Tag Archives: Nederland

July 11, 2013 · 22:24

Boosting Pensions

Would you like to lose your pension? This is more than just a simple question. If you live anywhere in Europe, then the danger to your pension is a lot more realistic and will have a larger impact then you thought there would be.

Let’s take a look at a few countries.

Netherlands.
This was already under review, however, at present there are discussions going on to get a handle on accessing pensions for all kinds of reasons. The image in part is that the Dutch government needs this treasure vault to deal with more immediate issues as well as well as the application of spending to start an economy. As reported yesterday by the NOS, the issue at present is that the government thinks it is getting access to billions a year extra. The ABP comes to the conclusion that the changes will in the end cost billions, not save them. This comes as the government is presently trying to cut almost 3 billion Euro in retirement funding. The cut back was based on the fact that businesses and employees will save-up less per year, which might save 1000 euro, which would suit the government, as this gives them a taxation windfall of 2.3 billion. In the new system it is stated that not only do people lose the 1000 euro advantage, they will have to pay more. So there would be zero advantage, even worse, considering the amount of government jobs the treasury would be down a billion, so in the end no savings at all for the poor poor coffer, only additional losses to deal with. At a time when 6 billion in cut-backs are needed, this is not the bad news they want to hear. All this has a few more hooks. Especially when we consider the questions by Hachchi (D66) in regards pension premium raises that the ABP added in January 2012. The costs were raised by 300 million euro, as documented in 2012Z01310 (source: http://www.rijksoverheid.nl/bestanden/documenten-en-publicaties/kamerstukken/2012/03/06/antwoorden-inzake-de-verhoging-van-de-pensioenpremie-door-het-abp/antwoorden-inzake-de-verhoging-van-de-pensioenpremie-door-het-abp.pdf)

It is interesting that a similar issue is now appearing only one year later. There is more!

In one view we read that the ABP in 2010 was set at 105% coverage (which means that if 100% pension is paid out, 5% remains for growth). It is however interesting to read from the NRC (at: http://www.nrc.nl/nieuws/2011/12/01/abp-verhoogt-pensioenen-niet/) we read that in December 2011 the coverage was only 94%, so in one year they went down to some degree. The same can be read at http://www.pensioenbelangen.nl/label/abp/ , more interesting, the numbers state that per September 2012 is was only at 101%. So if we recall the blog I wrote a week ago “The Age of ‘no retirement left’ is coming“, it is interesting that in that case the government is stating so much wealth. As the ABP is considered to be the largest one, we should wonder whether the Dutch politicians have any clue on what they are doing. More important, is this about short sighted cutting avoidance, or is it about more. Do not worry, they are not alone, we will have some fun looking at the UK situation next.

Is there actual evidence to support my theories? Well, the sources above clearly show that the ABP is only marginally above 100%, yet they had remained below 98% for a decent amount of time, so there is a valid amount of concern. In addition, when we consider the questions as stated in

2012Z01310, then certain issues in the recovery measures of pensions were not known, yet the initial billing would have been there, so this again is a piece of evidence that reflects 11th hour budgeting. The fact that this was never completely properly addressed remains a worry and not a reflective concern considering that in part the same issues are now again in the news.

The issues are only part of the entire picture. The fact that the Dutch pension administrator PGGM, has stated that there are issues with Walmart, could have some serious repercussions. Reuters quotes that “PGGM held 2.76 million shares of Wal-Mart as of March 31” (at: http://finance.yahoo.com/news/dutch-pension-group-halts-wal-211416613.html) this was only last week. Should the PGGM pull out then there would be concerns on both isles of the Atlantic river. Those shares represent well over 200 million, which means that Wal-mart might get some renewed problems down the line. Whether this would be due to PGGM is not a given, the fact that questions from a shareholder holding almost 3 million shares are not answered is certainly matter for concern. If we consider the economic downturn the Dutch have faced over the last 2 years, considering the issues the IMF reported in 2011 on Dutch pension funds. In that time, people entering their retirement saw their funds cut and a support capital of 50 billion was needed. So when we read less than 2 years later that those finds are so rich and that they should be opened for additional means, whilst a week later we read on some of the alleged dangers, it seems to me that playing politics with pensions is a very bad and not too bright idea. The 2011 article can be found at http://www.europeanpensions.net/ep/imf-team-recommends-adjustments-to-dutch-second-pillar-system.php

United Kingdom.

