It is become increasingly clear to me that the effects of the Libor scandal are being consistently underestimated, even politicians like Corbyn have enough of a neoliberal streak running through them that they obfuscate the consequences of the U.K overvaluing its currency. Obama was held to ransom at the same time the Libor conspiracy was being perpetrated (the global financial community having its tentacles deeply embedded in both regimes). What this means is that the vested interests of the unsustainable Industrial Revolution/Consumerist model have tightened their grip on our collective scrotum. When our government says, “it has no money” for this or that public work what we are really being told is that if we don’t conform to the laissez-faire model support will be withdrawn for the groaning financial structure of the old-paradigm. It will take new paradigm politicians to break this stranglehold.
We were over-exposed because of our reliance on financial services, the only reason we are supported in our deception is because we are a key-log in the old-paradigm international finance “industry”. The PtBs need to watch out for China though she stills has resources which could make the transition from unsustainable to sustainable resources economic (just).
Quote: "#LIBOR
Recent stories in the financial press are promoting the notion that it is separatism in Europe that posses the biggest threat to the European economy but also that the E.U’s single-market and currency are in such a poor state that it is best to allow the City of London to exercise complete independence from the single-market, quote;
"“April is the cruellest month,” wrote TS Eliot in the opening line of The Waste Land – possibly his greatest poem.
“August is a wicked month,” quipped the Irish writer Edna O’Brien in the title of her fifth novel.
“October will be a s—storm” is a less aesthetic phrase, but one I’ve heard a lot from market analysts lately. It may not be poetry – but the message may be worth taking to heart.
Last week saw yet more populist flare-ups across the European Union. In Germany, thousands joined rallies in the eastern city of Chemnitz after an arrest warrant for an Iraqi suspect was leaked following a fatal stabbing.
Italian deputy prime minister Matteo Salvini, meanwhile, met with Hungarian leader Viktor Orbán to discuss a common anti-migration strategy. “We’re walking the same path,” they said in a joint statement, posing for the cameras in Milan. The two nations have been on “the front line” as millions of refugees have entered the EU from Syria, Iraq and North Africa. “We want to change Europe’s rules,” they declared, “to protect our borders.”
Elections in Sweden this week will likely mark another populist uprising. The centre-left Social Democrats are heading for well below 30pc of the vote, this ruling party’s worst result in over a century – in an election once again dominated by anti-immigration, anti-EU sentiment. Jimmie Åkesson, leader of the upstart Sweden Democrats, could become the post-election coalition kingmaker – and he, like Salvini, is threatening a referendum on EU membership.
As traders return to their desks this week in London, New York and other financial capitals, they face concerns aplenty. Yes, the US is showing 4.1pc growth and financial markets are soaring. But stock valuations, pumped by years of central-bank quantitative easing (QE), look precarious compared to earnings. And the Federal Reserve is consistently raising interest rates – signalling a broader policy tightening."…
“For my money, though, the biggest danger facing global markets is Europe – and that relates to this upsurge in nasty politics. And while street protests and election shocks catch the headlines, the really telling impact of growing EU disunity, and the rising outrage among millions of ordinary voters at Brussels-imposed diktats, on borders and more besides, is revealed by looking at the market for bonds”…
“Since a populist Five Star/Italian League government took office in June, Italian bond yields have doubled to a four-year high. Market unease reflects the fact that Italy’s finances are even worse than the headline numbers suggest. Local banks themselves hold more than €400bn euros of local sovereign debt – so government and the financial sector are locked in a ruinous doom-loop, ending all hope of a domestic bank bailout.”…
“There is righteous populist anger in Germany, not just about immigration, but also the extent to which Berlin has been bankrolling the likes of Italy. And now the Italian government, when it presents its budget for European Commission approval in October, looks set to ask for much more.”…
“As populist pressures collide, with EU nations looking inward, eurozone bond markets could go haywire this autumn. And if that happens, the storm will inevitably spread.” Go to: October storms are gathering over Europe's economy for full article.
