Today, tucked away on an inside page of the Metro which is a Russian owned newspaper of sorts that is distributed for free in Bath, Birmingham, Brighton, Bristol, Cardiff, Derby, Edinburgh, Glasgow, Leeds, Leicester, Liverpool, London, Manchester, Nottingham, Newcastle and Sheffield was a little article allowing the Minister of Health Mr Hunt to comment on the strike without a response from the Junior Doctors.
From the beginning much of the media has supported Mr Hunt trying to drive a wedge between the Junior Doctors and the public as opposed to highlighting the attack on the NHS which Mr Hunt has apparently been given as his mandate.
In this instance the article focussed on blaming the Junior Doctors for the strike which was called off at the last minute rather than explaining that Mr Hunt finally agreed to drop his longstanding demand – albeit temporarily – to impose a punitive new contract on England’s 45,000 junior doctors if agreement was not reached.
His unwillingness to negotiate and his willingness to spread misinformation and outright lies resulted in the Junior Doctors voting overwhelmingly-98%-to strike in protest.
So rather than Mr Hunt being called out as the cause in this debate and being responsible for the strike all that could be reported was that the operations and the doctor's appointments which had been cancelled and could not be rescheduled were strictly the responsibility of the Junior Doctors.
Hunt, whose handling of the dispute caused huge concern in the NHS and medical establishment, must surely no have to answer questions over why he took so long to, in effect, stage a climb-down.
It seems quite obvious to me that if Jeremy Hunt were really concerned with client safety, with the welfare of junior doctors and the continued existence of the NHS he would have agreed to independent talks when it was first put to him.
Rather than give him a platform to blame the Junior Doctors the paper should have led with an apology on his part to those patients who had been inconvenienced by his actions.
But that would imply that he actually cared.
Wednesday 2 December 2015
Friday 27 November 2015
The Selling(out) of the United Kingdom
When I first heard that the UK was selling off one-third of its stake in a new nuclear facility to be built at Hinkley Point C in South West England I was somewhat taken aback. Of the £40billion of trade deals trumpeted by Mr Cameron £18billion would come in the form of Chinese ownership of a British nuclear reactor.
I fully understand the desire to engage in trade with China but I would have thought there were boundaries that one wouldn't cross if at all possible.
One would have thought that domestic nuclear energy generation would have been beyond the pale of trade agreements with China-but maybe I'm old fashioned.
In discussions it seemed that the British with whom I spoke were more than happy about the financial aspect of the agreement, but all felt somewhat uncomfortable with the Chinese.
Shades of Dr Faustus anyone?
This discussion was played out during the Budget Presentation/Question Time on the floor of Parliament in what I think was supposed to be a classic "there's truth in jest" comment that I for one found amusing.
The Shadow Secretary of the Treasury, John McDonnell, chose to read out of Mao's Little Red Book quipping "I thought it would come in handy to you in your new relationship" as he tossed it to the actual Secretary of the Treasury Mr Osborne.
Anyone who found it distasteful should think twice before they criticise him.
The current Chinese are the (bastard?) heirs to Mao...
I fully understand the desire to engage in trade with China but I would have thought there were boundaries that one wouldn't cross if at all possible.
One would have thought that domestic nuclear energy generation would have been beyond the pale of trade agreements with China-but maybe I'm old fashioned.
In discussions it seemed that the British with whom I spoke were more than happy about the financial aspect of the agreement, but all felt somewhat uncomfortable with the Chinese.
Shades of Dr Faustus anyone?
This discussion was played out during the Budget Presentation/Question Time on the floor of Parliament in what I think was supposed to be a classic "there's truth in jest" comment that I for one found amusing.
The Shadow Secretary of the Treasury, John McDonnell, chose to read out of Mao's Little Red Book quipping "I thought it would come in handy to you in your new relationship" as he tossed it to the actual Secretary of the Treasury Mr Osborne.
Anyone who found it distasteful should think twice before they criticise him.
The current Chinese are the (bastard?) heirs to Mao...
Wednesday 25 November 2015
And You Shall Reap What You Have Sown....
Although I still harbour some concerns about Mr Obama's approach to Syria insofar as I think he and his advisors have underestimated the truly medieval aspect of the IS's ideology and the fact that they have intentionally declared war on any and all who don't adhere to their draconian version of Islam I also appreciate that the myriad groupings make it all but impossible to have a clear strategy.
Enter Russia.
Mr Putin thought he had a clear strategy. He thought he could create realities on the ground which would position Russia favourably when it came to discuss a diplomatic solution.
And indeed there were many voices-a sheer cacophony from the Republican ranks- but even grumblings from the Democrats that the moment called for a man of action rather than a man of intellectual reflection.
It was couched in terms of "leadership" but meant that they didn't want a wet washcloth in the White House but-dare I say it-longed for a dubbya to take those terrorists by the throat and show them who's who.
And so we watched as the Russians fortified air bases and then brought in masses of offensive hardware and launched indiscriminate bombing raids primarily on the various groupings of "moderate Islamists" who were part of a Syrian civil war while ostensibly bombing IS.
I was dumbfounded that we sat and watched the Russians bomb "our" proxies while we left "their" proxy Assad alone.
We cried foul when he defended Assad rather than attack his supposed target of IS, and then sat and watched him do it.
But then Mr Putin got a little too cocky. Up until that point no one was willing to militarily engage the Russians directly despite all their provocations.
But with Mr Erdogan he came up against an adversary who is cut from a cloth much closer to Mr Putin's than from the Americans or Europeans who he had been bullying.
And Mr Erdogan not only has NATO weaponry-he has shown that he is willing to use it.
Add to that the fact that Russia and Turkey have been competing for supremacy in the Caucasus/Near and Middle East for centuries and you suddenly have a situation where Syria is to Turkey what the Ukraine is to Russia.
I don't wish to bring the Ukraine into this spat except to highlight the differences. Turkey is well-armed. Is a member of NATO. And unlike the Ukraine was a major power for the better part of 600 years before its demise at the end of WWI.
And like Russia, it harbours imperial ambitions.
So when the Russians continually ignored Turkish warnings for actual or borderline incursions into their airspace while bombing Turkish proxies it is not all that surprising that threats turned into action.
If this were a novel it would make for a good plot twist. But it is not.
Turkey has essentially called Russia's bluff.
One can only hope that the result is to clarify spheres of influence/military activity and that everyone adheres to the rules and focuses on containing if not defeating IS rather than opening up new fronts.
As I said.
One can only hope....
Tuesday 24 November 2015
The Clash of Civilisations- The Logical Extension of Weltanshauung
I have been hesitant to write about Paris given the complexity of the situation and the realisation that in such an instance knee-jerk reactions are the most likely and I wanted to avoid going down that road.
But now some time has passed and I have been able to move past my emotional response to try and make sense of it.
First and foremost I think the most important thing that Mr Hollande has done was to paraphrase Samuel P Huntington and in so doing loudly proclaim that this was NOT a "Clash of Civilisations".
In his speech to the French Assembly he focussed on the fact that the acts of the IS, were wanton criminal acts and were anything but civilised. As such they cannot be construed as a Clash of Civilisations.
For some this sound like splitting hairs. But I believe it is a very important statement.
Huntington was convinced that the wars of the future would no longer be primarily driven by political and economical consideration, but rather would be driven by conflicting "world views" between different civilizations
He postulated that "differences among civilizations are not only real; they are basic. Civilizations are differentiated from each other by history, language, culture, tradition and, most important, religion."
He distinguished between civilizations on the basis of differing views on the "...relations between God and man, the individual and the group, the citizen and the state, parents and children, husband and wife, as well as differing views of the relative importance of rights and responsibilities, liberty and authority, equality and hierarchy. These differences are the product of centuries. They will not soon disappear."
This is exactly what IS wants the West to think. By claiming the mantel of Islam they have a potential following of over 1.6billion Muslims. They want nothing more than for the West to put all Muslims in one group and precipitate the clash.
But Islam is not a monolith. And slowly the Islamic "silent majority" is finding its voice. It is of the utmost importance that Muslims who do not wish to be identified with IS speak out loudly and clearly.
There can be no limp attempt to explain radical Islam as a valid response to perceived or even real slights or discrimination. Every attempt to excuse their barbarity as an unfortunate but understandable reaction to Western values is a perversion.
It will invite a competing and equally warped fundamentalist radical response from "Western" extremists.
And that will lead to the dreaded Clash of Civilisations.
But now some time has passed and I have been able to move past my emotional response to try and make sense of it.
First and foremost I think the most important thing that Mr Hollande has done was to paraphrase Samuel P Huntington and in so doing loudly proclaim that this was NOT a "Clash of Civilisations".
In his speech to the French Assembly he focussed on the fact that the acts of the IS, were wanton criminal acts and were anything but civilised. As such they cannot be construed as a Clash of Civilisations.
For some this sound like splitting hairs. But I believe it is a very important statement.
Huntington was convinced that the wars of the future would no longer be primarily driven by political and economical consideration, but rather would be driven by conflicting "world views" between different civilizations
He postulated that "differences among civilizations are not only real; they are basic. Civilizations are differentiated from each other by history, language, culture, tradition and, most important, religion."
He distinguished between civilizations on the basis of differing views on the "...relations between God and man, the individual and the group, the citizen and the state, parents and children, husband and wife, as well as differing views of the relative importance of rights and responsibilities, liberty and authority, equality and hierarchy. These differences are the product of centuries. They will not soon disappear."
This is exactly what IS wants the West to think. By claiming the mantel of Islam they have a potential following of over 1.6billion Muslims. They want nothing more than for the West to put all Muslims in one group and precipitate the clash.
But Islam is not a monolith. And slowly the Islamic "silent majority" is finding its voice. It is of the utmost importance that Muslims who do not wish to be identified with IS speak out loudly and clearly.
There can be no limp attempt to explain radical Islam as a valid response to perceived or even real slights or discrimination. Every attempt to excuse their barbarity as an unfortunate but understandable reaction to Western values is a perversion.
It will invite a competing and equally warped fundamentalist radical response from "Western" extremists.
And that will lead to the dreaded Clash of Civilisations.
Thursday 5 November 2015
Vocation, Greed and It's All a Socialist Plot
I received some interesting feedback on my NHS post from some staunch members of the Conservative Party with whom I periodically come into contact through my work.
Their opening salvo was that being a doctor in the UK has always been a vocation and as such doctors shouldn't be paid more because they are doing what they love to do.
I was quite taken aback by this line of reasoning. Were they suggesting that everyone else in the UK hates their job? Perhaps they thought that (self)loathing one's occupation means one deserves higher pay? That they be highly compensated for their decision to pursue careers where the hours are long and the stress is high but in sectors which they hate and in which they have no "vocational" attachment?
Yes. That is exactly what they were saying. If you don't like the hours and the pay associated with being a doctor then you shouldn't have chosen that profession in the first place. They also suggested that given the high intelligence required to become a doctor they could easily be successful in law or finance and so yes, medicine is a vocational choice for them.
