Tag Archives: TLTRO

Electing Stupid People?

It was the first thought that I had when I got confronted with ‘ECB Injects More Stimulus as Draghi Reveals Slashed Forecasts‘, trillion upon trillion added in debt and none of it worked, the Europeans merely added 3 trillion in debt and they have nothing to show for it. The ECB has become a clear and present danger to the quality of life of Europeans. At present every European should consider that they have an added €5,859 of debt that they have to pay, so in a family of 4 that amounts to €23,437 with the optional €156 of interest every month. A setting where we see that close to 53% cannot make that payment, so that is merely the interest with no chance of ever paying the actual debt. A debt that was a bad idea and has been a bad idea for over 4 years and still the ECB does whatever makes themselves and their friends rich. No accountability for their actions, no transparency and no way to undo the damage they push unto others. Still people ask me why I am a Brexit person. The acts of the ECB are a clear indication that the EU has failed its people to the largest extent.

So as Bloomberg gives us “But bank stocks dropped as the new loans will have less favorable terms than the ECB’s previous operation. There may also be concern about the ECB’s gloomy prognosis for the economy and the limited ammunition it has left if things worsen“, I merely see that what I mentioned in my blog for over 2 years is becoming a reality. the article (at https://www.bloomberg.com/news/articles/2019-03-07/draghi-slashes-ecb-outlook-as-officials-inject-more-stimulus) also gives us “The ECB is reverting to more monetary support just three months after policy makers decided to end their bond-buying program and hoped to start weaning the euro-area economy off its crisis-era stimulus. The export-dependent European economy buckled under the weight of trade tensions, a slowdown in China and the uncertainties around Brexit.” This is making matters worse. You see the stage of ‘the uncertainties around Brexit‘ is one that the ECB gunned for trying desperately to keep the UK in and the actions of the ECB are pushing the UK away. Yes I agree that matters will become worse, yet only for the short term, the UK will over time rise faster and faster whilst the economies of France and Germany will become more and more stagnant towards facilitating to the other 23 players, as they are merely there to get an unrealistic economy and the loans that go with it. When I speculate, I come to the conclusion that Austria will get an expected debt that equals their GDP of 83% by 2021, Belgium is racing towards 108%, optionally by November 2020, Italy is likely to be at 135% by then, Spain is actually doing well, but it will not continue, if they are really lucky they will remain steady at 97%, France will climb to 99.2% and those nations are adding trillions more debt, because the ECB is not kept in check. that is the Europe that Europe is steering to and no one is asking the serious questions on how retirements will falter before 2028, the cost of living no longer realistic and there is no way to keep any economy in check because tee was never any real stage to keep it in check, with merely the impossibility to cast members out. Greece has a chain around its neck that will soon surpass the current debt level of 179% of GDP. So whilst ABC News over sells it with “Provisional data released Thursday show the economy grew 1.9 percent in 2018, down from a 2.1 percent estimate by the government, but closer to the European Commission forecast of 2 percent“, all whilst Greek Industrial news gives us: ‘Greek Economy Loses Steam in Q4, Recovery on Course‘, which might be really true as summer is coming for Greece so from that we accept that the Greek economy numbers will fluctuate positively. And those travelling to Greece tend to see a Greek alternative location, not an alternative country which is great for Greece but the overall numbers are merely positive, not overly positive. The weather has been part of that. There has been a tendency for people in Europe to select less foreign destinations for their vacations, especially the Netherlands and Belgium. This part is not the most important art, yet it still matters. If one nation is off by 0.1% we see an impact, however it is Germany where the economic slowdown is the most visible, and from the past people in Germany get cautious really fast, the 2013 smash down taught them that the hard way. It would impact Spanish tourism by a fair bit. For France we see a similar impact but less in tourism, for them the game changes in other ways and it impacts the EU as well. French RFI reported that the OECD gave “Italy is likely to go into recession. France comes out well, relatively speaking, with 1.3 percent, exactly half the likely growth rate for the US economy“. I personally have some serious doubts on those numbers. If France ends up with 1.1% they would be lucky, as we already have a debate on 0.2%, nation after nations have ‘recovery’ idea’s and not one is staged in any rock solid situation, it is all fluid and most of them hide behind ‘Brexit uncertainty‘ whilst they are all desperate to see Brexit fail before it becomes a reality, their economies will all take a massive hit, even the UK however, the UK once out will be able to push forward momentum just for the UK not for the dozen members hanging on the coattails of the UK. That was the truth that the ECB and the EU commissions are so desperate to hide. The UK residents get fear mongering story, one after another. How there will be no toilet rolls, how things collapse and how values are soon gone. Yet the direct impact is ignored. Once out the UK can determine for the UK again, not have an usurper player setting policy.

