Tag Archives: NOS

May 24, 2013 · 22:42

You might soon be sold by the banks!

I have heard often, in many situations the ‘that is not how it works’ was stated. How it was all in my mind. No, this morning issues were not just confirmed, I reckon that things are even worse than you think they are.

You see, for the most I do not trust ‘Financial Institutions’. They came in a time when there was an abundance of all, when people, as they were turned away from banks, they were willing to take a ‘chance’. For one part, this is Capitalism at its best! (Or at least that is how it was in the beginning.) Now they have grown, more margins more abilities and as we saw them grow in many fields they gained perspectives the banks in their conservatives states did not.

So, whenever I can, I stay away from financial institution. The main reason, they do not have the muzzle to keep them in place when needed. You think this is strange? Well, read on and prepare for the rudest awakening in a long time.

In the Netherlands there is a company called Equens. Today they temporary abstained from a plan to sell on their financial information. Equens is a payment provider. It processes pass (credit cards, bank cards and so on) transactions. They do so all over Europe and they are not the smallest. With 15 BILLION transactions they own well over 10% of the market. The plan is indeed decently brilliant, but dangerous as hell. They almost pulled in the banks to take their transaction data to market. It would have been quite the revenue, but it is the most dangerous one you will ever personally experience, and the issue with ‘temporary’ means it remains a danger. The initial report on this matter drew too much criticism, even though RABO and SNS Nationalised were interested, they crawled back when certain legal issues rose. It had been raised by the Dutch consumer society and the Dutch political party Democrats 66. I feel certain that this delay is a temporary one, as the issues involving legalities might be resolved over time. This is exactly the issue with financial institutions. Banks have power, but as such they were limited in freedom of movement (as it should be). Their commercial corporate brother named ‘Financial institution’ does not have these strict limits, which gives many of us the dangers currently at play.

Even so, Equens did make the promise that the sold information could not be tracked to any individual. This is where they are (intentionally) wrong in my mind.

You see, this goes beyond their system (and that is how they ‘focussed’ their view. Let me show you how. You buy an item at your usual store. That store processes your payment. You remain anonymous. Yet, your usual store has given you a discount/loyalty pass. NOW there is a connection between the bank card and your personality. So, as Equens data is sold on and on and on, more information can be added as the shop cash register (and therefor their data) has your bank pass and your personal details in the form of a loyalty card. Two numbers that could be connected with the greatest of ease and these cash registers have been collecting numbers for years and years. Now the link of two numbers separates their claim of anonymity and total financial and personal classification.

So look at those facts, now check your wallet and look at those cards you have. Are any of them for the Cinema? A book store? A game store? A fashion store? Do you get mail to your home from any of them? You’ll likely have at least one, and with every addition, you will get classified more and quicker. Soon you are nothing more than a product number. This is the ultimate marketing move! Availability of products, per person, per location. This is not such a future event; this is about to happen to us all.

I reckon that whatever happens will happen fast, and not just in the EU. If Equens is so willing to make this leap with only +10% market share, then who are the bigger players? This is a mega million market and if the Netherlands with 19 million people are so desired, then what about the UK with 68 million? Consider the meeting Equens had and a document they presented in June 2011 (source: http://www.paymentscouncil.org.uk/files/payments_council/npp2011_-_consultation_docs/22.06.11_equens_se.pdf).

The statements like: “However, the single largest criticism of the NPP is that it lacks an overarching business vision on which to drive a coherent strategy that delivers the various elements of the Plan.”

So, the National Payment Plan was even more in need of a business vision? To consider those consequences we would need to look at Q42 of that document on page 14. Single Euro Payments Area (SEPA) is under scrutiny where it was stated that ”The adoption of SEPA standards and formats should be introduced as quickly as possible. Whilst this will impose a cost on Corporate UK, the benefits of these new standards will take some time to reach fruition if standards migration is done on a phased basis.” So what adoptions exactly, and as such, which ones are less documented but not prohibited? From an IT point of view ‘formats’ reads as changes to interact data on more levels more easily. Why? Costs on Corporate UK! When have they EVER been willing to accept costs without tenfold falling back into their laps? It is simple basic capitalism. I have nothing against it, yet the part where most others get sold is not in those papers, yet it is not prohibited either. Welcome to the open world of financial institutions where we are about to become their product. Even though Equens is now visible, I wonder where a big boy like Schlumberger (Axalto) is at this point, who has a sizeable share.

The NOS reported on their website (www.nos.nl) today that these moves are for now of the table. Quoted was “Aanleiding voor dit besluit is de maatschappelijke onrust die is ontstaan.” (translation: ‘reason for this decision is the social unease that rose‘). I think that they have business concerns which will not allow them to endanger their 10% market at present. Yet, if they thought of it, then so did the other players and as such the next step is only a matter of time, and I reckon that we do not have that much time left before we are part of a sold system.

From there our world of what we need will be transformed into our world as THEY see we need. A small change will become a world of difference for us all.

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May 15, 2013 · 20:52

A noun of non-profit

The EU is getting a few more jabs using jibs, as it sails through the rough weathers of recession. Germany is up, France is down and the UK is about to remove their ship. If the Dutch economy does go up, it will be a plain victory through Nutricia as it shipped several containers of baby milk powder to China. As each container contains 20.000 boxes of Nutrilon (Source: http://www.nos.nl) this could be a first step to stem the tide of some safety for the Chinese baby nutrition. Yes, the article could not leave out the emotional side of crying mothers at the cash register. There is in opposition to the statement in the article little or no guarantee that supermarket hoggers will stop trying to ship baby food to China for now, as it is fast money for those involved and there are additional groups of tourists and foreign students trying to lend a helping hand to their families. This is the one consumer strongly aiding babies and the Dutch economy.

However, they are not there yet. The EU economy is no milk run as it is presently presented. It is not just the economy. If you think that just the local (read national) budgets are a problem, no it gets worse. The EU Budget itself is also coming up short. So that clearly reads that we have nations with a deficit, and now that the group that they belong, which also has a budget is ALSO in deficit. In an interview president of the Euro group Jeroen Dijsselbloem stated on the NOS journal in the Netherlands that the Dutch budget will get hit for up to a little over 500 million Euro (which was stated to be a worst case scenario). In addition the IMF stated the worrying condition of the Netherlands. The Dutch NOS reported the prediction that even though the Dutch economy will shrink another 0.5%, they do predict a growth of 1.1% next year. I personally join the group “Oh ye of little faith!” on that one and if they are able to get the economy up to 0.2% positive in 2014 than they would have achieved quite the small miracle.

The shortage, extra payments and several other ‘bad news’ moments we are likely to hear during 2013 would effectively prevent that 1.1% growth. We will know the actual number next year, but I am putting it out, right here, right now! I must admit that the idea of calling Christine Lagarde next year telling her “told you so!” seems definitely more appealing than a 2 week free for all in the Playboy Mansion (but then, as many have stated before, I was always wired slightly weird).

So, the Dutch government, who was unable to keep their budgets (like several other nations), and after getting a 1 year extension to get their budgets in order, this happens. The Netherlands is however not the only one, and this is not about having a go at the Dutch.

The French are also on the recession list. Or better stated, the French situation might soon become dicey to say the least. Even though their economy is not deep into the dip of bad economy, 0.2% is still an issue, especially as this is a continuing line of sub zero numbers goes on. If we look at the IMF Document called ‘World Economic Outlook‘, April 2013 (http://www.imf.org/external/pubs/ft/weo/2013/01/pdf/text.pdf) shows that these numbers who seem to be on par, are not that accurate. If we take the word from Dutch (NOS) and Belgium (VRT) sources we see that the Belgium shortage is now set past the 3% point, which is a big no-no as the EU had set an upper margin of 2.8%. So the account balance which was set for Belgium in the time range from 2012 to 2014 was supposed to be -0.5, -0.1 to 0.2 is now -0.5, -0.3 and ??? So we need to take into account that these were predictions, yet, if the numbers are off either by registration or by prediction (0.2% national difference is a lot of money), then we have another issue. What else is missed?

