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Smite the analysts

It is time to change the game. It is time to do a lot more than merely claiming to do something about fake news. I never claimed to bring the news, I have merely been in the process of nitpicking it as much as possible and the Guardian got my feathers plenty ruffled this morning, so it is time for me to be a little speculative of the matter.

We love our idiot products at time; it is something to laugh at or something to make a joke about; for the most harmless fun. Yet today something snapped. It might have been the abuse that Theresa May has been receiving, it might have been watching some poor sod holding a ‘We’re poorer without EU‘ sign, whilst like me that person is unlikely to have any economic degrees.

So when I see: ‘Theresa May’s Brexit deal could cost UK £100bn over a decade‘ by Richard Partington (at https://www.theguardian.com/politics/2018/nov/26/theresa-mays-brexit-deal-could-cost-uk-100bn-over-a-decade).

I hereby make my first demand (do not worry, no one will listen anyway).

In regards to: ‘People’s Vote-commissioned study says loss is equivalent to annual output of Wales‘, I DEMAND a full disclosure of the names of the people involved as well as a clear documentation of all sources used. this includes the names of those in the ‘People’s vote’ those who commissioned the study, the price paid for the study, as well as the names of those who made that report (not just the three who wrote it), the data sources used as well as how the report was set to the data and its results. I expect to find a dozen flaws in the very least. In this case any arbitrary choice (which at times is perfectly valid), should be seen as a flaw, unless clearly stated as such.

It is time to hold these people up to the limelight exposing what the Guardian (and many other newspapers) are giving voice to as being ‘the facts’. I would like to go as far as prosecuting (to some extent) the makers of these loaded and dubious reports by banning those names from any governmental research for life! When that happens, we will get all kinds of excuses and well phrased words or denial. Yet, I feel that we have come to a point where these activities can no longer be tolerated. Not by any government and not by any organisation with political aspirations, or connections.

The reality here is that the UK will lose income, lost funds and lose options for the short term. This has always been known. We always knew that things would get a little worse. Yet NOONE is making any call on the waste of three trillion euro’s by the ECB on their Quantative Easing and the waste of now close to three trillion that the taxpayer has to pay back, whilst people like Mario Draghi walk away with a ton of money, a member of an elite banking group of 20 and no accountability to anyone. The media refused to hammer on the ECB on any of it and the lack of clarity and transparency that the ECB has. This happened in full view whilst they all had 50+ articles on the death of a journalist no one really cared about (aka Jamal Khashoggi).

My larger concern is seen in: “Garry Young, the director of macroeconomic modelling and forecasting at NIESR, said: “Leaving the EU will make it more costly for the UK to trade with a large market on our doorstep and inevitably will have economic costs.” The NIESR report found May’s deal would not be as damaging for the economy as Britain leaving the EU without an agreement, which would cost the economy about £140bn over the next 10 years.” From my personal point of view, these people are in it for themselves, most of them are. Even as I will immediately admit that this report looks actually valid and good, issues come forward to a degree that might not have been seen at the beginning of it all, yet the scrutiny after the report is also lacking making the issue larger. What some call ‘lucrative European contracts’, we see a lack of investigation on both sides of the isle in all this, because as a Brexiteer, I will never deny a Bremainer to voice their opinion, or their opposition to it all. It is the acceptance of democracy that demands it from within me. The UK has not really profited from the EU, merely large corporations have and that is actually the biggest issue with the entire EU at present. When we look at the 68 million consumers, many of them have not been able to afford any of it. The bulk of all of us are dependent on moments like Black Friday to get the hardware we normally cannot get. It is a known issue that the quality of life is still low all over the UK and in many other places. The only true beneficiaries of the entire EU setting are the large corporations. The local grocer sees no real benefit, whilst the large supermarkets have all these deductibles that for the larger extent benefit its board members, not the customers. People like Gary Young are eager to make mention of ”inevitably will have economic costs“, which is a truth; I and many realistic others do not deny it. Yet in equal measure we can move away from a multi trillion bond buying scheme that has done nothing for the people whilst making the banks fat and rich. Never before in the history of mankind did the banks and Wall Street have such a large hold on governments and its citizens and we sat down and let it happen. Brexit is for the UK the first step to undo that damage and it will take time, we all get that. So as we realise that the ECB failure, in part to unmanaged ‘freedoms’, lack of transparency and accountability has greatly impacted the UK, at that point will we realise that there is a weighted and loaded stage against all of us, in every EU nation. The second part in all this is what some call: ‘the EU gravy train’, I have made mention of it on a few occasions and the lack of actions in that regard is close to sickening. Even The Times gave us some time ago: “MEPs are clinging on to lavish, tax-free handouts for travel despite publicly pledging to repay them, according to an internal report by the European Parliament. They have kept an estimated €6million (£4 million) after promising before the 2004 elections not to claim the money. “They get exposed, promise to be modest and then keep riding the gravy train. It is appalling,” said Hans-Peter Martin, an Austrian MEP, who has led a campaign against abuse of expenses. The €60 million-a-year travel allowance system is so generous that many MEPs admit it amounts to legalised embezzlement of taxpayers’ money. MEPs are paid a first-class air fare for travel to the parliament, even if they use budget airlines. They make an average of £20,000 a year tax free“. We can agree that in that meantime something was done, yet how much was done? The taxpayers have to come up with 751 times £20,000, giving us a total of fifteen million pounds and that is only the travel item every year, one of a lot more items, so how much extra are these people getting? The simple fact that many of these issues have not been adjusted for over 12 years is a clear stage that the EU is the goose for exploiting extra income and benefits, something taxpayers never signed up for in the first place. Even now (8 weeks ago) we see: ‘Details of MEPs’ €4,416-a-month expenses to remain secret, court rules‘ (at https://www.theguardian.com/world/2018/sep/25/mep-expenses-eu-court-ruling) with in addition: “MEPs are also refunded first-class travel expenses and get a €313 daily allowance for hotel and living costs when working in Brussels and Strasbourg“, which in the most optional stage grants them an additional £60K each, adding fuel amounting to £46,562,000 to the tax payers fire. I think I have made my point, did I not?

When Brexit is done and we start seeing the impact, I predict it will be less than 2 years before the complaining starts, not from the UK, but from the other nations that now have to pay for the part that the UK will no longer be paying for and that is the ballgame here. When that happens, and it will we will see a rejuvenation by both France and Italy wanting to get out as fast as possible leaving merely Germany as the large economy to carry the weight of the EU and they will not be able to do this and it will all collapse. That is not a speculation; it is a certainty as I see it. It will only need one of those three to join the leave team and it will already fail. In light of all that is happening it seems to me that Italy is now the frontrunner before France, yet that might be what the horse lover calls a nose length photo finish. It was almost two weeks ago when French Marine Le Pen gives us almost the same view in the Daily Herald with: “French far-right leader Marine Le Pen is blaming the policies of the European Union for Britain’s exit from the bloc. “If the EU wasn’t what it is now, the United Kingdom would still have been a member of a structure that respects the nations, the people, that doesn’t impose migration polices and deals that have very heavy consequences on our industries and agriculture,” Le Pen said Friday at a news conference in the Bulgarian capital, Sofia.” It was for the most what pushed me into the Brexit field a few years ago; even as Mark Carney, Governor of the British Bank and his presentation in the House of Lords gave me reason to doubt that, the acts of stupidity by Mario Draghi and the ECB pushed me straight into the Brexit field, supporting Brexit. A situation that had been known for years, yet in light of 751 beneficiaries nothing was done to keep tabs on it and Brexit become a fact.

So as we accept the setting (via many sources) that Marine Le Pen is giving through “the EU wants to punish Britain by imposing “conditions that are unacceptable to a large majority of the people in the U.K. and to members of the British government.”“, we have seen several parts of that in the media. Is it not interesting how infantile the EU gets when you do not want to be a member? They threatened Greece to throw them out, whilst there was no legal option for the EU, and they demand the impossible from those wanting to leave. In that setting, who wants to remain a member? I would go with the speculation that the EU is for: ‘those who needs the power of exploitation‘.

