directly coupled to Junckers 35 billion Euro carrot, you see, dumping money somewhere, but how and where will the economy be revived? You see, no money and no plan is destitution, a plan and no money is a future, money without a plan is a spending spree and a plan with money is a solution. It is actually THAT simple. Greece has had enough spending sprees, it is in a state of destitution, so it needs to get a future and move towards a solution. This is a simple path, but 3 Greek administrations have not pulled that one off, so they are in the state they are in.

I am not proclaiming to have the solution, yet no one else have any either. With the Greying European community retirement villages are an option. How many does Greece have? Consider that the nations with a retired population over 16% is Sweden, Denmark, Germany and Austria. All nations where the life style has been good. Now add to this the people who will start their retirement in the next 5 years. Thousands of people in relatively expensive cold places, they can in some cases sub-rent their property and retire in warm, sunny Greece. The food is good, the people nice and they move from a life with 4 months of summer to a life of 7 months of summer and the removal of cold winters (compared to their home turf that is). It is not a solution, but it is a start. Greece needs to become innovative and change the game all together. It is extremely likely that these solutions have been looked at, yet, how deep. Too many people look at solutions to fill their pockets, how many looked at it with the intent to fill the treasury coffers? Greece has a second option, is to use the church. Instead of making a short sale of places that came for sale, how about ‘nationalising’ them as tourist accommodation, managed through the church? Move hotels from foreign investors to local hands! Just an idea to start growing the foundation of taxable income.

In all this, the ideas by me should be regarded as laughable. Yet, how many options have been inspected? You see the problem does not go away by throwing a few billion at it, buying all the fish leaves you with a double debt, learning how to fish and get the pond to yourself will leave you with a future. Greece has limited products to work with, so it either adds products or it adds services, services is a first, products is often longer term, unless it is the service that becomes the product.

In all this I still have to address one part I talked about earlier. I stated “they have left, what should be regarded as criminal activities open to reactivation“, there is some of it (at http://www.globalresearch.ca/goldman-sachs-doesnt-have-clean-hands-in-greece-crisis/5459498), more in the annals of history. the article gives us: “According to investigative reports that appeared in Der Spiegel, the New York Times, BBC, and Bloomberg News from 2010 through 2012, Blankfein, now Goldman Sachs CEO, Cohn, now President and COO, and Loudiadis, a Managing Director, all played a role in structuring complex derivative deals with Greece which accomplished two things: they allowed Greece to hide the true extent of its debt and they ended up almost doubling the amount of debt Greece owed under the dubious derivative deals“, no matter where all this is going, consider the Greek bonds. I massively objected in the past against Greece being allowed anywhere near the bond market in April 2014. Consider the total value of Greek bonds out there, are they covered? Consider that Greece is completely bust, the fact that from multiple sources that Greek cannot repay its debt (amongst them the Finance Minister of Greece). Consider that Yanis Varoufakis stated on March 10th 2015 “Varoufakis Says Greece Was Never Going To Repay Its Debts” (source Forbes). So how come that at THAT point certain steps were not made to use the reserve funds Greece had at that time to settle the bonds. When you consider my opposition to bonds in April 2014 comes into view with the consideration ‘The terms on which a government can sell bonds depend on how creditworthy the market considers it to be‘, so as some power players had (as I see it) inflated the Greek credit rating, the question becomes, is the Greek bond market a continuation of the ‘Greekman Sachs’ protocols as played to hide debt, as such, should there be a more serious level of criminal investigation? Moreover, who are the involved parties and why are other parties not truly digging here?

In the end, let’s be clear, there is absolutely no indication that any laws have been broken regarding the bonds, is that not the interesting part? The one part that could have limited the issues now playing (like adjusting laws) is the one action 10 years of government had not adjusted. That seems to have worked out very well for Addy Loudiadis, Chief Executive and Director, Rothesay Life Limited and Managing Director of Goldman Sachs and a few others (Addy was just the most visible one), in all this we see that Greece needs changes, the law most likely first.

So can the Greeks dance? Unless their parliament wakes up, it is only one of many skills a Greek will need to add to his/her skill set to get by after the ATM’s stop working.

 

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June 8, 2015 · 00:31

A slave to greed

It is time to take a stance a little more vocal and a little more ‘anti’ certain voices. You see, the people are being led astray, misinformed and basically lied to. It is a clever lie that some people spin, where the involved players (like in Greece) focus on one part of the story and after that story is told, those who think they are getting informed, are told a fairy tale with no concrete connection to reality or to the factual complete truth. Those advocates work from the concept of ‘in the eye of the beholder’, which sounds nice, but when you pay your electricity bill, there is no eye of the beholder, there is just the invoice!

To get this party train started, let’s take a look at the definition. We are looking at Austerity!

According to the Investopedia it is: “DEFINITION of ‘Austerity’ a state of reduced spending and increased frugality in the financial sector. Austerity measures generally refer to the measures taken by governments to reduce expenditures in an attempt to shrink their growing budget deficits“.

Whilst dictionary.com tells us “strict economy”

Both apply here!

So when I am looking at an article in the Guardian by Heather Steward called ‘Austerity isn’t ‘good housekeeping’: it’s dogmatic, risky and unjust‘ (at http://www.theguardian.com/business/2015/jun/07/austerity-isnt-good-housekeeping-dogmatic-risky-unjust), it is time to get a few things out of the way. To help me, there is a source I used for part of this, which is at http://www.economicshelp.org/blog/5509/economics/government-spending-under-labour/. You see, in the time 1997 – 2010 several things happened, even though around 2007 the total debt was at a record low, the increase in spending has changed that. The debt is getting out of control, plain and simple. Governments (both sides) tend to hide behind GDP percentages to validate their spending, yet, in the previous conservative government, it was at 40% of GDP, by the time Gordon Brown was done, it was at 45% of GDP, considering that the UK GDP is decently high, that 5% amounts to a lot. Yet, that figure does not tell you the whole picture.

