Tag Archives: Mario Draghi

The slammer got slammed

There is nothing so rewarding as the moment you realise that you get to slam the door on those slamming the door on you. It is an innate feeling that is in the core of all of us. It is more powerful than getting the drop on your boss or CEO with an overwhelming amount of narcissism and the overbearing feeling towards the need of being some dominant / dominatrix figure (at that point they become merely a figurine).

I made several references over the course of 2018 that this was coming, the stronger one in May 2018 (at https://lawlordtobe.com/2018/05/05/milestones/) where I made the reference: “the EU was never about everyone agreeing on everything and the economic setting that requires that to happen at present is also making the dangers of waves that sinks the barge called EU. Now, that seems like an exaggeration, but when you realise that the German anchor is the only one giving stability, you can see the dangers the EU faces and more important, the dangers of no reserves and an utter lack to keep proper budgets in place, a setting now in more danger for the reasons that I gave supported by the economic views of many others. I believe some are downplaying the impact, yet when we realise that EVERY European Union government is downplaying the economic impact (as every nation always wants to look as good as possible, which is a PowerPoint setting of the human ago) we get a much more dangerous setting“. The article ‘Milestones‘ has more, it also has references to the AfD (Alternative for Germany), and even as we see in the Financial Times (at https://www.ft.com/content/d695fff8-b838-11e9-96bd-8e884d3ea203) “It is a happy hunting-ground for the AfD: if polls are accurate, it could emerge as the most popular party in regional elections on September 1, even beating the left-of-centre Social Democrats which have governed this corner of East Germany since reunification in 1990. Two other eastern regions, Saxony and Thuringia, are also choosing new parliaments this autumn and, as in Brandenburg, the AfD is set to make big gains. That is a major problem for the eastern political elite“, I believe that this powerful eastern political elite is part of causing the headline ‘Germany: AfD surge threatened by party disunity‘, they are that scared at present. The gains cannot be stopped not to the degree some elitists are vouching for; the best that they can hope for is derailing them from becoming the majority, which is actually a political war that is allowed. The question becomes will it work?

We are 2-3 weeks away from finding out.

CNN gave us less than 2 days ago: ‘5 of the world’s biggest economies are at risk of recession‘ (at https://edition.cnn.com/2019/08/14/economy/recession-risk-economies/index.html), it is a huge part because the impact matters. Under Mario Draghi and his bond buying program, there are no reserves left, so the impact towards recession is about to get real. The shift in quality of life makes the consumer spending tactic an instant non option.

Yet, it all comes down to the Washington Post who (at https://www.washingtonpost.com/business/2019/08/14/stocks-tank-another-recession-warning-surfaces) gives us: ‘Stocks losses deepen as a key recession warning surfaces‘. It is here that we get: “after a reliable predictor of looming recessions flashed for the first time since the run-up to the 2008 financial crisis. The Dow Jones industrial average fell 800 points, or about 3 percent, and has lost close to 7 percent over the past three weeks. Two of the world’s largest economies, Germany and the United Kingdom, appear to be contracting even as the latter forges ahead with plans to leave the European Union. Growth also has slowed in China, which is in a bitter trade feud with the United States. Meanwhile, Argentina’s stock market fell nearly 50 percent earlier this week after its incumbent president was defeated by a left-wing opponent“. First of all, ‘reliable predictor‘ is not the term I would use, the dangers were clear for well over a year, it was the wrong stage of a trade war, with the Huawei 5G setting that pushed the inevitable date forward by a lot. The entire Huawei stage was a stage of stupidity, and a more dangerous post-recession part than anyone was willing to consider. We might find clarity in the footnote: “But with so many losing confidence in the near-term prospects of the economy and rushing to buy longer-term bonds, the U.S. government now is paying more to attract buyers to its 2-year bond than its 10-year note“, is looking in the wrong direction. It is merely a small symptom at present and direct consequence on risk and not the one that bites. The US is losing its footing on the global mobile market faster and faster. And even as we accept the ‘marketing’ that Huawei gives via Cnet towards 6G, the direct truth is outstanding for a longer time. It links to my own IP that is currently available to Huawei and I want my share of that market, I believe that my part after the fact will be enough to truly make me independent on several fronts. One party found my claim a $ billion market through the investment on $25m post taxation too good to be true, but it is the second wave that takes care of my needs and you gotta give a little to get a little. It is was the ‘denied’ parts of Credit Agricole and the Paris games of 2024 that gave me the final straw I needed to see that I was right all along. In all this verification that I was correct was always the biggest issue for me to deal with, and the recession is making those big business daddies of greed close to desperate, giving me a small push forward. Those people are not willing to walk away from a one billion market at the investment of 2.5%, no bank has ever offered those margins and with the Credit Agricole parts exposed to the smallest extent, I know it will work. It is there that I saw that the IP I designed was never considered by either Google or Huawei, all set to iterative paths to innovation, and the economy shows that nearly all of the other players were looking at the next quarter, whilst the quarter+3 was the game changer. The Olympics gave the option to look at inverted innovation and make it a new innovation, Paris was not the first, but certainly the clearest indicator and whilst we see through Channel News “Huawei Technologies has joined 564 other entities in the Paris Call“, the message is not that there are 565 players, it is that they are all looking in a similar direction whilst the none excavated the gold mine that was right behind them, a first lesson that the classics can inspire towards a new direction. Now that I see their direction I found two other fields that had not been considered to the degree it needed. Saudi Arabia is giving us Neom City, but there is a lack in one direction and now that this can be exploited we see even more options. You only had to be willing to get your hands dirty in the most literal of ways. And all this is pushed even more through the impact of the European economy. A French invention gets a new life after almost 2 centuries and we can see that there is more to be found.

Sergey Brin on Sat. morning

It is what else Harmony OS can do that will push the benefits away from the US and it will hurt Google to the smallest degree (almost inevitable), Google is just too big, but now that the equation changes, it is Google who will be chasing Huawei, so well done Trump dude, you merely made everything worse for America and I will sell to the quickest bidder and the 2.5% approach gives me the edge; the two known entities Ren Zhengfei and Papa Smurf Sergey Brin can make the investment from the small change they have in their pockets and the bait would be just too appealing for them.

Al this was confirmed and accentuated through the US Senate with: “In February, the US Senate Commerce Committee held a hearing titled “Winning the Race to 5G and the Era of Technology Innovation in the United States”, to discuss what policies are required to accelerate the deployment of 5G to keep America “competitive on the international stage”” and whilst we accept the American point of view, they forgot about two elements in the 5G field and the upper echelons of decision makers showed at that point that they were working in a dimmed room without lights, giving additional evidence that they never saw the writing on the wall and now I get to make a new voice and whilst I only am willing to trust Google or Huawei in all this, there can only be one winner and the others are merely a chaser at best, it is the price of iteration over innovation. Even as Microsoft and IBM are in denial of what they are about to lose, they do know and accept their choice. Microsoft is banking on Azure and there the hindrance of Harmony will cause a void, they were ready for Android, yet HarmonyOS is another matter and China is seeing that as another opportunity. It is there where we see the talks of Huawei with the Shanghai Blue Cloud Technology taking an additional turn, and how many players in the Paris games are banking on Azure? How many lose out when they are not ready for the 5G version 2 under HarmonyOS, it will work with Android and Azure, but suddenly we will see some accidental 10% gap (latency) and that is how the game was played and all this before my elements come into play, and they will!

The big business slammers all relying on PowerPoint presentation they are given the elements and when we see the 2023 acceleration and people cannot answer the differences because they never considered looking behind them as well as looking at the corners of their eyes, the blind corners they ignored; now they no longer have one blind spot, they suddenly have three and we get all kinds of concept promises in presentation form, all whilst the data was never that unclear from the very beginning. An issue they claimed that it was being looked at.

So here I am, having to take their shit with the option to sit at the sidelines watching them fight over options because they anticipated without comprehension, sometimes the universe gets to be nice and smile at those having to take their shit. A direct zero day exploit of the applied intent of narcissism on how good a presentation looks, whilst their data never clearly supported it.