It is getting worse

In this we look back at Greece. Some might remember the big boast that Greece made. I mentioned it in my blog: ‘They are still lying to us‘ (at https://lawlordtobe.com/2018/06/23/they-are-still-lying-to-us/), so when we were treated on June 23rd to ‘Greece ‘turning a page’ as Eurozone agrees deal to end financial crisis‘. Here Alexis Tsipras was happy to be quoted with: “Greece is once again becoming a normal country, regaining its political and financial independence”, we saw none of the EU reservations in a claim that was off by decades. I also commented in favour of the Greek opposition shown by Kostis Hatzidakis with: “The opposing party reacted to the credit buffer with ‘Kostis Hatzidakis said it reflected the lack of faith international creditors had in Athens’ ability to successfully return to capital markets.‘ And in this Kostis is right, the international markets have zero faith in their return, they rely on a small thing called mathematics and the clarity there is that the scales are not in the favour of the Greeks.” Now we see a mere four days ago ‘How Greece Is Scrambling to Save Its Banks — Again‘, the EU has become this short sighted, this convoluted in misrepresenting the facts to the people. So as we see: “Greece is scrambling to figure out how to save its banks — again. Burdened by bad loans that make up almost half of total lending, crippled banks remain one of the biggest hurdles to Greece’s economic recovery. There are even worries that the country may face yet another financial crisis if it can’t dislodge its lenders from their downward spiral. With bank shares tumbling, the government and the Bank of Greece are working on plans to help banks speed up efforts to shed soured loans” and this comes one day after: ‘EU: Greece has Not Implemented 16 Bailout Program Prerequisites‘, which we get from the Greek Reporter. We see: “The European Commission is urging Greece to proceed with 16 prerequisites that have to be completed by the end of the year, as agreed with creditors. The first report after the end of the bailout program in August that was released on Wednesday says that Greece is delaying to implement 16 important measures and reforms. Among them are the staffing of the independent public revenue authority, the repayment of overdue debts, the legislative framework for resolving the problem of non-performing loans and the development of the new primary health care system“, the article by Philip Chrysopoulos also gives us “Despite the fact that Greece’s 2019 budget meets the target of a primary surplus of 3.5 percent of GDP” will see a speculative setback (speculated by me) by close to 2% at the very least, in what will likely be a wave of managed bad news. The EU is now that useless and pushing down all the other European players. If only the EU legal setting had allowed for removing Greece from the Euro setting and EU economy settings in 2014, a lot of the issues (like Brexit) would never have been an issue. It is in my personal view greed driven EU stupidity that allowed for this. A blind faith in Status Quo that pushed the need of large corporations and that might become the downfall of the EU as a whole.

Do you still think that the EU is better for the EU economy? First Greece and now Italy are becoming the weights drowning the EU. Merely one hour ago, the BBC reported that: “Italy’s government says it will stick to its high-spending budget plans, setting up a potential stand-off with the European Union over its deficit.“, are you actually believing in fairy tales when you think that this will not hit back on the rest of the EU? Even as the Independent reported 13 hours ago: “The pound fell 0.19 per cent to €1.1284 off the back of reports that Italy is headed for a breakthrough with its budget, which would bring to an end weeks of wrangling between the EU and the Italian government.” we now get the reality that there was no breakthrough, we merely see more of the same and the impact of Italy is not immediately reversing and upping the pound against the Euro is it? In light of the revelation, the pound should be up by no less than 0.27 percent against the Euro (the gain and the 0.19 percent loss), we will not see that will we (or we will see it as late as possible so that the 0.27 percent can be largely minimalized. When you realise that the UK is getting unfairly hammered to this extent, would you want to be part of that group? And when (not if) the UK shows the improvements making the UK economy better, what excuses will the EU, ECB, IMF and Wall Street give the people of Britain?

To be part of any exploitative regime as the EU is starting to show it in a few ways. The evidence of this statement was shown by the Clean Clothes Campaign last June when we see (at https://cleanclothes.org/news/2018/06/11/complaint-lodged-against-the-european-commission-for-failing-to-uphold-fundamental-human-rights-in-trade-policy) ‘Complaint lodged against the European Commission for failing to uphold fundamental human rights in trade policy‘. Here we see: “Bangladesh has committed serious and systematic violations of fundamental workers’ rights. Conditions are unsafe for millions of workers in Bangladesh. Additionally, the labour laws of Bangladesh create significant obstacles to the exercise of the right to freedom of association, to organise and to bargain collectively. Further, the government has not effectively enforced even these flawed laws, and workers complaints to authorities are routinely ignored. Without bargaining power or legal recourse, workers have been forced to live in extreme poverty.” and when we realise that the lack of activities, naming and shaming those who are part of it all, whilst the EU remains inactive to a much larger extent, my case of large corporations being in charge of those acting in the EU parliament is close to well made, tailor made one could state. The lack of visibility given in the EU and the oversight on what is imported into the EU from Bangladesh is frightening. The Dutch CBS reported 3 weeks ago: “The average import price per vest exceeds 3 euros in 2018. With an import price of around 2 euros, vests manufactured in Bangladesh are considerably cheaper. Prices of vests from China (approx. 2.50 euros) are also lower than average, while vests from India were average-priced (around 5 euros) and those from Turkey more expensive than average (around 5 euros).” good luck trying to convince me that this is not about money and that there is a proper investigation into the Bangladesh situation. The fact that even China cannot match these prices is partially evidence enough. The fact that manufacture owners in Bangladesh are part of the 250% plus stage that we see with: “This is the largest quantity ever recorded and approximately 2.5 times more than in 1998“, the lack of questions by those gravy train people is just a little too weird and more questions are not coming forward. That is the European Union that its members seem to like and letting the UK out is also not an option. The analysts are merely the first circle we should go after (the first of several mind you). Any report that is not clearly documented with the names of all the people involved in this should immediately be disregarded and kept on record for prosecution and smiting afterwards (when those reports are proven to be incorrect) at that point I wonder how many studies we will get that are so overwhelmingly negative. And it is not merely the analysts. The names of the people commissioning for the report and the clear definition of the question that was asked will also be set to scrutiny. I wonder how many politicians and corporate figures will suddenly run for cover and darkness like a group of cockroaches.

Feel free to disagree or even oppose my view. Yet also remember, I merely want to see the names and all data on those so called ‘commissioned studies’. Is that such a bad question? When we are given the results, should we not wonder HOW they got there? Is that not a duty we all should have?

When we look at The National Institute of Economic and Social Research, we see a clear stage of names, Arno Hantzsche, Amit Kara and Garry Young (which is a proper thing, mindyou). We also see on page 7 and 8: “The Governor of the Bank of England estimated that by May 2018, UK household income was 4 per cent lower than it would otherwise have been as a consequence of the referendum (Carney, 2018): “one third of the 4 per cent shortfall in real wages reflects stronger-than-projected inflation, which is almost entirely accounted for by the referendum-related fall in sterling. The remainder reflects weaker-than-expected nominal wages, the majority of which can be accounted for by weaker-than-anticipated productivity growth“, which should not be disregarded.

Am I opposing my own view?

No, when you see the charts in that page, we see the UK not being in a good place. Yet considering ‘UK economic growth relative to other G7‘ and ‘UK inflation relative to other G7‘, the UK situation would not look great whilst this is staged up to 2018, and now we get the good part. The G7 are Canada, France, U.S, U.K, Germany, Japan and Italy. Now consider the Italian part dragging down due to the stupidity of their budget decision (which might be seen as their right). In addition the Greek issue will drag down the EU as a whole and the USA is in a trade war that will also impact the USA, all parts seemingly not taken into account and suddenly the UK already looks a lot better in all this. Now, we cannot completely fault the report called ‘The economic effects of the government’s proposed Brexit deal‘, yet there is already a non-negative impact for the UK (it is a stretch calling it a positive effect). In addition we see properly placed “We have assumed” in the proper places and only thrice, which is also a good thing and for the most utterly unavoidable. We also see in one place: ‘Sterling effective exchange rate (January 2005=100)‘, which is possibly merely arbitrary, from my personal view the fact that 2008 and 2016 have impacted it all might also be a stage where the UK had more hardship than before and as such the three stages should have been included. My final issue is on page 15; I do not doubt the numbers or the statement perse. Yet when we consider “Ramasamy and Yeung (2010) find that openness to trade benefits in particular FDI inflows to services sectors, much more than to manufacturing. Ebell and Warren (2016) survey the empirical literature and calculate that reverting to trade under trade arrangements similar to those between the EU and Norway would reduce FDI into the UK by 8–11 per cent, and by 11–23 per cent under a Switzerland-type relationship” that openness of trade also implies the open acceptance of the unacceptable ethical stage that Bangladesh is showing to be, we need to ask the tougher questions on EU inactions to the degrees currently seen. You see, when we accept one part, we need to accept that all these sweatshop articles are out of bounds. They are merely emotional banter pressed on those trying to meet budgets, there is no humanity left, we should not allow for that. In this way my statement is harsh, yet that is what the EU has become, a harsh proposer of status quo at the expense of whatever is coming next. If you do not agree, feel free to ban all Bangladesh T-shirts, leaving others with 215 million T-shirts to sell; was that example too direct?

