Tag Archives: LIBOR

March 12, 2023 · 22:23

I honestly don’t get it

It started early this morning when I saw ‘Silicon Valley Bank: Regulators take over as failure raises fears’ (at https://www.bbc.co.uk/news/business-64915616), now I have never denied my lack of economic knowledge and these Simple Voluptuous Bobo’s should know a hell of a lot more than I do. So when I read “a key tech lender, was scrambling to raise money to plug a loss from the sale of assets affected by higher interest rates. Its troubles prompted a rush of customer withdrawals and sparked fears about the state of the banking sector. Officials said they acted to “protect insured depositors”.” You see, this left me with questions. Bankers should know this stuff, they should know about margins and leave room to spare to take a breather when things tenses up. So when I read “The collapse came after SVB said it was trying to raise $2.25bn (£1.9bn) to plug a loss caused by the sale of assets, mainly US government bonds, which had been affected by higher interest rates.” When one bank needs to cover losses to the effect of more than 2 billion dollars things go south fast, yet it was that one part “mainly US government bonds” that send my non-knowledge off flying. You see the US has a debt of well over $30,000,000,000,000. Is this the first signal that the US debt is buckling banks? I honestly do not know that, I am asking. You see, the fact that I see “Concerns that other banks could face similar problems led to widespread selling of bank shares globally on Thursday and early Friday” supports this. That does not make me right, I simply do not understand this setting and the setting that it merely happening to one bank. Then we get “US Treasury Secretary Janet Yellen said she was monitoring “recent developments” at Silicon Valley Bank and others “very carefully”.” One bank goes the way of the Dodo and she wakes up? This does not make sense to me. Especially when other banking Bobo’s (read: fat cats) are not responding to this. Then we get “The firm, which started as a California bank in 1983, expanded rapidly over the last decade. It now employs more than 8,500 people globally, though most of its operations are in the US.” Now this makes it not the smallest bank, but we also see that HSBC shares fell 4.8% and Barclays dropped 3.8% that ain’t hay. This implies that either the Silicon Valley Bank (SVB) is a lot larger, or the bonds are taking a massive dive and I wonder is this the beginning of the end for the USA? 

I am not telling it is, I am asking if it could be. We see the sleep sussing by people like Alexander Yokum and we get that, but consider that this hits one bank that needs to secure over 2 billion. Did they buy up way too much bonds and how many banks have bonds and how much bonds do they have? So when I see “Silicon Valley Bank would not have lost money if they hadn’t run out of cash to give back to their customers” did we not see a similar setting in 2016 in the wake of the LIBOR scandal? Perhaps they are two different things, but I remember something on Basel III, it was about stress testing and liquidity requirements. It was something with CET1 (Common Equity Test). I only know about it because it was a big thing in a program called Clementine, people were all over this and a program called Clementine was bought by SPSS and it became SPSS Modeler (later bought by IBM). So I saw the emails pass by, but it was not on my plate and this was a decade ago. So in a decade someone ignored the Common Equity Test? That is what it looks like to me and I will admit that the article has limited information and this is not the case, but this landed on the desk of US Treasury Secretary Janet Yellen? One bank? She wouldn’t even read my love letters (her glasses are too thick), so this one bank has her attention? Things do not add up, but that is my take and there is every chance I am wrong. Yet I saw a few articles and no one seems to be asking questions and that seems weird to me. 

Still my brain is asking, is this merely the first sign that banks are anchored to the titanic as American bonds are dragging these banks down. And the SVB is merely the first one as it had too many of them. I am ready to be called wrong, but the media isn’t looking very active. I do not care, I have been in a haze of achievement with my 8 IP’s and the fact that both Gucci and Tiffany are driving in my IP minefield 9 months after I published my stories on Augmented reality. I was in a daze of happy feelings and a bank that is not on my continent did not worry me, but HSBC is, so the puzzlement came back and the surprising nature was that one bank should not see the reactions of Janet Yellen, she is too big for one bank, as such my worry started. Was this the beginning of a lot more?

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September 3, 2019 · 11:05

Anacusis through silence

This is about an article I wrote on June 2nd 2018, the title ‘Cheese Pizza with Oregano‘. The story (at https://lawlordtobe.com/2018/06/02/cheese-pizza-with-oregano/) looks at the finance situation that the big 4 face. With Brexit 7 weeks away that premise is becoming a lot more important. You see the big 4 (including the UK) had a lot of debt, now the issues for the UK do not dwindle, yet the other three are in a less savoury position. As sources gave us then we see: “Spain will have refinancing requirements that exceed €300 billion per annum before 2022. In 2018, 41.2 billion euro, in 2019, 82.4, in 2020 83.9 and in 2021 58.5 billion euro, with 60.4 billion maturing in 2022“, the second part is not Spain, it is Italy where we see: “4 billion euro maturities in 2018, 161 billion in 2019, 164 billion in 2020 and 172.5 billion euro in 2021“. Bloomberg (at https://www.bloomberg.com/opinion/articles/2019-08-29/conte-s-five-star-democrat-coalition-offers-italy-respite) gave us last week ‘Italy’s Unlikely Allies Offer a Brief Respite From Crisis‘, a brief respite is not a solution and there well over a quarter of a trillion Euro to refinance in Europe alone. Where is that coming from? You see Italy is merely one of three players that is in the deep waters, I have no numbers on Germany, yet Spain is in a similar place and whilst we thing that there is no issue, there is. Two nations represent an outstanding invoice totaling €250,000,000,000 due in three months and there is no real solution (as far as I can see it). Refinancing is fine by the banks; with the added interest these two nations will sign an addition burden of no less than €2,500,000,000 and optionally close to twice that amount. This implies that in the two nations every person adds between €24 and €50 to their debt (read: taxes) just to pay for the increased interest. You might not think this is a lot and over a year it seems little but EVERY person in Spain and Italy must pay it, no exceptions and it is merely to pay for the additional interest on the debt, not the debt itself and next year it will be about twice as much and with the outstanding debt still there (I am ignoring the debt of 2018), in 2019 people will have to pay between €75 and €150 each, young, old, it will not matter. So how large is the percentage of people that have to face this invoice and have no means to pay it? Those having to live below the current poverty line is clearly one of these groups and it is not a small group. We all are placed in denial of outstanding bills because the media seemingly ignores it. I gave warning to this in 2017, I reiterated it in 2018 and now the issue is on the doorstep, pushing it forward one more year will make it all come apart. It is the clear stage of deafness through silence. If we keep silent, it goes away. Well, there is some news for you. Anyone who ever faced a debt collector can tell you, it never goes away and that feeling of hardship can follow you up to a quarter of a century. And all this is negating the French situation. Germany is in a much better place, but when the recession hits it will deteriorate and in addition, Germany is seemingly tired of carrying the burden of irresponsible politicians. And when it comes to France, I personally wonder how much Credit Agricole gets to pocket this time around (perhaps you remember the Libor scandal). I agree that Credit Agricole was not alone in this, yet this time around Deutsche bank and Credit Suisse have additional problems and they are not in a position to get caught with their fingers in the cookie jar (or is that fingers in the cocky jar?)

the problem is that these people tend to not learn, in addition, the wealth tends to outrun the fine by a fair bit and that is where the problem lies, the issues of debt needed to have been negated harshly a lot sooner and these governments pushed it forward again and again and this now directly interacts with any additional stimulus, because Spain, Italy, France and Germany (Germany a lot less) will get to feel the pinch on both ends of the pliers, the Stimulus branch and the refinancing branch. The UK is not out of reach of it all, but as it is on the way out it cannot be held responsible for a lot of these upcoming cost and the remain group just does not realise how much money is added to the debt in that way. It was the biggest issue that mattered and it has arrived at the front door of the UK, The Brexit door avoids that issue that was part of the larger problem all along. And now 12 of the 27 nations are eager to say yes to whatever infusion they can manage also becomes a worry, as they now face a much larger share of that expense, so they are complaining as loud as possible.

Even now as we see the Coup D’état message of: ‘Brussels would reluctantly agree Brexit extension if rebel MPs succeed in preventing no-deal‘, and other messages of delay, the delay is essential for Europe because they decided to remain in denial of Brexit, for three years these EU people got fat wages and remained possum, so now we see a larger issue. What use is the EU when it cannot contain any control over the irresponsible spending of the ECB? What use is the EU when the players have shown an inability to get a proper budget? The problem is actually a lot larger. You see the next part is speculative and I cannot prove it, but bare (or bear) with me. It connects to the IMF Data produced for the year 2018. Now we can agree that there is always an interaction. There is expected positive and actual positive. My issue is that EVERY nation in the EU gained (actually except Turkey). All are gaining, now we can agree that most might have had a positive impact, yet when we look back at the news we see: “The weaker end to the year weighed on the economy’s performance in 2017 overall, with growth revised down from 1.8% to 1.7%” (the Guardian), “Britain’s economy slowed to a virtual standstill in the first three months of 2018” (the Guardian), “It felt as though the sector was losing its lifeblood this month as Brexit worries continued to claw away at confidence, new orders and business margins” (the Independent) all these bad news linking Brexit, all whilst the IMF data shows that nominal GDP numbers for the UK went up by 7%.