My case of exceeding expectations towards customer satisfaction trumped some short sighted ‘Ca$h is king‘ setting, because it works at the grocer, but that part has no bearing when their minimum needs exceed he budget of 80%, it was a simple equation from the very beginning. So when we are now considering the new ‘truth’ where the Washington Post gives us less than an hour ago: ‘Weak global growth likely to mean US slowdown, not recession‘, we merely see wishful thinking in the quote “Yet most analysts expect the U.S. economy to power through the rough patch, at least in the coming months, on the strength of solid consumer spending and a resilient job market. The U.S. stock market plummeted earlier this week when the bond market, spooked by the global turmoil, sent a possible early warning sign of a recession ahead: The yield on the benchmark 10-year Treasury note slipped briefly below 2-year Treasury yields“, the article (at https://www.washingtonpost.com/business/weak-global-growth-likely-to-mean-us-slowdown-not-recession/2019/08/15/1cb8d81a-bfba-11e9-a8b0-7ed8a0d5dc5d_story.html),all whilst we see the clarity of next quarter believes linked to the next Thanksgiving and Christmas, all whilst it is Q2 2020 that makes the tequila slammer which gives the drinker the sledgehammer headache stated it was one that they never saw coming. The entire trade war is taking a new turn and when the people realise on all that the US is missing out on and therefor anyone taking that path will also learn that there is a long term price to pay and it is the markets that Google and Huawei are now staging for that brings the next stage. China has too much to gain, whilst Google will try to retain losses that they will optionally get (reduced growth is clearly a loss). Even as the impact for Google is small, losing one percent is still big news and there one percent adds to a billion plus, whilst their risk to hedge will cost them a mere 1.8% of the optional loss, it is a non-issue.

Guarantee?

There is none, but the option of a new 2% market is worth so much more than that, and it is not open to the iterative industries, innovators only, because it will be about the momentum and there is too much to gain. Consider what the 565 are looking at, whilst I focused on the group that represents up to 445,000,000 SME companies in a new 5G setting. The Olympics are merely the icing on the cake. 2020 Tokyo opens the doors more clearly but the impact is abundantly seen in Qatar 20222 and Paris 2024. And at present I see that they never looked in the places where they could be, merely where they want to be.

In the end it is one of Warren Buffett’s quotes that got me there: “the great moves are usually greeted by yawns“, thanks Warren; you were absolutely right on that part!

 

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When the media decides not to tell us

This has been a subject that has been a focal point for me for a while now. The first instance When I got a clear indication was in 2012 when the media on a global scale decided not to inform the people on actions that Sony had taken. The gaming stage for 35 million consumers was changed almost overnight, yet the media trivialised it to the largest degree. It was then that I decided to keep tapping the pulse to see what else was going on.

You will have heard about the issues in Yemen and that the Arabian coalition led by Saudi Arabia is part of this. That you know, but for the longest time, the involvement of Iran and the terrorist organisation Hezbollah was downplayed to a much larger degree, and no one seems to be looking at that part.

In the last 24 hours we were shown to a much larger degree on the dangers that the civil population of Saudi Arabia presently faces (around that airport mind you).

Reuters

Reuters gave us 9 hours ago: ‘Yemen’s Houthis say they attacked Saudi’s Najran airport by drone‘. the article (at https://www.reuters.com/article/us-yemen-security-saudi-drone/yemens-houthis-say-they-attacked-saudis-najran-airport-by-drone-idUSKCN1ST1HJ) gives us both: “Yemen’s Iran-aligned Houthi movement on Thursday launched a drone attack on a Patriot missile battery in the airport of the Saudi city of Najran near the Yemeni border” and “The group claimed responsibility for last week’s armed drone strikes on oil assets in Saudi Arabia and on Sunday said they would attack 300 vital military targets in Saudi Arabia, the United Arab Emirates and Yemen“, so far nothing really new, other than this is the third attack in a week. When we consider “Najran regional airport is used by thousands of civilians daily” we see a stage where another part is now making entry, but about that more shortly.

Al Jazeera

Al Jazeera gives us ‘Yemen’s Houthi rebels attack Saudi’s Najran airport – again‘ (at https://www.aljazeera.com/news/2019/05/yemen-houthi-rebels-attack-saudi-najran-airport-190523140308211.html), where we are treated to: “The group’s Al Masirah TV reported the drone attack on Thursday came as the Houthis said they would step up their offensive against Saudi targets“, as well as “An explosive-laden drone sent by the terrorist Houthi militia to target Najran airport – which is used by thousands of civilians daily – was intercepted and destroyed by the Saudi air force“. This news is mostly on par, we see the small addition by Colonel Turki al-Maliki that there would be a response but did not elaborate on any details.

I think that we can agree that Reuters and Al Jazeera are regarded as sources of integrity. it is news that so far has always been regarded as trustworthy.

So why is it that this news did not make it to the BBC, yet we were given headlines like ‘PSG boss Al-Khelaifi charged with athletics corruption‘ and ‘Egypt releases students held after exams protests‘. I am not stating that those headlines should not have been there, it is regarded as news, but the attack on civilians by Houthi forces was kept out of the news and that is a little weird, especially as the news on a global level had been slamming Saudi Arabia again and again. The guardian, the New York Times, Washington Post, none of them had it. Yet the Washington Post was eager to report: “In addition to suffering the reputational problems of delivering deadly weapons to governments that clearly misuse them, U.S. defense firms should exercise extreme caution that they are not opening themselves, their officers, and their employees to criminal and civil liability by exporting weapons pursuant to potentially invalid licenses“, it seems interesting that Democrat Robert Menendez was willing to sidestep drone strikes on civil targets at the drop of a hat. In addition, that article (at https://www.washingtonpost.com/world/national-security/trump-may-sidestep-congress-on-saudi-arms-deal-drawing-fresh-warnings-from-republicans-and-democrats/2019/05/23/ca4af24e-7d96-11e9-8ede-f4abf521ef17_story.html) also gives us “anxious to protect their authority to have a say on the executive branch’s ability to export lethal weaponry to foreign actors“, the operative ‘foreign actors‘, instead of ‘foreign government‘, this was written by an intelligent person, I accept that and that this is to set the consumer and voting state is also accepted, yet when a newspaper relies on ‘Democracy dies in darkness‘ and it is only giving you part of the information, is that not an equal attack on democracy? when readers are misinformed by only partially informing them, is that not (in the eyes of some people) the larger crime in all this?

The large papers have almost all omitted that part at the moment, and they are not alone, Deutsche Welle, NOS, Swedish news sources, they are all missing out on the Houthi attack, as well as the fact that in most cases the involvement of Iran remains unmentioned in many of the cases. When sources on TV and online are happy to quote President Trump stating: “I’m an extremely stable genius. OK?” (From my point of view absolutely nothing in that sentence was true), and we are not given the attacks on civilians from one side, we need to take a deeper look at the media and why they are given rights when they do it to march all over democracy.

So when we accept that any democracy gives us: “In a direct democracy, the citizens as a whole form a governing body and vote directly on each issue” and we see that we are not given the actual facts of ‘each issue‘, can we consider to agree that what was once a democracy optionally no longer is one?

The media has been about facilitation towards the big companies for too long, it is time to hold the media owners to account, it is the setting where we see that a democracy has turned into an oligarchy, it is the easiest to achieve in a republic setting, as corporations have a lot more power, in a monarchy that is a lot harder to achieve, but the power players in any Oligarchy achieve that by controlling the media and that is what is seemingly happening on a very large scale. It is time that we shine large lights on that part of the equation before the people to the largest degree no longer have any say in the matter. The EU is the best example (they have no hold or any say on the matters pushed for by the ECB), and it is there that we see the failing of democracy and some players are better out than in.

