Tag Archives: United Kingdom

June 8, 2015 · 00:31

A slave to greed

It is time to take a stance a little more vocal and a little more ‘anti’ certain voices. You see, the people are being led astray, misinformed and basically lied to. It is a clever lie that some people spin, where the involved players (like in Greece) focus on one part of the story and after that story is told, those who think they are getting informed, are told a fairy tale with no concrete connection to reality or to the factual complete truth. Those advocates work from the concept of ‘in the eye of the beholder’, which sounds nice, but when you pay your electricity bill, there is no eye of the beholder, there is just the invoice!

To get this party train started, let’s take a look at the definition. We are looking at Austerity!

According to the Investopedia it is: “DEFINITION of ‘Austerity’ a state of reduced spending and increased frugality in the financial sector. Austerity measures generally refer to the measures taken by governments to reduce expenditures in an attempt to shrink their growing budget deficits“.

Whilst dictionary.com tells us “strict economy”

Both apply here!

So when I am looking at an article in the Guardian by Heather Steward called ‘Austerity isn’t ‘good housekeeping’: it’s dogmatic, risky and unjust‘ (at http://www.theguardian.com/business/2015/jun/07/austerity-isnt-good-housekeeping-dogmatic-risky-unjust), it is time to get a few things out of the way. To help me, there is a source I used for part of this, which is at http://www.economicshelp.org/blog/5509/economics/government-spending-under-labour/. You see, in the time 1997 – 2010 several things happened, even though around 2007 the total debt was at a record low, the increase in spending has changed that. The debt is getting out of control, plain and simple. Governments (both sides) tend to hide behind GDP percentages to validate their spending, yet, in the previous conservative government, it was at 40% of GDP, by the time Gordon Brown was done, it was at 45% of GDP, considering that the UK GDP is decently high, that 5% amounts to a lot. Yet, that figure does not tell you the whole picture.

The UK public sector debt went in the period 2008 – 2010 from around 36% to over 65%, which is massive, this current government has been adding to that, but they are trying to stem that tide, which is not done overnight. Now this is not me blaming Labour (which is always fun), Health care spending almost doubled in real terms between 1999 and 2010, which is a Grim Reaper reality. Some were massive bungles by labour, but the added reality is that the UK population is growing old, that is just a natural part and we have always known that. So there is no blame, but it is therefore of a much higher importance to get a handle on it and none of the choices are nice ones.

You see, the source gives a possible connection, but not the reality behind it. We see the mention whether Keynesian economics are to blame, with the quote “Keynesian economics calls for counter-cyclical spending and deficits. Thus, in a period of strong economic growth, Keynesian economics would advocate balancing the budget or even pursuing a budget surplus“, but that is the problem, the politicians, in the era 1997-2004, in such a ‘good’ climate did not adhere to that. The GDP debt is evidence of that. You see, to some extent, politicians are like children, give a 17 year old boy  a credit card with one million pound, stating that he must be careful, and that person will find a reason to get the PS4, the Xbox One and get personal biology lessons at the ‘Steam and Sun Health Club’. At which point that person is feeling that the good life is here, alas, at some point the invoice is due and whilst it is not getting paid, the interest is getting paid from the credit card, dwindling reserves even further, this is EXACTLY where Greece is at!

So now to the first article as mentioned in the beginning!

“the spending squeeze the Tories now hope to implement, starting in the current financial year, is intense, as the spreadsheet wizards at the Institute for Fiscal Studies made clear last week. Shortly before Osborne’s statement, Carl Emmerson, the IFS’s deputy director, warned that achieving the Tories’ planned cuts would be “anything but easy”” Here I agree, it will not be easy, it will be hard and it will be even harder on the people, the issue is however that £1.56 trillion comes with the added issue that at 1%, this bill gets an added 15.6 billion in interest, however, the interest is not 1%, it is higher, so we see that the annual cost of servicing (paying the interest) the public debt amounted to around £43bn (which is roughly 3% of GDP). In an age where some people get instant orgasms from reporting a 0.2% increase in GDP, they seem to forget that this amounts to the part that the UK is annually down 2.8% of GDP. If we act harshly (really harshly) it can be dealt with and even be reduced! Which is the real deal. That interest is benefitting banks and foreign investors. It boils down to ‘money for free’. So now we get the second quote “the belt-tightening is likely to be profoundly unfair. Osborne has repeatedly said his cuts plan will involve a £12bn reduction in the welfare bill. Since pensioners are protected, and out-of-work benefits are a relatively small part of the £250bn social security budget, much of the burden is likely to fall on low-wage workers and their children” I agree, it is very unfair, but when the economy was high, no one was shouting loudly to decrease spending as bad times are always around the corner, no one stopped Gordon Brown to give away the keys to the kingdom, which is what he pretty much did!

So, the term ‘pursuing a budget surplus’ sounds nice, but politicians will avoid bad news whenever they can, so cutting down on expenses will only be done when there is no other option, and preferably in the 11th hour, whilst there is no guarantee that there is a surplus at that point to work with!

“More austerity is risky at a time when recovery appears to be fragile against a background of the bubbling Eurozone crisis” this is a clear misrepresentation. You see, the statement is true, but there is no ‘fragile recovery’ at present, Greece is making sure of that by not doing its part. Which is exactly why the UK is contemplating getting out of the EU in the first place. The bulk of the Euro nations are all not balancing their books and getting out now might be the only way to preserve the little gain the UK can get. Now we get to another ‘failed’ view. It comes from Nobel Prize winner Amartya Sen. The statement is “A nation’s debts are mainly owed to someone else within the same society – for example the pension-holders whose funds are stacked full of gilts“. Is that so Mr Sen? Well, if you did your homework on this then please elaborate where the 1.5 trillion in UK debt is? I feel 99.324% certain that a massive amount is in other hands, not in the hands of pension holders, in addition, with the annual increase of needed funds over the next two decades, that amount is about to dwindle to record lows really fast, so where is all that debt?

The next statement is a view that I oppose “a report from the International Monetary Fund, rarely considered a hotbed of fiscal recklessness, warned about the risks of trying to tackle a country’s debt burden too quickly“, what is too quickly? You see 1.5 trillion is not going away overnight, it will take 2-3 decades to truly slim it down, so for the next generation, someone is walking away with £43bn a year, so we should get the debt down soon, preferably by a lot because the annual interest bill is around 7% of the received revenue in 2014, that whilst George Osborne spent 15% more than received, so to cut back on that increasing debt austerity seems to be the only answer.

Now we get the next issue “Paying them down rapidly distorts the economy too much to be worth the risk“, the risk to whom? To banks not getting ‘free’ money? Debt is a kicker, it always has been it has never been different. We will never be completely out of debt, but the debt at present is unacceptably high. You see a debt driven economy is based on the illusion of never ending growth. How did that work out in 2004 and 2008? In that light, how is it working out for Greece? They can no longer pay their bills. Whatever they get now in bail-out will be swallowed by debts and interests before Q3 ends. So, when I read “Debts should be “reduced organically through growth, or opportunistically when less distortionary sources of revenue are available”, the IMF’s researchers argue“, I am reading more misinformation. The theory sounds nice, but in the time when there was the option of surplus NOT ONE government created surplus. President Clinton was the only one who got a true surplus, after that due to circumstances the US could not foresee, the debt went completely out of control. In reflection on Austerity, Germany did tighten the buckle and got part of its debt down, which is why they are in a better position at present.

So this is the first article, Heather Stewart is not stating anything untrue, but the article is missing a lot and some of these points I very much disagree with (figure me, disagreeing with a Nobel prize winner, whilst I have no economy degree).

Now let’s have a go at the second Nobel Prize winner. In this case Joseph Stiglitz, recipient of the Nobel Memorial Prize in Economic Sciences and the John Bates Clark Medal. The article that in centre of this is ‘Greece’s creditors need a dose of reality – this is no time for European disunion‘ (at http://www.theguardian.com/business/2015/jun/05/greeces-creditors-need-a-dose-of-reality-this-is-no-time-for-european-disunion). The first paragraph is the very notion of the beginning of my disagreement. “Athens has met its creditors’ demands more than halfway“. And we care….why? Why is Athens not meeting those demands 100% of the way? You see, Greece took the debt, it went back to the markets and sold 5 billion more in bonds (I still have not figured out the name of the idiot allowing for that act of stupidity). Greece vowed to make payments again and again, yet at present the already deferred TWO payments. Now, let me be frank. They were allowed to do that! The rules were there and they played by the rules, yet we all know that Greece is out of money, there are no more options. This will be the first time that a nation goes extinct through economic inaction! Even when Syriza won, instead of going after their predecessors, instead of sitting down and getting to the tax evaders, we see (at http://www.thetimes.co.uk/tto/news/world/europe/article4358352.ece) “The country’s financial crimes police, the SDOE, had begun shredding scores of documents linked to cases of corruption. What remained was stuffed in bin bags and discarded outside the bureau’s headquarters in Athens, in public view” the title ‘Greece shreds files on tax cheating by rich and powerful‘ Kostas Vaxevanis reported this on February 19th 2015. So, why was there no prosecution here? The entire debacle on tax evasion has been treated like a joke by 4 previous administrations, so as they cut their own jugulars, why allow for just a half way approach? So far this Greek administration has not done anything to give ample faith that there will be any level of resolution. Then we get “Greece has made clear its willingness to engage in continued economic overhaul, and has welcomed Europe’s help in implementing some of them“, is that so? So far there has been no overhaul at all, the public sector cuts were undone by rehiring. Greece needs to lower its cost by a massive amount. In all that time, which of the over 2000 of wealthy Greeks ended up in court for tax evasion (from Swiss bank accounts), perhaps one? Oh the Journalist Kostas Vaxevanis ended in the dock too, a massive miscarriage of Justice as I see it!

The one part I do agree with is the dangers of Greece exiting “I believe such views significantly underestimate the current and future risks involved“, this is true, but Greece can no longer be trusted to do what they stated to do and as such, some of the players prefer to get out, before the total debt grows with another 20% which is basically no more than a year away. There is not concrete evidence that the economy will truly pick up and those who have enabled this debt driven event are not held to account either (that small matter of a massive amount of Greek bonds on the market).

Then the last part “The ECB president Mario Draghi’s confidence trick, in the form of his declaration in 2012 that the monetary authorities would do “whatever it takes” to preserve the euro, has worked so far. But the knowledge that the euro is not a binding commitment among its members will make it far less likely to work the next time“, yes, how did it work? By spending a trillion or more one areas that are still not recuperating and will need at least a decade to regain the trillion that was spent in under a year? How is that anywhere near a workable solution?

In all this, whatever should work might have worked to a degree if politicians would control their budgets and that financial institutions would not be as greed driven as they are, which is why it all failed. When we see the quote “16 banks in five years to the end 2014 reveal £30bn increase in payouts, fines and legal bills on previous five-year period to end 2013” and this is linked to a total of well over £200bn. Lloyds alone got £117m in fines, how is this linked? Well, such losses means no taxation in the books as profits are gone, whilst many involved walked out with enough money (read: bonus) to pay their full mortgage in places like Golders Green.