So, let’s take a look at Australia’s baby brother UK (as UK is only 3% of the size of Australia). The UK is in dangers no less immediate. The Guardian reported last November that issues would impact greatest on savers and pensioners. Yet, the story behind several issues is not brought here. For that we should look at what is happening now. Part of that is set here as http://www.guardian.co.uk/sustainable-business/capital-markets-climate-change-pension-funds. Is that even a fair assessment? If we read the quote “The way pension funds invest will determine the future, which means that to thrive they’ll need to wake up to climate change” I will wonder whether this is wishful thinking of whichever politician or investor whispered to the author. When we looked at the Netherlands and other places, these nations are all looking at sustainability solutions. Yet at present the ROI of these options are not up to scrap, so WHY use pensions there. These are fields that have been ignored be several administrations. If it is SO lucrative, then why not invest in it yourself (me asking governments)? Yes, it will be the future, but at present too expensive, so getting articles out there for pension funds to invest in the future might read nice, but as ROI reports falter it will not hold a candle up to the coming rage. This view is shared by James Cameron, chairman of cleantech investor Climate Change Capital. I know that the next part sounds dodgy as hell, but when we consider the quote “Future pensioners are going to have to bear more of the investment risk themselves“. In that case Pension funds are much better of owning parts of Raytheon and Northrop-Grumman. It seems that governments all over the world are seemingly ready at the drop of any hat to buy missile technologies, and as such the ROI for pension funds are much better off going to those places. I agree that the statement is less appealing to read, but why should pensions now be put under more and more pressure whilst, those behind the scenes refused to budge when they should have done so. The investment risk reads like a joke considering the article published in May at http://www.guardian.co.uk/money/2013/may/22/one-five-poverty-line-state-pension where it states that 20% of those retiring this year will fall below the poverty line. This is in my mind the consequence of a housing issue never properly dealt with for over 27 years, whilst pensions were left alone. Taking both in the balance, then pensions might cover 80%-100% of the rent for this year, and those will come up short 2014 and later. So that is in the most positive case where people do not need to eat or drink ever. This is only for those not living in London, living there would almost amount to instant suicide. At least the Dutch can claim that their retirement issue had never been THAT bad. So, as there is a collective boost to raise the value of the RBS, that former bastion might be used to actually boost and increase value and strength of British pensions as they focus on getting back on the horse of profit (or at least try to get on that horse). Pensions are being cut in other ways too. That part can be read at: http://www.independent.co.uk/money/pensions/expats-call-for-fairer-pension-payouts-8659717.html. Some of these pensioners (almost 10%), saw the unaffordable future they saw coming their way and as such they moved to other areas. Some saw the light in time and bought a small place on Crete, some left for alternative Mediterranean locations and some went to the warmer regions of South Africa. These people saw the light, saw the non-linear growing costs and chose a better solution. It goes even further. What is less than possible in the UK becomes very affordable in India, where a week’s pension gets you a 2 bedroom secured apartment for a month, considering that rent is the most expensive part, three weeks of pension should keep a person well fed. So why not consider this? Instead of going on an exotic vacation, live in an exotic place, and of course, the Indians are all on average Cricket nut, so not the worst place to be during Cricket season. If these people are forced back because of pension issues, would the British government have the means to suddenly appoint housing to these people? They might not get an option in this as they froze pensions. In that regard, I do hope that the Exchequer George Osborne considered the consequence of even part of those 1.2 million pensioners returning to England and his 2 billion pound winter fuel allowance. That is only one post. On the other side, there is a genuine and acceptable concern of the people who are abusing that system. There had been earlier mention of the situation where UK men marrying Thai brides is a reason for the foreign pensions increase. If we voice the scenario where a pensioner marries a woman under 25 and she then gets the allowance after he is gone, then this would indeed be an unfair use of the system. We could argue that a marriage, not validated in the UK would not be seen as a marriage (I know, the legal nightmare behind this is so not nice). However, that those who never added to the British system, not being eligible for those funds would be slightly better phrased, yet the consequences for consulates to keep track of these people would be almost disastrous. Even though this would be spread over several countries, the fact that they could be required to deal with over 700,000 additional requests a year, is not likely to become a ‘relief’ to the system. Yet I must agree that something must be done. The dangers of cutting the transferred pension, if there was a marriage, could mean that these people might have a claim on humanitarian grounds to receive full Visa and transfers into the UK, which in the end might add up to be a lot more expensive. The only solution could be legislative, yet which of the ‘evils’ to choose from is not really for now. In my mind the options grows to make the pension only transferable if the marriage was longer then a certain period (5 years) or the spouse must have been a UK resident or lived, worked and paid taxes in the UK for no less than 10 years. I am just grasping the 5 years out of thin air, yet this would limit the dangers of UK pension abuse, it would also give a clear message to the valid pensioners that THEY are protected, yet that there are limits on passing over a basic state pension. In regards to those who are valid recipients of the basic state pension and their foreign setbacks there is more information at http://pensionjustice.org/.