Even as the ECB is only now (after months of assurances that the Euro was looking up) giving the media “European Central Bank policymakers are concerned that economic growth in the euro zone is even weaker than feared“, as well as the Washington Post that gives us (at https://www.washingtonpost.com/business/a-3-trillion-bond-beast-runs-the-show-in-europe/2019/05/23/db45efa6-7d35-11e9-b1f3-b233fe5811ef_story.html), when we see the headline that I have spoken about for almost 2 years ‘A $3 Trillion Bond Beast Runs the Show in Europe‘, giving the ECB ruling on EU matters, the EU called a democracy now run by non-elected officials not accountable for their actions, whilst they pushed for that debt. That should be regarded that the EU has moved from so called Democracy into Oligarchy and the media stays silent, they need the ECB to feed them for circulation.

The media decided to sway the story, they decided not to tell us and people wonder why Brexit is the only remaining way out? I as a Brexiteer prefer a stage so that people can be held to account, the Chancellor of the Exchequer (Rt Hon Philip Hammond MP) can be held to account, and Mario Draghi President of the ECB cannot. The world is in a dangerous stage and the few that have hold on the media stay out of the spotlight for all the reasons that they consider to be right, do you agree?

I certainly don’t, not with this much evidence out in the open.

 

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The political winds

It all started nice and slow this morning. I had one task that is due in 4 hours and 34.3 minutes (roughly), so the unnatural act (for me) of sleeping in commenced and it was nice. So there I was morning ritual all shot to smithereens and it was 2 hours until zero hour. My ritual of checking breaking news gives me the BBC and the Saudi Tankers, an interesting part, but the intelligence on the events are missing, even in open source intelligence it is too much on ‘decent confidence’ and ‘statistical probability of certain parties’. One source gives an implied presence of Hezbollah in Shinas (Oman), yet there is zero reliability as well as the fact that any attack would have required different tools as well as location does not add up, as it is at that point that Israel Hayom gives me ‘Saudi Arabia retaliates hours after Houthis attack oil facilities‘, the fact that we see “Houthi rebels in Yemen, who are backed by Saudi Arabia’s arch-rival Iran, claim attack on Saudi oil pipelines“, this is indeed a different status and I will dig into this when i get more data, this event could escalate matters fast. As such the defence needs of Saudi Arabia will explode (pardon the pun) soon enough.

Yet this is about UK politics and the issues will relate soon enough. The Independent (at https://www.independent.co.uk/news/uk/politics/jeremy-hunt-conservative-party-wall-street-journal-london-a8914171.html) gives us ‘Jeremy Hunt appears to struggle for an answer when asked why people should vote Tory‘, you see as a conservative (yes, I am a Tory) I struggle too. There is no shame in this, we need to walk a tightrope and keeping balance is actually a lot harder than you might imagine. So when we see Jeremy Hunt give us: “Because we are not going to solve this problem by retreating to populist extremes” he has a point, it is clear and he is correct, yet the problem is that we are looking at the wrong extreme. Nigel Farage is not the populist extreme, the European Central Bank is the populist extreme, just not a populist extreme for the people, they are the populist solution for the IMF, Wall Street and American commerce, three that they were never supposed to cater for and the European ignorance is just amazing. Also, the view that the media remains silent on many issues involving the ECB, Mario Draghi and their acts of non-accountability have become too staggering. And as the media is in denial in one side and then bashes Nigel Farage at every opportunity gives additional light to the fact that the media botched plenty of issues.

The people have been misled to a much larger degree and now they are willing to try Farage and the Brexit party, not because they like him, but because they largely mistrust all other parties including my own conservative party. That is the realistic stage, so why vote Tory?

The problem is not easy but the biggest issue is the debt, both sides (mainly the Labor party) have pushed again and again and left the British nation with 2 trillion pounds of debt. Even in the most optimal stage it will take well over a generation, it is passed in two parts. The first is no less than £20 billion in interest payment and an optimal £20-£50 billion in annual debt decline; if this is not done soon it will be too late for everyone. The benefit is that the UK without the Euro can steer shallow and deep waters, all having their own risk (and rewards), all having options, but the drag of the Euro 27 nations and their bad choices as well as the ECB and their unacceptable acts will no longer be part of it. It will be the first clear stage of resolving the issues that politicians are too hard to solve. Still, it will take a generation, perhaps two to resolve it and when there is momentum in the first 5 years that will signal economic improvements as well as economic opportunities.

Immigration

If that was not the case, do you think that the refugees would be racing and running to make it to the UK as fast as they possibly can? No, the people in the lower tier are actually seeing the lack of progress for the people all over Europe, and for now the UK is in a similar stage, but it could improve, the UK is in a stage where it could improve faster and better than anywhere else in Europe. Do you think I would sit on billions of IP if any official in the EU27 could be trusted? The EU27 and America are all in the stage to fill their pockets as much as possible before it is too late, I would rather make all my IP public domain and watch them all fight each other on claims that they were first and not giving actual evidence. That is why Google, Huawei and optional Saudi Arabia are seemingly the few parties worth talking to at present.

Google and Huawei have shown to be pushing innovation, not iteration. In addition, the acts we see in Saudi Arabia on renewal and Neom City are showing a push for larger changes, changes that the US and the European Economic Union is no longer able to make, they are stuck with a mountain of debt making everything a discussion, and no resolutions. The fact that for the most tax laws have NEVER been properly been adjusted so that the large corporations (FAANG group) make proper payment has never been addressed, it is a failing on both sides of the Isle, both Tories and Labour have fault at that. the BBC news in March 2018 gave us ‘Google’s tax bill rises to £50m‘, and we get two parts in addition: “The technology giant’s annual accounts show that the company will pay corporation taxes of £49.3m on UK profits of £202.4m” and “The total value of Google’s sales in the UK is about £5.7bn a year“, now I have nothing against google, as a matter of fact, I love Google (platonically mind you). Yet the numbers do not add up. When we consider that google is making 202 million out of 5,700 million, it amounts to a profit margin of 3.54%, considering that the Google Pixel 3 is well over £700 makes me wonder. Yet let’s not forget that Google is not alone here, Microsoft, IBM, Oracle, SAP, Facebook, Amazon all have profits that go into the billions (well the FAANG group players at least). So the tax image is wrong and the people get to pay for the cost of commerce, not exactly fair, is it?

This is the realisation that has been sweeping through the lower tiers of the population and they have had enough, and I get it. We see all these utter BS approaches on what we can sell to the government of Saudi Arabia and we cannot even sort out proper taxation to big business? Small businesses have been driven out of shops through large corporations working from abroad, the Britons have been dealt a raw deal and it bites, the Tories did way too little to deal with it (opposing the Labour party who did nothing at all when they were in charge). So the people have gotten to the point where they will try anything, especially give Nigel Farage and his Brexit party a chance.

Yes, how would I vote? Well, I am all for Brexit, yet I remain a Conservative. The issue is not Brexit, it will happen (read: it should), the issue will be about what happens after that, it will be a mess for close to two years and issues need to be resolved and it will take time and it will take serious discussions, Nigel Farage has charisma, he has knowledge yet what about his team? The players like David Coburn, Julia Reid, Nathan Gill, or Raymond Finch? I am not sure any of those people can hold proper seats like Home office, Foreign office, Defence, or Treasury. That is the problem the UK faces. Getting a proper government in place, Labor was never trustworthy and even as Tony Blair did a lot of good, he bungled plenty too. In that regard whatever came after Harold Wilson (1976) was pretty bollocks by the view of some (a view I only partially support).

These parts matter, the failings form the past are now part of the current battlefield and the failings are important to consider with a debt of 2 trillion, that is why the Brexit party is likely to be the biggest player, yet I remain a conservative, the mess needs to be cleaned up and whilst labour will indiscriminately spend money that they do not have, the Nigel Farage side lacks the true experience that the people need to clean the overall mess up, Brexit is an essential first, but the Brexit party is in my humble opinion not ready to properly deal with the 20 steps that follow.

Was there not a Saudi side?

