lend-lease oder prime-directive

Not to be confused with the Emminger Reforms, an arguably kindred precedent that essentially did away with trial-by-jury for the German justice system, the Emminger Letter (PDF from the investigative memory of the Official Monetary and Financial Institutions Forum) covertly drafted by the then president of the German Bundesbank, Otmar Emminger, to Helmut Schmidt, Chancellor of West Germany, in 1978.

The German banks made the willful decision to breach their rebuilding, reparations agreement to support weaker economies through exchange rate settings (before the common currency), fearful that manipulation would damage the home market through inflation. Haunting and lingering, the resistance was brought to unofficial policy back then over Cyprus, as today, and has been invoked several times during the intervening decades over France and Italy. The truth will out, I suppose. Do you think there are some secret intrigues going on in the European banking community?

tympaneum or archivolts and dosie-dotes

The de-coupling in phases of the world’s monetary supply from the Gold Standard is often cited as the cause of all the world’s ill, and I think I tended to buy this footnote wholesale without really understanding the circumstances but projecting the same consequences. The ability to imagine a different outcome from the same precepts is a good test for anything, including one’s own humanity, and even if one cannot really see an event through to an alternative conclusion—it’s an important exercise, nonetheless. In order to finance an unpopular and lost war with more latitude and flexibility (made inflexible by the lack of a legislative declaration of war and in part by foreign lenders that had grown increasingly wary of the America’s ability to make good on its obligations) than was afforded by dollars not yet fiat, US President Nixon, in 1971, abandoned the Gold Standard as the economic unit of account (at the time, about $35 per ounce and the move was the last echoes of economic inheritance that started with the Tulip Stock Market Bubble of Old Amsterdam or Istanbul) and declared the dollar inconvertible.
That measure, though serviceable, was just a means to an end— something universally arbitrary and scarce, and I am sure had it remained in place, mankind would have long ago harvested all the asteroids and be well on its way to colonizing that diamond planet. This untethering was quickly adopted by all markets and gave central banks license to weave new economic policies. The price of gold (denominated in dollars) has increased exponentially over the past four decades, as has the global population of dollars but I don’t imagine that the relationship is mathematically commensurable in any rigourous or positive way, since all those new dollars (and euro and yen, too) are floating currencies—unpegged to the exchange of any commodity or treasure. I am sure that the long–term consequences were pushed aside by immediate liquidity back then and no one could envision a system buffered but not buffeted, supported by any independent reckoning of wealth. Markets never move lock-step and there are inherent inequalities to begin with, so one should have anticipated deleveraging and inflation, though since that fateful, fitful decision. Financiers and croupiers, however, since have been busily spinning new and complex instruments and shadowy banks to hide the true impact of rising prices and wages that don’t keep stead. This concealment has served up a political and civic situation wherein governments are caught in the web of business interests, behoving them not to make a misstep for fear of attracting everyone’s notice, and lack a clear direction or goal, since any deviation is washed over with money matters. Among divided populations, every nuanced and blatant move turns back on itself and to the economy. It is not indecision that makes some fear a People’s Republic of America or a United States of Europe—there is division and uncertainty, true, but when calls for discussion or warning cannot rise above the din of money matters, we just get unenlightened despots thrall to business.

pseudoscience or bulls and bears

Unlike Math Bear here, being a numbers’ man in the bourses does not demand poise, genius or meditation. Solutions probably are not gained via reason or sudden intuition. King Consumer’s sentiment that underpins larger economic models is not rocket science either, and the thresholds and triggers that influence commerce cannot be rung up and down the totem pole to in a show of correspondence, neatness, predictability.

Investing is a calculated gamble but has as much to do with recklessness and risk than any de-natured economic principles or discipline. Yet the luck and hubris that is far from savant knowledge of the fundamental commodities for which money and monetary instruments is only an ethereal medium continues to be accorded with a level of respect and awe, assuredly with self-promotion and carefully crafted perception. The guesswork and gloss are even perpetuated against strong evidence to the contrary, put on horrid display over the past four years. The same dangerous configurations and unscrupulous behaviours are being vetted to continue the game, unbesmirched. All art and practice demand clarity and discipline and, regardless how particular and idiosyncratic and a framework of rules. Flexibility and responsiveness has created a drain on necessity, replaced with a codex of economic-relativism that allows one to dictate the rules as one goes along. While it is equally limiting to rely on false constructs, imagine what can still be done according to traditional arithmetic.

