Tag Archives: Wolfgang Schäuble

As the UK changes

There is no doubt about it, the UK is about to get a drastic change of image. Some of these parts is on them, other parts are set for them by others. We might all debate that it is usually the one or the other is sorely mistaken. It is when the industry and those trying to ‘guard’ their path to become members of ‘the billionaires club’, it is at that point we need to worry on who can influence our paths to a decent life and those who is trying to direct their ‘image’ from behind the screens. It is at that point ‘we the people’ must worry. You might think that me, being an Australian blogger, that I have no skin in the game. That is where you are wrong!

My grandfather was not just British, he served during WW1. In addition, there was a moment where my grandfather excelled, it was not WW1, it was a little later that he became one of the volunteers who acted and helped to unload the boats as there was a dockworker strike. I am not up to date on all the details as he passed away whilst I was still too young to comprehend the concept of ‘strike’. The reason why I remember it was because my grandmother showed me the letter of gratitude which came from King George V (I personally reckon it was done by his staff and he signed it). Still, my grandmother was proud to have the letter. This is not just some memory, the event mattered. Not all things done for King (or Queen) and Country is done in a war. We have points of view, and in the past the people had a strong moral compass. Those who did strike might have had an equally strong moral compass. I do not oppose that or their view. My point of view is different as I am from a much later era. So when we see: ‘Tories attack Labour over inheritance tax and spending plans‘  (at https://www.theguardian.com/politics/2017/may/03/corbyns-economic-policy-would-cost-voters-45bn-ministers-claim), where the backdrop is Jeremy Corbyn with the bomb stating ‘More debt, higher taxes’, we need to be concerned for our future. It makes me particularly sick that Jeremy Corbyn is making promises that have no bearing on reality. As a conservative, I would love to employ another 10,000 police officers. Actually, I prefer 4,000 Police Constables’s and 6,000 nurses, but that is just me. With over a trillion in debt the UK government cannot afford it and I get that. The previous Labour government has wasted so much money, they should not be allowed to drive the UK deeper in debt by making promises and spending cash that will take an entire generation of workers to settle. 4 years of spending and 25 years of paying it back is not a plan, it is idiocy! In that we need to realise that the game has been over for far too long. The UK needs affordable housing plans, which will also cost heaps, yet this is money they will get back as the economy is starting to employ people again and get the quality of life for all (especially the lower incomes up), in that Jeremy Corbyn has absolutely no clue what to do and it is with that level of cluelessness that he wants to be elected, so he is making empty promises (as I see it) to throw money at any sizeable group for the mere number of votes. A party that cannot even be one party and is infighting nearly non-stop, that is not a party that should be regarded as a valid choice, at that point UKIP will be a much better choice than Labour has been for close to 5 years. I reckon that even if the LibDems could find their groove and direction, they would be a better choice than the Labour party is at present, which is saying a lot.

The UK budget is an issue and those who can count know this, they have known this for 6 years that the party was over. The Commonwealth needs to pull together and find solutions that will bolster each other. In this Australia and Canada are the most likely allies, yet we should not discount New Zealand or India here either.