Yup and we are getting to that now. You see the economy is only one side. Military hardware is only one part of optional commerce, the national growth of 5G will benefit the UK, yet these parts can also be sold to Saudi Arabia, there is more than Huawei and even as the UK needs to catch up, and catch up fast, the sorted problem is not merely military hardware, that part needs services and whilst the UK can be a push forward there, they are up against American Giants and it is a fight worth fighting. The infrastructure for Neom City and even beyond that all the way to Riyadh represents an initial £350 billion, with more on the horizon. When I set the stage for my £2,000,000,000 IP, one part was that I did look beyond one side and since then found four more avenues where people merely accepted certain solutions and never looked at what else was possible. From Marketing, Awareness creation, communication, applied applications on the setting of streaming (yes, that was a pun and a puzzle all at once). And the biggest parts are not big business, it is a small business approach with global ramifications, and the nice part is that Huawei was nice enough to implement part of it in their 5G prospective and not look further, so happy, happy me (for now that is).

This is not merely one part, all the players (and the FAANG group) all want access to Saudi Arabia, so who do you think they will hand options too? These hypocrites who decided to suddenly revoke export to Saudi Arabia whilst ignoring the activities of Hezbollah and Iran, or those who stood by Saudi Arabia and their right for defence? Let’s not forget that the aid of Saudi Arabia was called on by the legitimate government of Yemen, a part most seem to ignore again and again.

Saudi Arabia is trailing in technology on several ides and they are trying to address this and those who facilitate for the progress of that will find themselves with the sweetest deals. More importantly, the UK will need proper trade partners to a larger degree. The US is all about export and the fact that export needs to exceed import, several nations are in that stage. The list that place true value to import to goods and services is small, so having the proper foreign office in place is going to be essential in the next 5 years, the Brexit party cannot deliver on that and that will make matters much worse down the Brexit trail. The Conservative need is easily shown when you look a few degrees beyond the current point of exposure. It is when you look towards the applied stage of the long game, that is where you see that the bulk of all politicians fall short. They will merely tell you: ‘We will solve it when we get there‘, or ‘We have a plan and we will present it at the proper time‘ and it is way too late to take that approach, it is well over a decade too late for that.

If they cannot clearly show you a plan, they are extremely unlikely to have one, which is not a stage the UK (and many other nations) can survive on at present. As such the political winds are blowing, top some degree those who we are willing to trust lack the power and know-how to make it work long term, most of the others are no longer trusted to the degree that they need to. I remain conservative inclined, yet they too need to realise that not only is the party over, facilitating in that direction is no longer an option, making that heard loud and clear is essential.

 

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The mental delay

There is a mental delay; we all have it, the moment between the realisation that things are wrong and the rest of the media finally willing to confess to the wrongful parts after they had been milked to the maximum. This is where I believe the UK is when I see: ‘Poll surge for Farage sparks panic among Tories and Labour‘ (at https://www.theguardian.com/politics/2019/may/11/poll-surge-for-farage-panic-conservatives-and-labour). The situation is given through “Support for the Conservatives at the European elections slumps to 11%, less than a third of what the Brexit party is polling“. From my point of view, it is not really a surprise. The people have had enough of the ECB and their lack of control and accountability. The people in Europe are down 3 trillion euro through ill-conceived plans, it gets to be even worse when we consider the march news from the Financial Times ‘ECB unveils fresh bank stimulus amid rising Eurozone gloom‘, a setting that is not unlike irresponsible children using a credit card for which they do not have to pay the bill, the people have had enough. It is emphasized by other media giving us quotes like “Even if we stipulate that Greece’s government is, in fact, as creditworthy as the U.S. government, why would investors accept a lower yield on the Greek bond? And why are they willing to accept the even lower yields on the bonds of other Eurozone governments?“, as well as “Despite the low Eurozone bond yields, investors may expect eventually to boost their returns by selling the expensive euros and buying cheaper dollars and other currencies. Indeed, there is some basis for such a strategy. As of late April, the consensus among analysts was that the euro will appreciate significantly over the next couple of years, and more modestly thereafter; forward markets (where buyers and sellers settle the price of a future transaction in advance) support this consensus view.” Source: MarketWatch.

My issue is that the writing has been on the wall for a while and whilst we are given “The poll suggests the Brexit party, launched only last month, is now on course for a thumping victory that Farage will, MPs fear, use to back his argument that the UK must leave the EU immediately without a deal“, it was a risk that had been 3 years in the making and now that the time is over, we see panic on a few levels. The need for Status Quo as well as the continued Gravy train is now at a stage that the UK and others have had enough, a stage where the large four are pulling a cart where 20 others have not been doing their bit, not even to the smallest degree. From my personal view, the biggest loser is Tony Blair when we consider: “Writing for the Observer online, the former prime minister Tony Blair says it is vital that Labour supporters go to the polls, even if they choose a party more clearly in favour of Remain than Labour“, in a stage where the ECB does as it pleases, the people have largely lost faith, with the economic anchors Greece and Italy still firmly in place things will not get better, not in a Bremain stage of mind. Even as we accept that things will get worse, there is enough indication that it will be relatively short term, without the anchors, the 15 smallest EU nations will unite against the UK, only to find that the setback will increase, a voice without money is worth the value of the empty wallet at best. The IMF report makes it merely worse, the stage where the three largest EU economies are Germany, France and Italy and their prospects are in the basement for this year, led by Italy with a forecast that is somewhere between 10% and 25 % of last year, and as I took the UK out of this, we will see that as the others slide faster, the UK will suddenly become the place to be, a nation in repair. Then MarketWatch gives us a part that I have been claiming for over 2 years: “Policy makers also underplay the financial risks. They emphasize the decline in government debt ratios and banks’ nonperforming loans from their peaks reached during the euro-area crisis. They fail to note, however, that these vulnerabilities are at present distinctly higher than they were in mid-2007 for virtually all Eurozone countries“, whatever options they thought they had was squandered away by the ECB stimulus plans that did not work twice around and now they are giving us an attempt at option three, with no evidence that the third time has any chance of being a charm.

So when I see “‘northern’ Eurozone governments worry that the ECB may be left holding debt that may never be repaid“, which is nice, but I told that the people close to two years ago. It is nice for others to catch up this late. All this is before we give consideration to ‘Italy budget deficit forecast to smash EU fiscal rules‘ (at https://www.ft.com/content/e3b662d2-70ac-11e9-bf5c-6eeb837566c5) all thanks (in part) to an ECB that cannot restrain itself or its members, the UK is much better out and the sooner they do this, the better it is for all. The problem is not merely the deficit, the economy downturn will hit jobs soon thereafter, so before the end of the year. As such the unemployment rate that was merely a stitch below 11% in February 2019 could hit 14% by October, and with one out of three Italian youths without a job, that situation will worsen. It is already worse than Spain, but it will worsen still, that is merely one of the 4 large economies, whilst the ECB was too worried on the next bonus spreadsheet, we will now end up having spreadsheets where the dominant colour is red, on pretty much every page.

Even as we accept the Financial Times words “The forecasts play down the risks of a no-deal Brexit, saying that it “would dampen economic growth, particularly in the UK but also in the EU27, though to a minor extent”“, the part that I see missing is that the UK economy will recover, the remaining EU27 players a lot less so, which is also why we have seen the fuelled anti-Brexit sentiment all over Europe, not because they lose what they call an ‘economic ally‘, but because their own mess becomes centre stage for everyone to watch soon thereafter.

The other part is that the Northern economies are seemingly slowing down, the Local Sweden gives us: “The Swedish economic boom has reached its peak and the economy is approaching a slowdown, the country’s Fiscal Policy Council wrote in its annual report“, I do not believe that to be correct, you see Ericsson is one of a few having a decent 5G solution, together with Nokia they are the only ones who have a decently advanced 5G solution, they are the only ones who are considered in several nations because those nations are narrow-minded and loudly anti Huawei, so these two profit to a larger degrees. When 3G was starting Nokia broke all records, these two will in similar drive 5G, even if there is a slowdown, it is likely to be a very short one, unless the US stops its Huawei smear policy, these two will propel the Nordic economies to a much larger degree.