For clarity: a usurper is a person who takes a position of power or importance illegally or by force. It does not seem to apply to the ECB, yet how are they setting policy that is pushing the Europeans into debt by trillions, even after the second stage where it did not impact the economy in a positive way? The moment it was switched off, the EU economy is showing to buckle, so how is such a stimulus ever going to be a solution?

When we see “offering banks cheap loans to try to help revive the economy“, well from my point of view, a plan to revive that has been going on for four years is not a plan to revive, it is a vegetation form of life that is being kept alive artificially, as it would have been dead for some time under any other condition. It is merely facilitating for large invoices on a cadaver that no longer has the ability to self-determine its life. And in this case the ECB is really ready to facilitate large invoices, the question becomes who gets that cash, the people of the EU merely get to pay the bill and there are questions that are not getting answered by anyone, giving us a much larger problem. Are people this stupid allowed to be elected into such powerful positions?

You tell me, because from my point of view it does not make sense, and it never did, not past 2015 anyway. It is one part that is wrong; we see even more when we give regards to the issues shown by the Guardian (at https://www.theguardian.com/business/2019/mar/07/ecb-to-keep-interest-rates-low-recession-fears-eurozone-banks). With: “The central bank for the 19 euro nations said it would launch a series of targeted, long-term refinancing operations (TLTROs) in September. These are to run until March 2021 to help banks roll over €720bn (£617bn) of ECB loans and to ward off a credit squeeze that could deepen the economic slowdown” we see a situation that could optionally be interpreted as: “we predict that we cannot pay the outstanding loan of €720 billion, so we are creating a new loan to pay the old loan. We will not mention that as our economic position is not as good, so the fact that this will come at a higher interest is something we will have to accept“, a danger I saw coming a mile away well before 2017. Greece was the most visible one, but not the only one, Italy is in a similar position with its 131% of GDP debt and it will go from bad to worse. With a current predicted debt of €2,526,450,000,000 its interest responsibility is beyond horrendous and that too is swept under the carpet. When we see these acts of stupidity and irresponsibility the Europeans do not have a clear prospect, they basically have seemingly no prospect at all. At present every EU nation will denounce my view, yet what will they say in 2024 when I am proven correct? What happens to the people born between 1956 and 1960 when they look at their pensions and see that they really cannot afford being alive having to pay their bills on what is left? What excuses will their governments and the ECB give them when these people get to hear: ‘OOPS!‘ The chaos that comes with it will be one we get to remember for generations. It will be the moment where all over Europe the life of a Ministry of Pensions official will have a speculated shorter lifespan than that of a crack addict overdosing.

