Tag Archives: PwC

FaceFlu

Yes, we have had Covid-19 v1, we are about to experience version two of that flu and neither of them speak Spanish, so now we see that the BBC is giving us ‘Facebook defends itself over virus misinformation’ less than an hour ago. Why do they have to? Who arrested David Icke over the spreading of the rumour, the false rumour that the Coronavirus was spread by 5G? Who has arrested him, who has prosecuted him? You see in all this, Facebook is fighting this fight with both hands behind their backs and every ankle has a ball and chain bound to it, not really a fair fight is it?

Another article by the BBC gives us that Malaria medication is used as a trial against the Coronavirus, why? Professor Nicholas White from Oxford University is not even sure if it is  beneficial or harmful, so as such does it even make sense to test this on 40,000 health workers? That is quite the trial, I see it as a massive overreaction, now let’s be clear, I did not study medicine, so I do not know, but I am aware that finding a vaccine is 12-18 months away and we are not even 6 months into that timeline. We see all kinds of media talk about frontrunners, with subtle undertones like “very early findings indicate the vaccine is safe and doing what it needs to do” in that path (source: ABC) can we not consider that this is corporate misinformation? Some company no one has heard of sets a record time, a record time that is close to one third? Whilst another source gives us ‘Vaccine experts say Moderna didn’t produce data critical to assessing Covid-19 vaccine’, something that ABC did not give us, or perhaps I missed it. Is misdirected hope not harmful too?

When we see “The Companies stock valuation also surged, hitting $29 billion, an astonishing feat for a company that currently sells zero products” I see that the economy is impacted several times over and all in the light of recession with a flavour of Corona (not the beer). We are so driven to slap Facebook, yet we refuse to slap the media on several fronts. 

We look at the good, we shiver at the bad, but we refuse to valuate and investigate the media bringing the news. How is that fair on Facebook? The media at large also uses Facebook to get the clicks and the views, yet they are not investigated, the balance of events is spinning out of control and we are not looking at what may be, it works for me, I am seeing an optional surge in my IP and I merely have to wait until the new Corona strikes, my IP will flourish because of it. It was never designed to do that, it was merely a happy side effect and my peers are still not looking in the directions I am and it is brilliant (for me), as there is every chance that there is another path that is opening up for me, I rejoice, yet I might have to rely on my nil existing knowledge of the Chinese language, such is life. So as the US senate is delisting China firms with a reference to the Luckin Coffee accounting scandal, I am not aware of it, but I do remember a grocery store named Tesco, how much action did the US senate take there? In 2017 the probe into PwC was called off, so as far as I can tell, we in the west have a lot more skeletons in our closets than China has. As I see it, we have plenty of problems, we do not need to inherit the short sighted, greed driven American ones. 

These are all elements that hit us and they impact our corona lockdown lives as well, because the news that we see, and the media does not care about us, it cares about its shareholders, its stakeholders and its advertisers, and they all need some bogeyman to exist, so that they can move unnoticed, and as flames are created and evidence is absent is several cases, we get handed a bag of goods, one that pleases the media and its three masters. To those four Facebook is a problem and they are making it a much larger and overly visible one, why do we not notice that? So whilst the media struggle for flames goes on, we might notice some news, but we ignore a whole lot more, because we are not informed. 

And there lies the problem, how can we know what we are not told? In some cases Al Jazeera, the BBC, the Guardian, the Washington Post and the NY Times give a decent completeview, but they are all for the most so deep into Corona issues that news slips them all. And that is the stage smeplayers need to have, yet Facebook can change that and they really do not like Facebook. Facebook can adjust instantly and that is what some do not like at present. Will we see another chapter in that? It is too soon to tell, but overall there is a stage where Facebook cold end up playing a much larger role, and if the timing is good the media will cry like a little bitch stating that they lacked resources, the only question that remains for you is how I could see this coming a mile away, the answer is simple, ithas been going on for a while now, yet the Corona virus was not anticipated, it changed a lot too fast for some and Facebook was there, like a tower, merely facilitating for the message and those messagemakers are often not in the pocket of the three controlling the media. It has been this way for years, the Coronavirus escalations are merely bringing it to the surface.

 

Leave a comment

Filed under Finance, IT, Media, Politics, Science

Want a cake? Buy a bakery!

There was a man (not me) who loved cakes so much (definitely me) that he decided to buy a bakery (not on my income), so he spend £1,475,000 and now he has a cake every day until he dies, and that was the happy ending, or was it?

Consider that at the Cake Store, an outlandishly super cake (birthdays) from £45 onwards (up to £850) which will give you colour choice for inscription, 4 levels of cake (the 4th being a Rubik cube cake), choice of filling and selections of candles and sparklers. So it does not get any better than that. Yet we all agree that the most expensive cake is not a daily choice, anything below that tends to be around £100, so a fair cake and there plenty of cakes are 16″ and a mere £69. So at that stage we see that the man paid upfront for 19,666 cakes, implying that he will have a daily cake for 53 years; and that is when we ignore the interest he could have gotten on the £1,475,000 which in an optimum stage is interest that pays for 983 daily cakes a year, we call that a bad choice when the goal is to have cake every day. Now when it is about government policy it is not that simple.

And this gets us to the actual story, the fact that the Guardian gives us: ‘Government spends almost £100m on Brexit consultants‘ (at https://www.theguardian.com/politics/2019/may/29/government-spends-almost-100m-brexit-consultants), I get that consultant might be needed to some degree, but Brexit is something new, so how would they know? Yes, I very much understand that one of Deloitte, PricewaterhouseCoopers (PwC), or Ernst & Young was needed, but all three? Even if that was the case, for example manpower, the issue is not merely the £100 million; it is the stage of what knowledge did these civil servants not have?

Before we go bashing civil servants left, right and centre, we need to acknowledge that you want consultancy to some degree on international tax issues, on international legislation, yet is that knowledge not available within the government? We apparently have Law lords, we apparently have treasury and tax experts and the fact that they came up short by £100 million in knowledge is a much larger issue than I am happy about.

The fact that the end of this is not near, a premise we see with: “Marked “official sensitive”, the investigation warns Whitehall spending on Brexit consultancy work could hit £240m by 2020, as officials scramble to plan for departure from the EU” should be a larger concern. Then I notice a name which I have stumbled upon. With the mention of the Boston Consulting Group (BCG), I go back to ‘The Repetitive Misrepresentation‘, A May 2016 story (at https://lawlordtobe.com/2016/05/28/the-repetitive-misrepresentation/) where I stated: “The quote in the Business Insider gives you “I got the analyst who wrote one of the reports on the phone and asked how he got his projections. He must have been about 24. He said, literally, I sh*t you not, “well, my report was due and I didn’t have much time. My boss told me to look at the growth rate average over the past 3 years an increase it by 2% because mobile penetration is increasing.” There you go. As scientific as that“, this was at the core of the issue I had with PwC earlier. The final Gem the Business Insider offered was “They took the data from the analysts. So did the super bright consultants at McKinsey, Bain and BCG. We all took that data as the basis for our reports. Then the data got amplified. The bankers and consultants weren’t paid to do too much primary research. So they took 3 reports, read them, put them into their own spreadsheet, made fancier graphs, had professional PowerPoint departments make killer pages and then at the bottom of the graph they typed, “Research Company Data and Consulting Company Analysis” (fill in brand names) or some derivative. But you couldn’t just publish exactly what Gartner Group had said so these reports ended up slightly amplified in message; even more so with journalists. I’m not picking on them. They were as hoodwinked as everybody was. They got the data feed either from the research company or from the investment bank“. This all from an article in The Business Insider from February 18th 2010! (Yes, more than 6 years ago).” I am not stating that BCG did anything wrong, illegal or immoral, I merely wonder how they got their numbers, Brexit is an unseen event and there are no scenarios that fit the bill, so how were their results gotten (or is that begotten?); these are questions that reside with Bain & Company, as well as the BCG. PwC is not out of that firing line, it is for the most only Deloitte who gets a pass (based on previous work), as well as some of the people I know (from) there.

If there is one part I get then it is the entire Defra mess (mess still an optional word). The Department for Environment, Food and Rural Affairs has to deal with all kinds of legal and policy issues that have never been transparent, I would be surprised if there is not a whole range of other issues floating up from there in regards to food matters from all over Europe (France being an obvious first). An example that was seen last year when those reading Wine magazines were introduced to: “It’s made from outlawed jacquez and herbemont grapes, he explains, and is produced by a coop of rebellious vignerons in the Ardéche region of southern France.” Wine that is banned by the EU, so that is one part that Defra might not have been prepared for at present and that is merely a top line result I looked at, when we start looking at the Romanian Equine Beef Burgers the matter becomes truly adventurous. None of it is the fault of Defra mind you, merely the stage in which they find themselves at.

That also raises the issue seen with: “Whitehall report criticises departments for lack of transparency“, at that point, what are the chances that the Border Delivery Group with £10.2m and Defra with £8m have been doubling up on data and reports? More important, if they are from different sources, the data will not match and cannot be compared, or better stated, until the questions and data are not rigorously inspected, there will never be a way to tall on a few levels how valid and optionally how replicated the issues are. There is clear overlap between the two, yet the lack of transparency implies that they are not aware of each other’s work until the final report was handed to all the players.

In addition when I see: the DHSC employed Deloitte for “management support … in ensuring the supply of medical devices in case the UK leaves the EU without a deal”“, questions are shaped in my mind. I get it; there are questions, very valid questions. Yet in all this, Philips Healthcare has 6 locations in the UK, the same for Siemens Healthineers UK. So suddenly they would not be able to provide? They had their tax breaks for decades; as such they are responsible for delivery. It is time to look at these places and see just what tax breaks they got and hold them accountable (to some degree). I am merely mentioning two elements, there are many more where they had the deductibles and now they would walk away? Did the Department of Health and Social Care ever look at that part of the equation? Because if these people ‘walk away’ we can undo these tax breaks immediately, for the next decade or two.

It could be my version of ‘the sun also rises’.

It all comes to blows when we see: “But the report says it has taken an average of 161 days for basic details of Brexit consultancy contracts to be published, compared with 83 days for all consultancy contracts“, the fact that details are withheld for almost 6 months, beckons the question, was that before or after the contract was signed? In addition to this, when we look at “In February, analysis found government and public sector bodies had awarded contracts worth £107m for “professional services” in relation to Brexit planning. Tussell, a private firm that analyses public contracts, said the figure included 28 consultancy contracts worth nearly £92m.” gives me the questions on how much Tussel costs to check all this and are these contracts checked for doubling up, or are the merely checked for validity, hours versus billed, as well as how the contract was set up and what was required to be delivered? Merely the basic stuff and as such, as these contracts are compared, will I find a doubling of data as similar questions are to be answered?

Even as I partially agree with the government spokesperson giving us: “It is often more cost-efficient to draw upon the advice of external specialists for short-term projects requiring specialist skills. These include EU exit priorities such as ensuring the uninterrupted supply of medical products and food to the UK.” I do end up with questions on the arrangement of short term contracts and the fact that the treasury coffer is now out of £100 million. The fact that we see ‘such as’ is also a problem, the people were so over the moon on being a member of the EU, the fact that the government never looked at contingency issues within any government since the UK became a member of the EU is also a failure on several levels, especially when we consider the fact that this looks like an impairment of national security (or is that on levels of national security) whilst we see unproven Huawei accusation left, right and centre, an issue that does matter as you are about to find out.

The Washington Post gave us two days ago (at https://www.washingtonpost.com/technology/2019/05/28/its-middle-night-do-you-know-who-your-iphone-is-talking) ‘It’s the middle of the night. Do you know who your iPhone is talking to?‘ with the added: “Our privacy experiment showed 5,400 hidden app trackers guzzled our data — in a single week“. It relates in a simple way, we accuse Huawei whilst apps are according to the Washington Post: “On a recent Monday night, a dozen marketing companies, research firms and other personal data guzzlers got reports from my iPhone. At 11:43 p.m., a company called Amplitude learned my phone number, email and exact location. At 3:58 a.m., another called Appboy got a digital fingerprint of my phone. At 6:25 a.m., a tracker called Demdex received a way to identify my phone and sent back a list of other trackers to pair up with. And all night long, there was some startling behavior by a household name: Yelp. It was receiving a message that included my IP address -— once every five minutes.

It seems that there is a flaw, not merely in transparency and regarding the consultancy groups, there is a flaw in the way we think, the government is set to a stage, what would we have to do, whilst the tax breaks have been ignored to the stage where companies have a responsibility to deliver, which of these reports takes a look at that part and when we see that Apple did not do enough, when we are told that the user should not have installed a certain app, the fact that the app should not have been allowed in the apple store (or android store) is equally a setting to look at, the lack of transparency implies that this was not done, not once.

