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One economy crises a day

Yes, it is the Guardian that alerts us to: ‘World economy at risk of another financial crash, says IMF‘ (at https://www.theguardian.com/business/2018/oct/03/world-economy-at-risk-of-another-financial-crash-says-imf). So as we see: “Debt is above 2008 level and failure to reform banking system could trigger crisis“, we think that this is a small issue, but it is not, it is however not the real dangers, merely a larger factor. The quote “With global debt levels well above those at the time of the last crash in 2008, the risk remains that unregulated parts of the financial system could trigger a global panic, the Washington-based lender of last resort said” gets us a little closer to it all, yet it is the phrase ‘Washington-based lender of last resort’ that is a little more at the core of it all. This, or in a roundabout mention towards the US federal reserve is not the only part in this. It is the ECB with its quantative easing setting, now at 3.7 trillion, which in light of the Bloomberg article in 2017 (a year ago now) mentioning ‘Some ECB Members Identify 2.5 Trillion-Euro QE Limit‘ becomes a larger issue. With the US national debt at $21.5 trillion the ECB at an estimated €2.4 trillion bonds as per June ($2.7 trillion), we are going off the deep end soon enough. So as people were all in such a state that I was wrong, it would not happen again and that the economy is great. Consider that I warned about this danger several times between 2016 and the latest in May 2018 with ‘Milestones‘ (at https://lawlordtobe.com/2018/05/05/milestones/). Yet all the parties are stating that I was wrong, and several hours ago, the Guardian treats us to: “The growth of global banks such as JP Morgan and the Industrial and Commercial Bank of China to a scale beyond that seen in 2008, leading to fears that they remain “too big to fail”, also registers on the IMF’s radar“. Yes, ‘too big to fail’, or should that be ‘to big too fail‘?

So when we see Gordon Brown getting quoted with: “former UK Prime Minister Gordon Brown said last month that the world economy was “sleepwalking into a future crisis,” and risks were not being tackled now “we are in a leaderless world”“. I found his response slightly moronic as there is no leaderless world, there are merely elected officials who know that they are merely in temp positions and they are paving the way for really nice paid futures. There is a distinct difference there. And in that I am still modestly awaiting my honour degree from the London School of Economics, in a pinch one from the Wharton School of the University of Pennsylvania will do too.

So when we see both “Christine Lagarde was concerned that the total value of global debt, in both the public and private sectors, has rocketed by 60% in the decade since the financial crisis to reach an all-time high of $182tn“, as well as “the build-up made developing world governments and companies more vulnerable to higher US interest rates, which could trigger a flight of funds and destabilise their economies. “This should serve as a wake-up call,” she said“. My response will be: “No Christine, you are wrong! The entire setting of a wake-up call is already 3-4 years too late. You have been unable to nurture the ECB, keep governments awake to get spending under control and the fallout will be huge and the people get to pay for it all“. The one benefit is that too large a population will be going through two depressions wiping out all their savings soon enough and in that there is an actual chance of a new civil war that would spread all over Europe. At that point the life of any politician will be £0.02 at best, once that starts, there will be not merely a Brexit, it will herald the end of the EU and it will impact the US in a most disastrous path, not merely wiping economies out, there will be a lack of trust between the US and the EU that will surpass the distrust levels between the USA and CCCP at the height of the cold war. It will redraw global economic maps to the larger degree. That is also seen in the part when we recollect the June 23rd article called ‘They are still lying to us‘ (at https://lawlordtobe.com/2018/06/23/they-are-still-lying-to-us/). There we were treated to “Greece is once again becoming a normal country, regaining its political and financial independence“, remember that part? So how normal is that country as we are treated to ‘Greek Bank Stocks Tumble Amid Concerns Over Capital, Bad Loans’ by the Wall Street Journal a mere 8 hours ago? So when we see “Investors appear to have completely lost confidence in Greek banks,” economists at HSBC said in a research note. The four main banks— National Bank of Greece, Alpha Bank, Eurobank Ergasias and Piraeus Bank—recently submitted ambitious plans to rid themselves of more than half of their soured loans by 2021 to the banking-supervision unit of the European Central Bank, several bank officials said. Under the new plans, which the ECB is considering, the banks would commit themselves to reduce their nonperforming loans to 15%-21% of their total loans, compared with today’s levels of 40.7%-54.7%“. the article (at https://www.wsj.com/articles/greek-bank-stocks-tumble-amid-concerns-over-capital-bad-loans-1538584978) gives us a lot more, but it shows that the banks are trying to shed the bad loans in as creative ways as possible and in this the governments are as I personally see it part of the problem, they were never part of any solution and the people will get to pay for it all as they were treated last quarter to: “as elderly Greeks face losing up to €350 ($416) per month when new pension cuts are implemented as of Jan. 1, 2019“, I believe that as the Greek banks collapse to the larger degree, as the Greek banks are shedding over 50% of outstanding loans, their value would also collapse as will their prospects and the loss of confidence will only increase the pressures. All whilst payments will still be due and cannot be met as it is staged to be at present. So there is a chance that Greeks will lose 50% more than they are currently losing at present in the next quarter, so we will see that the Greeks will start the year in utter poverty and the rest of Europe is not far behind. The ECB with its badly conceived QE plan has achieved that, so when the people are given that danger and handed the loss of retirement funds, utter rage will not be far away after that.