It is all merely part of a larger issue, even as Reuters gives us less than 24 hours ago ‘German industrial orders post strongest drop in seven months‘, we forget that this also impacts shipping numbers, the Dutch harbour revenues, in addition the “Contracts for goods ‘Made in Germany’ were down by 2.6 percent on the month, Economy Ministry data showed on Friday, marking their steepest fall since June 2018 and confounding forecasts for a 0.5 percent increase” gives rise to questions. We accept that we cannot predict increases and decreases to some degree, yet the stage of +0.5% against a 2.6% drop is quite another matter. I also had an issue with: “The Federal Statistics Office put the revision down to large orders for December being reported late“. I am not stating that they were misreporting to us, yet the question on the validity and quality of their forecasting pipeline shows to be more than a mere glitch, it shows that elements are either ignored or not properly doused in awareness. I am not sure which of the two is more dangerous, as the faltering positivity could also give rise to an increased risk of negated negativity through managed unawareness. I do not believe that either form exists by itself. I have accused some of orchestrated reporting through delayed bad news. I personally believe that this is a much larger problem in the EU, and it needs to be addressed really soon and to a much larger degree than it ever was. For that we need to make one final jump. It was last year September when Forbes gave us (at https://www.forbes.com/sites/michaelfoster/2018/09/29/bernankes-2020-prediction-is-dead-wrong/#3132f00c4df5) “Something strange is happening in the investment-bank and hedge-fund world: a growing sense that the next recession (which, by the way, Wall Street has long been wrongly predicting for years) finally has a due date: 2020“. By itself it is not really an issue in any way shape or form. We have all seen these predictions, all based on actual numbers before. I made a similar prediction before Forbes got there (yay me), yet when we see: “the likelihood of a 2020 recession has risen due to, among other things, a tight labour market and higher borrowing costs“, as well as “former Federal Reserve Chairman Ben Bernanke is getting in on the act, saying a boom “is going to hit the economy in a big way this year and next year. Then in 2020, Wile E. Coyote is going to go off the cliff“, we see a lot of it coming to fruition at present and still the ECB pushes forward? We understand that this should be about actual data and not predictions, yet the numbers have been towards the negative for some time now and pushing for more stimuli whilst there is enough data to see it as folly to become reality is another matter entirely. There is a play handed out to players, whilst whomever owns the bank is seeing exactly which player has which card and the players are kept in the dark that the banks have camera’s looking over the shoulder of every player, which indicates that the banks can decide at any moment to sell short the play made by any player. It is great to be told that you can bluff, whilst the bank gets to see the cards all the players have. So the bank decides to set a stimulus play whilst they know that all players have losing hands, how does that go over with the players in the room?

And we allow these banks to be elected to set the stage as such in the first place?

 

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Did UKIP get it right?

That is a question that is slowly growing within the minds of Britons and non-Britons alike. Some will be in denial over it all, some will ignore their inner voice and some will ponder it. You see, once the banter and the mudslinging stops and people are sitting down thinking over a year in political waves, we are slowly getting the aftermath news and suddenly things are a lot less gloomy. Bloomberg gives us “There’s dwindling talk of a recession caused by the vote the leave the European Union, and British politicians are wondering if a “hard Brexit” option –rapid withdrawal from Europe without a new trade agreement – might be feasible. The answer is no. Such views rest upon bad economic reasoning and the cost of Brexit remains high, albeit mostly invisible for the time being“, is part of the news. You see, the scaremongers are now out of the view and the negative impacts, the ones we knew about are showing to be less negative than the scaremongers proclaimed. I agree and always did agree that the cost would be high. Mark Carney, Governor of the Bank of England had stated it, and in addition stated that there were elements that could not be forecasted. Which is also a truth. They are the invisible costs that will come and come again. The issue in my mind has always been, will it in the end be worth it (are the costs not unaffordable high) and I leaned more and more towards the Yes side!

You see, one of the main reasons for leaning towards Brexit was Mario Draghi. The trillion plus stimulus plans he had were too unfounded. Japan and the US are showing that there had been no clear increase whilst we hear opposite claims. The issue is actually brought to light by Bloomberg last week (at http://www.bloomberg.com/news/videos/2016-09-08/ecb-s-mario-draghi-downplays-more-stimulus), where we hear at 00:39 that there is an impact on the markets, but no real impact on the economy, which was my issue from the start. Politicians casually mixing both up in their speeches were playing, as I see it a flim-flam artist dictionary game, trying to make us think it is one and the same, yet they all know that it is not. So no real impact yet will over a trillion deeper in debt, only those on the financial markets, only some of them got a big payday out of all of it, the rest just has to assist in paying off the invoice. It is one of the pillars UKIP had!