 

This is exactly why governments should not be allowed to skate to the edge of the ice (read maximum budget shortage) to that extent. All these predictors and good weather ‘reporters’ that the ice is good and the ice looks fine and the ice is thick enough feels to me that it would be part of the flim-flam confusion act. The issue is that even though these statements might all be correct, people forget that all involved parties neglected to check the quality of the ice below the surface. That part is now breaking off, in part due to many others jumping up and down on the ice for an extended period of time to the point that the skater now ends up taking a dive in the water and is starting to drown. There lies the problem! Should you doubt this part, than reflect on these events in regards to the Greece eternal debt.

Consider that the big nations are all in debt, even Germany. Yet Germany took a hard handle on their debts and fought it to lessen the power debt had. The issues that the other large players are stuck in a wrestling embrace with recessions and risk taking banks should not be lost on us. In addition several of them like France, Italy, Spain, Portugal, The Netherlands, Belgium and Slovenia are in a less good shape at present. When we then add Greece and Cyprus, we end up in a garden party with large portions of recession and deficits to go around for all players of the economy game.

I am not telling anything I had not blogged before, yet the issue remains and the game seems to be changing at present. If the UK, by pressure of its population is moved to walk away from the EU then we have a new situation. As long as the UK was part of the EU, they had a stable anchor in play.

Consider a large (really large) barge, that barge was kept in place by 4 strong anchors. UK, France, Germany and Italy. Yes, we to do know that most are in shabby state, yet, overall these nations are large, stable and democratic (that matters). They keep the Barge EU afloat in a stable place on the whimsy stormy sea called economy. If the UK walks away, then we have a new situation. None of the other nations have the size and strength of the anchor required and the EU now becomes a less stable place where the barge shifts. This will have consequences, but at present, the actual damage cannot be easily foreseen. Any claim that there is no consequence and they predict no issues, remember this moment! The Barge (as is), will lose stability and the smaller members thinking they are on a big boat are now thrown left to right then left again as the storm rages on. The smaller nations will get damaged and in addition, the weaker ones (Cyprus and Greece) could still collapse, especially if the UK takes a non EU gander.

There is however an additional look. Some could take at a paper by Edda Zoli called “Italian Sovereign Spreads: Their Determinants and Pass-through to Bank Funding Costs and Lending Conditions“. It is an impressive piece of work. and can be found at: “http://www.imf.org/external/pubs/ft/wp/2013/wp1384.pdf“.

The abstract states: “Volatility in Italian sovereign spreads has increased since mid-2011. This paper finds that news on the Euro area debt crisis and country specific events were important drivers of sovereign spreads. Movements in sovereign spreads affect CDS spreads and bond yields of Italian banks, and are transmitted rapidly to firm lending rates.”

Oops! That is interesting, as this is exactly the fear that drives some of us, especially when we saw Cyprus and recently the worries that the Co-Op Banking group is giving us and not to mention to unresolved issues on Barclays, Royal Bank of Scotland, SNS Reaal (now nationalised) as well as possible future issues with Banca D’Italia (The Bank of Italy), who currently seems firm and strong, yet if Italy continues to fend of the Austerity measures we will see an increased wave of issues that could have far fetching and long term consequences.

In regards to the UK, when looking at Barclays I found this with the New York Times in March 2013 By Julia Werdigier. “Despite the bank’s weak profit and legal woes, top executives at Barclays have been richly rewarded in the years since the financial crisis.” In addition it states “The payouts come at a difficult time for Barclays. While the stock was awarded before 2012, the compensation may still give additional fodder for critics, who have complained about the industry’s outsize pay packages.” That is not all! On May 7th Reuters reported that the Citigroup has sued Barclays PLC for over 140 million dollars for the 2008 Lehman Brothers party, a party from which some banks are still trying to recover from almost 5 years later. In addition there is the LIBOR rate ‘scheme’, which costed Barclays in the form of a fine exceeding a quarter of a billion pounds. Then we get Citigroup now claiming, wanting desiring and demanding over 140 million. Oh Joy! Yes the Barclay executives (around 430) ended up with a total bonus of over 650 million. So how much money did Barclays make? (Read on to learn)

This example shows exactly my fear. If we see the paper by Adda Zoli, we see part of the issue. If the national debt grows, the risk increases. The UK has a debt in excess of 1 trillion pounds. That is a lot! Banks seem to have less and less, and as such you and me (you know your average dopey lender) has less and less chance of any future in these dark days. Now, to be clear, Barclays was NOT bailed out by the government. They took the high road and decided to cut down on staff by almost 7000 (over a period exceeding one year). Like that is not additional pressure on the government? Yet, all these bonuses, which might have allowed them to hold all their staff for another 4 years for the price of 1 year of executive bonus.

In addition, Zoli’s paper is specific to Italy, yet that same approach might also be used to look at the danger levels in several EU countries. Take these facts and now extrapolate back to the big barge called EU. We can speculate that as people on the boat are thrown overboard. It changes the weight of the vessel as it loses, not gain stability. In addition, some get such high rewards, rewards that are kept to them, not used to maintain the barge! These factors will impede that barge even more and those additional factors are overseen and given to us in the form of ‘bad news’ moments that just pop up. Remember the extra EU payment at the beginning? So a barge, now less stable and a drowning population, all in the Economic Ocean, a restless pond, that is East of the Atlantic and West of the Pacific.

It is important to realise that these Barclays executives have not broken any laws. They were ‘rewarded’, yet Barclays reported a Nett loss of 1 billion for 2012. Seems utterly wrong doesn’t it?

 

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April 27, 2013 · 13:22

The allegiance of Economists

If we are dependent on the future of the US and Europe, then we should require and should be given access to dependable numbers. I think we can all agree that certain predictions are hard to get, because we should all be able to agree on the fact that it is a lot harder then we bargained for.

Yet, if we look at the numbers before and after then good news is never as good as predicted and bad news is worse than they thought.

This can be seen in several fields, but nowhere as visible as today when the expected unemployment rate of Spain, which was expected to get as high as 26.5% has now surpassed 27.2%. We could consider that being off by 0.7% is not that bad, but these people are used to work in increments of a tenth of a percent, which mean they were off 7 times. On a population of 47.2 million this means that they ‘forgot’ about slightly more than 330,000 people. That is the size of Utrecht (Netherlands), Leicester (UK), Bonn (Germany), Nice (France), Bari (Italy) or Tarragona (Spain). That is not a small miscalculation at all. These cities are reasonable large by most definitions. In the US the closest city would be Santa Ana in California, currently ranked number 57 by size in the US.

Everyone awake at present? This is important, as both the politicians and all that press buzz comes from these kinds of predictions by economists. I am not stating that it is simple or easy. It is however the case that these people often cost a hell of a lot and many claim that they are needed. Yet, overall we see a collection of ‘miscalculations’ in a time where every budget is slashed from point X to the basement.

Another example was a prediction made by the Dutch CPB (Central Planning Desk). This document was made in 2010; please take that into consideration when looking at these numbers. It is expected that the further the future prediction goes, the more likely that a deviation is to be expected.

Unemployment rate was to decline from 6.5% in 2011 to 5.25% in 2015.
Consumer purchasing power was to increase annually by 0.25%.
The Government budget deficit would decline from 4.9% in 2011 to 2.9% in 2015.

We will take a look at later predictions, but I think it looks clear that none of these predictions panned out to be close to correct.

Interesting are the following statements on unemployment rates “De werkloosheid daalt van 6½% in 2011 naar 5¼% in 2015” This was in the initial document dated March 2010 as I wrote previously. Yet the second document, which was published in September 2011 writes “Naar verwachting daalt de werkloosheid in 2011 en 2012 niet verder en komt deze uit op gemiddeld 4¼% van de beroepsbevolking in beide jaren“.

