Doesn't seem to be working

I'm afraid that the list of probable outcomes for Syria, the Euro, world peace and the solution to the Global Financial Crisis have had a bit of a set-back in recent days - back to the drawing board, eh!

Let's just kick a happy ending to the GFC into touch with the announcement of unlimited Quantitive Easing from the Fed. Seems that they have finally accepted that no finite amount of money is going to solve this one and they're going to print, and keep printing, sufficient money to buy back all the toxic financial waste out there until there is no believable money left and the world's economy explodes in a shower of million dollar bills. They're betting on the off-chance that there is a completely inexplicable global economic recovery in time before all money turns to wallpaper or that, with luck, a total collapse stops-short when inflation reduces the real cost to a couple of weeks of your child's pocket-money delivered in a wheelbarrow. All of this will, of course, be in an attempt to save the banks from themselves - and from collectively destroying Liberal Capitalist Democracy.

Another blow to Liberal Capitalist Democrats is their inability to immediately seduce everybody on their first date. An inability recently confirmed by the people of Libya, Tunisia, Egypt and Yemen. That democratic capitalism isn't the Casanova of politico/economic systems they imagine comes as a bit of a shock to those that announced an end to history some decades ago. Rather than call the rejecters ungrateful, treacherous, sods we might take a look at why they might not want to get into bed with the likes of Goldman Sachs and the Royal Bank of Scotland. The tenets of Islam reject the fundamentals of capitalism. One has Faith the other economics. The will of the Creator versus the will of man. And that's before you get to foreign policy.

Which brings us to Iran, Israel and Syria. Iranian Revolutionary Guards are assisting Assad in his fight against the very sort of "freedom-fighters" that just blew away an American Ambassador and attacked disparate US Embassies - fired mortars into a coalition of the willing base in Afghanistan and have racked up a growing number of kills recently. Not on a par with the number of women and children collaterally killed by CIA drone strikes but substantial enough to ask "what the fuck are we doing"? Meanwhile Bibi is threatening to launch the, peace-loving, Israeli Defence Force against the Iranians to stop Iran having as many nuclear weapons as they have - what ever happened to Mutually Assured Destruction as a keeper of the peace? Just to make sure the Israelis don't do anything stupid, like lose, the US has moved a fleet into the Mediterranean accompanied by a couple of tugs from the Royal Navy.

All of this is predictable but apparently incomprehensible to the Americans who are baffled and yet again asking "why do they hate us"? It's not Americans they hate it's their government's policies. Which takes it way beyond an anti-Islamic film clip. The Arab world has found a voice after generations of a repression supported by the USA, among others, for pragmatic political and economic gain. The travesty of Americans complaining about how ungrateful the Egyptians are, when they have received $billions in US aid, need to remember that most, if not all, went to a dictator that ran a police state and not to the fellahin. If Americans learned to shut-up and not claim to have brought Freedom to all and sundry and were to stop claiming they're Exceptional they might lose a few less Ambassadors. This is a message that the US News media needs to get it's head around. As was said when the USA was last embroiled in a war they lost "the whole world is watching".

If you compare the manner of death of Ambassador Stephens in Libya with that of Ambassador Davies in Cyprus there's little to choose between them. A group of armed attackers among a few hundred or so protestors that clustered at the US Embassy opened fire on it and killed some of the occupants. There was never any contemporary suggestion that Davies' death was the result of a pre-planned attack - things were different then -  although many of the armed attackers shooting at the Embassy were in Greek-Cypriot National Guard uniforms and had arrived carrying weapons - one had a stick of dynamite. The Cyprus attack was put down to EOKA-B terrorists - which suited everybody as the Embassy was attacked by Greek-Cypriot Guardsmen that believed the US had stopped the Greek Military Junta, then in power in Greece and supported by the USA, from providing military aid to combat the Turkish invasion of the island. The US didn't want two allies fighting each other and imposed it's will. In Libya, that there are a bunch of armed men at every road junction in Benghazi would have provided the requisite fire-power to attack the Embassy. That it was done by the very fighters that benefitted from NATO intervention in the revolution is problematic and needs an acceptable explanation.

You can't have the same freedom-fighters that you just provided with the blessings of freedom turn their guns on you as the spontaneous result of it - you have to protect your core belief of a grateful populace and invent a conspiracy involving a sworn enemy. Both deaths are the result of  US foreign policy camouflaged to look like the work of rogue terrorists rather than a widespread, popular, and violent rejection of those policies. I believe this is called self-delusion.

I have always thought that the habit of US worthies to travel in not-so-discreetly armoured, heavily tinted windowed, American made vehicles in the company of two or three men the size of American Football Line-backers, dressed as heavily armed anglers, with overly sensitive eyes, was a bit of a giveaway. The concept that this group can arrived un-noticed at a "safe-house" in downtown anywhere is bordering on the hysterical. Especially after the reputation such vehicles gained in Iraq - not without some justification.

