This is what you get!!

I recall the first time I went to the USA.  On business.  I stayed at the Ritz in New York.  And every time I walked out the door, a few paces, I would be accosted all the way down the street by people trying to sell me drugs, consorts, and pan handlers.  The touts were rampant.  And frightening. It would have been fall 1987.  It seemed to me at that time that the city’s crime rate, which was very high, could never be turned around.  Tourists were turning away in droves. 

And of course it was.  Turned around.  I visited the city a hundred times over the next several decades, and observed its transformation.  The touts disappeared; new buildings were erected; the parks cleaned up; and it once again felt safe to walk down the street.  Into the parks, the churches, just walk and walk.  Or run on occasion. On one occasion, there was a street person with all his worldly goods beside him, and as I passed, his mobile phone rang.  And he answered it.  How bad could it be?

Yet still my current view of the USA, is a country at war with itself.  We have all read of the 46 million on food stamps.  The shockingly difficult unemployment figures.  And recently I read that new job creation has a ratio of 1 in ten being a permanent job, and the rest temps or contract.  The average wage is $25,000, and the wealth of the average middle class American has declined by 41 % in the last five years (versus an increase in the top quartile, and mainly because their wealth is held in their home which have declined in value).

Yet as I have written here, one of the few industries with huge growth over the last four years is guns:  “98% increase in Ruger quarterly firearm sales since 3Q08 from $117m to $232m”. 

Another blog dealt with the crash and grab of the legislature as it throws up and sometimes passes the most extraordinary legislation. 

But I am going to again bang on about the out of control law(less?) enforcement being used to target its citizens by the USA.  I just don’t get why more people are not commenting on this in the international press.   The country is simply heaving with cities or suburbs in lockdown with an occupation style mentality, and people all armed. Syria, huh!!

Hotel rooms and TV;  watched a documentary the other night about the city of Philadelphia, in north eastern USA.  It reputedly (at the time of the show) had the highest murder / gun crime rate in the USA.  The show, Louis Theraux:  Law and Disorder in Philadelphia.

The cops were all doing their best in Philli.  The put-upon African Americans who were being constantly harassed by them, also got a little heated about what they believed was racial profiling.  And I have to admit, on several occasions, that’s what it looked like to me.  But African Americans represent 43.4% of the population there, and whites 41%.  So I am not sure that claim can be substantiated.

But a young articulate African American speaking to camera summed up one incident between the police and a group of his friends this way: “This is what you get in America right now”.  Couldn’t have put it better myself.

Pennies and Dimes and the 99%

It was this time last year that I fell out of love with London.  I was staying in a three story walk-up flat, in Kensington.  Close to shops, tube, and some great pubs.  And walking distance to the Chelsea Flower Show and Q&A amongst other museums.  From my bower window I could sit in the afternoon spring sun and watch the pedestrians far below, hithering and thithering.

Kensington was dirty, and the people grasping.  The young women wore stiletto heals that were reminiscent of the foot binding days of the Chinese.  All the shops had sales, although I am not a shopper, it was noticeable that along the strip the retailers were doing it tough.  Clear signals of a weak economy. 

The fact that it rained most of the week could have also contributed to my gloom.  In one day alone we had boiling heat, torrential and flooding thunderstorm, hail, and a wind storm.  

Across the street from my flat, and a floor lower was a gorgeous apartment.  Decorated and furnished in the old English style it was immaculate, with real old world charm.  The curtains were always open as though the owner was inviting people to glance in and admire.  

The owner himself was of old world charm style, an English gentleman.  Maybe ex military, because he stood tall and ramrod straight despite his clearly many years, and groomed to within an inch.  

As I sat in the evening, it was the only time I saw him, despite having a clear view the entire length of his apartment.  At that time, he would sit beside the window and read the paper, on occasion leaning into the window as the light faded, holding up the paper.  