So when we divert (for a moment) to: “According to privacy firm Disconnect, which helped test my iPhone, those unwanted trackers would have spewed out 1.5 gigabytes of data over the span of a month. That’s half of an entire basic wireless service plan from AT&T.” I made a similar mention in January 2017 (at https://lawlordtobe.com/2017/01/30/taking-xbox-to-court/) where in ‘Taking Xbox to Court?‘ where Microsoft uploaded almost 6 GB in a fortnight whilst playing single players games. The fact that Microsoft hid behind: “we have no influence on uploads, that is the responsibility of your ISP!“, as response the Xbox helpdesk (read: party line) that their support gave me when I called still makes me angry. But now it is not merely consoles, it is happening all over the place and the government either does not care, or has no clue, so when we see ‘privacy’ driven issues, I wonder who they are trying to fool. Especially when I was confronted with ‘possible civil contingency need‘, there are optionally so many contingency needs transgressed upon (as I personally see it), how about recognising that in all the elements clear transparency was an essential first, the fact that the large players are not willing to be transparent, we see a much larger issue all over the place.

Even as part of one of the DHSC reports gives us: “It is difficult to prepare detailed predictions or plans for such unpredictable concerns“, so if we see the impact of ‘unpredictable concerns‘, at what point do we ask more serious question on where the foundation of £100 million came from? And it is not merely the spending, those who asked the questions and the exact questions themselves would also need to be scrutinised, because the private firms merely facilitated and they did nothing wrong, the other side needs to be looked at, to a much higher degree than ever before.

Now consider a paper by DLA Piper (at https://www.dlapiper.com/en/uk/insights/publications/2019/04/no-deal-brexit/data-protection/) only a month ago where we see: “UK data protection law is governed by the General Data Protection Regulation (GDPR), which came into effect across all EU member states (including the UK) on 25 May 2018, and creates a harmonised legal framework regulating the way in which personal data is collected, used and shared throughout the EU. Should the UK leave the EU, the GDPR will cease to have direct effect in the UK. However, as the UK is committed to maintaining an equivalent data protection regime, a UK version of the GDPR will effectively apply following the departure date (exit-day)“. This is fair enough, yet as the Washington Post two days ago and I was able to show (850 days ago) that the collection of personal data is already off the wall, so at what point will we see recognition that the point of no return was passed a few hundred days ago?

So at what point are there questions on DLA Piper (who did nothing wrong) regarding; “The GDPR imposes restrictions on the transfer of personal data to a ‘third country’” and as the Washington Post gives us an iPhone example, we see that Huawei is clearly 0% guilty in that part, so how is the entire: ‘President Trump is clueless on true national security in the first place‘ not directly on the mind of all, especially when the transgressions are seemingly global. Perhaps when we realise that these are American Apps there is optional no national security infringement and privacy is merely a concept for all the players of that issue in town. At what point will the UK realise that they have much larger issues?

Even as there is complete acceptance of: “It is important to be aware that SCCs cannot be used to safeguard all transfers – for example SCCs do not exist for transfers between an EU-based processor and a UK-based controller (ie where a UK controller hosts personal data with an EU processor). This is a known area of risk to regulators, which impacted organisations may decide to ‘risk manage’ where data repatriation is not a realistic options“, I am willing to state that not only is ‘data repatriation is not realistic‘, it was not an option well over two years ago and the loss of data  (read: data copy transfer) under 5G will merely increase by a speculated 500%.

It is the realisation of these elements where we need to revisit: ‘those who asked the questions and the exact questions themselves would also need to be scrutinised‘.

I wonder if that was done and more important to what degree. We can agree that investigation on what might happen might have a steep price, I get that, yet overall there are larger issues regarding the exact question what was asked, the model, the data, the collection and the integrity of data regarding the question that needed to get answered. I wonder (because I actually do not know), how far did Tussel go regarding that part of the equation?

So how did this get from a bakery cake to 4G and 5G privacy?

It is about the cost of doing business, not merely the stage of prepared for what comes next and I feel that in light of what we are shown by the Guardian, the ‘cost of doing business’ and the ‘next stage of enterprising’ is not aligned, when we realise that there is a large non-alignment of issues, how large is the gap in these reports, not merely on legislation and policy, but on operational levels that will get hit first. The DLA Piper part makes perfect sense, yet when you realise that the mobile application status is already nowhere near it needs to be, how useful is the DLA Piper part, which is technically speaking flawless? When we see that part of non-alignment, how many reports costing £100 million have an operational discrepancy when tested to the actuality of the events?

In equal measure we get the additional question, would transparency have solved that, which is likely to give the answer that require us to take a hard look at those phrasing the questions. One led to the other, and I merely looked at the digital part, when we look at actual shipping (and ships), we see the realisation that the UK is still an island, one tunnel does not solve that, how do we see the filling of the prospect of the danger that a lot more contingency plans are missing, not because of Brexit, but because they already should have been there, the IOS data tracking part is evidence of that.

 

Leave a comment

Filed under Finance, IT, Media, Politics, Science

The economic insanity

We all have our limits, we all have parts we look at it and it just does not make sense. I am no different in that regard. I cannot fathom how a business survives at times. We all get that. I grew up having to walk to the grocer, the butcher and the general goods store when I was young. I got beef from one, I got cabbage from the other, we even had a potato vendor on a street called Vierambachtstraat (Rotterdam); this potato man had half a dozen of different kind of potatoes, sweet, non-sweet, large and small. We would pick up a bag 3-4 KG and it would be more than enough for a week (household of 5). At some point he left us, he stopped, the grocer remained for a while, yet I was still around when he left and it was replaced for a record store. The general goods store had already left. You see, a Supermarket called Albert Heijn had taken over and the other stores could no longer remain there. The butcher remained, yet over time he too would fall away it is now a furniture store I believe. My house is still there, yet none of the shops remained, over time they were replaced by other shops, a mere sign of the times.

So when I was confronted with ‘Interserve shares fall as growing debt sparks fears over its finances‘, I initially merely glanced. An outsourcer called Interserve; it seems to be something trivial. That is, until you realise the part “The Company, which carries out building work and provides services such as cleaning, said debts would be between £625m and £650m by the end of the year, having earlier said debts would be £575m to £600m“. So even if we would trivialise all this, in which universe would a company have any chance to survive with an initial debts of ‘£575m to £600m‘? The fact that it will be fifty million pounds more should be the fuel to the fire. A company will be in debt for well over half a billion pounds and people are worried? Why on earth were the members of that board of directors and their children (and grandchildren) not sold into white slavery on a market in Marrakech? You see, I get it, any company will have downturns and we should allow for repairs on that, yet when a company is the pressure on the existence of small companies, whilst it act as a behemoth with a workforce of an estimated 75,000 people worldwide, we need to up the ante. These people are pushing the envelope hoping that they would be like any bank ‘too big to fail‘ leaving it up to politics and wheeling and dealing to get them out of the hot waters, to save and saviour their hot potatoes some might say.

Even as we see: “It comes a week after Interserve was forced to comment on the state of its finances, after shares tumbled to a 30-year low over fears it was heading the same way as Carillion, the rival outsourcing firm that collapsed in January“, was that not a wakeup call to set the stage to push for oversight much faster?

We are also introduced by Russ Mould, investment director at AJ Bell to: “Chief executive Debbie White and her team are clearly doing their best to steady the ship at Interserve but the admission that net debt will end the year higher than expected, not helped by how the cash inflow from the troubled energy-from-waste business will be lower than hoped, means the company has yet to reassure shareholders and potential investors about the key issues that face it.” I am not sure how we should see this, in view of: ‘how the cash inflow from the troubled energy-from-waste business will be lower than hoped‘. When should we accept ‘lower than hoped‘? That implies speculative investment with funds that they never had and playing the gamble card in corporate expectations. So when these debts hit full on, who gets to pay for that, the taxpayer? It is my personal believe that until the debt is gone, none of the board of directors should be allowed any income above £100,000 with in addition all bonuses scrapped until the company goes out of the red. In addition, there should be no weight to the claim: “Interserve, which provides a range of services for schools, hospitals and government departments across the UK, agreed a £300m rescue plan in March, at a time of heightened pressure on the outsourcing sector and in the wake of Carillion’s collapse under a mountain of debt.” From my personal point of view, they took jobs and under-priced them forcing the small fish out of the water of revenue, and then they use that shortfall to push taxation to zero whilst walking that path too often in too many divisions. That is how I personally see this and I might be wrong. Yet in all this, that is seemingly the path too many large players play it, undermining services for the longer time whilst the others have no option to get into the business. The government might like the short sold services as it looks good on their costing spreadsheet, yet when group of 75,000 people end up to the larger extent being unemployed, the damage will merely increase for all the parties involved. Russ Mould also gives us: “some investors would wonder why Interserve was waiting until 2019 to unveil a new plan designed to reduce debt, whilst the share price slide suggests the company’s situation remains acute“. In light of that we see the urgent need for players like that to suffer a lot more oversight, the withdrawal of all bonuses and capping of income. In a state where we see an escalating stage of danger to staff members on almost every level (I did say almost), we see (at https://www.interserve.com/docs/default-source/investors/financial-reports/integrated-reporting/2017/2017-full-year-pdf’s/governance-report.pdf) the mention of something I will address shortly, whilst we see (at https://www.constructionnews.co.uk/companies/contractors/interserve/interserve-ceo-set-for-125-bonus-for-2017/10030955.article). Can anyone explain to me how well over half a billion shortfall gives rise to: ‘Interserve CEO set for 125% bonus for 2017‘, you might think that this was merely last year, yet consider that one company has a shortfall of well over half a billion in one year. That does not happen, this has been going on for a much longer time and whilst we accept that any company gets to have a hard time, it seems utterly unacceptable that its board of failures in managing that get to go home with £525,897 (the bonus of Chief executive Debbie White) for 4 months of work and if things go really south, to sit at home on the sofa optionally watching Netflix and porn for 5 years whilst the market ‘restores’ itself. It gets to be even less tasteful when we also see: “This includes an annual variable pay (AVP) bonus of £270,089, which is 125 per cent of her pro-rata base salary of £216,667 since she joined in September 2017 – the maximum available under the AVP scheme” are you feeling betrayed yet? She should be regarded as HMRC positive and kept in isolation, removed from income until the company is again in the non-red numbers zone.

Was that over the top?

When we consider the first report which is 62 pages, we see that plenty of space was used to give rise to bonuses where three people get to go home (in a best case scenario) with £2.555, £1.593 and £1.168 million. In a setting where we see that a company minus zero setting, towards the one billion mark in the red, how is there even a case for a best case scenario? How is it that we see all kinds of share and cash deals whilst there is a real issue with this type of company? Should we not see a whole range of other questions holding the HMRC responsible for allowing this situation in the first place? Whilst the cheapest of the three (other executive director), optionally being a figure of speech for a lot more than one person the issue merely intensifies. Their minimum pay is £380K, which is close to 1,800% of the average annual UK income; giving rise that one year would enable a person to afford a person to go on a holiday for close to 10 years. I never had that option, not in two decades of loyal service, interesting how some people are just not held accountable for bad turns is it?

So whilst these high and mighty desk jockeys get to relax over Christmas, considering on how to tackle it all in 2019, as per ‘Interserve to roll-out £650m debt reduction plan‘, they will leave staff in pressure and under threat of being laid off. It gets to be even worse when they ‘hide’ behind “This deepened due to additional cash outflows on Energy from Waste as well slow payments in certain Middle Eastern markets“. If they have been there they know what the cycles of payments are. They know on what is to be expected. So if there is plenty coming in, there should not be an issue. When jobs fall through, it is known as well, so even as there is a slack from the energy from waste, it seems that merely lose statements are given and they might not hold water under accountancy scrutiny here.