The UK public sector debt went in the period 2008 – 2010 from around 36% to over 65%, which is massive, this current government has been adding to that, but they are trying to stem that tide, which is not done overnight. Now this is not me blaming Labour (which is always fun), Health care spending almost doubled in real terms between 1999 and 2010, which is a Grim Reaper reality. Some were massive bungles by labour, but the added reality is that the UK population is growing old, that is just a natural part and we have always known that. So there is no blame, but it is therefore of a much higher importance to get a handle on it and none of the choices are nice ones.

You see, the source gives a possible connection, but not the reality behind it. We see the mention whether Keynesian economics are to blame, with the quote “Keynesian economics calls for counter-cyclical spending and deficits. Thus, in a period of strong economic growth, Keynesian economics would advocate balancing the budget or even pursuing a budget surplus“, but that is the problem, the politicians, in the era 1997-2004, in such a ‘good’ climate did not adhere to that. The GDP debt is evidence of that. You see, to some extent, politicians are like children, give a 17 year old boy  a credit card with one million pound, stating that he must be careful, and that person will find a reason to get the PS4, the Xbox One and get personal biology lessons at the ‘Steam and Sun Health Club’. At which point that person is feeling that the good life is here, alas, at some point the invoice is due and whilst it is not getting paid, the interest is getting paid from the credit card, dwindling reserves even further, this is EXACTLY where Greece is at!

So now to the first article as mentioned in the beginning!

“the spending squeeze the Tories now hope to implement, starting in the current financial year, is intense, as the spreadsheet wizards at the Institute for Fiscal Studies made clear last week. Shortly before Osborne’s statement, Carl Emmerson, the IFS’s deputy director, warned that achieving the Tories’ planned cuts would be “anything but easy”” Here I agree, it will not be easy, it will be hard and it will be even harder on the people, the issue is however that £1.56 trillion comes with the added issue that at 1%, this bill gets an added 15.6 billion in interest, however, the interest is not 1%, it is higher, so we see that the annual cost of servicing (paying the interest) the public debt amounted to around £43bn (which is roughly 3% of GDP). In an age where some people get instant orgasms from reporting a 0.2% increase in GDP, they seem to forget that this amounts to the part that the UK is annually down 2.8% of GDP. If we act harshly (really harshly) it can be dealt with and even be reduced! Which is the real deal. That interest is benefitting banks and foreign investors. It boils down to ‘money for free’. So now we get the second quote “the belt-tightening is likely to be profoundly unfair. Osborne has repeatedly said his cuts plan will involve a £12bn reduction in the welfare bill. Since pensioners are protected, and out-of-work benefits are a relatively small part of the £250bn social security budget, much of the burden is likely to fall on low-wage workers and their children” I agree, it is very unfair, but when the economy was high, no one was shouting loudly to decrease spending as bad times are always around the corner, no one stopped Gordon Brown to give away the keys to the kingdom, which is what he pretty much did!

So, the term ‘pursuing a budget surplus’ sounds nice, but politicians will avoid bad news whenever they can, so cutting down on expenses will only be done when there is no other option, and preferably in the 11th hour, whilst there is no guarantee that there is a surplus at that point to work with!

“More austerity is risky at a time when recovery appears to be fragile against a background of the bubbling Eurozone crisis” this is a clear misrepresentation. You see, the statement is true, but there is no ‘fragile recovery’ at present, Greece is making sure of that by not doing its part. Which is exactly why the UK is contemplating getting out of the EU in the first place. The bulk of the Euro nations are all not balancing their books and getting out now might be the only way to preserve the little gain the UK can get. Now we get to another ‘failed’ view. It comes from Nobel Prize winner Amartya Sen. The statement is “A nation’s debts are mainly owed to someone else within the same society – for example the pension-holders whose funds are stacked full of gilts“. Is that so Mr Sen? Well, if you did your homework on this then please elaborate where the 1.5 trillion in UK debt is? I feel 99.324% certain that a massive amount is in other hands, not in the hands of pension holders, in addition, with the annual increase of needed funds over the next two decades, that amount is about to dwindle to record lows really fast, so where is all that debt?

The next statement is a view that I oppose “a report from the International Monetary Fund, rarely considered a hotbed of fiscal recklessness, warned about the risks of trying to tackle a country’s debt burden too quickly“, what is too quickly? You see 1.5 trillion is not going away overnight, it will take 2-3 decades to truly slim it down, so for the next generation, someone is walking away with £43bn a year, so we should get the debt down soon, preferably by a lot because the annual interest bill is around 7% of the received revenue in 2014, that whilst George Osborne spent 15% more than received, so to cut back on that increasing debt austerity seems to be the only answer.

Now we get the next issue “Paying them down rapidly distorts the economy too much to be worth the risk“, the risk to whom? To banks not getting ‘free’ money? Debt is a kicker, it always has been it has never been different. We will never be completely out of debt, but the debt at present is unacceptably high. You see a debt driven economy is based on the illusion of never ending growth. How did that work out in 2004 and 2008? In that light, how is it working out for Greece? They can no longer pay their bills. Whatever they get now in bail-out will be swallowed by debts and interests before Q3 ends. So, when I read “Debts should be “reduced organically through growth, or opportunistically when less distortionary sources of revenue are available”, the IMF’s researchers argue“, I am reading more misinformation. The theory sounds nice, but in the time when there was the option of surplus NOT ONE government created surplus. President Clinton was the only one who got a true surplus, after that due to circumstances the US could not foresee, the debt went completely out of control. In reflection on Austerity, Germany did tighten the buckle and got part of its debt down, which is why they are in a better position at present.

So this is the first article, Heather Stewart is not stating anything untrue, but the article is missing a lot and some of these points I very much disagree with (figure me, disagreeing with a Nobel prize winner, whilst I have no economy degree).

