Tag Archives: Netherlands

Watership Drown for Mr Smith

There is no denying it. If you are in the UK, you are likely drenched, flooded or drowning. It is the worst hardship that any person could ever face. Even though such a situation unheard of in Australia, I grew up in the Netherlands and as such, rainy conditions are not unknown to the Dutch, the flooding they are facing however has not been seen to THAT degree ever. Yes, if you were living by the Maas, there some have had their skirmishes with floods; also the Australians have had their own versions of ‘enlarged’ swimming pools. The flood that has hit Somerset is however one of the few moments where ‘biblical’ is the only word that covers the hardship these people face.

It goes beyond Somerset, as per tonight, anyone who is living around the Themes is likely to be in dire need for higher ground. I agree with certain people when they state that this is not the time for the blame game. (at http://www.theguardian.com/environment/2014/feb/10/uk-floods-cameron-ministers-flooding). I myself do not have any intentions to blame Lord Smith of Finsbury at present. I saw how people seem to blame him for this, but why?

Dredging? The news that hit the Daily Mail less than 12 hours ago (at http://www.dailymail.co.uk/news/article-2555667/Environment-Agency-bosses-spent-2-4million-PR-refused-1-7million-dredging-key-Somerset-rivers-stopped-flooding.html), which shows us how their story is not a useful example.

No matter how correct their numbers are. You see, numbers do not lie; the writer who uses these numbers like in the quote “but refused £1.7million dredging of key Somerset rivers that could have stopped flooding” is at the very centre of the entire deception.

No amount of dredging would have saved Somerset, whatever experts will tell you in cautious words, the issue is not just the rain, but the amount of days that the rain continued. The soil is saturated for many hundreds of square miles. You see, rivers do help getting water away, but the soil soaks up most of the water. Consider a simple experiment. You take two buckets, one filled with dry dirt, one empty. You add 2 gallons of water to both, put a lid with a few small holes on both and after 15 minutes you empty the bucket again through the holes into the 2 gallon measure. You will see that the bucket without soil returns 99.322% (roughly), the other one will yield less than 60%. This is what Somerset and others face. Water that has nowhere to go, it remains afloat upon the land. I watched as an old lady on sky news proclaimed that she had never seen anything like this in her 43 years living in that area. That should be a first indication that England is not facing anything they have faced before. Weeks of rain and more rain to come for at least 2 weeks (as presently indicated), dredging would not have had the smallest of influence, there is too much water to deal with.

Additional consideration was the image they placed (at http://i.dailymail.co.uk/i/pix/2014/02/10/article-2555667-1B5A5F2E00000578-651_634x446.jpg), take the small blue lines as the rivers and consider the red areas as flooded. Now consider that all the red area water is at least 3 inches, which would make it billions of gallons. How are rivers to deal with that? Dredging would not have made a difference at all. Now, important is that I am not against dredging, but in this case it would not have been the solution people claim it to be.

In support we can see the following at the Guardian (at http://www.theguardian.com/environment/2014/feb/10/uk-floods-cameron-ministers-flooding), where the following was stated by former environment minister Richard Benyon “A lot of people are becoming very fed up with the way in which this debate is being reduced to a binary choice about whether rivers should be dredged or not. I have to point out floods are caused by rain not silt“, the additional fact that we can find in that story is that the Brits haven’t seen these amounts of rain since 1760. Consider that most of the affected areas had been uninhabited in those days strengthens that this event to this degree is a first.

The second misuse of ‘facts’ by the Daily Mail is “The Environment Agency spent £2.4million on PR activities“. The Environment Agency is not there just for floods. On their website they state “regulation of major industry, flood and coastal risk management, water quality and resources, waste regulation, climate change, fisheries, contaminated land, conservation and ecology, navigation“, so basically it is a big bucket of events that is covered. Keeping track of pollution is a big one as many (not at present) can agree to.

Looking through the articles, there is an interesting one by Colin Thorne from Nottingham University (at http://www.theguardian.com/commentisfree/2014/feb/10/britain-floods-chief-scientist-sewage-coastal-defences). It shows that not only is the UK facing hardship, it will soon be facing a really hard choice on how to deal with these events. Sir David King had mentioned the need for radical change a decade ago. The quote “Sustainable flood management actually involves a lot less flood management and a lot more managed flooding” might give an indication on how drastically the changes need to be. If we use the Netherlands as an example, the UK will soon face the discussion on spending. This is because in the Netherlands managing too much water has been a massive part of its national budget for over half a century. Take a look at the map of the Netherlands, and consider that the lowest dry spot in the Netherlands is 7 meters BELOW sea level! Let’s not forget that the Netherlands did not get to this point easily or free of hurt. The fight against the sea began in all earnest after the storm of Sunday February 1st 1953, which killed almost 1800 people. This storm changed the face of the Netherlands in more than one way. Such a project is not feasible in the UK, but we will see some projects start, which will start debates on many levels. As people realise that the future in Somerset could start to revolve around managed flooding, we will see new levels of anger. It is only natural that this happens. We are not talking about flooding residential areas, but consider that areas, surrounded by dikes doubling as roads will create places where all the water can go to, who owns these lands? More important, what happens when it is not enough? They are all valid questions and the least favourite part of this will decide on some of the choices, because all of it will cost money and it will take loads of money to get something done decently. In addition, the land lost will impact on land prices and land value. So when Sir David King spoke about hard choices he was not kidding and I wonder if people realise just how hard these changes could be.

The final thought I leave you with is this. ‘This had not happened to this degree for a little over 250 years!‘ How unsafe do the people feel there and how far will the government go to take a stand against what has happened? Lord Smith of Finsbury stated a good point when he mentioned the 5000 houses that did get hit and the 1.1 million houses that remained safe. It is a good point and we need to focus on that part before the parties in the UK start pushing out ‘wild’ programs on visibility against floods.

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Frack off?

Fracking, it has been a large issue in the Netherlands, now it is starting to get grounds on several levels in the UK. Some of the shown issues can be found at http://news.sky.com/story/1194087/fracking-cameron-offers-councils-drill-money. The first paragraph gives us two of several issues connected to this, as is stated “David Cameron has announced £1.7m for councils which agree to drill for shale gas sparking angry protests from campaigners who say it amounts to little more than bribery.

The issue is whether the environmental issues are dealt with. The incentive is a powerful one, and the complication is that this is now business against the future, not the consequences set against the present.

Why am I stating this?

