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Banking France

The last few days have seen a serious change in multiple directions in Countries all over the place (in that rugged area known as Europe). One part is not a surprise, the news that the ‘Pound jumps against euro‘, it is the second part ‘as Germany’s inflation data shocks markets‘ that is cause for concern. We should not be that surprised, because it had been known that Germany was facing a slowdown, which in light of so many events in Europe makes perfect sense. It is the by-line “as German inflation fell short of expectations to give a big setback for the European Central Bank (ECB) programme to support the Eurozone economy” which is the actual story. You see, last week I mentioned Mario Draghi and the dangers he represents, we now see the first chunk of worry that came from ‘Decoupling Draghi is hard to do‘ (at https://lawlordtobe.com/2017/03/28/decoupling-draghi-is-hard-to-do/). The mention of Reuters and how big funds are having concerns is now more than a fact. The quote “This assessment had raised hopes the ECB could perhaps cut short the money-printing programme, which injects billions of euros into the economy each month. But the fall in German inflation will be seen as a sign that money-printing will not be reined in any time soon“, implying more and longer printing of money to do something that never worked the first time around and will in equal measure fail the second time too. It is a side that the papers are not touching, not by a mile, yet it is also the reality that we face in the upcoming reality of Frexit. This is seen in two parts.

The first are the big 4 powers in the EEC Economy. France, Germany, Italy and UK. With UK triggering article 50, the stability of the Euro is now gone. Whether we have Frexit or not, the reality is that the Euro has relied on the German economy for a decade and now that there is an issue, that whilst The French economy has been stagnating since at least 2015 (actually longer than that), now with the German economy taking a dive towards no-growth, the issue changes dramatically, because the Italian lack of growth had been an issue for some time. With the German setback, the dangers of printing money becomes a lot more visible and the acts of the ECB needs to be questioned by several governments, who are actually not doing that. In equal measure the media at large seems to steer clear from the entire ECB debacle, which is a worry on another level. All this is now part of another shadow that is covering the ECB. Reuters has given view to the following quote “The documents show repeated violations of the ECB’s own rules by its executive board, chaired by Mario Draghi, and come amid staff complaints of favouritism at one of Europe’s most powerful institutions” as well as “Staff representatives complained last year to the European Parliament, which oversees the ECB, that dissent was discouraged at the bank, potentially hobbling its ability to spot the next financial crisis” an issue that should be very much on the minds of every European government, as the ECB is costing them a fair amount of money. Another Jewel from Reuters is seen in the quote “Recent comments from the ECB were misinterpreted, according to a Reuters report citing ECB officials, after President Mario Draghi dropped some of the more dovish central bank language and did not replace its bank lending facility at its latest policy meeting on March 9” as well as “adding to the slightly hawkish feeling, ECB policymaker Ewald Nowotny said a week later that the central bank would decide in the future if it would raise interest rates before ending its quantitative easing program, a comment that took market participants by surprise“. Whilst we can argue on the value of “The core inflation rate is currently running at 0.9%, not close enough to the ECB’s stated aim of ‘near to 2%’ to cause President Draghi to change anything, even rhetoric, at the next ECB meeting on April 27“, the reality is that we are facing a quarter of feigned misinformation due to what I would see a as an unacceptable level of ‘miscommunication‘ (read: misinterpretation). Especially when we consider that quote ‘comments from the ECB were misinterpreted‘, misinterpreted by whom? By the economic governmental powers, the banks, the traders? Is a major factor of the ECB not ‘clarity‘? Should clear communication not be seen as a way to thwart ‘misinterpretation‘?

The fact that the ECB is not just showing favour in the wrong places, but a level of non-clarity gives a second failing by the ECB, that whilst they are still printing billions of euro’s on a daily level. Not the place where you want to be anything less than crystal clear. It is that factor that is enabling Marine Le Pen and giving more and more concern towards Emmanuel Macron. There is a second sight to all this. You see, part of the entire election is set on what some agree ‘what is good for France’, yet who decides that? When we consider “The major candidates for the French presidential election Emmanuel Macron, Marine Le Pen and Francois Fillon all present their economic programmes to the Medef employer’s federation today. All will be hoping the influential group will give them the “business-friendly” imprimatur” (source: Reuters), It is in that light that I refer to the Saxo Group, who has an interesting article (at https://www.tradingfloor.com/posts/europe-divided-the-front-nationals-absurd-economics-saxostrats-8577141), there are too many quotes to just pick from and in the end, my version might come across warped. What does matter is the question that follows:

If we agree that the New Franc is not immune to speculation, how come that a national currency is (as claimed) so susceptible to speculative attack?

There is no clear answer, yet it is an important one, one that Marine Le Pen needs to answer. In addition, the article implies that Medef needs the ECB and that there is a link, as such we get two parts, the first is that Marine Le Pen is getting discriminated out of two economic groups, making the French elections no longer fair. The second is that the ECB has been setting up links and connections giving them unelected national powers in nearly every European nation, how is that in any way acceptable, especially when it gives them the influence over elections?

So why is it an issue?