Now let’s have a go at the second Nobel Prize winner. In this case Joseph Stiglitz, recipient of the Nobel Memorial Prize in Economic Sciences and the John Bates Clark Medal. The article that in centre of this is ‘Greece’s creditors need a dose of reality – this is no time for European disunion‘ (at http://www.theguardian.com/business/2015/jun/05/greeces-creditors-need-a-dose-of-reality-this-is-no-time-for-european-disunion). The first paragraph is the very notion of the beginning of my disagreement. “Athens has met its creditors’ demands more than halfway“. And we care….why? Why is Athens not meeting those demands 100% of the way? You see, Greece took the debt, it went back to the markets and sold 5 billion more in bonds (I still have not figured out the name of the idiot allowing for that act of stupidity). Greece vowed to make payments again and again, yet at present the already deferred TWO payments. Now, let me be frank. They were allowed to do that! The rules were there and they played by the rules, yet we all know that Greece is out of money, there are no more options. This will be the first time that a nation goes extinct through economic inaction! Even when Syriza won, instead of going after their predecessors, instead of sitting down and getting to the tax evaders, we see (at http://www.thetimes.co.uk/tto/news/world/europe/article4358352.ece) “The country’s financial crimes police, the SDOE, had begun shredding scores of documents linked to cases of corruption. What remained was stuffed in bin bags and discarded outside the bureau’s headquarters in Athens, in public view” the title ‘Greece shreds files on tax cheating by rich and powerful‘ Kostas Vaxevanis reported this on February 19th 2015. So, why was there no prosecution here? The entire debacle on tax evasion has been treated like a joke by 4 previous administrations, so as they cut their own jugulars, why allow for just a half way approach? So far this Greek administration has not done anything to give ample faith that there will be any level of resolution. Then we get “Greece has made clear its willingness to engage in continued economic overhaul, and has welcomed Europe’s help in implementing some of them“, is that so? So far there has been no overhaul at all, the public sector cuts were undone by rehiring. Greece needs to lower its cost by a massive amount. In all that time, which of the over 2000 of wealthy Greeks ended up in court for tax evasion (from Swiss bank accounts), perhaps one? Oh the Journalist Kostas Vaxevanis ended in the dock too, a massive miscarriage of Justice as I see it!

The one part I do agree with is the dangers of Greece exiting “I believe such views significantly underestimate the current and future risks involved“, this is true, but Greece can no longer be trusted to do what they stated to do and as such, some of the players prefer to get out, before the total debt grows with another 20% which is basically no more than a year away. There is not concrete evidence that the economy will truly pick up and those who have enabled this debt driven event are not held to account either (that small matter of a massive amount of Greek bonds on the market).

Then the last part “The ECB president Mario Draghi’s confidence trick, in the form of his declaration in 2012 that the monetary authorities would do “whatever it takes” to preserve the euro, has worked so far. But the knowledge that the euro is not a binding commitment among its members will make it far less likely to work the next time“, yes, how did it work? By spending a trillion or more one areas that are still not recuperating and will need at least a decade to regain the trillion that was spent in under a year? How is that anywhere near a workable solution?

In all this, whatever should work might have worked to a degree if politicians would control their budgets and that financial institutions would not be as greed driven as they are, which is why it all failed. When we see the quote “16 banks in five years to the end 2014 reveal £30bn increase in payouts, fines and legal bills on previous five-year period to end 2013” and this is linked to a total of well over £200bn. Lloyds alone got £117m in fines, how is this linked? Well, such losses means no taxation in the books as profits are gone, whilst many involved walked out with enough money (read: bonus) to pay their full mortgage in places like Golders Green.

Mr Stiglitz never lies or misinforms, but his view is incomplete. It is very dependent on the people involved doing the right and the correct thing. Politicians and bankers tend to be not those kind of people, Greece has shown it, Gordon Brown has spent it now the Conservatives need to repair the damage, Prime Minister Tsipras is ‘forced’ to play a high stakes game, whilst those involved are no longer willing to give leeway. In my view, that game should never have been played in the first place. By setting austerity, whilst going after the Greeks and their wealth benefitting from all this was perhaps one of the few acts that could have opened wallets all over the place, that act was never done, which is why many see that meeting half way is not really an option.

Austerity might seem unfair, and it is not fair on the payers at present, but someone opened a tap whilst the bulk of those knowing what was going on should have spoken out, and spoken out very loud. This was not done, so behold the consequence of that little caper.

There is one gem in his article at the end that is part of the entire Euro mess, which is fun as I have raised it a few times over the last few years. Not bad for a person devoid of an economics degree!

He states: “Europe’s leaders viewed themselves as visionaries when they created the euro. They thought they were looking beyond the short-term demands that usually preoccupy political leaders. Unfortunately, their understanding of economics fell short of their ambition; and the politics of the moment did not permit the creation of the institutional framework that might have enabled the euro to work as intended. Although the single currency was supposed to bring unprecedented prosperity, it is difficult to detect a significant positive effect for the Eurozone as a whole in the period before the crisis. In the period since, the adverse effects have been enormous”

This is true, the one part I have an issue with is ‘Europe’s leaders viewed themselves as visionaries when they created the Euro‘. I think Europe’s leaders had nothing to do with that part. I have always viewed this change as an essential; step by the US. Their benefit of trade with a single currency was titanic in proportions, in addition, the US would keep its option to float the currency as any economy tends to do in times of hardship, whilst the nations that are part of the euro are part of a collective, which removes the option of floating a currency. This was centre in the additional growth (or diminished fall) for the US, yet, even they did not bank on the credit swap meltdown, which did hurt them. The US is getting better, but their 18 trillion in debt is choking them, even with the option to float the dollar, the Euro in the massive debt it is, can only remove the debt by paying it, which is strangling France and Italy. The UK is dealing with it, and the Euro is hurting them, but not as much as being part of the Euro is. Which is just my view on it all.

As I stated in the beginning, the articles are incomplete, misstated, not by inaccuracies, but by incompleteness, which is why people have the skewed view they seem to have at present. In the austerity path, which is unfair to some, we need to add the legal premise and the legal definitions as well as legal obstructions to remove the option of overspending to the degree that was done, we need to make sure that the law will not allow for such overstretching ever again, when that is done, we will return to times when there is hardship, but when there are good times we will all feel it too, in my view, the push of the financial sector to remove the season of ‘financial winter’ resulted in the banks getting by and the rest suffering, this must never be allowed ever again!

