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.

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?

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.

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?

Theory

There is, of course, one very good reason that no matter who is elected they instantly renege on policy promises and revert to getting as much as they can for themselves and their mates before losing the next election -  Theory.  Any word in the dictionary can be placed in front of "Theory" and claimed as a best-practice canon of effective thinking on everything, anything and nothing simultaneously. The best thing about a Theory is that you can have one about things that don't exist, don't work and can't happen and win a Nobel prize for it. This is of little benefit to those supposedly living under it's influence. But given that a real insight is lacking it's better to have a Theory than admitting that you don't have the first clue. Theory is an excuse to stop scratching your head - and justify inflicting your opinion on as many people as possible.

There is little or no point in trying to explain a Theory to the vast bulk of the proletariat and even less in trying to explain one to Politicians - to whom complexity and getting elected are incompatible. This results in Cherry-picking simplistic elements of a Theory for public consumption while leaving the bulk of it's content and ramifications hidden from view to all - including themselves. The need for an aristocracy of thinkers is thus required to develop and prosthelytize Theory. Given that you can have a Theory about everything, anything and nothing then if you don't like one you can find thinkers that come up with another one that you do. This eventuates in conflicting Theories all regarded by their creators and supplicants as indisputable. Upon such things are Policy promises based. Sadly upon such things are nations and societies based.

Which brings me to the Theory of using a cow as a cigarette lighter. This would require positioning cows at all those smoking compounds outside bars, restaurants and office buildings - although for reasons of cows' sensitivities, restaurant locations, other than vegetarian ones, might be a little heartless - unless you blindfold them, but this would cause an additional fire hazard. A Piezo Crystal thingy in the nose or up it's ass would provide ignition. I call this "The Big BIC Theory". This Theory would work a treat in India. It would also provide a purpose for cows past their best milk producing years and make "I'm just popping over to the Abattoir for a quick smoke" common parlance. Even if smokers weren't around, to utilise this flame-off, a burning taper sticking out of all cows bums and noses would have a dramatic effect both on the release of methane into the atmosphere and upon the cost of street lighting. Why no political party in New Zealand has adopted this as a policy promise bemuses me.

Back to the subject of time travel - to a time when cows were pre-industrialised. Why bother? What's the point of arriving in the past and immediately catching Cholera, TB or the Plague and being referred to as "yee" - even if you can't expire. Do you have to take your own toilet paper with you? Anyway time as a continuum is only .... you've got it - a Theory. If it were available time travel would put an end to the retirement age dilemma and reduce health-care costs immeasurably as you'd be constantly sent back to a time when you were healthy and could work for a lower wage - or alternatively sent into the future and be dead. The Time Machine would be called the "See Ya" and located in every hospital, unemployment office, airport, police station and bank thus dealing with any and all social inconveniences at the push of a button.

If everybody had a time-machine would there be anybody left?

Now the Euro. How much would it cost to build a time machine - a few hundred billion, a trillion, ten trillion - certainly a lot less than saving the present financial system. Then we could all keep going back to 2006 and avoid the Global Financial Crisis. Despite the absence of time travel our politicians are attempting to do it by pretending it still is 2006 and using your money to wipe out the intervening years. So here you have two Theories, both of which claim that you can travel back in time, neither of which exist, work or can happen.

Immoral Hazard

Just wondering if you've got an elegant solution to the world's economic problems - because somebody has to or we're all toast - the smoke alarms are squealing.

The world's most erudite financial gurus have exhausted their usual panoply of platitudes and recklessly thrown our fiscal survival into the embrace of politicians. There is a flaw in this as politicians are local and the problem is global - so any solution from them will be more about re-election that resurrection. What makes this even more unlikely is that politicians don't know the full extent of what they're dealing with. As a result they are having a panic attack. Prior to being pressed to assume the mantle (stress position) of economic saviours politicians were told to "get off out of it" by the very same financial professionals that are now demanding that they take over.

Is this because the money-men know the size of the problem and their inability to solve it or another attempt to have the public purse bail them out of losses on innumerable bad investments and protect their bonuses? How, one may ask, does a bank that passed the health check "Stress Test" a few months ago suddenly find itself close to bankrupt - if they were telling the truth? Certainly a few billion for Greece wouldn't bring the world's economy to the suburbs of Armageddon were it not for the other tens of trillions of morally hazardous toxicity out there. The political terror that it is all about to collapse has led to a reluctance to save nobodies' banks but our own - it may be dirty, underhand and morally hazardous but it's our dirty, underhand, moral hazard.

The PIIGS (note the extra I for Italy) go under and the BRICS hoard money while I'm particularly amused by the choice of terminology for an economic disaster prognosis - as in "hard" or "soft" landing. It strikes me that if you are going to end up dead it hardly matters. This brings to mind the advice given if the parachute fails to open - "Cross your right leg over your left leg as it is easier to screw you out on a left hand thread".

Now is about time to eviscerate the hubris of economists - a delusional sense of esteem best illustrated by the self-bestowal of a Nobel Prize. It is not one of the Nobel prizes established by Alfred in 1895. Economists invented this one for themselves in the 1960's - they must have regarded themselves as too important to be left out. So they got the money from a bank, appointed their own committee of economists, and gave themselves prizes for coming up with ideas that looked good on paper but demonstrably haven't worked. Were it not for the prestige of the Nobel name most if not all of these ideas might have met the abortive fate they deserved. There should be a reverse Nobel Prize in Economics committee that takes back these awards based on performance and the whole groundless aggrandisement immediately abandoned. I too would like a Nobel Prize, in what hardly seems to matter, unfortunately it would be hard to find a bank able to cough-up the dough right now.

Rather than have the New Zealand Symphony Orchestra and the New Zealand Choral Federation go to the trouble of learning all the Rugby World Cup participating nations' National Anthems - given the economic condition of most of them - it would have been easier, and possibly more appropriate, to have learned only Meatloaf's "I want my money back". This, at least, would more accurately reflect the attitude of the players who are complaining that there's not enough money for them in it. So little in fact that the NZ All Blacks might not show up for the next one. Not much of a threat as a team of NZ economists could find a bank to pay them to form their own team. Global Rugby looks to be heading the same way as Global Finance - Money Rules, OK - except when there isn't any.