Maybe I am slow, but it took a few days to realise that he was using daylight to read by rather than turn on an overhead light.  And further, that I at no time when glancing out the window saw lights – either overhead or from a flickering TV – in the evening.  In the kitchen, I only ever saw tin cans on the bench, despite the inviting décor.  It took me a little time to understand that all over London some, like this elderly gentleman living in a million pound apartment, and others less fortunate, were not turning on the lights nor cooking, because they couldn’t afford it from their income.  I wasn’t just the poorer demographic.  The seemingly wealthy were suffering also.  

And maybe like this gentleman, they lived a proud existence, and told nobody for the shame.

I have written about inflation and ivory towers, in which I suggested that the governments would soon (and again) be adjusting how they measure inflation to grab back money on say, pensions.  Inflation is a number on which the whole world spins, whether measuring real investment returns, pensions adjustments, or planning for future expenditure.  

And that the western economies are experiencing stagflation, whereby the cost of essentials – food, water, energy, healthcare – are rising faster than the income on which we rely to meet these essentials.  And I don’t see how it is going to be any better for decades.  (I took my own advice and bought a farm.)

Then a month ago there was this extraordinary article, as if to prove me completely correct.  So that I am sure you have the benefit of reading it (and the following comments) here is the link in full.

http://www.bloomberg.com/news/2012-04-25/chained-cpi-switch-is-a-slam-dunk-even-in-election-year.html

I learnt various things from this article.  First, that Bloomberg now had its own editors publishing editorials.  When did that happen?  Second, that they also posted comments about an editorial.  Again, since when?  Third that Bloomberg is still getting its facts wrong.  Evan when written by the “editors” themselves, whose primary role is, after all, to edit the facts.  

Here is the opening line:  “Sadly, Congress and the White House seem incapable of agreeing on substantive measures to tackle the $10.4 trillion mountain of U.S. debt.”

Now the interesting thing about that line, is that the US debt is in fact US$15 trillion, because I looked it up on Bloomberg.  

The article then goes on (the “slam dunk” in the heading is a tip to its quality) to say that the government should switch to a Chained Inflation measure rather than the standard measure used today.  

Chained inflation is a measure, that reputedly tracks changes in consumer purchasing behaviour.  The example they use is that when the price of a granny smith apple rises, the consumer switches to the lower cost red delicious apple.  

Now, for sure you are getting the drift.  As inflation on food essentials (as an example) keeps rising, people will continuously switch to lower and lower cost products.  Cat food comes to mind, as it did to the many commentators who overwhelmingly mocked this article.  Dog bones anybody?  What inflation?

The “editors” suggested that this would save the government US$300 billion over ten years.  No suggestion how this was going to pay down the debt.  And at 0.2% it isn’t even enough to pay the interest on the debt. 

And you guessed it, the savings came from:  social security and cost of living adjustments;  pensions; and probably food stamp recipients.  The 99%. 

And again this turns to a continuing theme in this blog – penny and diming the 99% whilst the 1% carry on.  As pointed out in prior blogs, taxing the OTC derivative market, US$700 trillion and counting, just 0.1%, would raise US$700 billion.  And if the duration of the OTC market is 3 months, that would be US$2.8 trillion per year, or enough to pay off the USA debt in total plus a huge surplus using Bloomberg’s 10 year measure.  

Of course the USA is not the home to all the global derivatives, but probably a lot of them.  There would be quite a material amount in other financial centres such as London.  

And you guessed it, the Telegraph reports that that government is about to pennie and dime its citizens by adjusting how the RPI is measured.  That's the retail price index.

It reports “A reduction in RPI would save the Government up to £3bn a year on the interest payments it makes on index-linked gilts, but would also slash income for pensioners and those whose pay packages are linked to the measure.”

Like the pension for that charming elderly gentleman living in Kensington.  Or should I say, surviving, just! 

Oh dear!!

Politicususa published a list of thirty pieces of Republican legislation introduced to government [s] in the Obama term that they considered the Republicans War On America.  Their view was that Republicans are using these legislation to destroy America.  We republished their headings, but also gave access to the very very detailed and impressive research they had done to support their thesis.