One part of that evidence is coming from the Netherlands. The NOS stated “De gaswinning in Groningen leidde dit jaar tot een recordaantal aardbevingen.Gemiddeld twee keer per week: in totaal 127 keer. ” [Translated: the gathering of shale gas through fracking has led to a record amount of earthquakes. At present they are hit with two earthquakes a week, a total of 127 quakes]. The fracking as it is happening under direction of the Dutch NAM is having serious consequences. The quakes have been as high as a 3.7 on the Richter scale. The political field is still all open on finding some way to make this all continue in the Netherlands, which amounts to a strong devaluation of a unique architectural form in the Netherlands. In addition, on November 1st 2013 the following was also quoted by the NOS. “de Nederlandse aardoliemaatschappij NAM zo’n 900 miljoen euro voor compensatie moeten uittrekken.” [Translated: the NAM would have to pay 900 million euro in compensations, dealing with these damages].

[Addition] One reader had issues with the translation as mentioned earlier. In the literal sense, the commenter was correct, yet the information the commenter had not been aware of was (at http://www.nam.nl/nl/technology-and-innovation/optimization-natural-gas/fracking.html). There is however another issue I add to this (25th January 2014). The quoteDe techniek wordt al sinds de jaren ’50 regelmatig en succesvol toegepast in Nederland.” [Translated: The technique has been used regularly and succesfully since the 50’s.] The latter part is important for two reasons. First is that fracking had been used a lot longer and in addition, when I grew up there were no earthquakes in the Netherlands (at least none that I was aware of). So what other factors are part of the escalations in the Netherlands? Just more drilling?

Has David Cameron (and his advisers) taken these costs into account? Let’s not forget that Groningen is one of the lesser populated counties in the Netherlands. We are talking about a county with just over 510,000 people, compared to the national population of almost 17 million. Consider these numbers when fracking will commence all over Britain, especially in the southern parts the UK.

Now, the UK does not have the soft ground that is found in the Netherlands, yet the dangers will not be any less. When we look at the quote that Sky News gave us in the earlier mentioned article “The Government estimates the industry could attract £3.7bn a year in investment and support 74,000 jobs.” ‘Could’ is not a given, neither is the damage that the Netherlands are currently facing. I do however wonder about the short sighted look on 3.7 billion, when the UK is dealing with a 1 trillion debt. Now, as I mention this, you will think that this is all a good thing to have something that lowers the total debt and I would agree. However, consider the next quote, also from Sky News “A Local Government Association spokesman said: ‘Given the significant tax breaks being proposed to drive forward the development of shale gas and the impact drilling will have on local communities, these areas should not be short-changed by fracking schemes.’

So, these companies get even more tax breaks? Remember the old days? A company was visionary and had a good idea. There was no tax break and the tax paying people did not have to pay for their short-sightedness, once it reared its ugly head. Now, the topic of ‘tax break’ seems to be the introduction to any investment conversation. It is better than gambling as it is legally permitted. If it goes wrong they have no worry as no taxes are due, if they win they avoid massive taxation, a slightly rigged game, so to speak.

There are additional issues. Some of the environmentalists talk about the contamination of ground water as well as depletion of fresh water. It is hard to comment on those two claims as I am no expert on it. In one part, groundwater contamination could be avoided if it is properly investigated, yet the 1.7 million pound handout as mentioned in the very beginning could be cause to less vigorous investigation. If so, when the cost of living goes up for those drinking bottled water from 70 pence to lets say 125 pence per 1,5 liter, the issue will then become a colossal one, at which time it will be too late to do anything about it.

In the end, we must acknowledge that these risks have not been proven and as such the calamities the Netherlands are currently facing in Groningen should be investigated in regards to the risks that could exist for the UK. The latest statement by David Cameron “David Cameron said the Government was ‘going all out for shale’” does not qualify as evidence in either direction, but the economic state as it is faced by both Cameron and Osborne implies that they do not seem to be moving in a cautious direction.

The next quote to look at is “Mr Cameron’s announcement comes as the French energy giant Total has announced it will invest millions with a 40% interest in two shale gas exploration licences in the UK.” It is interesting how much France would like to get into this field in the UK, yet they suspended three gas exploration permits in France (exploration is just looking, not active drilling on a production level). There is something to be said for the expression not soiling one’s own bed. Other reports states that fracking would be at the centre of all kinds of water pollution issues. I reckon that being on an island, hazarding once water supply is just not advisable.

If we look at the BBC news (at http://www.bbc.co.uk/news/uk-politics-25705550) we see the final quote. “Councils that back fracking will get to keep more money in tax revenue“. Sky News mentioned the same thing, yet when we look at the tax breaks offered and the possible damages that someone has to pay for, in the end, how much of all that diminished cash will end up in the coffers of the British Empire?

There are loads of considerations and I have strong feelings that only the spread sheet boys have looked at this picture. I wonder how much positivity remains once the fixers, engineers and water boys have taken a deep look at the consequences of this entire endeavour.

Fracking is bad and sees to have dangerous very long term consequences. There is no doubt that there are a few places in the UK where this could be done without harmful consequence. Yet, the French view (pre French super debt date) has been cautious as they have a lot to lose. That cautious approach should have been taken for the Netherlands and the UK should follow along that same path. The realist in me also knows that under these heavy economic pressured the environment will most likely lose, it remains doubtful whether the population will ever get to see a clear and complete picture in regards to the cost of doing business in this regard and fracking could become the most expensive form of business we ever knew.

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What Syrian option is there?

It all started with the Tweet from Janet Royall, who is the current UK Labour leader in the House of Lords. The tweet was a link towards this article (at http://www.independent.co.uk/news/uk/politics/no-room-at-the-inn-britain-says-no-to-syrias-refugees-9025265.html).

I do not agree!

We know that something must be done, but this is not the solution. Which of the 10,000 would the UK help when the numbers of refugees are up there in the 2 million at this point! A solution must be found. Yes, I do agree that it always looks good when politicians are seen with those few people (especially children), when those people are truly happy to get out of harm’s way. It looks at times like the impoverished approach in getting votes (sorry for the cynicism).

The issue is a lot larger and a lot more drastic then many realise. At UNHCR (at http://data.unhcr.org/syrianrefugees/regional.php) we see that the number is well over 2.2 million, so when we see that the Netherlands was not about accepting refugees, but to send aid in all forms, then they would be right and the UK should do the same thing.