So when I see Justine Greening, Sam Gyimah, Alistair Burt, all conservatives, all pushing for a Bremain, a second referendum, or some ill-conceived idea that Brexit needs to be acknowledged, the voters have all realised that it is too late, the EU wanted to keep on playing games and leaving the game at whatever point is to be preferred over more and more unacceptable spending.

Yet the one part that is not pushed for is that the Brexit Party and Ukip are approaching a majority, if they can strike a deal with the greens and the Liberal Democrats (they tend to be great followers), we see a new government with the Labor party and conservatives sitting next to one another in the opposition. A historic first, the entire House of Commons for too long in indecision and the people have had enough, I cannot blame them. So when they want to play the blame game, a lot of politicians merely need to look into a mirror to see the guilty party.

I personally belief that the people are seeing the dangers of non-decisions as well as the added media pressures with non-stop incriminations and a total lack of explanation; It is driving the ‘better out than in‘ mood that seems to be exploding all over the UK. The fact that sources are claiming that Brexit might not happen, or that there is a 20%-30% that it will not happen has the people riled, in the end there was a referendum and the complacent and lazy Bremainers were all in a stage ‘it will never happen’, just like that popular claim ‘too big to fail’, so as that went the wrong way the people have been hit with media after media going wild in allegations and all kinds of managed bad news reports like ‘we could lose everything‘, or ‘you’ll get nationally evicted‘, exponential levels of fear mongering for too long, the people are fed up and the Brexit party is gaining more and more momentum. In France far right Marine Le Pen is again in the lead, the Dutch ‘Forum for Democracy (FvD) party’ is equally pushing forward, is that the Europe that the UK wants to be part of? The extreme right parties are gaining momentum more and more and I personally believe that not having a handle on the ECB was a first step, then we still have Mario Draghi being a member of an elite banking group and the fact that no one was holding him to account is still a factor that the few are disregarding, whilst the 3 trillion of bad conceived spending was never up for debate.

There has been a mental delay with the voters, but the facts are out in the open for too much and the facts are too visible, it has angered the people, so as the news thought it was fun to give the readers the news through “The Hinduja brothers, Gopichand and Srichand, have reclaimed their crown as the UK’s wealthiest people, according to the annual Rich List survey. The Indian-born, London-based industrialists are estimated to be worth £22bn, up £1.35bn on last year’s list“, so yes that was a nice part, as the people cannot pay their bills, have to deal with unaffordable living, someone made an additional £1,335 million pounds extra, all that whilst we get “The list reveals that retailer Sir Philip Green has lost his billionaire status; his fortune is believed to have halved in a year because of a pension black hole in his Arcadia empire. The Sunday Times Rich List has Green’s total wealth free-falling £1.05bn in a year to £950m“, when I lose 50% of my wealth, I go from £1,500 to £750, so where is the ‘half’ and the mere decline of10% illustrating going from £1,05B to £950M? It seems to me that he wealthy people are taxed differently on fortunes having to be halved.

Are you still wondering whilst millions of Britons are in anger and are you wondering why the Brexit party is gaining momentum? Farage has the charisma to exploit the silly news items that are seemingly fun to read for some, but in light of all that has happened, it is infuriating a lot more people in the UK than the media should be happy about. And as we saw Tony Blair, yesterday in his opinion piece ‘Farage cannot be allowed to dictate Britain’s future. He must be thwarted‘ (at https://www.theguardian.com/commentisfree/2019/may/11/farage-cannot-be-allowed-to-dictate-britains-future-he-must-be-thwarted) we are given “This is not a vote to choose a prime minister or a government. It is a vote for the Farage Brexit – or against it“. There I respectfully disagree; it has gone way beyond that. It has been about the unacceptable acts of the ECB and the overpaid EU gravy train riders for a much longer time and if Tony Blair had done something about when he was in charge from 1997 to 2007, or perhaps Gordon Brown in the three years that followed, the mess would not be there, in that same light the Conservatives after that did not achieve any significant push to make the ECB come to its senses, and now the people have had enough; they are willing to let Nigel Farage try. Tony should have done a few more things a decade ago and that was never the case. That is why the Brexit party is growing to the degree it is. The lack of kept promises, and the Italian government is merely throwing petrol on that fire, as such the Dutch are finding a person like Thierry Baudet more acceptable than ever before. A status quo play was the worst one to have, but the non-elected officials needed status quo for their wealth and now the gig is up in more than one way.

Tony Blair needs to realise that the Brexit party is not the downfall for either the Labor party or the Conservatives, facilitating to big business was and that is an important elements that none are touching on, the bulk of the politicians are tainted, tainted to the degree that they will stand out in every limelight and their denial in that is just staggering.

The mental delay has passed and now the people are in a phase where they are considering every other solution, except the ones that labour and conservatives offer. It is interesting that no one went on those tracks, the signals and indicators are clearly pushing in that direction.

 

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Life without pension

Yes, that is one of the elements that are now in play, life without pension, work until death. Did you consider this danger when you woke up this morning? It does not matter whether you are 55+ and awaiting your first months on a pension, or perhaps you are a decade younger and you are setting the stage for your house, your family and your future to be decently secure. Perhaps you are young and you do not care yet on how you celebrate your golden years. Yet what happens when you are becoming aware that this will never be the life you can embrace?

For me it is not really a concern, I have always been a workaholic.

Yet the picture I am painting is slowly becoming a reality. I made mention somewhere in 2018 that there would be noise on renewing, or not cancelling the entire stimulus program. I was initially pleasantly surprised that this was exactly what happened. It did not take long, a mere 8 weeks later we see: ‘Dutch central banker calls on ECB to pause plan to ditch stimulus‘ (at https://www.ft.com/content/d42d5c12-2def-11e9-8744-e7016697f225). Here we see: “The European Central Bank should pause plans to ditch its crisis-era stimulus, the governor of the Dutch central bank has said, in a sign that concerns over disappointing economic growth have spread to the eurozone’s most hawkish circles“, In addition we see: “the central bank needed to gauge how badly the economy was faring before pressing ahead with plans to normalise monetary policy“. This is merely one part where we see that the economy is a jester and we are all playing the same card whilst the protected few get the entire deck, an economy that requires $3 trillion and counting to run through invested support is not running, plain and simple and that debt is with us, the tax payers. The idea to runt that bill up higher should outrage us all, no matter what excuses we get to hear. So when we see “he has moved into line with Mr Draghi and the majority on the ECB governing council. It shows the steep deterioration in eurozone sentiment“, I merely see that not only was Brexit the better idea, we need to get out as quick as we can, with exit deal or not.

What do you think will happen when this blows up in their faces? It will; I personally believe that there is close to zero doubt on this. The Wall Street Journal gave us two days ago: “the ECB could raise interest rates this year. If it doesn’t, the bank might turn to new stimulus measures. It has few tools left“, I will go one step further, it has no moves left other than to tap unused resources for short term gains and that is when someone will give the audience assurances with some small ‘extremely unlikely‘ or some ‘failure is too small a factor to see it as any threat‘ mention and soon thereafter that one thing happens and the pensions will be gone. The Dutch Telegraaf reported on that less than 10 hours ago where the reader gets: “De EU-landen willen volgende maand de knoop doorhakken. De PEPP moet het makkelijker maken geld opzij te zetten voor de oude dag door een einde te maken aan de lappendeken van regels in de Unie“, which translates to: “The EU countries want to make a decision next month. The PEPP should make it easier to set aside money for the old age by putting an end to the patchwork of rules in the Union“. Critical viewers see the danger as the mandatory part comes into question. So not only do we see places like Carillion (UK) with their “pension fund deficit of £800 million” a mere week ago. So what happens when this ends up being the impact on a European scale? What happens when the Dutch and Swedish systems (which are among the safest and most secure pensions) collapse? That is not fictive, that is not academic, that is a realistic danger of the PEPP, when those schemes start banking on the wrong bonds and investments there will be no pension left. Good luck getting by with that March Hare menu. The fact that this is getting pushed by more and more marketing, complete with ‘How a US firm pushed for EU €2.1 trn pension fund‘. It makes me extremely cautious. In the age where we see new stimulus replace another, whist there is no economic good to be found, we see more and more debt, the moment the ECB gets there fingers on that PEPP option the fences move and the entire herd of economic protection levels gets squashed, like grapes in a wine barrel, to be diminished to the status of vinegar. So there goes your pension that was initially a decent chardonnay at $15 per 700ml, and is now no more than $2 per gallon, so how does that go over with your planned pension outlook?