As for the books

There we see that PwC are to be the financial advisors, some sources give rise to other parts. The independent report (at https://www.interserve.com/docs/default-source/investors/financial-reports/integrated-reporting/2017/2017-full-year-pdf’s/financial-reports.pdf) talks about ‘we’, but who is ‘we’? The report is 100 pages and it was set for the December 2017 point, yet there too we see a few things. If we are to accept certain previous statements, we see “We performed targeted procedures over component entities in Guernsey, Oman, Qatar, the United Arab Emirates, Saudi Arabia, Australia, Hong Kong, the Philippines and the United States of America. We performed analytical procedures over component entities in all other geographical locations“, so when we see the larger picture, how does the ‘Middle East’ reference hold water? This would imply they’re UAE, Qatar, Oman and Saudi Arabia customers. There are still plenty of other locations, even if it is largely weighted to those 4, the mention “as well slow payments in certain Middle Eastern markets” seems less valid. The shortfall of well over half a billion does not hold up, because if it was all due to investment, there would not be a shortfall to report, those debts are different. That is where the report on page 114 seems to give a little light. We see: “A further update was given to the market on 21 March 2018, indicating that short-term facilities had been extended for a further month to 30 April 2018. The Group announced that it had concluded refinancing negotiations and had arranged access to committed borrowing facilities of £834 million on 27 April 2018.“, on the other side of that page, we see: “assessing the appropriateness of sensitivities applied to the Adjusted Cash Flow Forecast to evaluate whether liquidity headroom and covenant compliance had been subjected to appropriate stress tests;” when they come up short by another £50 million, one might argue that either the stress test was wrong, or elements were unknown or merely ignored. I cannot tell what, why, who or which, yet it does not seem to add up.

So as that page ends with: “As a result of our work, we concluded that there were no matters in relation to going concern to which the ISAs (UK) require us to report to you“, I will offer that the news is giving us a £50 million reason proving that statement to be wrong (or at least partially). There is also increasing consideration that the auditing firms needs additional scrutiny, as jobs are handed over from one firm to another, there is the option that it speculatively gives rise to nepotism, as well as the danger that they all play the same game in what should not be required to be reported. The last is also highly speculative, yet the shortfall over 50 million as well as the debt surpassing half a billion proves me at least partially correct.

The question is how to move forward. There is a point of view that gives rise to a lot more than merely changing the laws towards outsourcing. There should be a long term accountability system in place, as it might all seem to be nice and correct on the balance sheet, the mere worry is that there is a long term impact. Should we see additional pressures where Interserve goes the way of Carillion, there might be a pressing point to start considering making that change. In an age of global accountancy where the costs are stored local, whilst indirectly the booked profits are staged to go to the land of the shareholder (wherever that is) we see an imbalance of accountancy that is seemingly all fine, yet makes no logical sense altogether. That might be one of the biggest settings that governments are facing in Europe and on a global stage.

Perhaps I will take tomorrow to give you a clear picture on what I mentioned here in examples. At that point I will be bringing graphics to the table as well.

 

Leave a comment

Filed under Finance, Media, Politics

In the back of my mind

Today is not the same as yesterday. Yes, the same issues are playing still. They will remain an issue for some time to come. Whether we look at Yemen, Iran, Grenfell or the Saudi Consulate at Istanbul, the media has decided to make this a long term event. Some events cannot be resolved easy or quickly, that is merely the stage we find ourselves in and as such I accept that. It was this mindset that was awakened rudely by a thought that I have had for the longest of times. Now, this is pure speculation and perhaps it is all utter BS. I accept that, yet it remains in the back of my mind, it will not delete itself from my thoughts and this morning it woke up again as I read the headline ‘Yes, I ‘cheat’ at video games – it’s half the fun‘.

I respectfully disagree, it just ain’t cricket!

Yet the thought has been there for a while. You see, the latest adult generation is different. It partially grew up with that thought. So as we read the article by Stephanie Munro (at https://www.theguardian.com/commentisfree/2018/oct/19/cheat-video-games-gaming-performance), we get a little more than we bargained for.

The cornerstone here is: ‘some games are worth a bit of cheating‘, we can agree that this is a thought every gamer has had, but I believe it transcends gaming. I believe that game makers have created the shits that audited Tesco (and devaluated it by billions). The people willing to quickly skate around the edges of Market Research to create a story that fits the bill, yet when we dig into the data, when we consider the weighting used, we see another issue. Some of these stories are more often than not, not worth the paper they were printed on. More importantly, the people mentoring these ‘younglings’ making (as a mere example) are achieving linear correlation by plotting two points. Even as they know that straight-line relationships between two variables can be achieved, they sometimes forget to tell them (implying that the newbie should have known) that it takes more than two observations. Yet a mentoring position is not about assumption. Even as reality is not this far-fetched, we see that there is a stage that counts. TU in Norway is one source giving us the most common example of unethical behaviour. It is: ‘Taking shortcuts / shoddy work‘ and it scored 72%, which is huge! I believe that there is a growing group of people relying on making deadlines and the entire issue is found there. It will almost always be on the new kid, getting advice left right and centre and not getting proper mentoring. Even when we see some parts not being violated, in some cases we see extreme examples of weighing data where weight values of well over 25 are achieved, an issue to be sure (when the population was increasingly small and unbalanced).

And here is where the shoe becomes too tight for comfort. You see behind this is the ‘golden rule’: ‘It’s important to realize that what is unethical may not always be illegal‘, it is a dangerous truth as it can at times be both.

Now this reflects back to the gaming article.

The quote: “I wonder whether cheating at video games is really anything to feel bad about. While downloading unverified cheat programs and exposing yourself to malware is not something to encourage, there are wider and greyer areas of game manipulation that deserve consideration“. There it is! The intentional push to consider cheating! We have all taken shortcuts; some are glitches within the game. Some are merely flaws in game design, the other part is exploiting a gaming bug and then there is God mode. God mode goes back to the beginning of gaming. A code that will set damage received to zero, or perhaps usage is now staged to a decrease of nil and the final part where build time and cost are set to zero. These are all stages that give you an immediate upper hand in the game. The codes tend to be there for testing purposes and were in the older days never removed, in some cases they still are not. Yet when we see the application done in Business Intelligence it becomes a different issue altogether, it has impact and it is too dangerous at present.

When we go back to Tesco in 2014, the Guardian gave us two parts. The first was: “what has already come out raises profound questions about how one of Britain’s biggest companies allowed itself to be run questionably – and about the role of its auditor. The making up of the profits figures was not in a report signed off by PwC. That happened in August – three months after PwC had given the supermarket chain’s figures a clean bill of health. Even then, it noted that there was something potentially funny with the numbers, and expressly warned about “the risk of manipulation” – but allowed them to pass anyway“, and the second one was “The audit is a key part of the scaffolding of shareholder capitalism. It is one of the primary ways in which investors, business partners and regulators can tell the true state of the company they are dealing with. If you can’t trust the audited accounts, you can’t really trust anything. This is why the vast bulk of public limited companies – and hospitals and charities – are legally obliged to submit audited accounts. And the vast bulk of those are done by PwC or one of the other Big Four auditing firms“. Now we get back to the gamer side. The bulk of people now becoming CPA have a gaming life. Whether they stay in the console closet is up to them, yet in a healthy life gaming will be part of it. It is a social interaction or perhaps a challenge to be among peers and see if you can Fortnite the hell out of your buddy and Overwatch him/her to death at the same time, nothing wrong with that. Yet we see more and more that the stage of normal gaming no longer suffices and we start relying on glitches and weaknesses, which is not altogether wrong, but when we knowingly have codes that give us 10% more, what then?

Gamers are actually getting pushed into that frame of mind and the industry as a whole loves it as the person willing to take every legal shortcut is a revenue asset, yet is it a long term solution and what happens when the border of legality was a grey area altogether? Consider the impact of Tesco, the most visible case in the last decade. And that is when we get to the 2017 New York Times (3 years after the event). Here we see: “The regulator said that finding did not suggest that any of Tesco’s directors “knew, or could reasonably be expected to have known, that the information in the August trading statement was false or misleading.” It did note, however, that there was knowledge at a sufficiently high level below the board as to the false and misleading nature of the trading statement to constitute market abuse under British law.” That is now the ball game. The two points ‘could reasonably be expected to have known‘, in opposition of ‘there was knowledge at a sufficiently high level below the board as to the false and misleading nature‘. So someone got a massive raise, someone got an overwhelming promotion and no one went to prison. This is what I would call an orchestrated cheat. When we look at PwC and we see: Tyco, Tesco, Taylor Bean & Whitaker, Bank of Tokyo-Mitsubishi and MF Global. All stages that are massive and all stages where in the end it is merely about the fine, the pressure for using ‘cheats’ is increasing and it seems that the gaming industry is banking on this. What is more appealing when an almost impossible task is achieved by someone who should not have been able to make it to level 2?

This is where Stephanie gives us the gem: “In the world of competitive sport, the line between a so-called clean win and one in which the performance of an athlete has been chemically enhanced is blurred – but we leave it up to governing bodies to decide what’s acceptable and what’s not. This leads us into the moral quandary of whether something being legal makes it acceptable“.

It is the moral quandary that is the switch, which is no longer an on and off switch, but a level that goes from 100 to zero. A lever that is pushed again and again a staged setting with online and single player achievements where we learn to do what it takes to get all the achievements, yet to keep a much more high profile stage to make us seemingly clean players.

So when we see a Battlefield example: “John is on the extreme end of a spectrum, because his tactics are so lethal, so outside of what the game’s creators intended, so far beyond what rival players can defend against and, oh yeah, he paid some hackers to have them. John pays to be able to kill your character instantly in Battlefield. He’s surely crossed some line, though it’s anyone’s guess just where that line must be” (source: Kotaku), we see the issue that is the stage on all this. This now directly reflects Apple and their mobile battery game. a conviction with a 10 million euro fine, whilst the payout makes crime a joke. The article (at https://lawlordtobe.com/2018/10/25/crime-as-a-business-model/) where in ‘Crime as a business model‘ we see: “Apple required the sale of 16,000 phones just to break even on that fine“, against “the means to sell 123 million iPhones through what the court is seen as deceptive conduct gets a fine that amounts to 16,000 units. A fine received that represents a mere 0.013% of their cost of doing business” and we see not only the progression of what should be regarded as unethical conduct, governments are actually encouraging it by giving fines that were a joke on a scale that is a mere 1% of what was done here.

So whilst we see: “For some of us, the idea of using a walkthrough is anathema, to others it is a means of bringing us back to a point where we can have fun. I’ll admit that I never completed the Ocarina of Time. It was too hard and I got bored. I’m sorry, Princess Zelda, I abandoned you“, we ignore that Ocarina of time is one of the best designed and most overwhelming puzzle journeys ever seen (I never got to 100%), the exclusivity of getting there is merely brushed on and the cheaters are given a pass. That is actually beyond the point where those with a gaming guide are not really cheaters, they merely walk the journey to get to the 100%. Apart from Ocarina of Time, there is Metroid Prime. A game I worshipped almost forever, I ended up only getting 98%, which is an achievement I was proud of (I never found all the missiles). And I played it a few times, loving that journey again and again. Yet the BI industry is merely hiring those with a 100% score and they had no interest how the player got there and that is actually the sad and worrying part in all this. Wall Street does not care how the revenue was achieved as long as it is and that is a much more dangerous setting in the upcoming future. To get the required numbers some analyst proclaimed no matter what. And when it is revealed in some scandal and the media is all over it, it is the mere ‘could reasonably not have been expected to have known‘ is what keeps the board members out of their well-deserved Rikers Island excursion (3-5 years). This sad evolution is not merely the creation of another Star Chamber, an old reference to a tribunal abolished in 1641, where we saw the king in council exercising criminal jurisdiction. It was inquisitorial, and torture is believed to have been used, with no accountability in any way shape or form. It is an upgraded system, evolved from those settings that allows corporations to do whatever they need to appease Wall Street and other financial centers, to exceed analyst expectations, whilst we see that these findings are increasingly becoming more and more unrealistic because that is what the market needs.

In all this holding these analysts and their formula’s up to scrutiny and accountability in the long run will not happen, making the need for these players to find the people who are willing, not to bend the rules, but to cheat their way across, increasingly more and more important to corporations and as such, the danger is that we get into a world where cheating is not half the fun, it is merely the only way to keep ahead of the curve and avoid being classified as no longer relevant.

When did we sign up for those values in our lives?