Contrast this with the following article from, “Capital X” that maintains that Britain’s separation could be its saving grace, quote;
“If we rewind to the cusp of the millennium, the EU had a sorry apology for a market structure. Stock markets were mostly national behemoths. Trading across borders was cumbersome and expensive. Step forward the original Markets In Financial Instruments Directive (MIFID), which has proven a great success. With one legislative sweep, the EU managed to open up a decent amount of competition across borders for the trading of stocks delivering, if not a seamless open market, at least a richly competitive environment enhancing choice for investors and issuers alike. Moreover MIFID enabled a generation of entrepreneurial activity in the market infrastructure field, delivering a raft of new competitor platforms to the existing monopoly stock exchanges. That was also hugely beneficial to the City as the majority of successful non-legacy exchange ventures clustered in London, further enhancing the UK’s significant leadership in financial services across the region. True, cynics may suggest much of MIFID’s benefit was already likely to occur thanks to technology but that misses the point of it crucially opening up closed silos across the continent to better integrate the competitive dynamic of free markets.”…
Then the 2007 financial crisis intervened. The G20 produced a series of pragmatic and broadly sensible G20 commitments at the Pittsburgh summit (2009) to make the interbank marketplace safer and more transparent, reducing the risk of bank collapses. The EU, seized by its usual sense of urgent “something must be dunnery”, allied with its general suspicion of free markets and a desire to trim capitalism at all costs, turned inwards, preferring to indulge in a very expansive hyper-regulated environment. A core concept of transitioning MIFID principles to other markets (bonds, derivatives, commodities etc) turned into a staggering hotchpotch of dreams, delusions and generally intrusive impositions on the functioning of markets."…
“Perhaps the greatest flaw to implementing MIFID II now is the Brexit process. The UK remains (as the ironic Twitter hashtag puts it, #DespiteBrexit), the world’s leading international financial centre, dwarfing the rest of the EU 27 put together. Stubbornly applying a vast raft of highly prescriptive restrictions on markets and their operation at this juncture appears the height of folly. However once the EU has plotted a legislative course, supertankers look as nimble as Mini Coopers when it comes to changing direction. Thus the EU plods on into a gaping own goal of its own making.”…
“Britain needs a coherent and comprehensive way out of the MIFID II muddle. The City of London must achieve a pragmatic regulatory freedom before this initial exodus of commodity derivatives business turns into a rout, and leads to rival financial centres in the US and likely Hong Kong and Singapore being seen as havens from the EU’s overreach.”…
“For London the path is now clear – remaining constrained inside the EU’s protectionist single market is bad for Britain and already pushing business out of the City. There is no coherent evidence London as a global financial centre will be adversely affected by being empowered once again freely to choose pragmatic regulations which are equivalent with the rest of the world, the EU included.” Go to: The City cannot afford to be constrained by disastrous EU rules - CapX
for full article.
Not a sniff in either article that it was the Wider Europe and its NATO-isation that has both overstretched EU finances and put so much pressure on Western European societies that additional immigration from the Middle East has become unacceptable to much of the populace.
This kind of economic double-think has its genesis in denial of the exposure of our financial institutions to the global credit crisis. For many years the British have been attempting to ameliorate historical problems (which date back to our near bankruptcy following the two world wars), of under-resourcing and in recent decades the lack of a truly British owned manufacturing base (sure we manufacture a-lot, much of which to a very high standard, but we don’t own the majority of these companies either privately or publicly which allows most of the actual profits to be salted-away offshore and in other countries where the owners are free from the burden of U.K taxation), by providing financial services (and this to the very people vampirising on our economy), to the world. The degree to which Britain was over-exposed was surely intimated by the Queen herself when she quizzed the then chancellor concerning the state of our nation’s gold reserves (but let’s not forget it was the previous Labour incumbent that actually flogged-them-off), quote;
"It was meant to be a visit without any high politics but the Queen still managed to quiz the Chancellor about British gold as she visited Downing Street.
Walking along the line of ministers in the Terracotta Room inside Number 10 before sitting in on part of a Cabinet meeting, the monarch came to George Osborne.
Until that point, every minister had been introduced by Prime Minister David Cameron but he failed to announce his friend Mr Osborne.
The Queen queried “someone?”, to gales of laughter from the assembled politicians, before going on to ask about “gold bars”.
Some of her words are indistinct on video footage of the exchange but she can be heard saying “regrettably” in a reference to their sale.
Mr Osborne told the Queen: “Some of them were sold but we still have some left.”
What she actually said was (paraphr); “…and how much of the nations gold have we left?” To which Osborne responded; “17% Maam” prompting Elizabeth the Second to damn with faint praise by saying; “17%? Well done!”
Quote; “In 2010, Osborne declared: “Gordon Brown’s decision to sell off our gold reserves at the bottom of the market cost the British taxpayer billions of pounds*. It was one of the worst economic judgements ever made by a chancellor.” At a time when his own strategy has failed dramatically, Osborne will no doubt be pleased to discover that the Queen appears to agree” Go to: https://www.newstatesman.com/politics/2012/12/queen-takes-swipe-gordon-brown-over-gold-sale
for full article.
*Italics mine.