Now we see even more issues, especially when we see additional issues in City A.M. (at http://www.cityam.com/249335/christine-lagarde-and-mario-draghi-call-politicians-do-more), with the quote “Christine Lagarde, head of the International Monetary Fund (IMF) and Mario Draghi, president of the European Central Bank (ECB) said governments and institutions needed to make sure their policies did not leave the poorest members of society behind, and called for structural reforms to help share the spoils of economic growth“, the failure of the European Community laid bare! You see, the people on EEC incomes have been meeting and not getting anywhere for almost 15 years now! The fact that tax laws and Corporate laws required revision even before 2004 as a requirement and after 2004 as a given is shown that none of this has been adequately done. The fact that the US played its cards in the Summit in the Netherlands in 2013, we all knew how that ended, so as we see that some are now crying cockroach, whilst littering food all over the floor only have themselves to thank for this situation. This all reflects back on the initial issue UKIP gave, ‘let’s make Britain about the British’. This is not racism, this is nationalism (read: nationalistic pride). An issue that neither Christine Lagarde nor Mario Draghi could resolve as they have been setting a neutral pose in aid of large corporations for far too long.

The next issue is the economic plan B that is now all over the news. The powerful monetary tool (TLTRO) that at 1:37 comes with the quote “that nobody has really fully understood or analysed“, and that is the plan B they are now grasping for!

TLTRO?

It is not a cereal or breakfast solution. It is a Targeted Long-Term Refinancing Operation. The ECB states “provide financing to credit institutions for periods of up to four years. They offer long-term funding at attractive conditions to banks in order to further ease private sector credit conditions and stimulate bank lending to the real economy“, that sounds nice on paper, but if we know that the impact is not understood, has never been analysed to the effect it is, this all whilst we know that taxation laws are failing and corporate laws are not up to scrap, the ECB quote could be translated to “provide financing to credit institutions for periods of up to four years. They offer a refinanced the current outstanding debts to banks, guaranteeing large bonuses by resetting bad debts and revitalising the conditions of what were supposed to be written off debts, giving a false incentive to a dangerous presented economy at present“, you see, I am almost stating the same whilst the intent completely changes, the markets are now getting a boost via the other side. This is a reality we could face!

You see, the view is given with “All the new operations will have a four-year maturity, with the possibility of repayment after two years” (at https://www.ecb.europa.eu/press/pr/date/2016/html/pr160310_1.en.html), yet like the US, Greece and Japan, it is almost a given (speculation from my side) that these maturities will be paid with new debts. When we see the quote “Counterparties will be able to repay the amounts borrowed under TLTRO II at a quarterly frequency starting two years from the settlement of each operation. Counterparties will not be subject to mandatory early repayments” gives way to the thought that it is entirely possible that when the debts mature, they could be replaced be a new debt. Giving weight to the dangers. The fact that the option ‘not subject to early repayments’ is clearly included gives ample weight to the solution, whilst not preventing additional debts from this rephrased stimulus. In the end, the economy will not prosper, the rise of the debt will. Whilst under the debts the UK already is, these arrangements are as I see it too dangerous, all this as the increase of debts only give rise and power to non-governmental institutions to grow their influence via corporations over nations. One of the better players (Natixis), had this quote “Natixis Asset Management ranks among the leading European asset managers with €328.6 billion in assets under management” (source at present intentionally omitted), with the TLTRO in play, depending on the rules of the game (which were not available to me at present), it is entirely possible that once really in play, banks can indirectly refinance risky debts in additional loans via the applicant and as such get themselves a boost. It could potentially allow Natixis to grow its asset management part up to 20%. The ECB states (at https://www.ecb.europa.eu/mopo/implement/omo/tltro/html/index.en.html) “The TLTROs are targeted operations, as the amount that banks can borrow is linked to their loans to non-financial corporations and households“, so basically companies in hardship can get relief, whilst the banks will still get their cut (aka administration and processing fee). Consider that Wealth Management is many things and Estate planning is one, now consider that Natixis has Credit and counterparty risks amounting in excess to 295 billion euro’s. Now there is a Draghi solution, one that no one seems to have ‘analysed’ that allows for solutions to non-financial corporations. Natixis is that, but their clients are not, and they can apply for the shifted funds, offsetting their loans, paying of the loans towards Natixis, who now have a massive amount of freed up cash that they can now pour into all kinds of solutions and endeavours. So do you still think that my view of 20% is oversimplified? And in 4 years? Well at that point, when things go south, Natixis and parties alike can jump in and possibly help out, ‘but at a price’ (which is fair enough).