Germany.

We should consider the German system, even though it is thought to be strong, secure and to some extent safe. They share the dangers those in the UK currently have. As reported by The Spiegel at http://www.spiegel.de/international/germany/germans-fear-poverty-in-retirement-even-after-life-of-work-a-855352.html, even though their economy is in a strong state, the lost investments, the futures of retirement are almost none existing. In fact, their pensions are a lot worse of then the UK ones. A person there would end up getting a mere 32% of their income. If we consider the Dutch system where 70% does not even foot the bill, the desperation of 32% is a lot less appealing. The question becomes important when we consider the required pension buffers these pension funds need to have. The interesting addition is that a report in 2012 from the labour ministry stated that “the Labour Ministry itself, which indicates about a third of current full-time employees could end up receiving social welfare unless the pension system is changed. Those who have spent 35 years working full time but earn less than 2,500 euros a month would also end up depending on welfare.”

So this is the third country playing politics for non-visible short gain and massive shortages in the long term. This gives serious concern for the bill the Germans adopted that as of January 2013 “for a reduction in the statutory pension contribution rates”. And that helps your citizens…..how?

So this is not just a national issue, this is a European issue on several levels. Unless some strong actions are taken, a large part of Europe will enter living conditions worse than that of several 3^rd world countries, whilst comfortable living would be found for those moving to places like India and Argentina.

Go figure!

About that house you wanted!

It seems the Dutch are ready to take on the advice the Wijfels commission is giving. Even though not direct, it will end up that you have to pay 20% cash up front for any house or apartment you desire. And indeed, there was the subtle ‘line’ that if you do not have that kind of cash, you should address your pension funds. Interesting on how they are willing to open up pension funds to fund that.

Am I against it? There are two sides to this. On the one hand investing into your own future is perfectly sane. If only there was some level of certainty. You see, the fact that banks leave its taxpayers with their risky investments is one thing, the issue on your house is another.

How does this differ? Actually, it should not. A good house is a good house. However, consider some of the housing. How these houses are currently so much over any normal affordable income. It is nice to see a newscast in comparison with Germany; however, when we look at the quality and square meter price, then these prices are far from average. Of course, when seeking apartments in places like Munich, then yes, the prices might seem comparable. Yet, where we see average Munich prices, that is pretty an average price for living anywhere in the Netherlands. I agree that it is not fair that those factors are accountable to the banks, yet, they were at the centre of events when the prices were artificially pushed upwards.

As they sold mortgages no one cared too much about prices as the interest was tax deductable. When that 7%-9% is no longer part of tax deductibility, then we have a situation where the consumer now pays for it all. Add to that coming up with 20% (in due time) and someone slyly mentions the need to access ones retirement funds, we see another political play to get pensions into the banking equation. There is supporting evidence from all kind of sources. An interesting read was how on average house prices went down in US/UK and other places by well over 20%, whilst in the Netherlands the prices lowered less than 8%. It is unfair to just name one factor, as several economic factors had been in place in other nations too. The US crash never hit the European sides that hard, Europe might still fighting the backwash from those days, but on average Europe never had too much of the hardship the US faced. Another reason is the fact that the Netherlands is pretty much ‘full’. Whilst many nations have plenty of housing space outside of the great cities, the Netherlands has become a connection of large cities, with next to nothing to separate them.