This is why it was done, quote;
“Libor, the London interbank offered rate, is a global benchmark for interest rates on everything from credit cards to trillions of dollars in financial derivatives and is at the heart of a scandal over rate rigging.
Libor rates are based on daily estimates from a group of banks as to how much they would expect to pay to borrow funds from each other for a range of currencies and periods. The British Bankers’ Association (BBA) published the first official Libor rates in dollars, sterling and yen, meeting demand for global benchmarks from financial markets in 1986.” Go to: Timeline: How the Libor scandal unfolded | Reuters
for full article.
Also see; “Understanding the Libor Scandal” go to: https://www.cfr.org/backgrounder/understanding-libor-scandal
Britain was forced to buy its way out of the financial hole it was in but the gold sales could only gild the LIBOR lilly*, our politicians were also forced to collude in the manipulation of the LIBOR rate in order to hide our degree of over-exposure but because both parties were involved (an indication of just how serious the situation was -and still is-), mouths have been kept firmly shut on both sides of the house with regard to the true size of our international debt. The undead corpses of both the British and European economies now stagger on propped up by only the geo-political interests of the dollar and the machinations of the State Dept.
So does separatism within the European Union represent the biggest threat to the markets? Only if you’re a zombie desperately trying to find fresh living flesh to feed on! Should Britain (for instance), achieve the kind of devolution for (what should be), its independent member states and then reorganise itself on a more egalitarian basis both a United Ireland and the mighty economy that is Brittany would be able to contribute to our common-wealth (having never actually joined the poor-old Euro perhaps even a “United Brit-Pound” could be something “we” could sensibly contemplate), and form a counterweight to a more democratic Western Europe Union (containing a number of then devolved member states and regions), and newly formed Eastern Union of a similar hue itself.
*It is claimed that Gordon Brown sold of much of Britain’s gold reserves whilst gold prices were at their lowest for twenty years because; "Central banks thought they could manage the world by tweaking interest rates, switching a few dials. Gold’s role as a financial backstop had diminished." However it was not the Bank of England but the treasury which was responsible for selling our gold and Brown had already freed-up the BoE to set its own interests rates so why the sale? As Rhona O’Connell, head of market analysis for Europe and Asia at global financial services firm Intl FCStone, said; “Regardless of its price on any date, gold is negatively correlated with virtually all other asset classes and from a central banker’s point of view it is important in terms of adding international credibility within the financial sector.” (quotes from; “Gold: Gordon Brown’s sale remains controversial 20 years on” go to: Gold: Gordon Brown's sale remains controversial 20 years on - BBC News ). Given the (apparent), degree of collusion between Britain’s Govt. and the financial markets concerning the LIBOR rate is it not more likely that Brown was trying to ameliorate what was already becoming an untenable position for Britain on the international financial markets? Brown’s sale of gold assets concluded in 2002 only six years before the Credit Crunch (go to: https://www.theguardian.com/business/2008/oct/08/creditcrunch.marketturmoil)
, however, Britain remained over-exposed and was therefore obliged to attempt to obfuscate her indebtedness as she could no longer support her currency.
What other explanation could their be for Britain’s chancellor selling off the majority of the country’s gold reserves at the arse end of a bear-market other than that the sales were a desperate dyke building exercise prior to a coming flood of debt that the chancellor hoped would not rise any higher although the deluge was threatening to completely inundate The City of London (as it did), and wash away the hubris of the Labour administration’s neo-liberal belief in the so-called, “free-market”?
That our Chancellor was attempting to bribe a smoother path for the country on the international financial (upwardly-mobile) free-way seems clear the question is how aware was he that Britain’s position was to rapidly become untenable? Whatever the answer the loss of our gold assets was clearly a contributory factor in the LIBOR scandal.
Tax Avoidance
“In recent years, the likes of Google, Amazon, Apple and Starbucks have come under the spotlight for large-scale tax avoidance. This means they’ve arranged their finances rather cleverly – albeit within the law – to dodge tax obligations they would otherwise have to fulfil. Less tax paid by these huge companies means less money to invest in our public services – we all lose out!”…
"As from the start of 2019, yes coincidentally just as the Brexit deadline looms, all EU member states will have to apply the Anti Tax Avoidance Directive (ATAD). It’s an EU law designed to tackle businesses shirking their tax-paying responsibilities.
The likes of Nigel Farage, Jacob Rees-Mogg and a host of wealthy Brexit donors are unlikely to warm to ATAD. It fact, it might be one of reasons why some Brexiteers are hell-bent on pushing for the hardest Brexit possible*.
How will ATAD work?