Even when we accept the part of ‘how the deal affects uncertainty and confidence‘, which is a topic that will remain as there will always be uncertainty, the entire report is seemingly staged towards the bad side, whilst any improves economic marker from the second year onwards are basically ignored. We can argue that year one will have no upsides, yet the stage of no upsides in year two is lose to unimaginable. Apart from the ‘EU donation‘, which has been significant, the downturn of Italy and Greece that will no longer impact the UK is clearly escalating and France is basically scared shitless of that part. France is so scared as it is in a much worse position than Germany currently is, who will also feel that impact to some extent.

No matter how this plays, it is a mess that will test the reality of a lot of people. My largest concern is not how good or how bad things get, it is the fake revelations by speculative analysts that are the impact of a lot of things and the moment when we see the managed bad news after the fact, we will also see the weakness that has become the EU, in light of an already weak USA, this merely strengthens the need for a segretative community (read: nationalistic approach to national issues). It is the one part where I see eye to eye with Marine le Pen: “the policies of the European Union as well as the lack of transparency and non-accountability” are the biggest drivers in this entire sordid affair.

I wonder how draconian the changes will become when others realise how correct my view of the matter was. I am less likely to facing the fact that I was wrong, there is too much documentation pleading for my view, especially as the Wall Street Journal reported “Greece’s Eurobank Ergasias SA said it will acquire real-estate company Grivalia Properties REIC, boosting its capital and paving the way for the creation of a “bad bank” to help deplete its pile of nonperforming loans” a mere 5 hours ago. So when exactly did the people ever benefit from a bad bank solution? We saw that in 2013 with the Dutch SNS and Reaal setting. So as Brussels treated us to: “The costs to the Dutch taxpayer were still substantial, resulting in a deterioration of the budget balance (excessive deficit procedure definition) for 2013 with 0.6% and an increase in EMU debt of 1.6%“, we see Greece doing the same 5 years later. As we look at the quote: “In fact, since the nationalization the Dutch press has regularly published pieces that show how the commercial real estate has been mismanaged for a substantial time period. Did this go unnoticed by the regulator? Why did it not intervene?” We now get to unite that part with the overwhelming inaction of the EU and the unacceptable actions of the ECB, so this will be a much larger thing that Greece is printing on the rest of the EU then the people are currently aware of and the impact will be felt much larger, the fact that the bulk of the EU states cannot keep a proper budget merely makes mathers worse (not a typo, it means ‘reaper of hay’), and now I am in a state of moments uncontrollable deriving laughter.

The lack of visibility to several parts (an issue I cannot blame the media for in this case) is just incomprehensible. In part this is due because there are so many elements interacting, yet the fact that the issues are not visible is still a matter of great concern, and also an additional reason to push for Brexit.

 

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My Prediction was spot on again

On August 14th the NOS reported exactly what I expected them to do. The economy was again slightly worse of then they thought it was going to be. This time they finally go one step further, they are now stating that it will not be that good either next year. Really?

According to Minister Dijsselbloem it was a structural problem and he points at the housing market as one of the reasons and 8.7% of the population is now unemployed. They expect now a 1.25 shrinking of the economy, which is not that much of a surprise! However, they do predict a slightly better economy for 2014. Which is not really true, but as they keep on bringing the same wrong news, they will get it partially right in 2015. So, I wonder how quick the bad news will hit the Dutch population, and in addition get more bad news before the budgets have been completed. They have 2 weeks to make a decision on what happens to SNS (which is due before the governmental budget is set) and with the 6 billion in cut backs they will then, not unlike actors come with a tear on their cheeks to ‘sell’ this bad bank option and voilà! The Dutch tax payers get another added 2.4 billion Euro in debts.

This option had been on the forethought of their minds considering the confidential paper they left open on the internet (at http://www.rijksoverheid.nl/bestanden/documenten-en-publicaties/kamerstukken/2013/02/27/07-non-paper-financien/07-non-paper-financien.pdf)

The NOS did mention that the negative steps are getting smaller and smaller. They state “the worst is over“; I personally think there is pretty much nothing left to shrink at present. The Dutch must start to realise that they are getting to some extent a ‘baked’ level of information. They mention some options to finding creative solutions and interesting enough, they steered clear from pensions. According to the NOS the government is pretty much ready with a presentable solution and the Dutch present their annual budget on ‘the day of princes’, which is on the 3rd Tuesday of September, some might think soon enough, yet the options left to them might be less then they expect with the impending bad bank shifts and a possible rehash of regulations opening up pension funds for what I would negatively call ‘waisted spending’, especially when you consider that this will be the third administration that is unable to keep a budget.

Considering these facts is why I believe that the current opposition has no right to complain, especially considering the words of Sybrand van Haersma Buma (CDA). Let us not forget that cutbacks were needed in 2009 when the government was in the ‘majority’ hands of the CDA in those days and when Germany tightened the belt when needed, Dutch politicians decided not to follow, as their projected economy did not warrant it. If they had stepped up to the plate then, the Dutch would not be in this bad a predicament today. Yet, even now their bad news is not complete. When we consider the British predicament, then they should consider, that even though their economy seems to be picking up, George Osborne admitted to the quote “the chancellor accepted for the first time that the UK’s debt would continue rising until 2016/17” (from political.co.uk). This means that with a Trillion plus in debt, the economy is in for hefty austerity measures until 2020, from that view we need to realise that hefty cutting costs in the Netherlands are essential, should they consider any decent level of growth before 2015, simply because both nations have been unable to properly budget their spending.

 

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Are banks now too much in control?

I mentioned some of this yesterday, some people are just too unwilling to learn and they are very willing to sell you a too pretty a picture. This is what is now starting to become clear and in a dangerous way. Again, not unlike previous events, this blog was inspired by the Dutch NOS (www.nos.nl).

Political parties are now starting to ‘panic’ and are quickly grabbing to solution wherever they can. The issue is that the Dutch economy is apparently even worse then was initially predicted by the Central Bureau of Statistics (www.CBS.nl). Their initial prediction of -0.1% is now -0.4%. Interesting fact is that I predicted something like this in my blog ‘A noun of non-profit‘ on May 15th, just over a month ago. So is this bad news management? To me it seems to be more and more the case.

Diederik Samson of the PVDA (Dutch labour party) is now trying to kick-start the economy by offering alternative sources to spend from. Well, Mr Samson, there are two issues with that idea. The first one, most people do not trust bankers and politicians, now they are seemingly joining hands many have reason to trust both of them even less. The second reason is that the unreliability of the current economy is stopping people to spend anything as long as they are in debt.

The basic issue is that there is too much uncertainty for the next two years. As such people pay their mortgage and essential bills as much as possible. The people are paying off their debts as banks cannot be trusted to play nice. This is the consequence of not containing the massive wave of simply put insane investment sprees. Perhaps some will remember how SNS Reaal needed to be nationalised?

So as the Dutch need to cut 6 billion in expenses, they now seek other way to find spending options to raise the economy and next on their list is the attempt to use pension funds to do this.

Basically, quoting Arjan Noorlander from yesterday’s NOS newscast “The people managing these funds are often investing abroad to get their dividends. This does not help the Dutch economy” He then further states “These funds should invest tens of billions by taking over mortgages from banks, so that they can offer new mortgage investments“.

How is this anywhere near a good idea? Banks, remember them? They are not to be trusted at present, or anywhere in the near future for that matter!

As we have all these bad bank mortgages out and floating, relieving banks from these burdens by losing upcoming retirement funds is more than just a bad idea. Arjan Noorlander did continue and did end with the fact that this is dangerous and retirement funds might get lost in this way, and that it might be an option if the government underwrites these loans so that they will pay the losses if those occur. To me it reads that in the end that another bill will be given to the taxpayers one way or another.

The issues of keeping the retirement funds safe was also mentioned by Alexander Pechtold (D66 = Democrats 1966), he continues by saying that first and foremost there should be clarity on how and if this should proceed.