Mr Stiglitz never lies or misinforms, but his view is incomplete. It is very dependent on the people involved doing the right and the correct thing. Politicians and bankers tend to be not those kind of people, Greece has shown it, Gordon Brown has spent it now the Conservatives need to repair the damage, Prime Minister Tsipras is ‘forced’ to play a high stakes game, whilst those involved are no longer willing to give leeway. In my view, that game should never have been played in the first place. By setting austerity, whilst going after the Greeks and their wealth benefitting from all this was perhaps one of the few acts that could have opened wallets all over the place, that act was never done, which is why many see that meeting half way is not really an option.

Austerity might seem unfair, and it is not fair on the payers at present, but someone opened a tap whilst the bulk of those knowing what was going on should have spoken out, and spoken out very loud. This was not done, so behold the consequence of that little caper.

There is one gem in his article at the end that is part of the entire Euro mess, which is fun as I have raised it a few times over the last few years. Not bad for a person devoid of an economics degree!

He states: “Europe’s leaders viewed themselves as visionaries when they created the euro. They thought they were looking beyond the short-term demands that usually preoccupy political leaders. Unfortunately, their understanding of economics fell short of their ambition; and the politics of the moment did not permit the creation of the institutional framework that might have enabled the euro to work as intended. Although the single currency was supposed to bring unprecedented prosperity, it is difficult to detect a significant positive effect for the Eurozone as a whole in the period before the crisis. In the period since, the adverse effects have been enormous”

This is true, the one part I have an issue with is ‘Europe’s leaders viewed themselves as visionaries when they created the Euro‘. I think Europe’s leaders had nothing to do with that part. I have always viewed this change as an essential; step by the US. Their benefit of trade with a single currency was titanic in proportions, in addition, the US would keep its option to float the currency as any economy tends to do in times of hardship, whilst the nations that are part of the euro are part of a collective, which removes the option of floating a currency. This was centre in the additional growth (or diminished fall) for the US, yet, even they did not bank on the credit swap meltdown, which did hurt them. The US is getting better, but their 18 trillion in debt is choking them, even with the option to float the dollar, the Euro in the massive debt it is, can only remove the debt by paying it, which is strangling France and Italy. The UK is dealing with it, and the Euro is hurting them, but not as much as being part of the Euro is. Which is just my view on it all.

As I stated in the beginning, the articles are incomplete, misstated, not by inaccuracies, but by incompleteness, which is why people have the skewed view they seem to have at present. In the austerity path, which is unfair to some, we need to add the legal premise and the legal definitions as well as legal obstructions to remove the option of overspending to the degree that was done, we need to make sure that the law will not allow for such overstretching ever again, when that is done, we will return to times when there is hardship, but when there are good times we will all feel it too, in my view, the push of the financial sector to remove the season of ‘financial winter’ resulted in the banks getting by and the rest suffering, this must never be allowed ever again!

 

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May 23, 2015 · 20:45

The outspoken lie

This is the issue we have seen many times in the last months. The lie perpetrated by people (including journalists) to keep them in some fake shape of ethical non-prosecution. The clearest one was shown by the Guardian Yesterday (at http://www.theguardian.com/business/2015/may/22/secret-bank-of-england-taskforce-investigates-financial-fallout-brexit), it is not the first one, it will not be the last one and until some individuals get out of their lazy chair, it will never improve. The quote “News of undercover project emerges after Bank staff accidentally email details to the Guardian including PR notes on how to deny its existence“. This is not even close to an accident, you do not ‘accidently‘ add journalists to confidential e-mails. This is almost like me going to Lucy Pinder (famous UK Presenter) stating: “Can you please stand there, now bend backwards a little and please keep your legs spread and without knickers, so I can ‘accidently’ land my penis into your vagina” (sorry about the graphical intensity Miss Pinder)! Either event does not happen accidently, only intentional or orchestrated as I see it! We will likely hear on ‘accidental’ typos, on how names were the same, but the cold reality is, is the mere fact that some people are trying to be some misguided whistle-blower yet the other group are doing that intentionally, some to warn ‘friends’, some to influence the market. And this event is nowhere near the only one. I wrote about Brexit yesterday in my article ‘Is it all Greek to you?‘ there are several issues in play. There is the link to Natixis, regarding their over half a Trillion Euro issue. Is that information not really handy to have? So in my view what is currently ‘regarded’ as an accident is possibly a simple case of either whistleblowing or corruption! The next quote is another one we need to take issue with “The revelation is likely to embarrass the bank governor, Mark Carney, who has overhauled the central bank’s operations and promised greater transparency over its decision-making“. The issue is, is that there is no issue. The Bank of England has a clear responsibility to investigate economic impacts, this means that both Brexit and Grexit are to be investigated. You see, if Brexit becomes a necessarily evil, those making the decisions would need to have all the facts, not just ask for the facts at that point. So, 30 seconds after the Guardian revelation, Natixis and all its links, Airbus, HSBC and a few other players will now be preparing their own kind of noose, threatening the UK government on the consequences of going forward on Brexit, the equations as per today will be pushed in other directions, including by the US, who would get into deep insolvent waters the moment Brexit becomes a fact. So, the accidental mailer is in my view an intentional traitor to the United Kingdom and the Commonwealth. That person is an even bigger traitor as this is not about where the freedom of choice for a sovereign nation lies, but the fact that it is no longer able to get the true facts ready for the people to freely make a choice on, so when the referendum does come, the people are likely to get misinformed because powerful players do not like it when their profitability is on the line. It is of course every little bit useful for the large industries who believe in keeping the status quo of exploitations high, dry and mighty. So even though Mark Carney will likely be under fire of questions as per Monday, we must also see that in this case our Canadian Marky Mark is totally innocent (in this case). He did what a responsible governor of the Bank of England did. He made sure the correct facts were collected (tried to do so without kicking a fuss), a task that is now less likely to be successful. So as we look at what happened, according to the Guardian article, we see “The email, from Cunliffe’s private secretary to four senior executives, was written on May 21st and forwarded by mistake to a Guardian editor by the Bank’s head of press, Jeremy Harrison“, so as I see it a mail from Sir Jonathan Cunliffe went to 4 senior executives. Now we suddenly see that Jeremy Harrison had it. Was he one of the 4 recipients? It seems unlikely as the text would have stated something slightly different. It is the formulation that gives way to the notion that it is likely (read: possible) that one of those executives forwarded the mail to Jeremy Harrison and he did give it to the Guardian. So we have two issues. Who gave it to Jeremy and was the release to the press more intentional than not? That question remains an issue. Is this orchestration or blatant treason. Let’s not forget that treason means: ‘The betrayal of someone’s trust or confidence‘, in this case the trust AND confidence of the British parliament. So the people are confronted with a spokesperson who likely spoke out, against the wishes of the ruling governor. So this event will have consequences from Monday onward. The markets will react and after that we will see more events into escalations as the British people will get to see over the week how the Greek fallout will hit the markets and the European economies as a whole. The non-actions, or any act regarded too small by the people will shift political allegiances fast, yet that effect is less likely to be felt in the UK and more likely to impact France at present. And these Brexit revelations are not the first ones. That Greek tragedy called insolvency is riddled with ‘leaked’ documents all over the place. In February 2015 we had ‘Leaked documents reveal what Greece had to say at the Euro group negotiations‘, in this view, I agree with blogger Raúl Ilargi Meijer who wrote less than a week ago “Whenever secret or confidential information or documents are leaked to the press, the first question should always be who leaked it and why” (at http://www.theautomaticearth.com/2015/05/the-imf-leaks-greece/), but that is not what orchestration is about, is it? So are the events from the Bank of England orchestration too? If so fine (well not entirely, but that would not be my call), if not then please fire Jeremy Harrison and give me his job. I have no proper degree for the function, but at least I will not be leaking any documents. These events go a lot further then just Greece of course. The Herald Scotland gives us ‘Civil servant who issued RBS leak email links with Better Together leader‘ (at http://www.heraldscotland.com/news/home-news/revealed-civil-servant-who-issued-rbs-leak-email-links-with-better-together-leader.120666908) gives us “THE Treasury civil servant who issued an email leaking sensitive information about Royal Bank of Scotland’s plans to leave the country in the event of a yes vote had links to the head of Better Together campaign, it can be revealed“, so again the question regarded is, is this not corporate treason? Consider the quote “Now the civil servant who issued the communication can be identified as Robert Mackie, the son of Catherine MacLeod, who was a special adviser to Better Together leader Alistair Darling when he was Chancellor of the Exchequer“, was he preparing his own more comfortable future? Getting himself into the proper future setting with friends of Alistair Darling? These are questions to be asked, for sure. Of course, a valid question might be, why would the Royal Bank of Scotland, leave Scotland if it becomes independent? Is it about the lost power of image of its board members? I do not proclaim or imply to have the actual answers, but the truth is not likely to come out, which means we end up living an outspoken lie, does it not? My own little island Australia is not without its own negative merits here. The title ‘Leaked documents reveal problems within Air Warfare Destroyer program‘ should give cause for concern, because that is not a mere commercial/political issue, it is a military issue, where one might expect a little more bias into ‘disclosing’ classified information (me going out on a limb here). we see the information (at http://www.abc.net.au/am/content/2015/s4232702.htm), where we get the quote “But documents obtained by Saturday AM reveal the alliance is now worried continued cost blowouts and delays are harming its shipbuilding reputation“, of course ‘cost blowout’ usually means that the leaders of those projects did not have a proper clue to begin with and the amount of 9 billion gives a lot more weight to my statement (the UK NHS IT program being a nice piece of 11 billion pounds in evidence), but that is not too unexpected. The quote “MARK THOMSON: With an alliance contract where you don’t have somebody clearly in charge, you can rapidly find yourself in a situation where things go wrong and people are looking at one another passing blame, not taking responsibility, and decisions aren’t made” is precisely to the point. Our own Marky Mark (not the one running the Bank of England) shows the major influence, a person that is clearly in charge. I would add that quality of communication tends to be a solid second one in these projects. You see, as these elements go back and forth the e-mail (read Memo) goes on and on. When someone is in charge we get that defining moment when they hear (or should hear). ‘Shut Up! This is what we have decided on!‘, yet military contractors (like Raytheon and Northrop Grumman) are very trained in encapsulating questions within answers, adding premises so that the water is murky, as this is all about their continues consultancy as those people are like lawyers, they bill by the hour per project (as I personally see it), so here again, we see the outspoken lie, now not by telling, but by omission through non-clarity. So as the article ended with “Last year problems with the AWD program prompted former defence minister David Johnston to warn he wouldn’t trust the government-owned Australian submarine corporation to build a canoe“, on one side it seems odd to bite the hand that feeds you, on the other hand the question becomes what evidence did he have access to? Was this a political move to shelter individuals or signal true issues? So now we get the news (less than 2 hours ago at http://www.adelaidenow.com.au/news/south-australia/first-air-warfare-destroyer-launched-at-asc-osborne/story-fni6uo1m-1227366174513) ‘First Air Warfare Destroyer launched at ASC, Osborne‘, which should be a huge reason for parties as well as spoil a bottle of bubbly against the hull of that beauty. Yet, the article is not all good news. We see that in the quote “The occasion was overshadowed to a degree by Friday’s release of a Federal Government audit claiming the destroyers cost three times as much to build in South Australia as they would if they had been built overseas. It also found the total cost of the project had blown out to $9 billion“, so here are my questions in this:

  1. Could we ever rely on our defense by getting things build overseas?
  2. Who kept check on the expenses?
  3. If I go over the books and If I can cut more than 20% by invalidating time wasted on drawn out lines of ‘communications’ (I mean those long winded memos from these military contractors), will I get 10% of the 20% saved? (This should amount to 180 million) not bad for a few months’ work! You know, I had a dream where I ended up with 160 million and bought a nice house on Guernsey. I am willing to settle on 20 million less!