 

Leave a comment

Filed under Finance, Gaming, Law, Media, Politics, Science

Sleeping with the enemy

We have heard the expression; most will remember the movie with Julia Roberts and Patrick Bergin. The expression is slightly harsh and a little over the top for the setting that I find myself presently in with PwC. You see, some people are playing a dangerous game. So when I see ‘UK firm PwC criticised over bid for major Saudi Arabia contract‘ (at https://www.theguardian.com/world/2018/jul/31/uk-firm-pwc-criticised-over-bid-for-major-saudi-arabia-contract), I find myself on the side of PwC supporting them. The article is an issue on a few levels. I touched on a few two days ago with: ‘Oman’s neighbour‘ (at https://lawlordtobe.com/2018/07/30/omans-neighbour/), so this setting is actually most informative when we consider the issues seen here. I objected to the setting that Amnesty International gave a consequence, yet the original setting that started it was missing, in all this, the fact that the Houthi forces are firing missiles into Saudi Arabia, as is Hezbollah and Iran is the puppet master behind all this, so when I see “Peter Frankental, Amnesty International UK’s economic affairs programme director, urged PwC to explain what due diligence it had undertaken before pitching for the work“, I wonder if Peter Frankental has done its due diligence into the situation where a terrorist organisation (with evidence from several sources) is operation on Yemeni soil with full backing of Yemeni officials, who are also extremely aware that they are facilitating for Iran. That part is missing from the charade that Amnesty International states is ‘the humanitarian nightmare‘. We agree that too many Yemeni are in the middle of this, no one denies that, yet the actions by Iran via Hezbollah and the Houthi’s are an issue and in this they merely ignore the founding factors.

In addition, the UK, with a desperate need to improve the economy has options and opportunities in Saudi Arabia, creating a dialogue, helping Saudi Arabia move forward. We admit that it will not be fast, it might raise obstacles, which is a fact of life. So when Peter Frankental sets ‘due diligence‘, I am of the mind that he clearly did not proceed with that duly noted diligence to a rather large extent.

So when I see “The United Nations guiding principles on business and human rights make it clear that a company may be viewed as complicit if they are seen to benefit from abuses committed by another party“, in that view, Frank please explain to me how you will prosecute Northrop Grumman, Palantir, Blackberry, Dell, Pelican and Apple? I would really like to know that at present. I am going to grasp back at an expression that we get from Robocop, it was spoken by Kurtwood Smith: ‘Good business is where you find it!‘ and Saudi Arabia has business settings for up to £825 billion, so PwC is getting vetted for a chunk of business that could optionally keep thousands employed, grow optional new businesses and industries. In addition, when exactly did Peter Frankental set the stage for a similar attack on Virgin? Are they not setting up the first Hyperloop there? So where is Frankie boy in all that? Now, it is not my intent to slam out at Frank, he seems to have his heart in the right place. Especially when we look at a paper by the House of Lords called: ‘Any of our business? Human Rights and the UK private sector‘, it seems that he has forever focussed on this, the paper (Attached) is from 2009, where we see on page 15 “In particular, we contend that the UK state could and should play a greater role in the governance of corporations so as to contribute to the protection of human rights from corporate abuse, whether the abuse occurs in the UK or abroad“, that is fair enough, yet he is setting now the acts of an attacked government into a corporate right, in that same setting all exports to the US should in that light be equally questioned and regarded as illegal, you basically can’t have it both ways Frank!

So when we grasp at: “In particular, we do support the idea of some kind of international instrument for corporate accountability within the UN system, but we agree with Professor Ruggie that such an instrument would not exist to monitor the activities of tens of thousands of transnational corporations, that would be unfeasible, but it would exist to reinforce the will of states to hold companies to account within their jurisdiction” and set the dimensionality of a flaccid UN when it comes to the events in Syria, there is such overwhelming evidence of inaction (through Veto or not), which gives us that in the faced setting PwC should not even be a blip on his radar. Not when we compare it to “the US contractors are mostly focused on supporting the 2,000 US troops in Syria by delivering hot meals, gasoline and other supplies. More than 30% of them support logistics and maintenance, according to the quarterly Pentagon report, and another 27% help with support and construction of US military outposts in the region” (source: Al-Monitor, April 2018). So how much visibility did Frank give here? In all this, he does not get to hide behind the ‘It is not linked to the UK‘ you just cannot become a ‘local’ party towards a global event when you decide it is. It just does not work that way.

In this, we also see: “PwC already has a presence in Saudi Arabia, but it is the company’s UK operation that is behind the defence project“, which is true, because I applied and they were not taking any non-UK citizens. Darn!

In addition, with: “PwC has launched a “call for resources” – asking specialists and consultants in London whether they would be interested in moving to Riyadh to start the work – because, it has said, it is “currently finalising the deal”“, we see that PwC has the setting to move people to Saudi Arabia, more employment and in addition a sector growth that could lead to 10 figure long term deals, but fear not! Peter Frankental will be there to try and undo the economic boom that will benefit the UK (was that overly simplified?)

So with the upcoming opportunity and the subsequent quote “focus on how to reshape recruitment, resourcing, performance management and strategic workforce planning, and how to manage and communicate change“, it actually goes further than that, even as a lot more performance management is likely to be shown, it will also be about what is the hierarchy and what is not. In light of work safety and preparedness (yes, even in the military), the setting of ‘Own the challenge‘ is a lot harder to scribe into the soul of the person. To set ‘solving’ the issue as the forefront of ‘that what is my actual responsibility‘ tend to be a challenge even within the most flexible workers, so I predict that there is a shift that will soon be shown in places like Saudi Arabia as well. I will admit that having never worked there, that this setting is more speculative than anything else.

So when I see Frankie give us: “As any accountancy firm involved in work for the Saudi ministry of defence must know, the Royal Saudi air force has an appalling record in Yemen, with the Saudi-led military coalition having indiscriminately bombed Yemeni homes, hospitals, funeral halls, schools and factories. Thousands of Yemeni civilians have been killed and injured“, the equal question on how many missiles that Iran enabled the Houthi and Hezbollah forces allowed to be shot into Saudi Arabia, and there is the drone strike issues in the UAE to consider as well. In addition, it is called ‘Saudi Ministry of defence‘, not the Hezbollah missile strike team. It might be nit-picking on my side, but then, I was always willing to go for broke.

Then there is the setting of “the UK “should be focusing on trying to stop this terrible conflict, not assisting the Saudi government.”“, yes it is an interesting setting by Anna Macdonald (younger sister of Ronald). When we go to the site (at https://controlarms.org/meet-the-team/), we see Anna Macdonald, Raluca Muresan, Zoya Craig and half a dozen volunteers. Yet, lets also congratulate on the bang up (or is that blow up) job they did in Syria, as well as a few other places. So when I see: “a global coalition working for international arms control“, which is a good goal to have, the flow of missiles and arms from Iran into a few places was not really stopped was it? Iran has exported small arms and ammunition to Sudan and Syria, anti-tank missiles to Syria, Sudan and Somalia; rocket exports to Syria, Sudan, Libya as well as shipments to Hezbollah and Iraqi insurgents. So in that list, and the goal Anna Macdonald envisions is a noble one, no one denies that, in all that, with at least two dozen of export mentions excluded, I think that PwC should not be on her list either. Especially, as the Saudi Arabian civil population is still under threat of missiles from a terrorist organisation. No one denies that the Yemeni people caught in the middle are in a really unbearable place, but all these actions means that no actual actions are taken against Iran. So as we were given ‘the European Commission has moved to add Iran to the investment mandate of the European Investment Bank (EIB)‘ a mere 18 hours ago, it seems to me that in all this Anna Macdonald and Peter Frankental should be setting their focus in a different direction, or perhaps that will merely not give them the limelight that they so desperately need (for all the right reasons mind you).

In all this, the defence from Saudi Arabia in the person of the foreign minister, Adel al-Jubeir was reduced to a mere: “Judeir blamed the Houthi rebels for blocking aid and contributing to the humanitarian crisis“, is that not interesting too? The actual blockers of humanitarian aid was set into a mere footnote, a mere 14 words, so in all this, where is Peter Frankental at this point?

 

Leave a comment

Filed under Uncategorized

Pinata whacking Couper

There is a little mean streak in me, you see, it started with Tesco, and it actually started a little earlier. But the gist is that when it concerns PwC (PricewaterhouseCoopers) I tend to take a swing at them whenever possible, I just roll that way. So there I was looking at ‘PwC charges more than £20m for first eight weeks of Carillion collapse‘ (at https://www.theguardian.com/business/2018/mar/21/pwc-charges-20m-eight-weeks-carillion-collapse-final-bill) when I realised that when I wack those boys I usually have good reason and supporting documentations to test my latest sledgehammer on a member of their board of Directors. In this article, when I saw “MPs have accused the accountancy firm tasked with salvaging money from Carillion on behalf of its creditors and pensioners of charging “superhuman” fees, after it racked up a bill for £20.4m in eight weeks” it took a mere 3.2 seconds from spitting in my hands and getting ready to swing that hammer at Kevin Ellis (yes all the way from Sydney, my arms are that long). I held off and went ‘wait a minute!

You see, I always had as I saw it good cause, but who are these MP’s thinking that they have good cause? The first is Rachel Reeves, the Labour MP in charge of the business select committee. So she mentioned that ‘superhuman’ part. What does she know? The Wiki claim states that she is an economist. So how much does one charge for 112 consultants? You see at £199 an hour we get £891K for these people working a mere 40 hours a week. As it is the UK, they are more likely to work 60 hours which gets us at flat rate £1.3 million a week which leaves PwC with an overhead of a mere £100K whilst I have not taking into account any additional expenses and they tend to get high. I reckon that these people are likely to make a lot more than 60 hours a week, that is the result of “£2bn to its 30,000 suppliers” and as the article states “a week to employ 112 staff to keep the company running and to honour government contracts” we do not see the inclusion of any additional staff that was not hired and that is still assigned via PwC. So that took a mere 6 seconds to realise that I was not getting to whack Kevin Ellis. Leave it to a Labour MP to spoil a perfectly lovely Friday morning feeling. Now, let’s also realise that my calculations could be way off, there are so little actual facts in the article (I am not blaming the article here) that there are hidden traps all over the place. I think that Rachel should have gotten up from the right side of the vibrator that morning, as we need to realise what an amazing mess Carillion is. The oversight had fallen short on so many sides, with the mention of pensions and a shortfall that is close to a £1,000,000,000 should be a much larger issue and the fact that this had fallen short implies a level of what I regard to be criminal negligence that is unheard of. We merely need to look at ‘Carillion’s pension crisis defies magic legal cure‘ (at https://www.ft.com/content/5041d10e-1a1c-11e8-aaca-4574d7dabfb6). So when we see “Yet in the seven years before its collapse, Carillion made contributions to the fund of just £280m while paying out dividends worth more than £500m“, my first idea is to look at the auditors and the accountancy firm. So how much overview did Rachel Reeves give regarding KPMG? We get part of this when we see ‘Why didn’t anyone working with Carillion say it was going to fail?‘ (at https://www.independent.co.uk/voices/carillion-kpmg-auditors-audit-hbos-financial-crisis-self-regulation-deloitte-a8185356.html). Here we see: “In March 2017, the giant audit firm KPMG signed off on the annual accounts of the construction giant-cum-outsourced services provider Carillion, saying they gave a “true and fair view” of the state of the company’s affairs. For this work, KPMG received a fee of £1.4m. This followed £1.4m of fees recouped the year before. In fact, KPMG had been Carillion’s auditor every year since it was founded in 1999. You don’t need to be an accountant to work out that that adds up to a very lucrative client relationship” that whilst we get the news that a mere four months later “its contracts to provide services were worth a remarkable £845m less than they had previously been valued on its books” that is an amount that exceeds whatever Richard Branson has in his wallet on his best days, so how was this overlooked? So as Rachel Reeves was kind enough that the value of KPMG is not good enough to audit the contents of her fridge, she should also be aware that this entire audit is not merely the outstanding invoices, there is a decent concern that the audit of KPMG has been unable to correctly assess issues for 17 years. So there is a real need to set up the correct framework to be able to take a long term look to the matters as well as the ability to set the right data dimensionality so that the data does not need to migrate over and over as more is found. I would think that an MP who part of the ‘the business select committee’, as well as a graduated economist would know that. You see as an experienced IT worker and a data analyst, I saw that coming a mile away.

So here I am partially standing up for PwC (so how fucked up will my day become?), news at 23:00. So when we get back to the Financial Times article and we see “As a House of Commons report has noted, Carillion’s growing borrowings were not used to invest in the company. In fact, while the group’s debt rose 297 per cent between 2009 and 2017, the value of its long-term assets grew just 14 per cent“, can we agree that there is a side that is terribly wrong here? These matters should have been clear in the KPMG reports, which now clearly overthrows the statement “they gave a “true and fair view” of the state of the company’s affairs“, I think that we can all agree that this part has been debunked in 30 seconds flat. In addition the Independent gives us “Moreover, KPMG was not the only auditor of Carillion’s numbers. Its 2016 report relates that it had a special “internal” auditor too, in Deloitte, with which it worked even more closely than with KPMG. So why didn’t Deloitte pick up on the dodgy contract numbers?” For me that is an interesting side as I have never seen anything dodgy in Deloitte. The fact that they might be part of the mess (unlikely though) is also cause for concern. More important, as I personally see it, it will be up to PwC to get that part out in the open. What was the exact assignment of the internal auditor, what data was presented, what data was accessed and used and who was part of the entire reporting stage of this internal audit? It would show more players in all this and could optionally give a better path in seeing the navigations that the decision makers in Carillion were involved in.

