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Archive for February, 2012

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France’s King Louis XV allegedly declared on his deathbed: “Après moi, le déluge” (after me, the flood),  this is the conceit of all great powers.

Those who monopolise power cannot imagine a world released from their grip as anything but a catastrophe.

~ Ian Buruma   Professor: Bard College.

Extracted [Al Jazeera]

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Ian was expressing this in the context of Global Power Geopolitics.

But it applies equally to any number of situations.  And particularly the financial elites. They cannot imagine a system that is neither within their control, or structured alternatively to current norms.

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N.B.    Hubris = Overbearing pride or presumption; arrogance

 

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Police, like Politicians, serve at our pleasure.  They are both public servants, paid from the public purse and accountable to the people.

But they certainly were not serving at my pleasure when they raided the Dotcom household in the manner they did.

Quite frankly, I don’t want to see that sort of Policing used in my country.

American’s might be used to it and see it as normal. But any NZ cop who starts in with that sort of business, needs his arse kicked, or even fired.

Elite Anti-Terror Police Went After Megaupload’s Kim Dotcom

NZ Police Assistant Commissioner Malcolm Burgess – I am talking to you!

Police defend actions during Dotcom raid.

  • I don’t want our Police tugging their forelock to the Americans.
  • I don’t want them using American tactics.
  • I don’t want them using Anti-terrorist squads in white collar matters
  • I don’t want them deciding that securing evidence requires stormtrooper tactics.
  • I don’t want them wasting that sort of money and resources on minor matters (particularly when the “crime” is of insignificant consequence in this country)
  • I don’t want them doing this to some-one of middling relevance, when they proceed to ignore globally all the Banksters stealing Billion$.
I know why they did it.
It was a great chance to work with the “Big Boys”(FBI).  Show off all their capabilities on the big stage. Practice in a near real environment, test their systems.  Make an example of a (more or less) no-body, shake the tree and scare off imitators (actually, that part worked, because several other “Up-loaders” have closed their operations subsequently).
But the thing that really pisses me off the most was that the assistant commissioner stated point blank that it was done this way in order that they could take control of the ‘target’ as quickly as possible, in order to preclude the possibility that evidence might be destroyed.
Right…  lets just examine that shall we.
  • I don’t give a F… if they lose evidence by being a bit slower and polite. Particularly not in this case. It’s not drugs, its not guns, it’s not anything violent or dangerous.  It was just big corporations in the United States bitching that they can’t make as much money as they like.  Boo Hoo…
  • They still didn’t take control of the target quickly anyway. Kim was locked into the secure room, out of reach, for a good half hour.  So that whole macho bullshit by the police was wanking on a grand scale anyway.  If there was going to be destruction of evidence, then the police were never in a position to stop it.
  • Unless the police are dealing with known violent offenders who they have good reason to believe would try to shoot their way to freedom, then I want them, as of policy, to go and knock politely on the front door if they want to serve arrest and search warrants.
  • I DON’T WANT OUR POLICE TO BE SOME SORT OF PARAMILITARY JACKBOOTED FASCIST ENFORCERS.  They have never needed to before now, and they still don’t.
  • If some-one senior doesn’t tell Malcolm Burgess to severely pull his head in, they and him needs their arses fired – and that is an example to others that I would applaud.

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Kodak Moment

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Have just read another interesting article, but was thinking as I was reading it that if you changed the word Kodak to government.. or housing… or economy, then that works just as well also.  [my comments in green]

Here’s the link to the original article  ~ Gary North (The Market Oracle).

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And here’s some extracts:  [try reading Kodak as ‘Greece’, or ‘USA’, or… insert your own favourite

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Kodak declared bankruptcy last week. For years, this company was visibly a dinosaur. It had no visionary leadership. The senior managers had the wrong vision. The company had lots and lots of debt, which indicates how blind its creditors were.

Moody’s Investors Service cut the rating on the $3 billion of debt of the Eastman Kodak Company to the lowest investment grade as a drop in film sales drained cash. The company’s long-term senior unsecured rating was lowered to Baa3 from Baa2, Baa3 is just above junk bond status. [Baa…  is that what sheeple do?] 