For me, not that much, yet when we consider the actions since Brexit intent, and now that Brexit has started, we suddenly see the same panic driven media mob with headlines like ‘Study: Frexit chaos would be ‘worse than collapse of Lehman Brothers’‘, where we see the label ‘doom-mongering‘ with the quote “the population at large is in favour of the single currency and that there is little to suggest any economic benefit to doing so“, this whilst we know that leaving the Euro is almost the singular reason that Front Nationale with Marine Le Pen is this popular. Then we get ‘Why ‘Frexit’ not Brexit should top bond investors’ fears‘, with the mild claim “‘A more pressing concern [than Brexit] is ‘Frexit’,’ he said. ‘Le Pen is polling well in the run-up to April’s presidential election and looks likely to win the first round. She has pledged to lead France out of the single currency“, which is given AFTER Article 50 was delivered to the processing parties. What remains unstated is that with 2 of the 4 large players remaining, the Euro cannot survive. They are mellowing it down with ‘the Front National is unlikely to win sufficient National Assembly seats to enact her policies and such a decision would probably be subject to a referendum’, yet as I see it, when the French realise that Macron in conjunction with Manuel Valls is gaining momentum, the French are angry (according to several sources), in addition Fillon is losing ground too fast. There is no doubt that it will be between Emmanuel Macron and Marine Le Pen, even as at least three elements have decided to discriminate against Front National, her numbers are still stable. This should be a worrying factor to many as this implies that her vote will be carried by just the French voters, no tainting by Medef or pressure through foreign European leaders.

No matter who wins, there will be a powerful backlash. Even if Macron wins, France needs to realise that changes are essential to survive what comes after. Italy is up next and there the mood is also heavy. The Financial times was ‘timid’ with ‘Italy is falling out of love with Europe‘, it is however not that easy and it is getting harder in Italy on several fronts. Here is largely a blame game in session and the truth is that Europe, the ECB and others are not that guilty in the hardships that Italy faces. Its debt is far worse than Greece and the Italian banks have no way to deal with this problem. So there is a chance (not a very realistic one) that the next in power will start the Italeave signal. Even if that happens, the chance that France and Germany can keep the Euro afloat is much more realistic, but it comes with a two decade burden that any hardship or any recession (read: some kind of economic crash) would be disastrous to both the two nations and the Euro, a risk that the ECB, IMF and Wall Street are very willing to take as it gives them time to find other solutions to not get killed in the process.

So in the end, we are now 36 days away from learning whether the Euro will be dead or only near death, yet still dying.

 

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Matt Damon’s Quote

You could wonder what Matt Damon has been up to, there will always be reason to do this, not because he is an exceptional actor, even a celebrity on Mars. No, the reason here is his connection to documentaries. He was the narrator on ‘Inside Job‘, which got a well-deserved Oscar in 2011. I personally feel that this is the best documentary on the financial crises ever created. So let’s get started. Today, we see a number of news items reach the twilight of dawn.

The first one (at https://www.theguardian.com/world/2016/nov/08/panama-papers-22-people-face-tax-evasion-investigations-in-uk), gives us ‘Panama Papers: 22 people face tax evasion investigations in UK‘, with the added text “Philip Hammond also said a further 43 wealthy individuals were under review while their links to the offshore files were investigated further. He made the comments in a written answer to the House of Commons explaining what had happened since the offshore tax files emerged“. Now we might go all huffy and puffy on these tax evaders, yet when you consider the news from August (at http://www.bloomberg.com/news/articles/2016-08-31/ex-tesco-finance-chief-mcilwee-probe-closed-by-u-k-regulator), where we see “The U.K. accounting regulator closed an investigation into Tesco Plc’s former Chief Financial Officer, Laurie McIlwee, saying there wasn’t a “realistic prospect” that misconduct would be found in the case“, with the added “The Financial Reporting Council closed its case into McIlwee Wednesday, according to a statement from the regulator. It is still investigating the grocer’s auditor, PricewaterhouseCoopers LLP, and other individuals involved in Tesco’s accounts“.

This has been going on since 2014, they have not been able to find anything after two years and now you are going after ‘simple’ tax evaders?

My initial message (with all due respect) to the Chancellor of the Exchequer is “Mr Philip Hammond, are you out of your bloody mind?” You are still trying to get anything real on PwC, or were you ordered to let it die down?

When a company suddenly loses billions in value (also due to their own stupidity) and you cannot find anyone to prosecute and go to jail for overstating profits by £263 million ($345 million), whilst we also know that for that year PwC gave Tesco a 10 million pound invoice for auditing (annual) with an additional 3 million pounds for consultancy that year (Source: the Guardian). You cannot find anything and now you are going after people, where you cannot state whether they broke the law and you will rely on illegally obtained papers. How stupid is this?

How about you making the following change as per immediate!

a. Until the Tesco case has been satisfied, PwC and its senior employees cannot undersign any accountancy venue, or corporate balance for any UK corporation for 2016, 2017 and 2018 until the matter is solved.
b. In case wrongdoing by PwC employees is proven beyond reasonable doubt, PwC will not be allowed to operate within the UK.