So here we see the outspoken lies! Political, commercial and even military, lines of miscommunication drained through ‘leaked’ documents. Is it all orchestration? Is orchestration not the same as treason when we consider the allegiance those people were supposed to have (in opposition where ‘leaked’ documents are a tactical move)? It would be for a court to decide, yet we will soon learn that these matters will not make it into any court, and as the cost blowout of 9 billion is shown, this leaky path will pay handsomely into the hands of businesses like Raytheon and Natixis, and what do you know, there are links between these two as well! So is this last statement my outspoken lie? Or can we agree at least to some degree that these companies all talk to one another? So in the end are governments getting played and who is actually in charge? That would be a very valid question as the bill got pumped by 9 billion, where 10% of that 9 billion could have solved the Australian legal aid issue (as well as a few other issues), so will any investigation into that issue result in a new outspoken lie (read: carefully phrased political conclusion without further accountability by anyone)? Time will tell!

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May 3, 2015 · 08:32

The Trans European Crash

It is a work of power, but not from any one station. The Germans would call it a Kraftwerk, but this is not an express as envisioned by Florian Schneider or Ralf Hütter. No it is a subtle hidden crash, pushed by those who need the status quo, not the fallout before they leave with a huge golden handshake.

You see, people forget how things are interconnected. We forget too often that the machine is based on values that are virtual and on foundations that are a generation old, we all forget that!

It is now 2 days ago that we see an article (at http://www.theguardian.com/business/live/2015/apr/30/markets-await-eurozone-inflation-as-greece-takes-on-brussels-live-updates), the title ‘Eurozone edges out of deflation – as it happened‘ is not informative, it all seems like a collected pile of lose facts, are they connected?

They are to some extent, but not in the view people have. Let me enlighten you!

“The Greek government was struggling on Thursday to complete payments to more than 2m pensioners after claiming that a “technical hitch” delayed an earlier disbursement“. I will not attack that. We all have our doubts, but we need to consider that technology glitches, it always does so at the moment it hurts the user the most. Yet the response ““Normally I only withdraw half the money at the end of the month but today I’m taking it all” said Sotiria Zlatini” gives us pause, the expected bank run is coming and this might not be the bank run, but Greeks all over Greece fear that the bank run will happen whilst some pension money is still in their bank accounts. This gives a view of 2 million pensioners holding on to their money for dear life. You see, a small element is that at this very moment that this is written the Greek government was due to pay 200 million. Had that payment been made?

If an ‘extension’ has been granted, you can be sure that this will upset the Conservatives with David Cameron and it will fuel UKIP with Nigel Farage. Two non-related entities, yet they are all connected through other strings. Yet, the news we hear from Reuters is “Greece’s next payment to the International Monetary Fund, totalling some 200 million euros in interest payments, is due May 6 because of the May Day holiday in Greece, an IMF spokesman said on Thursday“, so, because of one day, they get an additional 5 days. Do I now have your attention regarding the ‘Status Quo’? Still, the ‘technical glitch’ the Greek bank has could be for real, but now consider the 2,000,000 accounts that will withdraw all funds, how short will the Greeks be to make payment? Yet, another part of the Guardian already informs us of a third bailout negotiation, something we knew, but the timing is so auspicious, we will see if the Greeks made payment before the €7.2bn (£5.2bn) in funds are released. Perhaps a third party deal through an investment bank will see the 200 million released on May 5th, for perhaps a mere 243,546,576 dollars? Any takers at Goldman Sachs perhaps? I am not sure if that will happen, I am merely speculating!

You see, this goes a little further, it is not just the message of “Eurozone inflation picked up in April to 0%, from -0.1% in March. It brings to an end a four-month run of deflation“, which I got from Eurostat. You see, which of the 28 Euro players have rounded up their numbers? Likely more than one, so was the inflation 0%, or was it perhaps -0.048%? It is in the margins that we see the game being played, but playing it all from the margins is a dangerous game, because trimming the fat always leaves us with one player that takes the smallest slice of beef, now we are bleeding and one player goes ‘Oops!’.

We get the next piece from Germany. The statement “The number of people out of work in Germany dropped by 8,000 on a seasonally adjusted basis in April, to 2.792m. A bigger fall of about 15,000 had been expected“. I have two issues with this. the first being that these 8,000 mean 7.5 million a month less drainage on the German Treasury Coffers. These people now have a job, which is good for all parties, which means they will get extra groceries, perhaps treat themselves to a slice of cake to celebrate, which every person should do if they get themselves a job. It is the second part, the prediction ‘A bigger fall of about 15,000 had been expected‘, why? What data precipitated that thought?

You see, the people doing the forecasting as a whole have not been doing that great a job. They failed on multiple levels for years, mainly because of ‘unexpected’ conditions.

Now we get to Spain, where we see the quote “It shows that reforms work, it should help reduce unemployment much further and thus political fragility and it serves as a shining example to Greeks of what their country could have if its government finally returns to the path of virtue“, which is nice, but in this case, the given quote from Christian Schulz, economist at German bank Berenberg is one we also need to take caution with. I would like to claim this as a mere fact, because my ego would like to see Tsipras and Varoufakis cut down to size (am I too honest?). They played a very dangerous game on behalf of people who cannot afford to lose as they have nothing left, yet in my view Antonis Samaras had the right path. It was a painful path for all Greeks, but it was slowly getting Greece back. Now the Greeks face fears they never faced before. This is however not about Greece, this is about Spain. In my view Spain had nowhere left to go but up, or die. At 23%, one in four does not have a job, those with jobs work many long hours to keep their job, many products are still not getting sold because many people cannot afford it, so Spain is getting back on board, but ever so slowly and let’s face it, beating a 0.3% prediction, making 0.5% is not great, but it seems that exceeding predictions gets to be rewarded. The reality is that 0.5% is 2.5% below the currency inflation, so we have nothing to celebrate. When Spain loses even 2% unemployed persons, as they get a job, then we can make a cautious cheer. That moment is nowhere near at present. So why the optimism?

Now consider other elements, consumer spending is falling in France, Italy and a few other places. The economy slowed down in a massive way this quarter, even though in some places unemployment figures look better. The Netherlands now has the lowest unemployment rates compared to other numbers for a long period of time. Yet, the news came with the image of a lovely Dutch girl with impressive cleavage buying a backpack, which does not sway from the blow that the American economy is getting and that affects the Eurozone too.

So here we have the initial part, some EEC nations are now getting a little positivity (most less than 1%), which is better than zero or minus, but it still is a long way from serious movement away from dark times, they are still overhead for the largest extent.

Will you stand by the view that the economy is getting better? I say that this Trans European Crash is still moving along towards the assets of all citizens there. You see, every month I am wrong, it will not be because of the premise, but because some people were allowed to push forward the status quo. In the case of Greece that will be another €7.2bn, with additional funds for bailout three and four. Whomever considers that there will be no bailout four, so you better wizen up fast! Greece has almost 316 billion in debts, it will need another 7.2 to make payments now and then we will see the need for no less than 10 billion more and who knows how much for bailout number 4, which becomes a lot more important now that we see that the Greek government is out of cash. So as the Greeks are not defaulting, Europe gets the added pressure of 17-30 billion before the end of 2016 (likely no later than Q1 2016). So the Greek debt will go beyond 200% of GDP. So when you read these miracle messages of suddenly growing from 0.6% to 2.9% I worry, because someone is again getting creative with the numbers and not with the actual GDP. If the Greek GDP is doing so well, how come we see zero messages on how manufacturing is up by a lot, how unemployment numbers are down, as I see it this is a number ‘fixing’ game where Greece is kept on the edge of the Abyss in virtual representation, whilst in reality Greece took three steps forward over the edge! But those who need the Status Quo, those who invested and want their money, or give their losses to someone else are giving us a skewed picture.

This is what UKIP has been up in arms about. I can tell you now that the picture is a lot more complex than I give it, but I believe that I am right, I believe that several announcers are painting us something that is not there, that is even without the laughingly bizarre article in Forbes by Panos Mourdoukoutas on how ‘Greece’s Net Debt Is 18% of GDP, Not 175%‘, which sounds fine in theory (he uses net debt, not total debt), but why is all that taxation not collected? I see the article nothing more than the article of a Greek having a go at the Germans (oh, how original), yet in this light we also see Reuters stating ‘Ratings agencies say no default if Greece misses ECB, IMF payments‘ (at http://www.reuters.com/article/2015/05/01/us-greece-default-ratings-idUSKBN0NM3N420150501). This is partially true as I reported earlier, because missing a payment is only the track to the Grexit and Default, but not the immediate consequence.

Now we get to the jewel in that article, which links to all other parts “The only potential impact Allen & Overy’s Yannis Manuelides saw from any missed payments was that they could technically give the European Financial Stability Facility (EFSF) the option to demand immediate repayment of one of its big Greek loans. But as the EFSF is government controlled, that seems highly unlikely and it would most likely waive that option“. This is the crux, those in charge will put pressure on the EFSF to get time to settle things, which means the EFSF will not act immediately, because the governments want to make sure that there is no other option to get their money, so everything gets pushed forward. Yet not paying should have an impact on several linked numbers and it could hit Italy and France, this is the true nightmare, Greece is pushing to get both Italy and France on the edge, because that will unlock the big blocks of cash, from which Greece would ‘benefit’, in that regard we could see that Greece gets reduced to a mere slave labour nation, but that is just me stating the obvious.

This is partially the issue I feared coming. One small nation of less than 10 million gets to push the rest around because no one is muzzling the people who are not playing the game according to the rules, as many politicians are not held to account, Tsipras and Varoufakis worked under the premise, if they need not, then neither do we, which is not that ludicrous a thought, but Greece is the only one approaching 200% of GDP, giving pause to the incorrectness of their train of thought.

Station Crash

This is the point where the brilliance of ‘Kling Klang’ studios is shown, the repetitive background of the Trans Europe Express shows the status quo of the finance world, like a monotonous train engine, it is pushing the Greek situation and as we lose the ‘n’ of finance, we get that Greece becomes the debtors fiancé, a shattered relationship (perhaps battered might be the better word) that has no good ending in sight. In all this, I look again towards the Album of Kraftwerk and the brilliance how it relates here. Europe endless gives me the lyrics ‘Life is timeless’, or in this case the European’s time is lifeless. So as we watch the economists admiring themselves in the Hall of Mirrors, we see a shift, one that is NOT BECAUSE of Greece (lets remain fair here) but as they were allowed to continue, we see a shift of people now less and less willing to see Europe continue. When we see stories on how some families in UK sometimes have less than one meal a day, where Spain is in so much hardship the people are bleeding, but now Spain moves forward, in all this Greece sees itself above the law of normalcy and this will soon come to blows. Germany need only to step back and not interfere. So as Varoufakis states that Grexit advocates are ‘anti-European’, we see additional resentment towards Greece, not from the powers, l but from the voting population at large. In that form at present, National Front is still making headway in France, which spells really bad for the Eurozone. Spain becomes a second player, if it goes on like this, slowly making headway, additional fuel against Tsipras is won, yet if it goes the other way, several players will need to pull out if they wish to avoid getting hit by the debts of both Greece and Spain. You see, when one goes, the banks will want to offload the debts as fast as possible, preferably in the last hour before defaulting, leaving who owns it a mess no one will survive, which means they will try to get governments to sign long term agreements for the debts. Will it work? That is uncertain, the fact that most players desire status quo, means that it is not impossible, in the end the debt goes to millions of taxpayers, that might survive, the banks ending up with this bill will topple and go under. This is where we are!