[Translation]
The unemploymancy is not expected to decrease in 2011 and 2012 and this would amount to 4¼% of the professional population in both years.

So, we would think that this looks good. A much lower result then predicted which is good.

Yet the NOS (Dutch news broadcasting services) reported on the 16th of August 2012 that the unemployment rate had risen in July 2012 to 6½%. This shows not only the inaccuracy of the prediction; it also shows that predictions that go beyond 1 year in the current economic climate is not that reliable an act.

So what is the issue at hand?

When we read about all those cut backs, all those measures where we see a decline in legal aid, healthcare and a league of other needs now or soon no longer an option, should we be wasting large amounts of money on a document which seems to be a political presentation? We could even come to the conclusion that it has little value beyond its need as a political presentation.

In a day and age where the bulk of Europe is under such scrutiny of reducing cost, spending large amounts, resources and other additional costs on these debatable statistics should be regarded a little less then it currently is.

If you want to know a little more, then you should take a serious look at a book written by Darrell Huff. It was called ‘How to lie with statistics‘. It was initially written in 1954, and it saw the light of day again in 1991. It is an actual gem of much amazement! The book is really thin, so it will not take long to read it, but those pages offer a lot more insight then many books I have seen since then.

Darrell Huff, (1991) How to Lie with Statistics Penguin; New Ed edition, ISBN 0-14-013629-0

In 2010 Coen de Bruijn wrote a new book with plenty of examples. The book is thicker, yet remains light and amusing to read and as far as I know at present only available in Dutch, which is a shame as I feel certain that this book would be appreciated by both students and professionals all over the world. ‘Van tofu krijg je geheugenverlies‘ (translation: Tofu leads to memory loss). It has loads of examples where statistics were (mis)used, some quite unintentional I should add.

We should also look at these documents on the CPB. There is no evidence whatsoever that there was an intentional misrepresentation, yet, when we see the results and the effect as many newscasts all over the world use these numbers which results to either lull its population to sleep, or to soften the blows of bad news are things that should be regarded in some form.

Why should you care?

This is not just a Dutch issue. This issue is global! Too many use their national numbers in newscasts and live by these predicted percentages, whilst in reality they are in no way a representation of the facts. Even considering that most are nothing more than predictions and should not be regarded as factual, it seems that when the discussion moves to cutting back, too many nations seem to be focussing on the wrong presentations. It is actually quite fun (and I swear a complete coincidence) that only 5 hours after I started to work on today’s blog that Dutch newsgroup NOS announced a new director of the Dutch CPB. The new director will be Laura van Geest (who was formerly involved with the setting of the Dutch government budget). She was chosen by the same group that investigated the Dutch bank crises (Commission de Wit).

So back to these cut backs and more!

It is not just about cut backs and austerity. Spain is having riot issues and Greece is not in a state that much better. Harriet Alexander from the Telegraph commented in her piece on Greece holding a fire sale (source: http://www.telegraph.co.uk/news/worldnews/europe/greece/10007606/Greeces-great-fire-sale.html).
This was a story that also made the news in the newspaper the Guardian by Rupert Neate. This also includes the Greek Embassy in London, so that place alone should take care of 0.000010714% of their debt (roughly). This means they only need 94,000 places of equal value to break even. The percentage should indicate that these acts are less than a drop of water on a hot plate. So instead of growing an option of income, it seems to show that the Greek government is bailing out, leaving a nation in utter bankruptcy and deserting its citizens.

I understand that they want to do something, yet what I am seeing is nothing less than a short term vision. When all is gone, when all possible ways of revenue, resources and incomes are gone, what is left? There are still the gold reserves for now, however when (or if) Spain, Cyprus and Italy sells theirs, what of value will be left?

It is time for governments to realise that they had given too much power to the industry and they are not getting them back unless they invoke a new way of thinking. If these companies continue to use a method of blatant outsourcing and under-pricing many for a tax reduced driven revenue that benefit just a dozen people, then it is time to change the game so that it is fair to its OWN citizens. My reasoning here is that their approach has even less morality then that of a mercenary, yet they claim to be the value to ‘that’ nation.

When we look at such overwhelming numbers of debt and unemployment rate, then we have an increasing responsibility to deal with that. Yes, in the first degree the governments need to get their budgets under control. They must more openly report the bad news and not sugar-coat it for whichever government is in office. It is also time to get back on the horse and wagon of in-sourcing! Consider the fact that too many companies are getting their Jeans, sport shoes and mobile phones from sweat shops and low cost places like Indonesia, Bangla Dash, China and a few alternatives, only to save a few dollars (of course per 100,000 units this results in a hefty saving). Yet on the other side those nations have hundreds of thousands without a job, and THAT bill is not with those companies. Even if they would only transfer 10% of these markets, we would see a decent reduction in unemployment rates and we see a local gain in trade. These are all good and essential things for Europe. The danger of not doing so would just set the end date of nations like Spain and Greece. In case you think that this will not happen, then think again. These economists will state on how things will turn for the better, and after they are proven wrong, then an excuse reasoning will surface and they walk on. Yet in the meantime a few with serious cash would have bought up areas of Greece and Spain for less than 10 cents on the dollar. Oldest rule in the book: “In confusion there is profit!”
Let us take the shown evidence that many placed online, so it is visible to all; let us all realise that WE hold our futures by work in actuality and they in debatable prediction do not.

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April 15, 2013 · 12:57

The Euro in intensive care?

It is always nice to see that the NOS news will not stop to give me the inspiration I need on a gruelling Monday morning. We have all heard on the image of the Euro, the need for bail outs left, right and centre and the impression that the events do not seem to worry too many people. Yet, perhaps this look on the matter at hand from the financial industry and their ‘beneficiaries’ are overly too not worried. What most seemed to have forgotten is that any government (especially in Western Europe) is dependent on voters and the way they think, or more precisely the way they fear!

With a possible new political party, leaning slightly to the right (or better stated slightly conservative) a new option will have arrived with one specific agenda. The intention to move Germany away from the Euro currency. In itself it is perhaps not the immediate worry. Consider that Western Europe was on a route to real or feigned restoration, which does require Germany to weather the storm as it was (I am not ignoring the work France did on this either). It was the immense amount of self-austerity that Germany performed on itself that made them the strongest economy at present.

The issue is the new party! Even if this new party gets a firm foothold, it does not mean that Chancellor Merkel is in danger as yet. The predictions are that this new party stands to get up to 24% of the votes (presently at maximum). So the Chancellor is still in a comfortable pace for now. There is however the issue that not much more is allowed to go wrong at present as this could change the game as is with Chancellor Merkel to become the loser in the next election.

Why is this so important?
Anyone who tries to trivialise this is clearly of their rocker (and out of their mind too). This event, should it take place is huge and the impact it will have is pretty much beyond what anyone can imagine.

Consider two scenarios.

In the first scenario we look at the one that had been an issue a few times in the past. This was the situation where those countries unable to pull their weight would be cast out of the Euro. Merkel united with the others to prevent this in the past. Greece was number one on that list, but at present Spain might actually end up getting added to that list, so there is a lot at stake and the new party might change all that.

The second one is the one that is most concerning to all non-Germans. If the new party gets the strong voice, and this chance is not that far-fetched at present, then there is a chance that they will move to remove Germany from the Euro and moves straight back into the Deutschmark.

There will be many voices on how this will never happen, and then carefully phrased denials on how the Euro is in serious danger. Make no mistake; they will be leading you on. The bulk of all Euro countries are in deficit. Most have NO concrete plan on recovery (they all claim it will happen, yet the events are against them). They all claim that they have which they obfuscate by overenthusiastic information on economic recovery NEXT year. Too many parties are in assumption mode and too few in a state of pragmatist optimism. I do not pretend to be the expert. I am not some PhD with the knowledge of economic events. I am a data miner. I have looked at data in many forms for most of my life. From this point I looked at data and no matter how complex some parties make it all out to be, some simple rules always apply.