How about them apples?

So far we have seen massive leeway by the press and the SFO has not achieved anything at all regarding Tesco. So it is time to adjust regulations and legal premises, until that point comes PwC will have to operate on non-British companies. Now, we can all understand that when we see the quote “McIlwee resigned as Tesco’s CFO in April 2014, prior to the discovery of the accounting errors, amid reports of disagreements with then-Chief Executive Officer Philip Clarke” seems to imply that McIlwee was not privy to, and not guilty of any wrongdoings, yet the fact that the SFO got nowhere in two years means that there is something massively wrong. When we know that so many millions were overstated, we seem to have a decently clear case of fraud, yet no one goes to jail. In addition, we also know that PwC was in on it (at least to some degree) and in addition, the subsequent Deloitte investigation showed more than initially was found means that there is no scenario where PwC can be absent from guilt in the first or second degree.

The SFO gave that Carl Rogberg, Christopher Bush and John Scouler were charged (source: BBC), they pleaded not guilty and at present the court dates are set for September 2017. It is my opinion that until all that is settled, the Chancellor of the Exchequer has no business whatsoever to dig into cases based on illegally obtained papers, whilst his branch as well as the SFO has no flipping ability at present to close a 2 year old case for at least another year (if ever). And as reported by the Times in September (at http://www.thetimes.co.uk/article/tesco-auditor-slips-back-into-retailers-aisles-0gm9xt8md) that “Tesco has appointed PwC as an independent adviser, despite replacing it as auditor with Deloitte“, which gives my emotional and slightly inappropriate response “Are you fucking kidding me?

So, whilst the PwC issues were kept very low key by nearly all the press, whilst there is no condemnation on a daily basis by the press and even less success by the SFO, we should agree that PwC has no business being in the UK to begin with, especially as “Last week the FRC cleared Laurie McIlwee, Tesco’s former chief financial officer, of wrongdoing over the scandal, but added that its investigation into PwC and other unnamed individuals continued“, we could go by once bitten twice shy, or we could go by the fact that as the SFO is either unable or unwilling to prosecute PwC, why would we even consider their presence? In case some are considering a specific rebuttal, to them I would respond with the April article (at https://www.theguardian.com/business/2016/apr/14/brexit-could-lead-to-loss-of-100000-financial-services-jobs-report-warns), where they stated ‘PwC report estimates 70,000-100,000 fewer jobs in 2020 compared with estimated number if Britain stays in EU‘, so let’s start with theirs and let smaller accountancy firms continue and allow for growth. In addition, when we accept the news by the BBC in Feb 2015 (at http://www.bbc.com/news/business-31147276), where we see “We believe that PricewaterhouseCoopers’s activities represent nothing short of the promotion of tax avoidance on an industrial scale,” said Margaret Hodge, chairwoman of the Public Accounts Committee (PAC)“, so in that light, we could just send PricewaterhouseCoopers (PwC) packing, giving light that the facilitator of tax evasion have been dismissed from the country and as such the UK will see a decline in Tax evasion, no need for illegally held papers, no long and expensive investigation and the thorn in the UK economies side is equally removed. It will not mean that tax evasion is a thing of the past, but if PwC is send packing now, the other three might do a 180 degree on that clientele, which would at that point make the tax evasion issue moot, or at least deprive it from many options, which would amount to the same in the end.

So, you like apples?

If I am accused from persecuting PwC, then I would plead that I am not entirely innocent in that regard. I would bring the defence that the SFO has not gotten anywhere in 2 years and they are supposed to have the ability to find those culprits. Yet, as John Crace pointed out in the Guardian on April 5th that “Only last year, the public accounts committee reported that the accountancy firm PricewaterhouseCoopers (PwC) was promoting tax avoidance on an industrial scale. To make things worse, it was first in the frame to benefit from administering the windup of Tata’s steel operations in the UK. So where was David Cameron? At PwC’s offices in Birmingham. Some might call it a brave choice“, in that light, there is an additional reason to give PwC their walking papers.

In all this the exchequer has one final issue to deal with, you see, accountant at large, including (read: especially) those at PwC are really clever with what they do, meaning that there could be no broken laws to begin with, making the actions from certain parties from 2014 until 2018 even more questionable, with a strong need to truly scrutinise the rules that accountancy firms applied and how they were applied. As I see it, there is nothing worse than to paint a lovely target on a person only to learn that the laws fell short and none were ever broken. If you question that, then consider the following two options.

  1. The SFO has, as it embraced corruption onto a new level decided not to dig into PwC on the levels needed to secure evidence for the prosecution regarding Tesco.
  2. The SFO has found that even as it is clear that PwC assisted in these levels of Fraud and Misreporting, yet when the books and memos were investigated for these transgressions, there was more than a reasonable doubt that PwC was not fully aware, in addition, there are no papers filed by PwC to implicate them in any way in fraud or misrepresentation. As well as the established fact that no laws were broken at present.

When you look at the two options, which one is more likely than not the situation regarding PwC?