snowball

Those who criticized and ridiculed the Occupy Movement as something disorganized, unfocused and undisciplined are already getting a good dose of evidence to make them want to retract that statement through their help for the displaced by Super Storm Sandy and other charitable works. The cynics, however, might learn soon not to underestimate the power of the people through their latest venture. It goes without saying, I think, that there’s no revenge or getting back at the powers that be motive behind such projects—getting even is hardly hopeful or affirming and I think such objectives pull down the whole enterprise to the same sort of thinking, characterized by greed and insecurity, that got all of us in this mess to begin with.

Next week, beginning with a gala, old-fashioned fundraising telethon, the Occupiers will launch Project Rolling Jubilee. Taking a cue from the business plans of the worst loan sharks, bounty-hunters, repo-men and usurers—the practice of selling or unloading loans and mortgages that have the potential of becoming risky or going into arrears amongst each other at a discount, the organizers plan to buy up distressed debts from the lien holders for pennies on the dollar and forgive the car loans, medical bills, student loan debt and underwater house payments. Occupy owns the loans and liability and can discharge with them however it sees fit.  An outlay of $25 translates to about $600 worth of debt loans, and cumulatively that can add up quickly and rescue a lot people from a burden that they could not hope to dig themselves out of otherwise and do things more productive with their time and resources than worry and work to enrich a system that has avalanched so far afield from fair commerce as to be alienating. This cause sounds like an unbeatable and most sustainable return on investment.

forward

I heartily congratulate the American people and Barack Obama on his re-election. After debate, treatment, retouching and legislative gridlock, there would be more than a sliver of daylight’s difference in the outcomes for social programmes and diplomacy between him and his challenger. 

I believe, moreover, the opposition’s biggest hurdle (that they set up themselves as a stumbling block) was the inability—in fact and in argument, to convince voters that they were interested in being any more than the president of the 1%, the 99%, the 47% or the 53%, no matter how one cuts it, a whole swath of dissenters and people with different priorities and approaches would be disenfranchised. Sympathy and reform are not divisive, and while first terms are not dress-rehearsals, time, patience and experimentation are necessary to see innovation through, especially in the annals of government. Maybe not every hope and help was able to roll out after that carwash of debate, treatment, brinksmanship and infighting perfectly and true to the original vision and intent, and many decried the frustration and impositions of State as execution settled, but I think that at bottom inclusiveness proved to be an invitation to join in those aspirations and willingness to brave new directions, with open eyes and full knowledge that the roadblock of one person can become the safeguard of another. There is unfinished business to attend to.

ojos bien cerrados or pay no attention to that man behind the curtain

There a perfect cover for the meeting of finance ministers and reserve bank chiefs of the G20 nations going on in Mexico. One wonders about the timing of such things and though the meeting seems kind of formal and anodyne, one still cannot quite shake the feeling that important decisions are being vetted—the kind that governments cannot rely on democracy and openness to choose wisely. There is no rudeness, nor strategic advantage, I think, in not waiting for the outcome of the US elections, even though neither of these events went unplanned or were scheduled in a vacuum.

I fear that the results will be hotly contested and unknown for weeks, but regardless of the conclusion and attendant consequences, the US president will be accedes to the same fiscal situation. Most of the discussion in Mexico seems to be economic-boilerplate, not choking off near-term growth by too great a focus on austerity and discipline, deferring the savings and necessary restructuring for later, all which might seem a rather insignificant message to come out of the gathering of so much talent, power and influence ten-thousand kilometers away (for the EU representatives) but bureaucracy is often like that.

