The Greek Solution Isn’t (it is quantitative shysterism)

The real deadline in Greek debt is this afternoon when a private organisation, largely of banksters, decides whether insurance on this debt (collateral dervative swaps) has been trigger by the so-called credit event.  A number of vulture funds have bought Greek bonds very cheap in the hope of being either to cash in on the insurance or sue the Greek Government for the full price.  So the matter isn’t settled.  Argentina defaulted in 2002 and is still facing court action – a New York court has just ruled against a similar settlement by them.

The banks have sold us generally useless PPI that wouldn’t pay out anyway to people who needed it, we have ‘whiplash’ and other dodgy insurance claims putting our premiums up in the increasing compensation culture and all kinds of finance supposedly guaranteed by derivatives when it isn’t.  This Greek swap does mean some private interests have lost money, but the bonds in question were often held by banks, pension funds and such oddities at the French Post Office.  If the muck was ever really insured the insurer should pay – and the real insurer is us and we are paying by shifting it to public sector (i.e. taxpayer) debt.  All this quantitative shysterism is based on issuing insurance in order to take the fees involved, knowing the ultimate insurer (us) gave no permission.  I’d say this is the equivalent of TWOC or joy riding without a car and people should be going to jail.  There is no need for an intent to permanently deprive (though we have been) – insurance has been sold without there ever being any collateral to pay out, and guilty knowledge of who would have to pay out.  Our money was used (including our future money) to make bets until the point no wins were there to be trousered.

The quantitative shysters are borrowing money from us to make the same bets all over again.  The are shysters because we never get to know what bets they placed, who got paid out and where any of the money is.  Quantitative seems to fit because their excuses are expressed in complicated numbers that actually preclude us knowing the money trail.

Goldman Sachs did the quantitative shystering that hid real Greek debt in foreign currency exchange dealing.  They must have known what they were doing.  And where else has this process taken place?  What is the state of real value of any bonds sold under CDS insurance – the same as the 20 cents on the dollar Greek muck?  This even extends to stuff like student loans (thought to be 20% in default in the US) – loans dependent on future earnings in economies getting crappier.  These are about the same  in total as the sub-prime exposures allegedly behind 2008.

Greece is a pimple in current liabilities.  Even if it has been squeezed, expect an outbreak of acne.  Of CDS is triggered this afternoon, will it be just for the amount of bonds left outside the ‘settlement’ (mostly held under British Law), or have the hedge funds been in multi insuring for a much bigger sum through naked CDS and who might have been dumb enough to sell this for a few quid knowing the bill would be footed by taxpayers?

No solution has been attempted because there is no police investigation into how much money was taken and where that is.  The thieves not only don’t face criminal liability – they have also been in the position, through insider knowledge, to lay bets on the collapse they have caused.  It’s like a burglar being able not only to ransack your house, but also claim the insurance payout.  The Keiser Report may have elements of Radio Moscow about it, but I’m afraid it leaves BBC (Bimbo Broadcasting Corp) dead in the water on what goes on.

When you consider what must now be disclosed to the defence in criminal trials, the lack of disclosure required of banks, hedge funds and the rest so we can defend ourselves against them is Soviet.

 

 

 

Corruption Report

Corruption is seen to be a major problem across the EU, both in terms of the EU’s institutions themselves and in the member countries.  A major report can be found at – http://www.thebureauinvestigates.com/2012/02/17/corruption-considered-a-major-problem-the-uk/ – with the full EU report here – http://ec.europa.eu/public_opinion/archives/ebs/ebs_374_en.pdf

In the depths of the report you will find that interviews with around 1300 people across the UK revealed that a third of UK citizens think that bribery or abuse of power is widespread among the police. By comparison the Finnish seem relatively confident in their police force, with just 7% considering abuse of power as an issue for police in Finland.  Generally speaking, across the report, those having the hardest economic times (struggling to pay bills) tend to believe there is more corruption than those better off.

58% of the those asked in the UK see bribery or abuse of power is widespread among politicians, while an astonishing 98% of those asked in Greece saw corruption as a major problem.  The costs incurred by corruption in the EU are around £100 billion per year. Worrying then that the majority of Europeans (70%) think that corruption is unavoidable and that it has always existed.

The report is based on typical social science opinion polling and doesn’t break much new ground.  Work like this can be found buried under our glossy ‘news production’ for years.  Big business runs on tax evasion it makes into avoidance by bribing politicians.  Britain is the hub of massive offshore tax havens.  Academics even attempt to justify it all through Laffer curves and the like – based on the notion pretty much anything is better than letting government get its hands on the money.  Hedge fund favourite Apple sits on a huge offshore haul, and, of course, crude worker exploitation in China.