Still this play as such to push people towards their retirement finds is slightly less than acceptable. There is however the other side that must be highlighted too. According to Ernst & Young, between 1996 and 2012, the outstanding mortgage has gone from 138 to 650 billion Euros, That means that outstanding mortgages currently have risen half a trillion Euro’s in just 15 years. Some might think that this is not a lot, yet, consider that that the Dutch population is under 17 million, which seems like the banks remain dealing with 100% of unpaid mortgages. If these numbers are correct, then it bears reason that these numbers should be looked at. Is that actually true? You see, feeling it is wrong, and knowing it is wrong (even with supporting evidence) seems nice from the writers point of view, however what about the reader?

There we get the issue that gives us the crux. When comparing apartments in the Netherlands and comparing them To Sweden and Germany, I noticed something. I lived in two of these locations, so I know what to look for. I compared the Dutch http://www.huizenzoeker.nl, Swedish http://www.bovision.se and German http://en.immostreet.com/germany. When comparing an apartment in Rotterdam and Kista (outskirts of Stockholm) we see a comparable raise of prices, yet overall we get a lot more apartment in Stockholm then in Rotterdam, for comparable prices (30%-40% more living space). This comparison takes an astute dive when we look at Germany, especially Bavaria; where all over the place we can buy 5 bedroom villa’s for a lot less than a two bedroom crinkly monkey apartment in Rotterdam. As such we get a first inkling; if we need 40K to buy a 5-bedroom villa is one thing, needing the same for a 2-bedroom apartment becomes a whole other matter. Interesting how this was not mentioned.

So why so much issues about the mortgage changes? We see a political engine too eagerly bowing to the needs of banks, bowing to a group that has visibly forsaken a population, a group that have left many billions in debts and we still bow to their ‘needs’? Now with the additional need to open up retirement finances that had remained relatively safe until now.

Yet, with the massive outstanding mortgages, what is left?
In addition, knowing that level of outstanding debts, are their demands out of proportions? That question becomes a whole lot more interesting when we consider the following from Bloomberg (source: http://www.bloomberg.com/news/2013-04-23/dutch-mortgage-bond-market-threatened-by-capital-rules-dsa-says.html).

This part throws a whole new hole in these issues. Banks are pushed to outside influences, and even though the government pretend to be fighting the good fight to protect this market, it is interesting that this part was not that visible on the news. It might be that the Wijfels report shows this, but I have not read it, so I cannot tell.

My issue is now with this part of the Bloomberg article “Dutch banks are the second-largest issuers of RMBS in Europe, relying on sales of the securities to help fill a 452 billion-euro funding gap between deposits and loans, Dutch central bank data show.” Excuse me?

Looking at some quick 2011 population numbers:
Germany 81.8 million , France 65.43 million, United Kingdom 62.74 million, Netherlands 16.69 million.

EXCUSE ME?

How (or better why) exactly are the Dutch banks the second largest in Residential mortgage-backed securities (RMBS)? Even if 100% of the Dutch population is now under mortgage (which is statistically impossible), those numbers are showing an enormous gap. What are we not told? Even if we consider the 25% difference in mortgage funding there are a few questions that should be asked out there. What have the banks been up to, and exactly what questions are not being asked, or better, what part are people and perhaps even politicians not getting information on? Half a trillion Euro funding gap reads like that there is a deficit of half a trillion Euro. That could never be covered by 6 billion in cut backs. Before you think that this has nothing to do with governments then think again, if that shortage is not addressed then that money will have to come from somewhere else. What are the odds that this needs to come from taxation in one way or another next? More important is the news that people saw over the last year. What buffers do banks have, and if so, how come the Bloomberg (a respectable bringer of news) information was not part of the newscast?

Is this an orchestrate play? It seems to me that a clear yes is in play, however, there are sides to this that do not make sense and they are outside of government controlled sources, sources that currently seemed to remain largely unmentioned. To me it seems that both banks and politicians might need to publicly answer some questions in regards to some of these issues and it would be nice that this is done before banks are given any more leeway or options to shift certain finance issues around.

Repeating lack of retirement insight

We have seen many plays in the past and present, where some are so short sighted on getting their own margins set, that they seem to be in short supply of common sense. Where is this coming from?