That is a part that we need to realise and consider.

There is another concern that the Independent brought to light. With: “Previous probes by the FRC have produced nothing but clean bills of health for auditors. “In nearly every major financial scandal we’ve had since the financial crisis, the FRC decides none of its charges have done anything wrong,” notes Jim Armitage, city editor of the Evening Standard. Worse, these rulings come with no reports or published evidence, making a mockery of the FRC’s claims to “promote transparency”” we might think that it is merely the FRC, yet what Wall Street taught us is that the entire 2008 joke gave rise to an 8 trillion write off, whilst no actual laws were broken, or at least none that could be proven, so in that regard, if that happens again now, we can clearly look at the House of Lords, point fingers and tell them to improve laws immediately and hold any MP and minister accountable for naming and public shaming. It might work, but I doubt it. You see, until there are large and unforgiving prison sentences, whilst also remove all the rights of ownership to those involved in Carillion, nothing will change. I have seen people setting the ownership of their large estates to their wives and then deny that they had any outstanding financial responsibilities in more than one country. Until these matters are settled this game will continue because greed will always win in the end.

So when we get back to the initial article we get “Kelly, who said his personal rate was £865 an hour, said PwC’s costs would gradually fall as more parts of Carillion were sold and staff from the accounting firm stopped working on the project. He said the firm initially had 257 people working on Carillion, with a bill for about £3m for their services in the first week after its collapse“, we see where part of the costs went to, so as my calculations was based on smaller settings we see how easily these costs were attained and the end of it is not in sight. Rachel Reeves should have seen this clearly as she had access to data I still have not seen. I think it is much more interesting to look at “Finance director Richard Adam, who retired in December 2016 after nine years at Carillion received almost £1.1m in salary and bonuses in 2016“, which we get from the BBC. So if we get to see the wrongdoings of Richard Adams, this is a reasonable speculation as the entire mess goes back a lot further than 2016, will we see these same MPs demand the auctioning of the goods of Richard Adams to make up for the losses of Carillion? You see the article stated MPs, not singular. Rachel Reeves might have been the visible one, but I want to see all those names, because when we consider the BBC news (at http://www.bbc.com/news/business-42703549) as it gives us:

  • The £350m Midland Metropolitan Hospital in Sandwell: opening delayed to 2019 due to construction problems.
  • The £335m Royal Liverpool Hospital: completion date repeatedly pushed back amid reports of cracks in the building.
  • The £745m Aberdeen bypass: delayed because of slow progress in completing initial earthworks.

We need to ask questions on several MPs all over the field, all over the UK apparently. These three alone show a £1.3 billion issue are so out in the open that these three alone will constitute evidence of a much deeper required accountancy dig. Three issues shown last January and these three alone gives rise for me to think that PwC will be able to charge a lot more and in addition, the entire settling and selling could take a lot longer than some expect it to take. So these elements are the setting for additional costs, so those MPs might claim that there is a case of ‘milking the Carillion cow dry‘, but they better be ready for me to take a look at more than these three projects, because I will ask openly on their failings to get a handle on matters, because I am 99% certain that these three projects alone will lead to a dozen others all over the UK and if there are no clear memo’s from those MPs in regards to Carillion, they will be named openly to give rise to their shortcomings (perhaps also what was between their legs), because if you do not have the balls to go against the larger players, you should not be in office at all. Yet, that might be merely my warped expectation of elected officials.

Carillion is a clear mess that had been going on for a much longer time than some expect. You see, that part is seen in ‘cracks in the building‘, ‘construction problems‘ and ‘slow progress in completing initial earthworks‘ it implies optional failings going all the way back to the foundation of the works that were possibly never correctly done in the first place.

So I might still end up treating the bosses of PwC UK as piñatas, but at present there are plenty of other targets and so far (remember I say ‘so far’), in this particular case PwC seems to be in the clear (darn!).

 

Leave a comment

Filed under Finance, IT, Media, Politics

Apples, Pears or Fruit?

I got mesmerised not by the news, but by an article (at https://www.inc.com/heather-r-huhman/how-to-recruit-top-talent-3-trends-youll-need-to-know-for-2018.html) giving me ‘Big Changes Are Coming to Talent Acquisition in 2018. Here’s What You Need to Know‘, you see, there is nothing wrong with the article, it is sound and it makes a lot of sense. Two things jumped out. The first was actually the second issue “Know your ABCs: AI, blockchain, and chatbots“. It took me back to the 80’s where aspiring new IT Turks had their little vocabulary of things you need to know and mention. So that ABC would be a decent testing soon enough. It is a decent approach, yet soon after the thought was given we will be finding the highly desired ‘almanac of answers‘ soon enough and without technical representation at such an interview, the HR director could end up feeling slightly too lonely for that interview.

It was the first issue that was a larger concern. Perhaps concern is the wrong word. The need to contemplate the mention ‘Focus on adaptability‘, you see that train requires more thought and depending on your point of view, you feel right, wrong or decently confused. I always focussed on flexibility, they are NOT the same. Here the dictionary was of some assistance. As an example it gave me “rats are highly adaptable to change“, so do you want a firm full of rats? They tend to jump ship when things get dicey or too challenging. It was not the example I wanted to use, but I will happily adapt my flexibility accordingly. There is a second part; the option ‘capable of bending easily without breaking‘ is much better, but here I do not completely agree with the adaptation of ‘easily‘. I believe that a flexible workforce gives strength, at times adaptable applies in the same way, but there are differences. When you are flexible you can always resort to your earlier ‘shape’, and flexibility is presumed to be immediate. When you adapt to the new environment you change your shape, so we can argue that you become a new person, instead of merely a more versatile one. This is an equally wrong view as there is no given that an adaptable person cannot adapt back to his earlier self, in the application of flexible versus adaptable it is merely implied.

Another source gave me: “Adaptability and Flexibility, “Indecision is the key to flexibility!” The world of work is changing at an ever increasing pace so employers actively seek out graduates who can adapt to changing circumstances and environments, and embrace new ideas, who are enterprising, resourceful and adaptable“, here I disagree. You see, the flexible workforce has its own set of decisions to make, but they tend to have an everlasting changing atmosphere in where to score their Key Performance Indicators. This has been nearly forever the situation in customer service and customer care positions. That is from a software point of view. I will agree that such changes would be much less likely in the banking sector and that conservative placement is actually changing rapidly nowadays. From my point of view in these places would fare better with a flexible person than an adaptable one. If only from the presumption that adaption takes time and flexibility does not.

In all this there it is not same academic debate and in many cases it is basically the same from any point of view. Yet another voice gave the example that one person is talking about oranges, the other one about pears and they all agree that the fruit is peachy. It sounds nice but once we see that certain steps are linked to KPI values, the discussion could impact someone’s career to a larger degree and that is definitely a larger problem for all involved.

In another example we see: “that focuses on a child’s ability to adapt to new situations, improvise, and shift strategies to meet different types of challenges“, it is a view I very much agree with, yet here too there is caution, because flexibility is also set to parameters. It is more clearly shown when we add: “Video games can help improve Flexibility by allowing kids to practice their Flexibility skills while in the midst of a fun and immersive game“. Yes this is true, yet there is a hidden catch here. The hidden catch is that a game has software and hardware. In some cases a game could be played in more than one way, so set this child on a game like Minecraft on a console (PS4 or Xbox One), let the child play for two hours each day for let’s say 4 days, then on the fifth day give that child the same game on a PC or Tablet. Now you get to see the interaction of flexibility and adaptability, the flexibility to comprehend and adjust to another format seems easy enough, but the person adapting from a controller to a mouse/keyboard or a touch panel of a tablet is another matter. We need both and now the two parameters are shown more widely apart.

Yet this is not the only example and even as we can clearly see the interactions, the needs and the optional issues with flexibility and adaptability, the true test is not in a video game, it’s within ourselves, just like with any other new technology, the flexibility to allow adaptation and the adaptability we have to grow as we engage with new and evolved systems, as well as our environment as it changes as well. Blockchain technology is probably the best and clearest example for all involved parties. Parties on several levels are seeing its usefulness and as Mobile G5 is starting to arrive the list of benefits will increase, faster and larger. Moreover, as companies push in a more global way through clouds, Blockchain technology might be the only one that is least likely to hamper growth, even allow for Wild West growth. Yet this push has two opponents. The first is the marketing hype, as the ‘solution’ is oversold, more and more optional implementers will have ‘additional‘ questions and as no clear answers are given, opposition to the new technology will rise. In addition those evangelising ‘be first or become obsolete‘ players are not helping matters because this is a sales pitch that can never be proven, in fact we have seen how some who did not initially race towards the e-commerce side have not ended up dead (or last), in fact they benefitted from the mistakes and costs the early adopters had and avoided loads of hidden traps. In opposition there are those shunning Blockchain. Some seem valid (for now), much more of them are seemingly doing this in fear of loss of control. The latter is more likely to be seen in data and data management as the tools to manage, edit and audit these sources are vast and far away from today’s reality and today’s usage. Yet it does work (as far as it can be observed) and the part that stops some people is to view, depart and give the new format the go is the fear of being left behind with inconsistent data down the track (in case things fall over). Even as the sources can see how powerful this data could be, especially as data is collected for market Research, the fear shown so far seems to be overwhelming. Especially when we look at established brands and their lack of pace and space to upgrade what is into what could be. The people in Market Research merely need to look into the missed options by letting SurveyCraft be vultured, without clear evolution and system continuance, to see how a market was lost to a much larger degree than the players are willing to admit to.

And here we see part of the issue pointed out. We see this also (at https://globaljournals.org/GJMBR_Volume11/2-Impact-of-Employee-Adaptability-to-Change.pdf), in a paper called ‘Impact of Employee Adaptability to Change towards Organizational Competitive Advantage’.

On page 2 we see: “Organizations are now well equipped to switch according to the circumstances that will be sustained the operations in the long run”. When we see this in light of: “Studies by Bishop (1994) and Bartel and Lichtenburg (1987), proved that highly skilled workforce payback to organization in the shape of higher outputs and enhancing adaptability towards change”. Yet in this light ‘enhancing adaptability’ is not the same we see nowadays. Then it was in light of certain values and certain requirements that the masters of their workforce required. When the bottom line is set in light of a mere quarterly growth the short term requirements tend to have a very different impact. It was discussed in 2009 by Daniel A. Mazmanian and Michael E. Kraft in ‘Toward Sustainable Communities’. With: “Applying sustainability criteria to everyday matters of public policy, business management, and personal consumption is fraught with conceptual and moral hazards”. It requires a rare combination of long-range foresight and short- term adaptability, yet that proper usage is as I personally see it no longer ‘adaptability’ it is ‘flexibility’ through our contemplation of proper acts. Proper acts that tend to be absent of morality that the powers to be employ. Their limited care is towards their stake holders, their shareholders and their own bonus within the legal option available to them. The example of PwC in BT Italy and Tesco are merely two of several. The fact that we heard: “PwC has escaped official censure over the Tesco accounting scandal, after the UK’s accountancy watchdog closed its investigation into the auditor’s approval of the grocer’s flawed financial statements”. It is not because there is no evidence, but because it shows that under the most grey of versions of events that PwC cannot be pointed to as a culprit, the fact that no law can be proven to have been broken is central in this. We can argue whether their setting was ‘did we uphold the law’ or ‘will any of this stick to us’, are two very different statements. The flexible person will contemplate ‘did we uphold the law’ and do whatever he/she can without breaking it, which is a valid position to have. Yet the adaptable individual who will be set behind ‘will any of this stick to us’ is more questionable, yet is it wrong?

That is in my view the difference. I do admit that adaptable and flexible might be interchanged here, unless you accept that ‘Flexibility is the Thinking Skill’, when we do that the setting is no longer interchangeable. This is where I find myself now. Are we talking apples, pears or is it all fruit? I am no longer certain because the needs of Business Intelligence have changed. It is not about translating the results into ‘a story’ and presenting that. Not transferring the numbers and what they mean, but what it could be ‘seen as’, which is not the same thing. In this the bosses need adaptability.