 

You see, there are two sides to that part. In the first part the Dutch officials shot themselves in the foot for a long time by keeping housing too expensive for way too long a time. It was left to certain groups to keep the prices artificially too high. I myself viewed it as an artificial push to keep housing prices beyond acceptable as it increases the capital position of banks. Then there was the issue of preferential treatment for some places, as there were ways that the ‘right’ people got into those places. I myself experienced these events first-hand. Too many issues played and in a time when incomes were good, people got what they could and as such they are now stuck in a solid position, where moving away will cost any person a fortune. To illustrate this, my former, small, 2-bedroom apartment in Rotterdam would buy me an apartment almost twice that size in Stockholm, Sweden. So considering these facts, moving is not an option for many, which means that people are paying of their mortgage as much as possible.

The second part is that up to 2005, it was way too easy to get all kinds of credits and payment deferrals. These options all come at some percentage expense and as incomes were good, no one really cared too much. Now, to not end up in a situation where these people will have to eat their mortgage, or sell their house (making them destitute), they are now all paying off their debts as much and as fast as they can.

These two factors add to the fact that people will not spend money. Not unlike the government, too much money was taken in advance, and unlike the government, they are not getting to push it forward, so there is no spending. These factors had been known for a long time (at least 3-5 years), so when politicians are all so amazed that economic infusion plans are not working, then that amazement seems somewhat disingenuous to me. The fact that the Dutch are so about housing corporations, to be given the funds to grow is tying the cat to the bacon in more than one way.

This is not allowed to become an ‘opportunity knocks’ situation, especially when they are playing with retirement funds. If they really want to do something that adds up, then give people the option to use their retirement plan to pay of a mortgage of a new house. Those young enough will then have a building future. And it should be managed by a banking branch of those who keep those funds at present. Yet, I reckon that it will raise voices that this is not opening the economy enough. So is this about the banks, the people or the economy? I wonder how quick objections will loudly rise when banks are kept out of the equation. It would give rise to my suspicions that the banks are in more control then people realise.

Again, that risk is very real in the UK as well. Instead of keeping a decent flow of affordable housing, we see an economy in neutral whilst the hill it is up against seems to be rising more and more.

This was discussed in the Guardian, April 27th (http://www.guardian.co.uk/money/blog/2013/apr/27/pensions-system-failed-what-answer) When we look at this in regards to a failing amount of retirement savings as the predicted cost of living has been incorrect for at least a decade, likely closer to 2 decades, we now see a dangerous development. This is a market where over 40% of those approaching their elderly need will have to sell their residence to afford future care.

Suddenly ‘The Best Exotic Marigold Hotel‘ doesn’t sound like the worst idea for people to consider.

This again brings me to the idea of solutions. It is always nice to kick a parliamentarian (a therapeutic form of soul food), but we should consider options and opportunities for solutions.

There was an idea in South Australia several years ago that was quite remarkable. To solve housing, the government gave away land on loan. So basically, you got to buy a plot for $1. The conditions were that you had to place a house on it, and the value of the land was payable when you sold the house. So basically you had a house on free land as long as you lived on it. This solved two parts. One, the housing issues fell away for some, second a house needed to be build, so that was good for jobs and economy. I always thought that was a good idea to get people into their first house. The second part is the retirement issue. Now many prefer to remain where they are. This is fair enough. Yet, consider that instead of eating your house, you are leasing it away or renting it out. Consider that live in places like Greece, Spain and even India could be more rewarding (and warmer) as you live in a place where the cost of living is a lot lower. Lower cost means a better quality of life. I am not stating that this is an option for all, but perhaps it could be an option for a decent amount, giving breathing space to create new ideas and options. Whatever people choose, I hope it is one people will be able to live with in a comfortable way.

 

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You might soon be sold by the banks!

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

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

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

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

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

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

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

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

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

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

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

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

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Asleep at the wheel of the banking industry?

Cyprus is fast spinning out of control. The banks are still closed; the people are near civil revolt. All this was not just implied by me; it seemed to me that these acts were clear as day. So are people asleep at the wheel of the Eurozone finance?

The problem is that I am not that overly intelligent. In addition, I never had a degree in economy. So what on earth are the parties involved up to?

Last night on the 21st another Cyprus meeting was set in motion. And here, now the new game comes into play. Yes, they might have an alternative! They have offered a solution opting with two banks, a good and a bad bank. (Source: NOS News) Is this it? Is this the wave that we will see? It seems that Goldman Sachs has been very active. It was Goldman Sachs who initially mentioned such a solution in a few cases. This included the SNS bank, however the solution was rejected there and it caused the nationalisation of the Dutch SNS bank. I spoke about this in an earlier blog, and likely you might have read it in a league of other sources discussing this.

As mentioned, I did not study economics, yet I am overwhelmingly against this solution. There is no denying that the Goldman Sachs boys (and girls) are loads more qualified than me in this field and this has to be solved by clever people. All this I agree with. Yet, sweeping loads of debt under a carpet so that those who created the debt to forget about it is not the solution. Getting rid of it by creating bad bank swaps is not a solution and to accumulate all these bad banks in an effort to offset the overvalued total global sum as set in LIBOR is not a solution either (even though that would have been VERY clever indeed).

The banks never ending ability to play quick and loose with bank funds at the expense of all their customers so that they can enjoy a quick raise in commission is clear evidence that after 4 years, doing nothing is just no longer an option. It is extremely frustrating to listen to politicians and journalists games for alleged infringement of their freedom to speech and the need for better budgets. The one party that needs some intense new levels of legislation is left alone to play the games they play.

Yesterday’s news on NOS, where we saw the head of the Eurozone finance ministers Jeroen Dijsselbloem getting flame baked by the German Peter Simon who is a member of the German Committee on Economic and Monetary Affairs. He went the route of dust, stating that he was taking responsibility for certain joint decisions. So is this all incompetence? If we consider that he met with Christine Lagarde earlier this week, it gives clear image that more is going on, because pardon my French, but she is one clever cookie. Should we therefore consider that they are considering another path?

I reckon that the entire SNS issue as it exploded earlier this year did not go the way certain groups wanted. Even then there were clear calls for the bad bank solution. It was stopped and the Dutch government stepped in by nationalising it all. It is not impossible that the bad bank solution was the only option from the beginning, however they not in a public position to offer it as a first option. The people would have to be a little more against the wall there (not the Cypriots, but the general population in the Eurozone). This is more than just a call. I think there are several reasons playing the field in regards to the bad bank issues.

Should you consider my thoughts to be wrong (which might be very valid), then consider the US eternal resistance against Russian activity in Western Europe. Now, there is utter silence when Russia is willing to come up with the billions saving the Cypriots and getting access to the Mediterranean Gas fields? There is no way that they would allow this, which means that either another tactic is played here, or the US is almost officially utterly bankrupt. (Not entirely unrealistic either).

It seems that this is turning into a Machiavellian play. A play where the banks hold the dagger that they are ready to stab straight into the backs of the people they should be protecting. Their own citizens! This is where the shoes are getting too tight to dance. The banks have not been a caring factor for their local population for a long time. It is all for greed, commissions and it all tastes sweeter on the international market. This is also a massive reason why it is harder and harder to get a mortgage. In the end the return on those investments does not yield the returns the banks are hungry for. This was clearly mentioned by several sources. They have been bending over backwards to not qualify customers for a mortgage. (Source: Trouw, a Dutch newspaper). Banks want to make money, lots of it. Mortgages just don’t slice the bread for a banker any more, leaving most of us all out in the cold.

So why am I against the bad bank? In itself, the bad bank could be a solution if people in charge would wake up and ACTUALLY get some true banking reforms in play. Stopping this group for needless risks should be punished severely. Like the press they claim to self-regulate, yet, like the press it is nothing less than a joke.

This was reported by CBS on May 14, 2012: “JPMorgan Chase’s admission last week that it lost more than $2 billion in one set of trades should be used as a wakeup call to end the practice of banks regulating themselves, Massachusetts Senate candidate Elizabeth Warren said on Monday.

This is only one of MANY of these reports in a period between 2008 and now. 2009 with the reports by Lord Turner, and even now, or even in six months’ time when more fines hit the LIBOR banks. Self-regulation does not work. Show me a person with greed and I show you a person who does not care about the rules and often does not worry about the consequences either. Banks are filled to the brink and drowned in resources motivated by greed. It is the same reason why the press cannot regulate their ranks. Their need for greed (size of publication) and their ego trip to get the news first is why phone hacking started in the first place.