The rapid growth of all these international advisors all claiming that the Pan European Personal Pension products (Pepp) are a good idea is making me even less trusting. Having seen the eager needs of hedge funds managers over the decades and their renowned need for greed is making me worried that this will blow up and whilst they walk away with multimillion bonuses, we all end up without a pension. It does not get any better soon. That part is seen through the paper by Paul Cox, Lecturer at the Birmingham Business School (at https://www.birmingham.ac.uk/Documents/college-social-sciences/social-policy/CHASM/briefing-papers/2018/BP1-2018-Pan-European-Personal-Pension-Paul-Cox.pdf), and the first thing that should worry you is: “Currently there is no specific EU legal framework on the design, provision and distribution of PPs“, so not only is this an international product limited by national law, there is every indication that once outside of the borders a lot of national legislation loses its impact and power, giving rise to all kinds of dangers. Even as we are given: “The PEPP takes the form of a Regulation. A Regulation is directly applicable in each Member State and does not need to be passed in Parliament as a Directive does.” This comes with the added danger that these regulations can be altered at any time, giving the rise to ambiguity as well as adaption to fit the need of the ECB, that same entity that callously handed over $3 trillion in stimulus with nothing to show for it. How does that fit your retirement scheme?

Even as we see: “Transfers into a PEPP from any national Member State PP is allowed but a transfer from a PEPP to a national Member State PP is not allowed” and are given the reasoning of “The aim is to prevent possible tax relief arbitrage where the PEPP tax relief is not as generous as national Member State tax relief.“, the indirect danger will be that the PEPP could face additional taxation (on top of the normal national one).

Yet the bigger danger is in the unspoken part of: “An obligation to provide a financial guarantee might lead to investment in low risk and low returning assets, such as government bonds and money markets, which would go against the CMU’s aim of fostering investment in equity and increasing private sector economic growth. A financial guarantee may also create a significant barrier to entry as only some providers would be able to offer such guarantees“, so not only the loss of optional guarantee, yet the bigger part is the danger of much higher risk investments, apart from the partially visible danger of investing in ECB bonds fuelling more non profitable stimulus, the danger of big risk as people experienced in 2004 and 2008, at that point your pension is gone.

That is a direct danger at present and there is almost zero chance that these dangers will not hit you at some point. The problem is that the closer you are to retirement, the larger the impact will be. Some of my friends were hit with their low risk investments in 2008, resulting in an added 10 year shift to their retirement, so retiring at 75, do you think you will be that lucky?

From my personal point of view, it is not the large players that are the danger, there will always be another Carillion, the danger are the dozen small players where we see people diving into a pool they do not comprehend and set aside the essential protections required, all with the view to strike rich fast. In that view, consider the “the fallout of a $235 billion dirty-money scandal that has engulfed the local branch of Copenhagen-based Danske Bank A/S“, then take “the ABLV, Latvia’s third-largest bank, accused of laundering Russian money and starved it of American dollars, forcing it to close“, add “the closure of Malta’s Pilatus Bank and a 775 million euro fine imposed on Dutch lender ING” and the clear message, given via Reuters by committee chairman Petr Jezek: “The Financial Intelligence Units of many EU member states are ‘clearly not up to the task’“, that is the PEPP picture you could face, all getting in and out quick and ransack EU pensions overnight (and all falling over at the same time). There is too much danger and as we might have some faith in the uber wealthy Larry Fink and his need to grow his $6 trillion empire, the danger of small bank barracuda’s pretending to be great white’s or their version of an all devouring Megaladon (thanks Jason Statham) is too great, there is a lack of protection in place and with pensions that is just too great a risk to face. To translate that in other terms. It is not the one player losing $1oo billion that is the danger, it is the setting that 100 players all lose $1 billion at the same time, the systems are often not ready to deal with such a situation.

I fear that the fraud and pocket filling impact by greed driven persons the next time around will be a lot higher, a lot more devastating. I always figured that I will be working should I pass the 77 mark and still be alive, that is the one benefit of a workaholic, is that the view you are having for your retirement at 40+?

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Updates

First of all

So whilst Microsoft is trying to rephrase their weak position through: ‘We are continuing to look at engagement as our key metric for success and are no longer reporting on total console sales‘, yes try to sell that whilst you have been all aggro on boasting boosted numbers for decades. Now that Xbox is about to become the number THREE system, they are running scared. The Nintendo Switch is now at 32 million, which surpasses the previous total number of Xbox One consoles sold, but they are currently allegedly at 41 million consoles sold, which means that there is only a 9 million gap until the most powerful console in the world degrades to the bronze position. Nintendo sold 14 million consoles in the last quarter alone, so that gives light that this is the last quarter with Xbox in the number two position, optionally the last month. Yet, I admit, my expectation of passing Microsoft by January 31st was not met, I was wrong. Yet the total number of consoles sold in the last quarter is still an amazing feat by Nintendo and it also shows that even as I was not correct in the end, my view was a lot better than all the market analysts.

The writing is on the wall.

I personally believe that some analysts have been setting the stage for shorting the stock of Nintendo. The question becomes what the law states. You see, when we look at the definition of shorting stock, the most generic version is: “he or she borrows shares of a company from an existing owner through his brokerage, sells those borrowed shares at the current market price, and pockets the cash“, yet in this case, the premise is not entirely that clear, with ‘he or she borrows‘ we need to consider that shorting the stock was done as a service for a third party, giving rise to the sale at tremendous profits. At present I seem to be wrong, there is no evidence of a setting to allow for a short sell. Yet the predictions that were made last year were so wrong, in so many ways that the overall findings would lead me to this path (there are others too). So is it just me? I would actually agree with this, was it not for the fact that the level of wrongness regarding Nintendo was so profound.

The state last year (Oct 2018) was given with ‘Nintendo Delivers Record Quarter, But Misses Estimates‘, so the stock tumbled a little less than 2%, in all this, whilst within a year the total lifetime sales of the Microsoft Xbox One were completely by 67% at that time, in addition, the software sales were almost globally ruling software top ten lists all over the place. We can argue that the ‘missed estimates’ were so ludicrously unrealistic that the entire matter had to be looked at, now we see the last quarter alone delivered 14 million consoles, which is almost 50% of what Microsoft achieved in sales between 2012 and 2016, four years versus three months, so how were estimations missed?

The puzzlement is supported even further with: “That’s Nintendo’s most profitable Q2 in eight years and a solid increase from the $211 million it booked last year.” It is in that light that I had an issue with the predictions in the last year. From my point of view Nintendo smashed almost every record, yet the stock is not reflecting that, giving rise to a few issues, but as a non-trader and a non-economy educated person, I cannot give the weight to that thought, yet the thought remains.

And now that we are treated to: ‘Nintendo cuts Switch sales forecast despite strong holiday season‘ the matter should be set, yet I am not convinced. Even as we see 14.5 million consoles up to now the last two months are unlikely to give them the 5.5 million consoles they need, they expect to get 2.5 million consoles and that seems achievable. I am not convinced that the 5.5 million consoles cannot be met, merely because Microsoft is on the ropes and there is no marketing, no advertising to reflect that. In this aggressive expansion universe it seems odd that Nintendo is not taking up the gauntlet to that degree.