IMPORTANT

Now there are two important parts here. The first is that the metrics are not the same, yet the premise of one side claiming that there are losses, the positive is down, yet the year before the IMF showed that the UK GDP went down by 0.011% the numbers make no sense, we are thrown between different metrics and those different metrics do not reflect the battering news again and again. The people are being handled with data that is not reliable and that part is obvious not reported on. Just like the news three years ago that the IMF reported that UK austerity was a really bad idea, something that they had to retract later on. The second danger is that the GDP is a lot more complex, yet the premise that the UK economy is so bad, so less good and growing so much less so than before the Brexit ‘threat’ is not seen in a -0.011% versus a plus 7%. Even I agree that 7% is way too positive, but these are the reported numbers and they do not add up, not compared to the media and all the anti-Brexit reporting.

This comes to blows when we see the issues in the other large three European players. In addition, the setting ignores the fact that the medium economies (Netherlands, Belgium, and Sweden) had been doing a lot better. Their economies might be ‘too’ small, yet their good venture might reflect to Eastern Europe to a much larger degree. Merely agreeing with the big four is seemingly folly too.

Oh, and before I forget, we can now also consider the forceful removal of any politician in the European economic field if so desired. They can be fired without any legal repercussions at present. The EU enabled us to do that when they decided to label the no-deal Brexit as a major natural disaster. This works for the remain as well as the Brexit group as the ECB was the biggest flaw in all this. When the Coup D’état works in the UK, we can demand the immediate firing of Mario Draghi and his ECB associates (read: cronies). If the economy is seen as a natural disaster, those setting and prolonging the stage of a natural disaster are wielders of that natural disaster and as such should be pushed out of office without pay.

I wonder if they thought that through, I guess not. I hope I did not oversimplify matters here 😉

 

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April 5, 2016 · 20:34

In anticipation of

Yesterday’s news is glowing like only Plutonium can, it touches, it infects and it spreads. The Panama papers are a hot item, radioactive hot. The only place I skip on judging is Iceland. It was the only European nation that achieved a near utopian standard of living, so the impact from the collapse in 2008 will still enrage its population for a very long time to come. If you doubt this than take a look at Oscar winning movie ‘Inside Job’, the one movie that is the biggest eye opener on economies in the history of documentaries. On the other side we get the biggest joke in UK politics, namely Jeremy Corbyn. His quotes on ‘how only Labour will protect Britain’s families’. Perhaps Mr Corbyn will take a look at his party’s history. How Labour in the age of 1997-2010 achieved absolutely NOTHING in changing the wheel of tax havens. So when Jeremy is voicing his thoughts, he should take a long hard look in the mirror. Any defence or deflection is pointless and absent of values. Both sides have not done their job in stopping tax shelters.

Most important is that no laws seem to have been broken. Yes, we now see that there are a few issues, yet when we see the Guardian (at http://www.theguardian.com/news/2016/apr/03/mossack-fonsecas-response-to-the-panama-papers), we see: “Finally, the instances you cite in your reporting represent a fraction – less than 1% – of the approximately 300,000 companies that Mossack Fonseca has incorporated in its over 40 years in operation“, that is the actual case in all this. A system that is allegedly 99% correct and above levels, is now under scrutiny, through no less than criminal acts. Now the weirdest case in statistical history. We are looking at 300,000 cases. In the dataset that is well over 2.5 terabyte we see a fact evolving that is now soon becoming an interesting side.

Here begins a level of speculation that you must comprehend, there is little evidence, only suspicions. I hereby warn the reader to not take what follows as given!

One source (fusion) is giving us: “So far, the International Consortium of Investigative Journalists (ICIJ) has only been able to identify 211 people with U.S. addresses who own companies in the data (not all of whom we’ve been able to investigate yet). We don’t know if those 211 people are necessarily U.S. citizens”

Metro gave us this quote: “But weirdly, considering it’s the world’s largest economy, there was nobody from the USA. Is that because America is a beacon of transparent business dealings?“, the second quote is “Stefan Plöchinger, digital editor of German newspaper Süddeutsche Zeitung which obtained the leaks, shot out this teaser earlier today, saying: ‘Wait. Just look at what’s coming…’” (at http://metro.co.uk/2016/04/04/why-are-there-no-us-people-in-the-panama-papers-5794114).

One side states that more is coming, yet even under these properties even the term ‘there is more to come‘ becomes a highly suspicious consideration.

Now we get to the speculative side. You see, yesterday I made mention on the Libor scandal, yet I did not mention the part I speculated on initially (on April 1st 2013), in an article titled ‘60% confiscated and counting in Cyprus!‘ (at https://lawlordtobe.com/2013/04/01/60-confiscated-and-counting-in-cyprus/), at that time I wrote: “On 30th November 2010 Jullian Assange revealed that the next target of his whistle-blowing website will be a major U.S. bank. The same date a red notice was issued by Interpol. It was around that time that the hunt for Assange intensified by a lot. Perhaps the one bank was just the beginning? If we look back at the issues we know now, then there is a chance that someone made mention of the LIBOR percentage tweaking issue. If this is what frightens the US, then consider the consequences of a system like LIBOR being manipulated through the total value of trade. If that would have been off by 11.2%. Out of $1000T (UK and USA combined) then that difference would be $112T.

I would love to get 1% finder fee of that! It would make me the FIRST Trillionaire in history (not bad for a person only dreaming to be a Law Lord someday)”

It was my speculation that Libor was not limited to the UK. It was my speculation that the US, as it was in such deep debt, that it started to manipulate the total value of trade, creating an 11.2 trillion dollar buffer. Here the danger for them was that the UK could illuminate that and that would have made the US option impossible and it would go bankrupt overnight (I still want that finder’s fee!). It was a speculation, yet founded on some data I saw, the data implies (cannot confirm or prove this), that packages were reset so that they would not falter, even though collapsed mortgages were added to them. See it as a leave one extra in. A repackaged deal where 70% had not yet collapsed sold at bargain price.

So how does this connect to the Panama papers?

Ask yourself a simple question, a firm like Mossack Fonesca would have extensive protection, firewalls and other shapes of protection. When you represent 300,000 firms worth trillions, only an idiot would rely on a laptop running on Windows 98 (a mere exaggeration). These people are not idiots, they are a lot brighter than I ever could be. This now raises the question how that much data got out. This raises the question, is this truly just about tax havens, or is this about a clear message from the US. The message is ‘Do not leave the EU, or else!‘ a message aimed at the UK and at France. Germany is willing to give aid, because for the most Germany does not want anyone to leave the EU. I personally see this step as a desperate act form large players who would not accept any responsibility from acts of immense stupidity. A path that evolved clearly due to inaction regarding Greece.

The fact that US people are not (yet) mentioned is because the US needs its wealthy with extreme desperate shortages. A nation (the USA), who is at present perhaps so close to bankruptcy that it will take desperate acts. So is the USA behind the hack on Mossack Fonesca? There will never be any clear evidence on that. There is no way to prove this one way or another, this is all clear speculation from my side.

Yet, is this so far-fetched? I personally do not think so, especially when we consider the timing. So as the UK tax havens might undergo slimming down, we could suddenly see another batch of US deregulations set for the creation of taxation, wealth building and retrenching. So will this happen? Is my speculation way too wild? I am not certain, you see, even I question myself. I would have had a lot less faith in all this if we would have seen the ‘revelation’ of Americans. That absence is what fuels certain paths of speculation. When we consider the amount of bonuses that many bankers in the US legally got away with gives weight to all this, in a group of 300K people and this group 0.01% currently American is too low and too unbelievable at present. There is of course all the chance that those names have been held back, time will tell!

So beyond the speculation we see the facts, because the facts matter. And the press is massively ignoring the impact that Brexit has, not just on the EU and their Euro, but it is the value of the US Dollar that is equally hit when that currency gets hit with the impact the Euro would expected to receive. President Obama’s nightmare has officially begun, because the impact is likely to impact the US dollar before he stops being an elected official. So tactically there is not the question of Mossack Fonseca and the tax shelters/havens. A tactical question that Bloomberg answered on January 27th 2016 (at http://www.bloomberg.com/news/articles/2016-01-27/the-world-s-favorite-new-tax-haven-is-the-united-states) where we see ‘Moving money out of the usual offshore secrecy havens and into the U.S. is a brisk new business‘, it is followed with the quote “It is now moving the fortunes of wealthy foreign clients out of offshore havens such as Bermuda, subject to the new international disclosure requirements, and into Rothschild-run trusts in Nevada, which are exempt“, so ask yourself the following question: ‘Are the Panama papers with the details from Mossack Fonseca a mere hack, or is this a coup d’état by big players like Rothschild moving money into the US, forcing the wealth and the powerful in Europe to face the danger that Brexit will soon impact their money and that must not be allowed’.