I remember issues evolving in 1997 that politicians did not heed the words of people in the know when it comes to the issues of retirement. It was stated within the corridors of those who work there that the retirement funds were not getting enough money to build the buffers needed for that generation to enter retirement. Those words were ignored by those who could do something about that.

It was not until the Dutch Central Bureau of Statistics warned of the upcoming dangers of shortages in retirement funds a year later. (Source: http://www.cbs.nl/nl-NL/menu/themas/arbeid-sociale-zekerheid/publicaties/artikelen/archief/1998/1998-0129-wm1.htm ) This specific article warns the reader that the amount of people going into retirement up to 2015 will drastically increase as this will be the time frame where the baby boomers will go into retirement. Other documents gave the same warning. There was even additional warning that the group that follows was a lot smaller, as such the then current non-retiring population would not be growing the retirement funds to the degree it needs to grow. The consequence would be that the funds would grow dry really fast.

In addition, this was all before the crashes of 2004, so the reality was even grimmer then most thought it to be. That reality became truth as the retirement funds started to pay less in 2011. Whatever the reason that got voiced by those involved, in the end it was about an increasing lack of retirement buffers. Now, today (OK, yesterday), advertisements by groups like the FNV (Dutch Union of workers) is warning people about the dangers to retirements. Why?

Political parties are now in the mindset to lower retirement payments by people. They are hoping that fewer costs mean more income into the streets. Also, as retirement payments are not taxable, lowering the tax deductibility will result in more taxation entering the coffers of government. So, there is now a clear impression that certain people in government are really willing to betray those who need retirement later on and base that risk on the ‘I need to look good now’ option.

Am I exaggerating? Is it about their view, their look? That is a fair question, yet messing around with long term pension building, not just the basic fear that people might end up with no more than 55% of their retirement funds is a dangerous act. This is not even taking into consideration dangers of additional future bank and investment failings where the buffers are currently still way too small and too much danger is placed upon funds that needs to feed a generation is just short sighted and completely unwarranted and therefor unacceptable.

What is the opposite side? Well, if we pay a little too much now, then we do get into a field where pensions will be a true safety net, especially in ages where all costs keep on rising and rising. The AOW (Government paid pensions) will remain a true safety net and could be a future foundation of safety. All that should not now or ever be endangered by unproven and assumed options for revitalising the economy. This looks like an upcoming excuse where the statistics of a better economy in 2014 (a claim that is nowhere near any level of certainty) should not be fed with long term securities. I personally see that any politician signing of on this one is to be held liable. There is the crux; they will not care as it is all about the now! Can we allow politicians to remain in office as they overspend for such a long time, not being able to balance their accounts and now are willing to endanger the next generation?

This is not just about the Dutch system. We should investigate these issues as they are likely to emerge in the UK, Canada, Australia, France, Italy and other nations. These nations are all in a state of deficit and as such, politicians in those nations would also seek a way to look good. Playing poker with the retirement funds of a next generation is an unacceptable gamble which should publicly be stated as null and void.

It is very tempting for the young, restless and party generation to not care about those issues now, but those who are not in a field where they are assured of long above average paying employment will soon thereafter learn the hard way that they are looking towards working another 15 years just to make the bare minimum.

If a politician has one clear responsibility, then it is not about getting by now, but to create safety, stability and security for the future. We are used to the short-sightedness of ‘Excel managers’ managing the needs to their next commission with a lack of long term vision, we should not allow politicians to do the same to the future of so many.

Fraud, deception or Ignorance in IT Safety?