They drastically improved visibility, especially compared to the WiiU. They have the titles that have a large appeal across the board and the people who do play the Switch love the interactions. In addition the shock news of Marvel Ultimate Alliance 3 and the fact is that it is exclusively to Nintendo Switch is not merely news, it is equally a shocker to Sony as well, as this was the kind of stuff that Sony needed to prevent from happening. The fans (including me) loved the first one on Xbox 360 and as we see the foundation of the original Gauntlet added to the DC and Marvel Universe, we get a game any comic book fan would love to play and nearly everyone that was one did and loved it. So to get this exclusively to Switch is a dealmaker as well as a record breaker. I doubt that this game will be out in time to get the next quarter sales up to the degree it needs to be upped, but it will soar sales of Nintendo yet again (optionally not in time to make the 20 million marker).

So did Nintendo do it wrong? I am not convinced, they made huge mistakes in the WiiU era and seemingly repaired all those flaws in the Nintendo Switch stage, no matter what estimates were not met, we now see that Nintendo Switch has gotten to 45% mark of the PlayStation 4 lifetime sales in under 2 years which is quite the feat as Microsoft got nowhere near that result, ever!

In second place

This is given to us by the Guardian (at https://www.theguardian.com/world/2019/jan/31/italy-slips-into-recession-for-third-time-in-a-decade-economy) it is in the setting of the same wall with more writing. It was to be expected as Italy has a whole range of economic anchors and downfalls. Yet I had hoped that Italy would have been able to stagnate their economy; alas they do not get to be that lucky and recession is the result. The problem is that this could also adversely affect France at present. It is (according to the Business Insider) yet at present the recession there is most likely, yet not a certainty. No matter how it wields, the French President will have to make a few committing jumps on several levels and as the stage between the US and the EU is polarising France will be on the side of the French needs, which by the way is not on par with American needs, so the Europeans have that to look forward to in the next 5 weeks. It is also the Italian part where we see failings, the Guardian gives us: “The deputy prime minister Luigi Di Maio, the head of the Five Star Movement, said the recession was proof that Europe’s budget rules should be relaxed to allow Italy to stimulate its economy back to growth“, which is the larger mistake. That approach did not work for the ECB and now the EU nations have a 3 trillion Euro anchor around their necks, adding debt will not have any true influence on the economy. the entire spending spree is now to be the anchor that drowns the 27 EU nations sooner rather than later and that is the overbearing part why Brexit was essential, the moment the UK is cut form that, the entire mess evolves too fast for anyone to correct for. The entire mess on four economies, where the one (UK) leaves and two (France and Italy) have merely a recession to offer, which means no options at all leaving it all to Germany who has enough for the ace of spades to be handed to them again and again. Germany avoided recession as it grew by 0.1%, which means that they only defeated the recession on the academic principle. It still means that the German economy is stagnating and that is not a good feeling when you are a German. So whilst we now see a whole parade of blaming the UK on making matters worse through a chaotic Brexit, I merely state that these idiots only have themselves to thank. If they had done something about the lack of transparency at the ECB as well as muzzle Mario Draghi from spending 3 trillion euro’s, money they never had, the situation would not be this dire (as I personally see it). The fact that the Business Insider also reported: (at https://www.businessinsider.com.au/europe-economic-gdp-growth-data-heading-to-recession-2019-1) “Junk bonds went through the roof. Total issuance of junk bonds from non-financial companies (rated BBB) went parabolic, according to Bank of America Merrill Lynch, as more highly rated bonds declined“, it is directly linked to the problem, that market went up by €100,000,000,000 in the last year alone, so this time if there is another meltdown (like 2008) and it happens, Europe will not see the fallout as it happened in Wall Street. No, this time around Europe will be the cause of it all to a much larger extent, so the impact on Europe will be beyond disastrous. Whatever quality of life there is, the Europeans can kiss it goodbye for decades. They could quite likely desire the time of harsh austerity, how is that on forecasting quality of life?

In combination

The EU is in a bad place and it has been reflecting all over the place. You see, last November we were treated to: ‘CPPIB is shorting $750 million worth of EU stock, making it one of the most active short-sellers in Europe, data show‘, more important, it gets an added “Unusual in that Canada’s biggest pension plan also tends to hold ‘rather long-term’ positions“. It seems a perfectly valid place to be in, especially when we see that so far that pattern seems valid. We see the additional “the CPPIB has nearly doubled the number of its disclosed short positions since last year, to 23 from 14. That places CPPIB 14th on the list of the most active short sellers in Europe“, as stated before, I can see the presence, and in this case I cannot explain it (merely because I am not knowledgeable enough to do so). Now, as we see the recession hitting Italy, followed by France soon enough, we might see the reflection on how the gains for the CPPIB could be one of the most profitable ones they have ever had. Even as there is still a little doubt, the firm holding ‘$356.3 billion in assets’, might soon be growing to a half a trillion wealth management colossal. With the positions becoming winners as Talend SA, Wirecard and PostNL falling like a brick in free flight, we see that the CPPIB is lunging forwards through growth (for now).

When we see the impact markets where the fun of wealth comes through the investing towards the gloom of failure, there we see profits soar, profits for those selling short that is. This is not the end or the beginning of the end. As France is setting the stage to move directly into a recession we will see more and more short selling profiteers and as France stumbles, the eyes of all will focus on Greece. Even as we are given ‘Greece moves towards ending austerity with rise in minimum wage‘, it is hard to predict the outcome. It makes perfect sense to do this and when you realise it is significantly less than half of what an Australian would get over that same period. It makes us wonder how the Greeks had been able to keep themselves alive. I personally hope that the view of Alexis Tsipras works out the way he thinks it will, the case is viable, and will it work? Only time will tell at present. Yet it is also a dangerous place. That is seen with: “A glimmer of light emerged on Monday as borrowing costs on 10-year bonds dropped to a four–month low and Tsipras announced that the government would imminently be issuing a five-year bond“, we get the logic of essentially needing to borrow, but Greece is in a much too dangerous place and those bonds could backfire in a terrible way, I believe that the bond issuing was done too early, in a time when there is still too much to lose. In that I actually hope that I am wrong, yet my track record towards predicting these events have been too often on the nose and that worries me to no end.

In this Bloomberg view supports mine (at https://www.bloomberg.com/news/articles/2019-01-07/all-the-risks-besieging-europe-bonds-are-spilling-over-into-2019), the headline ‘All the Risks Besieging Europe Bonds Are Spilling Over Into 2019‘ gives that. Even as the view does not include Greece, the overall risk will be hitting all EU nations (as well as the UK). There are two parts to this, the first opposing me is the view “The risk of spillover from Italy is in our view overestimated,” by Arne Lohmann Rasmussen, head of fixed-income research at Danske Bank A/S. Both that as well as the positivity that he thinks that Spain brings is set on realism, the man is a professional, let’s not forget that. Yet on my side we see: “What happens in Italy is still likely to be felt in its Mediterranean peer, albeit not to the extent of the euro-area debt crisis earlier this decade” this is the Goldman view and I believe t is more accurate, more important the doubt and worrying nature of these investors will make them sketchy and shift happy on a few levels, so when Italy is hit, France will get a beating as will Greece and it will affect Spain too, depending on their economy optionally a lot less and there we get back to the academic non recession of Germany, that 0.1% in the plus, when that gets hit negatively it will escalate the Mediterranean issues by a lot more hitting Spain for certain and hitting the others harder. It is merely my view, yet I believe it to be the correct one. For how much is unknown, I have no idea and I am not willing to guess. We will see a lot more by the end of March. It is at that point where we see what the actual impact will be, at the point the people will decide to either enjoy a little sunshine or make sure that they can avoid the winter of their bank accounts, in Europe these options have become mutually exclusive, an impact that will hit tourism in Greece and Spain in more ways than one. At least the Greek prediction that their tourism will level off in 2019 is decently realistic, which opposes the view: ““2019 will be Greece’s year,” according to DER Touristik, the largest travel company in German-speaking countries” one that is wishful thinking at best.