Engpasskonzentrierte Strategie

It would appear that we are all now expected to find work "fun" into our seventies to fulfil our mission as state unsubsidised (and progressively less healthy) consumers - even if there is no work available outside of a supermarket check-out counter - as most people trying to get a new job at 60 might confirm. And as these jobs are now staffed by recent university graduates there's not much of that about. To what end are we working then? The vast majority do it to get into and then out of debt - a microcosm of today's financial market model. The product of Politicians and their economic advisers that have read Ayn Rand (incomparable nincompoop) as non-fiction. And we've recently seen where that leads.

Economists are now spewing forth the should have, could have, would have insights that the whole resultant catastrophe was predictable using the very same indicators that they invented to create it in the first place. The commander of the 18th Panzer Division said, after the battle for Smolensk, that they were winning themselves to death. Free market economics have succeeded in doing just that. Not very surprising then that Goldratt espoused the "weakest link" theory by following on from the German Wolfgang Mewes' "power-oriented management theory " and his later "Engpasskonzentrierte Strategie" - both of which the Wehrmacht could, would, should have borne in mind when they got into but not out of Stalingrad. And that's the Germans and the Euro for you.

There is a geo-strategic phenomenon called the "Eurasian Funnel" that illustrates the inability of a given Western force as it advances East to saturate and control terrain leading eventually to the isolation, exposure and destruction of that force. The same could be said of Economic Globalisation. Unfortunately the cheerleaders for Globalisation didn't follow the first law of military success - Never invade Russia - or, indeed, never march East.

What we have in Goldratt is a Bottleneck theory that ends up as a Funnel - most, if not all, Growth theories do this. That all of this is blindingly obvious doesn't appear to have prevented numerous repeats - the result of over-imagination rather than a limited one. Which brings us to that other financial market chestnut - Risk. Risk is always used to explain why we lost not how we won. It is a weasel word. While banks and bankers thrive and corporations sit on a pile of money a large part of the population is told to expect to spend their old age behind a checkout counter or stacking shelves. Which is the logical conclusion of a finance/retail economy when Economics relies solely on a selfish Dogma.

Work, then, is so that you can buy things you don't need to impress people you don't like. Its the best marketed product in the world, unfortunately for the majority of workers, its not the best paid. Which brings us back to the fundamental Market Economy sine qua non of Supply and Demand. If there is no demand there is no supply so there is no work and thus even less demand- no amount of Goldratt can fix that.

The modern Olympic Games have yet again demonstrated that they are simply an expensive giant monopoly advertising campaign decorated with athletes wearing product. This is best illustrated by the 100m and 200m sprinters wearing wrist watches - what for? These folk shave off their arm and leg hair to go faster. It takes less than 10 or 20 seconds but as they get into their blocks the cameras linger on their arms and hands settling behind the start line. Product gets air time and the athletes get a few more bucks.

It cost NZ an estimated $4 million a medal in London (a rounding error in what it cost London to stage the Games) - a few hip replacements there - so there is very little justification to continue this sporting nonsensical extravaganza - when slashing every other budget. The Ugandans, Kenyans and Ethiopians won a few medals while millions of their fellow Africans starved.

A load of outdated Nation State bollocks that brought us 2 world wars. Move the games to Greece permanently (they really could use the money) and select the athletes on ability not nationality. Also get rid of all this French language waffle - slows the ceremonies down and confuses the Chinese.

Barclays Boson

How appropriate it is that in a week when the particle that lends the impression of mass to elementary particles is claimed to exist there is an announcement about how Barclays, without benefit of a Hadron Collider, added previously unexplained mass to 350 trillion worth of LIBOR transactions. It involved a non-conventional mathematical construct, involving quantifying Bollinger receipts, and contacting collegial counterparties - you can’t pull off this experiment without a counterparty particle. It would appear that these particles avoid being transported, to another universe called jail, because of the complex rules and equations of international banking that result in situations where the normal rules of both finance and the criminal law are suspended. It would seem that these laws are invariably suspended when ultra high level sums exert their gravitational pull on conventional bodies.

However, finding this Boson is needed because if you give all the particles of the Standard Model original mass then the standard model explodes - whoomph - so mass has to be added later from a completely undetectable field - dreamed up by a Mr Higgs - a field as yet unfound. In the manner that bent plods will skew evidence against the accused, after charges are laid, physicists will find the particles required to support their case even if that still can't explain 75% of everything. To maintain funding for a hadron collider they have to come up with something.