Of course if all the smart kids became lawyers and bankers we would be dependent upon the less intelligent, less competent to fill the ranks of doctors and nurses. Or perhaps they think that outside of the dim only the vocationally driven or the independently wealthy can afford to be employed in the NHS. Who else would be happy to toil long, stressful hours in understaffed, underfunded hospitals for little pay?
Given this line of reasoning I guess one of my conclusions is that this smattering from the Conservative Party must not use the NHS so were uninterested in seriously engaging in a discussion of it.
They did tell me nod, nod, wink, wink that they know Junior Doctors and they don't really work that hard and imagine, they even might snatch the odd nap in a 15 hour day when there is a moment respite from the great unwashed.
Unhappy to show any empathy for a group of people who would want to enjoy their work, do it enthusiastically AND still want to get paid for it they moved on to explain that the problem lies within the system. They explained to me that the reason it takes so long to become a consultant is because the current consultants don't want to have more consultants and therefor intentionally keep a cap on the number of consultants.
As an aside they claimed the same structure obtained in the Police Force where promotion to the senior ranks is allegedly artificially restricted by the Senior Ranks to make sure that they have a cosy life.
I guess the Conservatives don't use the police either. I wonder how they feel about the Fire Service, the Military, the Civil Service, Public Transportation, and that great old Chestnut, the State School Sector.
But then what do you suspect from a class-ridden society built on the back of a Colonial Empire...
Their opening salvo was that being a doctor in the UK has always been a vocation and as such doctors shouldn't be paid more because they are doing what they love to do.
I was quite taken aback by this line of reasoning. Were they suggesting that everyone else in the UK hates their job? Perhaps they thought that (self)loathing one's occupation means one deserves higher pay? That they be highly compensated for their decision to pursue careers where the hours are long and the stress is high but in sectors which they hate and in which they have no "vocational" attachment?
Yes. That is exactly what they were saying. If you don't like the hours and the pay associated with being a doctor then you shouldn't have chosen that profession in the first place. They also suggested that given the high intelligence required to become a doctor they could easily be successful in law or finance and so yes, medicine is a vocational choice for them.
Of course if all the smart kids became lawyers and bankers we would be dependent upon the less intelligent, less competent to fill the ranks of doctors and nurses. Or perhaps they think that outside of the dim only the vocationally driven or the independently wealthy can afford to be employed in the NHS. Who else would be happy to toil long, stressful hours in understaffed, underfunded hospitals for little pay?
Given this line of reasoning I guess one of my conclusions is that this smattering from the Conservative Party must not use the NHS so were uninterested in seriously engaging in a discussion of it.
They did tell me nod, nod, wink, wink that they know Junior Doctors and they don't really work that hard and imagine, they even might snatch the odd nap in a 15 hour day when there is a moment respite from the great unwashed.
Unhappy to show any empathy for a group of people who would want to enjoy their work, do it enthusiastically AND still want to get paid for it they moved on to explain that the problem lies within the system. They explained to me that the reason it takes so long to become a consultant is because the current consultants don't want to have more consultants and therefor intentionally keep a cap on the number of consultants.
As an aside they claimed the same structure obtained in the Police Force where promotion to the senior ranks is allegedly artificially restricted by the Senior Ranks to make sure that they have a cosy life.
I guess the Conservatives don't use the police either. I wonder how they feel about the Fire Service, the Military, the Civil Service, Public Transportation, and that great old Chestnut, the State School Sector.
But then what do you suspect from a class-ridden society built on the back of a Colonial Empire...
Wednesday 4 November 2015
A Quick Journey into the State of the National Health System
For those of you not aware there is an attempt by the current Conservative government to change the terms and conditions of Junior Doctors working for the National Health Service (NHS).
Broadly speaking the Health Secretary, Mr Jeremy Hunt would like to make the NHS a 24/7 enterprise without paying any more to achieve this- or at least that is his stated claim.
Firstly however I should bring to your attention that the definition "Junior Doctor" is a bit misleading. In the NHS once you have passed your final exams you are a qualified Medical Doctor but are defined as a Junior Doctor until you become a Consultant. This process could take 10-15 years with many "Junior Doctors" being in their 30's with families and mortgages.
It is these Junior Doctors who are the engine room of the NHS. For the most recently qualified junior doctors, basic pay is around £23,000 a year. There is a 50% annual top up for those who work one weekend in six but that applies both to those who are on call at home and those who spend both Saturdays and Sundays at work. This top up, known as banding, also involves an obligation to work unsocial hours at other times of the week.
Social hours are currently 7-19h00 Monday through Friday. Some junior doctors are required to work one weekend in four to qualify for the 50% banding with a number even having to do one in two or three. Others receive a 20% banding payment, again, depending on their working hours schedule.
The net result of this is that their current average work week is 48 hours. The current top limit that they work is 91 hours.
Mr Hunt would like to extend the definition of social hours to include 7-22h00 Monday to Friday and to be extended to Saturday as well.
The British Medical Association (BMA) calculated that these changes will result in decreases for Junior Doctor incomes from 15-30%.
Mr Hunt's response to this claim is that no Doctor will earn less than they currently earn as long as they work the maximum hours available.
This seems disingenuous to me. I think he has a broader strategy. Mr Hunt was co-author of a book in 2009 claiming the NHS was no longer relevant and that it should be dismantled. This is indeed his goal.
Create enough strife in the system and then bring in private sector alternatives. But he is overlooking certain figures. Current health expenditure in the UK was 8.46 per cent of GDP in 2013. This compares to 16.43 per cent in the USA, 11.12 per cent in the Netherlands, 10.98 per cent in Germany, 10.95 per cent in France, 10.40 per cent in Denmark, 10.16 per cent in Canada and 8.77 per cent in Italy.
Current expenditure per capita (using the purchasing power parity) for the UK was $3,235 in 2013. This can be compared to $8,713 in the USA, $5,131 in the Netherlands, $4,819 in Germany, $4,553 in Denmark, $4,351 in Canada, $4,124 in France and $3,077 in Italy.
In the USA, despite the current health expenditure figures there were some 45 million Americans without healthcare.
These figures were the driving force behind Obamacare which has brought health insurance to approximately 16 million Americans who were previously uninsured.
Looking at the figures it must be that the UK government's desire to dismantle/privatise the NHS is on ideological grounds because by most accounts the NHS ranks very high when compared internationally.
So the Conservatives point to the fact that the NHS is around £750 million in debt. They wheel out this number to show that it is inefficient, and then wheel out the old chestnut that the private sector is more efficient than the public sector, as so adequately demonstrated by the privatisation of the Rail and Prison sectors.
Of course it could be more efficient- what couldn't? But that should not be used to suggest that the solution is to cut costs to try and balance its budget. That would only accelerate its demise.
The truth is that it is underfunded. That means it is understaffed. That means that it is constantly being jerry rigged as opposed to being properly funded, and managed.
Fund it properly. Staff it properly. But stop asking for it, a health system, to generate profits.
We don't ask the Police. We don't ask the Fire Service to be profitable.
We do ask that they are well run.
I am not convinced that Jeremy Hunt is the right man to oversee that undertaking.
Broadly speaking the Health Secretary, Mr Jeremy Hunt would like to make the NHS a 24/7 enterprise without paying any more to achieve this- or at least that is his stated claim.
Firstly however I should bring to your attention that the definition "Junior Doctor" is a bit misleading. In the NHS once you have passed your final exams you are a qualified Medical Doctor but are defined as a Junior Doctor until you become a Consultant. This process could take 10-15 years with many "Junior Doctors" being in their 30's with families and mortgages.
It is these Junior Doctors who are the engine room of the NHS. For the most recently qualified junior doctors, basic pay is around £23,000 a year. There is a 50% annual top up for those who work one weekend in six but that applies both to those who are on call at home and those who spend both Saturdays and Sundays at work. This top up, known as banding, also involves an obligation to work unsocial hours at other times of the week.
Social hours are currently 7-19h00 Monday through Friday. Some junior doctors are required to work one weekend in four to qualify for the 50% banding with a number even having to do one in two or three. Others receive a 20% banding payment, again, depending on their working hours schedule.
The net result of this is that their current average work week is 48 hours. The current top limit that they work is 91 hours.
Mr Hunt would like to extend the definition of social hours to include 7-22h00 Monday to Friday and to be extended to Saturday as well.
The British Medical Association (BMA) calculated that these changes will result in decreases for Junior Doctor incomes from 15-30%.
Mr Hunt's response to this claim is that no Doctor will earn less than they currently earn as long as they work the maximum hours available.
This seems disingenuous to me. I think he has a broader strategy. Mr Hunt was co-author of a book in 2009 claiming the NHS was no longer relevant and that it should be dismantled. This is indeed his goal.
Create enough strife in the system and then bring in private sector alternatives. But he is overlooking certain figures. Current health expenditure in the UK was 8.46 per cent of GDP in 2013. This compares to 16.43 per cent in the USA, 11.12 per cent in the Netherlands, 10.98 per cent in Germany, 10.95 per cent in France, 10.40 per cent in Denmark, 10.16 per cent in Canada and 8.77 per cent in Italy.
Current expenditure per capita (using the purchasing power parity) for the UK was $3,235 in 2013. This can be compared to $8,713 in the USA, $5,131 in the Netherlands, $4,819 in Germany, $4,553 in Denmark, $4,351 in Canada, $4,124 in France and $3,077 in Italy.
In the USA, despite the current health expenditure figures there were some 45 million Americans without healthcare.
These figures were the driving force behind Obamacare which has brought health insurance to approximately 16 million Americans who were previously uninsured.
Looking at the figures it must be that the UK government's desire to dismantle/privatise the NHS is on ideological grounds because by most accounts the NHS ranks very high when compared internationally.
So the Conservatives point to the fact that the NHS is around £750 million in debt. They wheel out this number to show that it is inefficient, and then wheel out the old chestnut that the private sector is more efficient than the public sector, as so adequately demonstrated by the privatisation of the Rail and Prison sectors.
Of course it could be more efficient- what couldn't? But that should not be used to suggest that the solution is to cut costs to try and balance its budget. That would only accelerate its demise.
The truth is that it is underfunded. That means it is understaffed. That means that it is constantly being jerry rigged as opposed to being properly funded, and managed.
Fund it properly. Staff it properly. But stop asking for it, a health system, to generate profits.
We don't ask the Police. We don't ask the Fire Service to be profitable.
We do ask that they are well run.
I am not convinced that Jeremy Hunt is the right man to oversee that undertaking.
Monday 12 October 2015
Putin's Strategy
I had dinner the other night with Americans visiting London. I will preface this note with the information that they are Republicans, primarily driven by their interpretation of President Obama's handling of Israel.
The conversation started with a discussion of the quality of the presidential candidates. Their view is that after 8 years of "no foreign policy" they were very concerned that there was no viable candidate to lead us looking forward.