One piece of legalisation in this honourable list was called “The War on Human Foetuses in Food” , which they poohed poohed as representing how mad the Republicans are.

Wrong guys.  The Republicans had every conceivable reason to suggest, and probably pass this legislation if this report in the Daily Mail can be believed.

In South Korea, customs intercepted cargo that included more than 17,000 capsules containing powder made from dried aborted Chinese babies.  

Frankly, I have nothing more to say on that.

However, the number of wars will now have to be 29.  

USA Civil War

In this blog we wrote about what appeared to be the civil war in many countries and includng the USA.  And those views haven't changed.

To celebrate the 1st May Labour Day, Politicususa published an astounding piece.    Called......

The Dirty Thirty – Occupy May Day Edition

By: Hrafnkell Haraldsson

"On March 14, 2011 we (they)  first published a list of thirty pieces of Republican legislation “that Republicans are using to destroy America” and called it “The Dirty Thirty.”

And here they are:

The War on Women's Reproductive Rights

The War on Human Foetuses in Food

The War on the Girl Scouts

The War on Divorce

The War on Church and State

The War on Special Supplemental Nutritional Program for Women, Infants and Children (WIC)

The War on National Public Radio (NPR)

The War on Desegregation

The War on High-Speed Rail

The War on Marriage Equality and the Anti-Gay Agenda

The War on Net Neutrality

The War on Obama: Birthers and Anti-Obama Legislation

The War on Unions and Collective Bargaining/War on Middle Class

The War on Immigration

The War on Child Labor Laws

The War on Islam/Islamophobia

The War on the Federal Government (Tentherism)

The War on Gun Control

The War on Consumers

The War on Democracy

The War on Jobs

The War on Science, the Environment and Health

The War on Hungry Children and Families

The War on Education/Historical Revisionism

The War on Anti-Bullying Laws

Doomsday Legislation

The War on Freedom of Expression

You’ve pushed us white folks too far!

The War on Privacy

The War on the “New World Order”? Really?

Following each heading is a comprehensive list of all the new Republican legislation brought (nearly typed “bought” which would be equally appropriate) to various government chambers all over the USA in the past 2 years.  The writer concludes that the USA is at war with itself.  

You can’t know a country until you read its policies in detail.  It is a very long read.  But well worth it.  Here is the link in full.

http://www.politicususa.com/the-dirty-thirty-occupy-may-day-edition.html

Yep!!

Pennies and Dimes and the 1%

No sooner had we written about the new electronic money in Canada, the MintChip, than we read of new technology with a similar purpose being introduced in the UK. 

It’s called PayTag, and The Telegraph reports that Barclaycard Visa (just reported a GDP2 billion first quater profit) is reputedly introducing the contactless payments.  Effectively a sticker on the back of your mobile phone that is waved over a reader device.  

There is an argument that this non cash form of payment helps identify the participants in the black economy, and contribute to the tax take.  True, but as we wrote in the above blog, it is pennies and dimes.  And a loss of privacy.  And more profits to the banks as they take a slice of every, ever smaller, transaction.  And Martin Vander Weyer in his Telegraph article argues that Britain’s should rise up to save the tenner.

However, I am going to return to my point in the previous Pennies and Dimes blog.  Stop regulating the little guy and regulate the 1% on their over the counter (OTC) derivatives.  This is where the real – very very large profits and losses occur.  And where danger lurks everyday with just the accidental push of a button.  They should be put onto an exchange, where they can for a start be known – eg the size of this market.  Who are the main players.  What concentration risk exists (think AIG in the GFC).  And tax every single one of them.  Evan 10 basis points (0.10%) would be a winner.  

And now via zerohedge to put some numbers on that market. 

I strongly recommend that you have a look at the visual presentation by Demonocracy of the global derivatives market – called Derivatives:  The Unregulated Global Casino for Banks.  This graphics and the detail is superb. 