The massive dangers at present are Jordan with 569K refugees and Lebanon with 851K refugees. You see, they are now danger places as resources are dwindling down over there. If something is to be done, then it will be imperative that as soon as possible an additional 20 containers measuring 40′ filled with food and medication goes tho these two places EACH DAY! (Not sure how much is send at this time) In addition, Jordan has always had a water shortage to some degree and another 569 thousand thirsty throats (which is an additional 10% of the population) are not helping any. This for the simple reason because if you think that things are bad now, wait until the local population notices the drop in fresh water. Then gooses will be cooked on several borders. So as the independent is happily voicing Shadow Home secretary Yvette Cooper, they did mention in a blasé one-liner “Ministers say the UK is helping more than one million of the estimated 2.4 million refugees in what the UN views as the biggest emergency in its history.” But it was all about the Labour side (as I read it).

The Conservative’s way is exactly the approach that is needed from several nations and the UK is seeing financial support from the Netherlands. More funds will be needed!

So this is not just about where refugees go, but where can support and aid be given the best? To move these people to Europe is not really a solution (perhaps just a short term one). We heard the US talking tough, but at present they seem to remain in the distance in regards to achieving anything to resolve the situation. It must however be said that they did send aid which seems to be well over $100 million at present, so they are doing their bit in this instance, but as the big power, a solution should have been found ending this bloody civil war a long time ago, which is not the case.

This is not the fault of the US, because Russia is part of this entire caper and as such, Russia has been less than forthcoming in any solution. I do not think any refugees made it to Russia to begin with (not the best climate to go to either).

Even the Israeli’s have been sending aid, support and medical assistance!

No matter how we turn the dice, a choice must be made, one that other nations can consider, or even accept. So what could we do? No matter what solution we choose, it should include moving people away from both Lebanon and Jordan before this all escalates further and we end up with not one, but three countries that will be in dire need of aid and support. My first choice would be Egypt, this because there is so much space beyond Cairo and Alexandria. If these refugees can start building something for themselves in the meantime, like farms and work them, they will have means and perhaps even options for a future. There are even optional possibilities when we see part of the Sinai desert, especially when we consider how Sharm-El-Sheik has grown into a tourist haven, perhaps it can grow into something more?

Perhaps that will not work, it might just be a real bad idea I am having, but in my mind, moving a population of this magnitude will not work, splitting them up over nations might seem like a short term solution, but in the end it will cost and cost and never be the solution it need to be, so finding a middle-eastern solution and making sure that essential resources make it there might work and it would help many more than just a few thousand getting placed in the UK.

What is the best option? Not sure, but the UNHCR currently seems to be at a loss as well and they are supposed to be the experts in this field.

 

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Questions at this time

I have been fighting with myself in regards to certain issues that have been rising in this day and age. When we look at the definition of treason we see this statement “In law, treason is the crime that covers some of the more extreme acts against one’s sovereign or nation.

The question is not just in regards to a nation as is the case with Edward Snowden, but what about the acts against the people? If we accept the following statement as an acceptable fact “Republicanism is the ideology of governing a society or state as a republic, where the head of state is a representative of the people who hold popular sovereignty rather than the people being subjects of the head of state.

So, if that is true, then should we consider the acts or even the absence of acts that stops dangers to the people as an act of treason? I have written about some of these parts for some time now, as per 5 days ago the guardian is now a little more vocal about it (at http://www.theguardian.com/global-development/2013/dec/18/rich-countries-money-laundering-tax-evasion-oecd)

It seems that governments are FINALLY getting on the horse of action (as seen at http://www.reuters.com/article/2013/12/20/us-usa-tax-fatca-idUSBRE9BI13J20131220). Yet it seems that larger tax holes are still in existence in Ireland (at http://www.reuters.com/article/2013/10/15/us-ireland-tax-idUSBRE99E0PD20131015)

So should tax evasion be seen as a form of treason? I am not talking about the people left right and centre trying to find every possible tax hole. I am talking about the large corporations and their boards of directors (at http://www.businessspectator.com.au/article/2013/7/15/social-media/looking-beyond-apples-tax-evasion-tactics). If we accept the quote “Taxed at 0.004 per cent“, then how un-national (or in this case un-American) should these people be regarded? And it goes far beyond that part. This is shown in http://www.bloomberg.com/news/2013-01-23/yahoo-dell-swell-netherlands-13-trillion-tax-haven.html as we see a glimpse of the size of evasion. It is nice to see that the Netherlands are getting of the tax evasion horse, but consider this article from the Guardian (at http://www.theguardian.com/business/2011/oct/19/tax-avoidance-in-netherlands-becomes-focus-of-campaigners) shows that this horse had a very comfortable 3 years. Simon Goodley and Dan Milmo from The Guardian reported all this in October 2011, if we consider that then the words of President Obama sound even more hollow when we read “President Barack Obama presented a series of proposals in 2009 to curb offshore tax benefits“. Hollow? Yes, because only now at the end of his second reign is he making an effort, making it clear that keeping rich friends near you is all about re-election. So, when the hard times hit in the next term he can point the finger at the Republicans. The idea that we hold large corporation’s tax accountable does not seem such an option for either administration (Democrats and Republicans alike).

So, after all these years, as the US is getting in a financial state more and more desperate actions are finally taken, which in my view is well over half a decade too late. The issue remains, as people are hit harder and harder for taxation, not just in the US, big business seems to escape their share of taxation, giving them a massive advantage. In addition, in what I would call the ‘incestual’ relationship between a board of directors and their ‘ability’ to avoid taxation on a borderline of actual fraud (example HSBC to name but one). The game does change when we read that governments themselves start to offer assistance in this field (at http://www.cbc.ca/news/politics/jim-love-canadian-mint-chairman-helped-run-offshore-tax-avoidance-scheme-for-clients-1.2441347)

So, as we go towards Christmas and those high and mighty people do their ‘charity’ thing, then also consider that it is not impossible that they have been paying less taxation (like in +18% less), how very adult adults!

So if you want to cheer for anyone, cheer for that 60+ person, who after getting cut on life, living standards and retirement funds, this person is still doing over 20 hours a week in a community centre getting it all done for the people in their neighbourhood, because that is true charity and one more noble then I could actually muster at present.

If we get back to Republicanism, if it was all about ‘representing the people’ and consider that the fat cats are the chosen few (like 100,000 in a nation of 325,000,000), are these acts of non-accounting a form of treason too? Especially as tax evasion leaves a nation in a state of destitution? America seems to be clear evidence of that as its total debt will be roughly $60,680,485,000,000 on Christmas evening. Still think delaying acts against tax evasion was ever a good idea?

