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.

 

 

 

Broken Windows

http://pse.som.yale.edu/sites/pse.som.yale.edu/files/Case_Bratton%202nd%20ed%20Final%20and%20Complete.pdf

This pdf is more or less the story of the Bratton management style.  It touches on some of the criticism of ‘Broken Windows’ – but frankly only the easiest to dismiss.

First Bratton needed a leadership staff that was committed to crime control. Before he arrived in New York in January 1994, he asked for resignations of all senior staff. Next he put together a new team of “deep selects” that included Jack Maple as deputy chief, John Timoney as chief of department, Louis Anemone as chief of patrol, John Miller as deputy commissioner of public information, and Michael Julian as chief of personnel.
Then Bratton created a crisis. He hired a consultant, John Lindner, to perform a “cultural diagnostic” of the NYPD, describing its strengths and its obstacles to change. He appointed more than 300 employees from every rank of the NYPD to “re-engineering teams” that studied everything from uniforms and equipment to discipline and training.

The failure was the organization’s leadership over the previous 20 to 25 years. They wasted your most valuable resource: your human beings; that’s what they wasted—by micromanaging, by setting systems in place that stifled creativity…. With the best of intentions, they set up a structure that was meant to fail as a crime-fighting mechanism. It was built for failure.

I’ve heard all this stuff – it’s standard management teaching and there’s more to understand.  What if our police forces are a combination of staff unwilling to deal with the real problems as ‘underneath them’ and what I term ‘Screwtape bureaucracies’ – I see see plenty of sign of both.

I’ve met plenty of cops who have heard about broken windows policing – few who knew it’s about massive attitudinal and organisational change.  The riots may show just how much harder our police could clamp down.  Many of the claims about this kind of management are false and 70% of attempts fail across all industry sectors.

But what if our cops are so ‘bad’ that they are as dysfunctional as Bratton claimed NYPD was?  I have seen companies that were this bad and even worse.  Most non-science and technology higher education is.  And I’ve seen all these management claims made falsely.  The classic examples are when our governments change and it’s all the fault of the last lot.

A recent, free academic paper on broken windows at:

ftp://repec.iza.org/RePEc/Discussionpaper/dp5484.pdf

has a good, relevant bibliography.  The standard liberal critique ideas can be started at:

http://www.csub.edu/~danderson_facile/docs/Week8_1.pdf

A recent MA can be found at:

http://drum.lib.umd.edu/bitstream/1903/11735/1/Distler_umd_0117N_12199.pdf

My own opinion is that the glaringly obvious factor is the crooked rich and our failure in democracy.  We cannot demand the solutions from our politicians other than through skewed systems that are as disgusting as the riots themselves and actually far more damaging.

Crime Figures From America

The modern American prison system evolved as an alternative to flogging: penitentiaries were designed to “cure” prisoners of their criminality—to render them penitent—rehabilitating them into productive members of society. On this score, as on most others, it has failed. Indeed, prisons seem to cause more crime than they prevent, hardly surprising when you throw a bunch of criminals together with nothing to do and lots of time. Today roughly 2.3m people live in America’s prisons, more than live in any American city other than New York, Los Angeles or Chicago. America’s incarceration rate of 750 per 100,000 is five times the world average; roughly one in every 31 Americans—and one in every 11 African-Americans—is under some form of correctional control, whether prison, probation or parole.  England and Wales have now exceeded 85,000. In France, with the same population as Britain, prison numbers are 59,655 and in Germany with over 20 million more people, 72,043.  The US system would mean about half a million in gaol here.

Nearly all of us think we are too lenient – one only has to look at the number of cases Ambush Predator raises and such matters as 1 in 30 rapes being committed by released rapists to think we should imprison more.  Yet the same matters should also lead us to wonder why criminality is so high and why apparent year on year on year drops in recorded crime and what the BCS picks up do not tally with actual increasing numbers in prison and our feelings more should be going for longer.  In the US the greater numbers banged up, often in dire conditions, has not acted as a deterrent.

About one third of UK men pick up a ‘list one’ conviction and about 6% do so 5 or more times.  A quarter of people in the US have criminal convictions, but I don’t know if their ‘list’ is comparable – it’s still 65 million people.