It was one of the reasons why I kept close eyes on Salini Impregilo. Even as Europe is going proverbially down the drain Salini Impregilo has been making headway on a global scale, foremost in Saudi Arabia and as their projects are kicking off, the infrastructure needs for Saudi Arabia grow. Their needs for dash boarding, reporting and data analytics will rise over the next two years and will require more and more knowledge and infrastructure with any additional building they are assigned. The entire project of the King Abdullah Financial District (KAFD) drew it even further to the foreground, merely because the required concrete levels that can be delivered seem to be at 30%-40% of what is required soon enough. It is an opportunity for Saudi Arabia and the UAE, but also optionally for Egypt. All these shortages ignored for now, yet when we see the image from 2012 and what was required then, and we consider that Neom will require close to 15 times that, where will the concrete come from? And it is not merely the availability; it will be about the proper planning of resources. Even as Salini Impregilo is merely a larger player of several projects, they in the end all need their concrete and where will that come from? So at this rate I expect to see the delays making the forefront news from 2020 onwards. Even as some places are increasing as much as they can afford. I expect it to fall short by a larger degree soon enough and when we are introduced to the heart of the matter. Smart cities will need smart infrastructure and the wiring will be well over 20 times what the entire Boeing 787 Dreamliner fleet required and that is a lot. the skills, the training to get the amount of people fuelling this is short on every level as I see it, so as Europe collapses with the debt, Saudi Arabia gets the option to buy staff cheaply soon enough. No merely getting the knowledge they need. Yet the brain drain to that extent has never been seen before anywhere in the world and that is where the ECB will suddenly realise that the fuel required to fix any acts of stupidity in the last 10 years will no longer be available and at that point Wall Street will wake up getting to live the perfect nightmare. It is not merely that there will suddenly be a boost of economy because there is no unemployment, getting the people trained up will take decades, stopping economic growth right quick and for much too long.

And as other players open up the doors for a guaranteed decent lifestyle, the setting is changing. We see that in the European Pensions last July, a mere 2 months ago when we were given: “European pension schemes are becoming increasingly attracted to the high returns and diversification benefits offered by frontier markets” This is the setting of: ‘more developed than the least developing countries, but too small to be generally considered an emerging market‘, yet as the high returns are estimated, the risks are also higher and there seems to be the risk ‘risk premiums are more greatly affected by political, economic, and financial factors‘ that is seemingly ignored to a larger extent. We see that part when we consider both “MSCI Frontier Market Index is the most widely used benchmark for equities. However, even this is highly concentrated in certain markets and sectors – financial stocks make up 46 per cent and the top three countries make up 53 per cent“, as well as “Argentina, which makes up around 22 per cent of the index, and Vietnam, 15 per cent“. So, now consider that the very same Christine Lagarde treats us to: “The International Monetary Fund (IMF) has agreed to increase a lending package with Argentina by 7.1 billion US dollars (£5.3 billion), seeking to calm markets over the country’s ability to meet its debt amid growing economic turmoil” a mere week ago. Do you still think that I was kidding or merely trying to kick the dead donkey? I am not stating that this is the fault of Argentina. I am speculating that too many parts of Wall Street are banking on the failure of others and it opposes the setting of returns on those seeking success, in this setting the pensions will lose, optionally they will lose every time without fail and the people are left with an empty bag not worth the price of that empty bag. Do you think that people will sit down and accept that? No, they will be beyond furious and the setting of Johan de Witt and Cornelis de Witt blamed and lynched in The Hague, the rioters were never prosecuted. So, there will be enough motivation on more than one level. It is something for the current European politicians to keep in mind, because this could happen again and the setting that the people face over the next 10 years is a lot worse than the ones that the population faced then. At that point, when this starts, I truly hope that those politicians will have the option of a quick getaway out of Europe, because they will not know safety ever again in that place.