Now I don't think that Obama has not had a foreign policy but I do think that he is finding it difficult to present his vision to the American public in a fashion that wins him the respect of those who would rather have a more robust, visible military presence.
Instead I think his foreign policy is almost a form of intelligence agency "operation" which is actually quite effective and yet it doesn't require "boots on the ground" nor does it result (generally) in American casualties.
Mr Putin on the other hand is very happy to march onto the big stage and make aggressive, visible moves forcing President Obama onto what would appear to be the back foot.
I have written a number of times recently about my concern that the Putin's of the world are very willing to risk conflict predicated on the belief that most Western nations are not interested in yet another (Middle Eastern) conflict.
Putin plays this very well. He has no Congress to heed. Russian rules of engagement don't require its Armed Forces to actively minimise civilian casualties. And his brazen actions would suggest that he doesn't care about world opinion.
Witness his attacks in Syria on government opposition forces as opposed to IS targets which to date has been met with much hand wringing by the West, but nothing more. He is now suggesting that he will start an air campaign against IS positions in Iraq.
I don't know but my concerns about Russian military creep seem to be being realised as I write.
But this time the Russians would be operating in an American sphere of influence. The risk of "friendly fire" incidents would go up geometrically. And Mr Putin would be forcing the Iraqi government to deal with Russia at the risk of upsetting the Americans.
Now everyone tells me that Putin's plan is to force the Americans to engage in high-level negotiations with the Russians to work out a Syrian/IS plan that gives the Russians an equal say.
My friends appear to be suggesting that they don't trust the Russians-indeed they have no love lost for them. They don't see them as valid negotiating partners. And frankly at this point they think the only response is for the USA to fight fire with fire. And yet I can guarantee that they are not warmongers.
I think they feel trapped and somewhere humiliated by Russia.
This is not good.
I don't know what is going on behind the scenes and can only hope that we are on top of our game but it looks to me that a day of reckoning is bearing down on us, and that is frankly frightening.
The conversation started with a discussion of the quality of the presidential candidates. Their view is that after 8 years of "no foreign policy" they were very concerned that there was no viable candidate to lead us looking forward.
Now I don't think that Obama has not had a foreign policy but I do think that he is finding it difficult to present his vision to the American public in a fashion that wins him the respect of those who would rather have a more robust, visible military presence.
Instead I think his foreign policy is almost a form of intelligence agency "operation" which is actually quite effective and yet it doesn't require "boots on the ground" nor does it result (generally) in American casualties.
Mr Putin on the other hand is very happy to march onto the big stage and make aggressive, visible moves forcing President Obama onto what would appear to be the back foot.
I have written a number of times recently about my concern that the Putin's of the world are very willing to risk conflict predicated on the belief that most Western nations are not interested in yet another (Middle Eastern) conflict.
Putin plays this very well. He has no Congress to heed. Russian rules of engagement don't require its Armed Forces to actively minimise civilian casualties. And his brazen actions would suggest that he doesn't care about world opinion.
Witness his attacks in Syria on government opposition forces as opposed to IS targets which to date has been met with much hand wringing by the West, but nothing more. He is now suggesting that he will start an air campaign against IS positions in Iraq.
I don't know but my concerns about Russian military creep seem to be being realised as I write.
But this time the Russians would be operating in an American sphere of influence. The risk of "friendly fire" incidents would go up geometrically. And Mr Putin would be forcing the Iraqi government to deal with Russia at the risk of upsetting the Americans.
Now everyone tells me that Putin's plan is to force the Americans to engage in high-level negotiations with the Russians to work out a Syrian/IS plan that gives the Russians an equal say.
My friends appear to be suggesting that they don't trust the Russians-indeed they have no love lost for them. They don't see them as valid negotiating partners. And frankly at this point they think the only response is for the USA to fight fire with fire. And yet I can guarantee that they are not warmongers.
I think they feel trapped and somewhere humiliated by Russia.
This is not good.
I don't know what is going on behind the scenes and can only hope that we are on top of our game but it looks to me that a day of reckoning is bearing down on us, and that is frankly frightening.
Friday 9 October 2015
Mr Trump and Syria
I have been following the circus that is the primaries to the USA presidential election.
I am not impressed.
But one of the things that most worries me is one of the apparent front runners in the mess that is the Republican Party, Donald Trump and his comments about Syria.
In an article about a recent Washington Post interview they mentioned that the strife in Syria has become a staple of Trump's stump speech. It was highlighted as an area where he has begun to differentiate himself by positioning himself as a much more cautious voice.
I know generally my fear of him is that he would threaten to nuke anyone who annoys him.
But in this instance my fear is a different one. His response to those who are advocating direct military intervention by the USA is: “They basically want to start World War 3 over Syria....If we’re going to have World War 3, it’s not going to be over Syria. . . . I won’t even call them hawks. I call them the fools.”
That's exactly what Putin wants him to say.
Now I don't want to rush into World War 3, indeed I don't want to rush into any war. But I fear that until someone stands up to Mr Putin he will continue to march through whatever country he deems imperative to his geopolitical view of the world. So Mr Trump crowing that Syria isn't important misses a number of points.
It makes sense on the surface. But it shows no depth of understanding as regards geopolitics and history. Where do we draw the line? Those Syrians are the modern day version of Pomeranian Grenadiers.
Bismarck was quick to say that the Balkans weren't worth the bones of a Pomeranian Grenadier.
It was the cause of the First World War, which I would maintain was the cause of the Second World War. In between the mess that is the Middle East was created.
Maybe Mr Trump is correct not to want to dive into Syria. But maybe he should be forced to say what would deserve American intervention at this point, and why.
But then again he is looking for sound bites.
Thursday 8 October 2015
The Power of Thanksgiving and Speaking English
My grandfather came to the United States as a 13 year old in June, 1914. He was definitely a stranger in a strange land. And yet when I reflect on my memories of him, heavy as his accent was, there was no question that he was American, and certainly that all his children were Americans.
Speaking English.
I also remember that his favourite holiday was Thanksgiving.
With the exception of the turkey, which would cause trouble if you were a vegetarian, the entire menu could be adapted to whatever your religious/ethnic/cultural bias might require, and yet there you were at the table celebrating the pilgrim fathers.
Despite all the baggage surrounding the Indians and the Puritans and that the Pilgrims survival was the beginning of the end for the Native Americans Thanksgiving still sets the stage for the development of the United States and is an entry point for almost every immigrant.
For despite the deeply religious fervour of the Pilgrim Fathers, the celebration itself became a non-denominational if not outright secular event, which allowed my grandfather to be enamoured with it although he was an orthodox Jew.
I would maintain that one of the most important keys to his integration was language.
Not far behind was the need to adapt to a secular society, outside, if not inside the house.
It is the only way forward and the sooner the nations of Europe, and the immigrants, face up to these requirements, the better.
Wednesday 7 October 2015
Syria, Again.
So the Russians have bombed quite a bit in Syria, almost none of which has been Islamic State positions but rather have focused on Free Syrian Army rebels and other groups.
Russia is trying to force a peace convention through its military intervention, and of course would like to ensure that when the various parties come to the table that events on the ground have evolved to putting Assad in a stronger negotiating position.
Following on from my previous note on Putin I draw your attention to the 2 incursions into Turkish airspace by Russian aircraft.
Turkey is a member of NATO and an "attack" on one member of NATO is an attack on NATO as a whole. The European member states of NATO already have a lot on their plate dealing with the economic and political fallout of the Great Recession. This has been amplified by the wave of Immigrants emanating from the instability in the Middle East and other flash points in the world.
The Russians would like nothing better than to push NATO to the point that NATO should respond, militarily, but won't, putting the organisation under even more stress.
It could be said that these incursions should bring a response beyond terse words and the scrambling of Turkish interceptors. Some might say that response should be robust certainly firing upon if not shooting down the Russian aircraft in question.
That would of course bring a Russian response, the nature of which under Mr Putin is quite difficult to predict. But that uncertainty is exactly what he is counting on.
I believe he will continue to push until someone pushes back. The way things are going it is becoming a question of not "if" but rather when it will happen,
Russia is trying to force a peace convention through its military intervention, and of course would like to ensure that when the various parties come to the table that events on the ground have evolved to putting Assad in a stronger negotiating position.
Following on from my previous note on Putin I draw your attention to the 2 incursions into Turkish airspace by Russian aircraft.
Turkey is a member of NATO and an "attack" on one member of NATO is an attack on NATO as a whole. The European member states of NATO already have a lot on their plate dealing with the economic and political fallout of the Great Recession. This has been amplified by the wave of Immigrants emanating from the instability in the Middle East and other flash points in the world.
The Russians would like nothing better than to push NATO to the point that NATO should respond, militarily, but won't, putting the organisation under even more stress.
It could be said that these incursions should bring a response beyond terse words and the scrambling of Turkish interceptors. Some might say that response should be robust certainly firing upon if not shooting down the Russian aircraft in question.
That would of course bring a Russian response, the nature of which under Mr Putin is quite difficult to predict. But that uncertainty is exactly what he is counting on.
I believe he will continue to push until someone pushes back. The way things are going it is becoming a question of not "if" but rather when it will happen,
Thursday 1 October 2015
Peace in Our Time....
I have been worried that Mr Putin's manoeuvrings kept smelling like Hitler's antics regarding the Rhineland, Austria, the Sudetenland and Czechoslovakia only for Poland to be the straw that broke the camel's back.
For like Hitler, Putin is playing on the fact that the West has demonstrated that it doesn't really have the stomach for war and so Putin has continuously pushed allowing each fait accompli to create a new reality.
And so we sat and watched as he stockpiled tanks, airplanes and other military hardware in Assad's piece of Syria, just as the West saw Hitler do the same thing time and time again.
Now he has again demonstrated that he has no intention of respecting agreements or understandings and that he is willing to do whatever he thinks is necessary to further his goals.
The ball is in our court.
But Putin is playing on many courts.
He is determined to maintain a deep-water port in the Mediterranean and the path to that end is through Assad.
He is annoyed that he was cut out of the USA/Iran deal, and this gives him some weight with Iran in that they are both interested in supporting Assad, though for different reasons.
And he was out to demonstrate that his Russia can match if not outdo the USA on the world stage as he certainly showed no compunction in blatantly bombing anti-Assad militias under the cover that he was acting to join the anti IS-coalition.
Lastly, over the past few weeks Putin been the good guy in reining in the Ukrainian separatists on the battlefield and in negotiations.
I would venture to say that his actions in Syria were designed to rope the US into Russian led diplomacy in the Middle East, and get the US to engage in the Ukraine.
The US didn't play ball.
They have not yet really responded to Putin's actions in Syria, and they did not engage in the Ukraine regarding a discussion on sanctions or a reduction in military and political aid to Kiev.
For me the question is where are we in the "run-up" to WWII with regards to Putin? Hitler had actually hoped that the West would not come to Poland's defence in September 1939. It was a colossal bet, that went badly wrong in the end.