It argues that 9 large banks (designated Too Big to Fail, and thus WILL be bailed out) hold US$228.72 trillion exposure in derivatives, ~ 3 times the world’s entire economy.  Here is the list: 

Bank New York                                  US$  1.375 trillion

State Street                                         US$  1.390 trillion

Morgan Stanley                                   US$  1.722 trillion

Wells Fargo                                         US$  3.332 trillion

HSBC                                                 US$  1.321 trillion

Goldman Sachs                                   US$44.192 trillion

Bank of America                                 US$50.135 trillion

Citibank                                              US$52.102 trillion

JP Morgan Chase                                US$70.151 trillion

Reported elsewhere, all up the unregulated derivative market is ~US$707,000,000,000,000.  That’s correct, US$707 trillion.  Now just imagine if this market suffers a one percent (1%) loss; that would be US$7,070,000,000,000.  Seven trillion dollars.  Who would pay for that?  Well you of course, we paid for the last loss.

But the point is, whilst we are penny and diming the people of the world with MintChip and Paytag, this market remains unregulated.  And profits untaxed for all we know.  Despite the global financial crisis, and in the face of acknowledgement from regulators that maybe it should be.

A 10 basis point tax on these (completely pointless) transactions, would generate US$700 billion.  More actually, because they trade in nanoseconds, and taxing every transaction would pay off the debts of all the countries currently in strife.  

So next time you use your MintChip or PayTag think on this.  And send a letter to your local pollie demanding that these transactions be regulated and traded on an exchange and taxed.  And maybe put the funds from the taxation into a World Bank fund (or IMF) to bail out the banks next time the fail.  Save us having to pay for it. 

This is the only “real” trickle down policy that would work for everybody.  

Our civil wars

On leaving my role in international investment banking in 2004, I visited my Professor Emeritus from my Master’s days.  And he challenged me to identify the five key issues I would be taking from my relatively successful career (which wasn’t over – just that phase).

One was the sheer scale of corruption / fraud / sailing close to the wind / psychopathy I had witnessed at the top of the largest organisations around the world.

I later went on to research this theory and found that others had of course been there before me, and also that it is only intuitive that a psychopath would rise higher because they are conditioned to do so.  And most people are conditioned to let them. 

There is abundant research that suggests, that although representing only 10% (to varying severities) of the population they have much higher representation in the upper echelons:  for example in law and finance and corporate management and politics.  Again, this is not surprising; but what was surprising was the apparent increasing scale of their representation and the systemic penetration of their pathological ideals.  It also heightened my awareness about how to invest for my future:  diversity by country; real assets; clean passport; live away from major cities; and asset liquidity in severe stress.  

This article brings me back to the point again.  It argues that psychopaths have infiltrated the USA governance to such a degree that it is on a tailspin to severe civil crisis.  Well no news there – I have written about that before – but it does come at it from a different and interesting perspective.  The authors are an investment advisory house, with 50 years experience.  They too concluded similar investment ideals. 

And this article on what Marx would have made of the world today, albeit interesting, does not consider the scale of the rot that is evident everywhere. 

Whilst in Europe last year, the usual watching TV in a hotel room whilst the snow fell, I caught a USA program that I found disturbing.  The name?  Do not recall.  It was a “swat” team of drug enforcers that had, by any measure more weaponry than is reputedly given to the USA forces in the Middle East.  Miami maybe?  A reality show. 

This team would invade homes with massive force, from large SUV’s equipped like tanks, shoot to kill, and scare the living bejesus out of anyone in the vicinity.  It looked like a country at war with itself.

Then there is the increasing internal surveillance carried out by many countries on their own citizens today.  UK, USA, Australia, China.  And protected by the USA Patriots Act that enables a citizen from any (allied) country – for seemingly scant rational reason – to be deported from that country to the USA to meet, in some cases unknown charges.  Internal surveillance and snitching on your neighbour are key signals of governments out of control.  Facism comes to mind.  East Germany. 

All this looks like the psychopaths are winning and in the USA, it is in civil war already.

The author of the psychopath article is spending more time in Latin America (from the USA).  My article on moving to Mexico is looking more viable by the minute. 