Yet, a royal charter will not work for banks. They will walk away too often without any severe consequences (because most dealings are international). A clear need to legislate beyond draconian is the only solution for banks, which must happen on a vast international scale. Also, my thought is that any banks on the international trading floor should have at least have 20% vested in local mortgages. The reason is that it will give most banks a better level of stability, it will serve people actually having a chance to work on a future and in the last it will give many a peace of mind.

All this is needed BEFORE we start playing with the bad bank solution. If we can tie these banks down with draconian measures making these transgressors homeless, income-less and future-less is the only way to ensure that not only will the current banks behave, it will give a realistic chance of the debt for bad banks to be resolved and paid.

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Savings from a bailed-out nation?

We all know, hear and get frustrated with bail-outs. So why is Cyprus different?

The bail-out will not just happen in one direction. It is not that the Euro zone and the IMF get out the wallet and give this small Island a $10B voucher. The other side here is that people on Cyprus will be taxed up to 9.9% on their savings. If your savings are under 100,000 Euro then you will only lose 6.7%. This is a new situation. It only effects those with money on a Cypriot bank.

So what is this Cyprus? For those not growing up in Europe, you are less likely to know about it. Cyprus is part Greek, part Turkish and all independent. There is more, the Island has only 1 million citizens, so we are looking at a $10,000 per person support fund.

The natural question following is how this place be THAT incompetent? More important, how can a bail-out be handed to this place without DEMANDING the replacement of that entire government? From my point of view, it is either too corrupt or too stupid to continue. Should we not take a more assertive stance before handing out cash you can pretty much kiss goodbye?

In addition, in my view all banks connected to this situation are to directly report to a Euro zone auditor. The rights of those banks, their managers and its board of directors are to be nullified!

It seems that we are way to ‘forgiving’. It is time to show banks that those who play to this effect get their rights, their bonuses and ego removed.

My method of reasoning is simple. President Nicos Anastasiades stated to Reuters as published on 16th of March “we would either chose the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis” he was referring to Cyprus Popular Bank, the recipient of the ELA facility for months, and Bank of Cyprus, the island’s largest bank. It is time to put all cards on the table, it is time that all its citizens, as well as all others to know the unimaginable bungling by those who claim and should know better. Their rights to trading removed at present and it should only be allowed by a controller of the most conservative and cautious kind. It seems to me that most banks and traders seem to have reverted to desperate Las Vegas gamblers who have one last chance and they gamble it all. Banks should not be allowed to do this. For those thinking these words are empty and hollow. Consider the SNS bank, the Dutch bank that was considered ‘too big to fail’. It is now nationalised. It seems to me that handing out money to a group of people ready to gamble it away at a moment’s notice should not be allowed in these positions.

It is however not fair to blame just the banks on this. All this seems to be directly linked to Government bonds as well. One set at $1.5 billion being due on June 30th. So again, we see some kind of borrowing strategy. Politicians who are spending others people’s money and then some more. Living in luxury and using up cash that place NEVER had in the first place. These kinds of bonds are actually usually very much desired because they are considered to be risk free.

Here is my second thought. ANY nation trading in these bonds, while levied above a certain level are no longer to be considered risk-free. I know that this is what those standard & poor ratings are all about, however they had downgraded the status of Cyprus as follows: “We have assigned a recovery rating of ‘4’, indicating an expected recovery rate of 30% to 50% in the event of a default, however unlikely.” (Source: S&P website)

They valued it unlikely? Well, that might be the case, but others have to foot the bill at present.

I suggest that ALL ratings of bailed-out nations are set to CCC (Yes, I can see the panic now!) until the bail-outs are paid back. Italy will not likely enjoy that either! (Mi scusi Presidente!)

Some will come with the reasoning that this is bad because it does not allow for restoration. Is that true? Look at Greece and Italy. Paying up is not on their mind. They seem to be pussyfooting around, all caught between bankruptcy and civil war. Italy might not be on that train yet, but one promise from politico Berlusconi and suddenly he is back in the political race. Yes, that is what Italy needs, more irresponsible spending at present. It is utterly unacceptable that these places play nice weather, with currently no way of paying back. Greece is likely the best example. They current;y seem to have no way to EVER pay it all back. Its people are rioting blaming all but their own governments and banks. For them, consider the amounts your governments spend while they never had the money to begin with. All those VERY willing to borrow to them should be as per now be visibly named too.

These people are all relying on anonymity. Take that away and they lose the option to walk in the streets thinking that life is great. In the end it comes back to accountability. The only fun part for some in the case of Cyprus is that it is filled with Russian mobsters who are likely to lost 9.9%. They really do not like it when their money is messed with. So, should the government and banks suddenly leave THOSE accounts alone, those involved should name and shamed. See what the local population will do then!

However, I am digressing from the issue at hand. Cyprus and the bonds are only part of the topics. It is becoming clear that the discussion should focus towards the S&P ratings.

Quoting Wiki it starts with “Standard & Poor’s (S&P) is an American financial services company. It is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds.

Wiki is not really an academic standard, however to quickly find a fact it is just as useful as anything else.

The actual issue is the word ‘analyses’ in the entire sentence. In addition I would like to quote a small part that was published by James Rowe on the IMF site on April 20th 2010. I know it is a little old, but there it does state: “IMF says is the newest threat to the financial system: growing sovereign risk.” This has been known for a while, and yes, not only WAS it a risk. I am stating that it STILL is. The S&P rating shows that very part. I am making the additional observation that the analyses might be flawed on a few levels (assumption on my side) as we look at the Cyprus issue. That view is only strengthened as we look at the rating that S&P still seems to hold as per December 12th 2012. “Ratings On Greece Raised To ‘B-/B’ From Selective Default On Completion Of Debt Buyback; Outlook Stable” (Source: S&P).

This is part of the problem! Consider the headline from Feb 20th 2013 “Greek Workers Walk Out in Fresh Austerity Protest” (Source: NY Times). These people seem to not get it, or at least not accept what is needed. They start riots and they start strikes. I am not blaming them. They got handed a raw deal. Unlike some optimistic analysts, who are claiming to see light at the end of the tunnel. There is serious threat that Greece could still collapse if these events are not stemmed. As such, the S&P rating of Greece (and other bailed out nations too) should for a long time stay in the C-range. Reasoning is that bail-outs are limited and there is NO guarantee that it will continue if debt control in Greece is not successfully done. I think that it is irresponsible to take bail-out money in consideration to up the borrow margins. I get it, as a factor, the bail-out is valid, but the fact that it allows Greece a ‘better’ credibility does not seem valid. Even if we consider ‘renewing’ current bonds, Greece (and others) must be used as an example to make it clear that the current path is running out of space fast. Especially as several other governments keep on overspending, with too small a chance to keep their budgets under control. I am against these levels of overspending and enabling by others whilst we all know that there is no end in sight. And it is not just Greece. These visible steps will show clearly to the other nations like Italy and Spain (to name but a few) that the good times are gone, perhaps forever.

It is time for financial institutions and governments to adjust their thinking and approach.

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The Italian menace?

The Italian menace?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Banks, eunuchs of a new congregation

The times are still all over the place. As I finished the 5th part of my previous story, the stories from SkyTV UK and the news by the Dutch NOS started to hit my TV. The thoughts I had on issues that are currently playing out are nowhere near done. I get the distinct feeling that this is far from over. It is almost that there is a voice whispering in the ear of Dutch Finance minister Jeroen Dijsselbloem. The whispers seem to be about the Bad Bank and the whispers could involve Goldman Sachs. There is no doubt that this man knows his stuff. He got his finance papers in Wageningen, a renowned and highly respected Dutch University. There is however more at play. I know it is a personal feeling and I am not an economy graduate, so there are plenty who can run circles around me in this regard.
The first part is that this idea comes from Goldman Sachs. Is it wrong to call a spade a spade as the expression goes? This firm together with the Lehman Brothers were the massive cause of something that had us reeling in 2008, and this is not over, not by a long shot. THAT damage will take decades to overcome. No amount of fancy bookkeeping can brush this under any size of carpet. This is however not about emotions. That path will never ever give any solution. My issues remain clinical (or at least I am trying to keep them that way).
Consider the banks are all allowed to get all their failings into a small rejectable corporation. These costs should be paid by the failed implementers. Not the government, not the taxpayer. The bank must pay for their blunders!
If this continues as it currently seems to be going, then we get a legal situation where high risk bad ideas can just be written off the books and straight onto the taxpayers list of to pay, whilst those responsible will ever show improvement. Those people will just keep on playing high risk games. That had been shown already. This thought was also mentioned by Rolfe Winkler at the New York Daily News. How is it even possible that a company that seems to have been one of the major reasons for the financial meltdown be regarded, or even ALLOWED to make any continued presence?
Wherever I looked Spain, Netherlands, Ireland, and perhaps even more places. Goldman Sachs keeps on being named as a primary advisor. How many bad banks are there in America?
Let’s take a clinical jump into health care. Would the Dutch Minister of healthcare Mrs Edith Schippers consider someone for a position? You see, I know a person (well, kind of). Brilliant physician (so they say), over a decade of medical research experience and deep knowledge of improving the physical best in all of us. His name is Dr. Mengele. Would she please consider him as the new Surgeon General?
Are people feeling ‘slightly’ sick at this particular moment? So if a transgressor of THAT magnitude is so offensive, can ministers not understand that we have a massive amount of resistance against parties like Goldman Sachs and Lehman Brothers? Some things should just not be considered. This is not emotion, this is common sense. If groups like that can debunk a generation, why trust them again?
Again I say, this is not emotion, this is common sense. My reasoning is simple. When a board member moves into such a power position, that person will surround himself/herself with the golden boys and girl that made for this to happen. It is an evolutionary step. The board member rewarded is also the golden boy/girl reward. The top of the pyramid moved to the direct vicinity of that power circle. And they would have moved a few people into their vicinity too. So whatever was done to that board of directors did not stop when they left. We are looking at a minimum of two additional circles of power, some moved up, some moved away and some stayed. But the way of thinking of those who left remained in place. That is the real danger. This could happen again!