Unfortunately, this discovery further closes off the standard model from explaining gravity - unless there is a bit of Higgs Boson left hanging out of the Standard Model. Nor does it help reconcile Quantum Mechanics with Relativity. For that they'll need the scientific equivalent of the Barclays Boson or Graviton. Remember these are folk that rely on a theory that allows the distance between zero and one to be infinite - while not having explained why there is a need for such a thing as infinity or where is zero? This is what is called fiddling the books to suit yourself. There is a Standard Model industry supporting tens of thousands of jobs. Scientists are perfectly capable of sending the "Look Jimmy can you adjust your outcomes to make sure we get this years money or we'll end up like NASA" email.

But what if the Standard Model is the same as LIBOR - an illicit mechanism - a complicity? The Barclays Boson has shown sufficient mass/gravity to suck all money towards it - leading to the conclusion that the Barclays Boson is a main particle ingredient of the Banking Black Hole. All money in the universe is sucked towards this black hole and after reaching the Event Horizon appears to stop moving before disappearing entirely. Which is the situation in the Euro Zone right now.

According to the little guy in the wheelchair with the funny voice there is enough leakage from this Banking Black Hole to fill bankers' pockets  - while everything else in the money universe is stretched to destruction before being compressed to the size of a Bollinger cork.

At this point, a reminder that most of the clever mathematics that went into the financial universe came from the same source as the Standard Model. 

And according to it there is no possible way of getting the Bollinger cork to re-expand - this having happened during the accelerated expansion era between the Big Bang in London and 2007. Unless, of course, we can find another dimension full of money. Seems unlikely unless discovered by the world's central banks in the form of a faster than light Money Particle, not subject to the Standard Model, that finds it's way out of the Banking Black Hole. So given this, it is probably time to hand over the fiscal responsibilities of the ECB, Bank of England, The Fed, World Bank and International Monetary Fund to CERN in the hope that 75% of the money is still out there and can be found. Otherwise we'll need to be invaded by aliens awash in cash.
So what other particles will we find in the Banking Black Hole - well, given the standard banking model, you'd expect to find all the banking Bosons in it. Unless the recent discovery is reversed and the Barclays Boson reverts to being invisible, undetectable and massless. Every attempt will be made to reverse this finding. No counterparty will ever be found to admit to trading in anti-money - the ability to make money where no money exists. 

The banks have turned out to be Hos caught faking a financial orgasm.

Criminal Complicity

Finance, it is claimed by its practitioners, is the equivalent of 4 dimensional Chess and can only be played by the gifted few. It is far too complex for run-of-the-mill human beings to get their minds around. We are the spectators, if not fans, of the thrill of money even if someone else has most, if not all, of it. And, as with all spectators, we are overcharged - in this case not for seats, hotdogs and chips but for homes, mortgages and credit cards. And who knows what else?

I’ve met bankers. More than a few of them, or I’d choose to. They were the ones drinking splits of Champagne when we were drinking pints – you didn’t particularly want them in your round. I’ve met brokers and traders, economists and regulators. I’ve engaged them all in conversation and I have to say that I didn’t find any of them spectacularly smart – especially given their level of hubris. Their choice of idiom made them sound more like real estate agents or used-car salesmen than responsible managers of untold quantities of other people’s money. The term that came to mind to encompass most of them was “lightweight”. I’d long before concluded, from the rich folk I’ve met, that you obviously didn’t need to be a member of Mensa to make a lot of money so I put it down to luck.

More the fool me it turns out. That 4 dimensional financial Chess game was a chimera if not criminal complicity. It may not have started out that way but it certainly seems to have ended up as one. Except, as is now exposed, it isn’t 4 dimensional it is 5. This additional dimension is inhabited by politicians, civil servants and the press - another zone where the term “lightweight” must be applied.

We are expected to accept that the same people can be permitted, without external interference, to investigate a possible criminal case of their own making. How? Why? They can’t be relied upon to prosecute themselves. The Prosecution is already briefed to lead for the Defence. Even though most, if not all of them, were aware of, and thus complicit in, interest rate rigging since at least 2007 they are now rushing to the front of the queue of the innocent claiming false outrage in an equal quantity to total ignorance. Do you expect the pickpocket who stole your wallet to return it to you and face charges of theft? Then why expect these guys to give you your money back.

Maybe the term “criminal heavyweight” is more appropriate.

So what else are they capable of being complicit in - fixing Oil prices, raising Food costs, ramping-up Power charges? How about crime? Where will the trail lead – “follow the money” straight offshore. To the land of NOD – No Oversight Desired. This land can be found instantly by a banker at the mention of the word “Tax”.  Bankers in NOD appear to have assisted in the transfer of $billions worth of laundered money into the USA for the likes of, in one instance among tens of thousands, Russian used–car dealers. The Banks excuse; “our controls could and should have been stronger and more effective”. This sounds a bit less than sufficient given that the bank ignored $60tn worth of wire transfers and account activity and had a backlog of 17,000 account alerts regarding suspicious funds. All of which was known to the appropriate regulators but about which nothing was done.

It’s been a bad week for banking. does anyone care?