Yet what are you adaptable or flexible?

And when you learn you were not one, you were the other, will you listen to your inner voice?

So what gives?

You see, I believe that our lives are in transit and to a larger extent our working lives are changing. There has been a push for a new kind of leadership in corporate circles. This has happened for a longer amount of time, but now we see more and more advertisements looking for people with an adaptable nature. The next example is not uncommon; it is appearing in more and more job offers. For example: “First and foremost, you will be a high calibre Business Systems Accountant with a positive, pro-active and adaptable demeanour”. What is central in all this is that the articles around us and there is an increasing focus on ‘adaptable’. This is not a fab or a hype. As I personally see it, it is the sign of the times. Every company is looking deeper and deeper into what is possible. As accountants, General management and members of boards are trying to hold onto their 20% growth they are more and more thrust into the world of Black Letter Law. UNSW had an interesting opinion piece (at https://newsroom.unsw.edu.au/news/business-law/bias-and-%E2%80%98black-letter%E2%80%99-judge-who-dyson-heydon). You might stare at the fact that it is 2 years old, but the issue is that the change has taken 2 years for people to be more and more thrust into the reality of that cold light. With “The Howard government appointed Heydon to the High Court in 2003 following a speech that was billed as his “job application” for the upcoming vacancy. In it, he set out his vision for the ideal judge. The judge should interpret the law “according to the books” and do so “incorruptibly”.” In addition we see: “Heydon called out the antithesis of the black-letter judge: the “activist” judge. The activist judge decides cases not by reference to established legal principles, but to further “some political, moral or social programme”. The activist judge uses cases to right social wrongs in accordance with the individual judge’s worldview.

I believe it is not entirely so the case, even though the phrase is not incorrect. You see, some look at the letter of the low, some look at the spirit of the law. What was that law meant to achieve? As our vocabulary has changed certain standards, the standards have shifted on, but the law did not. An example could be seen in ‘decimate’, which now means “to destroy a large portion”, yet in the old days, when it was originally used (by them Romans), it literally meant “to kill one-in-ten”, which came from the Latin word decimates, we still use this in the form of decimal, and another example in this case is ‘divest’, which originally meant “undressing as well as depriving others of their rights or possessions”, yet not until quite recently when it became “selling off investments”. I see this as a dangerous change, you see when the laws were made there was a different meaning in some cases, and consider that Australia still has the Crimes Act 1900, such changes could be a little more perilous then others. The importance of the spirit of the law becomes more and more evident when we consider certain implications. Even as we cannot fault the direction of those who embrace the black letter law, the impact is slightly too large for comfort. Laird Kirkpatrick gave us more dangerous examples in his book ‘Black Letter Outline on Evidence’, here we see: “in 2003, the UK changed the statutory definition of hearsay, and in Regina v Chrysostomou (mark), 2010. L. 942 (Ct. App. Crim. Div. 2010), the court of appeal concluded that drug enquiries found on the defendant’s cell phone were not hearsay, apparently rejecting the earlier view.”, that is the application of black letter law. So how often will these changes benefit the proper setting of the spirit of that law as it was initially set into law? So now take this headline: ‘The UK accounting watchdog today dropped a misconduct probe into Tesco’s auditors PwC, saying there was “not a realistic prospect” wrongdoing could be proven’, why was the investigation halted? Why was proving certain matters not realistic?

I would love to speculate here. You see, I think that in the black letter of the law PwC did not break any laws and did nothing wrong. In this Tesco inflated itself for well over £250m, and got fined £129m because of it. Even as some PwC members are still looked at, I believe that to sizzle away. I believe that PwC decided to go Black Letter Law and did EXACTLY what the law told them to do, even as the spirit of the law is nowhere near those actions. This is the age of Adaptable management and the question is will this be a repeat at BT Italy? It is too early to tell, but if we believe the Financial Times, who gave us: “The fraud involved various methods of hiding and minimising operating costs at BT Italia. Some were complex, but others were as basic as moving expenses into the “capital expenditure” column normally reserved for building and acquiring assets. None of it was picked up by PwC, BT’s senior management or its audit committee, which has regularly reviewed the global services unit, which included Italy, since an earlier accounting debacle in 2008-09.” (at https://www.ft.com/content/c633d452-5c99-11e7-b553-e2df1b0c3220).  I reckon that there will be additional questions at some point. Yet the one thing that was never brought to light in case of Tesco was how matters were missed. If you pay £13M that year (including £3M for consultancy), how was there anything left that was not looked at?

If we know from TV that you never say something specific to your attorney, so you say ‘I bought a new carving knife as a present for my mother in law, is that OK?’, instead of ‘my mother in law is rather clumsy, so I got her a super sharp carving knife and I have been lacing her drinks with aspirin so she could potentially bleed to death next Sunday, am I liable if something happens?

I reckon that in the application of accountants similar issues apply. So you would say: ‘We made changes in division X to look better, can you focus there to make sure we are all up to scrap’ instead of ‘for the love of god, do not look at division Y where we inflated the whole bloody lot’. So as the accountant was not ‘aware’, they missed it. It is just a thought, but how far off am I? Consider that the meaning of Nice changed from ‘foolish’ or ‘silly’ to ‘pleasant‘, it does not matter which version I am, I feel perfectly safe with either.

Yet in the spirit of the views that I have, I am slightly damning to the black letter adaptable workload of management, they could undo a lot more than we saw and felt in 2008.

 

Leave a comment

Filed under Finance, Law, Media, Politics

Lawyers on a weakly basis

It is the Lawyers Weekly that gets the attention at present. The article (at https://www.lawyersweekly.com.au/biglaw/22159-lawyers-don-t-need-to-become-accomplices-to-white-collar-crime) gives us the nice title with ‘Lawyers ‘don’t need to become accomplices’ to white-collar crime‘, yet is that statement anywhere near the truth or the applicable situation that many face in today’s industry? Monty Raphael QC talks the talk and does so very nicely as the experienced QC he is, yet there were a few points in all this that are an issue to me and it should be an issue to a much larger community. For me it starts with the quote ““Cyber space has not created any new crimes, as such, really, of any significance,” Mr Raphael said.” This is of course a correct statement, because until the laws are adjusted, plenty of issues are not covered as crimes. We merely need to look at the defence cloak that ‘facilitation’ gives to see that plenty is not covered. The case D Tamiz v Google Inc is merely one example and as technology renews and evolves, more and newer issues will rise, not merely in cases of defamation breaking on the defence of mere facilitation.

Yet for this matter, what is more a visible situation is the case of Tesco a how PwC seems to not be under the scrutiny it should be, it should have been so from day 1. So when we read: “Mr Raphael insisted that lawyers have an ethical obligation to ensure they do not support or enable white-collar crime” we are introduced to a statement that is for the most seemingly empty. I state it in this way, because the options of scaling the legal walls while not breaking any of the laws that were bended to the will of the needy is an increasingly more challenging task. If the legal walls were better than PwC would clearly be in the dock 2 years ago, or would they? In addition, they are not alone, merely slightly (read: loads) more visible as the profit before tax for Tesco ended up being minus 6.3 billion in 2015.

Monty makes a good case, yet the underlying issue is not the lawyer, it for the most never was. It is the law itself. This is why I object to the title, it is nice but is it true? PwC shows that even as we oppose their actions, the fact that they are not in the dock is because when we see Reuters (at https://uk.reuters.com/article/uk-britain-tesco-fraud/former-tesco-executives-pressured-staff-to-cook-books-court-told-idUKKCN1C41TK) we see “Tesco’s auditors PwC were “misled and lied to,” Wass added“. Is this true? Let’s consider the evidence, can it be shown and proven that they were lied to?

It might never be proven because the people in the dock have had years to get their story right (read: synchronised). What I stated at the very beginning of the events of Tesco remains true and it remains the issue. The fact is that PwC made that year £13 million from this one customer. Much of it in a project and auditors for the rest and they did not spot the fact that the books were ‘cooked’, will remain an issue with me for some time to come. It is the Tesco case that also underlies the issue here. It is about the weak lawyer, not because he is weak, but the lack of proper laws protecting all victims of white collar entrepreneurs is stopping them from aiding potential victims. In addition as the law is struggling to merely remain four passes behind it all, it becomes less and less useful, not to mention a lot less effective. As the next generation of economic tools are being rolled out (block chain being a first), we will see new iteration of issues for the law, for both the CPS and DPP as it cannot progress forward in light of the legal parties not comprehending the technology in front of them, so showing wrongdoing will become an increasingly hard task for lawyer to work with. The biggest issue is that as it is all virtual, the issue of non-repudiation goes out of the window. Not only will it become close to impossible to work with the premise of ‘beyond all reasonable doubt‘, there is the fact that ‘proof on a balance of probabilities‘ is becoming equally a stretch. The fact of non-repudiation is only one of several factors. So as we have seen that successful criminals tend to hide on the edge of technology, the chance to stop them is becoming increasingly less likely.

This now gets us to the statement “In the wake of the Panama Papers revelation from law firm Mossack Fonseca, Mr Raphael cautioned that clients’ criminal activities can come back to haunt their law firms“, the fact that both former prime ministers involved in the Panama paper scandals, Bjarni Benediktsson and Sigmundur Davíð Gunnlaugsson, have been re-elected to the Icelandic parliament (Source: IceNews), so it seems that the Panama papers are a little less of a haunt. In addition there will be a long debate of what constitutes the difference between Tax Avoidance and Tax Evasion, because only one of those two is illegal. In addition certain questions on how 2.6TB was leaked and no alarms went off is also an issue, because the time required to get a hold of such a large amount of documents would take a monumental amount of time and with every option to shorten the path, alarms should have been ringing. When we consider the basic IT issues, we get partial answers but not the answers that clearly address the issues, as they did not. The time it had required to do all this should have placed it on the IT radar and that never happened. So as we see on how patches and security risks are now being pushed for as a reason, we need to wonder if Mossack Fonseca could have been the wealthy party it claimed to have been. When we consider the expression ‘a fool and his money are soon parted‘ the lowest level of IT transgressions that have been seemingly overlooked gives rise to a total lack of Common Cyber Sense, staff that should have been regarded as incompetent and an infrastructure that was lacking to a much larger degree. You see, even before we get to the topic of  ‘illegally obtained data‘ which was used for investigations that have convicted people of crimes, the larger issue that could be in play  on the foundation of that data alone, a few prison sentences could be regarded as invalid, or might get overturned soon enough. There were cases where the story gives clear indications of what was done and here we see the consideration of what is admissible evidence. In this, the one step back is the IT part. The hardware would have regarded as little as $100K to upgrade to better security standards and hiring a better level of University Student in his or her final year might have given a much safer IT environment, perhaps even at half the current cost.

All issues worthy of debate, yet none of it hitting the lawyers; it more hits the infrastructure of it all. Yet these two issues that might now be seen as real hindrances for lawyers, in a place of laws that are now seemingly too weak, the law, not the lawyer. So as we recollect the Toronto Star in January 2017 where we see “Canada is a good place to create tax planning structures to minimize taxes like interest, dividends, capital gains, retirement income and rental income,” when we see the added “the Canadian government has made it easier than ever for criminals and tax cheats to move money in and out by signing tax agreements with 115 countries” we see growing evidence that the law is getting hindered by eager politicians making their mark for large corporations through the signing of tax agreements, and what they think would be long term benefits for their economy, whilst in actuality the opposite becomes the case. So every clever Tom, Dick and Mossack Fonseca can set up valid and legal shapes of international corporations all paying slightly less than a farthing for all their taxations. Legal paths, enabled by politicians and as the laws are not adjusted we can all idly stand by how nothing illegal is going on. So as we admire the weakly lawyers, we get to realise that the law and the politicians adjusting it weakened their impact.

In all this at no point would the Lawyer have been an accomplice. The data lies with IT, the setting of these off shore accounts were largely valid and legally sound and in that, there could always be a bad apple, yet that does not make the Lawyer an accomplice. That brings us to the final part which we see with “Money laundering has been in the spotlight recently, with the Commonwealth Bank facing punishment for failing to report suspicious deposits in its ATMs“. It needs to be seen against “Mr Raphael insisted that lawyers have an ethical obligation to ensure they do not support or enable white-collar crime” in this the banks are already faltering. We seek the dark light events of PwC and Mossack Fonseca, yet the basics are already getting ignored. I believe that the article is missing a part, I feel certain that it has at least been on the mind of my jurisprudential peer. You see, the legal councils will need to evolve. Not only will they need to do what they are already doing, the path where they (or more likely their interns) start to teach IT and other divisions a legal introduction on what is white collar crimes. The fact on how ‘suspicious deposits‘ could be a white collar crime is becoming more and more visible. I see that the education of IP legality in IT is now growing and growing. The intertwining can no longer be avoided. Now, we can agree that an IT person does not need a law degree, but the essential need to comprehend certain parts, in the growing mountains of data is more and more a given.