My fears are voiced in much better way by Professor Julia Black from the London School of economics in a paper from January 2011 “The financial crisis revealed weaknesses in regulation which went far deeper than organisational structure. The new legislation alone cannot provide the solutions – but it will be an important tool for guiding the future conduct of regulators, as well as determining the name of the institution for which they will work” (Black, J, ‘Breaking up is hard to do’, 2011).
So these weaknesses go deeper than just the casual parts. This is partially visible in an article in the Guardian written by Alan Travis on October 2nd 2012 (“Labour will introduce new laws against dishonest bankers, Cooper to say”). It is interesting that this happens more than a year after the paper by Professor Black and more than 3 years after the Banking Act 2009 (I reckon they could not delay it any longer). In the article Cooper says: “Cooper says that the public looked at what had happened and had seen no real sign of people being held to account.” This was Yvette Cooper MP, the current UK Shadow Home Secretary.

Really?

Many had that feeling since 2008 when retirement funds when to the local latrine and haven’t been heard of since. For me there are a few additional issues.

1. Can this happen in Australia? (Some might say No, we are not like that, but how clearly is this set in legislation?) We should find and test this BEFORE the Australian public is presented with a multi-billion dollar write off.
2. The UK has the Fraud Act 2006 (originally part of the Theft Act). The problem here is that the word ‘Dishonest’ is a factor in each of the variations of Fraud. That has the issue that the events that lead the 2008 meltdown were not illegal. When we look at the Banking Act 2009, the criminal links are not really there. More important, since its release there have been no additions, alterations or amendments to stop the bad credit ‘solutions’ the US banks employed. So it seems to me that proper protection is still not in place. This means that the impression remains with me that the financial top can continue to get their monthly shares of luxury items, real estate and yachts. It seems that this area is not filled with loopholes; it remains nothing less than an open gate. Beyond that is the statement of Martin Wheatley in regards to LIBOR and that this had been happening since 1991 is an indication of the remaining dangers. So how safe am I in Australia from our banks playing this game?
3. Which solutions and papers can we trust? Many of them are all about concepts, approaches and possible ideas. And nearly all of them are pleading against regulators, regulations and stricter control. It seems to me that those papers are all from financial experts who want a solution without hindering their need for freedom of movement. This is in the heart of my fears.

There are leagues of papers that proclaim ideas. An example is “CRISIS MANAGEMENT AND BANK RESOLUTION QUO VADIS, EUROPE?” written by Dr Barbara Jeanne Attinger. In the conclusions section of page 47 she writes: “National special resolution regimes are capable of addressing the characteristics of credit institutions at national level. The UK regime is exemplary in this respect, as it provides an effective toolbox for bank resolution”.
We might ask her about the LIBOR issues; that in itself does not invalidate her thoughts and approach to the Banking dilemma at heart. Stronger than that, her presentation on 29th January 2013 in Copenhagen reads direct, to the point, clear and pretty brilliant. I do not need to need a finance degree to read between the lines that this is a possible approach to a solution. The part I am missing starts to be visible when get to the resolution in the context of a banking union. She mentions this and focusses on the third pillar.

• Single supervisory mechanism
• Integrated resolution framework
• Common system for deposit protection

The first pillar is about the supervisory mechanism. From my point of view I see the specific need for a fourth pillar, which would require alignment over several nations (not all have the same acts, rules and legislations when it comes to banks).
My thoughts would go towards:

• Single supervisory mechanism
• Integrated resolution framework
• Common system for deposit protection
• Acts of Accountability for Banks and Financial Institutions

I have seen several papers that rely on a solution without regulations. There is no way to tell who’s right here (my lack of Financial degrees gives them the advantage), yet the fact has been shown that Banks cannot be trusted, and the LIMOS scandal just adds a bucket load to that belief.
The acts need to go further than the Fraud Act and the Banking act combined. It must clearly outlaw certain acts. It must also limit rewards. The utter need for a ruling that bad bank approaches are no longer rewarded. More important, any form of reward within financial institutions should be lessened by the amount moved to a bad bank, or bad investment write-off. Something they will not want, however, consider the fact that people end up with margin profits with swapping papers. That should no longer be rewarded.
The high risk use of Interest-Rate Hedging Products (IRHP) are reported to dent their net earnings prospects in the short- to medium-term. (Quote from the Guardian) Well, if it is impeding net profits, then it should not be rewarded in any way shape or form. You want to run risks, fine, but then the bank does it risking their own capital and own finances. What are the chances the banks agree to such measures?
There is an additional issue. This is the current instalments of Goldman Sachs creativity called Bad Banks. This is nothing to attack them on, as they do not seem to be doing anything wrong or illegal. However, I feel that this escape hatch will cause a lot more damage in the short and medium term than anything else. Even long term these Bad Banks are to be seen as issues. The required change would be that until resolved, no less than 5% of annual banking revenues MUST be transferred to the bad banks from the banks that had to be created because of their actions. In additions, the commission-able revenue must be based on the remaining profits AFTER funds are transferred into the Bad Bank. The need for this is shown as the Netherlands are already reporting the need for more and more financial assistance as Bad Bank properties are placed in financial duress. So SNS can just wave it off and sail to the future? It reads like the good old British days of Wine and Jousting: “Peasant Population Taxation! For a long lasting rule of Fun and Frolic”
The next issue goes beyond this. The Bad Bank might be taken care of in some way. Perhaps McKinsey & Company picks it up. Perhaps Moret & Young takes a creative accounting dip in that pool. The LIBOR scandal is however more than just an issue at hand, it will be a debilitating complication, allowing several parties to start muddy the water, leaving a solution hanging until sometime down the track, and at present no protection seems to be in place, and none to look forward to in the short term.

I reckon the current scandals show that this is not even the end of the beginning!

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It hurts every time, but we love it

So, in this fifth part, we will have a little look at the UK banks that were hit lately. This is a progression from previous parts. Not because they were linked (they might be, but I gave no deeper look at that). The important reason is that the banks are doing more than setting a trend. This is all a continuation when banks became more then service providing organisation. They became profit driven. Instead of the normal profit of continuation it became driven to the optional profit of speculation. Even though most banks would argue that this is the way to go, the Netherlands showed how their banks lost to the amount of 40 billion Euros. This pretty much covers more their current deficit. There is also the continuation of thought on the decision makers. How can we be allowed to sit down and see how a group of less than 100 took decisions that would cripple a nation on narrated limitations like ‘miscommunications’, ‘blunders’ and sheer incompetence? More astounding is that following the acts, some decided to look at advices from corporations losing utter fortunes (Source: Telegraaf, 31st October 2012).

This is not just about the fact that we are dependent on a very small group of people. We are confronted that they are just people, with needs and dark desires. A group having ‘ideal’ dreams and writing checks a lot larger than their ego could ever cover.

So what to do?

Let’s take a look at three groups.
The Bank of Scotland, The Lloyds banking group (of which the Bank of Scotland is now a part) and Barclays.