Dead Cat

The box is open and the cat is dead. The mathematical theoretical physics behind the "no risk" financial market experiment has ended up killing it. Theoretically the possibility of a loss was insured out of existence.

For example;

• Bank A issued a financial instrument and took out a CDS with Bank B against a possible default or loss.
• Bank B took out another CDS with Bank C to cover the possibility of Bank A's financial instrument going bad.
• Bank A took out another CDS against Bank C if it had to pay Bank B if Bank B payed Bank A 
• Bank A gets both the original loss back from Bank B but also the same again from Bank C.
• Bank C took out yet another CDS with Bank D to remove the risk of having to pay Bank A
• Bank D took out a CDS against Bank A's original financial instrument with Bank A.
• Bank A then used the payment from Bank C to pay Bank D.
• Ad infinitum 

So which Bank loses money? Nobody knows, not even them - but somebody eats the loss. Seems the citizens of any country with a Bank eat it.

The problem we have here is that the same folk that created the problem are trying to solve it. No fresh thinking, no real change in policies - accompanied by the dictum not to let a good crisis go to waste. Using this, or any, crisis to inject more of the same that caused it doesn't, unsurprisingly, appear to work. Never mind, we'll keep going until the life is choked out of it.

Not unexpectedly Obama and Cameron have popped-up demanding a quick fix. Primarily because when, not if, it all goes to rat-shit their banks will topple along with the rest. London and New York are the places that most carcinogenic financial instruments call home.

Let's not forget that, back when all this started in 2007, the estimated value of financial instruments lurking about the world was somewhere between 100 and 300 trillion dollars. Even if only 10% of them go bad - a joke - more like 40% on present estimates - then somebody has to print between 10 and 120 trillion dollars worth of money and give it to the banks.  And these estimates are on the conservative side. As all these instruments are in US dollars that would be bad, bad, bad for them - hence Obama's deep interest in having Europe not fuck the US economy.

Inflation won't solve it. Given the present state of the world's economy the result of a sufficient increase in money supply will be Stagflation - which we are already seeing signs of. Eviscerating trust in money and the printing of 100,000 Dollar, Pound, Euro notes to buy a cup of coffee doesn't sound like one of the better solutions.

So a very, very big turd is about to drop into the fan. This has been constipating since International Accounting Standards, introduced in 2005, prevented companies from provisioning against potential losses before they actually incurred them. Which is, of course, why banks are only now announcing hundreds of billions of losses and looking for some more free cash. Those now looking for the money are the same folk that lobbied for the change to accounting standards in the first place - so they could artificially keep their profits up - even if they knew that a debt was going bad. Better for the share price and the bonuses.

Anyway, I get back to my contention that Globalisation contains the seeds of it's own demise. When there is too little or no domestic industry, manufacturing or production and the banks are making unprecedented piles of money that money has to go somewhere and it, by default, goes into real property as that is the only place left for it to go

Around the turn of the millenium the same lack of alternatives created the "Tech" bubble.

To absorb the fists-full of money spewing out of the banks house prices exploded, builders went on the rampage. When regulations wouldn't permit this path they were changed or new markets created outside regulatory oversight. Not only did the finance industry believe they had found an infallible way to remove risk but they also didn't have to admit that they had lost the money until the instrument was undeniably dead and the loss was taken onto the books. So they had a few years to record record profits and bonuses before they became too big to fail.

The original bail-out money they were given was used to maintain this fiction - now that it has all been spent either they get another round of bail-out or they go down. Any money going to Spain to prop-up it's banks will be used to extend and pretend. When the next 100 billion of property market bad debt pops up, or RBS needs another 40 billion to survive, it'll be another matter entirely.

Upper-Class Tory twits & mindless idiots‏

I told you long ago not to talk or listen to politicians, bankers, economists or policy wonks. Instead, you should have been donating, very generously, directly to the money-men of the Conservative Party. It might have been an expensive "kitchen supper' as snacks go but by now you might have zero corporation tax, zero capital gains tax and a top personal income-tax bracket of 15p. All for a backhander of around 750k to the Tory Party. They might even privatise the police forces and toss in a knighthood for the round million. Follow the example of property developers that have bunged enough money at the Tory Party to get the whole of Britain turned into a free-for-all building site. Expect to see several property developers in the next Queen's Birthday Honours List.

To those of us with exposure to the American way of doing politics this comes as no great surprise - nor should it come as much of a shock to the citizens of the UK. Politics is about vested interests and the most vested of these is money and it's derivatives - wealth and power.  The man seen on hidden-camera offering to subvert democracy for large quantities of wedge got there because he threw enough folding money - (in his vernacular; a 'bar" and a couple of "plums")  - at the Tory Party to get the job as it's Treasurer. He made his money in Thatcher's Big-Bang City and he brought it's morality with him. That the Labour party did something very similar is no defence. Selling peerages and getting a "Bernie" from Bernie Ecclestone for political favours is part and parcel of what now passes for democratic politics in the age of unregulated capitalism. Didn't Marx and Engels say something about this? Instead of concentrating all power in the State all power is concentrated in private corporations. Either way democracy isn't involved.