In all this there is one clear part that I oppose with Mr Raphael, it is the statement ‘There’s nothing cultural about greed‘, you see, as I personally see it that is no longer true, the corporate culture that is globally embraced made it so!

 

Leave a comment

Filed under Finance, IT, Law, Military, Politics, Science

Retaining stupidity

This is the very first thought I had when I saw “Artificial intelligence commission needed to predict impact says CBI“. Within half a second my mind went into time travel mode. Back to the late 70’s where all the unions were up in arms on computers. The computers would end labour, all those jobs lost. This is not a new subject as the magazine Elsevier showed un in 2015 with “Angst voor nieuwe technologie is zo oud als de industriële revolutie zelf. Diverse commentatoren refereerden de afgelopen tijd aan de luddieten, genoemd naar een Engelse wever die eind achttiende eeuw machines zou hebben gesaboteerd omdat die banen vernietigden“. “Fear for new technology is as old as the industrial revolution itself. Several commentaries referred to the luddites, named after an English weaver who allegedly sabotaged machines at the end of the 18th century because it destroyed jobs“. There is a partial truth here, you see, it is not about the loss of jobs. It is the mere fact that some of these Business group will soon truly show to be obsolete. In this they rely on a firm whose largest achievement is (as I personally see it) to remain silent on overstated profits whilst not having to go to court, or to jail for that matter (read: PriceWaterhouse Coopers). So by engaging this party they have already lost their case as I personally see it. So when we see “Accountancy firm PwC warned in March that more than 10 million workers may be at risk of being replaced by automation“, with the offset we needed in the past (read: Tesco) the damage might merely be a few hundred people. So I do not deny that some jobs will go, yet like the automation sequence that computers brought from the 80’s onwards. That same industry would give jobs and infrastructure to thousands, livening up an industry we could not consider at that time. The same happened in the 18th century when the looms and weavers grew, the blossoming of a textile industry on a global setting. So when you see “The business lobby group said almost half of firms were planning to devote resources to AI, while one in five had already invested in the technology in the past year“, you are looking at what I would call a flim flam statement. You see, perhaps the more accurate statements might be: “The business lobby group stated that 50% of the firms are moving away from the facilitation that the business groups provides for“, so these firms are pushing in another direction, why give credence to their flawed way of thinking? You see, this is the consequence of the greed driven executives who rely on status quo, they ran out of time and they need extra time to get their upgraded pensions in play. Why should we allow for them to continue at all?

I am willing to give the TUC a small consideration because of their heritage. Yet, when we see in the Financial Times (September 11th) “Frances O’Grady, the general secretary of the Trades Union Congress, said the government was hurtling towards a “kamikaze Brexit” and should keep open the option of remaining in the single market” (at https://www.ft.com/content/c5f7afb8-9641-11e7-b83c-9588e51488a0), yet there is overwhelming presented evidence from all sides both positive and negative mind you that the single market only benefits the large corporations, the small companies are merely disadvantaged by the single market as such we must wonder where the loyalty lies of the TUC, by that notion if the TUC is there for large corporations, or to serve them first, we see another piece of evidence that shows the TUC to be redundant, and as they merely vie for the large corporations as their main priority, the fear of those companies would become the fear of the TUC and as such, they are becoming equally obsolete. The Trades Union Congress (TUC) is a national trade union centre should show clear cause with all the data, not merely the aggregated data results of a data scientist at PwC. So when I see “the CBI is urging Theresa May to launch the commission from early 2018. It said companies and trade unions should be involved and the commission should help to set out ways to increase productivity and economic growth as well looking into the impact of AI.” Who is going to pay for all that? I submit that the Trade Unions pay their own way and ask their members for the needed funds. What are the chances of that? The poisoners part is seen in ‘set out ways to increase productivity and economic growth‘. You see, AI will do that to some extent on several paths, yet it is not up to the government to figure that out or to set debilitating fences there. It is up to the business sector to figure out where that profit is. That is why they are in business! You see, as I see it, the drive to remain in some level of Status Quo was nice until it ended, these companies have driven away the people who wanted to innovate and now they are in start-ups, or in companies that embraced innovation, the older larger players are now without skills to a larger extent, without drive through misdirected use of funds and lacking ambition, so they are going to get hit in all three ways when the driver comes. 5G will be a first and when it does happen AI (it is still years away from being anything truly practical), these two paths will drive new methods of automation and data gathering. But the larger players wanted to milk their 4G base as much as possible, setting up side channels with smaller players like Orange, DODO, TPG, Tesco and giffgaff. Now that they are learning that 5G will be a larger wave then some academics presented (likely at the expense of some placement), now we see the panic wave that follows. Now we see the need for commissions to slow things down so that the milkers can catch up. In my view there are clear reasons that such paths should be allowed to exist.

That is my supported view, it has been supported by other articles and I have written about these events for close to two years now. Now that the party is over, we see players trying to change the game so that they can continue just a little longer. We allowed for these matters in 2004 and 2008, it is time for the governments to give a clear signal that change will come and stopping it should not be allowed, not until they alter the tax laws, the laws on accountability and the powers of prosecution to have a better grasp at these players, a change that must happen before we allow any level of catering to their needs.

By the way, when we consider ‘PwC placed under investigation following BT accountancy scandal‘ (at http://www.independent.co.uk/news/business/news/pwc-investigation-bt-accountancy-scandal-italian-operations-pricewaterhousecoopers-a7813726.html), as well as the Fortune.com issue (at http://fortune.com/2017/02/28/pricewaterhousecoopers-pwc-scandals-oscars/), where we see the five larger issues at PwC, which includes the previous mentioned Tesco, but now has an added Tyco, Taylor Bean & Whitaker, Bank of Tokyo – Mitsubishi and MF Global. So as I have been on the prosecuting tank, ready to roll it over the board of directors of PwC regarding Tesco, having any faith in whatever they want to report on now, unless it comes with all the data for the public at large to scrutinise, they should not get close to any commission and even less be part of the reporting. Now we can irresponsibly use 5 bad apples to identify someone who ships containers of fruit and that would be a valid response and defence. Yet overall the players asking for the commission seem to have their own needs first in all this. There would have been a consideration if there was any given that Google or the Alphabet group to be part in all this, yet that mention is missing and therefor the setting is void. Now, there are more players in the AI field, but it seems that the Google headway is the strongest, the largest and at present the fastest. And with a sense of humour I will add that you merely have to ‘Bing‘ the search ‘AI Commission‘ to see that Microsoft is in no danger of getting anywhere near an AI this upcoming decade. Perhaps the mention of ‘Australian Securities and Investments Commission – Official Site‘ on position 2 and ‘Fair Work Commission | Australia’s national workplace …‘ in position 5 to realise that their AI could be sunk in 13 keystrokes. The power of assumption will kill anything, including ones sense of humour and that same persons appetite.

Yet is there more?

Yes, there most certainly is. You see with “Investment in technology could help bolster Britain’s sputtering record on labour productivity, which is among the worst in the G7 and is failing to improve in line with expectations since the financial crisis” we see part of the fear being spread. The ‘milkers’ as I prefer to call some of them are realising that having space and capital for growth was essential to remain in the game. Some of the milkers are ending up being too visible and plenty of consumers are moving to a place where they can get a better deal. That was seen in Australia in June as ABC news gave the bad news that Telstra had to shed 1400 jobs. We see all kinds of excuses, yet the reality was that for well over 5 years they were too expensive, not by a margin, but by being up to 300% more expensive than a decent alternative. I have had personal experience whilst in a Telstra Shop because I was not an optional business account he had no time for me. Do you think that a company like that can remain in existence? Over the last 3 years, the shares dropped from $6.61 to $3.52, that is pain that a company feels and they remains ignorant and blind to the consequences. That view is enhanced even further by the statements given in the Sydney Morning Herald. With “Our approach [to 5G] is to get in earlier and try to have it modified so it’s more suitable to Australia when it arrives, rather than us have to try to modify it when it gets here,” Mr Wright told BusinessDay.“, so basically there is every chance that Australian 5G will be undercut by some level of standard that is not as given in the 5G handbook. As I personally see it is Telstra’s approach to setting a standard that is no standard at all. A ‘get in first so that we can tell others what the standard is‘, or better stated, what the standard is that you are not adhering to; 3.5G for your mobile anyone?

This Australian view translates to the UK as well. With “Despite the potential for technology to increase productivity, firms are cautious about investing owing to uncertainty over Brexit. Growth in business investment was flat in the three months to June, the latest official figures show“, so these business types are not willing to invest, they merely want the one market side to go on and in light of the delays needed, they want a commission, so that they can force government investment and delays. So they can get the best out of both worlds. The (as I personally see it) exploitative model is continued in every venue we see come and as I see it, it will be much better for us if those business models and business players go, they should go now before they become the detrimental force on UK industries. 5G will be a new beacon of industry and progress, it will open up additional venues for many telecom players and as such we are all better to get on board now and think of that one idea we had that could work for us all. It equally holds the solutions the NHS desperately needs and the fact that 3 larger players still haven’t seen that light is a larger worry than anything else. It merely shows them to be obsolete, dinosaurs in a modern age. As one person told me, the reason the T-Rex is such an angry creature is because its arms are too short to take a selfie. That does make sense, especially when you consider what some of these players think when they think 5G, they merely look at speed, whilst 5G opens up so much more than merely a quick download of a movie, in all this AI could be breaking the moulds and give us something that even I cannot envision, which is actually a really good thing. You see, the new waves will come from people that are different from me; they are the dreamers like the game designers in the early 80’s. They will show vision and give us something we never considered before. That is true progress and the people who bring us weighted predictions and tell us of fear of 20% of all jobs lost need to do what they were meant to do, die and become extinct just like the dinosaurs before them and soon thereafter I will become extinct too. That is the nature of future evolution. Just like my grandfather who could not comprehend the electronic calculator. I am clever enough to comprehend quantum computing, yet I hope I cannot comprehend what comes after, because if I can remain on board at that point we have all become technologically stagnant and we merely move backwards, that too is a personal view I have.

 