At the loss of some 40 million lives.
But that's what Putin is counting on. He just might be waking a dragon.
For like Hitler, Putin is playing on the fact that the West has demonstrated that it doesn't really have the stomach for war and so Putin has continuously pushed allowing each fait accompli to create a new reality.
And so we sat and watched as he stockpiled tanks, airplanes and other military hardware in Assad's piece of Syria, just as the West saw Hitler do the same thing time and time again.
Now he has again demonstrated that he has no intention of respecting agreements or understandings and that he is willing to do whatever he thinks is necessary to further his goals.
The ball is in our court.
But Putin is playing on many courts.
He is determined to maintain a deep-water port in the Mediterranean and the path to that end is through Assad.
He is annoyed that he was cut out of the USA/Iran deal, and this gives him some weight with Iran in that they are both interested in supporting Assad, though for different reasons.
And he was out to demonstrate that his Russia can match if not outdo the USA on the world stage as he certainly showed no compunction in blatantly bombing anti-Assad militias under the cover that he was acting to join the anti IS-coalition.
Lastly, over the past few weeks Putin been the good guy in reining in the Ukrainian separatists on the battlefield and in negotiations.
I would venture to say that his actions in Syria were designed to rope the US into Russian led diplomacy in the Middle East, and get the US to engage in the Ukraine.
The US didn't play ball.
They have not yet really responded to Putin's actions in Syria, and they did not engage in the Ukraine regarding a discussion on sanctions or a reduction in military and political aid to Kiev.
For me the question is where are we in the "run-up" to WWII with regards to Putin? Hitler had actually hoped that the West would not come to Poland's defence in September 1939. It was a colossal bet, that went badly wrong in the end.
At the loss of some 40 million lives.
But that's what Putin is counting on. He just might be waking a dragon.
Tuesday 29 September 2015
What Was VW Thinking?
In my years on Wall Street it was always said
that Fear and Greed were the driving forces which led to the massive
excesses which occur with disturbing regularity.
That they would drive the management of VW to the same excesses was something that was not supposed to happen. Manufacturing industries still make things and the quality, and the nature of the products were there for all to see.
There were no structured products; no sub-prime mortgages; no power caps; no inverse floaters; in short no financial engineering to create opaque financings where the bank was always the house and the clients always the mugs.
And then VW decided that engineering is engineering and if a financial construct could be used to circumvent regulations then an engineering construct could do the same.
Create a bit of kit that initiates emission controls when required, and turns them off under normal driving conditions. (Criminally) Brilliant!
This is an intelligent bit of software. It bypassed regulatory emissions tests for years. No one believed the figures as everyone knew that the test results were done under circumstances far and away from actual driving conditions.
But I don't think anyone in their wildest imagination ever considered that the test results were achieved by a piece of software that would turn on the "cleaning" equipment thus complying with the emission standards, and then automatically turn them off allowing the engines to run without any emission controls at all.
It's not fudging. It's not exaggerating. It is pure and simple actively and consciously contravening the regulations.
It is criminal.
And the fallout could have global repercussions.
I can only hope that this actually is the first nail in the coffin of the internal combustion engine.
Electric cars will remove a significant amount of pollution. Of course we still need to deal with how that electricity is generated, but that is a discussion for another blog.
Monday 28 September 2015
Don't Leave it to the Right Wing
Without a shadow of a doubt the rich developed world has had a crisis in the making since the original creation of colonial empires.
No matter how one tries to shade it the colonial powers practiced political, racial and economic exploitation which left deep scars regardless of how recent-or not- the granting of "independence" was.
Now the West is reaping the rewards of its geopolitical arrogance. We drew lines across geographies which had no relevance to the peoples living there; not to their loyalties, their religion, their language, their culture or even their ethnicity . Indeed, there were times that boundaries were drawn precisely intended to keep any one group from gaining hegemony over an area ensuring that the inherent tensions were an accident waiting to happen.
And the result? War, Famine and Poverty plague the former colonies from North Africa into the sub-Sahara through the Middle East to Afghanistan creating a migration of peoples not seen since Attila the Hun came charging out of Central Asia driving such a mass of refugees that the West Roman Empire eventually collapsed leading to the East and West Goths controlling Central Europe.
The point here is to highlight that Europe is facing a massive challenge to formulate a cohesive response to a massive influx of refugees- be they driven by political, economic or military fears. And it is not looking very coherent.
Twenty years ago I saw a film about the ramifications of having rich and poor continents essentially bumping up against one another. The plot was straight forward. The poor and miserable of Africa were marching across the continent to Gibraltar. There, despite the currents, through their sheer mass, exercising non-violence a-la- The Battle for Algiers they bridged their way to the Spanish coast. And their mantra was that they were poor, because we are rich...
Today that film is reality. I would like to emphasize that the causes of the migration are myriad, but somewhere in the mix it is clear that economics are involved. Economics drive politics. Economics drive wars. Economics drives everything.
Generically Europe is a wealthy area.
It is not to say that Europe shouldn't be taking refugees. It should. But it has to look at who is coming. It has to look at how the intake of refugees effects the social structure of the country, the county, the city and the village to which they are coming.
Currently the pro-narrative has been driven by Germany with its twisted history of the Second World War and concurrent desire to demonstrate that its fascist past was an aberration.
The contra-narrative has been left to the far right such as Alternative fuer Deutschland, The National Party Deutschland, The National Front, The British National Party, The Party for Freedom, Jobbik
Golden Dawn, Finns, The Danish People's Party, Austrian Freedom and Liga Nord.
This is extremely dangerous.
They are populist parties not only preying on the fears of the lower strata of society, but also appealing to the Middle Classes who feel their position in society is perilous and are looking for a party that "protects" their interest.
The Refugees are "ad Portas. We have to have a response which is both humanitarian and, frankly, takes into account the fact that it will be expensive to integrate them and part of that cost will be to ensure that those to whom their very presence is a threat-be it real or perceived-are not alienated.
For that door leads backwards to a past we would like to leave behind us.
No matter how one tries to shade it the colonial powers practiced political, racial and economic exploitation which left deep scars regardless of how recent-or not- the granting of "independence" was.
Now the West is reaping the rewards of its geopolitical arrogance. We drew lines across geographies which had no relevance to the peoples living there; not to their loyalties, their religion, their language, their culture or even their ethnicity . Indeed, there were times that boundaries were drawn precisely intended to keep any one group from gaining hegemony over an area ensuring that the inherent tensions were an accident waiting to happen.
And the result? War, Famine and Poverty plague the former colonies from North Africa into the sub-Sahara through the Middle East to Afghanistan creating a migration of peoples not seen since Attila the Hun came charging out of Central Asia driving such a mass of refugees that the West Roman Empire eventually collapsed leading to the East and West Goths controlling Central Europe.
The point here is to highlight that Europe is facing a massive challenge to formulate a cohesive response to a massive influx of refugees- be they driven by political, economic or military fears. And it is not looking very coherent.
Twenty years ago I saw a film about the ramifications of having rich and poor continents essentially bumping up against one another. The plot was straight forward. The poor and miserable of Africa were marching across the continent to Gibraltar. There, despite the currents, through their sheer mass, exercising non-violence a-la- The Battle for Algiers they bridged their way to the Spanish coast. And their mantra was that they were poor, because we are rich...
Today that film is reality. I would like to emphasize that the causes of the migration are myriad, but somewhere in the mix it is clear that economics are involved. Economics drive politics. Economics drive wars. Economics drives everything.
Generically Europe is a wealthy area.
It is not to say that Europe shouldn't be taking refugees. It should. But it has to look at who is coming. It has to look at how the intake of refugees effects the social structure of the country, the county, the city and the village to which they are coming.
Currently the pro-narrative has been driven by Germany with its twisted history of the Second World War and concurrent desire to demonstrate that its fascist past was an aberration.
The contra-narrative has been left to the far right such as Alternative fuer Deutschland, The National Party Deutschland, The National Front, The British National Party, The Party for Freedom, Jobbik
Golden Dawn, Finns, The Danish People's Party, Austrian Freedom and Liga Nord.
This is extremely dangerous.
They are populist parties not only preying on the fears of the lower strata of society, but also appealing to the Middle Classes who feel their position in society is perilous and are looking for a party that "protects" their interest.
The Refugees are "ad Portas. We have to have a response which is both humanitarian and, frankly, takes into account the fact that it will be expensive to integrate them and part of that cost will be to ensure that those to whom their very presence is a threat-be it real or perceived-are not alienated.
For that door leads backwards to a past we would like to leave behind us.
Tuesday 16 June 2015
What is the Greater Good
As a firm believer in the idea of the European Union (EU) despite the many problems associated with it I am especially at a loss regarding the negotiations with the Greeks.
First, as a bit of background, I support the idea of a Federal Europe which goes far beyond the current construct. A monetary union without a fiscal union, which by definition presumes a political union was always going to be a problem. But sometimes the perfect is the enemy of the good.
Believers in Europe amongst the political elite felt that a trade and monetary union, even without a fiscal union was better than no union at all.
And until the Great Recession it was. Prosperity was the coating which glossed over many of the problems inherent in the structure.
Even after the crisis and despite the harsh austerity budgets forced upon the Irish, the Portuguese, the Spanish, the Italians, the Balts, the Slovaks and even to a degree the French, the monetary union held together.
Greece on the other hand, despite a loan of Euro 110 billion and a write-off of 50% of the outstanding debts owed to private investors has resisted the austerity measures forced upon it as part of the new loans it requires to stave of insolvency. It has elected a government which happily accepted the poisoned chalice of a dual mandate renegotiating the terms of the loan and keeping Greece in the Euro.
That's what populism gets you.
So I ask myself what is it about Greece that makes them unwilling to accept the austerity terms that the other nations begrudgingly accepted.
Greece has a difficult history. It was part of the Ottoman Empire for over 400 years gaining independence in the 1830's. Since then it has gone from a republic to a monarchy to a republic to German occupation to a civil war to a republic to a military dictatorship to a republic.
Greece joined the European Union in 1980 and joined the Euro in 2002. As with many countries involved in the Euro there was a bit of statistical magic to get the Greeks to adhere to the Maastricht Treaty requirements.
Many observers are quick to point out that the Germans manipulated their statistics to reach the 3% of GDP debt level so why should one query Greece's accounting tricks.
That might be where the problem began.
Germany was in the midst of trying to incorporate the former East Germany which unsurprisingly was a very expensive undertaking for which the Germans are still paying through the solidarity surcharge.
But Germany has an economy.
Even before the Great Recession Greece was behind the rest of Europe. In 2008 only one third of households had internet- less than anyone else in Europe including the Baltics and some south-east European nations. Youth unemployment and government debt were among the continent's highest despite major funding through the EU's infrastructure development program.