In 2012 the LIBOR scandal got a hold of many (London InterBank Offered Rate), There were accusations and proof was given. As LIBOR affects the US market and it was seen as a violation of American law. The UK version of the Telegraph reported that the chancellor had made it clear that any financial penalty imposed by American regulators must be paid for by bankers, and not the taxpayer. (Source: The Telegraph).

From my side the first thought was that it might be nice if the US cleans up its own side first. I wonder how much money they reclaimed from upper management at Lehman Brothers? Interesting is the information, that those upper level ‘demons’ (aka members of the board of directors) got overall half a billion dollars in bonuses. How much was reclaimed? An example of this is Erin Callan (former CFO Lehman Brothers) who did get a nice payout and if I can believe the NY Times a new husband and moved to a high position with Credit Suisse. Now the next is really important. SHE BROKE NO LAWS! (As far as we know). Also, there does not seem to be any evidence of any kind that she lied. She has been portrayed as a ‘girl’ who was in over her head. That is hard for me to comment on, but it does raise certain questions. There seems to be a board of directors who seem to play the multi-billion dollar game like it is a round of Parcheesi. To debunk a trillion dollar company and then walk away with half a billion should result in more than just global questions. That part is important as at the end there were dealings with Barclays who had a small non illegal windfall. Now business is business, yet it does show that a certain game that was played in the US seems to be played in the UK to the extent that is now the LIBOR scandal.

 

How does this link to the Netherlands and the UK?

Well, look at the reports on how percentage bases are calculated and how it reflects not on ACTUAL debt, but based on how these debts relate to Gross National Product and how these things influence the DOW. So it is in the interest for all to keep certain numbers high. Especially for the greed driven! This is the real problem from my train of thought. Considering what I wrote over the last weeks means that the Greedy need the DOW index to move higher and higher. Yet, all the numbers give me an indication, especially when we see a global depression that those numbers should not go up the way they do. It feels to me that other factors are influencing it all. The US with the fiscal cliff (Fiscal Abyss seems more accurate). Many EEC nations are in massive debt, and then hit with waves of unemployment, higher costs, declining standard of living and no direct prospect that this will improve. People are not spending the way they did. The housing market is breaking down in several nations and so on.

So consider the next nightmare. If the DOW index drops 4,000 points to 10,000. What then? Too many people seem to ignore parts, others want to control parts and those in charge want to rule, so when it does collapse, they maintain whilst none survive.

This same view seems to be happening now in the UK. The controlling of percentages to LIBOR is only a first. A lot of these reports like the one the BBC showed in August 2012 mentioned that this system must change. This was spoken by Martin Wheatley of the Financial Services Authority. He also mentioned discrepancies going back to 1991. This means that some level of manipulation has been going on for over 20 years. So is this about ACTUAL justice, or is it that the US had become SO desperate for as strong as a hand as possible that they pulled a Benedict Arnold against their own banking ‘buddies’. For the UK readers, Benedict Arnold is the American version of Edward Devenney.

Another party in LIBOR is Barclays. They dealt in services that rely on LIBOR, by intentional misrepresenting information they got better deals and therefor more profits. The problem is that using Derivatives in this way and the involved banks’ lending money to each other it becomes a musical chair exercise in passing pieces of paper from one bank to the other. From my viewpoint it could be seen as adding funny money to the internal till and amassing profits from something that was not there. And as they moved hand to hand, they kept the margin of profit that LIBOR offers.

So the following step is reforming this. The UK government seems to be happy to accept all upgrades that Martin Wheatley suggested. However, Reuters reported on the 28th of September 2012 that these changes would add volatility to the short term markets. They also reported that the FSA (the place Martin Wheatley is from) mentions that this standard is too entrenched to replace. It seems that banks on a global scale are too afraid to rock any boat. Is it a fear that their united spread sheets are altered to remove their layer of manipulating? If that is so then their powers would soon be diminished. It seems clear to me that markets are manipulated on several levels and those in charge are in no mood to change any of it. That situation becomes a lot more volatile when you consider the US debt of 17 trillion dollars in addition to the Fiscal Abyss. Those two, when a change is set might mean that the US could be bankrupted overnight.

 

Any claim that this will never happen is slightly moot. Here we now get back to the Netherlands where the same was claimed of the SNS Bank. It is now nationalised. Many nations should now be contemplating massive change to remove the power of banks as we can no longer afford THEIR life style.

It is interesting that the UK is under such scrutiny by the US, yet the US is nowhere near on cleaning its own banks (in my humble opinion). This does not mean that nothing should be done. And it does not mean that they should not have done anything. There is however the question on how those could be improved (as I have asked myself and on my blog in several situations).

So we get to the Lloyds banking group. In January 2013, 8 people were charged connected to a $55,000,000 corruption scandal. (Source: AP). This is not the only issue. Ian Fraser, an award winning Journalist, who reported amongst others for the BBC and Thomson Reuters has a lot more on his blog http://www.ianfraser.org. If anyone wants to question his education? Well the man was ‘shaped’ by St. Andrews (the University, not the Saint), which means he should be regarded as a member of the highest echelon in his profession. In addition, when we look at the board of directors of the banks we mentioned earlier, then we see more than just casual links. Some of them had positions at Citigroup, the FSA, The Royal Bank of Scotland, the US Treasury, JP Morgan Chase, International Swaps and Derivatives Association (ISDA) and more. This seems to remain a very small inner circle in-crowd.

It is clear that a lot more has happened and even more is happening. This is not even the complete story, but we have clear evidence spanning 2 continents that several nations have a collection of banks where it is all about the profit. Looking at the ‘blunders’ where they were willing to bet the house on all of it. So I feel that clear, visible and vocal oversight of these parties is a given essential need!

Please consider this last part. The UK banks involved in regard to the corruption case and the LIBOR scandal consists of 4 of the 5 large UK banks. It sounds harsh however this implies 80% of the UK banks have prosecutable issues. This is more than a scary statistic. I would take a guess that these 4 banks are controlled by boards of directors and they would add up to less than 75 persons. What happens when they in the same fashion as the Dutch SNS agree that ‘blunders’ were made? Could the UK survive a hit that large? More important will be the question whether the results also impact their siblings Canada and Australia?

Several questions and I expect that no clear answers will be forthcoming (any day soon). A political step could be in the form of carefully phrased denials and years of closed door meetings.

For me the conclusion from what I have seen over the last few weeks is that oversight is a must, there should be a clear list of definitions that the financial world must openly agree on and that there must be an open list of those involved in those standards.

As I close this final part of my reflections, the hope is that you enjoyed these five blogs.

These series were my thoughts on the Financial Banking Blunders as set in:

  • Greed and the lack of common sense.
  • Time for another collapse.
  • The future of greed.
  • A solution by annexing greed?
  • It hurts every time, but we love it.

I will try to take an evolving look at banking laws in a future blog.

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A solution by annexing greed?

In my previous blog I took a look at certain events from the SNS bank. Here I will be taking a look at possible solutions. Before we do this we will have to take a look at certain elements that are in this bad bank. Each of these bad decisions is very costly one. Now we must look at what is needed to turn this around. We do have an additional problem. The people who blew up the financial industry (aka Goldman Sachs) had a finger in this solution!

So, can anyone explain to me why people are giving ANY LEVEL OF CREDIBILITY to ANYTHING Goldman Sachs has to offer? Please explain to me why SNS Reaal went for advice to the company who lost 2.1 billion dollars and is one of the major parties behind the 2008 financial meltdown?

OK, let’s get started.

In 2006 Bouwfonds Property Finance (BPF) was acquired. When it changed hands part went to the ABO bank, and this part became part of SNS Reaal. Now, as mentioned by NOS, this part consists of a collection of real estate projects. It is interesting that many searches did not reveal a clear list. Much information is unclear as i was not able to find a complete property list.

A. Business property.
Any business property that is part of SNS or SNS Property Finance and is currently under any mortgage where payments are not up to date kept should be annexed into a government building society for either leasing or rent (no sale allowed). The reason for sale is that sales must be very closely monitored. I fear that certain parties would jump in for a quick deal under ‘dubious’ conditions that cannot be met after a short time, prolonging all this and in the end will stack up costs again and again.