 

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May 26, 2015 · 23:46

An Olympic steeplechase

Greece is at it again (or still might be a better word)! Let’s turn back the clock a mere month! On April 28th we get the following news (via several sources): “Greece has decided to pull Finance Minister Yanis Varoufakis back from bailout negotiations, a move it describes as ‘clipping Varoufakis’ wings’ and ‘reining him in’ after three months of debt talks failed to produce an agreement”.

That move made perfect sense, several people (including me) saw him in some rock star presentation which was good for his ego and not too good for the Greek people. Of course, reining in does not mean ‘keeping him quiet‘, which I would not do (for the shear entertainment value alone), but also because he is the selected spokesperson of the Greek economy. So when we see the news in the Guardian a few hours ago stating: “Greek bond weaken after Varoufakis blames creditors“, my first thought was ‘can’t the man shut up?’

The quote given is “The problem is simple: Greece’s creditors insist on even greater austerity for this year and beyond – an approach that would impede recovery, obstruct growth, worsen the debt-deflationary cycle, and, in the end, erode Greeks’ willingness and ability to see through the reform agenda that the country so desperately needs. Our government cannot – and will not – accept a cure that has proven itself over five long years to be worse than the disease”

In my own view I state that he squandered 95% of the time he had with posturing, he forfeited the game buy thinking that Greece is too big to be ‘Grexitted’. Guess what Yanis! The Dutch SNS bank thought that very same notion! It did not pan out too well for them either!

Now we get the second quote, this one from Dimitris Stratoulis. He states “If we decide that there is no money left for the IMF, we have repeatedly said that our priority is to pay salaries, pensions, health, and education”. To be honest, I cannot completely oppose that! Although my priority should state Pension, Salary and Health, with a question mark to what salaries are to be paid, but I understand that the people should normally go first. I do not oppose this! Yet Syriza has been playing what I regard to be a pissing contest with people who did not need to play that game and had no interesting in playing that game. There is additional evidence. Perhaps you remember the case of Leonidas Bobolas, who got arrested in April 2015 for 1.2 million in tax evasion? That short term theatrical play just as the ‘negotiations’ were going on. I reported it in my blog on April 27th in the article ‘Finding inspiration‘ (at https://lawlordtobe.com/2015/04/27/finding-inspiration/).

How many arrests since then?

The news is awfully quiet around it. There has also been zero visibility on praising Kostas Vaxevanis on his findings and his reports. It seems to me that the members of Syriza have absolutely no intent of doing anything constructive at all towards their creditors. So when we see the statements “Greek finance minister Yanis Varoufakis has apparently pledged that Greece will meet its €305m repayment to the International Monetary Fund” by Yanis Varoufakis as well as “Tsipras instructed officials to act speedily as his government sought to defuse tensions saying it would do its best to honour its debts – even if it failed to reveal how, exactly, it would find the money to pay €1.6bn in loans to the International Monetary Fund next month” (Helena Smith, the Guardian).

Yet these two parts are already ignoring the 750 million pushed forward because the invoice of May 12th was not ‘paid’! It was settled using the IMF emergency funds, which means that this money is also due. In addition on May 12th, 16th and 19th are the amounts of 348, 581 and 348 million due. That is just the IMF, the maturing bonds as well as the ECB have not been taking into account in this matter. In addition, more bailouts are already known to be needed, so as Varoufakis is boasting, threatening and claiming, I notice that many are ignoring the observation some made “the creditors’ insistence on even more austerity, even at the expense of the reform agenda that our government is eager to pursue“. This is at the heart of the matter, because Greece is facing a 22 billion annual interest invoice, which it has no way of paying. A fact many are simply ignoring. So as non-actual payment of three quarters of a billion were made, we must wonder where that comes from. Let’s not forget that on June 12th 3.6 billion in T-bills mature!

Another non-reality comes from that same Guardian when we see: “Traders are also blaming Klaus Regling, the head of the European Stability Mechanism, for today’s euro selloff“, which is specified in “There is little time left… That’s why we’re working day and night for an agreement. Without an agreement with the creditors, Greece will not get any new loans. Then there’s a threat of insolvency. There are a lot of risks contained in that”, which is a reality I have pleaded for, for some time now. The funny part is that the New Democracy HAD it for the most sorted and the Greek people were suffering, no one denies that! Yet the courts have not made any attempt to hold previous administrations accountable, the tax evasion schemes had one trial so far and 1.2 million does not go far.

There is one final part that is an additional danger. It is not reported on, because in all honesty, the actual danger is not known yet. But did you consider how tourism will do this year? How many thousands of tourists will consider avoiding Greece (the Germans being a first nation that comes to mind)? You see, no matter how we regard the Germans, they for the most had jobs, had incomes and will desire a warm vacation. The Greek approach will work out nicely for Spain, Portugal and Italy I reckon, but with the acts of alienation Greece is cutting itself in the fingers. In addition, the dangers of drying ‘wells’, like the fear of empty ATM’s and other means not operational give added fear to the tourist population. Even though Crete should remain reasonably safe, the reality is that no part of Greece might be safe if clear progress is not booked within 2 weeks. I do hope that it will not pan out to be too bad for Crete, Stavros Arnaoutakis has been an active fighter for the prosperity of Crete for a long time and it was his birthday yesterday, so: “Happy belated birthday Stavros!” He was born in Archanes, due South of Iraklion. You might wonder why I bring this up. I will repeat the issue I voiced well over a year ago. It is becoming more and more visible that the power of Crete might reside in its independence. Crete has a founded tourist base, it has a functioning harbour for commerce and functioning airports for commercial ends too. This independence would not break their Union with Greece, but unlike the independence of Scotland, Greece has a much better chance to setup its independence at present, without too many nasty negative sides. Whatever options Syriza is currently destroying, Crete could set up a working base of minimal credit and continue for now. It will be hard, no one will deny that, but if Crete can sway a few services towards the Cretan island, it would for the better part be decently self-reliant.