The Irish have just added more proof, if any were needed, to the assertion that all power, in some manner or other, corrupts. Especially in an environment where the Treasurer of the Tory party refers to a billion quid as a "yard". Former Irish Prime-minister Ahern, where he to dwell in London instead of Dublin, could well have added the "Bertie" to the lexicon of money slang.

The recent litany of embarrassment for the UK government might be described as the Conservative Party Conundrum. The "New Labour" emulating "New Tory" modernisers of the Conservative Party are actually the former 19th century model (previously declared extinct) of wealth, class and privilege (requires a minimum of 300 years of inbreeding) now occupying the Parliamentary front benches while the Conservative Party and it's HQ remain firmly in the grip of the (mongrel) Thatcherites. Ne'er the twain shall meet. Cameron rose to power only because the Thatcherites went into hiding after egregious sleaze gave Thatcherism and it's adherents a bad name and made the Tories unelectable - New Labour then stole most of Thatcher's policies anyway. Cameron went out of his way not to speak to Thatcherites, to avoid contagion, in the hope of getting himself elected and he half succeeded. Thatcherites wouldn't have given him any good advice even if he asked for it. Now they're all regretting it.

This has resulted in a face-off between the resurgant Old Tory Entitlement and the Thatcher Meritocracy and they are both losing. The reappearance of Tory Class-Politics is exactly what Thatcherism was meant to prevent - unfortunately it was also meant to prevent exactly the present economic disaster from ever happening. So Thatcherites don't really have much of a clue as to how to solve it without admitting that it was their supporters that brought this disaster about or looking, god forbid, like the Labour party. The Tory Entitlement, represented by Cameron, Osborne and Maude, is doing what comes naturally to them -  concluding that what's good for them is, by definition, good for the country. By extension this means, in their minds at least, that the working classes are undeserving of the privileges dispensed by Public School and Oxbridge upbringings - and need to be treated as mindless idiots. The Lower Orders don't know what's good for them and, in any event, they don't matter. Meanwhile the system is tuned to provide the already privaleged with yet more privileges.

Unfortunately for the chinless upper-class Tory twits this sense of entitlement overlooks how they got put in power in the first place - by mindless idiots. No wonder they fought for so long to prevent universal suffrage. Not only has their socially-elevated personal view of what's right and proper upset the Sun newspaper reading Conservative working-class faithful but the Daily Telegraph, Times and Sunday Times reading middle-class Tory faithful to boot. They've managed to do this by surrounding themselves with doppelgangers - those whose senses of entitlement and self-worth greatly outweigh their abilities - but fit nicely into the Realm of Privilege they foolishly believe the country should revert to. They are so convicted of this notion that nothing - nothing other than electoral annihilation - will convince them that the return to a pre first world war Establishment isn't a good thing. This is benignly described as "being out of touch".

If they were simply "out of touch" it would be a good thing. They are also vastly and unknowingly incompetent. So that makes them oblivious to how vastly incompetently out of touch they actually are - as demonstrated by David Cameron showing his common-man, Cornish Pasty-munching, fuel-hoarding, pay-to-meet, credentials with a photo-op playing BADMINTON in the back garden of No.10! He probably did this on the advice of George Osborne - a man who probably thinks that Badminton is more popular than Soccer and is certainly more popular than Cornish Pasties - at least among the people he knows.

All of this brings us to the disconnect between Entitlement Politicians and the realities of power, money and the electorate. To the Entitlement money is vulgar and it is best to leave such unsavoury things to unsavoury people. By already having all the things others covet they believe they're much better than the people that elected them and so should, naturally, be looked-up to for leadership and guidance. We're better than you and have the plummy accent to prove it. Which begs the question - who are the real mindless idiots?

An Irish Tweet and Fat Americans

Few will be all atwitter if RTE in Ireland is found to have the same political survival culture as News International, if not quite on a par with the Murdoch brand of such an activity. Those that might help with your cash flow would come top of the list for a free lunch, weekend in the Sauna, spot of shooting, to be followed by a positive or contrived story. The BBC are masters at this but then, given the nature of the business, so is everyone in it.

Irish politicians will need to be very careful about throwing feigned acrimony or denial around or they could find themselves on the wrong borrowed horse. God forbid that someone asks for a Judicial Inquiry or the plods get involved. Even worse RTE could start actually investigating the politicians' relationships with bankers, developers and, drum roll here, journalists! While the British have remained stalwartly wooden in the face of systemic corruption and illegality the Irish love a fight. Given the amount of money that went missing there is no doubt the place, along with many others, is rotten to the core.