Greece (possibly with Spain) will push France and Italy, they will push whatever is left!

Now we get to the banks and the Greek bank run, this was nicely stated in the Reuters article I mentioned earlier. Here we see “They would be more likely to default on their T-bills (than the ECB) the only problem is that they are then defaulting mostly on their own banks… and in any case a distressed exchange on T-bills would definitely be classed as a default“, this is the fear I had, yet I did not think it would go that fast, because this act leaves the Greek population without any money and this means that the Greek solution could only work outside of the Euro, super inflating a Drachma, paying people pieces of paper that had no real value, a new kind of monopoly where everyone gets cash and no cause for it is needed. Here we see the faltering logic in it, partially the logic on my side too. It can only work if Grexit is forced, which some places do not want (they want their investment) and the inflated Drachma means that retirement funds have no value whatsoever, not even the printed money that is handed for it. A virtual mess of real money and no assets. It is a currency that goes nowhere, a funding from nothing that cannot be, because any product that needs importation will not be affordable. Basically that new Drachma would be even less stable then the old shekel, a worrying thought.

Now we get the UKIP charter in a new light. UKIP will close the borders and will proclaim the European Union to be null and void in the light of the Union Jack, the only Union that England will recognise. After that Germany, Sweden, The Netherlands, Belgium et al will have no alternative left to them, just because Greece would not play ball. The UKIP view is the worrying one, because the electorates that were once an ‘outside chance to win‘ could grow beyond contender, Greece got them there, by playing the rock star game, the British people are now angry, because many of them are getting by on too little whilst team Tsipras/Varoufakis kept playing the ‘we do not care game’ loudly and squandering, it opposes the UK standard of normalcy. They will often spend money, but fess up to it and pay it back, Greece leaves the impression that paying back is not a given, which has been illuminated more than once by Yanis Varoufakis.

Yet, Europe is more than Greece and Greece is less than 5% of that entire mess, which is not voiced that often. Because at GDP, the debt of Greece seems phenomenal, but the debt Italy holds is massive, it is only because Italy does have its products to bring abroad, it has additional tourism and it has almost 60 million people is why Italy does not seem to be in as much danger. But at 130% of GDP, Italy is in trouble, the debt of Greece, if defaulted could push Italy pretty much over the Abyss too. This is the danger Europe faces as Italian Liga Nord could do worse damage to Europe, especially as it does not like the place Greece is pushing them. The Italian debt at 2.6Trillion Euro’s is nothing to be sneered at. Their debt is growing at almost 4000 Euro a second. To deal with the interest, every Italian would have to pay an additional 2,000 Euro a year. This was the danger all along, where Greece is, Italy soon will be and after that France will follow, that is the Trans Europe Crash we will face. This is why Nigel Farage wants to bail out before that bill comes, which is fair enough. If the European governments had changed their irresponsible views 5 years ago, there would be an improved path and Greece would have more time and no one would worry, but that is not the case. The train is approaching station eleven and time is no longer a luxury.

The moment we dread is coming, yet in all honesty, how hard it will hit is not known. We only know that all in Europe will suffer, those who will survive decently are those without debt, the rest will suffer for many years to come. So are you still happy you let things slide or are you ready to pass the Accountability Act? In that act, those who created the mess do not get to push it forward, they either resolve it or become liable. It is in my humble opinion the only way to get governmental budgets properly addressed.

But that might just be my view on this.

 

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March 13, 2015 · 11:35

True torture

This issue started a while before this. The title “Tony Abbott: Australians ‘sick of being lectured to’ by United Nations, after report finds anti-torture breach” is just an incentive for emotion. (at http://www.smh.com.au/federal-politics/political-news/tony-abbott-australians-sick-of-being-lectured-to-by-united-nations-after-report-finds-antitorture-breach-20150309-13z3j0.html).

There are two quotes that need to be looked at: “Mr Abbott’s criticism of the UN follows his attack last month of Australian Human Rights Commission President Gillian Triggs, in which he called the report she commissioned on children in detention a ‘political stitch-up’” and “The United Nations report, by the UN’s special rapporteur on torture, finds Australia is violating the rights of asylum seekers on multiple fronts under the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment“.

I am all for human rights! I think Human rights are important, but what about the people ‘orchestrating’ the message?

Let’s that a look at the message ‘U.N. Urges U.S. To Treat Migrants as Refugees’ (at http://www.npr.org/blogs/thetwo-way/2014/07/08/329774643/u-n-urges-u-s-to-treat-migrants-as-refugees). The message seems to be clear, but what is that message? When we consider the quote “The refugee agency is particularly concerned about the large number of unaccompanied children arriving in the U.S. Washington estimates more than 90,000 unaccompanied children will arrive by the end of September“.

This was the news of last year. You see, what we all ignore (especially Labor and Greens) is that this all has a cost, it does not matter whether it is in Australia, Canada or America. When we accept refugees we accept financial responsibility to some extent. This is the not so nice part if us trying to be good and humane, there is a cost and we do not shy away from it, but we have limits, we all do! With every irresponsible act of spending what none have we limit our options and limit those who we allow in as well.

There is however another side, the side from the UN as we see the title ‘Asylum seeker torture report: United Nations special rapporteur Juan Mendez responds to Tony Abbott criticism‘ (at http://www.smh.com.au/federal-politics/political-news/asylum-seeker-torture-report-united-nations-special-rapporteur-juan-mendez-responds-to-tony-abbott-criticism-20150310-13zrwz.html). The quote “I think we in the United Nations also deserve respect and I wish the Prime Minister had taken my views on this more seriously and engaged with my rapporteurship more constructively” is a defence and a subtitle, also a statement that is not incorrect, but perhaps incomplete. When we see the quote “Among the concerns raised by the report was that escalating violence on Manus Island, and the ‘intimidation and ill-treatment of two asylum seekers’ who gave statements about last year’s violent clashes at the centre was in breach of the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment” issues come to light. Now, it is important that I am not making any claims of dishonesty or that the claims are lies. There would be no way for me to prove it. In addition, it is nice that we get these ‘verdicts’ from the UN, an administrative group where those ‘voices’ are incomes vastly above minimum wage, an income fuelled by other governments, but guess what, EVERY single one of these nations are in debt, not one excluded! Yet, this is not about money, or the income of some of these comfortable living executives. Let’s take a look at some of the elements.

Let’s restate the phrase: “intimidation and ill-treatment of two asylum seekers“, now, I am willing to blindly accept the following:

  1. There are likely more than 2 victims
  2. Let’s accept that in every case it is always both intimidation and ill-treatment

Now let’s take a look at the information form Amnesty international (at http://www.amnesty.org.au/refugees/comments/33587/), where they state the following: “There are currently 1,100 asylum seekers detained on Manus Island, all of whom are men who arrived without their families. These men have fled war, chilling acts of torture, threats of death, or profound discrimination. Many of them have made the desperate decision to make a perilous journey from Indonesia and other countries, including Sri Lanka, to Australia“.

Now, let’s be realistic and accept that more than two people have faced certain ordeals, there is no way for me to clearly find (at present) how many faced events. But if we take 20 people, than the issue revolves around 1.8% opposed to 0.18%. 1.8% might be too large, and I would agree with it, but we all seem to forget that a detention centre like that, is a place with constant pressures and clashing cultures, there are uncertain times ahead for many of these people, so pressures will come to a boil pretty fast in a place like that.

I am trying not to trivialise, but the need for better statistics is evidently required before we start a dictionary war between Australian parliament and the UN, whilst we know that the media is ‘presiding’ both sides whilst they enjoy the benefit of the occurring discord.

Yet, in the end, the actual culprit has not once been named. Oh, evil villain, oh master of the dischordian principle that weighs the loom of infinity unto the hands of fate. I have seen thee oh villain and I name thee………. (wait for it)………. Tax-Man!

Yes, in all the issues of emotion, so many forget that humanitarian aid must be paid for. Humanitarian causes require funds to exist, as do immigration centres, because they are a pure cost for any government. Which is one reason why Greece is getting rid of them tout-suit! In addition, they are so broke they are now returning to the need for WW2 reparations from Germany, which I will not condemn, but in reality, their own Tax-Man did not do anything, which covers close to 1/3rd of all their debt. So as they ignored current debts (and irresponsible spending), they go back to WW2. It makes perfect sense, the Greek PM and that finance ‘Rock Star’ have no other options (if they want to remain in power), but this is not about the Greek debt!

This is about refugees and the truth is that many nations (most of them), they are all failing refugees, mainly because of Tax-Man. You see, this super villain relies on the help of its sidekick Mrs. Poli Titian and this sidekick has been overspending, giving tax breaks to large corporations in a whimsy notion that under those condition more money would come in. It was a flawed approach, because they all rely on people SPENDING money. Guess what? They overspend on luxuries and are now paying it off, many have no jobs and many more have been in an income world that resembles the world of Frozen, whilst the cost of living is still rising. All this adds up to empty coffers.

So Mr Juan Mendez, where will these costs come from? This is not my lashing out, this is me actually asking. I remain in favour to help refugees as much as possible, but how? We need to make massive changes to the way of life we now have. Mrs Poli Titian needs to actually instigate massive changes. Not just in Australia, US, Canada et al. ALL nations need to accept certain changes. We need to readdress the way we think and I will admit right here, right now that I am at a loss how to go best about it.

In my view, there is an option, but it is not one you like, not one you will even find acceptable or humane.

  1. Retirement homes are as per now only for those without family. If they have family, they must go there. This needs to be a global change

Yes, you are all upset now. Yet consider, if we unite families we shrink the costs of arranging all this, yet in answer, those funds will ALL go to legal aid, health care aid and refugee aid.

  1. Refugees can come in, but only assigned to volunteer positions for places like Salvation Army, St. Vincent, Red Cross and other volunteer places. For this they receive room and board. It will give aid to other places, work force and support. For that they will receive a place in our community and after 5 years they will get automatic citizenship.

Non-compliance means expulsion from that nation!

This is not even that harsh, the situation could become a lot worse soon enough, then what will we do? As we get all these academic people (and governmental expert consultants) telling us how things will get better soon, hoping that they can avoid actually answering the question in earnest.

The Greek example of their detention centres might have been the most outspoken, but I feel certain that they are not the worst, not by a long shot. Real refugees want to work towards a better future, my solution seems to be less, but it still gives them a guaranteed future for them and their children.

The parliament of Australia site gave me two paragraphs that matter (at http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp0001/01RP05).