In as much as some events might like to have the spotlight stolen from, maybe this conference also stands for the scales that fell away from one’s eyes in another regard (scales—that phrase has been haunting me throughout the campaign, an obscure and automatic saying like, “As I lay dying, the woman with the dog’s eyes would not close my eyes as I descend into the underworld”): the chaos the whole of the banking and financial system has wrought. Maybe the illusion is dispelled that covered up the cycle of boom and bust that is a dissonance and a disconnect from the real economy and only plays policy into the hands of money-managers. The allure and ease, stoked by private concerns, keep central banks and ministers distracted from the real charges and warrants. The charade crested in 2008 and left many disillusioned but so long as there is money to be made off of money, some will try to keep up this effluvious momentum. Maybe such overshadowed events, spared some attention through timing, are acknowledgments that people are weary of talk without protection, calls for reform and toning down the rhetoric of ascetics, and efforts and assessments to bridge disorder best not receive top-billing so we’re not all heir to this fiscal froth.

umfrage and johnny quest

The word from Berlin and surveys departing on several different course to gauge public sentiment for the US election is overwhelming in favour of keeping the incumbent in power, both for charismatic reasons and for self-interest.

The observations of outside, apart from the mêlée of the alternately courted, demonized and pandered voting public, gave me more and more cause to wonder how it is that people can be persuaded to vote against their own self-interests and move retrograde on small yet significant gains. German opinion cites an economic introversion and protectionism that will create an unfavourable trade environment and a swaggering defensive posture that not backed up by ability (economic latitude) but rather demanding more of NATO partners in order enable their ventures, while other priorities, like ecological stewardship, fall by the wayside. Such secondary, knock-on consequences sound dire enough, and I wonder what possible first-order geo-political results might pan out, either by a pretend mandate or warring factions exhausting resources and credibility on a dishonest drive whose rules have been determined not by consequence but rather by the ephemeral spin of the media and framed fears.

we won't be pwn'd again

Via the ever splendiferous watchers at Boing Boing, Electronic Frontier Foundation reports on what struck me as a new tact on the part of the entertainment industry and intellectual property chieftains but is just I suppose the latest assault in the bullying-desperate attempts to alienate ownership, entrepreneurship and fair-use. Essentially, an international textbook publishing house has placed an injunction against a student from selling his used learning materials, because, they argue, the content was manufactured, compiled overseas and therefore not subject to the legal principle of first sale, a doctrine that makes venues like eBay and flea-markets and charitable giving possible because one is selling one’s ownership of the thing and not the copyrighted content of it. The US Supreme Court is scheduled to hear arguments, for what seems like a sophisticated and possibly pervasive loophole, since there’s little that is created without non-domestic contributions, and is expected to strike the publisher’s case down as clawing.

For companies to be able to dictate what can be resold or given away after they’ve made their initial profit seems absurd and specious, if not blatant overstepping.  Industry, however, has been codifying and campaigning against the idea of right to property or some time, through various avenues and with unbalanced successes, attempting to extend the lifetime of copyrights and franchises and introducing a little estranging thing called an end-users’ licensing agreement (EULA), which is not a bill-of-sale but rather a permit to use and enjoy their goods and services within strictly defined parameters. While I do not think that the American high-court would open up a legal framework to criminalize garage sales and that there’s no way to argue stealing and counterfeiting out of piracy, there is a creeping and seemingly relentless offensive in favour of large-holders that is in the interest of everyone watching carefully.

gestalt

Campaigning sets off a dissonance that I think goes hidden, unexamined too quickly for both the presenter and for the audience. It is not the art of oration, in my opinion, to suggest and convince segments of the public that what they want to hear untangles half-truths and heated promises, nor does anything more than mask the compromise and confusion. Though we’d like to look away and turn inwards, sometimes it is necessary to try to reconcile what does not quite correspond with reality.

ingot audit or treu ounce

While the merest suggestion that all the gold reserves in Fort Knox might not be fully accounted for is dismissed as the anarchistic and rambling speculations of a Sanka drinking mountain woman, the same question posed by the German Schatzkammer, the competent authority for auditing such things as the nation’s some 3 400 tonnes of gold, seems to have drawn some serious, if not careful and apologetic attention.