In my book, the fact that a person is not guilty, does not mean that they are innocent. I remain of mind that shutting PwC down in the UK is not the worst idea at present, yet is that point of view valid when we consider premise 2, which is actually the most likely scenario? When we consider that the spirit of the law has been violated by PricewaterhouseCoopers, at that point we still have the issue that no literal laws were broken. Here we could set forth that the government (read: parliament) created the foundations and the setting where industrialised tax evasion and fraud became legalised options. Even as we saw that there was a clear case for fraud, the law has been altered to the degree that the facilitators cannot be held accountable, as such, an issue was created and until that is resolved, and PwC cannot be prosecuted (which is wrong in many ways from the point of a simple taxpaying labourer).

So, we now have the issue of the letter of the law versus the spirit of the law, which should be seen as grammatical opposites, not just in grammar, it is that they are also opposites of the soul (read: soul of the law). When one obeys the letter of the law but not the spirit, one is obeying the literal interpretation of the words (the “letter”) of the law, but not necessarily the intent of those who wrote the law. Which is what black letter lawyers (and accountants) tend to do, because a nation of laws is about a nation with rules of playing the game. In our case, in Common Law, until a case is set as a precedent in law, there will be no adjustment and this can go on ‘ad infinitum’ and Intentionally following the letter of the law but not the spirit may be accomplished through exploiting technicalities, loopholes, and ambiguous language (at times a mere comma does the trick too).

Yet, when one obeys the spirit of the law but not the letter, one is doing what the authors of the law intended, though not necessarily adhering to the literal wording, which could get them automatically prosecuted if the District Attorney woke up on a Monday morning with a really foul mood.

So, whilst we might agree with Margaret Hodge, stating “We believe that PricewaterhouseCoopers’s activities represent nothing short of the promotion of tax avoidance on an industrial scale“, the fact that they are not breaking the law, implies that no corrections to the law have been made to correct for this. As such, you only have yourself to blame and admittance of this failure to the public at large is an essential second step. As I see it, making a lot of noise going after people who might have done something like this, whilst papers are absent and whilst all parties know that this is because of illegally obtained papers from the law firm Mossack Fonseca is even less intelligent, as the people behind this have leaked these papers for their own personal interest and ‘late taxation’ was not their goal, so to adhere to the promotion of such crimes is not the best way to get results.

Now that we see claims rising towards Tesco for misrepresentation from their investors for the amount of £100 million, which comes on top of the diminished value, so I feel that no matter what, there should be a negative impact on PwC one way or another, yet within the confines of the law of course. This takes us to ‘The letter versus the spirit of the law: A lay perspective on culpability‘ by Stephen M. Garcia, Patricia Chen and Matthew T. Gordon (paper here). The part that gives us the cakes are found in study 5 on page 486. “Study 5 sought to examine another instance in which the letter of the law is not broken but the spirit of the law may have been violated“, which is where I for the most stand with PwC in the Tesco matter as stated “We also wanted to control for various counter-explanations that underlie culpability such as violations of social and moral norms“, with references to Bicchieri & Chavez, 2010 as well as Mazar, Amir, & Ariely, 2008. Yet in the first there is Tonry, 2010, where he argues that “the foundations for disparity causing policy choices lie in the cultural and social forces that combined historically to shape U.S. society“, which is interesting as this implies that the policymaker and not PwC is the actual culprit and my rage was misguided. Yet, is that actually true? The spirit of the law is not equipped, or better stated should not be equipped to manage the input of self-interest, because the spirit of the will assume the setting for all people and as such will force the text and derail the letter of the law (as I see it). Tonry goes on into the racial destabilising side, yet in my view the racial part is not the real instance, I believe that the division is that we see two groups One is the (white) social enabled group who is set to the game with preparation (read: legal advice) to break the spirit of the law and not the letter of the law as long as self-interests are served. This setting will at that same time destabilise the (black) group, a group that is suffocating on the lack and lapse of social options and opportunities, where without proper and affordable advice the letter and the spirit of the law will be adhered to, yet at a massive cost through loss of opportunity. This now makes PwC a facilitator for the wealthy to avoid breaking the letter of the law and to optionally, when unavoidable adhere to the spirit of the law. From one point, can the facilitator be held to account? I believe so, yet the area is slightly too grey for my comfort. It is the policymaker that requires to shift the grey area, so that breaking the law is a more clear setting and as such the SFO could actually create a situation where conviction (let alone prosecution) becomes a reality.

I still believe that PwC has done great wrongs, yet as far as we can establish, not in the letter of the law. I find them guilty of knowingly set the stage for managed ‘breaking’ of the law. The spirit is as much a factor as the letter, either should be seen as breaking the law. Yet there is diminishment as the policymaker is seemingly also guilty, yet the reasoning for that flaw can never be easily determined, so we can tell it was wrong, yet to what degree is not a given, but an essential issue to address. When we look at the policymakers, we need to ascertain the application that the paper discusses. “This framework broaches a new language to understand complex situations such as those that are not technically illegal but seem wrong“, we can see that this applies to multiple incidents. In those cases it needs to be clear that these levels of protection do not make the cake edible. It makes for a sour venue where those with legal advice can abort too many payments whilst the underprivileged groups end up without support, protection and options. I am speculating here that this is the (read: speculated intentional) creation of the haves and have not, which is a policy drip down effect when you implement a prismatic system, which policymakers from business and sociological fields seemed to have resorted to as they (tried to) implement laws, on the premise of a non-legal mind. Which is what is pushing the issues. The political field needed the business view of opportunity and the resulting laws are toothless against larger corporations who end up getting a free pass here with PwC as the facilitating office.