Since then unemployment has tripled to 26% with over three quarters of the jobless being out of work for 12 months or more. This has happened parallel to a serious decrease in the birthrate coupled with mass migration of youth seeking opportunity (youth unemployment is over 60%). This has left Greece with an ageing population dependent upon state pensions. Over one third of the population is on the cusp of the poverty line, more than any other euro-zone member.
And yet everything you hear from the Greeks is that it's someone else's problem.
Today,Greek premier Alexis Tsipras has accused the EU of intentionally trying to subvert the Greek democratic system, having pillaged the country for the last 5 years and now trying to institute regime change.
I have been against a Grexit. I still would like to avoid it. But as the adage goes, "as long as my neighbour wants to fight I will have no peace".
Mr Tsipras seems to think this is a game and that at the end of it everything will be fine.
He is totally wrong. And his arrogance could certainly bring the Great Depression to Greece. With that comes financial and political chaos.
This is about to get very ugly.
First, as a bit of background, I support the idea of a Federal Europe which goes far beyond the current construct. A monetary union without a fiscal union, which by definition presumes a political union was always going to be a problem. But sometimes the perfect is the enemy of the good.
Believers in Europe amongst the political elite felt that a trade and monetary union, even without a fiscal union was better than no union at all.
And until the Great Recession it was. Prosperity was the coating which glossed over many of the problems inherent in the structure.
Even after the crisis and despite the harsh austerity budgets forced upon the Irish, the Portuguese, the Spanish, the Italians, the Balts, the Slovaks and even to a degree the French, the monetary union held together.
Greece on the other hand, despite a loan of Euro 110 billion and a write-off of 50% of the outstanding debts owed to private investors has resisted the austerity measures forced upon it as part of the new loans it requires to stave of insolvency. It has elected a government which happily accepted the poisoned chalice of a dual mandate renegotiating the terms of the loan and keeping Greece in the Euro.
That's what populism gets you.
So I ask myself what is it about Greece that makes them unwilling to accept the austerity terms that the other nations begrudgingly accepted.
Greece has a difficult history. It was part of the Ottoman Empire for over 400 years gaining independence in the 1830's. Since then it has gone from a republic to a monarchy to a republic to German occupation to a civil war to a republic to a military dictatorship to a republic.
Greece joined the European Union in 1980 and joined the Euro in 2002. As with many countries involved in the Euro there was a bit of statistical magic to get the Greeks to adhere to the Maastricht Treaty requirements.
Many observers are quick to point out that the Germans manipulated their statistics to reach the 3% of GDP debt level so why should one query Greece's accounting tricks.
That might be where the problem began.
Germany was in the midst of trying to incorporate the former East Germany which unsurprisingly was a very expensive undertaking for which the Germans are still paying through the solidarity surcharge.
But Germany has an economy.
Even before the Great Recession Greece was behind the rest of Europe. In 2008 only one third of households had internet- less than anyone else in Europe including the Baltics and some south-east European nations. Youth unemployment and government debt were among the continent's highest despite major funding through the EU's infrastructure development program.
Since then unemployment has tripled to 26% with over three quarters of the jobless being out of work for 12 months or more. This has happened parallel to a serious decrease in the birthrate coupled with mass migration of youth seeking opportunity (youth unemployment is over 60%). This has left Greece with an ageing population dependent upon state pensions. Over one third of the population is on the cusp of the poverty line, more than any other euro-zone member.
And yet everything you hear from the Greeks is that it's someone else's problem.
Today,Greek premier Alexis Tsipras has accused the EU of intentionally trying to subvert the Greek democratic system, having pillaged the country for the last 5 years and now trying to institute regime change.
I have been against a Grexit. I still would like to avoid it. But as the adage goes, "as long as my neighbour wants to fight I will have no peace".
Mr Tsipras seems to think this is a game and that at the end of it everything will be fine.
He is totally wrong. And his arrogance could certainly bring the Great Depression to Greece. With that comes financial and political chaos.
This is about to get very ugly.
Thursday 11 June 2015
Suddenly the Billionaires Care About the 99%
I have just read two articles, one by Mr Stephen Schwarzman, CEO and co-Founder of Blackstone in the Wall Street Journal (WSJ) and the other on Mr Jamie Dimon, CEO of JP Morgan in CNN Money. They are both members of the billionaires club thanks in a large part to the excesses associated with Quantitative Easing (QE)which created ferocious bull markets predicated on essentially free money.
Now they both have suddenly got religion and are out explaining how the the Dodd-Frank Financial Regulations are the harbingers of the next financial crisis and how this will hurt the mom and pops of the world.
The culprit: a liquidity crisis which Mr Schwarzman attributes to the prohibition on proprietary trading by the banks. He explained that this prohibition, when combined with enhanced capital and liquidity requirements has led banks to avoid some market-making functions in some key equity and debt markets.
Really?
In the same article Mr Schwarzman tells us that Deutsche Bank noted that dealer inventories of corporate bonds are down 90% since 2001. And this despite the outstanding supply of corporate bonds almost doubling. Funny that. I could have sworn that the Great Recession started in 2007.
And the doubling of outstanding corporate bonds has been driven by QE which was inaugurated in 2008....
Mr Dimon on the other hand, whose bank is one of the largest issuers of corporate bonds was quoted, along with a 'slew' of other smart people on Wall Street that there is a liquidity crisis looming and "...in a crisis there might not be enough bonds to go around".
So which is it. Is there going to be a liquidity crisis because there won't be enough bonds around? Or is the prohibition on proprietary trading, which is run solely for the banks profit, stopping those same banks from fulfilling their role as financial intermediaries and helping facilitate a fair and orderly market- and thus contributing to a liquidity crisis?
I'm not sure that either of them know. But the cake goes to Mr Schwarzman. His concern for small business owners, farmers and local real estate markets is predicated on the fact that the traditional lender to this segment of the economy are the Community Banks. Their number has decreased 41% since 2008, and he blames this on Dodd-Frank.
Selective memory perhaps?
The major cause of the demise of the Community Banking sector was that they all held the preferred stock of the housing related government-sponsored enterprises (GSE's)-Fannie Mae and Freddie Mac which went into conservatorship before Dodd-Frank.
Banks were able to hold considerable amounts GSE preferred shares because, even though banks are normally restricted from investing substantially in equity securities, an exemption to the standard limits on permissible equity securities was established for the GSE investments.
Some will cry that Mr Frank and Congress were behind this, trying to expand home ownership in the United States.
Other more sanguine observers will remember that the reason the real estate related GSE's went bankrupt was that the major banks and unregulated private lenders stuffed them with sub-prime loans rife with major documentation problems.
The truth is that all of these highly respected billionaires have been against financial regulations from the start. Wall Street smells blood and is starting to flex their muscles in the political corridors of power to try and roll back history.
They have learned though. This time they are cloaking their desires in the guise of wanting to protect the little guys- and reopen the floodgates to unregulated financial markets.
Now they both have suddenly got religion and are out explaining how the the Dodd-Frank Financial Regulations are the harbingers of the next financial crisis and how this will hurt the mom and pops of the world.
The culprit: a liquidity crisis which Mr Schwarzman attributes to the prohibition on proprietary trading by the banks. He explained that this prohibition, when combined with enhanced capital and liquidity requirements has led banks to avoid some market-making functions in some key equity and debt markets.
Really?
In the same article Mr Schwarzman tells us that Deutsche Bank noted that dealer inventories of corporate bonds are down 90% since 2001. And this despite the outstanding supply of corporate bonds almost doubling. Funny that. I could have sworn that the Great Recession started in 2007.
And the doubling of outstanding corporate bonds has been driven by QE which was inaugurated in 2008....
Mr Dimon on the other hand, whose bank is one of the largest issuers of corporate bonds was quoted, along with a 'slew' of other smart people on Wall Street that there is a liquidity crisis looming and "...in a crisis there might not be enough bonds to go around".
So which is it. Is there going to be a liquidity crisis because there won't be enough bonds around? Or is the prohibition on proprietary trading, which is run solely for the banks profit, stopping those same banks from fulfilling their role as financial intermediaries and helping facilitate a fair and orderly market- and thus contributing to a liquidity crisis?
I'm not sure that either of them know. But the cake goes to Mr Schwarzman. His concern for small business owners, farmers and local real estate markets is predicated on the fact that the traditional lender to this segment of the economy are the Community Banks. Their number has decreased 41% since 2008, and he blames this on Dodd-Frank.
Selective memory perhaps?
The major cause of the demise of the Community Banking sector was that they all held the preferred stock of the housing related government-sponsored enterprises (GSE's)-Fannie Mae and Freddie Mac which went into conservatorship before Dodd-Frank.
Banks were able to hold considerable amounts GSE preferred shares because, even though banks are normally restricted from investing substantially in equity securities, an exemption to the standard limits on permissible equity securities was established for the GSE investments.
Some will cry that Mr Frank and Congress were behind this, trying to expand home ownership in the United States.
Other more sanguine observers will remember that the reason the real estate related GSE's went bankrupt was that the major banks and unregulated private lenders stuffed them with sub-prime loans rife with major documentation problems.
The truth is that all of these highly respected billionaires have been against financial regulations from the start. Wall Street smells blood and is starting to flex their muscles in the political corridors of power to try and roll back history.
They have learned though. This time they are cloaking their desires in the guise of wanting to protect the little guys- and reopen the floodgates to unregulated financial markets.
Wednesday 10 June 2015
The Music Stops at Deutsche Bank
The recent resignations by the Co-CEO's of Deutsche Bank, Juergen Fitschen and Anshu Jain have come as a bit of a surprise to many.
To me it was just a matter of time before the music of the investment banking merry-go-round that was Deutsche Bank would stop and there would be far too few chairs for everyone to find a seat.
Mr Jain, an excellent salesman who honed his skills in the 90's forging excellent relationships with the hedge fund community was one of the first people Mr Mitchell took with him when he left Merrill to join Deutsche in 1995.
The Deutsche Bank they joined was essentially a large commercial bank with a poor investment banking franchise outside of Germany where it was big player in a small pond. The Merrill Lynch Mr Mitchell joined in the mid 80's had been a similar animal. A player with the slow accounts, and pretty much not involved with fast money. It was known as a wire house which essentially traded in between the institutional and the retail market.
Upon joining Deutsche Bank they set about turning it from a "broker" into one of the premier principal houses on the street. At Merrill everyone wanted to be Goldman Sachs, but the retail broker mentality of the senior management never understood risk and so were always uncomfortable with it.
The cultural gap between a Deutsche Bank, or a Merrill and a Goldman was that the former were big and ponderous and the latter was smart. very smart, and utterly ruthless. In addition to this despite the fact that it had gone public, which in and of itself was a reflection of their smarts and their ruthlessness, the partnership culture hadn't been defaced.
Deutsche didn't necessarily yearn to be a Goldman Sachs, but they were certainly not happy to be a big fish in the (relatively) little pond of Germany. Under Mitchell and Jain the way forward would be to work with the fast money, essentially becoming one of them, willing to take serious principal risk and looking for the slow money, institutional or retail to help take them out.