This now reflects back to UKIP and Brexit!

The Guardian had an opinion piece (at https://www.theguardian.com/commentisfree/2014/sep/14/ttip-deal-british-sovereignty-cameron-ukip-treaty), that gives us the following, remember this is September 2014! “If you are worried about the power of corporations over our democracy, be very afraid: ISDS in effect grants multinationals the same legal position as a nation-state itself, and allows them to sue sovereign governments in so-called arbitration tribunals on the grounds that their profits are threatened by government policies. Is this scaremongering, as TTIP supporters claim?” So far there have been many voices who seem to be over the moon that the TTIP is now a failure and that the issues within the EU would have been far more reaching that many players were willing to admit to before the signing. Politico.eu reported “U.S. diplomats are sketching out a last-ditch plan to salvage core sections of the EU’s moribund trade deal with Washington“, that with the added “U.S. and Italian officials are now weighing the option of a “Step 1” deal to lock in elements that can be finalized by December, possibly including joint testing regimes and mutually agreed upon standards for cars, pharmaceuticals and medical devices“. It is clear that the US want to lock in Pharmaceuticals and cars, yet how is such a niche nothing more than a path trying to ditch the title ‘total loser government’ regarding the current administration. In addition “The idea has sparked immediate scepticism in the European Commission and in some EU member countries, which argue that any form of a downgraded deal will be very hard to sell politically, particularly after French Trade Minister Matthias Fekl and German Economy Minister Sigmar Gabriel turned hostile on the negotiations” gives way that BMW, Mercedes, Bayer Pharmaceuticals, Peugeot, Citroen and Sanofi are none too pleased with such a one sided piece of paper. The idea that such set benefits would be allotted at this point gives even more weight to some of the UKIP statements in the past.

If 2 out of the many projection come true, you are not suddenly a better prognosticator, mainly because that title is reserved for the likes of Punxsutawney Phil, Queen Charlotte and Shubenacadie Sam. Let’s face it, it is the title worthy of a groundhog! But some of these steps were clearly seen, because this is where everything was headed, the more forward you look, the easier the prediction could come true is not wrong, but only if you are travelling on a straight road. A road that corporate greed depends on I might say!

In my view, there is not enough to state that UKIP got it right, yet there are also enough facts and questions in play that UKIP did not get it wrong. We might listen those who keep on shouting that Brexit was wrong and see them as the people trying to reinvent the vote, but overall people are starting to realise that the US (read Wall Street) has been trying to give people a bad deal to benefit their own greed. The fact that this is going on at this very minute is equally a worry. This is on both sides of the isle, yet we can understand that Labour needs to clean house and they have decided on the method of accidentally leaking names. How will that solve anything? If Labour was on the ball, than they would steering towards real economic improvements, not bickering minors trying to decide who should be the number two, and soon thereafter remove the number one (read: allegedly attempt to). Actions that are totally counterproductive as the Conservatives are governing until the next general elections. It seems like such a waste of energy to me.