The second part actually intersects politically with the first. I have a few issues with the article called ‘The six Brexit traps that will defeat Theresa May‘ (at https://www.theguardian.com/politics/2017/may/03/the-six-brexit-traps-that-will-defeat-theresa-may), yet there are parts that we need to truly consider in more than one way. The first is shown with ““It’s yours against mine.” That’s how Wolfgang Schäuble, Germany’s finance minister, put it to me during our first encounter in early 2015 – referring to our respective democratic mandates.“, as well as “Brussels became the seat of a bureaucracy administering a heavy industry cartel, vested with unprecedented law-making capacities. Even though the EU has evolved a great deal since, and acquired many of the trappings of a confederacy, it remains in the nature of the beast to treat the will of electorates as a nuisance that must be, somehow, negated“. I have some issue with the second one, but that will be addressed shortly. The fact is that the writer, Greece’s favourite rock star: Yanis Varoufakis (read: former Greek Finance Minister) has been playing a game whilst in office (a politically valid one), yet the consequence is that their play pushed Brexit forth. In addition, we know that there is a long lasting issue in Brussels and the fact that the EU-zone is a mere facilitator for big business is slightly too conspiracy theoretical. Yet the fallout, which I blogged about for a few years pushes that view forward too. I believe that the truth is that the EU opened up a power broker game where large corporations had much more influence than even before. The EU players have to have one front whilst corporate divisions could play both ends of the political field against the middle, with the economic area’s being always too scared of their local needs. And those in charge had (read: have) no real need for Greece, only for the banks that could give them larger than life careers after their political day. This has been a global view and shown to be correct for the longest of times. So when we read: “From my first Eurogroup, its president, Jeroen Dijsselbloem, the Dutch finance minister, began an intensive campaign to bypass me altogether. He would phone Alexis Tsipras, my prime minister, directly – even visiting him in his hotel room in Brussels. By hinting at a softer stance if Tsipras agreed to spare him from having to deal with me, Dijsselbloem succeeded in weakening my position in the Eurogroup – to the detriment, primarily, of Tsipras“, this read completely correct from my point of view, yet I must also state that as Yanis played his public game (or is that pubic?), as the testosterone was flying off the newspapers, whether under orders of his PM or not (an unknown factor), Yanis played his game too hard and Greece was in no place to play the game that hard, especially as the Greek spending and misrepresenting transgressors never ended up in court and prosecuted, Greece did not have any options to lean on, not morally and not literally. Yet, there is a side that we see has a ring too it, we have seen it over the last two years as the ECB and Mario Draghi have been playing their political game for slightly too long, certain better financial media are now asking questions on Draghi and his non maintainable status, that whilst Draghi has been making additional Brexit threats. All this in the agony of fear because the turmoil in France is intensifying. In sight of the slip of numbers in the pro-Macron group, the financial world is now holding its breath and the next 96 hours will be the killer with adrenaline levels so high that can be cut with a knife. Wall Street will be glued to the election result screens, quite literally praying for a miracle.

Last there is the everlasting issue with the NHS (the one where the UK Labour party wasted 11.2 billion IT funds on). The article ‘Hospital waiting lists ‘will rise above 5 million’ as targets slide‘ (at https://www.theguardian.com/society/2017/may/03/nhs-annual-health-budget-increases-conservatives-ifs), is one that intersects even more. the cost of keeping it correctly alive should be on the minds of anyone voting in the UK. It is the most important long term part in everyone’s life in the UK. The issue is that it might not be immediate and therefor too many people are ignoring it because there has been too many NHS news mentions, but it will define the life of everyone in Britain, as such we need to realise that the hollow promises of Jeremy Corbyn are a direct threat to the existence of the NHS. Many might blame the Tories here, but the reality is that 2 terms of Labour did spend all the money there was and they also did the spending of 3 additional administrations as I see it, which is why they are so dangerous. The quote: “Without further help from the next government after the election, this is what the real impact will be on patients of successive underfunding of the NHS,” said Ian Eardley, vice-president of the Royal College of Surgeons” is not incorrect, yet those in charge of the NHS and those connected to high valued luncheons and board meetings should have taken a much better posture when billions were spent on a system that never worked. There is a consequence to that and as funds and infrastructure both took a dive the future will be grim, not unsolvable but grim none the less. Denis Campbell has written a good piece and should be read, this is not merely about a few quotes, there are serious issues, yet in all this there are parts missing, parts that are connected yet unmentioned. In light of what needs to be a light, the one article will never cover it (not due to the writer). Merely because the issue has become too great. Now, as we see what is in play, we need to revisit the start of this blog. My grandfather did what he thought was essential and right. Ships had to be offloaded, the goods were meant for the people and as such if not unloaded, the people would suffer. In that light the NHS is in a place where it is doing what it can, but the truth is that the NHS must change and adapt. People a lot more clever than me will need to make a reform, reforms that Greece halted and it is dragging them down, the UK will have to change the NHS is drastic ways. When we read that 5 million people are on a waiting list, we have to question the time they remain on that waiting list. The elitist approach that the nursing groups have taken as to whom can become a nurse and which tertiary education is good enough to be a nurse in the UK is one that requires scrutiny. There are too many political games being played and even as they voice ‘quality of staff‘, there has come a point where people are dying because there is no staff. We need to instigate a change that opts for a situation where 100,000 patients can get some level of care as per immediate. The Corbyn solution of throwing money at it will not do. We can argue that in equal measure privatisation is equally a bad idea, because we merely replace ‘level of care standards‘ by ‘level of profit‘ and that will never ever lower cost for the people at large. The parts we tend to ignore is not privatisation, it is interactivity of services that will lower cost, that part needs to be ascertained and not by groups trying to create a new gravy train.