This is a much better position than the position Greece had in the past, which team Tsipras/Varoufakis efficiently destroyed as I personally see it.

I also believe that the dedication Stavros Arnaoutakis has shown for a strong Crete could go a long way with whatever creditor conversation might be needed. As Crete moves straight into the Drachma, which would then be called the Cretan Drachma, would start to build on a future for both social enhancements (within Crete) as well as built on the decent foundations that Cretan housing has as well as a shift towards a services oriented future. Consider the mild climate Crete offers with water views all around that island, how long until 2-3 retirement villages would rake in jobs, commerce and income from retirees who would like their last few years in decent sunshine?

It is not enough to warrant full independence, but it is a start, if only to make the reliance on tourism 10%-20% smaller. Consider call centres that could work in that time zone and the better weather conditions. Before too long, students from all over Europe will seek a call centre all day and party all night vacation. I admit it is not the business call that matters here, but good commerce is where you built it!

Now, this might not be a great idea (perhaps not even a good idea), but I am trying to find a solution! I hope that there will be options for the Greek people, because Syriza is quickly and as I see it possibly intentional discarding whatever solution is left for the Greek people. If you doubt this, then consider the following facts:

* Less than an hour ago, I see in the Guardian, the following release: “Mujtaba Rahman, analyst at Eurasia Group, reckons that Greece will probably reach a deal with the Eurozone in time” (I am not convinced), in addition we see “We continue to believe Tsipras will lose around 5-10 lawmakers from his coalition when the package is presented to parliament (potentially attached to a vote of confidence). But we suspect he will lose less than 12 MP’s allowing him to keep his parliamentary majority“. As I see it, this should be about protecting the Greek people, now we see the cold reality (not an invalid one) that this seems to be more about playing with votes and keeping a ‘parliamentary majority‘!

This is why I felt that Antonis Samaras was the better option. He was trying to find solutions, not be ‘the popular guy’! You think Antonis Samaras was making friends when he was in office? No! He inherited a 400 billion invoice (very rough estimate) with no way to pay for it. With floating the credit ceiling and pushing non actions, Tsipras in his short time (with of course support by Varoufakis) has added close to 20% to that total debt. Now, in all honesty, he did not cause that 20% directly, but by sitting on his hands and playing theatrics he has not helped resolve any of it.

But we must also adhere to reality. The following we get from Bloomberg if Greece misses a payment: “A missed payment date starts the clock ticking. Two weeks after the initial due date and a cable from Washington urging immediate payment, the fund sends another cable stressing the “seriousness of the failure to meet obligations” and again urges prompt settlement. Two weeks after that, the managing director informs the Executive Board that an obligation is overdue. For Greece, that’s when the serious consequences kick in. These are known as cross-default and cross-acceleration“. This is a true reality, yet is that per payment?

Consider that this happen on June 5th and we get to June 19th? At that point two T-bills will have matured for the total amount of 5.2 billion, the second one of 1.6 billion on the 19th itself. When the 5th is missed, what will the markets do then? In addition, on June 19th a total of 910 million will be due too (16th and 19th of June IMF payments). In addition, what will happen to the interest levels when the two week term passes?

No one denies that the payment pressure is too unreal, but the Greek government themselves was cause to all of this (not Syriza)! That is at the heart of the ignored facts (read: unmentioned). These facts are exactly why Crete should consider protecting the Cretan population if at all possible. In addition, the separation could give additional credit to the Greeks on Crete and it might (not a guarantee) instil a lesser negative impact on tourism, which would be a massive plus. A few extra options could be set up there, but that would be up to Stavros Arnaoutakis and his peers to decide.

So how will we see this steeplechase unfold?

The ‘die hard’ positive proclaimers are singing the same song again and again, the doomsayers are hammering on what cannot be and both are interestingly avoiding key issues. Whether they feel repetitive on them is beside the point. I try to remain on the fence (which is hard with Syriza), yet I do try to find solutions. Will they be useful? Not for me to decide, but at least as a non-Greek, I might be one of the few trying to find a non-exploitative solution, which puts me ethically, morally and spiritually ahead of the pack.

 

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April 27, 2015 · 05:45

Finding inspiration

The act to incite, perhaps even a form of stimulus. Yet, when we go back to a more theological page we see: ‘a divine influence directly and immediately exerted upon the mind or soul‘. So what is wrong with inspiration? You see whilst inciting could be seen to encourage a positive term, incitement is for the most ALWAYS negative. When we see incitement we see: ‘the action of provoking unlawful behaviour or urging someone to behave unlawfully‘, why not see incitement an act as to encourage positive change? Even stimulus is now nearly always seen as a negative. The stimulus package being a foremost example.

In an age where hardship rules, we could use a positive force, yet when we see that projection of feigned wellness is combined with managed bad news, what positive force could be atoned? This is the thought that has been in the back of my mind as I am completing my current assignment. A choice I made in the past, whenever I get one step forward, the next instance I am facing two steps back. This is perhaps just a situation that exists between my two ears (as we refer to mental issues).

Greece is not even the foremost example on my mind. There are other issues where we see a change on what is for some and will never be for most. The next part seems a little repetitive as I have mentioned these parts in the past.

  1. How is it possible?

Here we see a side of the world that seems out of context as per last year. Forever the oil prices were going up and up until it went beyond $120. Profits were astronomical. Now, as prices are just below the lowest basement, we see the following parts (at http://www.theguardian.com/business/2015/apr/26/bp-profits-down-still-in-deep-water). “It’s a big week for big oil, with both BP and Royal Dutch Shell reporting results. Despite crude prices hitting a 2015 high at the end of last week, they are still almost 50% down since last June, which means continuing trouble for the businesses“. Now consider the reality. Take a litre of crude oil, ½ becomes Petrol, one third becomes Kerosene and the rest goes into dozens of other products. Now consider the history of your shopping. Since 2008 (and since the oil drop of 2014), when did your petrol price go down and by how much? Jet fuel should go down, yet Virgin, Qantas and others are keeping the Jet fuel surcharge in place. So at present we have accounted for almost 85% of the crude oil, the rest goes into products like soap, Vaseline and other carbon based artefacts.  None have ever made a decent downgrade in price. However, the article claims on such hardships even though the price of the raw resource is still lower than ever. So what stories are we being told? Are the oil companies guilty of incitement to exploitation?