So whilst we see the distancing of politicians on all fields whilst trying to drench themselves in non-accountability, whilst they will try the path of ‘It was a miscommunication and we were given the wrong advice‘, the people will no longer accept that as the evening news. They will want their pound of flesh and a bucket of blood and the regard of the value of politicians at that point will have been degraded to zero, and their ‘post life’ Facebook profile image might optionally look similar to the painting of the brothers De Witt as it was in 1672. You might think that it is mere speculation and it is, yet the trigger is not my speculation, it is the message of economic crises after economic crises as the governments are not acting against the banks and the exploiters that hide behind ‘too big to fail‘. The people all over Europe, if not on a global setting as they are mistreated to overly optimistic futures that cannot be met and have not been met for over a decade, you see, if that was actually true debts would have been receding, would they not? The only ones that did that harshly were the Germans and they are indeed in a much better place. It is the difference between being popular and doing what needs to be done and in that Angela Merkel was not about being popular, yet now those Germans are in a much better place than most other nations. It is something for you to consider as you notice your pension is gone and you want to take it out on someone.

so whilst we consider the final line in the Guardian, which was: “Without a rise in investment economies remain vulnerable to financial stress“, we need to consider that the setting is not merely about ‘investment economies‘, it is about the setting where large corporations come in and use that setting to ‘invest’ whilst draining away the gained momentum, so the economy that once was in that stage has been drained and those momentum profits are relocated to other places where ever those boards of directors are fuelling their personal wealth accounts, leaving those nations in a post investment era that is now merely regarded as a consumer fuelled economy whilst those people never gained the better economic standing to spend the money fuelling it further.

A setting where the equilibrium of economics fails as there was never a state of balance, merely a stage of relocating available wealth and the frontier markets are no help, they are merely an optional stage not unlike the CDO issues of 2008, in my view a way to avoid taxation and move whatever they could to a non-reporting nation. Or as one source stated: “the smarter operators no longer use filthy lucre but instead employ modern financial devices such as Interest Rate Swaps (IRS) and Total Return Swaps (TRS) to evade tax“, a setting where some take a 4% loss to avoid 26% taxation, it still wins them 22% and many had to live of a bonus a lot more shallow then that and from a base amount massively smaller than the one moved away.

One crises a day, I wonder what the bad news we will get treated to next week.

#HappyWorldAnimalDay

 

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Is it a Prise, Prize or Price fight?

This is an interesting time, you see, many will not yet realise it, but we are roughly 19 months away from a game changing moment in our lives. There are groups of people scurrying to get to a virtual starting position, because they have learned the hard way that not setting the stage for the fight means that they will lose out the second time and this time there will be no third round for them. If you are at this point considering that I am kidding or that my statement is over the top, you better reconsider fast, because Orange Poland is now starting to get backers who have serious amounts of cash and last Wednesday, AT&T released ECOMP (their version) in San Francisco. They called it Indigo and it is one of two markers that are now actively in place to set the stage for massive shifts in Big Data. Yes, you are reading this correct!

This is not just a stage of evolution, this is now starting to be a stage of transition. As the people are marketed into a sullied state of dreams, they are tempted to seek what the places bring to them. Places like Tableau relying on AdWords top placement to show how important they are in this industry, with others using the same path on how ‘the magic quadrant of Big Business‘ is the solution, on how we see the ‘Gartner Magic Quadrant Leader‘, but the truth is actually in another direction. Places like AT&T who basically got their asses handed to them as they did not act in the 90’s, they now see that being there ahead of the game is the only move left to them, because AT&T sees that America will not make them great, it will not make them the global player. That is the first shift we see are now witnessing.