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Economic management through newscasts

When you think of the title, you might think that there is no real issue. You might think that certain events always take place and that the news covers it. However, when you monitor the news in several nations, you might see a different line of information.

So, let’s go through the motions and reveal that part that several did not consider, perhaps you should reconsider this in all sincerity.

The first red light was lit when I observed the Dutch news at the NOS. The message was innocent enough. The Dutch Bank has a new president. The man Klaas Knot was voiced on Dutch TV stating [translated] “although the numbers are not here yet, my feeling is telling me that we have passed the recession, and we are now at the start of economic recovery“.

In light of several numbers in the past that were in my personal view clear attempts to manage bad news, numbers that were used as proverbial straws to minimise actions are now surpassed that the economy is on recovery. As I stated before, we are more than a year away from that. So, why are people getting this news? The facts and numbers are a month away. Is it perhaps all about the US deficit ceiling? That 17 trillion dollar debt, oh what a feeling!

Klaas Knot is working from the information on growth from foreign nations. As they left the recession, the Dutch should follow. Another factor mentioned is that real estate prices are not falling any further. In that regard I wonder if that would be an actual possibility. If the houses fall any further, it would only mean that people stopped selling until the prices go up again. However, the NOS did report in summary that growth is not directly visible, especially considering that unemployment rates will go up further this year. I reckon that they might not improve until late second quarter 2014. There is also the actual growth to consider. I reckon that the growth in the first year is unlikely to grow beyond 0.5%, which would already be a good achievement.

So why do I without the economic degree oppose the president of the Dutch Bank who is likely to have a few economic degrees?

First of all, I am willing to doubt my view, however, after we have seen the Dutch predicaments as they cannot find the ability to cut 6 billion and as they struggle with minority groups to get anything done at present in that pesky regard of cut-backs. In addition, on July 11th I wrote a blog on the Dutch pension system and how they would cut 3 billion a year (in ‘Boosting Pensions’), that did not pass the Dutch First Room comparable to the House of Lords in the UK). The only question remains whether those 3 billion were part of the 6 billion euro package or not. If not then fine, if yes, then matters blow up in many faces. However, not to go for the worst scenario, the cut backs do mean that at present the purchasing power of Dutch citizens will decline more, so economic growth will remain out of the people’s reach until 2015. That does not mean that Klaas Knot is wrong, I do however belief that this optimism is linked to another event and should be slightly less optimistic.

The odd thing was that Klaas Knot was stating towards NOS news that it was important for political Netherlands to quickly come to an agreement on controlling government finances, also for 2014. That was a weird quote to be placed as a statement and not in answer to a direct question. So was he aiming for the budget agreements, opening the fountain of Dutch pension accounts or both? The latter seem to be in my mind. However, the NOS newsroom phrased that this was about the 6 billion in cut backs. Yet, if this is a play to get things rolling, it is good that it was followed by the statement from the Prime Minister to not get too optimistic. So why were we seeing these two parts?

The second red light did not become visible until the day after. The same day I get the news on a diplomatic escalation in the Netherlands, sky News UK comes with an entirely different matter. Two elements seemed to be in play. The IMF suddenly lifted the economic growth for the UK by 1.4% for 2013 and for 1.9% for 2014. Those are numbers that are beyond remarkable. Sky News showed Olivier Blanchard the Chief economist of the IMF to make this statement. It was interesting that the IMF calls on Christine Lagarde to give the bad news and Olivier gets to give the good news. There was a shimmer of hope for realism as Ed Conway, economic Editor at Sky News was happy to not reject the notion that the IMF have been lousy forecasters in the past to say the least.

In my view these two red lights are all about managing bad news. This is the preamble to the rising risk that if the US debt ceiling is not raised, we would end up receiving a spill of utter recession that will go on for a long spell. ‘Suddenly’ there was good news, a week before the debt ceiling needs to be raided, whilst the US is still in shutdown mode. Let us not forget that Greece, who also suddenly had ‘good’ news last week is still beyond broke, in addition France and Italy are still not in good shape. The biggest issue is that the UK forecast, which was +0.6%, which was a pretty good achievement to +1.4%. That boils down to a miscalculation of almost $18 Billion! That is a massive miscalculation. There is no indication that such errors were made. Consider that the IMF had high criticism towards the tactics by Chancellor George Osborne, UK’s faithful exchequer.

Three sudden good news moments are too much for just some level of chance. This reeks more and more towards managing impending moments of Doom. In that same newscast President Obama kept on chastising the Republicans. Yet, also to my surprise, several players in the media are giving little or no visibility to the republican side of things. The Democrats are so willing to raise debts again and again, yet the overspending as it is could sink us all and no one seems to be reacting to that part.

So is this raising of credit rates just so that a paper loan for the US can be parked on top of the 2 Trillion dollar debt the UK has? That part is speculation on my side, but it is clear that the recession is nowhere near solved until mid-2014 and only after that will we see decent levels of recovery. In that regard I do consider that those who are managing these numbers are playing a very dangerous game, I admit that this last part is my personal view, but I reckon that many in the UK, Netherlands and Greece can clearly see that improvements are pure speculative and there is no evidence that it will actually happen before 2015 (if they are lucky). The Greek situation was partially confirmed that Greece will need another 10-11 billion Euro bailout mid-2014, as reported by Jennifer Rankin (at http://www.theguardian.com/business/2013/sep/13/greek-bailout-back-on-agenda-as-eurozone-finance-ministers-meet-live), so a nation that is in recovery still needs 1000 euro for every Greek?

The reality of this global game will not be known for another week, but in the mindset of a Lemming it is likely that the quality of life we used to know, for now, only remains in the mind of the terminally ill and only if they do not expect to live past June 2014.

I sincerely hope I am wrong in this case, but the numbers are to some extent there, it seems to me that when coming to some conclusions the weighted events are considered. This is not an abnormal thing to do, however when we deal with several outliers in data, the weighted results tend to throw away those numbers and as such the bad news is never a correct, which does the trick for some, but it leaves Joe Public with a nasty long term invoice at the end of the journey.