  1. How are we in this position?

Here are 8 mergers for last year, several more are to come and hundreds more have passed and a fair amount of mergers are set at mega billions, several in the pharmaceutical industries.

Lets take a look at a few of the 2014 mergers: Value: $67.1 billion, May 18, 2014, Value: $46.8 billion, June 15, 2014, Value: $46.8 billion, April 7, 2014, Value: $25.3 billion, February 18, 2014, Value: $23.6 billion, March 11, 2014, Value: $19.4 billion, February 19, 2014, Value: $17.1 billion, April 30, 2014, Value: $16.01 billion, January 13, 2014. Total $262 billion. Now consider that these mergers are for the most tax-free when they are seen “as reorganizations through acquisition. Under this model, companies must swap, rather than outright sell, assets and equity such that the two companies end up becoming one new company with an agglomerated store of assets and equity“, that is very nice for the boards of directors and as multiple borders are broken, many options (highly complex ones) open up to maximise non taxability. Yet, many governments have done next to nothing to curb this form of greedy exploitation at the expense of the local governments whose protection they enjoy and the exploited workers who are left at the short end of the stick in many cases, again and again. There is often little consequence for the acquiring party will soon find themselves in an upward reorganisation, but the other party is more often than not in a less positive position, which is the way of the world, I will not oppose the issue of reorganisation and acquisition, yet the laws have been bend beyond reasonable. In the near past there was a level of equilibrium, as the governments got a slice of that pie. Now, as too many levels of non-taxability are offered, we see a completely unbalanced view of life, to a smaller part in regards to rich industrialists, but to the largest extent to a whole score of enabling politicians with a limited sight to the future whilst blind staring to what was in the past the ‘now’ and never to adjust the future of what should be.

We are all feeling these shortcomings now, Greece a lot more than the others I might add!

Now we get back to Greece for one simple example. The one thing Greece had to do for well over a decade is the step only taken (if we can believe the press) only last week (at http://www.newsweek.com/greece-launches-frantic-crackdown-tax-evaders-ahead-repayments-324927), here we see the story of Leonidas Bobolas, arrested and not to be released until back taxation had been paid. Some might think it is a solution, for me and many others it is a final desperate act by a government that did not take things serious until it was too late. This must be a laughing moment for Kostas Vaxevanis, whose list must be very important at this moment, but there is every chance that the truly big rollers are getting away with it all and more important, the money that will be gotten here is nowhere near the amount required for the payments over the next 16 weeks. It is the final spasm of a nation that has every real danger of becoming extinct a second time. New Greece might soon join Ancient Greece as it becomes forgotten, slowly but surely.

OK, I admit that this future is unrealistic (not to mention vastly exaggerated), but is that not how the Greeks currently feel? A system so broken that the people are suffering. The place where Democracy was born by the mind of Aristotle. It was the foundry where the Olympic Games were devised, yet in all its social paths, the one path forgotten was the safety of the Greek future. Why will this tax evasion path fail? Well, consider that Leonidas Bobolas is ‘regarded’ as one of the large evaders, now consider that his due taxation was less than 2 million Euro and add to this the following quote: “Government data suggested that some €70bn was owed in unpaid tax at the end of 2014. Transparency International found the country’s opaque tax code and corruption of tax collectors meant evasive tax arrangements could be set up for as little as €100“. To get to 70 billion, they would need at least 55,000 tax evaders, all due 1.5 million, now consider the Kostas Vaxevanis list that covered less than 2100 names. The amount due cannot be met, not even close through this way. In addition we see even more posturing of inaction. This comes again from Yanis Varoufakis who stated: “one of the key reforms the government was proposing was the creation of a fully independent tax commission to tackle the problem“. I would personally translate this into a delay of up to 24 months with no actual actions at all. This one arrest is just for show as I see it, a few more will make headlines, but in the end, the funds will not be there on time and we can state that clear evidence of inaction from the Greek government is a mere display of fact.

Why mention Greece?

Greece is at present the extreme example, but not the least of the issues. It shows a governmental failing that is present all over Europe. Greece in its position is only the first one to visibly no longer manage its upcoming bills. The majority of European nations have maintained an inability to manage budgets, which is the second tier in this. As these governments make new mentions of ‘stimulus’ as a solution, it only masks an inability of forward momentum, whilst on the other side of that formula we see governmental spending sprees that cannot be covered in any way, shape or form. One example is the Dutch Stimulus package of 2009, one document (at http://ec.europa.eu/economy_finance/economic_governance/sgp/pdf/20_scps/2009-10/01_programme/nl_2010-01-29_sp_en.pdf) forecasts a GDP growth of 2% in both 2011 and 2012, a number that would never be achieved, in the end, the growth would be -0.2% and -0.6%, the year after that it was -0.8%, we can speculate that without the stimulus it would have been worse, which is a likely result, but the fact remains, how well are the people off? Let’s not forget that stimulus packages are basically loans, the interest on those billions go somewhere, so in the end the people pay! France with its 26 billion package in 2008 would not see a positive jump until late 2013, then only 0.6%, after that until 2014, France only marginally kept its head above water. Italy does not even get close to those numbers and only had one moment in 2013 where they were positive at 0.1%, the rest is all negative. They pushed in a mere 9 billion. So with three nations, Europe has spent 44 billion and no real results to show. It could be debated as I stated earlier that the state of affairs for those nations would be a lot worse, I could agree with this on the mere premise of the thought. Yet, the one issue that should have been done, namely proper budgeting has not been achieved by any of these nations for over a decade and debts are stockpiling. This has been at the centre of my considerations for a long time.