Leave a comment

Filed under Finance, IT, Media, Politics, Science

Prognosticated WaterhouseCoopers

I forgot what fun it is to go up against PwC, I missed slapping them around and the article ‘Netflix and Amazon ‘will overtake UK cinema box office spending by 2020’‘ was a mighty fine reason. The article (at https://www.theguardian.com/media/2017/jun/14/netflix-amazon-uk-cinema-box-office-film-dvd-blu-ray-pwc) gives us a few things. The title is fine, I have no issue with that and there is every reason to believe that this is true. I always prefer and love to watch the big screen, but I know that I am a majority here. It is the subtitle that got me. With “Film industry will remain ‘pretty healthy’ but DVD and Blu-ray sales will go into ‘terminal collapse’, says PwC” they gave me a reason to have a go at them. As I search deeper and deeper, we are confronted with a wave of titles that have been released on Blu-Ray and DVD, yet there is no Netflix date, they do not seem to have any titles released to disc from 2017. So that is the first group. I reckon the Marvel fans would race to the shop to pick up Logan as soon as Wolverinely possible. The second thing I found is that a decent list of TV series is absent. This is a lot harder to predict, yet Grimm, Lucifer, Sleepy Hollow, Battlestar Galactica and a list of others do not even show on Netflix. This makes the need of Blu-ray consistently there. There is no doubt that those with really good bandwidth will prefer Netflix, so there will be an impact, yet the size of that impact is not a given for now. You see, as Net neutrality becomes more and more endangered, we will see shifts. We saw President Trump put Jessica Rosenworcel in the FCC seat and she apparently champions net neutrality, yet there is a rustling in some bushes, especially the adult entertainment bush. What people ignore, or like me do not care about is that certain ‘settings’ is seen in International Business Times (at http://www.ibtimes.com/july-12-net-neutrality-day-action-will-slow-down-your-pornhub-videos-2552375). It is a place like ‘Pornhub’ that brings the news. The quote “Pai’s proposal would remove the FCC’s authority to enforce net neutrality and other consumer protections while simultaneously allowing companies including Verizon, Comcast and AT&T to create “slow lanes” that force consumers to pay more for certain sites or as a competitive move among corporate telecom rivals“, is one thing, the second quote from a related article gives us “The Washington Examiner reported Trump deliberately withdrew her nomination when he took office. That move temporarily gave Republicans a majority in the FCC. Since then, the FCC has voted to revoke net neutrality regulations. If Trump’s renewed nomination leads to her confirmation, as is expected, then this idealist could return to take on the telecom industry head on.“, these quotes give only an indication of what will happen next, it is seen a little better when we consider the Law Times (at http://www.lawtimesnews.com/201706126217/focus-on/focus-u-s-and-canada-diverge-on-net-neutrality), which is 3 days old. Here we see: “With the possibility of broadband rate regulation looming on the horizon, companies investing in next-generation networks hesitated to build or expand networks, unsure of whether the government would let them compete in the free market,” he wrote, advocating for a return to a “light-touch” approach to Internet regulation“. This is now the indication, as the FCC rolled back a few things, they leave it with the providers and a ‘free market’ to offer ISP packages, which of course comes at different prices. So, as net neutrality comes back, it comes with the option that is linked to a Service Level Agreement and they tend to come with $$$ labels attached. In addition we see “The CRTC’s decision and policy position on “differential pricing” arose out of Videotron’s 2015 launch of Unlimited Music, a premium service that allowed customers to stream as much music as they liked on services such as Spotify without having the data use count against their monthly allowance“, so as we get premium ISP options, how do you think that this will impact the Netflix use? Are you sure that this billion user service will not come with nails attached? You see, the issue is no longer mere net neutrality in speed; it is now ‘the elimination of data caps for home and mobile Internet use for Canadians?‘ This implies not just Canada; it is merely a stepping stone for America as they use Canada as a show case, what will happen when the gamers are added? This is a simple math part. Assassins Creed Unity sold over 2 million copies (exact number unknown), now in December 2014, the owners had to download a patch that was 34GB in size. So consider 2 million downloads of that patch, how congested will the internet get? As the number was global, there is no way to tell how the patch impacted on areas, yet as caps are removed, we will see more and more shabby developers getting new patches out ‘as soon as possible’ making us download patches more and more. So as there are globally well over 105 million Consoles (next Generation only), the millions of Gaming PC’s, now consider the amount of patches and the impact on the internetworking’s, as well as the Internet of Things, because bandwidth hits all options. Now consider 3 massive games released per month, game download and patches and now consider how Netflix is impacted, because it will. I am putting those two groups together because they get their ‘net mobility’ from the very same fuel tank. Now add Spotify and a few other players in this domain. There was never any question that there was a need for net neutrality, yet in all this it goes via an ISP and that player is greedy, so if the cap cannot be pushed in place, or when it is removed, why do you think will happen next? There will be an impact on speed.

This is set in an easy equation (not an accurate one, but it shows certain factors). Fuel = data_amount * speed * users, so if data_amount is infinite, how will that impact speed? The same we see when the user base become massively larger, speed is again impacted. yet there is another consideration, to keep speed high, the number of user and data_amount needs to remain in a state of balance and set at a nominal place, when we realise that this is not an option from day one, speed will always be impacted and that is where the ISP’s are now, creating in a conjoint setting the Service Level Agreements (SLA’s) and the option to price it all. The FCC can claim it is out of their hands and as the FCC is about avoiding ‘anything that negatively affects competition and innovation in the sector‘, the FCC rules are altered and whatever comes back might seem nice, but will come with the ability to let the ISP call the shots. As such Netflix, unless it sets ironclad contracts with ISP’s, these users will see a shift of options and usage, at a price that is.

How does this make sense?

You see, even as the numbers are global based, the US has a lot more congestion than the UK at present, yet the current growth as seen, which is before the upcoming 5G data need, the ISP’s have been milking their system and these providers have not been addressing the ‘fuel tank’ they had. Now, this issue is in the UK and Western Europe is nowhere near the mess that the US is in, but as the UK rural growth is now growing at an accelerated rate, the congestion is still becoming a factor, Cisco tells us: “Services like YouTube, iPlayer, Netflix, NOW TV and Amazon Prime Video continue to be a huge draw, which has in turn helped to fuel demand for superfast broadband connections”, in addition, we get “Cisco forecasts that the average Internet user is expected to generate 140GB (Gigabytes) of Internet traffic per month in 2021”, which is average and I expect that to be a conservative low estimate. Now consider that a Netflix movie can take up to 7.5GB, now consider 3 million people in London alone will watch a Saturday movie, and now consider that in the UK another 15 million will do the same, do the numbers start adding up? Even if these 18 million do not start it on the same time, there will be a sizeable overlap, there is enough indication that congestion will be an issue, which either ups the price of the internet, or there will be an increased agitation for Netflix. This is why there is enough questions on ‘terminal decline’, there is in addition consideration that when 5G hits, the curve will steepen by a lot. It is too soon to predict a near exponential growth for data need, but it is not unrealistic, especially when we consider the push from 3G to 4G and data usage curve when most moved to 4G.

Now I go back to these gamers, even as the Statistics state the gamers group to be a steady penetration of around 42%, their data need has grown more than exponential. The Next generation consoles, as well as the growth of being online whilst gaming has grown. So this is not just about downloads and patches, merely the online presence which fuels uploads, Even as some statistics state that they are on average 5 hours per week online, there is enough data to question that. Polygon gave us the title ‘PS4 owners spend about 50,000 years a week gaming’, again a global number, but that already gets us an average of 7 hours a week, which is 40% higher and these are 2016-2017 numbers. As it all comes from the same ‘fuel tank’, I hope that we can clearly see that it impacts the ability to service Netflix. I believe that congestion will be its worst enemy and as we see a shift in costing, the prediction is unlikely to become reality (yet, I am willing to accept that I could be wrong)

So back to the Guardian article! The quote “PwC predicts a “terminal decline” for DVD and Blu-ray sales from £1.22bn in 2016 to just £533m by 2021. The report predicts that internet video will overtake DVD sales this year, but some analysts claim this has already happened“, I believe that the market will adjust in a different way. I believe that the initial shift will be in price. The price of $40 for a new movie cannot be maintained with monthly services and as the margin is large, we much consider that shift. It has been stated a few times that “high-definition mastering costs for Blu-ray will run close to US$40,000 per title with a pressing cost of US$2.00 per Blu-ray disc”, so at 100,000 discs sold, the making comes to about $2.50, so selling at $20 would still leave a large margin, There is a given that mastering goes down in price, yet at this pace, the impact becomes negligible. So when we consider that owning a movie we like at $20 is still a good idea, even if we have Netflix, my view is that there is an impact, yet not to the degree PwC claims.

Could PwC be right?

Yes, that is indeed the case, especially if the economy does not pick up. If the economy stays in the bad shape it currently is in now, Netflix might be the only option for some people, yet the options will still depends on whatever internet options that household has. In that, we see the impact on both sales down as the economy faltered whilst buying movies is equally a non-option.

There is one element that has been ignored by me and it is time to address that now. The mention ‘some analyst’s claim this has already happened‘ is one that needs a look at. It comes from the January article ‘Film and TV ​streaming and downloads overtake DVD sales for first time‘ (at https://www.theguardian.com/media/2017/jan/05/film-and-tv-streaming-and-downloads-overtake-dvd-sales-for-first-time-netflix-amazon-uk). one element is ‘Netflix has rapidly grown to 6 million UK subscribers since launching in 2012‘, which is fine and the issue that physical retail is in decline cannot be countered either. The fact that the UK cost of living has been through the roof; so as we see the price of a Blu-ray being equal to 2 months of Netflix, people adjusted their budget. Yet in all this, the internet bandwidth remained an issue. As long as it could be pushed through Wi-Fi and more importantly the Free Wi-Fi places, people were fine, yet just like some of the more advanced filters, when those places start actively blocking Netflix, the user game changes too. You see, Spotify demands cellular data and does not stream via Wi-Fi. So remember the earlier formula? Spotify has 50 million users. Now consider that the other elements were speed and data amount. As these services grow congestion will be a logical consequence, meaning that the ISP’s have reasons to push through the SLA solution, solving all their issues and none of yours.

Netflix is here to stay, nobody opposes that, there will be an impact on DVD/Blu-ray sales and nobody opposes that either. It is the part of ‘terminal collapse‘ that I oppose and I am certain that at some point it will happen, yet not in the time period PwC says it will be. I could be wrong of course, but I don’t think so.

If they were wrong, then nothing is lost, for that PwC analyst there could be a golden future in show business for them as a the new member in Orange is the new Black Season 7 named ‘Wall Street Bitches‘ (speculated conjecture).

In the end?

In the end, the Guardian article does have one larger benefit; it is bringing congestion issues to the surface, as such the article had a good side, In the UK most people know it as ‘Internet Rush Hour’, yet what happens when the infrastructure will no longer provide for that side? The BBC gave us in 2011 “UK broadband speeds drop by an average of 35% from their off-peak highs when most people are online in the evening, according to a report”, yet the growth that we have seen then was at the beginning of 4G, even as the ISP’s upgraded their equipment, the user base In the last year alone, went up by 1.5% for the entire population. In addition, over the last 5 years, the amount of inactive internet users decreased by 13.3%, which is a lot, also consider that the UK Netflix user base is expected to double between 2015 and 2020; these numbers show a dangerous part. The largest one is that the numbers seem to have been incorrectly speculated. I get there as the growth of subscriptions grew by 1.8 million during 2015-2016, which was almost a third of the 100% expected growth. You might think that the Guardian article is therefore a lot more accurate, I still disagree, merely for the fact that congestion is a larger risk, which now gets us back to the Net Neutrality issue. Because as this grows, ISP’s will have additional ammunition to start thinking and pushing for Service Level Agreements on consumer markets, it is what the FCC sees as ‘anything that negatively affects competition and innovation in the sector‘, yet what the ISP sees as commercial opportunity. Here I truly hope to be wrong, yet some sources (read: ISPreview) are already revealing prices to rise close to 10%, in addition, the prices will rise even more next year due to the 2017 Digital Economy Act. This is where we get back to the ‘Pornhub’ part. You see, I give not a toss about them, but they illustrated a part that other sites are now getting into. When we look at Endgadget, we get: “There’s one slight issue with age gates in that we’re still no clearer on how they are to be implemented. Proving age using credit card details, the electoral roll and pay-monthly mobile phone contracts have all been suggested, but the government has admitted that forcing you to expose your identity might be a step too far. And so, it’ll likely be some time before this new law can be enforced as the government and newly appointed regulator decide on the best and least intrusive way for porn sites to verify age.” You see, it is not about the fact that it is about adult content, it is about the option to classify, so consider that via politicians (never a good start) to settle on what defines the boundary and needs more than mere access. It is the first time that there would be commercial option to slice services, not cutting them, but restraining the maximum bandwidth. When we see the quote ‘the new data-sharing regime effectively being lawful already’, we might think ‘government’ but that is the least of our concern, it is “Any business that handles large volumes of personal data is required to employ a data-protection officer under the new rules, and any breach must be disclosed within 72 hours”, you might think that this covers it, but what about back-ups, what about social media with multiple ownership over a larger amount of nations? It is the commercial value that is being played with and the EU does not have a great track record when it comes to commercial versus private interest. So as these elements come into play, there are now already three upcoming levels that would cater to ‘Service Level Agreement’, which is defined to charges a person has. It gives one more level that Net Neutrality is already a thing of the past. This is seen in “Reed Hastings seemed to walk away from fighting for net neutrality but his company has done a big 180”, so in the two days that I worked on this, Netflix did a massive corporate ‘about face’, the direct implication of ISP’s and the limit of bandwidth is showing now, almost a year before it actually hits us. News Network (at http://www.news.com.au/technology/online/after-ceo-downplayed-the-importance-of-net-neutrality-netflix-changes-tact-and-rejoins-the-fight/news-story/654c63348e3dbd4f7d697fe322eeb350) also gives us “major Telco company AT & T is in bed with media conglomerate Time Warner. Because of this high level of “vertical integration” there’s a lot more scepticism in the US that companies will be compelled to engage in anti competitive and “non mutual” practices”, which I already knew. Yet the clarity as given in my earlier setting in ‘anything that negatively affects competition and innovation in the sector‘, is now showing its fruition and that is before the dozens of new 5G services come to our mobiles and TV settings. As this collides, and it will! People will happily return to a worry free Blu-ray ad DVD, if the makers adjust pricing and remove the 5 iteration contribution application, the discs will be here to stay for at least a decade or (hopefully) two more.

 

Leave a comment

Filed under Finance, IT, Law, Media, Politics, Science