In the end I am more correct than even I thought I was, yet this should not digress from handing out the penalties that are needed to give a clear signal that the party is over. We have learned the hard way from 2004 onwards that unless we make a massive shift, this will continue a few more decades, as such stronger language and harsher penalties are required, because continuing on this path is far too rewarding for all the players that can afford to play this game, which gave me the idea to give PwC their marching orders out of the UK. I don’t believe it is too harsh, especially as they made 35 billion last year alone. So the question to you becomes, do you have any idea how much taxation they paid? I have no idea how much exactly, but we do know that PwC was elemental in avoiding Lehman Brothers to pay an addition £1.2 billion in taxation, due to inconsistencies, we see the quote by Mr Justice Hildyard: “It is of real importance, both in terms of good governance and a fair market, that HMRC should make every effort to ensure that this sort of thing does not happen again“, (at http://www.theweek.co.uk/lehman-brothers/77510/lehman-brothers-creditors-to-avoid-12bn-tax-bill) giving rise that larger changes are needed to bring back fairness to all tax paying people, who have not seen a whole lot of fairness in that regard these last 12 years.

Judges will soon have to science the shit out of these tax laws, making them actually fair to all, not just large corporations, who seem to be judged on ‘the Principle of least accountability’.

 

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European Exodus Community

There is a reality that people seem to miss. There is a reality that the people at large have been ignoring for far too long. Big business had been until early this year trivialising the entire Brexit issue. Some started the catchphrase ‘Bremain’, but that went out of fashion fast. At some point, in October 2015 something expected happened. An American opened his mount (in this case Trade representative Michael Froman), which gave the Britons “If you leave EU you face barriers to trading with America“, Is that really so? In my view, if the Democratic Party does not get its A-game in place, many will not want to be in trade with a nation that cannot pay its bill anyway. You see, if Brexit becomes a reality, the Euro will take a sizeable dive, which will also hurt the US Dollar. More important, as the US has not been able to keep any kind of control on their budgeting, the US issue would take additional tumbles. Consider that the US exports $57 billion to the UK, should one direction fall away, than so does the other direction, you see pharmaceuticals can come from India, Vehicles can come from Japan and Medical Technical equipment can come from places like the Netherlands (to some extent). We are looking at an easy 12 billion going somewhere else. So that part is not a given, yes, UK export might have a few hitches, yet when other players are found for at least 20 billion in goods, new arrangements will be an option (very fast), not so much for the US of A.

Yet, I get it. The USA is afraid, very afraid because of what the Euro changes will bring and their fear is escalating. This we get from Euractiv (at https://www.euractiv.com/section/uk-europe/news/majority-of-french-back-holding-frexit-referendum/), who is now proclaiming that “53% of French surveyed would like to hold a referendum on their country’s continued EU membership“, an issue I saw coming a long time ago. i was the first one keeping my eye on this, and even as Hollande and Sarkozy are trying to make other ‘arrangements’ they now realise that non-compliance with the French voters will mean that the bulk will demand Marine Le Pen be elected, another prediction I saw coming. More important, should Brexit be averted, than Frexit still remains a real risk. It implies that American will almost be forced to send their own Al Jolson European Tour 2016-2017, yet unlike Al Jolson, this tour will not be a sell-out success, it will be seen as a painful reminder of America not cleaning ‘house’ in the 2004-2009 era. An era that brought many nations to the edge of despair. Now we see the Obama administration trying the option of Al Jolson singing ‘can I have a little more please‘, an idea many Europeans will regard as offensive. The changes will give additional worry. From one perspective, if the dollar collapses, export from America should go through the roof, but the overly mismanaged economy gives a clear clarion call that the funds to cate to this need would end up being insufficient. The latter part is my own speculation, I have no hard numbers supporting that part. From all the export, one in eight is about machinery. This seems to be a solid one, especially from the excellence in the past, yet in all this we in equal measure ignore that the US is not the only place to get this stuff, so if a part will move to an Asian provider, American wealth numbers will take a sharp dive, all that because Michael Froman seemed to have forgotten that they are not the only player in town.

Yet I digress!