 

Whether this is mere bad budgeting or a completely unbalanced system where corporations have been uber enabled, whilst their rights are not questioned is another matter entirely. In that regard we have the HSBC view (at http://www.theguardian.com/business/2015/apr/24/hsbc-warns-it-could-leave-uk-over-eu-referendum-uncertainty), where the option of the UK leaving the Eurozone would make HSBC move offices to other shores. Yet, when we google this bank we see articles on how they pay millions and millions less than expected. Now, these articles are not the ones you should have too much faith in, but with this much smoke, the question becomes, were tax bills burnt? I am willing to partially ignore the Swiss scandal as this is only one instance, it is the overall picture that goes far beyond just the HSBC. When we consider Libor, the fines of billions that followed with banks all over the world, we see that populations all over Europe, even on a global level are denied the funds for their support that they should be entitled to. Yet, the paths taken now are also questionable. I support to the larger extent both the Conservative path as well as the Australian Liberal party. Here we see a protection against naming apparent tax-dodgers. My reasoning? If a company engages in legal paths for revenue and investments whether on shore or offshore where the tax laws allow for it, the companies who are creative enough to exploit the loophole shouldn’t be punished. This is at the core of the issue, the tax system has to be fixed and altered. Yet, as we see with HSBC, politicians are often too scared for their own political hide (as I personally see it) and will push forward any tax change. This has gone on for over a decade and many changes are yet to be properly addressed. This is at the heart of the matter.

In the end, what is the wisest of actions? To cater to HSBC and mind liking parties that seem to pay the minimum in taxation, whilst at the same time, the millstones of debt are dragging down all European nations? The UK might have the highest European debt (1.7T), yet the path that the conservatives have taken its population has the best options to lower the debts whilst offering a modest growth. The inability of the other European nations to adhere to this is only one of several factors. Greece is now becoming a larger issue as their timeline of pushed from April to May and now we see the mentioning of June by Yanis Varoufakis: “We wish to merge the current review with the June agreement“, which is now a more pressing issue as the voters in May would steer fast into a direction many will not like, this is the danger, as emotion drove Greeks towards Syriza, that same dangerous move could push the UK voters stronger towards UKIP and the Euro exodus that could follow. Another version where we see a legal incitement away from the Euro, there is no inspiration, just a need for what could be regarded as ‘false sense of security‘. That danger only increases when we consider the next quote: “Tsipras said he was optimistic an interim agreement would soon be reached. But Greeks know another bailout will be needed even if the short-term €7.2bn is secured“, that part and the inability of the Greek government to seriously commit from day one is at the heart of all this.

A need to incite a tax system that works more honest towards the nations that give ‘free’ protection to the corporations that seem to shun a moral refinement is needed. Not just for the UK, but for all European nations. Yet, will this happen? This is the question we should ask when we look at the papers from the IEA (Institute for Economic Affairs), where we saw on December 1st 2014 the following quote: “Despite the Conservative’s pledge to raise the threshold to £50,000, over 5 million taxpayers will pay the higher rate of income tax by the end of the next parliament. Indeed, it is likely that the number of higher rate taxpayers will continue to increase even if the threshold is raised“. I question the spirit of this. You see, the groups are 24.1 million in the basic rate and 4.5 million in the higher rate (source: UK Statistics Authority). I do not deny these numbers, yet, raising the threshold will force other measures too. A more immediate and more just move would be to increase the 0% rate from £10.6K to £13K, which will also benefit the higher rate to some extent (£2.5K less taxable), after this I personally advocated raising both groups, the Basic rate +1% and the higher rate +2%. he reasoning is simple, in the end a budget has to be met, even though we see these ‘holier than thou‘ groups all moving for more tax breaks, yet, in the end, until tax loops and tax havens are dealt with, the tax coffers will remain massively underfunded. Let’s not forget that the UK has to meet a 1.7T issue, all using official bank notes with the ‘£’ symbol (replacing IOU’s in place). If the IEA really wants to push certain tax shifts without properly balancing the equation, we will see a push for drastic austerity sooner rather than later. It is not a mere guess, it is an outcome of mathematical certainty. Only after a serious dent has been made in the total debt, then it would be possible to consider a change. All this is now endangered when we see ‘promises’ by Ed Miliband as he states: “Labour will pledge to deliver a surplus in the current budget as soon as possible in the next parliament. This could allow the party to borrow to fund capital investment for infrastructure projects“, so a surplus and MORE borrowing? So basically he will likely spend his budget and the budget of the next administration in one go. The UK is still dealing with the borrowing acts of a previous governing labour. I see at the heart of ANY government at present, the need to borrow ZERO, whilst still reducing the overall debt to some degree (not possible to state by how much), this is the only way to incite true growth, to inspire a growing economy and to stimulate some version of ‘quality of life’. There are a few steps that any of the elected parties could do, but that requires vision, I have some answers, but filling that solution will take a different view, not one of borrowing, but one of an adapted vision that allows for new growth by changing the equation of costing, a different approach to a changing world where the UK moves ahead stronger still, which will be good for the entire Commonwealth at large!

An act to incite stimulus through Inspiration, a positive wave not based on pre-spending.

 

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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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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 26, 2015 · 21:19

Double standards, no resolve (part 1)

This is at the heart of two matters that are at play. The mere notion that change will do anything definite is just a laughing matter. Yet, it is not laughter at the people trying to do this; it is about the next two cogs of grinding that will halt it all. The first issue is Greece. There had been little doubt on Alexis Tsipras winning this, I was holding my breath in favour of Antonis Samaras winning, but it was never overly realistic. The problem is what will happen now. The direct issue is that none have been able to deal with Greek corruption in any way, shape or form. The fact that Kostas Vaxevanis and not those dodging Greek taxation ended up in a courtroom in 2013 is still additional cause for concern. Can we agree that as Greece has not been able to do ANYTHING about the mounting debts from 2009 onwards, a massive change must be made! It goes hand in hand with the quote we see in the Guardian “Priti Patel, Conservative MP in Westminster, just told Sky News that Greece’s economic problems are “a stark reminder that we should never join the euro”“, I will take it one step further, if Alexis Tsipras is not massively careful on what he does next, the downward curve (curve, not spiral) of the Euro will only fuel both British UKIP and French Front Nationale even further, it could also force the German people to feel pressure to leave the Euro in a failing attempt to bolster their diminished fortunes. It is a failing notion because no matter what happens next, those under the Euro will take a hard hit over the next 2 weeks, whatever bolstering will happen, it will only aid the super wealthy and only short term as they recap their non-tied down wealth as I personally see it.