The future of that island, both north and south, is in the hands of a political cadre that didn't evolve from socio-economic or democratic principles but from a populist nationalism that has permeated and substituted for what passes as governments' policy since the nation's inception. The Irish have done a remarkably good job in hiding the fact that they had their own Civil War by blaming everyone but themselves. The simplicity of getting elected on this basis hasn't filled the halls of democracy with capable, never mind great, thinkers. This doesn't bode well in the search for a political solution to their present economic problems. But at least they can follow ingrained tradition and blame the rest of Europe. Or, if they take my advice, bury fat Americans.

Fat Americans are an integral part of the global economic recovery. What would happen if they all stopped over-eating or paying more for their XXXXL clothes? Processed and fast food companies would go broke. Thousands in China would starve. Internationally when you get a large fizzy drink at a burger joint it is less than a pint - in the USA it is around a gallon. The same phenomena applies to coffins. So many Americans won't fit into a standard size coffin that super-sized ones are available, on display at funeral homes, which necessitate the purchase of a, likewise, super-sized plot in the cemetery - making the funeral industry very profitable and an ideal candidate for outsourcing.

The same Americans are too big to be cremated and, if you can get them in, burn so hot they can damage the incinerators. We're talking people that can weigh a quarter of a ton here. 6 of them weigh as much as a small truck, so ambulances can't carry them.  The cure for rampant obesity - smoking. It has come to my attention that this explosion in girth has coincided with an equal and opposite implosion of cigarette smoking. Encourage, if not mandate, all fat people to smoke. Give anyone over 400 pounds free cigarettes and they'll die thinner and can be buried cheaper. Health care costs might rise a bit but think of the tax revenue. As 75% of Americans will be overweight by 2020 the US debt and budget deficit should be long gone.

Ecologists are to blame

So who is really to blame? Theophrastus is who. It is the Ecologists who asserted that all human existence and behaviour can be reduced to a formula and number that begat the rot. We're all digits in the computer of life. Hence the belief that all outcomes can be predicted by formulae - the best of which get a Nobel Prize - hence Game Theory et al. Thus, according to this poppycock, the chances of your best mate fucking your wife are the same as those for a, soon to be cuckolded, Rwandan Gorilla. And there is an elegant formula to prove it.

Never mind that these theories are disproved by reality - the relationship between wolf and bison populations isn't linear any more than a Credit Default Swap takes all the risk out of a Collateralized Debt Obligation. Given the Self excluding nature of these theories, "this is a load of bollocks" is an unapproved response as you can't be outside a universal, mathematically elegant, truth.

This brings us to the truly head banging realisation that the same theory is used to prove opposite ends of the same argument. Those arguing for expansion of the planet's economy are using the same mathematical models as those bitterly opposed to it. Your Goldman Sach's Quant is more like a Greenpeace Eco-warrior than either of them care to admit - even if they realised it. Neither of them take individual behaviour into account as it isn't permitted by the model. Unpredictable individual behaviour is so anathema to an elegant mathematical solution that they invented a means to do away with it - Chaos Theory. When this was challenged by some bright spark that wondered how this could apply universally they invented Fractals. We're all predictably the same - have to be - or the models don't work. Then one day, somehow, somebody let the smoke out of the computer.

Now you'd wonder why any cognitive being would subscribe to an outcome where they're regarded as mathematical rather than biological. But it seems that rather than accept that not everything can be predicted by digits they concluded that there must be a "Theory of Everything". Which brings us, alas, to the purveyors of String Theory. Faced with the reality that most of the mathturbation that got them to this point is based upon giant assumptions that ignore the tricky bit between Particles and Relativity they spent decades introducing invisible dimensions and multiple universes but still couldn't get the numbers to work. The results have all been Infinity. Fear not say these intrepid number doodlers we'll insist that we're on the right track and give our grant money a new name "M Theory". Unfortunately this didn't stop the grants from shrinking so a lot of mathematical physicists were looking for a job just at the time that unregulated financial markets boomed. "I know a theory that takes all the risk out of stupidity" they said, "because we can predict the future - it's just like wolves and bison. Even if it isn't, we have another model that proves you can't lose." What they overlooked to mention is that they couldn't find Gravity and three quarters of Matter and Energy.

In a world where everything can be predicted in numbers and theories nothing else matters - yea, right! Unfortunately, economists didn't seem to realise that any theory that always ends up at Infinity wouldn't, in fact, work. Especially as the same theory could be used to arrive at both plus-infinity and minus-infinity simultaneously. Surely this would raise a few heads, you'd think - not if we're making so much money that it has to be right - QED. Wrong - somebody forgot that the rich like to, whenever and wherever possible, fuck the poor. The theory choked financial system, politically manipulated, permitted the rich to get richer and the poor to get poorer. The theory was that by exporting our poverty we'd all be better off and spend our time having our hair done or buying a flat screen TV. While the people that got our poverty would be delighted to have it as they live on less than $2 a day. Corporations loved it. The rich loved it. The poor, and increasingly the middle-class, got fucked.