This last tactic is again speculation, but it is a tactical one, and it is supported by some facts. In that regard this tactic is old, hundreds of years old, because it was Niccolo Machiavelli who stated: “Never attempt to win by force what can be won by deception”

I wonder what ‘revelations’ the Panama papers will bring, more important the parts the press will trivialise into the trashcan?

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April 4, 2016 · 21:21

Working for a new boss

This morning starts off with an entirely different wave of events. Brexit is turning out to the two teams misrepresenting issues as much as possible, many of these representations are about scaremongering. The NHS is going on and on and on and other views are given. In both cases I agree with some parts, I disagree with loads of it (from my point of view with decent evidence). Yet all this we would have overlooked almost half a dozen articles. The story is only the smallest part of it. What is massively interesting that there is for a chosen few a job available! It is not glamorous, you will be frowned upon, but consider a job that will get you a 7 figure income (after a while), a decent house, possible tropical views a few times a year. In this day and age? Who would not accept that? Perhaps the single ideological man or woman, but that leaves a few million people, all ready to accept a position with the glamorous firm of Mossack Fonseca, a panama based law firm, with services on a global scale. Clients like Russian President Vladimir Putin (allegedly). They operate in tax havens including Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle of Man. I would love a nice job on Guernsey, a nice house, retirement at some point. I am a Trade Marks attorney, one that would love to get an additional degree in finance if that gives me a good job with Mossack Fonseca, is that not what you saw?

The first article ‘What are the Panama Papers? A guide to the biggest leak in history‘ (at http://www.theguardian.com/news/2016/apr/03/what-you-need-to-know-about-the-panama-papers), assisting the rich and famous store their wealth in tax havens. You see, this is all legal, this is not FIFA screwing its soccer fans over breaking ethical boundaries. This is all thankful to a multitude of short-sighted politicians (or really clever ones depending on your point of view) who enabled options in their tax homes. The article ‘used lawfully to anonymously hold property and bank accounts, these companies were registered in a range of tax havens and this map shows the most popular locations among its clients. The British Virgin Islands held more than 100,000 companies‘, so you would not be breaking the law. You just have to accept that some people pay (a lot) less taxation. After 30 year I have clearly seen and learned that living morally correct will get you a one bedroom apartment in the suburbs, a place you will not be able to pay off before you die. So as morality is not a legal requirement, as all this work is perfectly legal, why not?

This is all coming to light because of a leak, someone (as stated by the Guardian) got a hold of 2.6 terabytes of data. The quote is literally “There are 11.5m documents and 2.6 terabytes of information drawn from Mossack Fonseca’s internal database“, which implies that the facts were discovered through criminal activities. This means that Mossack Fonseca might have a case against those perpetrators. Another interesting quote is “Using offshore structures is entirely legal. There are many legitimate reasons for doing so“, so why not become a service provider here?

On the other side there is the quote “In a speech last year in Singapore, David Cameron said “the corrupt, criminals and money launderers” take advantage of anonymous company structures. The government is trying to do something about this. It wants to set up a central register that will reveal the beneficial owners of offshore companies“, which is equally valid. Mossack Fonseca stated: “it complies with anti-money-laundering laws and carries out thorough due diligence on all its clients. It says it regrets any misuse of its services and tries actively to prevent it. The firm says it cannot be blamed for failings by intermediaries, who include banks, law firms and accountants“, this gives us another side too. When we consider banks we can consider Barclays (Libor 2012), Marcus Agius, former chairman of Barclays, resigned from his position over it. He’s sitting pretty being amongst others on the board of the BBC. Now, there is no evidence that he was directly involved, but it happened under his nose (so to speak), with a few exceptions most got out with their bonus intact and this was a legal transgression, so why would anyone not want to work for Mossack Fonseca, who is not breaking any laws?

When we consider law firms we should consider the news form the Independent in 2013 where we see: “The Serious Organised Crime Agency (Soca) knew six years ago that law firms, telecoms giants and insurance were hiring private investigators to break the law and further their commercial interests, the report reveals, yet the agency did next to nothing to disrupt the unlawful trade” (at http://www.independent.co.uk/news/uk/crime/the-other-hacking-scandal-suppressed-report-reveals-that-law-firms-telecoms-giants-and-insurance-8669148.html) and when we see the word ‘accountant’ I think Tesco and Pricewaterhouse Coopers. For example the quote I used “Tesco paid PwC £10.4m in the last financial year – plus another £3.6m for other consultancy work“ (at https://lawlordtobe.com/2014/09/30/thriving-team-tesco/) in the article ‘Thriving Team Tesco?‘, where again the case of wrongdoing should be regarded as more likely than not, so why would we not consider perfectly legal work at Mossack Fonseca?

Let’s not forget that the governments on a global scale are enabling this to get some tax revenue. Consider that the British Virgin Islands have 100,000 companies, without them, how much taxation would have been collected? It is a mere case of need and availability.

For example, a fictive person goes to His Excellency John Duncan and states: “Sir, if you offer us a favourable tax option, the option would be open to bring industry and taxable revenue in access of $1,000,000,000. Would you be willing to consider a low taxation plan?” to this the governor would respond “My dear man, we have no profit tax and no corporation tax!”

So how long until the big boys move a few billion to a place like that?

We seem to find time to worry about ethical issues, when the installed governments in Europe have yet to show a mere accountable bone in their bodies for overspending trillions. We seem to be ignoring the obvious. Even if this was illegal, how many banker have gone to prison from 2004 onwards? This is not illegal, this is a mere application of true globalisation. In addition, consider that offshore companies and offshore trusts are in most cases taken out of the view of taxation to begin with, so why not employ this option?

You see, the part that is in the middle of all this is not answered, it is skated around. No one seems to care on HOW the information was gotten at. The quote “2.6 terabytes of information drawn from Mossack Fonseca’s internal database” implies hacking. This does not mean that it could not have been facilitated by internal sources. Such an amount of data does not just easily download, so either someone got access and mirrored a drive, which implies that the server was accessible, what is more likely (read: speculation), is that this is one of the first cloud hacks. To have such a large environment, so global gives the option that data was in the cloud and someone was able to access it. This morning IT Pro had the following quote (at http://www.itpro.co.uk/data-leakage/26293/panama-papers-leaked-through-server-hack-1). “it had opened an investigation after discovering that “unfortunately” it had suffered “an attack on its email server” and that it is taking “all necessary measures to prevent this from happening again“, which could be the case. My issue here is that from a server, getting access to that much data should either be noticed (bandwidth), or it was internal (read: facilitated). When we consider the e-mail data overall, there is nothing that raises flags. Oh yes, there is! That much data with a truckload of attachments gives food for thought. Even as we consider no criminal acts have been undertaken, one would try to secure that much data. Perhaps this was done, but how was so much data gained?

In my view, encrypted UNIX servers would have required massive amounts of time to access and a good IT team always keeps one eye on their servers. Fortune quoted “Mossack Fonseca is calling the 11.5 million leaked documents a “limited” breach” (at http://fortune.com/2016/04/04/panama-papers-law-firm/), which is also likely, yet in all that if that was limited, yet fortune gives us one quote the Guardian would be unlikely to state “It appears that you have had unauthorized access to proprietary documents and information taken from our company and have presented and interpreted them out of context“, now that part will be close to impossible to prove, because the Guardian clearly stated “Using offshore structures is entirely legal”

No matter how this plays out, it seems to me that politicians on a global scale will start playing their ‘hypocrisy card’. Which is another laughing matter altogether. I cannot predict how this will officially play out, but they do have a website at http://www.mossfon.com/ and they are also in Trade Marks, so I should see what my options are. For you the reader, especially those with a degree in wealth management. I suggest you send your resume to:

The MF Group
54th Street, Marbella
Panama, Rep. of Panama

You could also go to web page: http://www.mossfon.com/about_service/careers/, if you want to post your resume online!

Let’s not forget, these people have not broken any laws (at present).

Have a fun day and dream of a life without debt in a place you could never have afforded in any other legal way.

 

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November 17, 2014 · 01:59

Rated into immorality

Can anyone explain something weird to me? The news is given (at http://www.theguardian.com/technology/2014/nov/14/twitter-given-junk-credit-rating) to impress upon us a combination of values and steps that are beyond immoral. Consider the tweet, tweet twitter engine. I use it almost every day, it is the one unbiased part where we can follow events, people and companies so that we keep up to date, small messages that bring the actual information. A company that had a massive idea, is making money, when we see the quote “Jim Prosser, a spokesman for Twitter, pointed to S&P’s own words as comment: “Twitter will continue to experience very strong growth and not encounter a significant increase in competitive pressure.”“, we see issues, but is anyone seeing the question behind it? Then we see the one little gem hidden in all the text “The rating is unsolicited“, is this part of the issue? You see, as we look at companies, their revenue, their profit and some might consider their contribution, so as we look at it why is S&P suddenly decided ‘Twitter given junk credit rating‘? It seems to me that there is an economic shift going on. As companies are doing well, they are now getting downgraded for not meeting the expectations of some analysts.