The biggest issue remains corruption and tax evasion in Greece, no matter who comes next, without dealing with those two elements is simply selling a fairy tail (pun intended) to the Greek voters. This is at the heart of Zoe Williams piece that I disagree with (at http://www.theguardian.com/commentisfree/2015/jan/25/syriza-uk-left-labour), the title is already a bit of an issue for me ‘Syriza stood up to the money men – the UK left must do the same‘, which money men are you referring to Zoe? The artful tax dodgers, who are partly to blame for the entire mess, yet no one has the cajones (or any jurisprudential power) to actually prosecute? Or are they the people holding the debts? Let’s not forget that governments got ‘assistance’ under the strict rule of austerity, a promise never kept, because none of these politicians will do anything about them Greek artful tax dodgers.

There is also another side, the fact that less than 2100 Greeks have this much money in unpaid tax debts seems simply ludicrous to me (the Kostas Vaxevanis list of 2100 naughty Greeks), so I wonder how much spending should have been cut for over half a decade, so again we get to Alexis Tsipras, who would need to cut massive spending, for the mere reason that there is no money coming into the coffers. Yet, within the article Zoe wrote, there is a gem, it is out there in the open and it has been there for a long time: “Ukip is often saying something similar to the Greens: business interests aren’t everything. That’s a reality that the majority feels, but that you never hear described; that’s how the Greens overtook the Liberal Democrats, while all eyes were on Ukip“, when we see ‘business interests aren’t everything‘ we need to realise that this is not just corporate greed, it is a majority of corporate greed signs that have been rampant on a global scale. The issue of a 15% board of director’s wealth growth in a 2% margin world; how was that ever a sustainable situation? It is also the deadly option Alexis Tsipras might opt for. As Greece becomes a possible tax shelter ‘for a fee’, to allow for closed bank account details under limited donation of revenue (all for the people approach) where we see the next waves. Global corporations will love the coming step (if it happens), a non-accountable 0.3% tax account, each coming with its own island. It will anger the American IRS (and State Department) to no extent, it will drive the IMF into entirely new problems and the rest of Europe will see a shift of fund flows. This is all assumption (read speculation) on my side, but it could work for Greece, for a very short time. I reckon that this step, if taken, might have one massive obstacle, that would be assuring that another Kostas Vaxevanis list never surfaces, so when you see any announcement on the new Apple iOlympian or the new Google Nexus ‘Theíos’, then you know that Greece will be embracing new tax free shores. The question now is not, what is the solution, but what options are actually open?

We can accept the statement from Professor Christopher Pissarides from the London School of Economics “Greece’s debt pile is simply too high for the country to return to growth and services its borrowing”, in addition, we can accept the words of Yanis Varoufakis MP “Grexit is not on the cards, we will not go to Brussels in a spirit of confrontation. There is plenty of room for mutual benefit”, this all sounds fine, but if no one is actually actively dealing with the list of 2100 of Kostas Vaxevanis you tend to not have that many options, which means you need a decently strict austerity regime, the one issue that got them elected by disposing of.

What is the option of change?

Well, with my law education, I do have another path for Greece, yet, it is an uneven path, but it could be a long term salvation if it works. Now, feel free to object to the notion and if you are a law professional, than those remarks will be met with my personal investigation. So here is the premise!

Issue: The levels of corruption within Greece are beyond several layers of acceptability. We all acknowledge, that any nation will have a level of corruption, however, what can be done to stem the tide in a novel way.

Solution: As the current legal system is in such disarray, the mess will evolve from bad to worse. We might state that it had gone from worse to unsustainable, so what if we change the premise altogether? What if the new Greece will implement a new legal system from a common law system? Instead of making their civil law more draconian, with of course the added danger of more loop holes, what if Greece evolved into a Common Law nation? It will still be based upon Greek constitution and Greek values, but will come with a few centuries of English jurisprudential evolution. The benefit is that it does not need to happen overnight, but can be structured to deal with the tax laws and criminal law (corruption, fraud and such) first. You see, if there is no faith in the Greek courts, would it not make sense to evolve the justice system (this is a choice of words; this does not indicate that a civil law system is less evolved than a common law system).

It seems that the evolving flexibility of common law is exactly what Greece needs, no matter how good the law is regarded now in Greece; it has failed a nation and its people. This is at the unspoken heart of several issues. There is ample concern on such changes too; the big issue is that no matter how the Greeks feel at present, there is enough concern that Alexis Tsipras is not the new hope, he will be their last hope, because if no solution grows now, Greece will be finished, that much is clear. The reported word from several nations, in many publications is all about reforms. Greek journalist Nick Malkoutzis from the Kathimerini English Edition stated today “Syriza’s top priority should be to reform the justice system, the civil service and the tax-collection operations, to show Eurozone allies he is serious”. He is one of many voices stating issues in this direction. Yet, reforming a justice system is also wrought with the dangers they get when new legislation is passed. It sounds good in theory, but such reforms tend to be time consuming ones and that is one element Greece no longer has. It has been sustaining on borrowed time too long and those holding the debt papers are out of patience (loss of profit will do that to these people). So will common law be good or bad for Greece? I personally do not know, but the current system is not working and so far, the failed system has not been overhauled or tested since the 2009 collapse, which makes the issue more pressing, so as Alexis Tsipras claims it is turning a page, will it be for better or for a lot worse for Greece and for the Greek people. Only time will tell.

 

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