And although Mitchell and Jain were certainly smart enough and definitely ruthless enough to work at Goldman, Deutsche offered the best of both worlds. They could replicate Goldman's culture, but unlike Goldman, use OPM- other people's money.
And those other people were the shareholders, large and small, representing one of the bastions of the German financial, social and political establishment.
Moving over to Mr Fitschen for a moment, he was part of that German establishment. That is not necessarily a compliment. Without going into a longwinded history of Germany there are still remnants of what Prof. George Stein described as "feudal modernity" in Germany, especially in such institutions such as Deutsche Bank.
Meritocracy is not a hallmark of such institutions. Many would say that the only reason Mr Fitschen was elevated to Co-CEO was that he was a Deutsche Bank insider. Mr Ackermann who picked up where Mr Mitchell left off* with the added benefit that he could speak German could fit into the Deutsche Bank hierarchy. Anshu Jain could not.
The Co-Head solution is the worst solution an institution can impose. The suggestion that the world could be split into a domestic and non-domestic market was a throwback to pre-Mitchell days.
And so, regardless, the co-head structure meant that as long as Mr Jain could deliver profits, his star would stay aloft.
But his profits stagnated, and his organisation began to find itself embroiled in regulatory/legal disputes which took much management time and in the end would require far-reaching changes in the way the Bank operated.
Enter Mr John Cryan.
A Brit, who speaks German. A finance guy which is bankspeak for someone who not only looks at the revenue side of the balance sheet, but also the cost side.
Under Mitchell Deutsche Banks cost ratio was continually bumping up against 98-99%. My motto was that one wanted to work at Deutsche Bank, but not own the stock. This continued under Ackermann and as recently as the end of 2014 it was still over 75%.
Most investment banks target a cost income ratio below 65% and in really good years are in the 55% range. Those with high cost income ratios tend to focus on revenues, or more specifically revenue growth. Those with lower ratios look very closely at costs.
I should expect that Mr Cryan will swing a sharp blade cutting into much of the fat at Deutsche Bank. He will certainly cut into muscle. The question is will he cut into the bone.
Cost ratios are important. As are capital ratios. Human capital is probably the most expensive, and so it is where Mr Cryan will focus, followed by capital usage.
The question is whether the accountant Mr Cryan will be able to square the circle of cost cutting while maintaining the revenues.
I understand he left UBS because he found the stress of the turnaround overwhelming.
Herzlich willkommen nach Deutschland.....
*Mr Mitchell died in a private plane crash December 2000.
Meritocracy is not a hallmark of such institutions. Many would say that the only reason Mr Fitschen was elevated to Co-CEO was that he was a Deutsche Bank insider. Mr Ackermann who picked up where Mr Mitchell left off* with the added benefit that he could speak German could fit into the Deutsche Bank hierarchy. Anshu Jain could not.
The Co-Head solution is the worst solution an institution can impose. The suggestion that the world could be split into a domestic and non-domestic market was a throwback to pre-Mitchell days.
And so, regardless, the co-head structure meant that as long as Mr Jain could deliver profits, his star would stay aloft.
But his profits stagnated, and his organisation began to find itself embroiled in regulatory/legal disputes which took much management time and in the end would require far-reaching changes in the way the Bank operated.
Enter Mr John Cryan.
A Brit, who speaks German. A finance guy which is bankspeak for someone who not only looks at the revenue side of the balance sheet, but also the cost side.
Under Mitchell Deutsche Banks cost ratio was continually bumping up against 98-99%. My motto was that one wanted to work at Deutsche Bank, but not own the stock. This continued under Ackermann and as recently as the end of 2014 it was still over 75%.
Most investment banks target a cost income ratio below 65% and in really good years are in the 55% range. Those with high cost income ratios tend to focus on revenues, or more specifically revenue growth. Those with lower ratios look very closely at costs.
I should expect that Mr Cryan will swing a sharp blade cutting into much of the fat at Deutsche Bank. He will certainly cut into muscle. The question is will he cut into the bone.
Cost ratios are important. As are capital ratios. Human capital is probably the most expensive, and so it is where Mr Cryan will focus, followed by capital usage.
The question is whether the accountant Mr Cryan will be able to square the circle of cost cutting while maintaining the revenues.
I understand he left UBS because he found the stress of the turnaround overwhelming.
Herzlich willkommen nach Deutschland.....
*Mr Mitchell died in a private plane crash December 2000.
Wednesday 3 June 2015
Private Violence
I just read a review on the nature of States and how they have changed over the last 500 years. The premise is that we have evolved from the Princely State of 1500 through to the Kingly State; the Territorial State; the State Nation followed by the Nation State and that we are now entering the time of the Market State.
The article described the various State types and the causes/stimuli for their evolution over the last 500 years. Although there were many interesting points I was struck by two specifically.
The first is that the constitutional order of a state and its strategic posture towards other states form an inner and outer membrane of a state.
So far so good. It wents on to explain that these membranes of States are secured by violence, without which a State cannot exist, and that the violence a State deploys must be viewed as legitimate.
Now throughout history there have been innumerable cases of the private sector exercising violence on behalf of the state. I think of the privateers Sir Francis Drake and Sir Walter Raleigh as perfect examples of how the State allowed the private sector to further its goals through the use of violence.
This is not to say that the private sector wasn't involved previously, nor that it has been dormant since Elizabeth I.
The military-industrial complex Eisenhower warned against didn't occur overnight. Weapons, ammunition, vehicles etc have been supplied by the private sector for centuries.
But the assumption of many activities by the private sector, be it a Burger King on Haliburton built army bases in Afghanistan, Iraq or even in the USA to the hardly discernible division between "Security Services" and mercenaries not only reflects the old adage that War is Good Business, but also portends to a more sinister transition.
For if we are indeed morphing into the next state of Statehood, and that is indeed the Market State,
do we now have the private sector determining the use of violence, externally as well as domestically?
The Transatlantic Trade and Investment Partnership (TTIP) hints at the first step of removing legal responsibility from the State to the private sector. Rather than turning to the legal system to solve disputes TTIP will bring in "corporate courts" which will follow guidance written by corporations for corporations.
These courts will be controlled by arbitrators who oversee proceedings undertaken in a closed "court" focusing on questions of free trade and (quite probably) disregarding issues such as public health, environmental protection, employment rights and other social rights in favour of maximizing profits.
Nothing wrong with maximizing profits.
But something very wrong with corporate kangaroo courts. And those "courts" will be the basis for Investor-State Dispute Settlements (ISDS) which allow un-elected transnational corporations to sue governments if the policies of those governments cause a loss of profit.
This is already happening to an extent for example in Germany Vattenfall, a Swedish company operating nuclear facilities in Germany is suing Germany for its decision to exit from nuclear energy in favour of renewable energy. But it is being discussed within the confines of the German Constitutional Court. Not a private ISDS forum.
This sort of snowballs into my second point.
Privatization has been the battle cry of the Chicago School of Economics. Free Marketeers are the modern version of privateers. Market decisions are always right, and although initially the neo-classical economists were content to confine government to the 18th century functions of justice, police and arms I am unclear as we move into the Market State what role government will have in this new Jerusalem.
For without government what legitimizes the use of violence....and without violence there is no state.
The article described the various State types and the causes/stimuli for their evolution over the last 500 years. Although there were many interesting points I was struck by two specifically.
The first is that the constitutional order of a state and its strategic posture towards other states form an inner and outer membrane of a state.
So far so good. It wents on to explain that these membranes of States are secured by violence, without which a State cannot exist, and that the violence a State deploys must be viewed as legitimate.
Now throughout history there have been innumerable cases of the private sector exercising violence on behalf of the state. I think of the privateers Sir Francis Drake and Sir Walter Raleigh as perfect examples of how the State allowed the private sector to further its goals through the use of violence.
This is not to say that the private sector wasn't involved previously, nor that it has been dormant since Elizabeth I.
The military-industrial complex Eisenhower warned against didn't occur overnight. Weapons, ammunition, vehicles etc have been supplied by the private sector for centuries.
But the assumption of many activities by the private sector, be it a Burger King on Haliburton built army bases in Afghanistan, Iraq or even in the USA to the hardly discernible division between "Security Services" and mercenaries not only reflects the old adage that War is Good Business, but also portends to a more sinister transition.
For if we are indeed morphing into the next state of Statehood, and that is indeed the Market State,
do we now have the private sector determining the use of violence, externally as well as domestically?
The Transatlantic Trade and Investment Partnership (TTIP) hints at the first step of removing legal responsibility from the State to the private sector. Rather than turning to the legal system to solve disputes TTIP will bring in "corporate courts" which will follow guidance written by corporations for corporations.
These courts will be controlled by arbitrators who oversee proceedings undertaken in a closed "court" focusing on questions of free trade and (quite probably) disregarding issues such as public health, environmental protection, employment rights and other social rights in favour of maximizing profits.
Nothing wrong with maximizing profits.
But something very wrong with corporate kangaroo courts. And those "courts" will be the basis for Investor-State Dispute Settlements (ISDS) which allow un-elected transnational corporations to sue governments if the policies of those governments cause a loss of profit.
This is already happening to an extent for example in Germany Vattenfall, a Swedish company operating nuclear facilities in Germany is suing Germany for its decision to exit from nuclear energy in favour of renewable energy. But it is being discussed within the confines of the German Constitutional Court. Not a private ISDS forum.
This sort of snowballs into my second point.
Privatization has been the battle cry of the Chicago School of Economics. Free Marketeers are the modern version of privateers. Market decisions are always right, and although initially the neo-classical economists were content to confine government to the 18th century functions of justice, police and arms I am unclear as we move into the Market State what role government will have in this new Jerusalem.
For without government what legitimizes the use of violence....and without violence there is no state.
Friday 1 May 2015
True Democracy
I am a member of a Public Interest Research Group (PIRG) which is essentially an environmentally driven organisation which chases its' members to write letters to their congressional representative to vote for or against any number of bills such as bottle refunding laws, clean water etc.
For those causes with which I agree I dutifully write letters and get responses from my congressional representative thanking me for my interest and explaining how they will vote and why. For those causes that I disagree with I write letters back to the PIRG explaining why I disagree, and sometimes I get a response.
Granted the PIRG doesn't have a congressional staff at its fingertips it is still curious to me that they sometimes don't even acknowledge my note.
But recently they hit a nerve which cut across a number of sectors and with which I was completely in favour.
Specifically they asked me to write to McDonalds to get them to stop serving meat that came from animals which had been treated with antibiotics.
The use of antibiotics in industrialised agriculture has two sources.
One is the overcrowding of animals where they are held in such close proximity to one another and in such a manner that hygiene is severely impacted thus requiring antibiotics to combat what is essentially poor animal husbandry.
The other is the overwhelming power of the corn lobby. It has created a relationship with the beef industry that has replaced grass as the main staple of feed for beef cattle with corn- a feed stuff that makes cattle ill thus requiring antibiotics.