Now we see a new escalation. It seems (at http://www.ibtimes.co.uk/jean-claude-juncker-proposes-new-european-military-hq-worj-towards-eu-army-1581391). So the quote “The president of the European Commission Jean-Claude Juncker has called for a European Union military headquarters to work towards an EU-controlled army. Juncker made the proposals during his State of the Union address to MEPs in Strasbourg on Wednesday (14 September)“, which automatically makes me wonder how this correlates with Nazi Germany as this was how they resolves their bad economic times. It is a harsh history lesson to learn, but in that I am actually less afraid for a ‘new’ Nazi Europe. My issue is that many nations have their Cyber plan not in hand and any actions here give rise to the dangers that this would open up data for the Chinese Cyber groups to learn a lot more than they bargained for. You see, no matter how much denial we see, the facts are simple, Ren Zhengfei is the Huawei CEO and a former officer for the PLA. Now this does not mean that he is now still committed to the PLA, yet Huawei does business with the Chinese government and as such, they have all the specs and as such, they have all the weaknesses  of these devices too, meaning that governments all over Europe are in a possible place of Cyber Scrutiny. This does not mean that I am willing to just blindly accept the NSA report, but ties like that, when you are on these levels talking to the ruling members of Chinese government, you need to be networking on a massive scale and if both the Chinese military and Chinese Intelligence (MSS) gives you the thumbs up, you have been playing the game they want you to play, plain and simple. By the way, this is not a rant, or a side step into the matter, this is a direct factual response. Nigel Farage addressed the EU on an EU Army opposing it on valid points, and he got a few more hands clapping than his opponents are comfortable with. Now this was about opposition of the EU army as a whole, but underneath is the need for any military organisation to be secure and have systems in place, systems that could be compromised. In this Huawei could validly give the same argument that all Cisco Systems are compromised by the CIA and NSA. As we cannot prove either side, or perhaps even both sides, how to proceed? Both sides would be fair enough and it only makes a case strong enough to not proceed with any EU Army, which is no solution to any existing threat, will cost massive amounts of money (and that just the initial infrastructure) and with the current upcoming changes to the EC as a whole. Especially as Marine Le Pen has vowed to hold the French referendum if she is elected, this whilst several European magazines are now stating that France can no longer avoid Frexit (at https://www.letemps.ch/economie/2016/09/12/france-ne-pourra-eviter-frexit), which I stated was a growing realistic danger if Brexit would commence, in addition, Italy is seeding its own departure later this year, but no given certainty exists at present.

All these parts I gave visibility to almost 2 years ago, the press still largely in denial and additional players are now coming out to (as I personally see it) fill their pockets as fast as possible because when this comes to town and the referendums do fall, certain people will have to give account of their actions. The fact will remain that the Credit Card that Mario Draghi used will be spread over several nations, most of them with no option to get into deeper debt. So they have this to look forward to. In Italy there seems to be a plus side, as the larger players are now looking towards the option of as referendum, the act as such seems to be taking the wind out of the sails of Matteo Salvini, head of the far-right Lega Nord, which is regarded as a relief in many European nations. They seem to regard Matteo Salvini the same way that they regard the French Newspaper Minute, too far to the right and not really that readable. I cannot confirm that (as my French does not surpass the ability to read a menu), but I understand the sentiment as there have been Dutch papers on the other side of the political isle receiving similar accusations.

In the end Europe is about to take economic steps with large implications, the fact that they are trying to push it through regardless of whatever consideration it required, which makes me worried on the fact that the impact on the European populations have been ignored for too long. The weird thing is that any action should have been in support of the European population and their needs, giving weight to more than one statement from the side of Nigel Farage.

I would suggest you ponder those facts before blindly moving into the Bremain field in the near future, because there are several issues that no one can answer and they come with obscenely high price tags!

 

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