Opinion, of course, may be just what people make up in their tiny little minds after a conversation with Fairies.  The big message may be that human behaviour tends to corruption when the system doesn’t keep us honest – but this is facile as one only has to watch sports to know this.  We may be approaching a time in which we need to sweep our organisational systems clean, with all the dangers this brings in changing power relations.  We need something as severe as revolution, but we’ve seen plenty and they have done little about the problem.  Behaviour doesn’t change, just possession of the whip and how can do the ripping off.  All the anti-corruption design of the New York PD left it needing Bill Braxton and communism has been little more than a notable failure (weirdly many of our performance management schemes are broadly ‘Soviet’).

Hard evidence on police corruption comes from areas like wire-taps and long-term observation.  If we turned this kind of investigation on our politicians and big business (which is done at micro-level in Panorama and Dispatches), god knows what we’d find.  Obama is preventing any such investigation into bank mortgage fraud and the rest – so the Establishment must know the likely outcome.

If this EU survey had caught me in its questioning, I’d have said I think our police are corrupt.  But it would not have gone on to ask why or whether I think I’d get a better deal from them in comparison with other places I’ve lived (generally a big yes).  The corruption issue for me is that our cops are not loosed on corruption in our wider societies.

Your Friendly Not Quite Neighbourhood Police Force?

These cuddly chaps are part of a European squad who can be called into an country according to David Malone.  They are rumoured to be operating in Greece, though based in Italy under the name ‘Eurogenfor’.  One has to favour the crushing of the kind of riots we had recently in the UK, but if we have to have these chaps in reserve we’ve lost the plot. The UK is not among the 6 nations contributing, but they could be called here.  Cops in the old days were often outsiders, but this is ridiculous.  Have we really sunk this low?

Portugal Reduced to Junk

The economic crisis is far from over and I guess most of us haven’t a clue what it is about.  Moody has just slashed Portugal’s credit rating to junk.  Greece is screwed, Ireland screwed and Spain and Italy look very vulnerable.  Germany is riding high, doing export-led manufacturing (which is where Britain should be an is not) – and this is partly due to the low Euro – something of a German currency manipulation.

Economics is at its best when you can be safely ignorant of it – and nearly everyone is ignorant of economics.  The standard now on undergraduate courses is that of a little knowledge being dangerous.

What people need to understand now is that freedom is at stake.  Money is no longer linked, other than negatively, with genuine effort.  Productivity has been rising sharply since WW2, but over the last 30 years wages have been falling.  You need to earn 20% more in the UK this year to maintain last year’s position and inflation is stocked up to rampage soon.  This situation is much worse if you are poor to average.  No political party is responsible for this – politics in this sense hardly matter, though public sector cuts are not the answer.

We have been borrowing to maintain ‘GDP increases’ (this applies to China too, where 12 ghost cities remain with no one in them and massive local government borrowing is being written-off).  This borrowing is odd because we could have prevented private borrowing through higher wages linked to productivity, and governments are using our ‘money’ (futures almost) to prop up idiot and greedy banks.  Essentially, like likes of Fred Goodwin have had it off with our ‘money’ and Lord knows what else.

The nightmare story lurking beneath any notions we are encouraged to have about profligate Greeks, Portuguese and so on, is that ‘our banks’ are the real culprits having made reckless loans and had it away on their toes with bonuses and so on.  I have little doubt this is true on the figures.

The real question is why ‘you’ don’t know.  I’m no ‘commie’ and always detested the Soviet Paradise.  What I’ve seen is the collapse of what was worth believing in – reasonable freedom gained by work reasonably easy to get and reasonably paid in reasonably dignified conditions.  This is almost swept away now.  The classic example may well be Gadget and his claims that to tell the truth would mean he would have no mortgage-paying abilities.  This jobsworthness is now writ large almost as our organisations.  With the ‘Zil Chill’ factor this was the hallmark of the Soviet Block.

The ‘world’s debt’ has not been spent on anything we have as public capital.  You’ll find none of this in Portugal or Greece or Italy or Ireland – it’s gone on speculative gambling and a pernicious form or organised crime.

The plan is to re-adjust money through inflation (you’ll be noticing the price of your food and energy) – quantitative easing and other jargon – but also to buy up public assets to rent them back to us.  This is incredibly similar to Hitler’s plan – Nazi Germany’s expansion was all done on credit they could not repay other than through war-looting.  So who is going to be the target of looting now?  The USA is in Germany’s old position, brimming with debt and military.

We need a new politics to stop what’s coming and there is no sign of any.