tag:blogger.com,1999:blog-1078500584204106202024-03-14T09:25:31.489+02:00TraderMark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.comBlogger114125tag:blogger.com,1999:blog-107850058420410620.post-12515858096117122592016-01-18T09:46:00.000+02:002016-01-18T09:56:39.120+02:00South Africa - be pragmatic<div dir="ltr" style="text-align: left;" trbidi="on">
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NO investment is fool-proof. The hedging [protecting] against a loss on an investment is easy, cheap and an essential ingredient in effective management. Yes, at face value, I believe the US market is in for a correction. Notwithstanding, turn over any forgotten stone and you’ll find a dooms-day forecaster proven wrong.<br />
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Here’s the gist of it:<br />
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<li>The fall in oil is stimulatory and the market knows this ie: the market is building extra profits into company projections. Given this prognosis investors are paying more for stock, currently, than they would have / should be. Why? Investors are discounting high prices on the expectation of improved profits sometime in the future. The flip-side of this stratagem is just as Grampie told us on his knee – 'don’t count ‘em before they hatch…' What would happen if OPEC cut supply, drastically? We know the US shale industry is a dark-pool of goo filed 'not for your eyes' under SES [State Economic Security] or 'policy' for short. There are countless other layers to this onion which we don’t have the time to peel. Managers lump these under ‘market risk’; a catch-all for ‘we just don’t know’.</li>
<li>The ECB has mooted / announced a 1.2 trillion approx. euro rescue package; supporting European sovereign bonds in the main ie: the ECB will buy up to 30% of all sovereign bonds [paper countries issue to borrow money]. It’s a backstop other investors like and on that basis only, will continue to buy the paper even though the paper is inherently risky. These governments then have access to cheap money and will continue to bolster their respective economies by spending. Spending isn’t mending and those chickens will come home; soon. Paradoxically Greece is our shining beacon for the future. Push ‘the people’ hard enough, for the economic ineptitude of their government, ie: reckless public-spending and the government is soon replaced by the far-left advocating social change & or defiance of the status quo. It’s Capitalism feeding on itself. Denying the fact is as stupid as sweeping Greece under the table by excommunication, on the sin of delinquency, when the son is the product of the father..</li>
<li>China’s growth hasn’t stalled but is slowing; that’s if you chose to believe the data that is. Their socio-economic troubles are just beginning. </li>
<li>If the global consumer treadmill breaks down, we, the human race, are in for the high-jump whichever way you want to spend it. The oil which soothes the grind is a media-controlled process ie: through advertising and cajoling consumers to replace / buy / ‘need’ / aspire to etc. If that bias swings in favour of logic [We’re consuming resources at a grossly UNDERSTATED rate] then ‘consumerism’ or ‘anti-consumerism', more accurately, will be the catalyst for a financial Armageddon no one wants. It’s a hamster’s wheel of dread which keeps the lights on and we’re all on it. Make no mistake.</li>
<li>SA’s corruption is entrenched and it’s difficult to see how that can change for the better, certainly not under the current circumstances. The international perception is equally trite. Infrastructural decay; a paucity of foresight / planning and an ever-widening wealth-gap concludes as follows: - SA is on the road to becoming another failed state. It is the perception, at least, we surmise from international cash flow. The fall in the rand will tell you much the same.</li>
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In the end I’m pragmatic more than optimistic. We live in SA. We save / spend / and earn our crust in SA currency. Outside of SA most rand-based savings wouldn’t buy you a pregnant goat. The fiasco that is hyper-inflation, under conditions of a currency negatively out of control, is emblazoned on the psyches of most Africans and a sad state of reality for most ex-Zimbabweans. So we’re damned if we do and damned if we don’t. Whilst we’re here and living under this hatchet, all we do is what we can. The first step is to have your wealth invested in the correct instruments and in such a way that the vagaries of the future don’t impact too negatively because when the US goes we all go too.<br />
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-32901774646480697882015-10-15T09:50:00.002+02:002016-08-12T10:47:47.746+02:00Economics is neither tasty not nutritious!<div dir="ltr" style="text-align: left;" trbidi="on">