A single example is Energy Business Park Arnhem. This was under mortgage with TNC which is now bankrupt with outstanding debts in excess of 20 million Euros. This is part of TCN UROP SE en TCN Assets B.V. both also bankrupt. This is just ONE example. Loss upon loss upon loss upon bankruptcy. It looks like one building seems to contain the infrastructure for several buildings, all costs, all needing Accountants, lawyers and nothing moving forward on the profit bar. The ‘Bad Bank Inc.’ portfolio is filled with these sorts of issues.
So, let us get back to annexing. These buildings are to be confiscated. Their infrastructure gets disbanded and we try to get some of the money back. If we look at the issues over 2012, than some might remember the complaint on how some of these building directors got way too much money. Well, now they get to earn that extra by turning around some of these places.

B. Consumer properties.
This is a bit harder. Many of these places are not in the Netherlands (Spain). Yet, Spain does remain the most popular holiday choice for the Dutch. I mentioned this place before. It is Mosa Trajectum (possibly more than one project). The question becomes how far payments were made, and how much is still uncovered. If not covered then I say Annex it for the Dutch Government and let they be sold in smaller parts and at reasonable prices. I consider 600,000 Euro to be severely overpriced. Some of these villas can never be sold, however, I think to let them out as holiday bungalows, and get some of the money back that way is not too far-fetched. This is what the original owner had intended. I personally belief he was not very realistic about the approach. Yes, likely some places could be sold to others for a nice fee, and yes, it will remain a loss, but at present someone is still getting some money out of a project that he is not entitled to (if the bills were paid this project would never have made it to the bad bank stack). In addition a sharper look should be taken if there is a possibility to take these places into different directions. I already mentioned that several of these places had an amateur approach to its sale (really bad websites and such). The governments through the courts should assign these places for sale with brokers who have proven to deal in good ways. All parties who have been involved in bad mortgage dealings (no matter how non-illegal) should be auto blacklisted.

This first part is all about trying to sell Consumer properties, renting out the commercial ones. However, the difference is that I want ALL middle men and all traders removed from this financial track. They have no business in a track that made it to the bankrupt pile. They failed, good luck, goodbye and have a nice day. There should also be an additional message attached as mentioned in the sale of consumer properties. Brokers and dealers are to be held accountable. That means those in dubious actions are to be withheld from new options. Their defence that they did nothing illegal is no longer an acceptable answer. It reeks like the German defence from 1945. “we were under orders (befehl ist befehl)” We need to change without softness, the atmosphere of greed driven, vulture approach of stripping places bare and walk away with a hefty handshake, money in the bank and walking with filled pockets towards another endeavour.

We have witnessed for too long how companies operated for years under the approach of conceptual profit and ending up with no revenue. This means that the monitoring efforts of treasury and taxation must change as well. This SNS example is not alone. When we look beneath the surface we see collection of events that go in similar direction. these thoughts come from the following article from the Newspaper Trouw (meaning: faithful) reporting on the 10th of October 2006 that the sale of BPF had gone to SNS Reaal with net profits of 87 million Euro in 2005 and 46 million Euro for the first 6 months in 2006. When we look deeper at this we see two optional paths. In the first path, as presented by all matters of web publications that This person Ronald Ras would be investing 250 million Euros in building a 4 star resort. In addition he had a new investor. An American that would be providing 1000 million in funds (not one billion). And what currency is that in? The article did not mention that. This was an article in April 2012. The source was the IAGTO a golf promoting website. So where are the hard facts? When seeking through web search you can find all matters of web news. Yet, when we seek the sources we should rely on (Reuters, newspapers, on-line news providers) we see that their commitment to facts is lacking completely. This is not about going after Mr. Ras. I personally do not care about the individual. I do care about large organisations like banks that seem to provide annual reports balanced nicely, that they do NOT seem to keep a proper handle on matter. The excuse that the forms look correctly should not hold any water.

This is about solutions, and this is part of that. Banks need to start doing their proper homework. From what I have been searching, reading and discovering in the last 48 hours, it seems to me that there is a massive gap in that area. We should all agree that many facts might not be on-line. However, the parts we read on-line do not seem to add up and red flags should have been raised all over the place. It will be up to the Dutch Justice department to consider the needed steps and actual steps in calling these parties to court, to give evidence and hand over documents proving correct steps were taken. A 10 second message ‘blunders were made’ should not be allowed to cover it. For the former boss “Sjoerd van Keulen”, to silently walk away, dropping his tasks as Chairman of the Holland Finance Centre looks like a joke. The Dutch Finance minister was very outspoken into confiscating previous commissions is a stronger step, and he did mention on the NOS news (2nd Feb 2013) that parts are currently not achievable as the law changes are pending at present. Those changes would give him a lot more abilities in this matter. I would suggest that Mr. Sjoerd van Keulen is placed in a public parliamentary enquiry, where he must show evidence and answer public questions by ministers and Banking CEO’s on his choices, his actions and events. This too is aimed towards a solution. For the simple fact is that the Banks think they can just walk a nice walk. Over the last three days many sources had the same line: “SNS Reaal is the smallest of four Dutch banks designated as systemically important and too big to fail, by the Dutch central bank”. It seems that they auto assumed a government injection of cash, so that they could make a mess a little longer. I think it is important that these citizens see these people live on TV. My only worry is that not unlike the passport scandal in the late 90’s the only response given will be “I do not seem to recollect the details to those facts”. The Jurisprudential fun fare will be complete at that point, but it could push the citizens into forcefully demanding massive banking changes. That is the aim. This scares banks (well more the people receiving fat checks). As long as the people are not awake, they walk away.

The Dutch could set a tone for other governments. This would include France, Italy, Spain and the UK. The simple reason is that I feel certain that this tidal wave WILL CONTINUE! My fear is that the damage will just add and add.

So far the property branch! Let’s take a look at insurances.
Two additional sides are to be seen here.

They acquired SwissLife and Axa. Interesting was that SwissLife was purchased at 16.3 times the annual profit, totalling at 1.5 billion Euro (Source: NRC Handelsblad, a Dutch Newspaper). This happened in 2007. Now, can anyone explain to me how this was a decision anything less than utterly insane? A bank agreeing to a business matter that takes more than 15 years to break even. When I was living there I could not even get a mortgage past 3.5 annual incomes. The insane part is that it has been known to be a bad bank decision less than 4 years after purchase. So this buy was conceived by….? (I am utterly clueless how this became a reality!).

Yet, this is still about solutions. The Netherlands has a few issues with healthcare and Mental Health care, so we could unite the two. Consider the possibility to get 2,000,000 people switch now to SwissLife/Axa, which is roughly 8% of the population. Making these funds all government, we get two things.

First is that the government gets a MASSIVE financial injection. Yes, it comes at the expense that healthcare costs will go up too. Consider however that several of these funds have a board of directors with a very fancy fat check and commission. All that money will now go into the treasury. More important is that those profits could pay for the needed mental health care that is now being scrapped as there are no more funds. This is obviously not a perfect solution, but it is a possible stronger move forward. In addition, the events towards SwissLife/Axa might help to stabilise certain retirement funds. As Swiss life and Axa improve either other funds MUST do better, or their customers would move to SwissLife/Axa. This would mean that retirement funds go towards a non-commercial, government controlled side. Very much like the Swedish system. This might not be a bad idea. I will be the first to admit that many complaints will go up; however this is about more then moving forward. A fundamental change is essential here, and we might as well consider going into another direction all together. In the end if this does work, then SwissLife/Axa can be sold again for with a good profit, which is also nice to add to the empty treasury. I kept the two together as any solution for SwissLife and Axa might require a solution in the same direction.
These sides all need new and adjusted legislation. They need guarantees in place. However, consider that the people are no longer funding some person’s fat check, but it goes on the big stack benefitting all. This means that millions are already saved. Not a bad way to achieve Social Justice.

My ideas remain (highly) debatable, but I feel strongly about two sides. The first is that some financial institutions like Goldman Sachs are to be blacklisted. We seem to revisit places for advice that are at centre of the mess we got into in both 2004 and 2008. In addition, why should nations keep on funding US businesses, whilst its government will not get a decent handle on these corporations, their own debt and their own impending bankruptcy? Several experts in this field keep on claiming that rules and more regulations are not the solution. I am not sure whether they are right or wrong. I do know that those presently in charge are all about greed. THAT is a massive reason for many problems and until those people are under control, they should not have any control at all. We are heading to massive changes. Not just in Europe, but also in most Commonwealth nations. Without those greed icons we might have a chance. With them our chances are zero. In addition, I am not some Social Justice type who opposes Capitalism. I believe that Capitalism can propel any industrialised nation. But this has gone over the top. When it becomes about revenue and shares, and no longer about actual profit, there is no Capitalism! We remain with nothing more than greed and a vulture based decay. Those two I do oppose strongly.

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