Germany and other countries have some of their supplies held in case of emergencies at central banks and depositories around the world, in order to be able to more quickly liquidate their stocks in a foreign currency, should a crisis break out. Given advances in electronic commerce, the common currency of Europe and the shaky state of the economy in general, this arrangement does seem a little outmoded. Although assurances are issued annually, Germany also worries that its treasure might not be inventoried and guarded properly, if not loaned out from time to time, used as door stops or treated to a tea-party rather than quietly resting inert in the vaults. Unlike Fort Knox, with little trouble, the public can arrange tours and get a glimpse of the horde (it’s Germany’s that they get a peek of) in the deep cellars of the Federal Reserve Bank in New York City, some fifteen levels below the street and beneath the waters Hudson Bay. I am sure it’s a safe place but perhaps the gold should be repatriated and not on permanent-loan.

wies’n or the price of eggs in china

Der Spiegel’s English language site has an excellent essay—somewhat of an apology, on the opening weekend of Oktoberfest, which goes on to extol the virtues of the world’s biggest celebration. Though many Muffels summarily dismiss Oktoberfest as dilute and overrun with tourists, profoundly Bavarian and like Pinocchio’s Island of the Donkey Boys, this ode urges people not to succumb to this attitude and enjoy the traditions and atmosphere, which are still buoyant. All in all, there is little negative press surrounding the event (that’s propagated by word of mouth and wavering on plans to go) other than the annual constructive cost analysis on that litre mug (Maß) of specially brewed beer. The increasing expense of refreshment is intensely discussed as a macroeconomic indicator. Everything from the relative worth of the euro, inflation, grain supply and climate and fuel costs—including how much of said grain supply is on hook for bio-fuels, and the sentiment of the competing brewers, is encapsulated in the price of a tall drink. These incremental increases do dampen the mood, a bit and at first I suppose, but attendance and consumption is on the rise as well and I think, despite the crowds and excess, such dull cares ought to be tossed away at a monumental and historic party.

vorbild

There has been a strange culminating coincidence of following Germany’s example in the media echo-chamber of three diverse episodes and I am not sure what to make of it. The first two decisions came from the States but came in such a fashion seemingly unaware that of Germany’s contemporary hardships and debate over the same issues: the decision to award an outrageous prize to a former Swiss banking executive who was willing to disclose the practices of his old employers regarding US accounts, and the decision on the part of the state of New York to regulate circumcision ceremonies.
Regarding the former, not only does what the US tax authority did by putting its faith in the char- acterization of a jilted banker, probably dismissed from his post for cause, sound dangerously like the trust that the war-mongers and architects of the invasion of Iraq placed in dissident and informant Curveball (who told the planners exactly what they wanted to hear—German intelligence recommended that one ought to consider the source, incidentally), America is moreover choosing to traffic in stolen goods and jeopardize any established agreements to share information. Germany was put in agonies by the same breed of thieves and illegal sales. The later matter is certainly not a trivial thing and means a lot to a lot of individuals, but the repetition of the controversy on Germany’s proposed ban on circumcision carried out on solely religious grounds was nearly nauseating to hear, considering the subject, and sparked protests and counter-rallies. Even though the government recanted, somewhat, later, the anger is still fresh and repercussions are still being felt and relations need to be mended. The last instance was of a surprising and somewhat uncharacteristic protest on the part of the people of Japan. As Germany done in the immediate aftermath of the disaster of Fukushima, the Japanese demanded a phased drawdown of nuclear power. Japan, however, was fully cognizant of the challenges that Germany is facing and scramble to maintain energy for a hungry industrial sector and affordability for the public. The decision, in this case, was made by the people and not the government and had some time to incubate.

munity on the bounty

For the US (and I wonder who were the competent authorities in this decision-making process) to reward a former Swiss banking executive with a king’s ransom (some one hundred million dollars) for disclosing the apparent practices of his employer and the handling American clientele is undoubtedly incendiary and no recompense (should any materialise) can justify the damage being done to dialogue and diplomacy.

The already strained relations regarding reciprocation and transparency are being trounced further, and no caution was heeded though this routine has been well-rehearsed by some desperate (despite intentions) elements of the Germany government, who offered similar bounties for equally ill-gotten intelligence. Swiss banking culture, being what it is, models the integrity, discretion and independence of the confederation and cannot expect to assimilate the heavy-handed and rogue tactics of failed regimes that provoke such flight in the first place. Had the US Internal Revenue Service or the tax-code that governs their work been crafted and enforced in an equitable manner at the onset, there would be no need to try to deputize informants to act as its agents.

johnny appleseed or be you and I behind an arras then

It’s painful to contemplate—and is by no means exclusive or necessarily defining but as far as trends go, so goes America, so goes the world—how American influence and leadership is being hijacked and replaced by the pretenders of corporate hegemony.