There is now the realistic concern that a European Exodus could hit the community, a real danger, which also means that certain borders will come into a different play. This will impact the USA as well as Europe. Yet instead of a clear summary, the press seems to be throwing too much in the air with emotional plays from both sides of that isle which I consider to be not so productive. We see not so helpful articles by Jane McConnell on ‘why Brexit would be apocalyptic for the games industry‘ with quotes like “British gaming receives a wealth of talent and funding as a result of being in the EU“, which is a joke to say the least. When we see PC Gamer giving us info regarding Ubisoft Montreal “but it was built primarily on the strength of Quebec’s generous subsidies and tax breaks, and with a newly-elected government facing serious debt problems, those breaks are being cut back. That has CEO Yannis Mallat taking another look at the studio’s long-term future“, so that billion Euro firm in France is ‘surviving’ due to tax breaks. (at http://www.pcgamer.com/ubisoft-ceo-ponders-reductions-to-quebec-tax-breaks/). Now, remember that this article is 2 years old. So basically in the time that Ubisoft created mere mediocrity in gaming. In all that time only the recently released ‘the Division‘ seems to be up to critical scrap. So how about not catering to tax breaks? The final argument “and thanks to the EU working time directive, we are guaranteed 20 days a year of paid annual leave, offering us all us all at least one day we can happily set aside for binge playing. That’s worth remembering“, how interesting that she relies on that part, not on the part of government accountability which is actually driving people away. In addition, remember Markus Persson, simple small software firm in Sweden? It made over 2 billion in the end (from Minecraft). So, let’s not cater to mediocrity! The same issue can be stated for Hello Games. It is about the reset the bar for gaming quality, both small firms, just the two visible in a group of dozens. These tax breaks are there for the small players, but they have been overwhelmingly used by large players to not dig into the ‘quality setting’ frontiers they should have been in.

I feel personally decently certain that Brexit is becoming a reality. If the press would focus on truth and fact, not on emotion to sway the people, there would be a certainty that Brexit will be. It will drive Frexit too. The EEC will become a near death-trap for the last one in, which means that Italy will not be in a happy place between 2017 and 2018. I expect it will drive the membership numbers of Lega Nord with Matteo Salvini, I cannot tell how strong, because I know too little of the other Italian players. Yet in all this, certain other players are rearing its ugly head. You see, when we go back to November 2015 we see a paper by Natixis (at http://cib.natixis.com/flushdoc.aspx?id=88106), there we see “In the worst case scenario, the United Kingdom leaves the EU and does not join the European Free Trade Association; there would then be custom tariffs between the United Kingdom and the EU, but given the size of the trade flows, the impact on the economies would be limited. The United Kingdom has a very small industry and its exports of services, which are very specialised, would probably not be too severely affected“, this is the view I also ‘synched’ to. Basically, the bad sides of the EU towards the UK are massively larger than the good sides. The Natixis paper by Patrick Artus might not be complete, but it gives the goods that matter, from that point of view.

You see, the short-sighted users of a spreadsheet forgot the drive that Brexit could have, the view I predicted already in 2014. In addition, the growth and danger that right parties all over Europe became, fuelling one another is a side I did not see coming either. In addition to that view, we saw in November that Wolf Richter, Wolf Street in Business insider had “A Brexit would be ‘a non-event’“. I wonder where that came from. Oh no, I need not wonder because they mention Natixis and quote the relevant parts.

So what changed?

Well, the part I foresaw and everyone ignored is that Frexit is slowly becoming a reality. Now we have ourselves a lot more than a mere horserace, because this is what Natixis can’t use. It is in massive parts a French conglomerate, not a global one. In that regard Frexit will impact on Natixis as a whole. In this I mean that Natixis will see its profit margins decrease by a fair bit (we are talking a game of billions here), whilst in equal part limit certain economic movements and options. That makes it a different event. And the less we say about the impact on the US the better. Ah, here I am wrong!

You see, Lieutenant general Frederick Benjamin Hodges gives us the following last Tuesday (at http://www.reuters.com/article/us-britain-eu-usa-idUSKCN0WH0QJ), we get ‘Brexit would weaken NATO versus Russia‘, which is not entirely correct, is it Freddie? It is not a lie either! The mess seems complicated but it is not. We can agree that the General is under orders here. I reckon massively from his Commander in Chief who dropped the ball several times and is sending the General out into an economic field that is not ‘his’ theatre of war. Here is the part that is unwritten (not by me), whilst everyone was looking at Lehman Brothers and other Wall Street players, they all forgot about Natixis, who has a wealth portfolio that delivers an annual return that outranks more than just a few EU nations. When that limits and dwindles many players will panic, because the survival of some is now depending on continuity. Something that behind the screens of Brexit and Frexit comes to terms. With Brexit there was enough time to make adjustments, with Frexit that time will not be there, apart from the fact that it will force Germany to take a different course (one that is expected, but cannot be predicted). In all this that is only one element. The General is right that NATO will weaken, what is not given is that it will change the expenditure that some nations are making, which will directly hit Raytheon, Northrop Grumman, Boeing and Lockheed Martin, which will now be a sizeable dent in the American economy too. Apart from a collapsing Euro, America will get hit by a double whammy, that part is not given (it is ignored by too many), not shown and not elaborated on. It is how expenditure changes. NATO existed since long before the Euro was a reality, but as those evolutions were taken, by lowering defence spending on a national level in Europe, we see that this ignored cluster will have serious consequences, very much so for the American military hardware industry.