 

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A case of Molasses

We have seen the news, we see the new news and we are all wondering what the impact will be. I am of course talking about Mario Draghi and his ECB minions. MarketWatch is the most recent one with ‘All eyes on Mario Draghi as investors look for ECB to acknowledge risks to Eurozone economy‘ (at https://www.marketwatch.com/story/all-eyes-on-mario-draghi-as-investors-look-for-ecb-to-acknowledge-risks-to-eurozone-economy-2019-01-23). There are more sources and the total amount of sources is likely to increase over the next 10 hours. We have all heard it before, all the dangers and the gloominess, so when we see “it’s time for European Central Bank President Mario Draghi to acknowledge growing risks to the Eurozone economic outlook” people might ignore it all, which is not a good thing this time around. You see, at this point the ECB is at minus €3 trillion, France is at minus €2.2 trillion, Germany is at minus €2 trillion, Italy is at minus €2.3 trillion, Spain is at minus €1.2 trillion and the UK is at minus £2.1 trillion. All that debt, most governments have no further degrees of freedom to work with. And the media is not properly informing the people, for them it is all business as usual and it is not.

These are merely the larger players and I am hoping that the UK can get out of the EU before this collapses, because the moment it does the EU member states are in a world of hurt and will remain to be in that stage for close to 5 generations. That is the impact of debt and most players are all in denial as they need to gravy train to provide for them a little longer. When we consider surplus and deficit of GDP the message does not get any better. When considering the larger economies, the Netherlands, Sweden and Germany are in a surplus, the Netherlands merely at 0.42%, yet the rest are all in deficit as bad as -4.54% (Spain), France, Italy and the UK are at minus 2.44% or worse, the image is that bad and the UK has options to turn it around as it leaves the EU, it will still take a lot of work and optionally 2 generations, which is still better than 5 generations, but it will be a hard fight, anyone in denial of that element is merely utterly stupid.

Even in the surplus, the Netherlands and Sweden who are in a good place will need to be extra careful and tighten every belt possible, because one bad event will turn surplus to deficit quite quickly. In addition, the Netherlands is relying on the Rotterdam harbours to keep on working as good as they have been and thanks to Germany being at +0.76% they end up having options for now, but the difference between +0.76% and minus 0.56% is merely two strikes away and there German trade union Ver.di. is not too much useful for now, and it is not merely them, the mess is growing in Germany. It is as I personally see it the impact of long term Austerity. So as we see: “Workers are seeking a minimum hourly wage of €20“, which is close to 36% better than in Australia (in general), we are treated to the impact of the cost of living and even as a lot think that their bosses have it way too good (not entirely a wrong thought), what was positive could turn into a long term negative part too easily and the national and ECB debts will take a massive toll to the quality of life soon enough. Oh, and when the German situation worsens, which is likely to happen by Q3 2019, there will be the impact on the Netherlands too. Even the minimal impact of 0.3% would move the Dutch economy to a nil point; at that point they are one move away from recession and the monster that feeds it.

That has been the clear danger for the longest of time and the entire disaster called the bond buying scheme by Mario Draghi will impact Europeans for a very long time. You see, the bonds that do mature in 2020 will be a non-deniable impact and when the ECB and those connected to it fail to push forward those bonds and payment is due, the entire mess will really look like ‘a shit on the front door’. Good luck trying to get anything done at that point. This is the biggest part in my view of the UK getting out of the EU as fast as possible and France is no longer limited to Marine Le Pen going for Frexit, now we get the Gilets Jaunes’ manifesto where Frexit is the top demand, they are all catching on that the EU is the limiting factor in all this and so far we have seen and in most cases proven that only large corporations truly benefit from the EU in all this, the rest is merely window dressing and people in general and to a much larger degree have had enough.

The issues I warned about in 2015 are not merely coming true; the overbearing danger of the UK delaying Brexit could still bite to a much larger degree, so it was always clear that the break needed to be fast and even a no-deal Brexit was better than delay. This is seen in a few ways, when the others follow (France, Italy and optionally Germany) these larger players will unite in trade deals really fast making them the growing players soon thereafter, the rest will suddenly feel the pinch of all the smaller players filling their pockets and now realising that debt has to be paid for, at that point we will see an infrastructure collapse on a scale so large that it will cause nightmares to a large part of the populations in the 27 member states. Do you think that banks and wealthy people will sit still? No, they will run to EVERY profit shore possible, even if that means collapsing on their national grounds. If you think that this will not happen, think again, I merely listed the larger players, but they are all financially stretched and when the EU starts breaking down, we will all learn that the ECB is a paper tiger and the debt will get shoved into whatever nation is still part of it, collapsing the financial infrastructures tout suit.

As Germany is in a positive state, their departure is not to be expected, but that feeling changes when the UK is gone and that will trigger the French financial revolution (aka Frexit) soon thereafter. So when these two are gone, the entire mess of comparison to a barge, I made that comparison in May 2013 when I stated: “Consider a large (really large) barge, that barge was kept in place by 4 strong anchors, namely UK, France, Germany and Italy. Yes, we to do know that most are in shabby state, yet, overall these nations are large, stable and democratic (that matters). They keep the Barge EU afloat in a stable place on the whimsy stormy sea called economy. If the UK walks away, then we have a new situation. None of the other nations have the size and strength of the anchor required and the EU now becomes a less stable place where the barge shifts. This will have consequences, but at present, the actual damage cannot be easily foreseen“, now that same barge is at risk of losing two if not more anchors, how much stability will remain? I can tell you right now that the impact will be huge and as the economies will take hit after hit; the wrong people will get to enrich themselves through the hardship of others, that is the consequence of a Wall Street state of mind too.

so when we see the entire political machine delaying and moving like molasses towards the undoing of infrastructure through inaction, we need to consider the damage that they are inflicting on the people and when they need to explain themselves on the news, how much consideration will you give the politician stating: ‘We thought that we were acting on the best interest of the people‘ as your quality of life goes into the basement for the next decade?

And still the people are getting lied to. From my personal point of view even the UN is involved at this point. That part is seen (at https://news.un.org/en/story/2019/01/1030902) where we are treated to ‘Global economy to see ‘steady’ growth of three per cent in 2019 despite risks, says UN’, the entire delusional statement, whilst we see the slowing in both Germany and France to a larger degree, Spain and Italy are already in the decline and whatever is gained is set against the debt of the largest four economies, that too impacts the economic growth as none of the nations has any financial options to create growth or set the stage for an increased infrastructure for years to come. So the 3% marker is what I personally would consider the delusional thought of a fictive inclined mind, even if whatever pressure would be applied to stop Brexit that predictive number is not realistic.

So when we see: “Among these looming dangers, accelerating trade tensions are already “having an impact” on global trade and employment, Mr. Harris told UN News. In addition, rising national debt is also crippling many countries’ ability to provide basic services, but this and other risks – such as those from climate change and waning support for international cooperation – could be avoided or minimized if countries worked together to do so, the UN’s top economist insisted. With mounting pressures in the areas of international trade, international development finance and tackling climate change, the report underscores that strengthening global cooperation is central to advancing sustainable development.

We see the delusion of United Nations Chief Economist Elliott Harris and his dangers of ‘accelerating trade tensions’, ‘rising national debt’ and ‘waning support for international cooperation’ are all set against ‘strengthening global cooperation’. So how is a person allowed to sit in the place he is? How can the additions and denial of massive factors are negated by the mere idea of ‘strengthening global cooperation’? The fact that the bulk of the EU nations cannot get their tax laws in order giving rise to properly tax the FAANG group and a few other players is evidence that the system is broken beyond believe and the entire mess of some magical +3% economy where the numbers deny the realistic notion of overwhelming nil status or actual recession makes the entire mess larger and I believe it is time to hold such reports up to scrutiny for prosecution of these elected officials who make more than 90% of the rest of a nation, there should be prosecution for those giving reports that are debatable to the largest of degrees. That will never happen of course, but in all this the media will give the fake positivism of 3% and in the end not hold these people to account after the fact.

The system is rigged to not leave the larger population with anything and that is soon becoming the actual driver to break the entire EU asunder. When that happens remember those who stated that the EU would become a better place and call them out in public, they will love that.

 

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