Industry lobbyists have courted (bullied) the government to such an extent, that legislators and officials have little choice when it comes to drafting rules and regulations in support of business of gaffers and the artisans that produce all the props of security theatre and the clawing theatrics greed. In blocking most any scene, the portrayal of need is unconvincing and rather an unashamed taut for the wardrobe or lighting-and-sound department. How many new uniforms, calliopes, magic lanterns, gels and flats do we need, in the name of safety, security, integrity or unmotivated invention?

The framework that’s been crafted is not just to the benefit to the darlings of contracting world, but a legislative landscape has been staged that’s overly favourable to the establishment, both in government and in business, and is very much against competition and growth and has sanctions in store for anyone not willing to play by the rules. This type of performance has a lot of different venues and circuits but is probably most stellar in the politicking of ways basic and unalienable—food and footprints. So many stage-hands are helping to ensure that no one or nothing is ever forgot, exposed and articulated except when the truths are embarrassing or uncomfortable for the directors and producers, and nothing’s committed with an ounce of anonymity. As for food, it is acquiring similar markers but to a different end—invasive and not readily refused.

elucidation

Der Spiegel’s English language site has an interesting brief (that I could relate to) on the challenge faced by media outlets in finding fresh visual metaphors to illustrate the economic crisis in the eurozone. The standard seems to be subjecting the banners and mascots of statehood and national identity to various forms of torture and peril and most definitely showing euro coins in all denominations defaced and distressed.

Some subjects and themes, as determined by mood, rumour and the forecast, are highly popular. There are certainly a lot of creative and emboldened dioramas out there that demonstrate photographic ingenuity and that sometimes verge on silliness and hyperbole and sometimes a bit mean-spirited. I especially feel sorry for the poor stunt-money that’s afforded no respect.

doctor pangloss, I presume

The ever engrossing and a sure bet for a good take-away to ruminate on, Boing Boing, recently presented two brief and chilling tracts about the echo chamber of communication and some dismal reflections on the realities draped by economic cheerleading. Boy, this was some bleak stuff, presented in a way that was hard to refute or not be disheartened.

Both made some arresting assertions that only seemed truer on dissection, memorable and ready to be unpacked or walked back like the collection of pensées. Without being shrill or dogmatic, the first article offered the axiom that one's smart phone is basically a tracking device that allows one to place calls. I only ever use that app that allows one to hear and speak to people over any given distance and that other app that allows one to see the time of day, but the interview goes on to illustrate what systems are already in place to limn a complete dossier of anyone and how the idea that one has nothing to hide is smug and irresponsible, since communications are interconnected and false assumptions are made and errant words can unintentionally become artillery for anyone in our network. The second article is a virtual bucket-list of 21 facts from economist Ian Welsh that bespeak trembling and revolution. Among other truths, austerity is defined as the opportunity for venture-capitalists to acquire assets usually not up for sale, that wage-earners are beholden to the company store and are unlikely to escape (although that disbelief is what sustains even the worst of markets) and that resistance is futile for those regimes who would dare oppose the conditions levied on the public by corporate interests. Both are definitely worth the read, despite the discomfort and disillusion that may result.

forever blowing bubbles

Shopping cart here has perhaps an overly simplistic view of the European financial landscape but does pose an interesting choice. I think matters are still relatively ratcheted down for a summer of tourists skimping on the souvenirs and a bit of muted enthusiasm for travel in general. I do think, however, there are some dangerous undercurrents that ripple and bellow in the belated season, like some strange mirage or fata morgana come too late. There are swirling simooms of dissonance that might prove to pull the eurozone asunder with their contradictory forces. Rather than structural weakness in underlying markets or an experiment disproven but rather because on the one hand, investors, seeking shelter, are inflating a bubble of Germany’s relatively robust economy, while simultaneously, supporting the isolation, quarantine of broader institutions by encouraging locally-funded initiatives.
Ripe for chaos, Germany as an anchor of the eurozone’s single currency fronts quite a bit of appeal, industry more sustainable than the husks of manu-facturing or market nervousness elsewhere, but that too could be oversold. Meanwhile, in order to contain potential losses should the euro be splintered into the Mark, franc, lira and peso again, activity is quietly being limited to sources in-country and involvement across borders, save berthing extra money for safe-keeping, which really benefits no one in the long term and damages the good-turn done for regional entrepreneurs and business at the same time. For example, an Italian multi-national corporation is shoring profits in Germany (perhaps buying up debt and real estate) and elsewhere while directing its affiliates in France to only solicit from French partners, as if the denomination was imminent I hope that this familiar tug-of-war does not escalate further.

dbase or paying peter to rob paul

The German state of North Rhine-Westphalia is again bringing scrutiny on itself by putting on airs of vigilantism and proceeding with the purchase of more data CDs from Swiss banking institutions with information on German account holders.