In this a very similar view can be found in the movie Assassins Creed. Now, it got written off by a several critics, but the beauty of the product is not in the movie, which is still bringing in a decent amount of profit (millions) for first time producer (and actor) Michael Fassbender. The reason why this movie is so interesting is seen in the revenue. Only 25% came from the US, the rest international. Rogue One: A Star Wars Story does it to some degree where the US and international set is 50/50, the US is no longer the bulk of the income for, a basic issue that now needs addressing, especially by the American players.  That time has gone and these players have caught on that in 22 months the infrastructure is either in place, or they are out of the race. Even as we still see large players (like the Dutch KPN) rely on presentations on how ‘great’ they are. Certain players are realising more that tactics need to change, the presentation is no longer enough, and they need to be ready sooner than ever expected.

This is seen in another way, a way I already saw coming. This time it is the Canberra Times (at http://www.canberratimes.com.au/technology/technology-news/ftc-accuses-vizio-of-spying-on-smart-tv-customers-20170206-gu70p5.html) that gives the goods. We see ‘The US Federal Trade Commission said on Monday that Vizio used 11 million televisions to spy on its customers‘, which reminded me of my blog article ‘The back door‘ (at https://lawlordtobe.com/2016/12/29/the-back-door/), which I wrote on December 29th 2016 with the part “consider the amount of mail you have at present and see what happens when 10 devices are added to your house profile. The refrigerator, your smart TV, your smart recorder, your game console, your laptop/tablet/PC, your 5 smart devices” as well as “A large group of people will get more and more access to your way of life. In addition, there will be an option to influence your way of life, which is a side nobody signed up for“, a stage that is now coming a lot faster than I expected. The Vizio case is only the most visible one now, this whilst more evidence is coming that Microsoft is engaged in similar actions. Is it not interesting that Microsoft is not mentioned? Perhaps that is because they are only doing that outside of the US? What is interesting is that with Vizio, places like Time.com states how to deactivate certain options, there are more and more indicators out there that this is not an option with Windows 10. How many devices use that? The other part we need to know is that the Vizio case started all the way back in 2014. So it took the trade commission well over 2 years to get there, and for how long was data collected? The interesting part is however not there, it is in the quote “manufactured VIZIO smart TVs that capture second-by-second information about video displayed on the smart TV, including video from consumer cable, broadband, set-top box, DVD, over-the-air broadcasts, and streaming devices. In addition, VIZIO facilitated appending specific demographic information to the viewing data, such as sex, age, income, marital status, household size, education level, home ownership, and household value, the agencies allege. VIZIO sold this information to third parties, who used it for various purposes, including targeting advertising to consumers across devices, according to the complaint“. You see, the issue is not seen towards one place, when you consider ‘including video from consumer cable, broadband, set-top box, DVD, over-the-air broadcasts, and streaming devices‘, this implies that Vizio played the field and was also getting the data from Consoles (which hurts Microsoft and Sony) as well as Foxtel (several data paths), so did Vizio get dobbed in? You see, in 2014 this field was in its infancy, now in 2017, whilst data will be the essential centre stage to all matters big data related, now it gets to be a different thing and still the media at large is asking way too few questions on the who, where and for how long. And as our exposure is set to 2014 cases that are only decided now. Even as now suddenly a wave of newscasts is hitting the screens of people on how Microsoft has privacy tools, how Microsoft is trying to quash gag orders. Microsoft is part of all this from the ground up. Whilst within a Chinese wall environment, one side of the wall is boasting that they champion the privacy of others. As we see that there are now Microsoft privacy tools, we see that that part comes with the small quote “coming to future editions of Windows 10“, which is the case because Microsoft and AT&T are very aware that being alive is being in the game and data is the one element that allows them to do it in an affordable way. There is an additional side, which was brought by Forbes. It is just a week old and gives us the consideration we actually need. The part where we get hit with ‘Tempest in a Teapot’, which could just be a storm in a teacup is not that minor an issue. You see Forbes own Thomas Fox-Brewster is setting the stage, but is he doing it intentionally so? consider “Trump’s decision should only affect the privacy of data handled by government agencies, not private companies” as well as “the only way in which the order may affect non-U.S. individuals lies in the manner the Department of Homeland Security handles personal information“, which is actually the part we should not care about. It is the ‘private companies‘ part that is the actual danger. First we need to take a look at the legal part. Now, I can do that, but the experienced people at DLA Piper (at https://www.dlapiper.com/en/us/insights/publications/2016/07/privacy-shield-is-final/) did that and I just hate inventing the wheel twice. Yet in that part the following issue rose, and it did so because it has happened before (and it will happen again). It is seen in this part ‘Secure personal data and ensure the ability to restrict secondary uses‘ and the issue is not because of that part exactly, it is because of the technological side to it. You see the restrictions on data and backup data are not the same, backup data is not seen as data. Forbes actually raised it in 2012 with “First and foremost, IT auditors need to come up to speed on the implications of auditing data that’s beyond the organization’s control and beyond the organization’s home borders. While some auditors are worried, many are more optimistic that these requirements provide business opportunities within the security, compliance and auditing community as organizations move data and long-term storage into the cloud” as well as “When data is moved beyond an organization’s technological and geographic borders, the organization runs the risk of losing control of how that data complies with regulatory compliance. By addressing legal and regulatory challenges up front through technology, an organization can begin architecting an off-premise, cloud-based storage solution that meets the business’s needs as well as keeps regulatory compliance at bay“, yet only now, or better stated only recently do we see a shift that places like SAP are now realising that technicians and consultants have their own agenda’s and an American one does not see things the same way a European technician sees things. Computer Weekly raised it, but they did so with the interesting quote “data analytics technology, will ensure that only technicians in Europe will have access to potentially sensitive data held in its cloud datacentres, if companies demand it“, you see, it’s the ‘if companies demand it‘ part that matters. If provider A has an infrastructure yet it gets its backup serviced by consultancy provider B who uses a different cloud and cloud system, where is the security set when system B is in the USA and system A is in Italy? There we might see the term ‘data safety is not impacted‘, yet it is equally not impacted when Intelligence Agency ‘who gives a damn‘ has mirrored that backup and now has 100% of all data. That is the realistic issue that the Privacy Shield addresses, but does it do that in equal measure for a cloud corporate infrastructure? Is the backup party vetted, or even identified? You see, this is not about paranoia or what people learn about me. This is about large corporations getting an even more unbalanced advantage. That part is not addressed because those supporting large corporation only need to delay things (Vizio 2014 is evidence enough). It is Kevin Werbach from The Wharton School, University of Pennsylvania who gives the parts I have been referring to. In a podcast on innovation we get “Companies like Uber and Airbnb are built on algorithms. They’re built on software that understands supply and demand and matches people on both sides of the network“, THIS IS IT!