Yet, where is this world going to?

Consider the application of morale (a word not found in a financiers dictionary) and reasoning for my thought train at present is the following: ‘Forex-rigging investigation: George Osborne gives full backing to SFO‘ (at http://www.theguardian.com/business/2014/nov/14/forex-rigging-investigation-george-osborne-sfo). Libor, Forex, Tesco and there is absolutely ZERO indication that this is just it. At the edge of reason we see the quote ‘Because I don’t want you to see any of my wobbly bits‘, which sounds ample and applicable as the financial district of happily ‘screw everyone over‘, it is all about the wobbly bits, according to Bridget Jones!

Consider the Forex articles. The second one is http://www.reuters.com/article/2014/11/14/us-banks-forex-crime-idUSKCN0IY0LV20141114. The issue is not just the events, the quote “Royal Bank of Scotland, HSBC, JP Morgan, Citigroup, Bank of America Corp and UBS were hit with penalties. Barclays is still in talks with authorities over a settlement“, which not just how far the issue has overstepped, but the issue is where banking laws are falling short, short to the extent that we have in access of half a decade. The issues continued after the banking collapse as the financial population continued to be nothing more than an eager courtesan to the bonus they so crave. The end result is a malignant decay of morals, standards and all this now (as I personally see it) on the standards as the poor are left with less than none, so Standards & Poor it is!

We now get back to what I regard to be a new level of exploited levelling. Consider the hidden simplicity that Libor held; now consider that debt ratings Moody’s, S&P, Fitch and the relative newbie Egan-Jones decide on ratings. Combine ‘how to lie with statistics‘ (a famous book by Darrell Huff) and the need to manipulate the market for 23 billionaires and we see the light of junk status made Twitter in a whole new light. Consider the basic state of an economy. A company sells, makes profit and pays taxes, a nation flourishes! This is a naive (remember my non-economic degree?) approach towards the worlds cloud of business. Investors, shareholders, analysts and raters are a cog within a machine of cogs. Yet this inner circular machine is different. It inflates, malleably changes and coaches towards a change that seems to be intent on syphoning and draining virtual cash flows into a different premise of profit, which is then turned to actual money. In an age of debts that go beyond the total of all treasuries, virtual numbers that have little to no foundation. The foundations and the levels they have been compromised towards are of a dimension we never imagined possible. Consider that the big banks have been fined in excess of 2.3 billion (at http://www.forbes.com/sites/halahtouryalai/2013/12/04/big-banks-fined-2-3b-over-illegal-libor-cartels-more-fines-on-the-way/), I wrote about it in ‘60% confiscated and counting in Cyprus!‘, on April 1st 2013, yet do not think this article to be a joke. I stated “If this is what frightens the US, then consider the consequences of a system like LIBOR being manipulated through the total value of trade. If that would have been off by 11.2%. Out of $1000T (UK and US combined) then that difference would be $112T“, several people laughed out loud then, yet now consider not just Libor, but the audited events of Tesco, the $5.3 trillion market of Forex and the fact that morality might be found in a church, but as we see the evidence, morality is not found in banks and financial institutions, where will it end?

With the Twitter events that question becomes more debatable and the impact that rating companies now impress upon profit turning companies have. Is it just about profit, or about the stated ‘anticipated statement of profit’? As certain ‘analysts’ claim that events are not exceeded, stock becomes junk, waves are created and as such, the welfare of companies are tweaked into a state of artificially changed state, some are inflated, some deflated, but always towards the claim of raters and analysts. The bottom line set towards an algorithm. Consider these states as we have seen not just the change of Tesco, but the events as they also gave way of downgraded profits with Sainsbury, which was not so vocally seen before that day in September. Interactions on many levels, based upon foundations that no one seems to question. Consider how the expectations were set by ‘analysts’ based upon data given to them and data available to them, now consider how Tesco had a quarter of a billion inflated and how the Pricewaterhouse Cooper auditors were ignorant of the inflated condition, now consider how Analysts used that element in predicting waves, the raters predicted and set the value and they are now setting the anticipation of investors and shareholders, an artificial pool with tidal wave creating capacity, and the two elements that have the ability to set the power and size of the waves. So how is your view of financial morality now? Consider the final part in this story. When we consider a story on Fortune titled ‘Twitter is junk, while Alibaba is class, ratings agencies say‘ (at http://fortune.com/2014/11/14/twitter-is-junk-while-alibaba-is-class-ratings-agencies-say/), why is that? Twitter is still holding its own, is it perhaps that the waves of Alibaba can be more easily influenced? Companies valued at the ability where the waves can be decided by the financial cogs, the stability of Twitter is less interesting to them, so they make way for whoever can aid in creating the waves these financial people want. (The last part you read is all speculation on my side), yet speculation or not, when we see the waves of Libor and Forex, are my thoughts so far out of bounds? How Twitter making millions is downgraded, how Tesco, beyond the inflated profits, still made a billion, it’s downgrade of 90% seems excessive beyond punishment, but Tesco is not a good example (because of their own internal manipulation), Consider the Fortune quote “And the fact that Alibaba is 90% dependent on a home market that is slowing, while acknowledged as a risk, doesn’t seem to scare the agencies“, it does not scare them, or it appeals the dependency of Alibaba to make certain decisions down the line? There is a side that seems ignored by all, I personally still have a hard time believing that (as my calculation went in ‘Price Waterfall Blooper‘ on October 25th) the price for 199 auditors could not find two events of inflation of each well over 100 million. Are my suspicions in regards to manipulations that far-fetched?

I wonder how long it will take for the law to catch up, for the Department of Public Prosecutions (DPP) or Crown Prosecuting Services (CPS) to get a handle on these events and deter these actions to such a degree. There should be additional questions as the raters are all American, in light of their shortfall that approaches 18 trillion at present. It seems that the US has no options, no solution and no resolution strategy, yet we see that the big four give ratings are all American. The last part is not an accusation in any way, yet the fact that the Auditors need new oversight, especially in the light of American auditing firm Pricewaterhouse Cooper as they will face questions regarding Tesco. As the 4 largest auditors include UK and Netherlands, why are there only American raters (of the proportions of the large 4)? With the risk of manipulation, should there not be a British and even a French or a Dutch rating service? Let’s not forget that PwC faces possible investigation, not because they are more likely than not guilty, but because their innocence needs to be proven beyond any doubt, especially in light of the amount of companies audited by them as well as the issue of 199 auditors (as I calculated them) not finding anything. When we consider the length of time that PwC has had Tesco as a customer, yet, these are two separate issues, there is no inkling of suspicion that auditors are part of any manipulation, yet the auditor’s data is essential to such steps.

Where is the solution?

Not sure if I know of one, laws can be made draconian to give much harsher sentence to the transgressors, but the issue is not the transgressors, the issue is that these ‘manipulators’ have by definition of law not broken any rules. Yes, we see the fines of Libor and soon Forex, these transgressions are seemingly clear, but what of the raters and the analysts? The issues of data are at the foundation here. That what is raw data and how it becomes processed data is now at the centre of it all. That what is construed to be the creator of waves through analysts, raters and auditors; Auditors collecting the data, analysts to manipulate (which is what they might see as a simple application of personal preference and weighting) and raters to set the pace for investors and shareholders.

So tell me, how wrong is MY view and why have these influential cogs not been dealt with through legislation?

 

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August 26, 2014 · 12:03

About America, chapter 11

This is a short story; it is not part of a novel where you have seen the first 10 chapters. This is in all seriousness an issue when we consider Code of Laws of the United States, United States Code, number 11 deals with bankruptcy.

So why take my word for this? Why am I right, when every journalist, every economist claims that this is not the case? How diluted am I to think this?

These are all valid question. Now consider the facts. The US treasury (from various sources) had collected in 2013 around 2,700 billion dollars. This seems like a lot, yet the budget as President Obama stipulated in 2012, the budget had spending set to around 3,800 billion dollar, so the US is already 1 trillion short. If we consider the total US debt at 18 trillion, meaning 18,000 billion, then the total debt would need 100% of all taxation for 6 years, an act that is totally unrealistic.

Now take this to your own homestead. I remember that I could never get a loan for a mortgage for more than 4 annual incomes. Now, this is like comparing apples to oranges, but is my train of thought so far out of bounds? It is my view that these seemingly ‘clever’ economists have been rolling their gambling dice in several ways for too long.