We need actual solutions and it requires a different train of thought, one that needed yesterday. So as the press is facilitating on how Labour will spend more on the NHS and nurses, whilst the publishers of these papers know that there is no way that this can be funded, you need to question on what makes for an actual solution. The only solution (as I personally seen it) is to create a wave of credible positions and train the people in some places on the job. Perhaps these colleges need to accept a new degree where people can be trained on sight step by step, lowering the pressure for those who can do it all by slowly replacing those who can do it too and not just in nursing, because if the waiting list got to the millions, we need to see where surgeons could have an alternative group of people, not unqualified, but those who barely missed the grade. We need to reconfigure the pyramid shaped triangle into a parallelogram, so that some functions that cannot be filled can be done by others. Now, lets all accept that a surgeon is an extreme example, yet can the same be stated for a radiologist? an Anaesthesiologist? or even a surgical assistant? Three functions that might opt for additional people from other branches. Even as we know that they all claim ‘dedicated’ and ‘perfectly schooled’ personnel. It is time that those academic ‘advisors’ from Royal Colleges take a sharp look at wartime conditions and to the parts that some could play in aiding in a solution. Now because there is a strike and the dockworkers are busy standing up for their rights (which is a valid activity), but because in this high pressure world there are ships docked and there is no one left to unload the boats. That is where the NHS is and that is where they need to find a solution. Perhaps this will be found in the military, it is possible that those in the medical services of the Army, Navy or Air force will find that they are doing part time work at an NHS location. In that same stage, so will other defence branches find themselves. Fighting for their country, not in the trenches of the Somme, but in the tranches behind a desk of London Hospital. It might just keep that deficit down from £134.9m (that is this year alone) to something that could actually be managed.

We need another play, and it is perhaps the UK who might remember how they changed Cricket tactics in 1932-1933, so they did not get completely humiliated by Don Bradman. We still need a better solution and the Bodyline tactic was never an acceptable tactic, that whilst the ‘win at all cost‘ is not a decent play, but the NHS is now in a stage where it is ‘survive or die‘ and nobody wants the NHS to die, so in this the NHS and especially the advisory boards will need to look at tactics that will make them really unhappy, but at this stage they have left themselves no other options and the political players can only facilitate unrealistic options that are no options. They will start a path that will change the UK for generations, yet in that let that be in a way that will allow for the existence of some level of National Health Care. In this that they will need to write a new playbook, one that can offer options, not limitations.

 

Leave a comment

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

I told you so!

OK, not the best title, but it is time to throw a little hardship onto the fire. Now, the next part will be one you might not agree with, especially if you’re an economist, yet, so far, my prediction have been spot on and there is a lot more to come.

First there is the answer to those who either revoiced or proclaimed that Greece still had plenty of time, in addition, we now see the how the inactions of Tsipras is now showing to be the death of his fellow Greeks. The message that is only hours old “It’s official, Greek cash reserves are running dry” The quote gives us “In a move that puts Greece’s credit crunch into perspective, prime minister Alexis Tsipras’ government has revealed that it has just over €600m euro in cash reserves. A presidential degree allowing the state to sequester the funds of public bodies has seen €64.5m being transferred from local authorities to the Central Bank of Greece, said a government statement released this morning“, in addition we get “The statement’s timing – hours after Greek finance minister Yanis Varoufakis’ alarming warning that the country could go bust “in a couple of weeks” – is clearly aimed at focusing minds as EU finance ministers meet in Brussels” and last there is “described by the leading economist Mohammed El Erian today as potentially “devastating for Greece’s long-suffering population.””. That part I stated weeks ago, but several people disagreed. It would never get that far. Now we see it! It has come that far! In addition the 600 million part implies (implies not fact) that the loans can no longer be honoured. Now we see the first clear consequence of the Status Quo push I opposed all along.