First event to take into consideration is that America seems to be printing more and more money on a daily basis. Printed money, which does not seem to be set against anything tangible especially, taking into account a massive 17 trillion dollar debt. Funny enough Germany did something similar in the 1920’s. I remember it because I used to have one of those fünfhundert tausend Deutsch Mark bills (DM 500,000) which is now valued at less than $5. So is this where America is headed? No! I doubt that it will get THAT bad, yet a bankrupt America would be the definite death nail in the coffin now known as ‘the Euro’.

A second fact in this equation is the economical drop in several nations. The Netherlands, Italy, France are all in a not so good financial position. A nice little footnote to this is that the Dutch TV (NOS) reported that the Netherlands would see a more then 2% increase in their economy for 2014 on March 3rd 2013. Yet on the Dutch government site   (http://www.cpb.nl/persbericht/3213019/zwakke-groei-economie-door-achterblijven-consumptie) on 13th of March (10 days after my blog doubted that in my article ‘march Hare of Government’) it now states the increase to be only 1%. I still think it is slightly too high, but whatever, I had made my point. France is also toning down their near future predicaments for their economy. For now only Germany seems to have some reasonable strength (in the short foreseeable term). This is relative as it cannot pull the weight of Italy, France and the Netherlands. Should Germany pull out then the Euro will have a definite problem on several levels.

Before you consider calling Germany names consider that the Euro can only survive if ALL pull their weight. Most of the nation’s overspending the way have been doing for some time is not that. As stated in earlier blogs. When you overspend for well over a decade, at some point the invoice is due and too many are ignoring that little fact. So don’t blame Germany, blame your respective governments. If you have any doubts on that, look at how Cyprus needed 10 billion, an island with barely a million people living there. That is only one island. Several nations are in much higher debts. Granted is that they are not reliant on 80% of their GDP coming from the banks and financial industries.

So the Euro and the issues they might be getting.

It would be very incorrect to say that it is all about the value of the German Mark, yet this is not that incorrect. If you have a soccer team and you lose your star player, will that team survive? Yes, it usually does! However, in most cases that team will not end up as high because of the loss of their star player. When that team is pulled by 1-2 players a lesser result is usually the case. The issue becomes will that team continue on the same level (division) as the other teams. My thought is that this is not the case. That new German party does have a valid point. The other nations could survive if those weaker players are no longer there. What will happen in the immediate response is one from the markets and it will not be a positive one.

We are now left with two thoughts.

1. Should this direction be avoided?
I do not have a direct answer. Let us face it. The chance of Greece or Cyprus EVER paying back their debts is pretty much out of the question. There are off course the additional nations Spain and Ireland. What about them? So far they are coping, but consider that the economy will remain weak until at least the end of 2014. There is no true answer of what to do in that case. Throw out more and more nations? Will the Euro become a factor analyses under the leave-one-out approach? This seems a cold and very logical approach to deal with this matter. Have we loathed ourselves to such an affect that nations are now under the scrutiny of a spread sheet approach?

2. If we embrace this path what is the use of the Euro?
I personally still see the Euro as the means for America to do away with all these different currencies and have a nice go at corporate Europe by moving in with all their options and less as a solution to unite Europe. This is a personal feeling in this matter and the evidence seen in the last three years are clear that European unity is a nice theory and that is all it remained. A theory! If there was true unity then budgets would be kept in check on a European scale. Yet the Euro nations seem to remain a place of PowerPoint global and expedite ‘the local needs’ as it ever was. No matter what we read in the papers and propagated by all kinds of interested parties. The issues in play are kept in a vicious circle.

I wonder whether this is what the banks envisioned from the very beginning, a debt driven society that leaves them out of the equation to do whatever they wanted. This is how we get back to this new German party. Their most prominent speaker was Bernd Lucke, a professor of Macroeconomics from the University of Hamburg. Is he wrong? He definitely knows more about economy than I ever will, but so are the experts who are on the other side of that equation. So where should we stand? It was Bernd Lucke who mentioned in a German magazine ‘Spiegel’ (German for Mirror) in 2011 that all these collapses would end up in the German lap for an amount of 180 billion Euro. That is almost 2200 Euro for each German citizen. And it seems that so far his vision is slowly becoming reality. If someone has to pay 2200 for damages they never made, or issues they never ordered. Would you not get upset with that?

Governments do not seem to accept accountability, Banks and financial institutions are given free reigns to do for the most, whatever they like and the population end up having to pay for it all. How long until we have had enough? This is where the German population is at now. So when people start talking in a trivialising way consider your personal financial situation. Consider paying 2200 Euro for something that is not your fault, not your order and add to this that there is no guarantee that it will not happen again next year. Now consider that the amount is on average 15% of a Germans pre taxation annual income. With German economy losing strength not unlike other European countries, ask yourself how many Germans will consider an alternative to the vision of Merkel?

My views?

Europe should stick together, but there is a clear valid worry that leaving the bill to be paid by a few without clear regulations on what some are allowed to do is just not realistic. It is the present German fear and it is shared by too many people in Germany.

 

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April 13, 2013 · 14:47

Cold War Two?

When we look at the news and other media, then we see immigration issues on many levels and in many nations. There is no denying that every nation has its own issues with immigration.

Here in Australia there has been an uneasy issue with refugees for a long time. Many claim that options could be found, especially when processing off-shore, yet the initial issue was clear that this could never be done as it breached humanitarian law. Yet, only one year later PM Julia Gillard seems to look at additional options to press this solution once more.

The issue that brings this to the top of the list is the issue that the NOS reported in the case of the Russian Dolmatov, which was also reported by Fox News and the BBC. The BBC was even so clever to put the word suicide within quotes. Perhaps they have the same concerns I have. Was this truly just a suicide, or are these levels of miscommunications set to such an unusual level that more is going on? Perhaps some of the involved parties were doing Putin a personal favour? Before we consider this to be another thought of conspiracy theory, let us take a look at the facts involved.

First
The Dutch IND (Immigration and Naturalisation services) conveniently concluded that Dolmatov’s life was not in danger should he return to Russia. Perhaps they want to rethink their status? If a band like Pussy Riot, likely nothing more than a nuisance can get placed in a small cell, then someone with ACTUAL knowledge of Russian missile systems could be regarded as a more serious issue to Russia, only fuelling the evidence that wrong calls were made.

Additional evidence was shown by the Dutch Newspaper NRC where information was brought that there was information that the FSB tried to recruit Dolmatov. Whether that part can be proven, it does clearly indicate that Dolmatov’s return to Russia would have much further reaching consequences. There is no doubt in my mind that these facts should have been in the IND report and as such this entire immigration process would have taken another turn from day 1. If these facts were intentionally ignored or omitted, then the question becomes, were these facts tampered with, and by whom for what reason?

In the rebuttal, if those facts by NRC were incorrect then even so, the fact that he was a visible activist against the Putin administration was a known fact. The fact that the Russian police had been actively engaging anti-Putin protests is well known. Several newspapers had reported on some anti-Putin activists to be jailed for terms in excess of four years.

We see support to the status as it SHOULD have been in: “Handbook on Procedures and Criteria for Determining Refugee Status under the 1951 Convention and the 1967 Protocol relating to the Status of Refugees”

For this we look at the General principles (31).

“The inclusion clauses define the criteria that a person must satisfy in order to be a refugee. They form the positive basis upon which the determination of refugee status is made.”

That document also states that: “There is no universally accepted definition of “persecution”, and various attempts to formulate such a definition have met with little success. From Article 33 of the 1951 Convention “it may be inferred that a threat to life or freedom on account of race, religion, nationality, political opinion or membership of a particular social group is always persecution“.