Pennies and Dimes

We all know that privacy is gone, gone, gone.  However here is one more (semi) rant on the changes to the fiat in Canada.  Written by James E Miller of the Ludwig von Mises Institute of Canada Via Zerohedge.

Canada is phasing out small currency usage, and introducing digital currency, the MintChip.  This can be used for all small (and I guess large) transactions in Canada and is anonymous (bah humbug).  If data is captured it is used against you in one form or another, and at the very least is valuable information to the tax man, marketers, and your ex during divorce proceedings.  

Mr Miller suggests “Governments have been waging a war on anonymous business since central banking became the norm.”  Well, it has on the 99% Mr Miller.

But not the 1%.  What I find difficult to understand, or at least throw down the challenge, is why if the governments around the world can penny and dime us, why they cannot get the US$700 + trillion of over the counter derivatives onto an exchange so that we can monitor them too?  They are after all the biggest risk, not the penny tax dodger, and the greatest cost to the community when they go boom!!

Someone always says it better

A big thanks to one of my readers for sending me this erudite representation.  Frequent followers will have follwed my comments "trickle up trickle down and squeeze" and "trickle up austerity". 

The Elite’s Thoughtful and Erudite Response To Occupy

Well the elite in the USA have kindly responded with some well researched and thoughtful rebuffs to the issues of Occupy Wall Street in a Bloomberg article.  Mainly being about the enormous wealth disparity between the have’s and the have nots, the latter being the 99%ers.  So lets run through it.

Jamie Dimon, CEO JP Morgan Chase, says “Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it,” is at least honest.  He clearly doesn’t get it.

Bernard Marcus, co-founder of Home Depot Inc, says “Who gives a crap about some imbecile?” Marcus said. “Are you kidding me?”  Again, another honest statement.  He doesn’t give a stuff, about the 99%ers, of which thousands upon thousands would be his own staff. This is clear in the company’s Chairman’s statement for fiscal 2010, where the staff are not mentioned once.  Not even a thankyou for the first year of profit growth in 4 years.

Stembourg (BB&T Corp) and Allison (Winston-Salem) said the new S.953 (b) of the Dodd-Frank Act – disclose ratio between CEO and employee median salary – said this was wasteful and also insane.  The first is false, as any management data is always useful,  and the second is clearly based on extensive research.  I wish he would publish it. 

Then there is Schwarzman (Blackstone Group) who says that “attacking the banking system is a mistake because it contributes to a healthier economy”. Err, I think that is clearly overwhelmingly false.  We have been in the middle of a global banking crisis for four years.

But my favourite is Golisano (Paychex Inc, and billionaire) who is going to “vomit” if he hears a pollie say “paying your fair share” one more time.  I don’t know why this was in the article, because clearly the poor chap has a medical condition.  After all I have listened to all their crap for decades and it doesn’t make me vomit.

Then another referred to the elite as job creators; err, no.  Consumers are and they are the 99%.

Last but not least there is Cooperman (Omega Advisors and ex Goldmans), who says “capitalists “are not the scourge that they are too often made out to be” and the wealthy aren’t “a monolithic, selfish and unfeeling lot,” Cooperman wrote. They make products that “fill store shelves at Christmas” and provide health care to millions.”

Truth antenna?  Partly true, clearly false, wrong point – see comment on consumers above, and finally absolutely true.  They do provide health care to millions – the 1% elite.  It is the 99%ers that Obama was trying to include in health care that got the elite all riled up earlier this year.

Honestly if this is the best they can do makes you wonder how they got where they did in the first place.

Thanks to Bloomberg:  http://www.bloomberg.com

Occupying the Isle of Skye

Note to self:  Next time you travel on one of the world’s top ten scenic train trips remember:

(i)                  do not do so on a day that includes severe  weather warnings,

(ii)                especially as you must stand at the open platform train station in Dalmuir for an hour or so,

(iii)               with horizontal rain, and severe wind gusts, no coffee shop nor newspapers and

(iv)              every few minutes news of more train delays and cancellations.