Now we get to the utter incompetent politicians, better known as Alexis Tsipras and Yanis Varoufakis. The quote “Media and analysts in Greece this morning believe it is almost inevitable that a deal will now be put to public vote” means that these two are going to hide behind a referendum, In my mind, the actual response should be ‘If Syriza actually loves its nation, it will abdicate today and returns power to New Democracy and the seat of power returns to Antonis Samaras’. I believe that such a change, with additional austerity would give Greece a chance to remain in existence. This had also been my view all along and is now voiced by Costas Karagounis (at http://greece.greekreporter.com/2015/05/11/new-democracy-the-greek-government-has-put-the-party-above-national-interests/). This will not be an easy sell.

The only way that this works is to do two steps that the Greek rich will not like.

  1. All tax settlements from December 2014 are to be declared null and void in Greek Parliament.
  2. All tax evaders to be prosecuted with late fines set at 20%.

2b. the accounts of any listed tax evaders are to be frozen through the Palace of Justice in The Hague and to be monitored as payment is properly made to the Greek treasury.

Now for the other parts, this is the one that will cost the IMF, however, they can now consider an option where the payments will become an option.

  1. All loans are to be reset with the total amount set at 1% interest and all bonds are to be matured immediately and added to the debt, also at 1%.
  2. Greece is prohibited from entering the bonds market until 2040, in addition, they are not allowed any more bond actions until 75% of the debt has been repaid (whichever date comes last).

 

Now we get to the future of Greece, for that to work a harsh change will be needed if Greece is not to become extinct (again).

  1. Every municipality is now under austerity for balanced budgets, which means that services would cease unless there is money coming into the city. Debts are no longer allowed to be passed on, in every municipality the mayor and the local treasurer are liable for prosecution and mandatory prison terms if they fail. It seems to me that wasting funds should be stopped at the source.

You see, some will see my steps as ‘too extreme’, but when we get the quote: ““there is almost no-one who believes that negotiations over a [long-term] deal will end in June. Everyone is saying journalists should be prepared to work right the way through the summer and ensure they are around in June, July, early August.”” This implies that Tsipras is still playing the ‘let’s delay it all game‘. This is given added weight, but the following statement from Wolfgang Schäuble: “12-May-2015 11:21:47 – GERMAN FINANCE MINISTER SCHAEUBLE SAYS IMPROVEMENT IN GREEK TALKS CLIMATE NOT MATCHED BY SUBSTANCE“. Which was a clear reported issue in February 2015, so in one quarter the Greek team had not learned anything at all. This was not a ‘pissing’ content, this is a situation where two politicians are playing with the very existence and livelihood of millions of Greeks. You see, when it all stops the Greek retirees are literally left with nothing.

So as the EU finance clambake ended with no progress for Greece, we see a small message at the end. The message is: “They also hope to reach agreement on a new scheme, the European fund for strategic investments (EFSI), by June – so it can begin investing in private projects this summer“. Can anyone tell me where that money is coming from? Another trillion euro’s? I have no idea how much is involved, yet with the EU at large out of cash, who will fund those investments?

Yet, the trouble for Greece is not even close to over, it only deepens, that part was shown less than two hours ago, when we got the following from Twitter source: @enikos_en

The Social Security Foundation (IKA), Greece’s largest pension fund, has decided to take short term loans worth €360 million in order to pay June’s pensions to its members, financial site enikonomia.gr reports. The decision was made Monday by IKA’s governing board. The loan is comprised of €150 million in repos from a private bank, using Greek Treasury bonds that IKA owns as collateral, and the rest from cash reserves of three other funds, including €100 million from the Public Power Corporation (PPC) employees’ insurance fund” (source: the Guardian).