So we seem to have a proven point. The Netherlands did sign that charter and it even specifically states that the Netherlands extended the application to Aruba. With additional evidence from Dutch press sources (the NRC is often regarded as one of the highest quality sources in Dutch Journalism), I can come to no other conclusion that this was NOT just an administrative (data entry) error.

Second
I was stated in the Dutch NOS newscast that the immigration police did not mention the right that he was allowed to have his own lawyer. Such a basic right omitted? Can we deduce that there is a structural problem?

This can be supported by a report in a case that was judged in November 2006 where was stated “in een geval waarin ervan wordt uitgegaan dat het aan verweerder – de IND of de politie – te wijten is dat geen advocaat bij het gehoor aanwezig was, sprake is van schending van het recht op rechtsbijstand. De rechtbank verwijst daartoe naar artikel 5.2, vijfde lid, Vreemdelingenbesluit 2000 en artikel 18 van de Grondwet.”

[Translation]: in a case where the defendant (the IND or police), that no legal representation was present at the interview is a transgression on the right of legal aid. The bench refers to article 5.2 paragraph 5 of the refugee act 2000 and article 18 of the constitution.

There is additional evidence to state that the IND has had its failings longer than that. Can we therefor reject the assumption that this is ‘just’ miscommunication as was reported? This gives a view by both Gertjan Bos (Chief inspector of Security and Justice) and Fred Teeven (Secretary of Security and Justice) as insincere and an utter fail. The words by Gertjan Bos where he was unable to answer whether better dealing with the situation would had a different result cannot be answered as something too funny to consider to be a serious response.

The first seems to clearly prove that Dolmatov did make pass the requirements of Refugee. As such, as the detainment of Dolmatov was unjust, it would already be evidence that reason of a possible ‘suicide’ is no longer an issue.

Third
The NOS reported that Dolmatov had already tried a first attempt to take his own life, after which no physician was assigned to his case. That in itself is a failing too. This does have a two sided issue. On the one hand there was a suicide risk and no proper care was taken, which is an even worse ‘foo foo’ point for the government. Yet on the other side, the responses that there was pressure and intimidation in regards to Dolmatov taking his life is also an issue, as there is no mention that this pressure was there in the first attempt (or at least so it seems to be the case).

So, are the Dutch dealing with a failed IND system, or was this all a very convenient solution for the Russians. The fact that the Dutch government is very vocal in accepting blame after a three month investigating is not strange. So that is not a factor. What is a factor is that Secretary Teeven did not want an investigation into the dealings of the IND after the murder of evicted Serbian Kosanovic only a month before the Dolmatov case hit.

The NOS did report that Secretary Teeven will adopt the findings in regards to the Dolmatov report. Yet, part of the newscast is a worry, where this has been set as a failing with inaccurate computers and miscommunication. Blatant right violations seem to be at the centre of this all and as such we could deduce that the IND has a strong infrastructure failure where the rights of refugees are set. I read more than one article where it is stated that the IND prefers to do a first interview WITHOUT legal representation, as to ascertain whether a person is a true refugee. This is fair enough, yet, in a legal state, such a solution should be regarded as inferior. This I voice as we know that many western nations have a high amount of freedom and refugees come from places where these rights are missing. This means that refugees who are trying to escape a place of intimidations (often worse) as placed in a setting where they are highly intimidated. They are in their own job interview where failing the interview would mean certain death. Would you not be intimidated?

Going back to the Dolmatov case. There was an interesting mention made by the Amsterdam Herald on the 4th of April. There it stated the following: “Ludmilla Doronina, Dolmatov’s mother, said that as the note went on the style became less recognisably her son’s. Towards the end it contains an elementary spelling mistake which she insists he would never have made. ‘On the first page every comma is in the right place,’ she told Dutch state broadcaster NOS. ‘I think he wanted to give a sign that this had been written under the influence of something or someone.’”

I mention this as I found it. I am not sure how reliable this is, yet as the Amsterdam Herald seems to be the only source, some question marks should be added. I do wonder if any of the Journo’s took a serious look at those insinuations. It does not matter whether the mother is an emotional source (some papers live on emotions). It is a fact that could support or reject certain issues currently under discussion.

In the end we are left with an interesting question. If refugee issues are mounting up, and in this case where a nation as evolved, liberal and free as the Netherlands has a failing of this magnitude. Should we worry about certain issues that are now visibly in play all over the commonwealth?

Is this the second cold war? A war that decides who gets to live in freedom? For if freedom is a right subjected to conditions then what defines freedom and what is the future of any refugee?

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March 25, 2013 · 15:16

Ideology?

It was tempting to continue on my blog to have another go at those ‘Masters’ of finance, but a newscast by the NOS (Dutch News Broadcasting Service) opened my eyes to another issue that is playing at this precise moment. It also plays in other nations, even though most might not have given it much visibility and we might not be aware, but many people have met this situation whether they are aware of it or not.

For me this started in 1983/1984. I knew a man, just a loose acquaintance who I met in our days in the army. After his tour with UNIFIL, where he was placed in Lebanon for 6 months he was swayed and decided to join the PLO (after he returned home). At that time, I thought he was an utter idiot and I had only barely celebrated the point of no longer being a teenager. Those lovely days, everything was clear in black and white! Grey was for pussies!

Listening to the voice of Yassin El Forkani in regards to stopping Dutch citizens joining in their Jihad against Assad I find myself in a very different place. Ideology, how can we condemn it? This is not a group of people joining as terrorists (or perhaps they are). No, these people belief in what they think is right, and they are willing to put their lives in danger to fight for what they belief. They feel that they are fighting to depose a murdering tyrant. Who is correct? Who is right?

Yassin argues a valid and good point: “The youth does not see grey, they cannot relate to nuance“. How right he is. He is pleading. He wants these ‘kids’ to stay at home, to support their family, to finish their studies and to build a future. From my view now, he is correct. Yet, does that make the stance of those people who went to fight against Assad wrong?

Looking back to 1983 perhaps my Dutch comrade was not wrong, yet I would not have joined him. If I aligned with that train of thought I would have joined the IDF. We might have ended up facing one another. He was swayed by the charisma of Arafat. There is no doubt that Arafat had Charisma, only fools ignore that part. So how does this relate to Syria? It is clear that the people fighting Assad are in need of troops, materials, weapons and ammunition. For me to judge one side, or the other seems hollow and empty. Not because I care/not care, I believe that a sovereign nations must manage their own issues. This is not because of my level of care, but because these pivotal moments of a nation are written by the victors. The Netherlands took care of the Spanish, The Americans took care of the British and the list goes on and on and on.

Should we oppose any stance, by any reason, we must understand that for most of us, our nation, whichever it is came into existence one way or another, and belief me, most of those histories are a bloody mosaic of deaths and executions, the ones who fight fair usually die.

A view that was also shown in that newscast was a jihadist speaking out for going to the war, but he was not going, because he is a father and he is not strong (His words). Does anyone remember ‘the Patriot’ with Mel Gibson? He got a nice script ‘A parent does not have the luxury of choice’. Remembering my past, when I decided not to go either. I was not a parent, was I weak? I do not think so! I had a life to return to. I had some level of roots and it seemed to me, I had something to look forward to. Is that the threshold factor we are missing? It seems to me in these nations where unemployment levels are rising, any clarion call of ideology will be considered by those who listen.

So, how to see the situation in Syria? More important, will it end with Syria? This is the other side of social networking. Interests can grow, people can be swayed and troops could be gathered this way. This is what was feared the strongest by FBI, MI-5 and a few others. Not that these people went to fight for their beliefs. No, the fears are that they come back with a full arsenal of military trainings. This would be a massive win for Lone wolf recruiters and it would be a real concern to those having to deal with the returning people.