Fraud, deception or Ignorance in IT Safety?
Again it was the Dutch NOS last night that gave me the idea of reflection on today’s blog. Their newscast and articles on NOS.nl is all about cybercrime. The news was that last year (October 2012), cyber criminals using the botnet Citadel was able to acquire over 750 GB of data. The data is coming from computers involving the Energy industry, Media corporations, Hospitals, Universities and airlines. The data seems to have gone to eastern European cyber criminals. Over 150.000 computers infected in the Netherlands alone.
Watching it, you could see login details, passwords, network layouts, detailed notes from a doctor and the medication prescribed. The amount of information was staggering! I looked a little further into this botnet. Its name is Citadel. It seems to be an ingenious piece of work. This is something the NSA, GCHQ or the FSB and several other Boy Scout units of a governmental type. When looking at the info, there was an implied strength that it could go passed and ignores many anti-virus systems. When looking at my own provider, there was an interesting lack of information regarding this botnet.
So we are looking at a three edged sword.
Are anti-viral protectors committing fraud? When looking at a Norton protection plan, and I see the green ‘Secure’ sign. Am I really secured? Tracy Kitten from Bankinfo security wrote: “Segura notes that hackers claim PCs relying on anti-virus solutions from Microsoft Security Essentials, McAfee, and Norton were infected. ‘That’s kind of worrisome,’ he says. ” So, am I paying for security I am not receiving?
It seems that this secure statement is also a case of deception. My Norton anti-virus states a secure setting, yet, citadel was initially designed to collect bank information for cyber criminals. From the two facts earlier, I must also conclude that the banks have been insincere to me on more than one occasion (big surprise I know). They claim safety and security, whilst 150.000 computers in the Netherlands seem to prove the opposite. Especially considering that banks have been trimming down on staff because much more goes on-line, yet there is no clear information that the cyber divisions of the financial industry is making any kind of strong progress. The BBC stated on Oct 10, 2012, that GBP 341 million was acquired through card fraud in 2011. The events involving Citadel imply that the losses in 2011 are not likely to go down any day soon.
Last is about Ignorance. That would be you the reader and me. These anti-viral dealers leave us with a false sense of security while we are charged $70-$100 a year, whilst it lowers intrusions, but not remove the threat. I must confess that we are all likely a lot safer with then without anti-viral protection. So stopping anti-virus protection is the worst of ideas.
I feel slightly safer as I have always refused any kind of on-line banking option. From the 90’s I knew that their X-25 protocols had several weak spots, which is now getting me to the last part of this.
If Windows is so weak, volatile and easily transgressed upon, then the dozens of security updates seem little more than a smoke screen. I reckon a lot of us should seriously consider moving to another system like Linux. Linux has proven to be a very secure system. We used to consider Apple to be very secure as it was a Unix based system, which has all matters of security or a much higher level than Windows ever had. However, that it is now an INTEL based system with Microsoft attachments makes me wonder if it remained that secure.
What is my issue with this all is that Yesterday’s news on Citadel was known with the Dutch cyber security for months, and little was done, the newscast even mentioned that many had not been alerted to this danger. I reckon that IF there is truth on transgression on ‘secured’ systems, we need to consider the dangers of connected networks. This likely endangered the infrastructure, and it definitely endangered personal information of millions. With that state of mind, how should we see the security of corporate and personal systems in the UK, US and Australia?
Consider that the implied ignoring of Cyber security is mentioned (but unproven as far as the validity of sources go). Yet, when I seek places like Norton, I get no answer (connection was reset). If we can believe people like Tracy Kitten then the financial sector that relies on massive internet presence, we are in serious trouble. On the other side is the opinion showing on the NOS site by Professor Michel van Eeten from the TU Delft. It is not really created to a directed attack. He compared it to a buck shot into the internet. It was designed to acquire login, passwords and bank details.
My issue is the fact that 150.000 systems were infected! The one flaw in the NOS newscast is the absence of the cyber safety factor. Whether Common Cyber Security was used by those infected. If so, then why are these questions not openly directed at the makers of Norton Anti-Virus, McAfee, Kaspersky and a league of other Cyber Safety providers?

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Filed under IT

Tagged as Banks, botnet, Citadel, cyber security, hacking, Kaspersky, Microsoft, Nederland, Norton, NOS, UNIX

February 2, 2013 · 22:05

The future of greed.

Today another example of failing greed has become apparent. The Dutch SNS bank has been nationalised to avoid a large bank from going bankrupt and delivering millions into utter despair. It had been some time in the workings, and to be honest, they had been trying to find new investors, new finances and solutions. This solution is not what the bank wanted and not what the governments wanted, but they told us that they had no choice. There was an interested party; however they would only want to buy the bank, and not the bad sides. So they were willing to buy the cream and dump the milk.