 

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About the Miliband Family

This morning as conservative, in opposition of the current Labour ideal I see no other option but to stand next to Ed Miliband as a son of a father, to stand behind him in support and stand in front of him as a shield in regards to this attack. What I just read on the internet, after seeing the news on Sky News is just too disgusting. I personally will never have too much respect for the daily mail and the assault on a person who has already passed away, just to get to someone else. Ralph Miliband, a person who served for his new country against Nazi Germany, who stood there, serving and fighting to keep the British Empire save is just unacceptable. Why? Because he believed that Marxism had the answers? Of course we cannot rely on the Daily Mail to know all this, as I reckon their viewpoint comes from a day and age when the Black and White TV was no longer there, a post radio tube era! Why is this important?

Well, many in England had not lived through those early years. In Belgium and the Netherlands in the years post WW1 life was hard. Workers in those days were there to work themselves to death for a chosen few, who would exploit people again and again. The sad part is that current events are bringing this age back and it does not scare enough people (I will get to that evidence soon enough).

The years in the Netherlands and Belgium between WW1 and WW2 were hard ones (not just there mind you). Books like ‘op hoop van zegen‘ ([translation] ‘Trusting our fate in the hands of god‘) by Dutch writer Herman Heijerman shows the exploitation of Dutch fishermen as they are forced into the sea in unsound ships. In the end people die and the owner would pocket the insurance money. It was Herman Heijerman’s socialist view on the capitalist system. For those not having faith in these issues, remember 2008, whilst the bulk of the western world is still reeling from that ‘Wall Street cabaret‘. The Dutch also had events post WW1 in the east of their nation in an area called Twente, where the Textile industry collapsed as it was confronted with the competitive practices from Japan. Belgium had its own issues and in those times Adolf Hitler came to power and soon after started his European tour (1939-1945). So Ralph Miliband, this Jewish sociologist was lucky enough to flee the horror that would hit Belgium and went to England. To be quite honest, at times it is unfathomable that Marxism did not grow as strong as it could. When the bulk of a nation lives in absolute poverty in the service of a small group of silver spoon people, that consequence would today seem like a given reality.

So, Ed’s dad, Mr. Miliband, a person with Marxist convictions ended up in England and served with the British Navy against Hitler. Whether he was there to protect England, or to fight Hitler, or even both does not matter. In the end he served like so many others and ended up as a CPO (chief Petty Officer).

After that he became an academic. He did not become an anarchist, a terrorist or an anti-social. No, he became an academic and a sociologist. It was all in a time before I was born (such is life). So the paper that attacked the Miliband family was actually (at some point) sympathetic to Oswald Mosely and the British Union of Fascists. Interesting isn’t it? Their ‘Hurrah for the Blackshirts‘ didn’t last long and in that regards it is important to read the ‘Greenslade Blog‘ in the guardian, specifically, the one that was written in December 2011. (At http://www.theguardian.com/media/greenslade/2011/dec/06/dailymail-oswald-mosley). It is an excellent read, showing in addition that the Daily Mail was not the only player in town. The Daily Mirror was on that same horse (that strange Mr Daily and his newspapers, right?) The evidence is clear that both had changed their tune before WW2. What does remain that Mr Miliband’s view was shaped by harsh events in Belgium. The Netherlands had its own ghosts. In Amsterdam in 1934 there would be a workers revolt and in the end under Dutch PM Hendrik Colijn, a harsh response was given against the revolt and in the end the police and military would shoot into the crowd. 5 people died. This event is talked about in a book by Harry Mulisch (the Assault). The son of a NSB agent in that book states ‘My father was ordered to shoot into the crowd of workers. He would never allow for that again.‘ With that he explains his father’s move to National Socialism. The NSB were not the good guys, but the sentiment voiced in several in these books reflect the sign of the times in both the Netherlands and Belgium. I believe that Marxism grew in that same environment, in an age of much injustice and imbalance. So when Mr Miliband escaped that environment, is it a wonder that he would favour the far left, Marxism and/or Socialism? His view as an academic should not be attacked. They should be heralded. He voiced certain views and let us ponder those views. I see that this approach shaped his son Ed Miliband and his son saw the wisdom for what it was and ended up a lot more towards the centre of the left wing. The generation that followed Ed’s dad is like I was, we believe that the wisdom is more to the balanced centre. Me to the right of it and Ed Miliband to the left of it, together the system will remain in balance (as long as we can keep UKIP out of that equation for now). I spoke earlier about returning times. We see now that the retirement age will shift. Meeting financial ends is getting harder and harder. Companies in the Netherlands are now advocating reduction in pay and overall working conditions will hit hard times for years to come. Labour has always fought this (not always in the right way). But I believe with utter conviction that opposition politics is the only way to keep things for the most honest and fair.

So as we end this small piece with a few additional thoughts and a request. The fact that Ed’s dad fought for England is a fact. He must have been good as he ended his service as a CPO, not a rank easily achieved. He ended up with a degree from the London School of economics and even though he was not a conservative, he was a devoted academic. He put his words to books and got 7 of them published. So a man of thought, whether we agree with them or not, they are regarded as distinguished works. If wisdom comes from the past, then the Miliband family contributed to the British Empire (I love the old names), something that a person hating that nation would never do. Finally, there is a book ‘Newman, Michael (2002). Ralph Miliband and the Politics of the New Left.‘ there is a little more at http://monthlyreview.org/press/books/pb0866/ it shows from other sources that the Miliband family contributed to the evolving English way of life. Books that end up on the shelves, unlike the daily Mail that ends up at the bottom of a budgie cage the day after if it is lucky.

Now for the small request to you the reader. Some will agree with the Leveson report (I do), some do not. I believe the article about Mr Miliband to be in really bad taste. This was not about ‘the right to know‘, I see this for what it was, a personal attack on the son of a deceased academic, who is patriotic and who cares about England. In my personal mind, on the wrong side of the isle ;-), but we can’t have it all, can we?

So, if you agree that the attack on someone’s dad, who had already passed away and has no defence against what is being done to him, then this coming Saturday, please DO NOT buy the Daily mail. Buy any other newspaper.  The Guardian, the times, or whatever paper you buy. Let us all send a message to the Daily Mail editorial that some things are just not cricket!

Have a lovely day all!

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Biased Journalism on USA shutdown?

We have seen reports of all forms. We see information management in what I have called bad news managing. This has happened in the Netherlands. Is it Biased Journalism, or is this journalism based upon the information handed to them?