(v)                Also, choose to travel past the most picturesque scenes of the Scottish coast during daylight.  You may see something.

Well that is all a bit embarrassing then, but goes on to prove the point about local knowledge.  The train trip to Mallaig was great all the same.  There is no Occupy Mallaig though, that I can report on, although I searched far and wide.  The only occupying was being done at the pubs, because outside you could only travel in the one direction, and that was with the wind.

The ferries to Isle of Skye were cancelled of course.

However, when they were running again, it was a wonderful if rolling trip to Armadale.  Now ponder this, that trip cost GBP3.15.  After arriving in Armadale I was planning to stay until late afternoon and have a look around, before catching the bus to Portree. The latter being the capital of the Isle of Skye.

On this glorious ferry, (who doesn’t love a good swell), was one other passenger.  With a little local knowledge, which proved correct, she said take the bus straight to Portree, it will be at the ferry terminal.  And as soon as we arrived I knew why…..there was nothing at Armadale.  Certainly no Occupy Armadale. 

And what a trip, in a small bus, winding road up hill and down dale, horizontal rain, and heavily gusting wind, and a driver hell bent on arriving on time in the face of apparently overwhelming natural forces massed against him.  Aghh, that wonderful highland spirit, and it doesn’t take a lot to look around at the incredibly inhospitable environment to learn what makes the highlanders incredibly fierce and tenacious.

For the record there is also no Occupy Portree, either.  But there are more of those happy happy happy Scottish people first met in Glasgow.  This last summer season has been a bit slower for them however, and although many tourist service destinations close for winter anyway, there are more so this winter, apparently, and earlier.  Yes they are feeling the economic downturn. 

But not the buses.  One driver, one bus ride cost GBP6 compared to one ferry ride with at least 10 people, from the captain to the deckie, and a cost of slightly more than GBP3.  What does that tell you about economies in small communities? 

I searched in severe weather for any hint of Occupy.  But there was none.  However, the economic woes against which Occupy Everything is standing up, are here to.  Even here on the wild and immensely beautiful coast of Scotland, and the tenacity of the highlanders is going to be tested.

Then I recalled the books I read in my youth about this region, and I realised that the highlanders were the first Occupiers.  From Robert Louis Stevenson’s “Kidnapped”, where the lowlander David Balfour of the Shaws, was kidnapped and then fought and crawled his way through this desolate highland landscape to reclaim his landed birthright. 

But more prosaically, Katherine Stewart’s book, “A Croft in the Hills” is seemingly about Occupying Everything Everywhere.  “When you have lived for a few years in the bare uplands, where life has been precarious from the start, you learn, first, not to panic. Then you learn to love wholeheartedly what need no longer be feared.  You become so deeply involved in the true drama of cherishing life itself that mere attitudes and the pursuit of possessions are discarded as absurd.”  Where people no longer “fall under the spell of the shopwindow”.   Now that is true Occupying!

Occupying Glasgow

A wet and windy afternoon on arrival in Glasgow.  But warm, warm, not November weather at all everybody tells me.

There are two main rail stations in Glasgow, go figure; Central and Queen St.  Such poor central city planning usually suggests graft somewhere along the way.  Maybe that isn’t the case here, and now Glaswegians everywhere will be cross with me.  Hold back, I am here because my Granny was born here.  So we are one.

Taxi driver’s view of the economy is things are tight.  People have stopped their spending, worried about their jobs.  “That is the main worry, heating and electricity costs are up 20-30% over the last 18 months, and salaries aren’t going up that fast”.  “People are worried about losing their jobs, it is all to do with what the banks did.  So they aren’t spending, saving their money just in case. Same as Europe and London.  There will be a lot of people doing it tough this Christmas”.

“Our unemployment is much the same as the rest of Britain, but we are all worried.  Our young people are going over to Australia looking for work.”

You’re not a banker are you?, Yes I say, an ex-investment banker, and we both have a good laugh.  Mainly because I cannot repeat some of the things he said in this blog.  And that is the main thing I have found here in just a few hours.  Everybody seems so damn happy.