Now what would have happened if chemists rather than physicists had come up with economic and financial theories. Well, chemists don't have any vague theories, they do have Principles. Principles, many and varied, are the key missing ingredients in mathematical financial theories - none of which have empirical proof outside of mathematics. So chemists would probably have done a better job. They don't join molecules together in an invisible dimension or another universe. Nor can they fill a test tube with ingredients that only exist in theory - they might try something that does exist. Not so Physicists - they just keep flogging this dead horse in the hope that it will, theoretically, come back to life - somewhere in the 15th dimension or in the billionth universe. If you believe String (M) Theory it is happening in a Universe near you right .... now.

My suggestion is that chemists round up all physicists and lock them up in a Silo. Where they can plan a theoretical escape.

Beware of gifts bearing Greeks

While the story line goes that it's all about saving the Euro it is really all about saving Banking. The ECB, with or without the assistance of other Central Banks, announces it has printed some fictional money and gives it directly to the banks exposed to Greek debt so they don't go bankrupt and the financial system doesn't collapse in Domino fashion. In order to pretend that this money is real they call it a loan to Greece and tell the Greeks they will have to pay it back with heaps of interest. This allows previous, unrepayable, Greek debt to be written down on the banks' balance sheets and makes them look healthier. It will keep going until the banks don't hold enough Greek debt to take them down along with the financial system when the inevitable happens. Then the Greeks will be allowed to default and leave the Euro. The Central Banks will by then own most of the Greek debt, write it off and invent more money to cover the gaping hole - they are the only ones that can do it. Until this happens the Greeks will continue to have the shit kicked out of them - austerely speaking - without getting so much as a sniff at the money. You'd be on the streets too.

It is all part of the same financial Shell Game. The Central Bank lends other banks invented money at zero interest to buy Government Bonds and accepts bad, invariably worthless, investments as collateral for the loans - a toxic for good paper shuffle.  The banking sector looks to have solid(ish) Government Bonds as investments. The Government is charged less interest on it's Bonds for which there appears to be a market, hopefully resulting in a negative yield. It also works the other way round - the banks issue paper and the government, by one means or circuitous other, buys or provides the money for them, thus injecting liquidity - it has to be this way since the public won't stand for another bank bail-out.  By this sleight of hand the risk is taken out of the private banking sector and made public. The theory being that the present system can survive a near-death experience - until things get better. Extend and pretend at it's best. Unfortunately for this scenario Greece isn't the only problem. There are several more countries on the brink of default. The hope is that the Central Banks can extract the banking sector out of the bad national debt, one debtor country at a time, by printing money in controlled quantities that doesn't result in massive inflation. This is what they mean by a controlled default. An uncontrolled default is one where the banks are still nostril-deep in bad loans when a nation implodes - nothing to do with the manner of the country defaulting. There is only one way a country can default and that is neither controlled nor uncontrolled it is simply "Goodbye!"

The question is how long will the public go on letting this happen before they rebel. Something that politicians, bankers, economists, fuck-wits and the rest of the 1% don't seem to have asked themselves. Not as long as you'd need is the answer, despite assurances that it'll all get better just so long as you do what we say and don't argue. If the Greeks manage to bring down their own government and default before the next round of loans then the game becomes extremely difficult if not cancelled due to bad economic weather. "Pour encourager les autres" is the great fear of Greece defaulting. The Portuguese, Irish, Spanish, Hungarians and even the Italians might see this as a good idea when Greece is still there the next morning. Why spend years paying off debt for money that went directly to banks.

It all gets a bit more emotionally complicated because the Germans are in charge - never overly popular in Greece - so it is a pity they're telling the Greeks what to do and insist on running their country - again. Especially as Germany is the main beneficiary of the Euro - and plays a big part in the reason several countries are now in the financial latrine. Wehrmacht dressed as bankers to most Greeks.

As recent research has shown, the poorer you get the stupider you get the more right wing and religious you become - doesn't bode well. A quick glance at the USA will confirm this. What are the odds that the Greek Army will make a comeback; this time it won't be communism but finance as the excuse the US uses to support a Junta. Spain, Italy and Portugal all have histories of Juntas. Will the real revolution come onto the streets after Armies try to usurp power to save Liberal Capitalist Democracy? An interesting proposition.

Of course an aristocrat fed-up with the nouveaux riche might follow the example of the derided Marquis de Sade. A man capable of not only deviant writings but of both philosophical and political musings that point to him as a materialist atheist, rabid left-winger as well as a sadist. He is rumoured to have played his part in the storming of the Bastille. Will Robespierre ride again?