The second part would be fair enough, because the journalist is dealing with what is handed to them. However, when we look at the canons of Journalism and their codes of ethics some questions come to the front of the lines. Truthfulness, accuracy, objectivity are three of the elements and there are more than just these three. I am not willing to attack truthfulness. It is in my view an empty gesture to do so. This is all based upon information that the Journalist gets handed. Accuracy might be an issue. They might have passed on the exact information they were handed, yet how accurate was it? Was the information tested in any way? Then there is objectivity. I am not sure if that is a valid point. Let us face the fact that objectivity is in the eyes of the beholder and as such there is more than one viewpoint. In all honesty, any article would need to be viewed from more than one side and the news as we usually watch it on TV is actually not that equipped to do just that. Newspapers are!

I have illustrated in earlier blogs that some of the mentioned information seemed inaccurate to me. This happens, I do not claim to be correct, but it seemed too upbeat to me and as such I questioned it. I was not alone, but not too many public contributors were, and in more than one occasion my view was the correct one. So when I saw the NOS news today, more questions rose in my mind and it is time to ask a few more and some other questions.

The most questionable part was the news on the US Shutdown as that danger approaches within the next 24 hours. What I saw as an issue was the way some parties were illustrated. First of all, it is important to know that I am leaning strongly towards the republican view. Not stating so beforehand would be wrong in my mind. The issue I had was with the NOS newscast of the US shutdown. It was not incorrect, but there were issues that have not been mentioned, which were at the centre of it all.

I see this all as the republican move to stop the abundant of irresponsible spending by a democratic party run government. Yes, we know that this is not about the fiscal cliff this time, but the government budget is directly linked to this. The democrats have taken the debt out of acceptable proportions.

Let us not forget that the US has a 17,000 BILLION dollar debt, this comes down to 340 billion dollars per state. In addition, if we look back to the Californian change in 2003, when Arnold Schwarzenegger became governor, former governor Gray Davis was confronted with a recall because the state shortfall was only 10% of the 340 Billion. That was directly due to the dot com boom collapse and a large group of companies were suddenly in a position no longer able to pay taxation, which meant that California, one of the richest states was suddenly without cash. Now the simple logic that follows, if one of the richest states cannot pay 10% of the outstanding debt, how can the others pay at all? This is the big cake that gets layers after layer of icing. With each layer it is presented as something that can be dealt with, but both democrat and republicans have no real solution. This is at the core of it all. So it is not just about the government budget, it is the issue that the budget is not realistic and that it is only adding to the debt. So when I see the part where Democrat Nita Lowey is talking about a compromise, then I end up splitting my guts with laughter. For two administrations there has not been any decent level of compromise. The republican view is that spending MUST go down by a lot. We could view the state by state comparison, especially against the Netherlands. Most states are larger than the Netherlands and none have a realistic approach to dealing with a 340 billion dollar debt. Now compare that to the Netherlands having to cut 6 billion and the view is almost complete. We all have to tighten the belt and within the USA this would last for no less three generations. The view I am proclaiming to be correct does have issues as well. It is however the view I behold. After Detroit, which already has gone bust, almost two dozen cities are facing the same problem in the US. Fresno, Compton and Oakland are three of them and they are all in California (one of the three rich states). If we would take a deeper look at the 50+ largest cities, then we see healthcare and retirement cost issues that make Detroit look like a joke. It is the healthcare part that is at the centre of it all. The Republicans are utterly convinced that Obama Care will not solve it at all. It will just add to the massive debts. What has been propagated as a solution to all, is in the realistic view of many a non-solution that will push forward debts and invoices that cannot be paid for in the end and as such people will face even more hardship down the line. Not to mention the fact that healthcare professionals might end up seeking greener pastures outside of the US.

The budget shortage is not new. This has been going on since 1995 (at least), however, in those days former president Clinton had two advantages. The first was that the government coffers had a cash surplus. Second was that the dot com boom was going nice. Consultancy firms were going strong, the incomes were really nice and consultants were making loads of cash by selling concepts. So, people were buying ideas and not an existing product. No matter what the reason was (like 9/11), it was the spending that the Bush administration started which gave the treasury such a negative jolt. It was nowhere near the spending that President Obama did, but he did not start this, so let us be fair about it. Against the current administration it must be stated that the no true legislation has been passed stopping Wall street the way it should, so there is no evidence that this will not happen again. And we are all aware that the economic thrashing started all with the Wall Street Clam bake ‘lets go hedge funds’ that was a huge part of the predicament we have now.

The question from the NOS ‘Is there no talking with the Republicans?‘ is not the only question and the one sided part of it is not correct. The linked question is ‘Can US overspending not be contained?‘ is the side the Republicans are dealing with. That part does not seem to be addressed by anyone. We see that side when we look at all the other places, including the Netherlands, the UK and Australia. They all have their own budget ghosts to deal with.

The Dutch government has its own cross to bear trying to find solutions to a 6 billion cutting spree. Too much talking and for too long no results. If we take all these sides (in all the talked about nations), then perhaps another method should be found. The first part is to cut ALL political incomes by 20% and no overtime payment at all (not sure if they get that to begin with). That should make a decent cut in the cost to the national treasuries and might make for quicker decisions. In my view I see no solution in any way to lower taxation. I think that this approach is an unrealistic one. What might be a solution is to change it all to a two tiered tax system with only 27% and 39%. That might work, but only if ALL tax deductibility’s are removed. This has two benefits. The system becomes simpler, and over all, with no deductibility’s left it becomes a clear approach. In addition there is a need to make all commerce taxable at the point of sale (the location of the purchaser’s keyboard). This must be where the buyer physically is. This is to take a stance on that Google, Amazon, et al approach, where on-line companies seem to be selling it all from an empty office in Ireland at taxation levels which should be regarded as a joke.

The system has to be changed. We have heard so many voices that a solution can be made, whilst ZERO results have been achieved for close to a decade. When we see administrations of entire cities go bust, it is time to just end whining about a solution that remains no more than a concept.

By the way, when we look at spending it all, what has been the end result? The fact that the US, the bulk of the Commonwealth and the Netherlands are spending way too much (compared to what is coming in though taxation) is out of proportions. That is why the republicans are putting their foot down and so far there is no evidence that they are holding the wrong position.

What is the right position? That is the question and I do not know whether the Republican position will be the correct one either. Yet, staying with the Democratic view whilst we have almost a decade of evidence that it is not working seems to be a flawed point of view. That view is reinforced by the Heritage foundation where it was quoted “While federal revenues are recovering from the recent recession, spending is growing sharply, resulting in four consecutive years of deficits exceeding $1 trillion.