This disturbing practise of feeding cattle with a foodstuff that makes them ill thus requiring antibiotics is and the use of antibiotics to counter industrially induced diseases in chickens is compounded by the transmission of these medicines up the food chain to humans thus rendering many many standard antibiotics useless and accelerating the evolution of diseases which are resistant to new and improved (my italics) seemantibiotics.
But back to true democracy.
Much to my pleasant surprise, McDonald's announced that they would stop selling chickens which are free from medically important antibiotics. Chickens are one of the prime examples of the overcrowding of livestock.l. I am not totally comfortable with the condition of "medically important" in their announcement, But it is still a massive step in the right direction.
And surprise surprise, in addition to Purdue and Pilgrims Pride, two large producers of chicken who have announced their commitment to phasing out antibiotics, earlier this week one of McDonalds largest providers, Tyson Foods announced that they too will be abolishing antibiotics.
So through the power of the "ballot box" we were able to make a rational positive change.
Next up is the corn lobby....
Democracy can work.
For those causes with which I agree I dutifully write letters and get responses from my congressional representative thanking me for my interest and explaining how they will vote and why. For those causes that I disagree with I write letters back to the PIRG explaining why I disagree, and sometimes I get a response.
Granted the PIRG doesn't have a congressional staff at its fingertips it is still curious to me that they sometimes don't even acknowledge my note.
But recently they hit a nerve which cut across a number of sectors and with which I was completely in favour.
Specifically they asked me to write to McDonalds to get them to stop serving meat that came from animals which had been treated with antibiotics.
The use of antibiotics in industrialised agriculture has two sources.
One is the overcrowding of animals where they are held in such close proximity to one another and in such a manner that hygiene is severely impacted thus requiring antibiotics to combat what is essentially poor animal husbandry.
The other is the overwhelming power of the corn lobby. It has created a relationship with the beef industry that has replaced grass as the main staple of feed for beef cattle with corn- a feed stuff that makes cattle ill thus requiring antibiotics.
This disturbing practise of feeding cattle with a foodstuff that makes them ill thus requiring antibiotics is and the use of antibiotics to counter industrially induced diseases in chickens is compounded by the transmission of these medicines up the food chain to humans thus rendering many many standard antibiotics useless and accelerating the evolution of diseases which are resistant to new and improved (my italics) seemantibiotics.
But back to true democracy.
Much to my pleasant surprise, McDonald's announced that they would stop selling chickens which are free from medically important antibiotics. Chickens are one of the prime examples of the overcrowding of livestock.l. I am not totally comfortable with the condition of "medically important" in their announcement, But it is still a massive step in the right direction.
And surprise surprise, in addition to Purdue and Pilgrims Pride, two large producers of chicken who have announced their commitment to phasing out antibiotics, earlier this week one of McDonalds largest providers, Tyson Foods announced that they too will be abolishing antibiotics.
So through the power of the "ballot box" we were able to make a rational positive change.
Next up is the corn lobby....
Democracy can work.
Thursday 30 April 2015
Is QE Musical Chairs or Russian Roulette?
Since the start of the Great Recession in 2007 the world's Central Bankers have done everything in their powers to ensure that the liquidity in the financial system doesn't dry up.
The crowning glory of this effort has been QE or quantitative easing. Essentially quantitative easing is a form of monetary policy whereby the Central Bank creates new money to buy financial assets such as government bonds but expanding in most instances to also support other asset classes.
The goal of this process is to directly increase private sector spending and to combat deflation by increasing inflation.
So, where has this taken us.
These QE purchases means that central bank assets now exceed $22 trillion. This is the equivalent to the combined GDP of US and Japan.
Central banks now collectively own nearly a third of global GDP in government bonds and equivalent assets and over half of the world's government bonds yield 1% or less. Parallel to this the globe's major stock markets are also in reach of all time highs.
So what does this mean.
It means that we are riding on the back of a tiger. We could discuss ad nauseam how we got here. Why we shouldn't be here. But it wouldn't change the facts. We are now riding a massive tiger with no clear plan as to how we are going to dismount.
The Federal Reserve Bank is slowly marching to the exit. They began by reducing their purchases in the so-called "taper".
In its' place the ECB has stepped up to be the QE liquidity provider of choice. They have an extremely aggressive buy program requiring them to purchase over 2.5 times the net new issuance of Euro governments out to 2016.
During the heyday of the FED's QE program, 2009-2013, foreign issuers, primarily from Brasil, Russia, India and China (the BRIC's), and other developing countries raised over US$9 trillion, which is now having to be paid back with a much stronger dollar resulting in a massive fx move.
Using Mexico's stunning feat of issuing Euro 1.5 billion 100 year bonds at 4% as an example of a similar frenzy in the Euro denominate market on the back of the ECB's QE program it is clear to me that at some point the ECB too will have to start to put the brakes on. One can assume that the value of the Euro will also gyrate wildly as issuers once again scramble to find Euros to repay their debts.
The FED decided that after years of lowering rates whereby the liquidity thus generated rather than stimulating consumption resulted in deflation that they had to face the tiger. Their answer was to introduce the "Taper" which meant a measured reduction in the purchases by the FED. This was accompanied by noises about raising interest rates at some point in the future.
The hope on the part of the FED was that the economy was now robust enough to create its' own demand and they could gradually move away from a zero interest rate environment.
The most recent economic statistics in the US suggest that the economy might not be as strong as the FED has assumed it to be.
So as QE moves from the USA to Japan and now to Europe deflation remains a problem. Raising interest rates won't ignite inflation. And restarting QE will ensure we remain on the back of the tiger.
These are interesting times.
The crowning glory of this effort has been QE or quantitative easing. Essentially quantitative easing is a form of monetary policy whereby the Central Bank creates new money to buy financial assets such as government bonds but expanding in most instances to also support other asset classes.
The goal of this process is to directly increase private sector spending and to combat deflation by increasing inflation.
So, where has this taken us.
- In 2015 there have been 26 rate cuts by global central banks. Since the fall of Lehman Brothers there have been a total of 569 cuts.
- There are now $5.3 trillion of government bonds trading with a negative yield.
- In March 2015 more than Euro 60 billion of new corporate bonds were issued-a new record.
- Switzerland issued a 10 year bond at a negative yield- a new record.
- Mexico launched a Euro 1.5 billion 100-year Euro bond at 4%.
- And the Market cap of the US tech/biotech industry now exceeds that of Emerging Markets and the Eurozone.
These QE purchases means that central bank assets now exceed $22 trillion. This is the equivalent to the combined GDP of US and Japan.
Central banks now collectively own nearly a third of global GDP in government bonds and equivalent assets and over half of the world's government bonds yield 1% or less. Parallel to this the globe's major stock markets are also in reach of all time highs.
So what does this mean.
It means that we are riding on the back of a tiger. We could discuss ad nauseam how we got here. Why we shouldn't be here. But it wouldn't change the facts. We are now riding a massive tiger with no clear plan as to how we are going to dismount.
The Federal Reserve Bank is slowly marching to the exit. They began by reducing their purchases in the so-called "taper".
In its' place the ECB has stepped up to be the QE liquidity provider of choice. They have an extremely aggressive buy program requiring them to purchase over 2.5 times the net new issuance of Euro governments out to 2016.
During the heyday of the FED's QE program, 2009-2013, foreign issuers, primarily from Brasil, Russia, India and China (the BRIC's), and other developing countries raised over US$9 trillion, which is now having to be paid back with a much stronger dollar resulting in a massive fx move.
Using Mexico's stunning feat of issuing Euro 1.5 billion 100 year bonds at 4% as an example of a similar frenzy in the Euro denominate market on the back of the ECB's QE program it is clear to me that at some point the ECB too will have to start to put the brakes on. One can assume that the value of the Euro will also gyrate wildly as issuers once again scramble to find Euros to repay their debts.
The FED decided that after years of lowering rates whereby the liquidity thus generated rather than stimulating consumption resulted in deflation that they had to face the tiger. Their answer was to introduce the "Taper" which meant a measured reduction in the purchases by the FED. This was accompanied by noises about raising interest rates at some point in the future.
The hope on the part of the FED was that the economy was now robust enough to create its' own demand and they could gradually move away from a zero interest rate environment.
The most recent economic statistics in the US suggest that the economy might not be as strong as the FED has assumed it to be.
So as QE moves from the USA to Japan and now to Europe deflation remains a problem. Raising interest rates won't ignite inflation. And restarting QE will ensure we remain on the back of the tiger.
These are interesting times.
Tuesday 31 March 2015
Reflections on 4U 9525
Over the weekend I listened to an interview with a brain researcher who made two statements that really stuck with me.
The first was that humankind is the only being in the animal kingdom that is fully aware that it will eventually die, and yet has built in a defence mechanism that somehow manages to deal with that reality and generally does so without cracking.
The second thought was that perhaps that the very ability to build that construct is also what allows people to create walls in their minds to combine seemingly incongruous actions. I refer to torturers and their ilk that happily go home every night to their families where they are perceived as wonderful loving parents and spouses, and yet in the morning go off and commit brutal acts against humanity as thugs in police or military units.
I believe the interview was taped before the Germanwings disaster so there were no references to the crash. Despite this the actions of the pilot somehow fit in to the discussion. Although this interview was concerned with the workings of the brain as a series of chemical reactions which are governed or at least tempered by the creation of cultural umbrellas under which civilisations function in normal circumstances, it hinted loudly that cultural mores were necessary but not sufficient to ensure that an individuals actions didn't go beyond the accepted norms.
There was of course the usual nurture versus nature argument, but essentially the researcher's take was that it is a mixture of the two.
But it did segue into the plane disaster.
There has been a lot of talk as to the mental state of the pilot. He suffered from depression. Apparently he had had suicidal thoughts. But in none of the documents made public to date was there any indication that he was actively suicidal or that he was harbouring seriously aggressive thoughts towards others.
First and foremost I think on the part of Germanwings, and to a degree Germany as a whole there was some sort of relief that there was not a mechanical failure.
Germany is a highly industrialised nation which takes great pride in its' engineering prowess. Having a plane crash because of a mechanical fault does not sit well.
And so it was almost with relief that the first reports were of pilot error.
Which then turned to fear.
Pilot error is one thing. But a suicidal murderer is another.
It breaks every convention that society has constructed to ensure a basic code of conduct. And for Germany, which has a leaning towards viewing every problem, mechanical or human, as being solvable and therefore avoidable, this pilot's actions cuts deeply in the nation's collective psyche.
The first was that humankind is the only being in the animal kingdom that is fully aware that it will eventually die, and yet has built in a defence mechanism that somehow manages to deal with that reality and generally does so without cracking.
The second thought was that perhaps that the very ability to build that construct is also what allows people to create walls in their minds to combine seemingly incongruous actions. I refer to torturers and their ilk that happily go home every night to their families where they are perceived as wonderful loving parents and spouses, and yet in the morning go off and commit brutal acts against humanity as thugs in police or military units.