“Asylum seekers are drawn to particular countries by a range of obvious factors-proximity, family and ethnic community networks, employment opportunities and wage levels, generosity of welfare systems, levels of tolerance within existing societies, and the accessibility of determination systems. In Europe last year 70 per cent of asylum seekers sought protection in just four countries-Germany, Britain, Switzerland and the Netherlands. Acceptance rates are more revealing of a country’s political priorities, or its attitude to migration, or the weight of numbers it has had to deal with, or its diplomatic relations with ‘sending’ countries, than the genuineness of refugee claims” and “Australia is perhaps unique amongst Western countries in its capacity and willingness to remove failed asylum seekers; in other countries most failed asylum seekers simply remain. Australia has however joined other countries in attempting to discourage new applicants. The most minimal welfare payment, special benefit, is provided to illegally arrived asylum seekers even after they have been determined to be Convention refugees; they are provided with temporary visas with no family reunion entitlements; and they are denied access to settlement services tailored for and provided free to off-shore refugees”

In my view refugees would (read: should) willingly go to any place that will accept them, this information gives a slightly different view. It is also interesting that the information is incorrect. The Dutch numbers are going down, whilst the Swedish numbers were going up. Moreover, the Swedish numbers are over 25% higher, yet the premise of the writ is not strongly affected. In this light we will see that the economies of the large 6, Germany, France, United Kingdom, Sweden, the Netherlands and Switzerland will soon change stronger and stronger if large changes are not made. Reasoning is that ‘in earnest’ (not in condemnation of any kind), refugees are an economic burden. They often cannot speak the language, the culture is different and there will be other moments that will stop them from becoming an asset to any future (most important their own future).

The solution that I am proposing might seem ‘inhumane’, but they are cast in places where people are less likely to take advantage of them. They will be in places helping their new nation and as such themselves as well and they will get exposed to a strong impulse of skills, language and cultural foundations that will only propel them stronger in future. In that light their children will already be eligible for schools and will help them build even stronger foundations.

Is my plan the best? No, it is not, but by giving it to large industries, who gave a massive part of that to their own members of the board is certainly never going to be a solution. This is not some anti-industry chant. The issue is that life in any environment requires equilibrium. A ‘coalition’ and politicians with their ‘after-elected’ need, as I personally see it, have been uniting for the need of a few and that need has been answered for these few to such an extent that the many are now no longer regarded as essential. We have now entered into the realm of trimming. Not the trimming of the fat, but the trimming of non-consumers and in the short minded view of the industry, those, of whom they think no one needs. But in that same view we will also trim our humanity, reduced to be workers, for the lessened good of consuming.

My view is not a good one, but as I see it, it beats where we are moving towards. In the end, is my view just an exaggerated negative view? I personally wish it was so, but consider the following facts:

External debt and population

  1. Germany – 5.5 trillion – 81m
  2. France – 5.7 trillion – 64m
  3. United Kingdom – 9.5 trillion – 65m
  4. Sweden – 1.1 trillion – 10m
  5. Netherlands – 2.5 trillion – 17m
  6. Switzerland – 1.6 trillion – 8m

Now take the next part in close (but sceptical consideration), one report claims that for the UK servicing the debt costs a mere £43bn, which amounts to the entire defence spending of the UK. The UK collected a forecasted 650 billion in taxation last year, taking 6% of the budget away just to keep Even Steven, so if the UK wants to move forward they need to budget on 90% whilst collecting the 100% forecasted part. It is quite the miracle to make that happen. Now the UK and Germany are doing reasonably well (compared too many other nations), but they too have issues. When we look at Sweden and the Netherlands; that image swifts a lot faster in a downward spiral. Perhaps some will remember the issues Switzerland and their currency had a little over a month ago in my article ‘A seesaw for three‘ on January 18th 2015 (at https://lawlordtobe.com/2015/01/18/a-seesaw-for-three/)

We now see the picture adding up to a lot more hardship, and add to that the refugees:

  1. Germany 571K – 144
  2. France 210K – 310
  3. United Kingdom – 194K – 319
  4. Sweden – 86K – 106
  5. Netherlands – 75K – 222
  6. Switzerland – 50K – 154

Now the view is almost complete. So for Germany we see 571,000 refugees, which means one refugee per 144 non refugees. The 144 pay for the way of one refugee. We could think that this is easy, but now consider that taxation is down, so the required money is not getting in (for various reasons). Now we see the problem, how can any government continue to support a sliding scale? This is not about fairness, because it is not fair on the refugee. I will be on the first line stating this, but when the bills are due, fairness will no longer be a factor. If we want to resolve the refugee solution, so that we all can continue giving them a future, something must give way. We can hope for a much better economy, but that is a ludicrous fantasy, even if the economy suddenly upgrades by 15%, these nations will still be hurt by the overspending and the consequential bills that became the headache for well over a decade.

So in my view we either change the way the refugee issues are addressed, or soon thereafter Australia will not be the only one sending back refugees, with the consequential nightmare that such actions will bring.

So as I contemplate the words of Juan Mendez, I wonder if Mr Mendez has considered the dangers of true torture when funds run truly dry on a near global basis. We all need to look at how it can be made better as we all should consider such steps, but in addition, no one seems to be looking at the cost of it all, yet the pressures of the rising costs of helping refugees getting a future are not being addressed in this economy, why not?

 

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December 14, 2014 · 21:39

Where we disagree

There is another article in the Guardian; it was published almost 12 hours ago (at http://www.theguardian.com/business/2014/dec/14/deficit-problem-crisis-productivity-george-osborne). It is a good story, it gives a decent view, but I feel that I cannot agree. It must be said that this is all in the eyes of the beholder. The article is good and sound and many will adhere to this idea. Yet, I do not completely agree. Yes, all the facts are right, the view is not incorrect, but it feels incomplete. The first quote “The most important issue is the poor performance of the nation’s productivity, which, far from being improved, has almost certainly been exacerbated by the constant emphasis on the putative need for austerity”, now this is a decent view to have, it is an optional view, yet in my view the following com up:

  1. Productivity relies on orders; the UK is competing with its baby brother India where daily labour rates are decently below the hourly rate of a UK worker. That in itself is not enough, the EEC overall is pretty broke, no less than one in 10 has no job, it is driven up by Spain and Greece, yet after a long term most Europeans are very careful about where money is spend on. So which manufacturing industry is getting the few coins that do get spend?
  2. There is no reputed need to austerity; there is an overspending in excess of 1 trillion that needs to be addressed. We can bark high and low on the reasoning for it, but that water passed the bridge a long time ago, now the debt needs to be taken care of. The US, Japan and UK have a combined debt of 30 trillion of national debt, the UK is a little over 3% of all this, let’s make sure that when the two behemoths stumble into nothingness, the UK does not end up being the biggest debt of all (again just my view), yet I feel certain that the banks will be in charge of a nation with such debts.

Yes, productivity will take care of all it, but I believe that the debt needs more then productivity. It needs innovation and IP. They will drive true productivity. People forget about the innovators. Alan Turing is still regarded as the man behind the concept of Artificial intelligence. What was a fab in the 40’s became the driving power for the planet from the 90’s onward; let’s not forget the foundations for the computer. We seem to herald IBM and others, yet Professor Sir F.C. Williams was at the foundation of the driving force that became the behemoth for almost half a century and this wave is still going strong.

The new currency will be IP; innovation will drive the places of work, the places of sales and the filling of coffers (the empty bags currently in a corner of George Osborne’s office).

People keep on ignoring the need for innovation; I tried it twice in a previous job. The response remained almost the same ‘it works as it is, so leave it‘, that is the drive stopper that ends a future, although the early 1900’s did not have the need for IP, consider the history of the paperclip and Gem Manufacturing Ltd, a British company. They had the better design, but never registered the patent, which is why Johan Vaaler is often seen as the inventor. I am not debating the validity, yet he registered his patent. In those days the rights were approached a lot more liberal then now. Nowadays our lives are all about IP, patents and who it is registered to. Haven’t we learned anything in 115 years? No matter that we now enjoy an article that is not patented, in nice contrast to people who enjoy a life because the man behind finding a cure (read vaccine) for polio did intentionally decide not to patent it (Dr Jonas Salk, who deserves a sainthood for that act), our future for certain, our survival to some exaggerated extent is depending on IP. Need drives production, but who owns the article that is needed? That part I see ignored again and again.

William Keegan does not look at the IP side, because he focuses on the steps following it, yet those in this real rat race seems to silence the need to look at it as they talk about productivity and manufacturing, but the innovator behind it, the one designing the IP, that person is worth gold. Consider Microsoft paying 2 billion for a piece of IP called Minecraft. A simple game, looking the way Minecraft does, is worth the revenue the high end looking GTA-5 made. It is all about IP in gaming; it should be the same in nearly any industry, not just the one that got kicked off by Alan Turing and Professor Sir F.C. Williams. IP drives every computer industry, it became the centre piece in the jewel that is now called ‘Business Intelligence‘ and ‘Predictive Analytics‘, but we broke the system after that.

Why was the system broken?

It is a broken system that is now illuminated in its flaws by people like Sir Kenneth Robinson and Brian Blessed. We ignored for too long that IP and innovation requires creativity. As Universities have been pushing logic and business, they forgot that the future tends to be created in the arts. Creativity is the driving force for any future, whatever is produced after this required a need for IP. It is a chicken and the egg issue, will the thought create the idea or is the idea the drive for creation? As I see it, this drive needs an artistic side, a side I was never any good in, but the best futures will need an artistic hand. It is shown into the massive amounts of IP the gaming industry manages. People might wonder why I keep on coming back to the gaming industry.

The answer is simple Games have driven a trillion dollar industry (totalled). Commodore Business Machines (C-64, Amiga) Atari (2600,800, ST), Creative Labs (soundcard), The consoles that followed by Nintendo, Sony, SEGA and Microsoft and the list goes on and on, all from creativity. Even the military sees the essential need of creativity. Consider the text “Space-based Missile Defense: Advancing Creativity“, it is at the heart of everything, so many forgot about that, those in charge forgot about that part. It is why my vote for Cambridge chancellor would not have been for Lord Sainsbury of Turville, but for Brian Blessed. Lord Sainsbury is not a wrong person, or a bad choice. As I see it, all our futures require a much stronger drive towards the arts and creativity. In my crazy creative view photography was invented in 1642 by a Dutchman named Rembrandt van Rijn; his visionary view came 200 years before the chemicals were invented, if you want evidence? It is in the Rijksmuseum and they call it ‘the Nightwatch’.

 

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December 6, 2014 · 20:43

Not just telling you so!

This article took a little time. There is so much not happening, it is almost scary. Yet, I found a few issues that gave way to the following topics from both the past and the upcoming present.

The Dutch Economy will recover slower according to the IMF (at http://nos.nl/artikel/2007483-imf-langzamer-herstel-economie-nederland.html). Here we see the following statement in regards to this: “Het IMF dacht in oktober nog dat de Nederlandse economie volgend jaar met 1,4 procent zou groeien, dat is nu iets naar beneden bijgesteld op 1,2 procent. Dit jaar wordt een groei verwacht van 0,8 procent. Dat is overigens iets meer dan de 0,6 procent die het IMF een jaar geleden verwachtte“. “Translated: The IMF expected the Dutch economy to grow next year with 1.4%, which is downgraded to 1.2%, this year the economy will grow with 0.8%, which is slightly better than the 0.6% expected a year ago“.

Yet, when we look at my blog dated May 15th 2013 ‘A noun of non-profit‘ (at https://lawlordtobe.com/2013/05/15/a-noun-of-non-profit/), we see the following: “The Dutch NOS reported the prediction that even though the Dutch economy will shrink another 0.5%, they do predict a growth of 1.1% next year, so basically, they expected the economy to grow 1.1%“, so that story about “this year the economy will grow with 0.8%, which is slightly better than the 0.6% expected a year ago“, seems to be retroactive rhetorical whimsy (a sort of economic BS using numbers, as I see it). When we see the predictions on how they were ‘so close’, it is in its most colourful form an example about a guy having unprotected sex and then cry out ‘but I almost did not get her pregnant!’, yes, pragmatically speaking he failed by a mere six inches (you the reader can connect the dots, can’t you?).