While I can understand and do sympathize with the slowness of reform and the byzantine channels of bureaucracy, NRW is really airing its frustrations—continuing to pursue this tactic in order to reclaim hypothetical tax revenue loss from citizens who might be seeking to hide wealth in the Confederation and then previously threatening to withhold financial assistance meant to help the former East Germany develop economically—by taking matters into its own hands and exercising a prerogative that is criminal, at least by proxy, is exacerbating and threatens to unseat the whole process. Such volleys of deals that are not above board, however indirect, and trafficking in stolen goods would make the Swiss, I think, unwilling to entertain more transparency and reform in a legal framework, and turn German depositors into anathema, unwelcomed like their American counterparts already shunned by the US’s world-policing. Further, Switzerland, in order to dampen the effects of investors seeing the franc as a safe-haven and the follow-on inflation of its value (being bad to trade and export), is buying up quite a significant amount of German bonds. In other words, servicing German debt, and while I don’t think that act against its own interests like the government of NRW (or what the American authorities are doing) by doing something rash and outside of jurisdiction, decisions are suspended on a delicate equilibrium that is not beyond being passive-aggressive.

nickled and dimed or be gone dull care

Summer recesses and vacation opportunities, depending on the culture of course, I think have always muted financial developments. It is, however, rather eerily quiet right now, and not maybe the driving forces, rather than those that have to deal with the consequences, are on holiday. Still, underlying conditions have not improved or set in the right direction and plans are going unattended without even follow-on debate or discussion. Perhaps less meddling is called for in order to separate the real from the virtual market, but still America is without a budget with an economy buoyed momentarily by turbulence and expecting yet another round of so called quantitative easing and the bargaining and coping of an election that may see drastic cuts to the social safety net, and Greece is primed to renegotiate its financial aide and stake its membership in the eurozone on the good graces of its neighbours.
Toil and trouble never take a holiday and I wonder if the hiatus from the attention and worry from the usual hyperbolic and gloomy headlines and analysis is to purpose: the prophecies of doom are inuring, lulling and desensitizing and can be by such cycles suspended or overcome before they cry Wolf. The driving forces probably need the support of a labour and spending pool prone to anticipate such drama, because I suspect that a dramatic crisis is not deferred otherwise, creeping and leisurely at a vacationer's pace and not with the expected and wanted clarity of disaster.

no quarter or crowded house

Here’s a pessimistic thought: the same mob-mentality that fomented the same froth of bubbles that burst with the real estate market is likewise the authoritative voice on what constitutes a secure harbour, a safe-haven investment to berth one’s wealth and is kettling (purposefully or otherwise) to the same supposed shelters.

Not finding the proposition of holding fiat currency liable to fluctuation at interest rates that are not keeping pace with inflation and an uncertain stock market, people sought shelter in fundamental instruments that were lauded to retain the value that by all rights they should’ve: homes and real property. This trend, however, attached more takers than the market could honestly sustain and some trickery and greed kept up the enticement far too long. Though they have economic trifles of their own to address, bigger markets like the US and Germany are able for the time being to absorb the rush and act as a relatively secure harbor, but brokers are redirecting interest and channeling fear to a clutch of smaller economies to their acute displeasure. I don’t think a Switzerland, a Norway or an Iceland on the mends particularly like being dubbed a safe-bet as the influx of phantom money, held in trust but not benefitting the local marketplace, that they cannot accommodate and is proving ruinous for trade as it over-values their domestic currencies. Consequently, like with the housing sector, or anything else over-sold and amateurish, one seriously risks inflating so-called safe-havens and worse denigrating the commodity that is one’s home—maison, zu Hause, Huset, Húsið, and making it worth less through attribution.