The consequence would have been sizeable. Now the bill is close to 5 billion Euro, making the bill 220 Euro per citizen. In addition the not profit making real estate branch is placed into a bad bank that side had to be guaranteed by the government for an additional 5 billion Euro (Source: NOS). The people with investments like bonds and shares lose it all, they lost all investments. This is a unique event. I can definitely agree with the Finance minister stating that it is ridiculous that a good investment makes money, whilst a bad investment is still covered. To me this is like gambling with 0 risk. The Dutch Finance minister stated that the financial industry must accept ad deal with its own losses. Those losses are set to a total of almost 1.25 billion Euro. We can all agree that this invoice adds up to a massive amount of money. These issues do have one emerging issue. As this has never happened before, it might end up in lengthy trials, tribulations and litigations.

There is an historical side to this. This bank was founded in the early 30’s. It was a simple labourer’s bank for savings and mortgages. It was all working fine. When the bank goes public in 2006, things change fast. Through this step they obtain 1.5 billion Euro in funds. They enter a field of high risk property investments. After the 2008 crash they get an injection of an amount approaching 750 million Euro. So we are looking at a bank, who was allowed to proceed to play Las Vegas style Craps with billions and they are now a non-party. A small group of people had thrown it all away in a little over 5 years. They wasted over a billion a year and no one with authority, insight or even common sense stopped any of this. And this is just one bank! (Source of most of these numbers: NOS).

The question becomes was this bank fattened as a pig, to be handed as a roast? After an era of bad banking, of inflated accreditation and as we saw the plunge of 2008 all over the US and other places, why were these dangerous environments not handled by the respective local governments? To give an additional view, the Dutch government had deposited 34 billion into Dutch banks nationalizing those 3 banks. 11 billion has been recovered (as in paid back), yet 23 billion is still to be recovered. So this is over 1000 Euro per citizen. This is not including the bad bank side which has billions in bad property choices (read investments). This part has places all over Europe that no one seems to want to buy. I wrote about this earlier. Those exclusive places that only 0.1% could afford, and those people do not want to be close to one another.

The issues of SNS Reaal were described as a stacking of blunders and mismanagement. This is not the first but the third bank that had to be saved using taxpayers money. This should lead to overwhelming questions as to WHY there is such reluctance to keep a better watch on this group of people. The UK has its own demons on this field, the Lloyd banking group to name but one.

The Huffington Post UK Charlie Thomas wrote: “The chairmen of five of the high street’s biggest banks today appealed to their industry to accept their wrongdoing and continue work to rebuild a sense of trust with the public.”
That does not even sound funny. That thought has two massive issues.

1. The issue at hand is more then not distorted, and there is NO clear message at all where the mistake were made, what corrections are made and how it will be prevented in future. That entire operation is a story of unclear messages. There seems to be no clear person to hold accountable (not as in blaming, but as in cleaning it up). Charlie Thomas also quoted Sir Philip Hampton, chairman of the Royal Bank of Scotland group, quoting: “At the core of our bank, there’s never been anything wrong with it – we did lots of stupid things, but once we’ve rectified those silly things we’ll be in a good position.”
Well from that point Sir Thomas I would like to point out that these bungles are too often greed driven and as such a no-one-to-blame policy sounds very grown up, yet the driving spears of those star chambers remain untouchable and oversight is in my humble opinion one of the few remaining options.

2. Over the last few years these banks, namely the banks in the EEC messed up (or let’s just call it plainly mismanaged) for an amount of many billions of dollars. How long can we allow for back-door dealings between governments and banks? How long until these levels of mismanagement are translated into complete confiscation of goods and owning from those in charge and then if debt remains added long term prison sentences? The UK used to hang people for highway robbery. Those of lesser crimes, like stealing bread, would find themselves on a paid holiday trip to penitential Australia (now a major Commonwealth nation far from the UK). So what are these banks doing? Should it be seen as nothing less than highway robbery, or was it a massive heist? The simple heist of all bread from all the people?

Now, I will admit, that at present, I seem to be no better than others. However, this is only part 1. In my next blog, in part 2 of this blog, I will look at possible solutions. What can we do? I would especially like to look at the options, currently within the bad bank called the Property ranch of the SNS Bank. What could be done to limit the damage?

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Tagged as Banks, Nationalisation, Nederland, NOS, SNS, SNS Real