The directive seeks to tackle the thriving culture of corporate tax avoidance. For example, consider the scenario in which an EU company shifts profits to a related company in a low-tax country reducing the tax paid on these profits: under ATAD, a company could still do this, but the profits will be taxable at EU rates.
Another situation is where EU businesses developing a new product move it to a low tax country to avoid paying larger taxes on the profits once it is developed. Thanks to ATAD this tactic won’t work as member states can levy tax on the product before it is moved.
Even with ATAD, you might argue companies – through their nifty lawyers – will find new loopholes to avoid tax, right? The EU thought of that: ATAD provides a general anti-abuse rule to counteract these regimes where national laws have failed to address them."…
“As from the start of 2019, yes coincidentally just as the Brexit deadline looms, all EU member states will have to apply the Anti Tax Avoidance Directive (ATAD). It’s an EU law designed to tackle businesses shirking their tax-paying responsibilities.
The likes of Nigel Farage, Jacob Rees-Mogg and a host of wealthy Brexit donors are unlikely to warm to ATAD. It fact, it might be one of reasons why some Brexiteers are hell-bent on pushing for the hardest Brexit possible.”…
“The directive seeks to tackle the thriving culture of corporate tax avoidance. For example, consider the scenario in which an EU company shifts profits to a related company in a low-tax country reducing the tax paid on these profits: under ATAD, a company could still do this, but the profits will be taxable at EU rates.” Go to: https://www.theneweuropean.co.uk/top-stories/is-the-anti-tax-avoidance-directive-the-reason-the-rich-want-out-of-eu-1-5669763
for full article.
*Italics mine.
Greece
Quote; "Former Greek finance minister Yanis Varoufakis explains how the debt crisis was a Greek tragedy
**"**He spoke with Marketplace Morning Report host David Brancaccio about how the story it tells is like a Greek or Shakespearean tragedy, and how Europe lacks a “moral union.” Below is an edited transcript of their conversation.
David Brancaccio: What do you think of what I would say is the conventional wisdom right now regarding the eurozone? Things are generally going quite well over there. We don’t have to worry about those guys much anymore.
Yanis Varoufakis: A regime’s incapacity to reproduce itself is evidenced at moments when the reality and the narrative about the reality becomes so huge. It’s very much like the early 1980s in the Soviet Union. The official version of the actual truth was so desperate, you knew the system could not reproduce itself. Europe now is in a situation where the numbers are prospering and people are suffering, with more than three and a half trillion of non-performing loans private and public. We’ve got a banking system that needs about one and a half trillion dollars to be properly capitalized and you have a political system which is absolutely buckled under its own hubris.
Brancaccio: Now the villains in your story are the forces that prioritized bondholders and big banks over the Greek population. But you also blame Greeks for getting into the mess in the first place. Are you seeing finally — it doesn’t sound like you are — structural changes in Greece that are possibly going to strengthen the country for the future?
Varoufakis: Well, we’re responsible for the fact that we were the first domino to fall. We were not responsible for the domino dynamic, which began in Greece and then ended up rendering, for instance, in Italy. Insolvent, in a sense. Structural reforms. What is a structural reform? Do you think that taking a pensioner who is living on $300 a month to $200 counts as a reform? This is confusing butchery with surgery." Go to: Former Greek finance minister Yanis Varoufakis explains how the debt crisis was a Greek tragedy - Marketplace for full article.
Deutsche Bank Suicides
Quote; "Calogero Gambino, 41, was found hanging by the neck from a stairway banister, reports the Wall Street Journal.
He was found by his wife, and pronounced dead at the scene, New York City officials told the paper.
Gambino, an associate general counsel and managing director, had worked for Deutsche Bank for 11 years.
He had worked closely for the bank on legal issues relating to the Libor scandal, after regulators started investigating the company in 2012.
He was also an associate at a private law firm and a regulatory enforcement lawyer between 1997 and 1999, the Wall Street Journal reports, citing Gambino’s LinkedIn profile and conference biographies.
“Charlie was a beloved and respected colleague who we will miss. Our thoughts and sympathy are with his friends and family,” Deutsche Bank said in a statement.
The bank has been battling allegations that employees manipulated the Libor benchmark interest rate as well as currency markets."Go to: http://www.ibtimes.co.uk/second-deutsche-bank-executive-found-dead-suspected-suicide-1471744 For full article.
The Old Divides?
Quote; “The imbalances in the economic strength of euro area countries make the continued function of the single currency area a primary concern, said former US Federal Reserve chairman Alan Greenspan in an interview with the World Gold Council. He suggests the inequality is largely down to a north/south geographical divide which means the division between the northern and southern EU countries is too big. The bloc’s more prosperous nations such as Germany consistently fund the deficits of those in the south, and that simply can’t go on, said Greenspan.