I believe the interview was taped before the Germanwings disaster so there were no references to the crash. Despite this the actions of the pilot somehow fit in to the discussion. Although this interview was concerned with the workings of the brain as a series of chemical reactions which are governed or at least tempered by the creation of cultural umbrellas under which civilisations function in normal circumstances, it hinted loudly that cultural mores were necessary but not sufficient to ensure that an individuals actions didn't go beyond the accepted norms.
There was of course the usual nurture versus nature argument, but essentially the researcher's take was that it is a mixture of the two.
But it did segue into the plane disaster.
There has been a lot of talk as to the mental state of the pilot. He suffered from depression. Apparently he had had suicidal thoughts. But in none of the documents made public to date was there any indication that he was actively suicidal or that he was harbouring seriously aggressive thoughts towards others.
First and foremost I think on the part of Germanwings, and to a degree Germany as a whole there was some sort of relief that there was not a mechanical failure.
Germany is a highly industrialised nation which takes great pride in its' engineering prowess. Having a plane crash because of a mechanical fault does not sit well.
And so it was almost with relief that the first reports were of pilot error.
Which then turned to fear.
Pilot error is one thing. But a suicidal murderer is another.
It breaks every convention that society has constructed to ensure a basic code of conduct. And for Germany, which has a leaning towards viewing every problem, mechanical or human, as being solvable and therefore avoidable, this pilot's actions cuts deeply in the nation's collective psyche.
Wednesday 25 March 2015
The Public Sector Again to the Rescue?
It is a strange quirk of capitalism that the private sector is always clamouring for independence or freedom from government intervention and regulation. Yet the private sector has no qualms about using the public sector as a major source of income through government contracts.
It is even more galling that these champions of the private sector in times of crisis-and these seem to come with increasing regularity- have no pangs of conscience in allowing the public sector to bail out the private sector "in the name of the nation"....
This idea of privatising profits and allowing losses to be borne by the public purse has traditionally been the unspoken catechism of the banking sector so it was somewhat surprising to see a new variant of this in the world of soccer or football as it is known outside the USA.
The newly (re)elected president of the Union of European Football Associations or UEFA, Michel Platini came out today blaming the increase of hooligan in European Stadiums on a lack of policing on the part of the public authorities, and therefore reiterated calls for a European sports police force to ensure that hooliganism doesn't take over the stadiums.
Now part of his argument is that the rise of nationalism with its ugly sisters racism and extremism are not really the responsibility of Football as stadiums are the stage for undesirable acts but not the cause.
It would perhaps be harsh to blame these "isms" on Football, but they are all part of a tribalism that was present in the very nature of supporter groups when it was city against city or even intra-city. As always, part of the "acting out" took place under the perceived protection of mob psychology and safety in numbers often leaving the perpetrators immune to prosecution.
Recently, after many years of benign antagonism there has been a marked increase of verbal and physical abuse in stadiums which has been either ignored or even defended as part of the game.
The first line of defence has to be the clubs and their stadium security stewards. Mr Platini however seeks to put the blame for this increase in undesirable behavior on trends within society as a whole that are merely being manifested in football tribalism, and are therefore not Football's responsibility.
Hmmm.
This year the poster child of UEFA, the English Premier League sold the television and marketing rights for even more obscene numbers than the already ridiculous prices paid in the past
.From that comes footballers earning hundreds of thousands of dollars per week, and yet the public sector should stump up for increased policing of stadiums in a time of austerity budgets for the public sector.
I know Panem et Circenses was a means of keeping the masses distracted from the actual stresses of life. They were however financed essentially by the public purse and as such were part of the socio-political fabric of the state which served the purposes of the political elite.
The modern version of the games, especially in their global extravaganzas such as the World Cup and the Olympics are incredibly profitable for the organisations that run them, but are often ruinous for the host nation. They require massive investment in infrastructure and security and yet the "games" negotiate tax breaks in the host countries as part of the selection process.
A classic example of private profits and public losses.
And now Monsieur Platini would like the public sector to provide security and oversight of Football stadiums throughout the season with an ever increasing plethora of leagues and competitions.
I might be too harsh and he intends to have UEFA pay for this public service.
I wouldn't bet on it.
It is even more galling that these champions of the private sector in times of crisis-and these seem to come with increasing regularity- have no pangs of conscience in allowing the public sector to bail out the private sector "in the name of the nation"....
This idea of privatising profits and allowing losses to be borne by the public purse has traditionally been the unspoken catechism of the banking sector so it was somewhat surprising to see a new variant of this in the world of soccer or football as it is known outside the USA.
The newly (re)elected president of the Union of European Football Associations or UEFA, Michel Platini came out today blaming the increase of hooligan in European Stadiums on a lack of policing on the part of the public authorities, and therefore reiterated calls for a European sports police force to ensure that hooliganism doesn't take over the stadiums.
Now part of his argument is that the rise of nationalism with its ugly sisters racism and extremism are not really the responsibility of Football as stadiums are the stage for undesirable acts but not the cause.
It would perhaps be harsh to blame these "isms" on Football, but they are all part of a tribalism that was present in the very nature of supporter groups when it was city against city or even intra-city. As always, part of the "acting out" took place under the perceived protection of mob psychology and safety in numbers often leaving the perpetrators immune to prosecution.
Recently, after many years of benign antagonism there has been a marked increase of verbal and physical abuse in stadiums which has been either ignored or even defended as part of the game.
The first line of defence has to be the clubs and their stadium security stewards. Mr Platini however seeks to put the blame for this increase in undesirable behavior on trends within society as a whole that are merely being manifested in football tribalism, and are therefore not Football's responsibility.
Hmmm.
This year the poster child of UEFA, the English Premier League sold the television and marketing rights for even more obscene numbers than the already ridiculous prices paid in the past
.From that comes footballers earning hundreds of thousands of dollars per week, and yet the public sector should stump up for increased policing of stadiums in a time of austerity budgets for the public sector.
I know Panem et Circenses was a means of keeping the masses distracted from the actual stresses of life. They were however financed essentially by the public purse and as such were part of the socio-political fabric of the state which served the purposes of the political elite.
The modern version of the games, especially in their global extravaganzas such as the World Cup and the Olympics are incredibly profitable for the organisations that run them, but are often ruinous for the host nation. They require massive investment in infrastructure and security and yet the "games" negotiate tax breaks in the host countries as part of the selection process.
A classic example of private profits and public losses.
And now Monsieur Platini would like the public sector to provide security and oversight of Football stadiums throughout the season with an ever increasing plethora of leagues and competitions.
I might be too harsh and he intends to have UEFA pay for this public service.
I wouldn't bet on it.
Wednesday 14 January 2015
For Clarification
A good friend of mine asked why it appeared that I have an obsession with radical Islam. Because he is a good friend and I value his opinion I thought it merited some reflection on my part.
My reflection was shattered with the events in Paris last week.
Our western ideals have been developed over the past 500 years. It was not always pretty. The West's conquest of overseas colonies was perpetrated by soldiers going hand in hand with priests spreading Christianity under the banner of God and Country.
But those same cultures brought about the American and French Revolutions and with them the march of secularism.
And it was precisely the development of secularism, drawing a radical distinction between public and private life and more importantly the relegation of the religious to the private sphere which stopped the internecine warfare within Christianity removing one of the great causes of war and strife in Europe.
This secularism provided the basis for the West's pursuit of freedom- the freedom to believe whatever you wish in private, while still adhering to the rules and regulations of the public sphere. It tried to implement a social contract which allowed the individual many freedoms and rights, while demanding that the individual still remain subject to the rule of law and the requirements of the state that provides for that freedom.
These freedoms were enshrined in our democratic institutions in the form of our Constitutions, Basic Law Books or Parliamentary Procedures.
Democracy means that the majority determines who runs the State but the method of checks and balances ensures that the changes any one party can institute are within the remit of the State.
It took the Judeo/Christian world 500 years to reach our present state. As mentioned, it hasn't always been pretty. But I have no intention to sit idly by and watch our hard fought freedoms-despite the fact that the concept of Freedom of Speech has been bastardized in any number of legal defenses-and allow religious fanatics to run rampant over our values.
I appreciate that the cartoons of Charlie Habdo were often crude and intentionally offensive. But the Charlie Hebdo's of the world are what provide me with my way of life. And I like my way of life.
If Islam still has 500 years of development to go through before it too can embrace a secular society that is a saddening thought. But it does not mean I have to subject myself to it.
I choose to live in a secular society, exercising my freedoms within the structures of the State.
If anyone, regardless of race, creed or colour wishes to live in a non-secular state, be my guest. But don't try and impose your rules and regulations on me in my state.
I would maintain that radical Islam has every intention to try and make me live according to their rules regulations.
I object to that, and for the record, I am equally adverse to any other religious group which attempts to coerce me into their belief system.
My reflection was shattered with the events in Paris last week.
Our western ideals have been developed over the past 500 years. It was not always pretty. The West's conquest of overseas colonies was perpetrated by soldiers going hand in hand with priests spreading Christianity under the banner of God and Country.
But those same cultures brought about the American and French Revolutions and with them the march of secularism.
And it was precisely the development of secularism, drawing a radical distinction between public and private life and more importantly the relegation of the religious to the private sphere which stopped the internecine warfare within Christianity removing one of the great causes of war and strife in Europe.
This secularism provided the basis for the West's pursuit of freedom- the freedom to believe whatever you wish in private, while still adhering to the rules and regulations of the public sphere. It tried to implement a social contract which allowed the individual many freedoms and rights, while demanding that the individual still remain subject to the rule of law and the requirements of the state that provides for that freedom.
These freedoms were enshrined in our democratic institutions in the form of our Constitutions, Basic Law Books or Parliamentary Procedures.
Democracy means that the majority determines who runs the State but the method of checks and balances ensures that the changes any one party can institute are within the remit of the State.
It took the Judeo/Christian world 500 years to reach our present state. As mentioned, it hasn't always been pretty. But I have no intention to sit idly by and watch our hard fought freedoms-despite the fact that the concept of Freedom of Speech has been bastardized in any number of legal defenses-and allow religious fanatics to run rampant over our values.
I appreciate that the cartoons of Charlie Habdo were often crude and intentionally offensive. But the Charlie Hebdo's of the world are what provide me with my way of life. And I like my way of life.
If Islam still has 500 years of development to go through before it too can embrace a secular society that is a saddening thought. But it does not mean I have to subject myself to it.
I choose to live in a secular society, exercising my freedoms within the structures of the State.
If anyone, regardless of race, creed or colour wishes to live in a non-secular state, be my guest. But don't try and impose your rules and regulations on me in my state.
I would maintain that radical Islam has every intention to try and make me live according to their rules regulations.
I object to that, and for the record, I am equally adverse to any other religious group which attempts to coerce me into their belief system.
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