The Mayan Economic Forum

As the elites, that brought us to the outskirts of economic armageddon, fly into Davos in their private jets and helicopters, stay in $1000 a night hotel rooms and have $500 dinners, I just thought that a few of the hurdles they'll have to jump over in the next day or two include:

225 million people unemployed around the world

A third of the people on the planet either poor, unemployed or both
1% of the world's families own 40% of the wealth
Wages as a percentage of GDP at an all-time low
Corporate profits as a percentage of GDP at an all-time high

Jump over them they will with the usual clap-trap - austerity, non-regulation, free-trade, market-forces, more loans, less debt and all the usual conflicting advice all wrapped-up and tied-off with a neat bow of "confidence" cheer-leading. Undoubtedly the word "innovation" will be bandied about until it becomes even more meaningless. Also expect to see the brief rise of the "Austrian School" of economic gibberish.

What is missing from the debate in Davos is the Mayan School of Economics. A school that predicts the end of the world this year and therefore, by definition, offers no pie-in-the-sky long term solutions. The best feature of the Mayan School is no matter what advice they give they simultaneously admit that, given the circumstances, it is totally pointless. In contrast, the other Schools of Economics won't admit to the pointlessness of their advice even after it has proven disastrous. Given that the Mayans have vanished well prior to their expected 2012 departure date it would seem appropriate to call the present deluded fiasco "The Mayan Economic Forum" as the attendees world will end about the same time.

Just to add to the upcoming potential for even greater misery the Gulf Arabs are planning – along with China, Russia, Japan and France – to end $US dollar dealings for oil - the last guy who attempted this was Saddam and shorthly thereafter a heavily armed $US dollar invaded him. The old "weapons of mass destruction" fable is raising it's ugly head about Iran and Seal Team 6 is at it again. All in the cause of driving stakes through the hearts of imaginary evil empires.

Possibly we should be hammering imaginary stakes through some of the 1%'s hearts - in the manner of one of those cocktail hors douvers with several comestibles impaled on one stick. Banker - cheese - politician - green pepper - economist - olive.

While we all descend into poverty and deprivation preventing us from affording either the weed killer or alcoholic beverage of our choice I leave you with the enlightened view of one Henry Ford who chose voluntarily to raise the pay of his workers — so they could afford to buy his cars - unfortunately he was a Nazi.

Financial Costa Concordia

There's a modicum of attention being paid to the apparent US economic resurgence in comparison to the UK et al. Attributed to the efficacy of assorted US economic policies. I want to get in early and disabuse you of such thoughts.

While, on paper, the UK's total debt burden is 5 times GDP as against the US's less than 3 times GDP and UK financial institutions have, on paper, 5 times as much debt as US ones - it is actually a load of bollocks. This is because the US banks are not marking to market by using access to cheap Fed money and are relying on Credit Default Swaps to deny and hide inevitable losses. Granted that US national coffers are benefitting from repatriated money and illusionary safe-haven status - as is the UK - but this won't protect either of them from a global financial collapse - France, Italy, PIGS and latterly the BRICs, Australia and Asia in general will succumb to fear.

When, not if, there is a default on a large national debt the CDS market will implode and there'll be a global Costa Concordia moment. The critical moment is when does the Captain leave the ship - Captain Greece, Captain Portugal and Captain Ireland are at the rail and Captain Italy, although a little behind them, could well accidently fall off on purpose. Captain France will go down with the ship while blaming Britain. Captain Germany, like the Captain of the Olympic, will not answer the distress calls.

I'd also like to steer the proletariat towards understanding that overpayment of CEOs and Bankers is a symptom not a cause - a few billion is neither here nor there in the present catastrophe. And that it's present high profile is just a ruse to divert attention away from the real problem - that the system itself is beyond fucked.

Incredibly, for example, General Motors, a company that never made a car worth owning, is claiming to be back in profit. In the usual manner they have achieved this by lending cheap money to purchasers to buy their products and then counting the money they've borrowed then loaned as profit. Even you and I can see the flaw in this as would a blind man on a galloping horse. Bearing in mind that there is no remaining ecosystem to support, never mind grow, manufacturing as the route out of recession. There is no supply chain outside China, nor are there enough low-wage workers; so celebrating the survival of a company based on lower wages and benefits to support more consumer debt doesn't appear to solve anything.

Your belief that one can - with generous public cash donations of course - Innovate out of the abiss is counter to all accepted business methodology. If a widget can be made in China for $8 or made in the UK for $80 then how many UK workers will benefit from the $250 profit made on the widgett? Answer: none. How many CEOs? Answer: one.

Stoking my higher than usual level of Outrage are the Hedge Funds that bought Greek debt for cents on the dollar that now want paid out at face value before agreeing to any deal. They bring to mind the last thoughts of the Mr. Black Husband spider when he asks Mrs. Black Widow "How was that for you"?