"The European Central Bank (ECB) has greater problems than the Federal Reserve. The asset side of the ECB’s balance sheet is larger than ever before, having grown steadily since Mario Draghi said he would do whatever it took to preserve the euro,” he said.
“And I have grave concerns about the future of the euro itself… The eurozone is not working", added Greenspan.” Go to: ‘The eurozone isn’t working’ - Alan Greenspan — RT Business News For full article.
Arafel comment: North and South? You might just as well say,;“beat the w*ps!” Surely returning the Grecians their marbles would be an anti-imperialist act (for it is the imperialists who have championed “The Greater Europe’s” unconsidered eastern expansion -is it any wonder that; “The centre cannot hold”?-)? Please see; “Sophie’s Choice (again)”, go to: https://gkhales.blogspot.co.uk/2016/06/sophies-choice-again-brexit.html
and the archive on; “A Place to Talk” especially all titles concerning "The Omerta", go to: https://gkhales.blogspot.co.uk/2016/12/a-place-to-talk.html
From; “Squaring the Circle: #Intersectionalities #SERCO #Mercer #CambridgeAnalytica” go to: http://www.arafel.co.uk/2017/03/squaring-circles-intersectionalities.html
" Go to: https://www.arafel.co.uk/2018/09/a-council-of-britons-peoplesvote-brexit.html
Quote; "Our focus therefore becomes on “democratisation” not as an enforced process but as a principle the benefits of which are made manifest by entering into dialogue with all the organs of the body politic. This is consistent with the notion of “emerging economy”, quote;
““unsustainable economy” is an oxymoron” No? I thought about this…many would argue (and many on the “left” also), that “short-term” “profit-taking” exploitative economies exist…but do they? Can we truly call them “economies”? For one thing; “how long is your piece of string?” We define economies by describing relationships (they are “relative”), there is a chronological imperative concerned, one cannot (surely), argue that a 5 year “un-sustainability” is an economy whilst a 3 month one is not!
Economy, of-course, also can be “of effort”, in other words efficient…there is no “economy of effort” in an inefficient system, therefore, we can argue that any economy that is not sustainable does not exist!
If one “economises” one makes one’s actions more efficient…literally one creates an economy.
One can argue that the economy existed for a five year period…but one cannot say it was “un-sustainable” for the same period…period…
…and, therefore, sustainability is a necessary component of economy…
The system is “open ended” (#opensource), it is emergent…
Quote; "Words Based on the Eco- Root Word
Following is a list of words based on the Eco- Root Word:
1. Ecoactivist: One who actively opposes the pollution or destruction by other means, of the environment.
2. Ecobabble: Using the technical language of ecology to make the user seem to be ecologically aware.
3. Ecobiology: The study of the relationships of organisms to their natural environments.
4. Ecobiosis: The conditions pertaining to a mode of life within a specific habitat
5. Ecocatastrophe: Major damage to the environment, especially when caused by human activity
6. Ecocentric: Centering on the environment
7. Bioecological: A reference to the interrelationships between plants and animals and their abiotic enviro ments.
8. Bioecologist: Someone who favors, or specializes, bioecology; such as, an ecologist.
9. Bioecology: The science of organisms as affected by the factors of their environments.
10. Ecocidal: Designed or tending to destroy the environment.
11. Ecocide: Destruction or damage of the environment
12. Ecoclimate: The climate as an ecological factor; the climate of a habitat.
13. Ecocline: Reflecting ecological conditions in general.
14. Econometrician: A student of, or specialist in, econometrics.
15. Econometrics: The branch of economics concerned with the application of mathematical economics to economic data by the use of statistical methods.
16. Economics: The study or the social science of the production, distribution, and consumption of goods and services and with the theory and management of economies or economic systems which include material goods and financial resources.
17. Economist: Someone who studies, works, or is an expert in the field of economics." https://wordpandit.com/eco-root-word/ Here we can see how closely related the notions of ecology and economics really are, this seems to indicate that the Industrial Revolution (esp.), saw a perversion of the language describing transaction/exchange in order to underpin a Socially Darwinistic notion of human evolution, allow this exploitative model to gain ascendency and fulfil (esp.), capitalism’s imperial “manifest destiny”. It may, therefore, be the case that a misapprehension of the nature of economic theory has stemmed directly from the exploitation of non-renewable resources." go to: https://www.arafel.co.uk/2021/06/a-dangerous-conflation-socialism.html