You see, this is not whether I am right or wrong (it is a nice side effect), I am postulating the issues of managing Bad News. We see this happen all over the world, even in the more respectable places like the Netherlands and the United Kingdom. There are cogs in the system, but between these cogs is one extra cog that is slightly variable in size. You see, if the cogs are consistent as a watch, then they are always at one speed. Yet economies do not run like that, so the spring that drives it is not consistent in strength and resilience, as such the cogs would be a little variable in displaying the economy, now here is the magic cog, it is placed between two cogs so that it can shrink or expand, so as the economy slows down, then so does that cog, which means it rotates faster and commercial times will move through with the same consistency, we do not get to notice the slowing. Yet, this approach is virtual, it is nice on paper, but in reality, the money is not coming in, so the people have to make due with less, but the economy shows growth, no matter how much we cannot afford food and the items for our creatures comfort.

I think that the IMF is aware of this to some extent. Euro nations have been optimising their presentations in a few ways. Mind you, then are not cooking the books, but at times as the situation is generic, there are all kinds of posts that could be included or excluded, the difference is billions allowing for an upgrade or downgrade by one or two tenths of a percentage point. That is at the heart of it, now we see this for almost a dozen nations and the colourful loom that is called the EEC economy is now a lot less white and its product shows a fabric in all the colours of the rainbow, which is what we face now. We get incorrect presentation which will require a lot more adjusting. Doubt me? Then consider the two quotes that I showed earlier from the IMF. In an economy of 770 billion (previous Dutch GDP), the offset comes down to 3.85 billion, that covers a lot of bills. Now that you see this, consider how inaccurate some need to be to base a budget on something that is off by almost 4 billion, which is 50% of the entire budget for defence. How can this not have been ‘predicted’ better? Well, here is the crux, prediction are never accurate (and 4 billion out of 770 billion is a mere drop), yet in the end, governments all over the world will always portray them to be in a better position, then downgrade that view, yet with billions at risk, that approach seems short-sighted to me. It is almost a forced attempt to spend where there is no money, which is how we all got to be in this predicament to begin with.

To illustrate it, I will grasp to the article and link of a story done by Greg Jericho, who does an excellent job of it. It is called ‘Why isn’t the government being held to account on the China free trade deal?‘ (at http://www.theguardian.com/business/grogonomics/2014/nov/20/why-isnt-the-government-being-held-to-account-on-the-china-free-trade-deal). I do not completely agree with his assessments, but overall the picture that is painted here is quite clear and not incorrect. The first quote in this regard it “The modelling, which was used in the feasibility study, estimates that had a free-trade agreement been signed in 2005 by 2015, our GDP would have been about $3bn more than it would have otherwise been. Is that much? Well it’s about 0.37% bigger. So no, it’s not much at all“. Yes, I have warned in previous articles how dangerous it is to compare statistics, what I had not mentioned at that time, which was not in play, is that changing the base of measurement is also a good way to ‘lie with statistics’, as the article points out. I had done an example in a class I have years ago on founding a hypothesis. In there I used a Dutch municipality data set. When I compared the two in one graph, it showed how the states that were adjacent to the river ‘the Maas’ had decreased in average population, in those years that river caused damage due to flooding in several towns. Yet, the municipalities are all over that state, so does it apply? How to prove it? That is an entirely different question.

Now, I have nothing against free trade, but when we consider the large corporations not paying tax at all due to artistic accounting, adding fuel to the fire to give these large firms even more options to avoid taxation is not a good thing. So that net revenue, how is that taxed, what is more important, once this agreement is in place, how long until Google, Apple and Amazon will change their parameters to include that setup to avoid paying more taxation. How does that help Australia or Australians in any way, shape or measure? When that graph changes, export slows down and imports of all measure go up, how will free trade benefit then? I am not stating that this will happen, I am just wondering what happens if it does.

The one statement by Greg I disagree with is the one at the end “A free-trade agreement is no more a guarantee of economic growth than not having one is“; I would state “A free-trade agreement gives a lot more danger to tax avoidance on several levels than not having one“. Google, Apple and several others proved that point for the last 4 years, at present there is little chance of seeing them pay any taxation for at least another three years, then there is the solar panel debacle, but the least said the better. The fact that there is a decent issue with well over 50% of the panels (out of 600-1000 manufacturers) should give an indication that this free trade agreement, does not necessarily mean that quality will improve, with free-trade in play, that list consisting of dozens upon dozens of articles will sharply rise. How to guarantee that quality? The article does not reflect on that (was not meant to do so), but that issue will be (better stated should be) on our minds too. There is however one side that we should consider. We forget how rich the Chinese culture is. I believe that China could become a serious player on the video games market. Some of these stories would translate into different genres of games on every console. I am not talking about South South East China (most people call it Taiwan), I am referring to Guangzhou, Shanghai and Beijing. One of the strongest cultures has not presented itself digitally in any strong way, which is a shame, because in the end, gamers care for good games, not where it was made.

Why the jump to games and gaming? Well, it is one of the markets I know a lot of. We might be on par with IT, engineering and other options, but gaming in China, original gaming in China is a relative unknown. We tend to look at Japan for that. Well, guess what, Nintendo has been rereleasing games for some time now (good games mind you), but they are slowly becoming an iteration of what was an original concept. It is not about the games (well, it is only to some extent), I believe that new innovation, new IP and new, truly mindboggling advances come from interaction. We need IP, advances and new opportunities, these come from fields we have not seen yet. If you doubt it, consider 1993, when a game named Doom entered into our lives. Most will not remember it, but it changed gaming in a massive way. I still believe that this game became the spark that would be the conception of what would become in 1998 the Unreal engine. That would change gaming forever, even today, 16 years later, many games are relying on the unreal engine, and some of the artwork created today through the Unreal engine is so amazingly sharp that it makes the result almost undistinguishable from reality. That is the foundation I believe we can see, another jolt in the advance of gaming. That is a development which will not just remain in gaming, as unreal developed, it developed a commercial need for 3D technologies and it even has military applications in more than one nation today. I believe that the multi-billion dollar games industry has the potential to drive a trillion dollar commercial need for innovation; we only need to find the right combination to make it work.

That’s just the opinion of one blogger, but I feel fairly certain it is a shared opinion.

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November 2, 2014 · 00:20

When we lose the plot

That is actually the first thought I had when I read the thoughts of Ed Miliband in today’s Guardian. The view ‘House of Lords not representative of much of the country’ (at http://www.theguardian.com/politics/2014/oct/31/miliband-devolution-elected-second-chamber-regions), of course, as the statement is made on Halloween, or All Hallows’ Eve if we go by the old title is a moment when we see the brain dead zombies walk the street and Ed Miliband’s statement fits right alongside with it! OK, I apologise Ed that was not very nice of me. You are entitled to your view, I should not attack it, but I can disagree with it.

So why all the zombie references?

Well, you see, as we see nations being less and less about proper long term planning, we see short term stopgaps that lead nowhere and they all cost a bundle. If you are in the UK and you stare towards the setting sun, you might, if you live westwards enough you get to see the Atlantic river, on the other side is a former colony that is ALL about short term resolutions that go nowhere. They are allowed to do that of course, yet, overall it costs much for all, many will never be helped and few are around filling their pockets with cash whilst not solving anything. Let’s call that colony ‘little Britain’ (not Ireland mind you, which is another place all together). Now, if you go on towards the west as far as you can, past those hills called ‘the Rockies’ you see another river called the Pacific river, and yours truly (that would be me), is living on the other side of it on an island called Australia!

Now, we have the same issue the Americans of Little Britain have. More and more of this is getting to be about short term solutions that are not really solutions. We need a long term solution in government, like the UK has; it is called the House of Lords!

Many tried to do away with it and some just called it ‘change’, but so far the verdict is: “However, no consensus on the future of the upper chamber emerged“.

You see, the House of Lords seems to be up, up and removed, but the future of the UK is decently stable and safe because they look out for all Brits, those who pay tax and those who don’t. You see, as I see it, the basement of Parliament (also known as the House of Commons), want change, they want it quicker and quicker. But as they are planning their political agendas, as they are too eager in securing an extremely comfortable future by enabling commerce too easy, too much and too often, the House of Lords stops them when needed so that the other people, those who are in the eyes of commerce and retail revenue ‘not that valuable’, yet they too are British and deserve protection, the Lords looks after all of them.

I understand the frustration from Miliband at times too well, but many forget the expression “Nature does not hurry, yet everything is accomplished“, life is improved in small steps, the Lords will look after all Britons.

This is at the foundation and Australia misses out, just as America does. However, for Australia there is hope and a solution, which I will address down later on.

I particularly liked the following quote: “In a speech on Saturday Miliband will highlight figures showing that the House of Lords is failing to represent large parts of Britain. “When people say that they are turned off from politics and that it doesn’t represent them, we have to do something about it”“.

Eddie, my dear fellow, please explain to me the words you had during the Scottish referendum and now, I read “The Tories want to go further on the handover of tax levying powers than Labour do“, so why are you not on board? The reasons might be very valid, but what are they? So here we see that in past referendum times, devolution seems to be not all that de-evolved, it must make them tartan fellows mighty happy that you are on the case, is it not?

You see, as I see it, Scotland remains a factor for Labour and so it should, but as certain issues move over to Scotland Miliband is set having to fight on two fronts and as such, he does not have the reserves, the energy and the battle plan, so now we see this (this is all purely conjecture on my side).

You see, all these parties are for the better part short term, one perhaps two rounds after that usually the other takes over. The House of Lords is all about long term. Anyone stating that long term is not for now is basically deceiving you, because short term is about the now, the commissions, the bonuses and so on. Like some half-baked sales person in software solutions selling now what they can as they need the revenue, the forecast and the bonus. It is never long term and whatever long term they claim to make is nothing more than the final push for the end of quarter sale, end of year sale and then the new quarter goals. It is a limiting vision that is in the end doomed to falter. It is particularly interesting how these people all need +15-20%, without ever expecting saturation, almost like the well that never dries. Go to a well increase the drain of water by +20% each year and see how long until there is no more water. Then what will you do? The house of Lords is there to see that when faced with these short sighted people, that someone will arrange for options of additional depth or extra irrigation towards the well.

And let me be frank, this is not just about Labour or Liberal Democrats, the Conservatives will have a similar short-sightedness in this regards, which is why we need a solution like the House of Lords. I rechecked the roll today, and yes, my name is not there between Lord Vallance of Tummel and Lord Verjee. My first thought was, ‘good grief’, once I am elected as an official Law lord, I will be placed between two Liberal Democrats. Well, there goes the neighbourhood! 🙂

Yes, we must keep a sense of humour about it all. Anyway, short sightedness, in the UK there is a solution, but here in Australia there is not. I do believe we need a long term option here, You see, Australians have a Senate, yet, unlike Canada who designed it to be like the House of Lords, someone here on this island thought it was a good idea to take the American model. I respectfully disagree, however the Australian model seems stronger than the American one (seems, is used as I never did an in depth study of both next to one another).