Consider the Dow Jones Index. We get fed the line that the economy is good, because 30 companies are doing ‘well’. Ever since the ‘dip’ it took in 2009 to 6547 (at http://stockcharts.com/freecharts/historical/djia1900.html), the Dow has ‘restored’ itself to 16743 (as per now). So, in the time when all was well, before the first economic collapse in 2004, when the Dow was 11722, and until the second collapse in 2008 when the Dow went from 14164 to 6547 in 2009, we now are in a time when many in the US are down on their luck and finances, when many all over the world are feeling the brunt of recession and other financial calamities, the almighty Dow is at 16743.

Is anyone considering the notion on how dislodged the entire Dow Jones concept is in regards to the reality of life?

Consider the following information:

– Amazon is buying Twitch for a billion Dollars in cash (at http://www.theverge.com/2014/8/25/6066509/why-it-makes-sense-for-amazon-to-buy-twitch)

– Roche to buy U.S. biotech firm InterMune for $8.3 billion in cash (at http://www.reuters.com/article/2014/08/24/us-intermune-roche-idUSKBN0GO0PI20140824)

These are two of several (read dozens) of large shopping sprees, throwing cash around like it is nothing and as these billions come into the other parties’ hands, what taxation ends up getting paid? This is at the heart of the founding issue that should keep our minds busy ‘Is America Bankrupt?’

There are two sides. First there is the Sovereign Default. No matter how you twist or turn it, if a nation cannot pay its debt, it will default and should be seen bankrupt. A good example is Greece. After Europe bailed out a nation with 11 million people, by ‘giving’ it well over 300 billion, it is still complaining. The reality is that it should have been allowed to go under in bankruptcy. Not because I like it, or because I have anything against Greece (in all honesty, Crete is one of the loveliest places I ever saw). The natural cycle of economy has been ‘arranged’ (I would call it mismanaged) into cycles of only good news. You talk to any farmer, they will all tell you that no field can survive on spring and summer alone, nature is all about balance and as we threw away balance, we started to undo our own prosperity.

It is said that a business is stated as ‘insolvent’ when its debts exceed its assets.

Is that not the case here? I have stated in the past that I have reservations about the true value of LIBOR.

If we continue the question: “How much money they need to borrow from their peers to plug any holes in their balance sheets and if they have an excess of available cash, how much they can afford to lend“, which is at the heart of LIBOR (at http://citywire.co.uk/money/qanda-what-is-libor-and-what-did-barclays-do-to-it/a600479), considering that the margins had been played with in the last two years, is the idea that the total valued amount has also been tweaked?

This is all based upon an availability of actual existing Cash. But the entire system is based upon a certain value of assets and goods, as I personally see it, I do not trust that list as it is dependent on the ego of honest bankers, which seems an impossible concept and no one can produce at any given moment an exact list of it. So what value exists in all reality (not in the eager mind of a commission driven banker)?

We now get back to the Dow Jones Index. If we consider the past (when life appeared good) and the now where most of have lost a lot (if not all), then is that index not artificially driven upwards? This is not just my view; several parties, including USA Today (at http://www.usatoday.com/story/opinion/2013/03/04/federal-reserve–quantitative-easing/1963539/) are showing us a view that shows an economic system that is driven upwards in artificial ways. So we now get a different view. Are all these mergers and multi-billion dollar deals we see regularly now on TV about growth, or about the top of the US industry that seems to leave the sinking ships before the system collapses.

This is at the centre of a few issues, where the US is rallying for ‘support’ whilst not showing one iota of accountability to get its budget under control. The last part is at the heart of the need to call the USA bankrupt (not because I desire it). It will cost many a lot, but is growth not depending on the downfall of others? If we consider that all together we are 100%, does our growth not depend on the need that someone else does less? That intertwining, where we ignore basic foundations that growth is not eternal, we see that there is a consequence to overinflating (yes, this also applies to my ego).

Yet, economists have time and time again stated that there is more here and there (whilst they point to virtual spaces). Now we see the heart of the problem, who has the actual 18 trillion that the US is down for? If we look at the oil links, should USA perhaps mean ‘Unionized Saudi Arabia‘? If we consider the real wealth, are they not the ones holding the oil reserves (one of the big four) and as such, the outstanding debt? I know it is not that simple, it never is, but when we ask a summary of where the debt lies; we will get some clever list from a highly educated economist and some excuse ‘that it is all a lot more complex then it looks‘.

He is not incorrect, but he is also not telling you who hold the 18 trillion the US had been spending in one way or another and as such, the realisation should now be upon you. If America is bankrupt, then what will happen next? Japan will pretty much be permanently out of commission and I reckon the UK will be in very deep waters, but we the Commonwealth must find a way to go it together if we are to survive.

It seems to me that America never realised that lesson, like several others, they all used to max out a credit card in virtual space whilst the actual, supporting currency is not there, so why has America not been declared bankrupt?

I reckon soon enough we will get more and more long winded talks, but in the end no one is sayng anything because those who will be making the speeches are at the heart of what went wrong and no one wants to hold on to that guilt when those left without their house ask them the question ‘where are my savings?‘.

 

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June 8, 2014 · 10:13

17 or 70 trillion?

Even though we see so many ‘stories’ on how well the US is doing, we must ask ourselves on what value these numbers are trying to convince us of.

The thoughts I am about to phrase started a little after the following had been released (at http://blogs.marketwatch.com/capitolreport/2014/06/06/standard-poors-is-concerned-about-the-u-s-debt-burden/). “Standard & Poor’s Ratings Services put out research Friday confirming the AA+ rating of the U.S.“, so the US has dropped a notch on the credibility scale. This in itself should not be a reason for direct concern. The one part that does worry is that S&P was the only one doing this. The other part we should notice is the quote “The federal debt was $16.1 trillion at the end of fiscal year 2012, according to the Government Accountability office.” why are we not seeing a 2013 number, which according to some is over 17 trillion? How interesting is it to see the numbers game whilst the numbers quoted are not up to date?

The next part is the article from Bloomberg on April 29th 2014. Here we see the following “The drop in net marketable debt will be $78 billion in the April-June period, $38 billion more than the pay down projected three months ago, with an end-of-June cash balance of $130 billion, the Treasury said today in Washington. The improvement will be short lived — net borrowing of $169 billion is projected next quarter, with $130 billion in cash Sept. 30th“. Can anyone see the issue I have with this? The debt of well over 17,000 billion is getting met with a quarterly pay down of less than 0.4588%. How is this progress and even though we see that the US still has a high credit score, is the likelihood of a continued credit score even realistic?

That part can be seen in the Market watch quote “We believe that renewed debate over the debt ceiling could resume after the midterm elections in November 2014 under certain scenarios. While we expect the discussions about the debt ceiling to be ultimately resolved as they have been, we still see risks that these debates entail.” So, not only is there no solution to the current debt levels, the chance of any serious solutions occurring within this current administration is close to zero, which means that the next administration will inherit a debt closer to 20 trillion. I do find the headline about ‘US debt level concerns‘ hilarious. Many with me had raised these dangers for well over 2 years and now as the game is up, some are ‘raising’ concerns, whilst those in charge and those on the watchdogs of economy had long known that any level of lowering the debt had been a mere myth for over 2 years.

There are of course other views. One is from Chad Stone who wrote in US News (at http://www.usnews.com/opinion/economic-intelligence/2014/05/16/too-much-deficit-and-debt-reduction-too-soon-will-wreck-the-recovery) “now about $17.5 trillion, found on the ‘debt clocks’ that are so popular with debt hysterics. Gross debt (and its close cousin, ‘debt subject to limit’) is debt held by the public plus debt internal to the government“. This is fair enough, yet there is no information, not even any indication when this debt will start to lower. There is another side to consider. When we look at the IRS data book (at http://www.irs.gov/pub/irs-soi/13databk.pdf), consider that the IRS collected a net value of taxation of 2.4 trillion dollars. A slightly more accurate number is 2,490 billion.

When we consider all the numbers thrown at us, like the ‘% of the GDP’ and so on, even if we accept that the 17 trillion dollars debt is held on multiple level, compared to what the IRS collects, we see a number that reflects the tax collected, compared to the total debt. The US gets through taxation a mere 14% of where the debt is at. How is any of that realistic? So, the total collected taxation, before any other cost is taken into account (like paying government staff and utilities), it only amounts to 14%, after all that is done 0.1% is left if the US government gets a fitting budget (something that has not been achieved since president Clinton was in office).

My issue is not just with the US debt levels, it is also about the ‘blasé’ approach economists are throwing at the people stating that things are not that bad and that it will all work out. That part is a figment of THEIR imagination, because for things to resolve, actions must be taken and none are getting taken at present (or in the near future for that matter). My biggest issue with the Article of Chad Stone is seen at the end. His quote “Lowering the debt ratio comes at a cost, not only risking the recovery if it’s done too fast but also in burdening businesses and households with larger spending cuts, higher taxes or both to stabilize the debt ratio“. There is truth in that statement, yet the issue that the money should have NEVER been spent is an issue that is ignored. The culprits of this dangerous endeavour are not named, not held accountable and many of them walked away with millions in bonuses.