I am straight off looking for Occupy Glasgow, and I am sure it is here somewhere.  But instead I find another version, Occupy St Enoch Square.  And on a wet and windy Wednesday afternoon it is packed with browsing shoppers, young future louts, pretty young women parading, families with children playing and running around in the soft rain, couples and business people, all of many cultures.

It is also full of market stalls from all over the world; food, clothes, delicatessen, cheeses, biscuits, meats, tomatoes. German cooking and beer, Holland sweets, hamburgers made with wild beests [not sic] from all parts, from Kangaroo to Springbok, Ostrich and Crocodile.  French delicacies, baking, and food.  Russian dolls. Asia is not forgotten and nor is the various woolly animals that are doing a thriving trade with the teens and children.

Business women and men on their way home stopping for some mulled wine and Asian food;  lovers walking and laughing; and the people serving in the stalls dancing to the loud Christmas music and love songs (young and older).  All service is with a smile and a bit of teasing and joking. And this all stays every day until Christmas.  Fun fun fun! Happy happy happy!

I am talking HAPPY!!

Even the security service at the markets in St Enoch Square, who are ubiquitous with their earpieces, and muscles, well groomed haircuts, bring a smile to ones face.  They have boldly printed on the back of their florescent jackets "McSecurity".  Police are pounding the pavements as well, around the perimeter.  Nodding and smiling at those passing.  On the back of their jackets, they have their website so you can read all about them.  I feel as though I have entered a parallel world.  But one that is very welcome. 

I had been here for business many times in my old banking days.  What a glum lot they were back then.  Obviously I was meeting the wrong people, huh?

Is it possible to fall in love with a city?  Just have.

Occupying Edinburgh

Glorious, glorious, Edinburgh.  Surely, the most beautiful city in the world.  If a little overcast today, but the plus side of climate change is that it still seems like early autumn so it was warm. [Okay, there are no plusses, I know].

Straight to St Andrew’s Square to visit our Occupying forces. I say ‘our’ because they are working for you and me. 

Counted about 20-25 tents, and after five pm, when the darkness has arrived seemingly early, there were no lights in them.  However there were about 25 people milling around the main tent, and other scattered about.  And the whole scene looked fabulous with the fairy lights in the trees of the Square, and, ironically, the windows of Harvey Nicholls, Louis Vuitton, and Rathbones casting their warming glow over the whole occupation.

Inside the main tent there are message boards with many signs on how to conduct yourself in the Square, from security to cleaning.  The Square was very clean and tidy, and not at all intrusive as you walked through the Square, on one’s business so to speak.

Also up on the notice board and highlighted is the manifesto that appears to come from the Occupy Wall St team –surprisingly profound and actually true.  I was pleasantly surprised.[i]

Soon an ex antipodean introduces himself.  All around other people are in deep conversations and I hear wafts of communism [“just means community”], Marxism, and all the “isms’.  On the message board is a notice saying “forget the isms, look at the issues”. So someone was there before them.

Also on the board are various notices containing the words “citizen” etc.  This is the only thing that gets up my nose.  Only semi and permanent fringe people use this word.  It is a word that rarely comes up in normal mainstream life [unless in warfare] and is a barrier, a wall, a jargon indicator, that isolates them to some degree from the rest of us.

I have a long conversation, listening, with the ex antipodean and later with a local publican.  Both raise Royal Bank Scotland ["RBS"], and both raise Fred Goodwin.  Is it in shame? Anger? But they don’t speak heatedly.  They speak of the loss of sight by the executives of RBS and all the other banks with their service to the community.  Their race to achieve bigger and more more more.  As the economy tanks, on the old people who will die this year due to an inability to afford heat, of the kids not getting jobs when they leave school.

However they [bankers] have / had no insight into the effect on the community of what has happened, “mainstream community” they called it.  The publican quotes me all the statistics which I later look up and he is right.  This is a topic they know well, whether in the Square or at the pub.  Fred Goodwin and the RBS's nearly GBP25 billion dollar one year loss; the hundreds of thousands of people who have since lost their jobs in the community; the long road ahead for the economy.  The fact that the average wage in the UK is GBP25,000 and Fred Goodwin lost the equivalent of 100,000 job in one year alone[ii].  The waste.