That is why the players need the data and as much as they can. Do you think that people like Mike McNamara (Target Corp) got a massive oversized budget for the fun of it? No, he realised (and successfully sold that to the board of directors), that if he had the data and the systems in place he can take K-Mart and Walmart to town and take chunks of their share, in the next 6 months we are likely to see the first small victories, small in start but it will be a growing wave, have no doubt about that part. These are the advantages that larger corporations have and some are doing it ethically acceptable. Yet in a similar fashion I see that those taking a different path are not questioned or hold to any level of accountability. How is that for screwed up? I have nothing against these places, but in the global setting, Target would gain an advantage against the Dutch C&A if this continues. I believe that to some degree competitiveness is a good thing, but what happens when the tools available are not available to all? What happens when one retailer is ethically kept blind, whilst the outside competitor has a dataset describing the national population in excellent detail? Where is the fairness then?

So are we facing a fight with three players? That is not a given, there are a few elements in motion over the next 18+ months so there will be shifting. Except those who are claiming and considering not participating, they are pretty much out of the game for good. Nokia is now re-joining the mobile fight, trying to bring a competitor to the Pixar XL and the iPhone 7 to the fight (Nokia P1), what was interesting is that they avoided the one ‘mistake’ the Google Pixar has. It will be one way for people to get a cheap solution this year, but will it be enough?

Not enough data to tell and that is where it sets the pace of the continuing fighters, who has the data? Which might be the premise of a joke. Three fighters were getting into the match. One thought it was a prize fight, one thought it was a prise fight and one assumed it was a price fight.

Which player do you think will be the one left standing in the end?

 

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