We are however nowhere near the end of this debacle. The articles give another view on the matter. An article was published in 2013 stating an entirely different matter of debt. The REAL total debt is set at 70 trillion (at http://www.foxnews.com/politics/2013/08/15/california-economist-says-real-us-debt-70-trillion-not-16-trillion-government/). The quote that matters is “Hamilton believes the government is miscalculating what it owes by leaving out certain unfunded liabilities that include government loan guarantees, deposit insurance, and actions taken by the Federal Reserve as well as the cost of other government trust funds. Factoring in those figures brings the total amount the government owes to a staggering $70 trillion”

Now we are off to an entirely different race, this only gets worse if we take the Bloomberg article into account from March 2014, which headlines as ‘Debt Exceeds $100 Trillion as Governments Binge‘ (at http://www.bloomberg.com/news/2014-03-10/debt-exceeds-100-trillion-as-governments-binge.html). Make sure you realise that this last article is about global debt and not about US debt.

This was already on my scope for another reason, but I will return to that shortly. I need to return to the Fox News article where it stated the view of Professor Hamilton, an economics professor from San Diego. The reason for this is because I try to stay fair and balanced (statement plagiarised from Fox News) and as such, as I found additional views from the professor, it is only fair that I mention that too. This all is linked to a paper he published in 2013 (at http://econweb.ucsd.edu/~jhamilton/Cato_paper.pdf), it is the starting quote “This paper examines the growth of federal liabilities that are not included in the officially reported numbers” which should grab your attention. Yes, we are talking about ‘off’ the book liabilities, which should make us all wonder whether ANY government should be allowed to be part of liabilities that are not on the books to begin with. If our job is to stem the tide of irresponsible spending, then keeping things ‘off the books‘ as the ‘kids’ seem to state, should not be allowed under any condition. If we look at the quote that was found in the Econ browser by professor Hamilton, we see “Similar calculations from the trustees reports for Medicare report Medicare’s net unfunded liabilities for current program participants to be $27.6 trillion. For more details see Table 4 and the accompanying discussion in my paper.” The floor should open to an entirely different debate and soon. I think it is high time that these events are properly mapped out and as such ALL governments need to adhere to a different level of ‘accounting’. Their books can no longer remain silent in regards to unfunded liabilities. Is it any wonder books are not in order in a massive amount of nations?

This now grabs back to other observations I made and more important the small revelation my data implied. On March 22nd 2013 I wrote the blog article ‘60% confiscated and counting in Cyprus!‘, here I quoted “If this is what frightens the US, then consider the consequences of a system like LIBOR being manipulated through the total value of trade. If that would have been off by 11.2%. Out of $1000T (UK and US combined) then that difference would be $112T“, I implied to some extent that not only were the percentages messed with, I had some reason to believe that someone had messed with the total trade value that LIBOR represents. Perhaps my mistake (to some extent) was thinking that it was ‘just’ manipulation. In my defence, I came up with these findings before Professor Hamilton had finished his paper, so as a non-economist I was slightly in the dark to begin with. Consider that some politicians could be overspending, whilst using the options of unfunded liabilities within LIBOR to excuse themselves for accountability? What will other governments say, when such events are brought to light (if that would be happening). More important, if my number was closer to the truth then many considered, the global economy is playing high stakes poker with debts twice the size then most realise and our cost of living is based partially upon the irresponsible spending of both Washington and Wall-Street. How are the people ever to get a fair shake at a happy life, when a group of no more than 3000 people have been spending the dreams and futures of well over 1 billion people? Most do not realise that this goes way past the borders of the US, if there is indeed an established group editing the total value of trade considering the manipulation of the LIBOR percentage, the established setting of unfunded liabilities, as well as the breaking up on loans as they might occur. For this example, I would like to point you towards www.lsta.org/WorkArea/DownloadAsset.aspx?id=2480, here we see a paper from Credit Suisse made by Julia Kingston in August 2006. The next part is just pure supposition on my side. Look at slide 35, here we see a term loan set in three parts. What happened when something falls over in 2 or 4 months? How many parts when Wall Street made its 8 trillion bungle was not written off? Is my consideration that the TOTAL LIBOR trade value has a massive amount of ‘entries’ that had remained hoping it would turn for the better? We have seen a multitude of financial advisors playing just such a card on many levels in the 2008-2011 periods. My question now becomes, was my implied 11.2% just the tip of the iceberg?

I am not claiming, nor do I pretend to have the actual answer here, My issue, as it was in the past is that ‘proclaimed’ Journalists sitting in the top newspapers have not taken a hard look at some elements. It is nice for them that Reuters does much of their work for them and many aspire, but will never come close to people like Paul Mason, Robert Peston or Deborah Hargreaves. Yet, how deep did they dig into LIBOR? Also linked (especially with the Guardian) was the claims that Jullian Assange made in regards to banking, they were never followed up (or so it seems), not even by the Guardian as far as I could tell. Consider the article the Guardian had on February 10th 2011 (at http://www.theguardian.com/media/2011/feb/10/julian-assange-wikileaks-book-claims). The quote “Asked about the ostensibly sensational bank leaks Assange keeps suggesting he is ready to release, Domscheit-Berg said the only banking documents he knew WikiLeaks had were ‘totally unspectacular’ is at the heart of this”. When it was ‘just’ about the US military there was some upheaval (especially by the US), yet when banking issues were raise (slightly mentioned in the Forbes interview in November 2010 at http://www.forbes.com/sites/andygreenberg/2010/11/29/wikileaks-julian-assange-wants-to-spill-your-corporate-secrets/). The interview gives us the following “Will we? Yes. We have one related to a bank coming up, that’s a mega leak. It’s not as big a scale as the Iraq material, but it’s either tens or hundreds of thousands of documents depending on how you define it. Is it a U.S. bank? Yes, it’s a U.S. bank. One that still exists? Yes, a big U.S. bank.”

After this the hunt for Jullian Assange really takes on additional energy. I have no idea what he found, or if it is even related, the issue is that there is a recorded atmosphere of unaccountability within the banks (on a global scale) which must stop, if not, not only will governments be allowed to continue in irresponsible ways, but the additional ‘myth‘ that banks and governments apply checks and balances need to be thrown out of the nearest window. A last quote from the Forbes interview is every bit as important “We’re still investigating. All I can say is: it’s clear there were unethical practices, but it’s too early to suggest there’s criminality. We have to be careful about applying criminal labels to people until we’re very sure.”

This is the part I had written about for some time, it was not just that the issue with Goldman Sachs imploded the financial industry; it was the issue that they, in black letter law, basically had not broken any laws. The people lost well over 8 trillion and no crime was committed even though their money was basically gambled away. It is that part, especially in the LIBOR sight, as well as the issue raised by Professor Hamilton in regards to unfunded liabilities. No laws are broken, but we are all kept in the dark in regards to the debts inflicted upon us, which in itself is a massive wrong.

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November 27, 2013 · 17:01

Two deadly sins

This is the second attempt to this story. I was still on the Sony horse when writing the first attempt. Yes, it will hurt us and it will have long standing consequences for many to come, but I realised that it was not really the story (even though the press remaining silent on it is).

Of the seven deadly sins (Gluttony, Greed, Lust, Envy, Wrath, Pride and Sloth) I only truly hate Greed! It is also represented in Dante Alighieri’s 14th-century epic poem ‘the Divine Comedy’, which actually introduces something I would like to call the 8th deadly sin, which is depicted in his 9th level of hell. It is Treason! These two sins are the most debilitating sins to consider. These sins are not against one, or against one’s self. These two sins are acts by one against many and we see the consequences every day. These are not just acts by people against people. They are also seen as acts by governments against people or even against their own nation. We must arms against these two, we must do so fast, because the liberties we lose as we allow this to go on will hurt billions and many care for one thing, they care for number one, they care for themselves!