The fact that these groups are growing large in size, willing to go there at a moment’s notice and indeed take up arms is a new charter in war management we have not seen before to this size and extent. It is certain that it will go on, and many will start to ponder two issues. Where will they be swayed to next and what are the international ramifications? Today Damascus, tomorrow Doha, then what? Muslim, Jew, Hindu or Christian, when a citizen takes up arms against another nation it will become a diplomatic issue, non-combatant or not.

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March 19, 2013 · 17:07

Banking the blame game

Yes, it took less than 72 hours, but Cyprus has broken more than just a little all over Europe. There was always the issue is the situation that the numbers did not add up. Looking at the news as it hits us from Sky News, NOS, Wall Street, Reuters, CNN and a few other sources, we get the distinct impression that politicians have heard of the concept of a spread sheet. There is however a decent chance they have never seen one. Consider that these politicians were involved with the Cyprus deal, we should wonder in how much problems Europe currently is.

First is the issue on the uniqueness of the plan in the first place. Those who saved all their lives, high and low savers, all have to chip in to prevent Cyprus from going bust. So, in this situation the people will be taxed twice. Once on the average of their income their savings will be cut up to an extra 9.9%.

So, how did this get this weird? Well, reporters are giving us all kinds of reasoning; many of them make perfect sense. A good one was the issue that the bail out of Greece had to be paid by banks, and this is where Cyprus got into trouble. I am not judging whether it is ‘true’ or not, but there are two sides. I personally belief that this is NOT the full story and more has happened! The interesting part is that the side as mentioned is not given the visibility it should have. Yes, there is an issue, yes, a bail-out is needed. We can also see those reporters around an ATM with queues. Yet, this issue is naught compared to the question how the $12B is needed, and even more, as they scared people to lose faith in the banks and all are withdrawing of billions of Russian Cash, all really willing to take a hike to a safer banking place. Is no one wondering whether certain ‘made’ miscalculations were really this ‘unexpected’? This is what was stated by Bloomberg on the 16th: “‘Simply to leave Cyprus alone and see what happens would be, in my view, irresponsible‘, Merkel told reporters in the Belgian capital after a two-day European Union summit. In her wake, the finance officials arrived, along with European Central Bank President Mario Draghi and IMF chief Christine Lagarde, for the Cyprus talks.”

The other side is that, should this all be true, then the issue becomes that the bail-out of Greece is not just half baked. The solution the financial experts claim to be a solution, was not only not a solution, it is turning out to be a solution that is now dragging down other nations and the Eurozone as well. As markets opened, both Spain and Italy are feeling that like a painful stab in the back. Consider what was stated on Cyprus. They need $12B, they Cyprus is only 0.2% of the Eurozone economy. Whether they were given a bail out, can someone please explain how a market this small be such a financial tsunami creator?

Take the following facts into consideration

1. If the bailout of Greece has this effect on connected banks, what are the EEC and the IMF not telling us?
2. How can an economy this small be allowed to hold such a chunk of so much debt? Remember that the issues continued AFTER the bail outs. We can seriously ask questions on how the acts by the Eurozone ministers are cut down like this. Also interesting that a lot of this was never loudly questioned by members of the press either (if I am incorrect, please refer me to the evidence I missed and I will happily correct this).

3. The markets are now realising that the Eurozone issues are far from over. Bad management seems to be a clear factor. Perhaps that this scenario and the effects were always envisioned by certain players of the big money game! If so, what are they trying to do? Push savings from banks from place A to place B? Would they intentionally want to weaken banks, especially in Spain and Italy?

We could in my mind come to the thought that either the banks and the bailed out governments are in worse shape than ever reported and the IMF and its partners in managing the banking issues are deciding on issues behind closed doors, therefor missing issues that should have been dealt with, or it is not impossible that the lack of bank regulations on an international level are reason that there is no progress at present, and none is to be expected in the near future. More important, imply that part of this is either orchestrated, of that those in charge are a lot less competent then envisioned. There is one remote third option. I admit that this thought is far out there. What if money is ACTUALLY running out? Consider all these swaps, credit vouchers and derivatives. A derivative is a mathematical future. It is not real. If LIBOR represents, UK and US combined, a value of over $1000T (yes, trillions). Consider all the debt out there; no one can pay for it. What is really left? Traders, still dealing in make belief? Concepts and nothing seems real. Food is real, Land is real, and revenue COULD be real. All those governments all claiming to have so much, yet the US is minus 16T, UK is minus 1.5T, except for Germany, nearly ALL are deep in the negative. Now consider why Cyprus gets such a unique treatment. Is it about the $20 billion the Russians have stashed there? If so, then that would be a weird act, to endanger Euro markets to such a level. Those factors might give a little value to the third option I mentioned. I admit, it is a very thin line of thought.

People all over Cyprus are now considering the fact that their banks are all closed until Thursday. Cyprus seems to be hiding a larger secret. Part of this was reported. The issues on money laundering through Cyprus had been reported before, and last by CNN. This is hardly a secret. I know my lack of knowledge and my naive thought of replacing the ENTIRE banking management groups in ALL the Cyprus banks could have actually increased reliability. In addition, it would have given a strong message out to the banks too. None of this was done, no, the saving of people were initially cut, causing market unease. I feel there are enough thoughts proving more is going on than just a bail out.

Legally? The UK and Germany should step in setting up banking laws immediately (one common law and one civil law nation). Not the penny washing kind, but the kind that has sharp teeth. Real reforms start with laws and regulations. The Wall Street Journal reported by Lukas I Alpert reported this statement 4 hours ago: “Cyprus has always said it abides by international banking laws. Russia’s departing central bank chairman, Sergey Ignatiev, recently acknowledged that Russia saw illegal outflows of $49 billion in 2012”

Perhaps those international banking laws are a lot shakier then banks and politicians are willing to admit to.

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March 11, 2013 · 13:23

Start making sense

I have been tossing and turning for most of the night. Something has been bothering me all day, and as it seems most of the night. You see, the Dutch NOS reported on Saturday 9th of March an interesting footnote in their newscast. They suddenly had this short part on the news on how this is possible. (Source: NOS http://nos.nl/artikel/482586-record-op-record-voor-dow-jones.html)

This is interesting, as I asked pretty much the same questions in an earlier blog called “It hurts every time, but we love it”, which I published on Feb 6th, so slightly more than a month earlier. The Dow index is currently at 14,397 (which was a 2007 record). The issue is that we had the crash of 2008; one in six in the US lost their house. So, the economy is not in a good place. There was also the mention in their radio cast (English and Dutch). They seemed to focus on two parts. First was the fact that Economic recovery is gotten through revenue recovery without staffing (so 5 do the work of 10, and they are happy to have a job). Second is that the Dow is based on only 30 companies. Yet, when we look at the number I wonder what game is being played as I look at a 2 year index graph. This graph is Stellar. My issue is twofold. One I am NOT an economist, but a data miner. Second is that the given ‘excuse’ feels wrong. Especially given that the news had this production line backdrop of cars, and none of the 30 seems to be in the car industry. So why not present this with a pharmaceutical backdrop?

So let us take a look at some of these Dow Jones Index companies.

1. Bank of America. A bank, and after 2008, we could wonder in what state it is in. This quote comes from Forbes and was written by Halah Touryalai, one of the Forbes Writers “No bank knows that better than Bank of America which has agreed to pay a jaw-dropping $42 billion, settling credit and mortgage-related legal battles in just the last three years“.

OK, if we take that into consideration, then seems a little weird that their stock graph has the same shape as that of the DOW. (As one of the 30, it would make sense that the graphs are shaped similar, however, such confidence after such a legal fee settlement bill?)