As it watched digital dissolve its high-margin film business, Kodak has shed 47,000 employees since 2003, closing 13 factories that produced film, paper and chemicals, along with 130 photo laboratories. The restructuring has already cost $3.4 billion, because it was done “in a socially responsible” way, said a spokesman, Christopher Veronda.   [how about socially responsibly not going bust in the first place…?] 

Then there were its stock investors.  This company was doomed because it sold film.  Film as a technology was clearly doomed a decade ago.  Nevertheless, there were blind investors who paid $40 a share in 2003.  Then it went over the cliff.   It was at 31 cents when it filed for bankruptcy.

Hope springs eternal.  So do losses.

In an article on the British operations of Kodak, the author interviewed a Kodak executive who quit in 2010. The poor guy had hung on faithfully for a decade longer than he should have. But, finally, he abandoned the capsized ship. He told of a baffling conversation with a member of Kodak’s management: “Just last week a Kodak executive came to me and said ‘I think film will make a comeback’, and I’m thinking ‘who are you kidding?’ That’s the mentality that’s stuck in that company and you’ve got to break that and they’ve never been able to.”  [delusion trumps reality right up to impact – everywhere]

Kodak is a classic story of a fat and sassy firm with a near monopoly in its field that did not bother to adjust to changing customer demand. Its executives had no perception of the fact that the new technologies would kill it if it refused to alter course. They thought they were immune because their industry was immune internally. But it was not immune externally.  [Global Financial Crisis – if we just hold on long enough, it will all come right, just a bit more stimulus spending…]

Kodak’s executives refused to develop digital cameras because they feared that the new cameras would destroy their business. They feared cannibalizing their own company. [substitute: govt policy and electoral support]  But as Steve Jobs famously said, “If you don’t cannibalize yourself, someone else will.

Kodak’s executives made a fundamental mistake in 1975. This mistake is almost universal. It did not understand what business it was in. If you had asked a Kodak executive what business the company was in, he would have said “the film business.” Kodak was famous for its film. But it was not in the film business. It was in the photography business. Kodak film buyers bought the film in order to get pictures. [Governments forget what business they are in too. They are in the people business – look after the people; but they forget and think they are in the money business. Money is a means to the end, not the end itself. And you sure don’t want to get caught up and trapped by the money-people in the process…]

In 1995, Kodak charged Fuji with trade violations in Japan. The hypocrisy of Kodak is obvious to anyone who understands economics.  It was focused on government, not customers. Kodak was worrying about Fuji. It should have been worried about digital photography  [Hypocrisy abounds everywhere – and means you have taken your eye off the ball]

At about the same time as these antitrust cases, the World Wide Web was beginning as a result of the introduction of a graphical web browser, Netscape. Lew Rockwell got the Mises Institute online in 1995, the year after Netscape was released. I got GaryNorth.com online in 1996. A couple of guys in the boondocks could see what was coming. Kodak executives didn’t.  [too busy doing what they are doing, because that’s what they do]

They were too busy worrying about film sales in Japan. They were hypnotized by film. They were not focused on pictures. If anyone wants an epitaph for Kodak, I suggest this: “out of focus.”  [works for the global economy too]

A company that is run by people who do not see the future clearly is in big trouble.  Senior managers must decide what is coming next, and in what order, and how soon. Then they must allocate the firm’s resources to meet expected future conditions. This is why great success in the past can blind decision-makers.

“They were a company stuck in time,” said Robert Burley. “Their history was so important to them, this rich century-old history when they made a lot of amazing things and a lot of money along the way. Now their history has become a liability.” Kodak was a company with a great future behind it.  [mmm… who should we substitute into that sentence?]

Profits come from one source: accurate forecasting. The free market allows people to invest their capital in terms of their vision of the future. Most people will guess wrong. A few will guess right. [that’s for damn sure right]

The institutional problem is this: decision-makers find it difficult to keep seeing the future accurately. They are committed to one way of doing things. It is expensive to change. They don’t want to change. They want [their] high salaries, stock options, and leisure [to continue – they have a right, donchano..].