Do not take the last sentence as an assault, I am not talking about selfishness perse, but we are in a life cycle where we are almost forced to survive. Greed and Treason pushed us there. The Dutch NOS showed us several parts in one newscast. It was the news of the 26th of November 2013. The first piece came from the news on the scale gas winning in the Netherlands. I had written about part of it in July 2013. The blog was called ‘The Setting of strategies‘ where we see that the Dutch are trying to get billions in gas using a technique called ‘fracking’. There were major concerns, but should you watch the issues, you will see that parties involved were trivialising it all to some extent. Now questions are called for a large investigation. The most interesting part is the quote they stated in the news [translated] “the NAM will not drill for any less gas as this is not a mandate handed by the stockholders“. In addition reported e-mails by the Dutch Gas drilling firm (NAM), which from their side, remarks and ‘interpretations’ seem to be taking a negative term. The mail showed that they knew that earthquakes in excess of 3.9 (on the Richter scale) were to be expected. This means that not only is this, the possible start of a class action in damages against the NAM, the NAM could be seen as a major contributor into damaging a unique Dutch landscape. Not just the land, but also the cultural heritage that the Dutch area of Groningen has. Many buildings, most of them predating WW2 are structurally damaged. It is an area that had been culturally unique for over two centuries, even by Dutch standards. Are you fracking kidding me? Stockholders are allowed to ruin the state of Groningen? So the government oversight knew this going back to 2012? So what were these investigations in 2013? Party favours? This is greed gone wild as I see it. The most important part is that the UK and the conservatives are facing similar issues at present. The conservatives are very willing to go this route. It was reported in the Guardian (at http://www.theguardian.com/environment/2012/nov/03/uk-dash-gas). The question becomes whether George Osborne has been properly instructed involving the risks he would place Wales in? If he is briefed by stockholders, the UK should take another look at these proceedings. I understand that heating is hard and very expensive, but can people continue when they are faced with long term, perhaps even unrepairable damage to England itself? Can that be acceptable? I am not a geologist, so there are elements I have no knowledge of, yet it might be realistic that many Walesians did not sign up for Shale Gas experiments when it could cost them both Cardiff and Swansea, both containing the largest population in Wales. Is Britain ready to pay for 350,000 damaged homes? I agree, that is an exaggeration, yet the true damage will not be known for some time. Perhaps there will be ZERO damage. I am fine with that, but the Dutch evidence shows that greed trumped safety and health easily. Can the UK afford such a mistake?

The second link to greed, are the changes that Finance Minister Dijsselbloem is trying to push within the Netherlands. He is aiming for commissions not exceeding 20% of a banker’s income. I think that this is a good idea. I also believe that he is on the right track. Greed is debilitating to say the least. The Dutch Union of Bankers stated that this law is not needed; there are enough rules in place. The interview with Chris Buijink, who is the chairman of that union, is not in agreement. He is mentioning that with specialist jobs, temperate commissions are to be expected. You see! We all agree, so make it no more than 20%, which is temperate enough (in my humble opinion). I, personally think that a group of Dutch banks, after the SNS Reaal and other banking issues, including the RABO LIBOR fixing issue, need to expect much stronger measures. Greed must be stopped!

This is not what he called ‘a black page’ (as Chris Buijink stated), the banking issues from 2008 onwards show that there is a structural issue with the banking industry. The fact that the Yanks are too cowardly to act (see the non-passed tax evasion act and the Dodd-Frank act for my reasoning in this), does not mean we should sit still. That part gains even more weight as we read more and more about the ADDITIONAL issues the RBS is now facing (at http://www.theguardian.com/business/2013/nov/26/mark-carney-rbs-deeply-troubling-serious). So on one side Conservatives are trying to get the economy going and the banks on the other hand… (You get the idea).

There was a video linked to this, which states “Bank of England’s Mark Carney ‘offended’ by Labour MP’s questioning“. Is Mr Carney for real? As Labour MP John Mann asked questions in regards to the ‘distance’ between the governor of the bank and the political wings. I do not fail to see that it is about quick economic restoration, the issue that it is now likely that small business got sold down the drain into non-viability to get this done is indeed an issue for concern. Why is there no stronger oversight on this? I think that it is time for governments to intervene in stronger measures. What they are? Not sure, but it should be somewhere between nationalising a bank and barring the transgressors from the Financial industry for life!

This issue goes on in another direction too. If we accept what was written by the independent (at http://www.independent.co.uk/news/media/press/royal-charter-on-press-regulation-may-be-redundant-says-culture-secretary-maria-miller-8919775.html), we see that in the end the Press might not ever be held accountable for the acts they did. Not only are they advocated in their need for greed (as in circulation and advertisements), we see that they are in a connected center of treason against both their readers and the audience at large, again as I personally see this.

How?

Well that is a fair question. As the big papers have steered clear from the Sony issues as they became visible just over a week ago, they seem to remain extremely taken with their advertisement needs and less with protecting the audience. “£3bn: the total price-tag for Christmas gadgets” is a nice tag to have and even though we see news on Microsoft and Sony all the time, those messages are small and do not hit the bottom dollar. The small technology hit “Cody Wilson created a gun that can be download and built with a 3D printer – is he too dangerous for Britain?” is a small article and iterates something I wrote many months ago. He is now linked to advocating bit-coin, which is another matter. I have not taken a stance on it. I think it promotes white washing and I personally do not think that virtual currency has a foundation, once it goes bust in whatever way it does; these people just lose whatever cash they had in it. I reckon that these ‘victims’ when they come will have no turn back and the first case against any government should be thrown out immediately. The story how Sony (and Microsoft too) will hurt an entire industry and how they are setting up the events that could stop local commerce is completely ignored. How quaint!

I see it as a form of treason, because this is no longer ‘the people have a right to know’, but ‘the people have a right to know when we see fit’. That same application can be made for the banks. If we take the RBS case, then the people involved could be seen as committing treason against their customers. Is that not EXACTLY the issue we saw in the US where we see banks setting up mortgages and then betting on them failing? Why is this not under control?

The Dutch examples are their own version of treason. A company that seems to be betraying the people living there by submitting them to intentional dangers is no small matter. This is not the end by a long shot. Treason can go further, from governments towards allies. I am not talking about Snowden, that loon is a simple traitor for personal gains (in my view). The damage he caused will take a long time to fix. No, I am talking about the TPP, the Trans Pacific Partnership. I mentioned it in previous blogs linked to the Sony/Microsoft issues, but that is small fry. The big price is the pharmaceutical industry. You see, America wants it passed soon, because of the powers this partnership gives. I will not bore you with the patent law details; the issue I see is that America is afraid of India. Apart from being really decent in Cricket (a game America does not comprehend), the Indian industry had made great strides in generic medication. With a population of vastly over 1 billion, they simply had to. The changes are mentioned by IP experts like Michael Geist as Draconian. The Guardian covered part of the TPP (at http://www.theguardian.com/commentisfree/2013/nov/13/trans-pacific-paternership-intellectual-property), the changes could impact this market into a damaging result which will go into the trillions. My issue is that Australia sides with America. Why?

America had been asleep at the wheel. Instead of opening a market, forcing affordability towards a population, we see segregation for industry against people. How bad is that? Canada kept its consumer driven approach, which is why Americans love Canadian medication. As America does not keep its house in order and they got passed by! Do not take my word regarding these parts; you should however take a look at what Doctors without Borders think. I reckon we can agree that they have always been about healing people. I consider them a noble breed. A group of physicians, who spend a fortune on an education, making less than the personal assistant for a middle manager in a small bank, which is not much to live on! At http://www.doctorswithoutborders.org/press/release.cfm?id=7161 they state “Five countries—Canada, Chile, New Zealand, Malaysia, and Singapore—have put forth a counter-proposal that tries to better balance public health needs with the commercial interests of pharmaceutical firms” As an Australian I state that Australia need to take the high-road with Canada and New Zealand, not follow the cesspool America is trying to force down our throats. In the end, I suspect that this is about more than just plain greed.

Consider that the Dow index is based on 30 major companies. Now consider that 10% comes from pharmaceutical giants like Johnson & Johnson, Merck and Pfizer. After the issues we had seen in the last 3 years, I started to doubt the correctness of the Dow (and I reported on that in past blogs). It goes up and up, but with JP Morgan Chase, Goldman Sachs, VISA, American Express putting pressures on those numbers, the three big boys (drugs) could rock the boat in a massive way, which scares Wall Street to no extent. India had made great strides in affordable medication; the TPP is now a danger to affordable medication for people on a global scale.

Greed and Treason, it is all connected and it hits us all critically hard sooner rather than later!

 

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November 1, 2013 · 17:58

Crime still pays!

If the banks are any indication then there is plenty of indications that only amateurs become burglars, thieves or murderers. If you really want to move forward in strong financial ways, then one needs to become a banker. That is the message we read when we see the Dutch approach to their RABO bank in regards to the LIBOR scandal. The RABO received its 774 million euro fine. Part of the information is here at http://nos.nl/video/568494-rabobankbestuurder-schat-geschokt-door-renteschandaal.html

One of the issues is that they paid off the Dutch version of the CPS with a 70 million euro settlement.

The news mentioned that some got fired, some lost rank, and people lost commission (no explicit mention whether all lost it). This is part of the problem. Some got away and they can try again at some point. I personally found the mention that chairman of the board Piet Moerland’s departure to be a hollow one. Yes, this is just my personal view! He would have retired next year. Consider that the RABO puts a fine of three quarters of a billion in the books this month, which gives us that the next fiscal year the board is less likely to get any commission, which gives us the view that the RABO boss decides to retire and not work for free. Interesting is, that whilst the issues of LIBOR have been visible (for well over a year) that the final moment when the amount is known sends him to make a gesture resulting in his non-working near future. There is no evidence that the top knew what was going on. Yet another story by the NOS shows that even though traders got such lovely extras, no real internal investigation existed on how they got to these high commissions.