Can I be wrong?

That is what matter, for me as much as for you the reader. We will be depending on two elements, Is Brexit a reality in the first and will it force Frexit in the second. The first is less up in the air, but not a given, in the second, when Brexit happens, Frexit will be a certainty. Even if Brexit does not happen now, the French are worried and they do not want to be the last in the row of decision makers as Italy currently is, the fact that 53% want this referendum is worrying to many players (except for Marine Le Pen). Both Francois Hollande and Nicolas Sarkozy cannot ignore the cries of the French, if they do, they will feel the discomfort that Marie Antoinette had on October 16th 1793 (well, one can fantasize, can one not?), because France is for the French (as they see it), not for the Americans. They will come down hard on their government, which is playing perfectly into the hands of Marine Le Pen. No matter what happens, with or without Brexit. Germany cannot sustain the environment without the other three players, which places the UK now in a tactical predicament. Relying on France to keep cool, this is what drives Brexit to additional momentum.

So all this will drive the European Exodus Community, to some extent people, because national business needs the motivated people to get businesses working and moving forward, but for the most it will be about small businesses in a national setting. Those who adapt fast will grow. Larger corporations will feel the disastrous drag of not changing gears, of not adapting to the new environment, mainly because those head offices (many in America and Asia) will not comprehend the old systems that drove them and the changes required to make them. Those depending on decision makers will find that delays will cost increasingly until (often enough) the decision has been made too late. Rowing against the current will be a new slogan that larger players will have to deal with, driving their talents to smaller places where speed is available. This exodus environment will hit in many places, in many layers on several fronts. A front where only the adjusted will make headway. I wonder whether 2018 will be the year of culling the corporate herd. It is too soon to tell, but it will for the most depend on the brethren Brexit and Frexit both leaving this rocky boat called EEC!

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By the Jewish numbers

I have been thinking a lot in regards to the Jewish population. It all started when the numbers showed how small the fraction of Muslim extremists is. Was it like the fatwa pronounced against snowman in Saudi Arabia? I am not judging on that ruling, or on the reasoning there. It seemed so odd that one religion was such a large issue to some. You see, outside of Israel and the US, the Jewish population is less than 2% of whichever nation they are in, it is 1.9% in Gibraltar, because Gibraltar counts 600 people (excluding the monkeys), which gives us less than 12 people. It is likely just one family, perhaps even two. Why is this hatred against the Jews so intense? Perhaps the thought is sedition? Anyone who ever has a Shoarma (with garlic sauce) will decide to become Jewish?

A totally random reason, but what to think of this hatred? A level of hatred (or perhaps envy), that has existed in the minds of some people for such a long time. Let’s not forget that the total Jewish population is around 15 million globally, which is less than the Dutch population, giving us 0.19% of the global population, so what gives?

It is not just the events in France that have sparked an issue regarding the safety of Jews. When we look at the Atlantic, we see a different link (at http://www.theatlantic.com/international/archive/2015/01/will-this-time-be-different/384322/) ,

A survey of French Muslims in 2014 found a community seething with anti-Semitism. Sixty-seven percent said “yes” when asked whether Jews had too much power over France’s economy. Sixty-one percent believed Jews had too much power in France’s media. Forty-four percent endorsed the idea of a global Zionist conspiracy of the kind described by the Holocaust-denying French Muslim comedian Dieudonne. Thirteen percent agreed that Jews were responsible for the 2008 financial crisis“. The quote is an interesting one. You see, statistics are at times like horoscopes, if the numbers fall flat, you can just ignore them. The last one on the financial crises is such a revelation, because the fact is not false (Marcus Goldman, the founder of Goldman Sachs is indeed Jewish, so is a slice of the top of Goldman Sachs), so even as this fact cannot be denied, the entire 2008 financial fiasco such a weird mention. Yes, the same involvement could be stated for the Lehman brothers. It was a twist of managed fates that kept Wall Street out of jail. Loads of the involved parties were not Jewish at all, the fact that national laws allowed for these events calls blaming the Jews even more in question. It is actually the mention “Sixty-one percent believed Jews had too much power in France’s media” that is central in all this. You see, these facts have bearing, but not in the way you might have ever considered.

If you look at different religions, we see that some are in unison, but for the most, people for the most remain at odds and in strife. The next is not a proven given, but it has shown to be correct. If we look at the old ages, we see that at times the Jews started in a place, in Munich (Germany) the first recorded name is ‘Abraham the Municher‘ in 1229, persecution through rumours and non-evidence has started from as early as 1285 (Source: Susanne Rieger), it took until the late 1700’s for levels of false persecution to diminish. When the Jewish population returned, it did so fairly quickly, and there is a weird situation linked to this. Wherever they moved to, the change was monumental.