Companies [politicians] with brand loyalty are set . . . for a while. Their customers don’t change brands very often. But there is always a generational problem. Their customers die off. A new generation of not-yet-customers buy new products that produce the same results in a new, better way.  [Get set for the generational battle. What do you imagine is happening in Tunisia, Libya, Egypt, Syria…]

The employees at Kodak did not believe that this would happen to Kodak. [Denial – not just a river in Egypt]  

They hung on to their jobs. They could have left. They could have had new careers in another company or another industry. But they held on for dear life, just like the owners of Kodak stock. Just like the bond experts at Citigroup.  [Just like the sheeple… Baa³]

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Here is an interesting Link.

The value of the US dollar is determined in large part by the fact that oil is sold in US dollars. If that trade shifts to a different currency, countries around the world won’t need all their US money. The resulting sell-off of US dollars would weaken the currency dramatically.

So here’s an interesting thought experiment. Everybody says the US goes to war to protect its oil supplies, but does it really go to war to ensure the continuation of the petrodollar system?

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Interesting times…

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Just some quick thoughts on Wealth… and Money, and Tax’s.

Let’s start with Government transfer payments.

That is, money taken from one place, and then given to some-one else.

One of the continual bitches heard, is that there is too much money spent on Benefits to the poor (read indigent). Particularly in stressed financial times.  It is nonsense.

Of the amount of money that governments spend, the benefits paid out for unemployment, sickness etc, is insignificant.  Both absolutely, and relatively.

Absolutely: the governments pay out far more to corporate welfare and other lurks/scams – like ruinous Superannuation Schemes, Tax Write-Offs, System Capture of Government Depts, Subsidies, Defence… etc etc etc.  I won’t go into all that here, except to say that in the total budget of government spending, welfare spending is not a big deal. The rest could be cut in half if necessary, to sustain the income and welfare of the vulnerable population – and if the national economy became so dire as to require it, that would be the better outcome.

I will make the proviso here that it isn’t a desirable outcome to have huge numbers long term on the unemployment benefit (for example), but that is still better than having them in poverty.

Relatively:  Money that goes out in such Benefits is recycled into the whole economy very quickly. The problem isn’t money spreading out into the economy, the problem is money in the economy being locked up in useless and counterproductive endeavours.

For instance, Housing.

For sure, a certain percentage of a nations wealth will have to be assigned to housing, that is a given, and unavoidable.  But government policy should be towards holding that to a minimum.  When property prices soar away from 3 x average income, to 8 x average income, then far too much of the nations wealth is tied up in non-performing “assets”.  Particularly when that dynamic also results in major transfers of wealth out of the country and into the hands of foreign bankers – via expatriation of the interest/profits.

On the matter of “assets” – an asset can be defined as: something which earns you an income. So by extension, a house you live in and which costs you money, is NOT an asset. (unless you get a capital gain out of it – but you only get that in an inflationary environment – and we know that is actually a deceptive stealth tax, that in the end really helps nobody.  Ohh, except the bankers and governments… all the usual thieves)

The question in the end always boils down to: who is government policy designed to really aid?  There is sufficient money to support the whole population equitably and humanely, if that is actually desired.

But not if policy and the economy are structured as present, to move money into (and lock it into) systems and structures than benefit a monied minority. Or a middle class that thinks its interests are locked into a ridiculous home ownership model.  Not that home ownership is ridiculous, but the way we have constructed and operate the system certainly is.

House prices rise as a result of deliberate government policy.  Beyond any debate,  reform of government policy could reverse that.  The debate is only whether politics would let that happen. Inevitably it would result in a material reduction in wealth of a LOT of people. (and powerful, connected people at that – to date it has been easier to further impoverish the small and powerless instead, coz they don’t matter…)

But in the long term holistic picture, we can’t afford to lock up such a large proportion of our wealth in non-performing “assets”.  Or to spend the amounts of money we do on non-performing government spending.  That is a Asset too, but only if it produces a productive result.

Benefits may not be the most desirable thing to have to spend money on, but reform the system and you wont need to do so to anything like the same extent anyway. And there are much worse things we can and are spending money on. The bitching about Benefits is smoke and mirrors, to deflect your attention from what the other hand is doing.  It is the stuff you don’t see, or recognise, that is the real issue.

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