Now we get to the issue I had less than two weeks ago, I predicted this to some extent, get loans to pay for loans. This situation is so much more dangerous when you analyse the information, which should get you the following:

  1. IKA takes a loan to pay members.
  2. It is using Greek Treasury bonds it holds in collateral (Which the Greek government cannot pay as it seems).
  3. Consider the previous statement, if payments are not met those bonds will get value $0.00, in addition, we saw that Greece has 600 million left and this Friday 1.4 billion in Greek bonds mature. So, how is this going anywhere else but to a really bad place?
  4. The loan drained the PPC insurance fund.

So these facts imply that IKA will have no more payment options in a month, whilst the loans could claim chunks of whatever IKA had as a foundation, which could now give added dangers to the PPC getting hit. Can anyone else see the dangers here? You see, if IKA had so many reserves left, the Greek government would not be out on a limb claiming it only had 600 million left. It seems that when we see a full list of everyone’s money in the Greek bonds, we will see a few names that had been quiet, then what?

So as we see no results from Ecofin, we should wonder what will happen this Friday. One set of 1.4 billion in Greek bonds matured on May 8th, the press has remained awfully silent there. I cannot find any actual news on what happened, there are mentions that the debts will be rolled over with new bonds, but that is also a clear misrepresentation. Many of the old bonds were at 6%, now the rollover, will mean that the new set will represent 1.6 billion, more important, if bonds are usually set to a 1% commission, who did all this and where EXACTLY did that 16 million go? That is quick money, but for whom? A fan/friend of the Varoufakis rock band? I actually have no idea, so perhaps someone else knows.

Any finally we see that ‘rock star’ (Varoufakis) back on the microphone stating “From the perspective [of timing], we are talking about the next couple of weeks” regarding the liquidity. Well, that is not the case, because the bills due before Friday, in addition another 1.4 billion bond, that 600 million will have melted like snow in the sun. As payments are now an issue on several levels form a multitude of places, this weekend could start the end of Greece in a very real way, which is only hitting harder as the ECB has raised the Greek ceiling again, now by an additional 1.1 billion. Giving the Greeks now a total minus cap of 80 billion, put that on top of the 300 plus debt they already have and we see the makings of a new level of approaching disaster.

Are you, the reader still thinking that my approach was extreme?

Now consider the 750 million due today. Greek repaid it, but it did so by using money which was already at the IMF, so basically, they extended their death line by one month. Yet in the Guardian it was stated as: “Greece moved to banish fears it was on the brink of insolvency and default on Monday, ordering the repayment of €750m (£535m) in IMF loans hours before they were due“, that news came on May 11th. However, the Financial Times gave us “Greece took the unusual step of raiding its holdings of the International Monetary Fund’s de facto currency to make a €750m payment to the fund on Tuesday, in another sign of the country’s increasingly desperate cash crunch” (at

http://www.ft.com/cms/s/0/ddb97ae8-f899-11e4-be00-00144feab7de.html#axzz3ZzefGf2r), so the consequence here is that any bond action will be a lot more expensive and under these conditions, the Greek debt goes up by something approaching another billion.

There is now another question, are the releasers of information guilty of manipulating the markets? The markets released pressure because of the initial news and panicked when the ‘true’ facts came out. Moreover, this gives us more clarity that Greece is still all about misrepresentation, an issue the creditors might find alarming on several levels. We cannot truly condone the way Greece went about paying the amount, but this game of extensions, deferment and delays has been made for too long, whilst we see from various sources that the reformation essential to the survival of Greece is being made, in addition, staff that had been fired earlier is now rehired, which means that the governments costs are going up again, no real income is reaching Greece. Add all this up and Greece seems to be working itself into a deeper hole with every passing minute.

The Greek people deserved better!

 

Leave a comment

Filed under Finance, Media, Politics