Yet, we were talking about long term plans. I believe that true long term plans might come from a Mayoral party, a group of Lord Mayors that decide on long term plans. A Mayor often needs to think long term and as such, a different course of actions might work for Australia. Now, I am not on the side of our Lord Mayor Clover-Moore, I think she overspends by a lot, there are other issues I disagree with and as such I did not vote for her, but I admit that her Sustainable Sydney 2030, is a balsy plan. Getting the roads more and more to be ready for bicycles is one way to get Sydney moving, now they are getting light-rail over George street and when the busses are a mere past tense on George street we will see true change. It is visionary, no doubt about it. It is long term and could change the life of people in Sydney for the better, I should know because as I grew up in Europe, the use of a bicycle is one I am very familiar with.

So is my idea out in never never land? Not sure, I am willing to admit that it is and perhaps the Senate does think long term, but I do not remember seeing too much of that happening, which made me think of a solution that is not at the top of a pinnacle, but at the very base of it and are our lord Mayors not at the foundation of any city and our lives?

So my advice to Ed Miliband: let it be dude! (Yes, I called him dude)

Let us all find solution together and let the future be long term, short term thinking might get us to the next crossing again and again, whilst we learn after 10 crossings that we could have saved a massive amount by turning left, right, right and left and avoid a dozen of them crossings. And in many occasions it is not about getting to the road at the end faster, but to get there without too many obstructions, the rest we will figure out in the course of the day.

Yet, I am not done yet with Mr Miliband. There are two more quotes to look at.

“And it cannot be right that those peers who do live outside London are less likely to be from great cities like Birmingham, Liverpool and Bristol than they are to be living in less-populated rural areas” and “We will make the second chamber of parliament truly a senate of the regions and nations of our whole country“. Really? How is that in any way a guarantee for a better quality of politics? When we see that not the best in this field, but the best one from Shropshire is chosen, then we will truly see how bad some choices are. As such, I cannot identify for one iota with the idea of Ed Miliband. Yet, in the end, perhaps I am the one who lost the plot. I will let the reader decide and I hope that they will vote for whatever solution is the best, not the cheapest or the most comfortable.

 

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October 11, 2014 · 12:02

Intentionally not that bright?

On average, why do you not give your $2 (or £1) to the junk sitting at the entrance to the underground? Why are you hesitant to give the same to the drunk half passed out on the street? This is not a question of morale, or on the idea that you might have a ‘Samaritan’ bone in your body. This is purely human nature, we all do ‘good’ things at times, we give to the red cross, the Salvo’s, yet when we know that the money will go into health endangering acts, like money so the junk can buy more drugs, how do we feel then?

I tend to not give any!

I do my share, the daffodil, the heart foundation, starlight, legacy; the list goes on for a while. I do not give a boatload, but I definitely spend dollars on good causes. These causes make sense and I feel that there is a moral obligation to do things for those less fortunate than me. Yet, knowing a junk will buy more drugs stops me from giving, and yes there are no exceptions. I do not think my way of thinking is out there, many follow my lead. So why do I read ‘Poor nations ‘pushed into new debt crisis’‘ (at http://www.theguardian.com/business/2014/oct/10/poor-nations-debt-crisis-developing-countries), how moronic (read: overly simplified silly) is the act of giving loans to a group that cannot control a budget? When we see “Jubilee Debt Campaign says as many as two-thirds of 43 developing countries it analysed are at risk over next decade” as well as “Coinciding with the World Bank’s annual meeting in Washington, the anti-poverty campaigners accuse the international lender and other public bodies of “leading the lending boom” to poor countries without checking how repaying debts will divert resources from cutting poverty“. I would change that in how can we make international lender accountable for their own bad choices?

Not unlike Wonga ruling (at http://www.theguardian.com/money/2014/oct/03/payday-lenders-repay-loans-wonga), these nations should get those loans expunged and the international lenders will just lose their money. They will of course disagree, but the entire loan issue is getting massively out of hand and those enabling them get paid no matter what. This needs to stop.

Sarah-Jayne Clifton, director of the Jubilee Debt Campaign, makes a good case, yet overall she is not willing to far enough on one side and is treading where she should not on the other side. Let me explain this. At the end, the quote is “As such, the campaigners are urging the UK government to push for policies that support developing countries in increasing their tax revenues by clamping down on tax avoidance and evasion“.

No, no, no, no, no! That is not a good idea!

Pushing for policies tends to be a slippery slope (even though the approach is not that bad), in addition, the issue with developing countries and their tax push is only one side, which is the wrong side. These developing countries need to take a hard look on what they are spending these loans on and WHO they are enabling in the first place.

Let’s take a look at a few quotes from the past years and see how they fit in: “Ana Olivera took office on Friday promising to streamline the overweight administration of Uruguay’s capital“. Seems like a good approach. It must sting the Americans to no end that the elected official is a communist. OK, Ana Olivera is only mayor of Montevideo, but that village contains well over 50% of the population of that entire nation, which gives the mayor loads of political power. Uruguay is sometimes called the Netherlands of Latin America, because of its social approach, yet Uruguay is almost 5 times the size of the Netherlands and a mere ferry ride away from Buenos Aires (in case you want to have some cosmopolitan fun). There is method to my madness and here it comes. When we see the news in the International Business Times (at http://www.ibtimes.com/uruguays-economy-will-struggle-unemployment-inflation-it-will-grow-4-percent-2014-1540214), an article from last January where we see that some nations can get a decent grip on their debts, although inflation remains a worry for now. Bloomberg had some additional issues (at http://www.bloomberg.com/news/2014-02-19/uruguay-s-growth-pushing-inflation-above-target-bergara-says.html), “Uruguay, a nation of 3.3 million people wedged between South America’s two largest economies, has since become less dependent on trade with Argentina“, it gives rise to worry about inflation, yet it seems that they are staying on top of it for now.

This links back to the other ‘poor’ nations. These players seem to be given an unofficial charter of bad financial management. If it were just one or two issues, no! When we see the report that two thirds is in the high risk zone of getting a new debt crises, even though most of them got their debts written off, we can clearly see the proverbial pattern of junkies. This of course makes for the analogy that it turns the international lender as a debt dealer at best and as a debt pusher at worst. So, here we see my part of disagreeing with Sarah-Jayne Clifton. We need to put into place clear policies on how loans are to be allowed in the first place. How these nations are currently held to account (and accountable)! If we see a structural failing, then we have a duty to deal with that weakness and deal with the implied ‘pain’ from such irresponsible actions. Yet, governments and ‘overseers’ of these lending institutions seem not to be willing to do just that, we can assume we know the reason, but that is just listening to gossip ;-).

However, as I go for the expression of being artistic, there is this story about being black and that story is played by a pot and a kettle. How can we push for responsible, budgeted governing when the big players involved seem to be unable to do just that (USA, United Kingdom and Australia, but to name a few). Is it truly conspiracy theory inclined to claim that governments are over enabling banks and financial institutions? I am very willing to accept that I am wrong here, but the numbers all speak into my favour (towards my train of thought), so what is the link?

Consider the impact of Neoliberalism. Consider how the term changed usage and to a certain effect the value and application from the 1930’s, the 1980’s and it seems that the concept is changing again. In the 30’s it came from a desire to avoid repetitive economic failures that were visible up to the early 1930s, this resulted in the gesture of blame towards economic policy of ‘classical’ liberalism. Then later on it had shifted in meaning from a moderate form of liberalism to the radical and privately held transactions between parties, set in a ‘free’ (read: unaccountable) environment, free from intrusive government restrictions, tariffs, and subsidised capitalist set of ideas. Is it not interesting how this version as we see it now, is all about what it was with added non taxability and non-accountability? It is a new form of Neoliberalism with a twist that is all about enabling the wealth driven and the wealth begotten, yet in that view neo liberalism is not just a ‘new’ kind of liberalism, it is not just based on ‘old’ values of civil rights, freedom of the press, freedom of religion, and free trade. It is enabling non-accountability, non-taxation and even non-prosecutable to a certain extent. So the freedom they have been given are evolving into a total form of freedom where they obscure, device and decide, whilst the people get saddled with the bill of their appointed exploitation.

How is that liberal in any way, shape or form?

There is none more part we can look at. It comes from the paper ‘Neoliberalism and the Global Financial Crisis’ by Sharon Beder (at http://www.uow.edu.au/~sharonb/GFC.html).

The paper has a very fitting part where the topic headline reads ‘Financial Market Coercion‘ and we see “Whilst the IMF and the World Bank enforced the Washington Consensus on poorer countries in desperate need of capital, other more affluent countries were forced into adopting the same formula by the world’s financial markets. Their vulnerability to these markets was facilitated by financial deregulation“. This is what we see in action. Additional we see: “Financial deregulation was demanded by business interests, particularly large financial firms and transnational corporations that wanted to be free to move their money around. The economic argument for financial deregulation, supplied by free market think tanks and economic advisors, was that the free and unregulated movement of capital is more efficient, because capital can move to where it gets the best returns (Helleiner 1996, 194, Bell 1997, 103-4).”

Yet in that part, it does not state the one issue that is massively in play for governments on a global level. This is read in the part “free and unregulated movement of capital is more efficient, because capital can move to where it gets the best returns“, but what is does not state, which it should “free and unregulated movement of capital is more efficient, because capital can move to where it gets the best returns, absolvent of taxation and financial duties“. Now we get back to these ‘poor’ nations. Yes, they are getting pushed into new debt crises, as the facilitating business branches are all about getting money out and not paying for taxation which was enabled by neoliberalism (their altered version of) as I see it.

Is it not an interesting part that we now see the scary view that a Uruguayan communist shows more social responsibility then the ‘free west’ has shown in the last decade?

As I stated it before, when you make banks and big business the facilitator for the future, you will see that their only future you end up with is their own selfish needs. This is why the push for policies by Sarah-Jayne Clifton worried me; she might end up giving the keys to that group of people that should never have access to the keys in the first place, not if a nation wants to do anything for its people. Is there a better solution? It seems that either we go the Uruguayan way and deal with inflation dangers, yet the other way is equally drenched in risks and dangers. The first order is to set up the right policies that keep large corporations tax accountable. They might ‘threaten’ to walk away and to go to Paris or something like that, yet a nation has a multi-million consumers market. If a firm cannot do business, in the end, they stop from being a business and someone else steps in. We need to stop the greed that these investors represent. I am however at a loss to give a clear answer of what will actually work. There are too many variables and not enough people ready to stand up for that what must be decided upon, so we stay in an impasse, a status quo that had stopped being just that years ago, we just do not see clearly how much we lose every day, so we continue the status quo as is.

 

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October 5, 2014 · 22:41

The cost of doing Business

It is the guardian again, not in anything specific; however generically speaking there is an issue that requires visibility.

Let’s take a look at the following headlines: “Ebola is in America – and within range of Big Pharma“, “How bet365 profits from Chinese punters who risk jail for gambling” and “Brutal competition batters supermarkets the world over“, here is the cost of doing business.

How is it relevant?