So the US government has been spending more than a trillion more then it received. Consider that in 2011 the total revenue was set at 2.3 trillion, spending 43% more then you get each year is not a good idea. Consider that the recession is not done by a long-shot; overspending 40% annually will have long term consequences.

If we accept that a government is not a profit based organisation then we could consider that a government would collect taxation at 105%-110% of what it needs. When you spend money and then only collect 71% you are going to need guarantees that things will go wrong. So when I stated that it will take 3 generations to get rid of the debt I was not kidding. In addition, the 17 trillion was just the national debt. The total debt is set at 60 trillion (roughly). This means that every state in the US would have to come up with 1.2 trillion dollars to deal with it. (I know it is not fair, but I need to show an example).

If we consider the three richest states and considering the 2012 numbers (from http://www.census.gov/govs/statetax) we see the following:

The collected taxation from California was 112.3, New York 71.5 and Texas 48.5, all in billions of dollars. So whether we use either the 340 billion or the larger 1.2 trillion, only 3 of the 50 states have any chance of paying it to any effect. Viewing these numbers, do the math and we see that things must change (by a lot). The Heritage foundation is also showing that current entitlements are double the defence budget. How does this relate to Obama care? Will the info they state gives us that the additional costs by 2019 which was set at 100 billion, which is a little over 12% of all collected annual taxes. So, another 100 billion needed whilst there is no income against that. The slide states “Obama care imposes numerous tax hikes which total more than $500 billion over 10 years. Obama care’s higher tax rates on income and investment will slow economic growth, leaving hardworking American families and businesses worse off.

These are the issues that the republicans are fighting. We have seen enough ‘evidence’ to know that most economic recovery for Europe will not commence until 2015. So, as the GOP (Republican Party) is watching these developments, whilst they are watching the additional entitlement costs go up even further, costs, which are pushing their sense of humour all the way to the basement of Congress. This means that there are additional issues stopping the America from regaining its status of ‘economic superpower’. So these are some of the elements that are not too ‘illuminated’ as the US government squabble goes on. The only bonus I see at present, is that when the government shuts down, they should consider not paying any of the elected Democrats and Republicans for these days either. It might at least save the treasury a few dollars.

 

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Political ego and their costs

I recently wrote a little about the Dutch Fyra train, a high speed billion Euro train that is still not functioning. There have been several pointing fingers, yet why is this such a complicated project?

You see, a project is basically a simple thing. It has a goal, it has requirements, it has noted milestones and if the project manager is a clear communicator, then that person has the easiest and best paid job of them all. That is the theory!

The reality is less clear. It becomes an increasing mess, when those in charge make oral promises and not follow them up, or even better, in some commercial corporations where sales executives make so many changes on the fly to wear the project manager down, so when things are asked, those sales executives respond with “where is it written down?” and the problem of it all remains in the clear. This latter example happens in several situations where the Sales department and not the project manager is in charge.

With Fyra there is a third tier, namely the politicians. The NOS reported last night that this group had been putting pressure on the Fyra project. Even though the testers reported massive amounts of events, flaws and even clear malfunctions and design flaws, they seem to have been ignored. These issues add up to a system that should not have been implemented. The political pressure that required ‘high speed train revenues’, in the light of spending was getting louder and louder. So over the heads of those people in charge stating that there are issues, the Fyra was implemented against the technical proven flaws.

I discussed the fyra in a previous blog called ‘Multi billion train ride’ on June 5th.

Now they have a situation where a train was accepted in this light of events and in that same light must be paid for. The Dutch rail roads do not want to pay and AnselmoBreda is telling them to pay. Even though it was never completely a fault by AnselmoBreda, there are more and more clear indicators that political interfering by approving something that was not ready seems to have been a clear interfering factor. So apart from the 7 billion in rails, they are looking at an additional half a billion for 19 additional trains that do not do what they are supposed to do. Basically, they would end up being regarded as VERY expensive non hi-speed trains. Then there are the annual interest and maintenance costs on 7 billion of rails, the list grows on and on. Consider these costs whilst the government needs to push 6 billion in cut-backs. Are you having fun yet?

So basically, a multi-billion Euro push, by politicians, who were guided by ego and a misguided sense of profit, the second factor was never a reality to begin with. If we consider this and see that under current conditions the Hi-Speed trains are not an option, then an additional 7 billion has been wasted. I personally wonder how many people will become non-accountable and in addition will be reason for a massive bill to the tax payer. Considering these events, the upcoming parliamentary committee might take a lot longer than many bargained for, which additional costs to boot.

So why are incompetent politicians getting in the way of sound business?

This claim is in this instance not about the present group, it was the previous groups interfering with this process, yet overall when we read some of the current statements on capping banking incomes, and then when it is decided that the new head of Robeco must get 30 million a year, nothing can apparently be done. Ah, the joy of claim versus reality!

There are several indicators that the UK’s version the HS2 is on similar tracks. As reported by the Guardian in July, there have been voices that the high speed North-South line, which will cost to the scope of 40 billion Euro is going in a not dissimilar direction. Even though the UK government is claiming a 20% nett return, the additional factors might have not been weighted enough. Consider that the current issues involving price hikes for train rides are growing between 4% and 9%, the group that can no longer afford these kinds of prices is growing fast. More important, these price hikes are now pushing people away from rail and towards buses for the sheer cost of it. This is an entirely opposing reaction to what the UK government needs it to be.

Those in favour of HS2 claim in the quote “This is a massively misleading oversimplification because it doesn’t take into account the significant financial returns that will be generated from an investment in high-speed rail.

Even though it is given that unlike the Netherlands, the distances in the UK make for a much more viable need, we should not negate that this is about connecting London to Birmingham. I agree that it is too simple to state that this line is for all those Ashton Villa fans in London, yet the same flaw is shown, when we consider the actual issue. If the distance is 119 miles, then a normal train at 125Mph does it in just under an hour, then why add 40 billion to install a train doing 155 Mph? Getting there 10-15 minutes faster does not warrant such expenses, more important, considering the economic charges, the group willing to pay such an extra amount to get so little extra time would be dwindling a lot faster than some might think, which beckons the question “What significant financial returns?” it is not until the train goes beyond 200Mph that this all becomes a more interesting issue, which means a 20-25 minute saving on that part alone. Here I agree that some (not all) will consider it. The question becomes how much extra will people have to pay until the 50 billion returns is begotten? In my mind that requires a commuting population a lot higher then it seems to have, or the tickets will become extremely pricey to say the least. In my mind, the wisdom is in the middle, it takes a massive amount of traveller, all paying top pound a day. Considering that the economy is nowhere near that strong in the UK until past 2016, the costs involved might be way too high. This all in the end gives weight to the statement made by the Institute of Economic Affairs calling it a “political vanity project“.