Now the next parts are supposition and very speculative. It is my personal believe that the Jewish community is not one person, it is a united group. I have seen that the Jewish population at large is communicative almost in extremis ad infinitum. They debate and discuss everything with one another. What was then the Jewish area, now in Munich ‘the streets surrounding Gaertnerplatz in the trendy area of Glockenbachviertel are in increasing demand‘, which is a real estate quote! So as you consider my statement as reductio ad absurdum, than consider that this is not an isolated case. Amsterdam, Paris and many other cities in Western Europe have areas what was before the German culling through World War 2 to be amongst the most valuable real estates. This was not due to magic, witchcraft or crime. These people would buy a property and then take all effort to improve the house and to make the house a proper home, keeping it in perfect order. Where we would see rental properties fall into decline due to bad maintenance and greed driven choices, the Jewish houses would increase in value. In many cases (especially in Paris and Amsterdam) we see the proper optimised commercial use of any property, making it a long term asset. Now consider the Jewish population talking with each other, not at each other (as we see in many Christian places).

Weirdly enough, nowadays we share information open through social media, in those days the Jewish population did this using a Goose-feather, an ink jar and paper (aka actual communication). That trait got these people an advantage in banking, commerce and what is now regarded as media.

So is my speculation (based upon information read) so far out of synch with what might be? That is of course the question, which does not let the Goldman and Lehman family off the hook, but here we see an aggregated factor of growth that is exponential above many others. Is that the reason for the hatred? When someone internally ponders ‘the Jews’ are doing so much better then poor old lazy drinking me? If that is the view of some of these people, then perhaps they will consider getting educations and jobs instead of picketing against Jews (a subtle Westboro reference). Interestingly enough, in a Jewish family, everyone works (not unlike some Muslim families I know). That will in the end have an impact on the budget a family has and on the amount of debt that they can reduce.

Now we go back to some of the references, so even though some statements are true, are they still correct? That is the part no one can actually honestly answer. You see, they do not have too much power over the French economy, they are part of it, and many regard Natixis to be the biggest player in France, not a Jewish firm at all (as far as I can tell), so as we watch the quote of ‘found’ events, we see that in the cold light of day, against all elements the fact seemed true but they were not, neither were the facts correct.

The big issue here is anti-Semitism, by the numbers we see a correlation where bad economies seem to need scape goats, as these emotional attacks start, we must tactically acknowledge that for those people, attacking a group that represents less than 1% is an easy target, what is strange is how this can happen again and again, whilst the governments involved seem unable to stop such attacks until serious damage has already been inflicted. Yet, this is not completely correct either, when we see that in the French case it was actually a Muslim hiding the people under attack in the cooler, there we see that this one man Lassana Bathily, made all the difference in keeping the intended victims safe.

The issue goes further when we consider the Guardian article (at http://www.theguardian.com/world/2015/jan/13/french-jewish-community-ponders-future-after-paris-attacks), where we see the following ““I’m tempted to go,” he said, referring to Israeli prime minister Binyamin Netanyahu’s invitation on Saturday to French Jews to “come home to Israel” to escape anti-Semitism in Europe“. I very much disagree with the sentiment for two reasons. The first one is that if the Jews leave and they all move to Israel, we as a people have failed them. I believe that people when united, can and will achieve a lot more then when they are segregated and divided. We must find a way to keep our people (in a local national sense) all of them regardless of religion safe.

Yet then again, we need to learn how to stop and how to counter such hatred. Part is seen in the analyses of the people regarding Charlie Hebdo. The Guardian article states: “Amédy Coulibaly took the first steps towards terrorism in prison, but what the three had in common was growing up on the margins of French society“, here we see part of the issue as Nazi Germany grew, and now we see similar patterns after the 2008 crash. ‘The margins of French society‘ is more than just a phrase, it is a global issue. As we see the stronger and longer exploitation through big business, we see an unbalanced shape of life, so unbalanced that the mass of the people is growing resentment and require the need of scape goats to focus, the reality is that their marginalised lives came from speculators, big business and the financial industry. Sides governments all over the world were unable (partially refused) to deal with, now we see the results and this is only the beginning. As we see the facts evolve on how these events also could be seen When we take the quote “At that point, the young Kouachi, known as Abou Issen in the group, didn’t seem structured in his thinking. “He couldn’t differentiate between Islam and Catholicism” and wasn’t well educated, said the source“, we see a pattern that we have seen before, radicalisation through confusion. It is not unheard of. What is more important is the person who was connected to Amédy Coulibaly, namely Farid Benyettou. When we take the NBC quote “Farid Benyettou was sentenced to six years in prison for recruiting young Parisians for al Qaeda, including Kouachi, but since his release from jail has been training to be nurse“, we must wonder why he had such a change. Has Farid truly changed, or has he taken a vocation, where his chance to find marginalised people has a much stronger chance on finding those ready to radicalise through a marginalised world.

This is a question, not an accusation!

You see, in the way the Jews are spread (thinly) over nations, Lone wolf attacks would be devastating towards diminishing the Jewish population. The authorities would have no way to counter it and until it deals with the elements of marginalisation, they might never succeed at all. That part is not just France, that is a global issue and we need to find a solution fast, because as the economy goes at present, there is every danger that the attacks in France are only the beginning. I truly hope I am absolutely wrong here, time will tell!

 

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