That is the first part, this is not about relevance, and also, these issues are not linked (as far as I can tell), but they do have something in common (other than that they were all in the Guardian on October 5th 2014). Let’s take a look at big pharma. The article comes from Julia Kollewe and is a good read, from the article I got the following parts:

“Unfortunately, the standard economic model for drug development, in which industry takes all of the risk in R&D and gets a return on investment from successful products, does not work for diseases that primarily impact low-income countries and developing healthcare systems” and “GSK is developing a malaria vaccine that could be ready late next year and is expected to be sold on a not-for-profit basis. Its success rate was only about 30% in infants but better in toddlers, although final clinical results and data on the effect of a booster are still due“, last there is “Turner says two commissions are looking at alternative financial models. One idea is that governments could underpin the economic cost of drug development by committing early to buy the first 2m doses of a new vaccine, for example“. How is any of this ‘just accepted’? Let’s take a look at GlaxoSmithKline. It made 25 billion in 2013 with a net income of well over 5 billion (20% net income is amazingly good). Is that not enough? Is the issue not on how they come up with something, how it becomes a solution and then they make a fortune. So, why must they get ‘a set government incentive’? Why are we allowing for governments to bank on failure? Is their continued existence not based upon proven success? Now let’s take a look at the BBC article from May 10th 2012 (at http://www.bbc.com/news/business-17993945) where we see: “The programme obtained confidential tax agreements detailing plans to move profits off-shore to avoid what was a 28% corporate tax rate at the time. Those involved include pharmaceutical giant GlaxoSmithKline (GSK)“. So, not only are they ‘avoiding’ certain due invoices to the Coffers of Osborne, they want pre-ordered and ordained solutions? An anointed decree of set maximised profits. It reads like these boards of directors have a spine no stronger than a paperback, one that is comprised of balance sheets I might add.

So, as we say goodbye on how big pharma will find new ways to get loads of cash on possible medicinal solutions, we should take a look at number two.

‘Brutal competition batters supermarkets the world over’, the article states ‘observer writers’ yet gives us no names. When we look at certain parts we see a view that is incomplete, but seemingly not inaccurate “Aldi has made huge gains in market share in Australia, from about 3% in 2005 to 10% this year“, this means that the two running the show (Coles and Woolworths), will get a third to deal with. There is more to the entire situation, as we look at the price of milk in Australia “The battle for the hearts and dollars of Australian consumers has distressed the dairy industry, threatened small shopkeepers and prompted a Senate inquiry“, yet is that it? Consider that the dairy market is suddenly downgraded in revenue in excess of 20%, how can that be fair or even good to the supplier and when that is no longer an option, how will the consumer pay for milk when offers will dwindle to 2 suppliers? Then what will the market do?

Last there is ‘Revealed: how bet365 profits from Chinese punters who risk jail for gambling online’, which is an interesting article by Simon Goodley. It is the subtitle that gets us the first part “Bookmaker ‘rotates website addresses to keep ahead of authorities’, says employee“, which already implies that the cost of doing business and ethics are no longer in synch with one another. Ethicality has become a nuisance, especially when a business is actively ‘keeping ahead of the authorities‘.

Then we read “The gambling group says its legal advice is that it has broken no law by taking bets from the country“, is a local law the only part of legality?

When we consider Part 2 of the Serious Crime Act 2007 (UK), we see at sections 44 through to 46, three inchoate offences of intentionally encouraging or assisting an offence; encouraging or assisting an offence believing it will be committed; and encouraging or assisting offences believing one or more will be committed. Is that not the implied part of the ‘alleged’ crime when we see the term ‘keeping ahead of the authorities’?

When we look at section 48(3) we see that a person can only be found guilty of the offence under section 46 (encouraging or assisting offences believing that one or more will be committed) if the offence or offences that the jury find the defendant believed would be committed are specified in the indictment. Yet, this is not enough, for the most, it is not clear to me whether this applies to crimes outside the UK, however In Part 1 section 4 we see “For the purposes of section 1(1)(a), a person has been involved in serious crime elsewhere than in England and Wales if he;

(a) has committed a serious offence in a country outside England and Wales;
(b) has facilitated the commission by another person of a serious offence in a country outside England and Wales; or
(c) has conducted himself in a way that was likely to facilitate the commission by himself or another person of a serious offence in a country outside England and Wales (whether or not such an offence was committed).”

This seems to give enough to warrant it all (if the Jury would agree on this). So why is there such an abundance of acts and actions?

You see, the three articles are unrelated, but together they show a massive change in morale and ethics, the kind that people tend not to get back from. This might be the UK (to some extent), but it is clear that these events have been a fact in the US and are starting to get a more stringent grip to the acts of people in both Canada and Australia.

Now for the part that is linking these three views together. Let’s be clear, that this is a personal link, and as such it is debatable on many levels and also that is up to you to agree and disagree. I am not here to path the road for you, I merely speak of where the next place is, and how you get there is up to you. The press seems to favour emotion over logic (to a certain degree), you see, logic is all about reasoning and emotion is about (rashly) acting. The press gets more signals from the emotional reader, so as we react to soaps and reality TV, the press is having a field day cashing in on a league of events, all informative (in their viewpoint), yet overall not that result driven. Is it for that reason that we see a growing calendar on ‘human events’?

As we look at the big pharma piece we see a growing lack of ethicality. They state one thing, whilst pressing other avenues. The statement of moving in one direction, yet not willing to go the entire distance is something entirely unacceptable. We see the stories on how it is all so expensive to create a drug, yet the other side is not told, on how the top 20 are making in excess of half a trillion dollars, whilst in addition their net revenue is around 25%, which is one of the strongest profit margins. At this point we need to take a look at the initial premise of ‘pre-ordaining’ 2 million vaccines. How unbalanced is all this and with margins that large, why are they allowed these tax breaks?

The Bet365 issue could be regarded as an act, likely to be recklessly criminal. If there was no crime, these places could live on a static IP and we would not see the phrase ‘keeping ahead of the authorities‘. We have entered a stage of living where morality is not just taking a backseat, it is leaving the room, add to that a rapidly declining system of ethics and we end up with a change into chaos. You would wonder how a government would allow for that. Well, that is where the issue becomes murky. I think that for some time now, we have been living under a false pretence. Not unlike Sweden, where in 1917 the King’s powers were considerably reduced, becoming a figurehead with only limited political authority. A change that was done in that case for the good of the Swedish people, yet in many other nations big business made a similar change, only they did not remove power of those elected, as a long term strategy they placed themselves ABOVE the law. This is shown in several of my blogs and the acts BBC showed involving GlaxoSmithKline is only the smallest of examples. I discussed this in my blog ‘The Sanctimonious pretender‘ on August 30th where I stated: ‘Big firms consider leaving the Netherlands, says KPMG report‘, the quote “Some of the Netherlands’ biggest companies are considering leaving the country because of the worsening climate for entrepreneurs, according to a new report by consultants group KPMG“. Well, this is not about worsening climates, this is because nations with a monarchy require a fair bit of accountability, which is why the Netherlands and the United Kingdom has seen much stronger measures for the protection of the people and less so in favour of Big Business.

It is important that we seek solutions that require accountability for all, not just those who are not too rich. It is a tall order, but it can be done if we work together. We accept that there is a cost of doing business, but the view as agreed upon seems to differ as to what big business accepts as a valid cost and what everyone else thinks is a valid cost.

In a world of rapid degeneration of values like Ethics, Morality and Accountability we need to make sure that we see a stronger focus in these three values, if not, standing up to big business might no longer be an option.

 

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June 12, 2013 · 16:05

Has the case of UKIP been made stronger?

It seems that the EU is starting to hand out slightly less restricting measures. Commissioner Olli Rehn is removing for a short time the 3% deficit limit. This is a slippery slope to say the least. Yes, it is correct that the economy is a fact that needs to be fought. Yet all (including the UK) are spending money that they do not have. UKIP is riding on the waves of these fears, where we the taxpayers will end up footing that bill no matter what. And in the European picture the ‘we’ is simply any citizen paying tax. Governments writing checks, for which they have no money. However the difference of that small point that they can no longer cut is still amounting to billions. In the UK with a vastly over the 1 trillion pound deficit such sliding numbers will really add up. Like me, Nigel Farage saw this coming from a mile away and now he is ready to play his move to start walking towards a landslide victory.

If these driving reasons are not dealt with then both Labour and Conservatives who are currently nowhere near changing the economy are heading to a legendary defeat. There is however a comical side to this. (One should always find reason to smile) It would be the first time in history that the opposition could get crowded by both Labour and Conservatives, with day one likely becoming quite the show. How would that fall in the House of Lords? In that case Black Rod (the Usher) will have a field day! A role currently assigned to Mr David Leakey, former Lieutenant General in command of European Union Military Staff. He was awarded ‘Companion of the order of St. Michael and St. George’. Take it from me that when the members of Club Carlton and the Reform Club are on the same side of the isle, the Usher might need a little back-up to break up slight differences of opinion and he better bring a bigger Dragon then the one St. George slew to aid him.

Yet, the shortage is the issue. How to stem the tides? It is clear that spending more and more is not making it happen. I personally think that it is time to join hands together (not singing Kumbaja). As Commonwealth nations we have a duty to stand together. We have always seen the US as a brother, yet when it comes to accountability, their actions have a massive bearing on our situations, yet they just shun accountability, they have remained absent in stemming the tide of the economical Tsunami, they themselves are creating. My suggestion is that we the United Kingdom, Canada, Australia and New Zealand start uniting economic solutions together. Being parked in London, Sydney or Melbourne is no longer an option. All three have to deal with shortages on one hand and unemployment rates on the other. What if we seriously start to change that? What if we push for a preferred partner in solutions? I myself experienced last week the answer from Canada, that they (one consultancy firm), when it comes to foreign workers limit themselves to US citizens. Perhaps our English is not good enough? There might have been a very valid reason in this, yet I cannot stop to wonder whether we are ignoring possible options to make the Commonwealth economically great again.

We are under such pressures to adhere to ‘corporate’ standards, and the bulk of all those companies are American. This is not about pointing fingers, but to restart an economy. If we look at the gaming industry nowadays, then that war, which was a former war of innovation, which is now diminished to a war between Microsoft who is about to hurt low income gamers and Sony, who is true to the gamers. The interesting side is that they for the most come with the same titles. There is still Nintendo, yet they seem to be lagging way behind. This is a multi-billion dollar industry and the shares are almost 40-40-20 with Nintendo in the 20% group. What is stopping us to take the Google OUYA Android Gaming Console into that market and start growing a market that is now, but has massive potential. Let’s face it, getting 10% of that market is still serious money and the economic downturn to people will remain at least another 3-4 years. So with a play to a cheaper solution is one they would love. It also forces the other three to become innovative and competitive again.  Smaller playable games at less than £ 5 makes it possible for starting developers to make many millions. Consider that families can afford 4-5 games instead of 1 Microsoft game with a £5 surcharge. It does not end there.

Europe is outsourcing customer care centres, technical care centres and we cannot find a way to get 100,000 a job? We need to rethink corporate thinking that is smaller based, makes money and pays taxation. That makes those places 3 times a winner for all parties involved. It does not matter who gets to be in office, in the end we need to fight to make sure that this office survives!

And as we go back to that multi-billion dollar gaming industry, when these people get a pre-owned game surcharge where will that be taxed? It is time to put a stand and make these chargeable items taxed in the gamer’s nation, not in a virtual server location where no taxation is due. When these companies move into the nations of the world, demand rights, protection and support, yet walk away from taxation that is due as they receive all those rights, then we should look at the abundance of non-accountability and make it an accounting matter.

We need to start moving. It is nice and essential to fight over the GCSE A-levels, but without an economy they have no future, and we must fight for both!

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