Everyone I spoke to did not appear angry;  if anything the impression I walked away with was they just seemed to want someone to listen.  They spoke eloquently, and with care, in both terms of the word. As an investment banker I certainly feel shame.  After all, who can blame them!!

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[i] http://www.dangerousminds.net/comments/first_official_statement_from_the_occupy_wall_street_movement/

[ii] Actually this site has a lot of info on averages http://career-advice.monster.co.uk/salary-benefits/pay-salary-advice/uk-average-salary-graphs/article.aspx.

Occupying London

Here in the heart of the Occupy London, we are reporting the facts on the ground, with a visit.

Of course the first person to ask about the economy when visiting a country is the local cabbie.  “How’s business”?  Must have said that a thousand or more times all over the world. During a GBP20 trip, he says business is okay, that people are still going out, bankers still need cabs, and he hasn’t noticed any real cut backs. I asked how he felt about the terrible headlines concerning the European financial crisis, and he said it seems to be happening to somebody else.

The next of course is the local pub and restaurant.  The Eagle, in Farringdon, used to be the main watering hole for the journos from The Guardian, until the latter moved offices.  Should be the hub of knowledge. “How’s business?”.  Oh concerned and careful, but business seems to be holding up.  Having dinner there, you could observe that it was a great favourite of the locals – and I know why – absolutely fantastic food and friendly service.  Things are pretty okay he said.  Highly recommend with a KVVV 6/6 star rating.

Strolling around everyone seems busy, either outside St Paul’s, in the golden mile [of bankers] or in the inner city suburbs.  There is substantial building, road works, buses galore, and when dining out in the evening in many local restaurants it is necessary to book.  All looks good so far.

Fantastic soya latte in the local boulangerie (always packed), with a breakfast cost of GBP10, and the Financial Times, get to meet some of the locals.  A mature woman is there every day, and very friendly;  we often discuss the news.  One day she stays longer, saying she is waiting for her son to move out before she goes home.  “Its about time” she says. 

A guy in his forties is there every morning, and as all the locals seem to do, we get chatting.  He has been a senior executive in IT for decades, and for personal reasons 12 months ago decided to have six months off.  “Never been without a good job”.  And here he is today, unable to find any work at all in IT.  He was slightly stunned as he told this story, but claimed that the banks and other institutions that are the largest IT users, have been cutting back sharply on staff and new projects.  Even as the salaries they pay their chief executives reach all time highs.

Waitrose is certainly packed, and it seems that whenever I go in for a shop the lines for check outs are at least 50 -75 people long.  And that is with at least eight check outs.  The British love a good queue. Great fresh food, ready to eat and organic, is the reason. 

Of course this is not Spain, Greece, Italy, nor US, where the jobs situation is dire – not yet anyway.  However, there is a real disconnect between the so called crisis in the Eurozone which is on the front pages of every newspaper and what is experienced on the ground.

And the reason could be this.  In research just published (1 below), from a database listing 37 million companies and investors worldwide, they mapped the structure of economic power using complexity analysis.  It revealed a core of 1318 companies represented 20% of global operating revenues, and owned through their shares the majority of the world's large blue chip and manufacturing firms - the "real" economy - representing a further 60 per cent of global revenues.

From this group,  147 companies controlled 40% of total wealth.  That is, less than 1% of the total companies and investors in the world, control 40% of wealth and 80% of global revenues.  And they were mostly financial institutions. 

Yes that’s right, the ones we are still bailing out around the world and in Australia with the recent “covered bond” legislation.  No wonder the people on the street are yawning.  In the most part it is not their day to day problem.  However Occupy London [and everywhere else] gets it.  Have you seen Blade Runner?

(1)www.newscientist.com/article/mg21228354.500-revealed--the-capitalist-network-that-runs-the-world.html