There is something to be said about Sipko Schat, who was in charge of the traders in that period and who remains with the RABO bank. That part is not negative. There was no indication of any sorts (or so it seems at present) that he had any idea what was going on. We can doubt that, yet considering the structures of the other involved banks, the viewpoint that Sipco Schat seems to be innocent and unconnected is a rational and acceptable one.

So why the issue on crime that pays?

It seems to me that if we consider the Dutch Banking law of 1998 that at present, there do not seem to be enough handles in place to successfully prosecute these transgressors and this issues goes vastly beyond the Dutch borders, which is the one part that truly bites the people of many nations (not just the Dutch). It is my conclusion that the Dutch prosecutions office was willing to settle for 70 million, for the realistic reason that the chance of getting true legal justice for the transgressors seems to have been unlikely and for those who got to feel the axe, the proceedings for the crown would have been a lot lower. Yet prosecuting them might have been a better option. This is because many are now seeing and feeling the same sting of the years of building frauds for the Amsterdam International tunnel (to name one of several events), where three constructors settled for 1 million each, even though the transgressions showed inaccuracies of well over 30 million. This was in November 2001. There were additional building fraud cases in 2002 and 2003. Isn’t it interesting how builders and banks seem to get to settle for the fraction of the transgressed amount?

Even though much of the actual damages will get returned, not all of it will and it seems to me that profit margins remain to be too good for people not to try a roll at the high yielding criminal slot machine.

I see the issue in several nations that non-violent crimes are not correctly weighted (so, not just in the Netherlands). Too many judges seem to remain oblivious on the consequences of non-violent crimes, often these events get trivialised in courts (not just the Dutch). Not enough power is placed on improved legislation and successful convictions against financial crimes and no one seems to be willing to rock the stable boat in these regards. Until the cutting knife of the law shows unreservedly that traders and bankers could lose their professional licences and qualifications for such transgressions too many remain willing to give the slot machine of ‘hefty returns’ a go, as $1 might give them $xn if they can roll the bars to F-RAU-D, because even if they get caught, there seems to be a decent chance for them to hold onto a fair share of the unfair gained amount.

 

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May 1, 2013 · 21:14

Another banking issue

People might have read a previous blog where I discussed the issues involving LIBOR and a resolution donation of over half a billion dollars of fines by the Royal Bank of Scotland.

Today’s article by Jill Treanor of the guardian at “http://www.guardian.co.uk/business/2013/may/01/vince-cable-rbs-prosecutions” gives notice of issues at play. Moreover, these issues have been at play for some time now and there is clear need for answers on several levels. The article mentions the issues as quoted: ‘Scotland’s Crown Office and Procurator Fiscal Service have been reviewing whether a case can be brought against any former directors since January 2012‘.
So, it seems that this investigation has been going on for 15 months. A letter was written to Lord Wallace in this matter. My question would be the why it is taking his Lordship the Advocate General of Scotland this long?

There is no doubt in my mind that it is a complex issue, yet overall, when it comes to banking issues, too often the public perceives this as the ‘out of sight, out of mind ploy’. The fact that this is the second bank involved in the LIBOR scandal and the fact that the fines are currently sailing close to 1 billion pounds in the UK alone, visibility should not wane for years to come.

This is not (just) about LIBOR. This entire issue is about the investigation into the directors who were in office at the time of the 2008 bailout. So, this is about a case 5 years old and this case seems to have only started in 2012 and now 15 months later there is still no final answer. This is interesting as the UK has the Limitation Act 1980. This statute has different limitations for different crimes, yet many of them is set at 6 years. This means that if defence can twist it that these crimes would fall under one of those statutes then prosecution has a lot less than 1 year left to take a stance and get started. The fact that these issues are still not for prosecution with the CPS are an additional matter of question.

If we look at the Limitation act and we consider this to be a tort, then Part 1, section 2 states: “2. An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued. (Time limit for actions founded on tort)“.

The same time limit applies to actions founded on simple contract. The interesting question becomes where these issues are founded on. Is mismanagement a wrongful act, and there for a Tort? Are these wrongful actions and forms of mismanagement breach of contract?

Yet, we should not despair. There is a wise addition in this act that is stated in section 32 of that same act, which deals with ‘Fraud, concealment and mistake‘. Hip, hip, hurrah!
There it states “the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.”

So we might have a little more time left. Yet, we should not…. how is that expression again? ‘Dilly dally’. Yes, that was it. My grandmother told me that more than once. So we should not dilly dally to find the answers whether we have a case against those directors, lest we forgot that time ran out.

So you see, I am not convicting them, but I do want to see a case brought to trial where they can either be convicted, or where they can submit evidence that would exonerate them. Either will be the case, yet no case means there will not be any answers forthcoming. This would be interestingly unfair as that bank gave the taxpayer an additional cost of 45 BILLION pounds to the taxpayer. If you are from the UK and reading this then you should ask yourself. Did you make your GBP 666 donation to the save the Royal Bank of Scotland funds? Will you? If not then we should figure out what happened and get this to trial. Considering that the UK has a 1 trillion dollar deficit, then the added debt is costing its citizens GBP 225 million each year in interests. That is almost 3.5 pounds per citizen each year just to keep that part of the debt on par.

So yes, it is interesting to read the article by Jill Treanor. It is also interesting that she was not the only one to mention it; similar articles could be read in the independent, the Telegraph and on the website of the BBC. It seems to me that this is not some political ploy as both MP Vince Cable (Twickenham) and Lord Wallace (Shetland) both seem to be Liberal Democrats, unless Mr Cable prefers Shetland over Twickenham.

The Guardian refers to the report of April on Banking Standards. The report was described to be enthusiastically damning. In another fine piece of writing by Jill Treanor at: “http://www.guardian.co.uk/business/2013/apr/04/bankers-brought-down-hbos” is one sentence that I found ….hmmm, ‘hilarious’ just does not describe that sinking feeling in me. The sentence was “Under pressure from parliament Goodwin’s pension was halved to £340,000“. Are you guys for flipping real? My total pension will never even come close to that amount as a total sum. If there was ever a case of evidence that incompetence pays, then that would be the evidence at hand.

This gives way to a quote in a book by Robert L. Bradley it states: “The businessman who refuses to acknowledge, despite clear evidence, that his facilities are out-dated, his product uncompetitive and his cash flow inadequate, is dishonest just as the one who makes fraudulent claims to the customers is dishonest. Both are trying, at the deepest level, to fake reality.” (Bradley,‘Capitalism at Work: Business, Government, and Energy’,2009,p.66).

I think with this quote he hits the nail on the head for a truckload of cases. He also shows a graphical  bar of difference between incompetence and prosecutable fraud, whilst showing unethical behaviour and Philosophic fraud somewhere on the trajectory. This book is actually quite the little gem where they look at more than just ENRON and a few other devious little greed seekers. It even takes time to discuss the UK and ‘the Coal panic’ of 1865. So keep this book in mind please, it is a diamond in its own right.

So even though we get into the ‘Cloak and Kegger’ mindset that it is not a crime to be incompetent, then there is still the need to assure ourselves of a situation where those people do not run places like banks and corporate enterprises. Financial Services Authority (FSA) was supposed to have handled issues and cases, yet the Parliamentary Commission on Banking Standards seems to show a lack of actions on several levels. That committee on their web page reflected “The regulators also have a lot of explaining to do when it comes to their role earlier in the HBOS debacle. From 2004 up until the latter part of 2007, the FSA was ‘not so much the dog that did not bark as the dog barking up the wrong tree’”

From my view I wonder whether the regulator realised they were indeed the fore mentioned dog, whether they realised what a tree was and whether it ended up eating a bone instead.

The commission report which can be read at: “http://www.publications.parliament.uk/pa/jt201213/jtselect/jtpcbs/144/144.pdf” leaves us with another question that requires serious visible pondering by the press on several levels too. If we consider the issues of HBOS (20 billion) and RBS (45 billion) and the consequent fines that followed over the timeline until now then there are serious questions on those getting an income from the Financial Services Authority (FSA). Here comes the kicker! “and was funded entirely by fees charged to the financial services industry.” So basically we have a group that was not biting the hand that feeds them. How was this ever a good idea?

As per April 1st (no joke) its responsibilities have been split between two new agencies, the Prudential Regulation Authority, the Financial Conduct Authority at the Bank of England.

If we see what has happened here on several levels, it seems to me that self-regulation has failed on a massive scale. Both the Banking and Press industry seems to have scuttled justice, fairness and ethics on many levels and at many places. The question is not how they can restore their integrity; the question should be ‘Why are they presently allowed a place on the negotiation table in the first place?’

This brings me back to the bars as displayed by Robert L. Bradley. In my mind the distance between incompetence and prosecutable Fraud needs to be a lot smaller then I am currently comfortable with and the buffer called Unethical behaviour is a buffer zone that should be nothing more than a mere hairline. From those parts I wonder why massive visible and noisy steps have not yet taken place to remove options of self-regulation in several places at present.

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