2. JP Morgan Chase. Another Bank! It had two more dips then BofA, yet overall it is in an upwards movement as well. It was also mentioned in the same Forbes article as before on settlement fees, but those fees were a lot lower. The Bank of America had to chew on 66% of the total settlement fees by itself, so for the other 5 big banks, the damage was relatively small in that regard. However, In April and May 2012 they had lost more than six billion dollars on derivative trades that had gone bad. There was a report of 9 billion in total, which also involved Bruno Iksil for part of the mentioned amount, he is also known as ‘the London Whale’. The numbers and the names vary when we look at UK and US papers, but overall they pretty much tell the same story. It is interesting that JP seemed to bounce back within 6 months to stock values higher than before the June 4th 2012 dip. Last on my list is Boeing. It is a giant, but we have all heard of the 787 issues and it’s now named ‘Nightmare liner’. The issue is all about batteries, yet the news from January as reported by Reuters : The new production forecast raised some eyebrows. Russell Solomon at Moody’s Investors Service was forecasting 100 787 deliveries and said Boeing’s forecast of more than 60 was “significantly weaker than we had expected.” Interesting that what analysts expect and what the vibe says Boeing will be delivering is off by almost 40%. Suddenly NOT meeting expectations has almost no impact? 40% less on a firm the size of Boeing should have a very visible effect (imho).

Now the DJI is about 27 other companies and there are only two banks in it. It is also a fact that these banks work with securities and values in the hundreds of billions, so are my concerns just a storm in a teacup?

It is a valid question, and I also ask myself this question. Let us take a look at the two following thoughts.

1. US debt. It is set at 16.6 TRILLION dollars. The total US debt is a lot higher. That one is $59.1 TRILLION.
Can anyone even imagine those numbers? Now consider that someone has that kind of money. To be honest is that really true? Is there a group of nations with that level of wealth? the only nation capable of owning that much is one with an abundance of oil, so basically the United Arab Emirates (UAE) is the only one that wealthy. Either the US is labelled UAE-west, or my thoughts are not that correct in this instance. So perhaps I am wrong (I will be the first one to admit that).
We know that most value trades are now done digital. It is the only way for the market to move such amounts of wealth. However, who checks this?

I have seen my share of digital forms of miscommunication by loads of people in several fields. Often they seem connected to the corporate headquarters of Bloated, Botched, Bungled and Baboon. An always newly formed enterprise, coming to a local public stock market near you. Consider that this is done on the electronic super highway. Now consider that Hackers come at a dozen a dime and greed is eternal, these last two are given facts. Also realise that ANY system can be gotten at. DARPA and the NSA proved that more than once.

The valid question loudly remains: “Who truly checks the validity of trade and the numbers they are traded at?”

2. LIBOR scandal. I wrote about it, the news has talked about it in abundance. Last week in an article by Mark Scott in the NY Times on March 5th the following was stated “The review published by the Financial Services Authority, the country’s regulator, said there had not been a major failure of oversight by local authorities, but it added that officials had become too focused on containing the financial crisis to analyse information connected with the potential rate-rigging”

This is a fair enough statement (it did seem shallow in relation to the handed fines), and them be hefty fines, so why are these two events related? Well, in my mind there are two parts of the LIBOR that were in play. From my point of view there are two variables that might be played with. The first one we know. It is the interest rate; the second one is the bigger issue. You see, those percentages are linked to a total sum of $350 trillion in UK registered derivatives. That is 20 times the US national debt. If people play with one, there is every reason to suspect that they might have played with the other. So again, who controls those totals that are being traded in? If derivatives include hedge funds, swaps and forward rate agreements then we should be worried. Consider as well that the US Bank for International Settlements holds almost twice the value the UK seems to be registering.

So, we are now confronted with just in excess of 1000 TRILLION dollars. How can this even be monitored? Now let us add one more part. The US LIBOR rate is set by 18 banks. The two banks in the DJI are members. Are we all on the same page now? The third bank (Citi) is to be given a fine in regards to percentage ‘tweaking’. According to Reuters, later this year, a new set of settlements will be ‘delivered’. In their publication of March 8th by Kirstin Ridley and Philipp Halstrick it states that: “Deutsche, Citi and JPM are the banks named in regulatory circles as those candidates near the next settlements,” said the second source. So now we have both a DJI member and libor member in this illustrious ‘donation’ scheme. What else is at play?

What if the total value is not correct? What if they did not just play with the percentages, but the total package of the trade able amount? Let’s just take a fictive 5%. Mainly because I feel not so comfortable with the value they say they have and in part because I cannot even comprehend that much, as we get above the $200 trillion range. So, if 5% is taken off the total amount of over $1000 Trillion, would mean that we might all be devaluated by a total of 50 trillion dollars. That comes down to $8400 for every citizen on the planet. Did we sign up for that invoice?

It might be just be me (and I can happily live with that notion), but can bankers and financial corporations be allowed to continue on this track? We have seen clear evidence that those places cannot be trusted with even a small speckle of such amounts. Even though they NEVER broke any laws initially, LIBOR shows that some are very willing to do that. With the US on the edge of bankruptcy (or on the wrong side of a fiscal abyss), with the financial industry in such disarray, what can be done?

So when this all falls over (not if it falls over), what will we be left with?

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February 15, 2013 · 11:32

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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February 10, 2013 · 01:14

The Italian menace?

The Italian menace?

Just when you thought it was safe to think of any kind of future again, the abyss opens up right in front of you and your savings are again in danger.

The first topic of discussion as presented by the Dutch NOS was of course the European budgets. To a budget of 960 billion, the Dutch contribute 6 billion and they got a one billion dollar discount. Yes, this seems to be the Marks and Spencers approach to budgeting. Now, they seem to be happy, and I am not sure how to feel. It does however give a clear picture that the Dutch, always visible as a high player, are anything but that big. When you are profiles as a larger player and their contribution is less than a tenth of 1 per cent, that it means that they are not that big a player at all (or so it seems).
So, the Dutch politicians are going home with a satisfied feeling until the end of the decade. So how is this impacting? It is what followed that could become the real worry. It is a newscast of the return of Mr Berlusconi. Yes! He is returning to Italian politics with elections less than 3 weeks away. Does he have a chance? Not sure and not really my worry to be honest.

What is interesting is how he pulls people in with his dreams of giving back the real estate taxation of 2012. So, if that is done then Italy would be withdrawing from their promise to get their budget and deficit under control. If that happens, then what is next for Europe?
The bigger issue is that this might be a clear indication that Goldman Sachs is back and actively trying to meet their share in the Game of Greed.
They seem to be a clear controlling and influential party with most European governments. Forbes already reported this as a ‘danger’. They did mention the Monte dei Paschi banking scandal as part of their news cast as well. They also remained soft in their ideas of nations no longer being governable. I am less subtle. From my viewpoint I am willing to contemplate the opinion that the European governments are about to become the bank’s bitches with Goldman Sachs leading them the way to population enslavement. I agree, the thought is a little strong!

You see, there is method to my madness, or my madness is methodical (either way works). So, let us take a look at how I got to that conclusion.

In the Dutch newscast on this, as well as in Forbes and as well as mentioned in other sources “Berlusconi, who said he won’t seek the executive position but rather prefers to become Finance Minister, has seduced the masses saying he will repeal a property tax imposed by Monti, returning about €4 billion ($5.4 billion) to the people by refunding taxpayers’ 2012 payments” so with all the shortages, they add to the non-debt resolving side. We can debate whether it is the right or the wrong thing to do. In my view it is an Italian choice and it is their right to choose. Whether right or wrong, it is however interesting that Berlusconi seeks the Finance Ministers position. With him being a connection to Goldman Sachs as a (former) international advisor? It also means that the Italian deficit will be upped by another 5.4 billion dollars. This implies that Italy is less interested in getting their deficit down.

My issue is that according to the numbers Goldman Sachs is one of the banks retaining their gains these last years. I have nothing against that as I do have a capitalistic side. There is however a realistic side to profit, and many greed driven organisations seem to remain very unrealistic. With the ties he had/has, and the rules of the game so unaltered. I worry about what will happen to the Italian debt during the next government term.