So which cheques are underwritten by a political ego and can people afford the consequences of such amounts?

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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 3rd world countries, whilst comfortable living would be found for those moving to places like India and Argentina.

Go figure!

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Exploitation fears for tax-payers

The Dutch NOS reported another go with banks in the view of business. Bernhard Wientjes has been voicing the opinion that some of the banks (ABN/AMRO and SNS Reaal) should be sold. It was brought in the air of ‘when you have no more money you start selling the silver cutlery’ would be the next step. As the Dutch government needs to cut 6 billion, the cutting spree could be a lot less. Well, in this matter I personally stand with Finance minister Jeroen Dijsselbloem who is not that eager to do that. There is logic for not doing this, as this relief would be for one year only and after that the cuttings would still need to be found next year. I am worried that certain business men are now in a state to strong hand certain political decisions. I leave it up to the reader whether those decisions are purely for the need of greed.

If business is linked to greed (often called ‘enterprising solutions’) then that would clearly fit in the views of Bernhard Wientjes. As chairman of the VNO-NCW it would be an enterprising solution that is right up his alley. The VNO-NCW is a fusion of the VNO (League of Dutch Commercial Enterprises) and the NCW (Dutch Christian Business Society). Their mission is to support and further the needs of Dutch corporations both on a National and international level. In this he is doing exactly what he is expected to do.

Yet, in this light, at a point where two banks would be sold far below value and at the expense of the tax-payers, one should clearly ask and look at the possible windfall for Bernhard Wientjes and his friends should this work out in that way.

There is a clear valid question whether the Dutch Silver cutlery is currently in a safe position. The reality of 6 billion of cutbacks will start to show a strangling result, yet, this was the danger all along when previous political alliances (2006-2010) were clearly pushing the outstanding invoice forward. Now that there are no more options, the consequences are likely to be dire, and as such in his position Bernhard Wientjes is clearly trying to look forward for Dutch corporations. I see this specific step as a dangerous one and until Dutch banks are clearly on a minimum set standard nothing should change. In addition, I am all in favour at present to keep these institutions nationalised to prevent their boards to just seek additional high risk gains at anyone’s expense to meet personal commission goals, whilst ignoring local needs (mortgages and such).

Even seeing these banks as possible training steps for younger jobseekers on the dole, to give them short term jobs whilst staying on the dole, would give them additional food for job experience. The answers that some view that this is not how it is supposed to be, I would counter, with ‘what solutions do you have?’. We need to change the way we think and operate. Instead of trying to balance which pocket the money is coming from, we should accept that the money is coming from the suit the government wears and see how far we can walk with this suit. Instead of staying on principle of keeping tabs what pocket it comes from, use the principle of it comes from us anyway and focus on instilling knowledge and experience. That will strengthen the young to get a good shot in getting something better with a decent chance. If you have any doubt, then consider that the Netherlands is only one of 3 countries where youth unemployment rates are below 10%. Many of the Southern European countries are way over 40%. If the future of youth employment is about experience, then make sure that the youth are getting a running start now is going to be important down the line. If their future could be a decent job in Germany, then giving them an edge as they compete with desperate youthful jobseekers from Spain, Italy or Greece is essential. Do not think that those kids are any less. Those who graduated from Universidad Complutense de Madrid are more than top Notch. 7 of their graduates ended up with a Nobel price and graduates from there ended up with 2 dozen of other internationally acclaimed awards. So, if we are looking at future events, getting the youth ready NOW will be an essential step.

Yet, this week has even more issues involving banks. A report that is due to be released tomorrow on advised banking changes. The ‘advice’ is to change the mortgage market. In the Netherlands it is currently possible to get a 105% mortgage so that the house and the notary costs and change of owner registration can all be covered. The commission chaired by Herman Wijfels is now advocating that the mortgage cannot be any higher than 80%. This is to prevent that the debt of selling a house at loss would end up hitting the banks. It seems that the banks are all over their need for ‘securing’ for the little man (read the average consumer). Taking into account that the average house in the Netherlands is around $350,000 the question, especially in this era of lack of funds is where on earth will a person get $70,000 in savings when the Dutch taxation system makes it almost impossible to get that kind of money saved up. They also mentioned that this should not be done until the housing market is stronger and prices are on the rise. Like that will help people to get the money. It is interesting that there is no mention of the much more reliable and fair Swedish system. Perhaps the report due out tomorrow will mention it, but I have not been privy to the full report. In the Swedish system a house often has a two tiered mortgage. You have the bottom part which envisions the gross off it (let’s say 80% for argument sake) at a low base percentage. The rest goes into the top part. Now that part (in my case) was almost 2.5% interest higher, but the mortgage was 105% covered. So instead of the unaffordable savings needs, we have a slightly higher mortgage. So, even if we have to accept a slightly cheaper house, we at least can get a house and not be looking at houses, never being able to afford any of it. The question becomes on what it was about. The fact that a report leaks is no news, but that the report leaks just around the same time Bernhard Wientjes is making a play to sell banks is a rather convenient coincidence.

These events are important to consider. This is because the same issues are playing in the UK. Consider that Lloyds is in need of an extension as they are selling 631 branches. This and the issues around the Royal Bank of Scotland do have links, as the UK government needs to cut cost by a lot more than 6 billion (having a Trillion in deficit makes that an awkward necessity). So will we see the same play as some are now seeing if they can sell banking interests at no more than tuppence on the pound? There is absolutely no known plans at present (in case you got scared or overly enthusiastic), but the issues remain, and the solution as such would be there in equal measure. To allow the young unemployed to become part of the bank on internships and training places, so that we can offer a solution where those seeking jobs will have actual work experience in their CV. These measures might seem small, yet the confidence boost that the younger jobseekers gain, could be the winning factor. In addition, extra hands, helping to boost the value of these banks would mean that when sold, they will go for a much better and more realistic value then they are currently set at. All this in a combined effort to strengthen commonwealth economy and their assets, for the simple reason that the European Economic outlook remains grim at best and relying on overly confident reports of economic prospects, that get downgraded quarter after quarter is not doing anyone any good.

 

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