Here is the link between this all. This was discussed by the Independent. “What price the new democracy? Goldman Sachs conquers Europe”. In there they made the following statement: “Instead what you have in Europe is a shared world-view among the policy elite and the bankers, a shared set of goals and mutual reinforcement of illusions.” (Nov 18th 2011). I could not have said it any better.

Now we get to the juicy part. Should Berlusconi get elected, and then we will suddenly read on how certain realignments of bad banks will be needed? There will be a change, and of course Goldman Sachs will get their share. It is all nice and legal. No matter how they react, whether Europe breaks apart, whether the costs will once again be set into other places. We are looking at an additional total debt increase of half a trillion dollars (across the EEC) and Goldman Sachs will get their share. So why are the European legislations not dealing with this clearly visible weak flaw?

Now, here is where I get to go on thin ice. The conspiracy theorist in me might think that this is what the power players from the US had in mind from the beginning. From their point of view governments are obsolete! Especially when these governments are getting in the way of highly desired profits, commissions and personal wealth goals.

Politicians seem to get pushed into an ego trip (in some cases they are simply with their backs against a wall). They do not cover their budgets and get the back of these strong players to get visibility and media to do the things that should be investigated and questioned on many levels. The Dutch SNS was a clear example. However other banks and acting parties should not be forgotten. The ABN/Amro Bank was one of these banks that required nationalisation. They are linked in all this with connections to the Royal Bank of Scotland (who was having a nice go at acquiring ABN/AMRO). And again here comes Goldman Sachs around the corner, having a nice juicy finger in all of these matters. They were in an investigation regarding Collateralized Debt Obligation (CDO) traders. They were not guilty, as some people forgot to disclose certain matters. However, the LA Times reported this on October 12th 2010: “Hedge fund operator John Paulson a key player in SEC case against Goldman Sachs. His firm made $15 billion in 2007 by betting that Americans would default on their home loans in droves.” From my point of view, that is not all they betted against.

Why am I so against Goldman Sachs? The issue is not Goldman Sachs; they are not breaking any law. It is the politicians that walk away with golden futures, creating bad banks and leaving the population to work of the debt through taxation, a population left with forever less and less. Soon this can no longer remain affordable and Italy seems likely the next one moving into this direction. This is where banks and large corporations become in charge and we get to work past retirement ages to fill the need of their greed. This is a need that is eternal and will never be satisfied. If you doubt me, then look at the list of nations that was able to keep their budget. It seems that only Belgium made their budget, and that might only have been because they were without a parliament racking up cost for the most of 2011. They even celebrated their new parliament after a record 541 days without a parliament on December 11th 2011. So that would definitely helped in keeping the cost down.

So back to the headline I started with “The Italian menace?”
Is it Silvio Berlusconi the menace? Possibly! If he continues on a path that does not stop the rising debts.
Is Italy the menace? Possibly! If they do not get a handle on their debts. In this case I mean a solution where they pay for their massive overspending from more than the last decade, mostly under Silvio Berlusconi.
Will the Italian menace end the EEC? Likely! If debts keep on rising, and as insurmountable debts are taken as write off’s against retirement funds and national treasuries. It is not impossible that Italy becomes the straw that breaks the camel’s back. Should you consider that this could never happen, then think again. The same was said about the SNS bank and that puppy is now a nationalised one (but it seems that for now it is not house broken).

This has happened again and again. This is not just about the banks. Politicians are also to blame. For that I would like to mention papers like “Investing in Greece: an Olympic opportunity”. It came from Costas Bakouris in 2001. The thoughts were all fair enough. However, how much came to happen? How much money did come in?

Most facts point towards the information that the Olympics cost double from what was budgeted and out of the amount approaching 10 billion a lot less then budgeted came in.
There was the article called “Business and investment prospects strong after Olympic Games triumph” Which was released after the games of 2004. In December 2004, through the newspaper USA Today. It was published in December 2004. The interesting part of the second story is that there was no name attached to it. So what was THAT source?

Even though the Olympics are a unique event, the financial consequences are real and high. Yet, there were no visible budget cuts and massive cuts were required. But wait, here is super hero/villain Goldman Sachs to help with the presentation of it all.

The Olympics were the most visible, but not the only one. This is what Felix Salmon wrote for Reuters on February 9th 2010 (exactly 2 years ago). “It’s a bit depressing that EU member states are behaving in this silly way, refusing to come clean on their real finances. But so long as they’re providing the demand for clever capital-markets operations like these, you can be sure that the investment bankers at Goldman and many other investment banks will be lining up to show them ways of hiding reality from Eurostat in Luxembourg.”

In that time, banks wrote cheques for investment events no one could cover. This is clearly shown in the case of the Dutch SNS. And the fun does not stop here. The article “ABN Amro hiring spree targets Asian private wealth” 29 January, 2013 Written by Elliott Holley shows that they are hiring again, with at least 1 person from Goldman Sachs. It is interesting how this small circle gets to go everywhere.

Goldman Sachs does not seem to have broken any laws. Politicians all over Europe seem to have changed very little, and they seem to all extremely willing to get into bed with Goldman Sachs, their ‘golden’ solution. National politics does not seem to regulate banks to the degree that is needed and some governments do not seem to properly regulate themselves either.

When we look at the 2011 EEC numbers we see the following: the largest government deficits in percentage of GDP were recorded in Ireland (-13.1%), Greece (-9.1%), Spain (-8.5%), the United Kingdom (-8.3%). Whilst the Government debt kept on going up and was set at 10 421 987 million Euro, which boils down to 82.5 (% of GDP). (Source: Eurostat News release 62/2012 – 23 April 2012)
They also show that Even though the GDP was set to become negatively in 2012, it had been forecast slightly positive in 2013. There is no proof of that, and whatever taxation was acquired in 2012, Berlusconi wants to hand that back to the people. Consider these numbers. Now add three facts to this equation.

1. The LIBOR scandal (see previous blog) shows how within the UK the percentages had been tweaked. This means that the percentages were incorrect. Now consider that the LIBOR is based on 4 times the planets GDP (adding up to 300 trillion $ as mentioned in several articles).

2. The GDP is the market value of all the final goods and services produced within in a country in a given time period. We have seen how people are without work. Economies are shrinking and services are lost to families all over the EEC. So how does that number keep on going up?

3. The European Economic Forecast, Economic and Financial Affairs (Spring 2012) document shows a picture again way too optimistic. In several nations it seemed to predict that 2013 was a year when things would be turning up. There is NO sign that this is happening. The belts are tightening in nearly all European nations. In addition, when we consider the SNS Property moving into Bad banks, we see that the current need for business property is diminishing due to lack of revenues. From my point of view it implies that the mentioned government debt at 82.5% of GDP (2011) could be as high as 90% of GDP. If that is true, then the overall percentages will hit all harder as the interest rates for government debts should be higher, and their credit ratings might be lower as a consequence.

Now consider that should the debt grow and their rating goes one level down, then that nation might have to pay a percentage on their debt. With governments owning hundreds of billions, an example means that a debt of $300B, if the interest is only 1% that would come down to an annual payment of 3,000 million, just to keep it stable. That means every person pays between 50 and 300 dollars to pay the interest. EVERY PERSON! Now consider that this is not a real problem for most people, however Consider that in Spain 24% has no job, that means that this amount will be paid by 75% of the population with income, so they pay more now. Then consider that the debt needs to go away.

We cannot trust banks as LIBOR shows. The EEC papers show them to think of them in a better state then they are, and the presented numbers are debatable. And as shown from several sources Goldman Sachs is connected to nearly every stage, somehow in some non-criminal way.

So two years later (after the claim by Felix Salmon), where are we now and what bad news is yet to come?

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