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Entitlement is deceptively subjective; politics an unfortunate structural requirement and yet, one thing's true, you can't feed your kids on hope and hype.<br />
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Tinkering with or restating GDP data is one thing; not addressing unemployment is something else altogether. Too many people from all walks-of-life and in most geographies are in financial stress. Although we're on the cusp of the next innovative age, there is little suggestion that the REAL issues are being adequately addressed. We're surprised when consumer-spending data shows that consumers are spending less.... Consumers are spending less because they, wait for it, have LESS to spend! Following on from that companies obviously stock less, build less, manufacture less and sell less... Why then the surprise when 'manufacturing data' deteriorates? Since companies sell less they employ fewer people who then spend less and so on. That's not economics it's common sense. Ironically companies reliant on technology and laying-off staff are merely 'passing-the-bill' hoping other industries employ the people they sell their goods to. It's not sustainable..<br />
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Do yourself a favour and employ as many people as you can. Your financial security, like mine, depends on them and theirs and his on hers and mine on yours.... The rest is rubbish.</div>
Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-11091470821108901672015-10-07T11:31:00.004+02:002015-10-07T15:16:45.286+02:00China's stranglehold<div dir="ltr" style="text-align: left;" trbidi="on">
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BRICS - the acronym originally coined by Goldman Sachs, isn't exactly food for the imagination. Even so the moniker stuck and as the laws of gravity dictate and as the epithet suggests, like a stone has settled nicely at the bottom of the economic quagmire.<br />
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The original BRIC, for those of you who don't know, defined the broad association of the four major emerging economies; <b>B</b>razil, <b>R</b>ussia, <b>I</b>ndia and <b>C</b>hina. In 2010 the plural was added with the addition of South Africa and since those heady days and the euphoria of that headline we haven't come up for air even once.<br />
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In 2007 the China-owned ICBC bought 20% of Standard Bank, South Africa's largest bank by assets & earnings. At that time it was the ICBC's largest investment outside of China. By inference it was also the perfect window into Africa; where local knowledge & expertise was acquired for not much more than 30 <i>pieces of silver..</i>. Oh captain, my captain.<br />
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Simultaneously China continued to accumulate Africa's primary resources / commodities by all means legal.. - either by entreaty, trade-treaty or by IOU and we loved them for it. So enthralled were we that we filled boatloads of Africa's future at <i>prices-past</i> whilst the puppet-master piped the economic tune. Elsewhere EMEA and other 1st-world professionals / experts plied the Chinese with intellectual capital as fast as Switzerland could absorb the short-term Judas-change. China's only contribution was artificially-cheap labour & an enforced / exploitative work-ethic. <i>Made in Italy</i> was really <i>Slapped-up in China </i>and for a while consumers noted a disparity in quality. As a consequence China upped the ante. <b>Quality </b>became the focal point. Soon goods usually <u>made by hand,</u> with scrupulous attention to detail and by processes handed-down from craftsmen to craftsmen, were no better than China's / [<i>Germany-sold] mass-produced-machine-product</i>. Craftsmen all around the globe perished on China's ambition to own the shelves & her propensity to exploit her own people. Mainstream media fobbed off these inevitable consequences as a spin-off of GLOBALISATION and derided the craftsmen for their tardiness and inefficiencies.<br />
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Back in South Africa China's easterly vacuum accounted for both our intellectual property & our hard-commodities. Trees were felled to make Chinese-built, Chinese-staffed & Chinese-supplied thoroughfares usually into the hinterland where more trees were shelled and more holes dug. That the infrastructure has subsequently begun to disintegrate is a discussion for another time. Shipping lanes were gridlocked with the outflow. Around about then ships, hitherto empty, started returning to South Africa fully laden with <i>Made in China. </i><br />
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<i>Made in China </i>carried a State-subsidised price tag & almost always significantly lower than the prices of similar goods <b><i>Made in South Africa.</i> </b>Local product competed for a while, usually on loyalty, but in time-honoured fashion, consumers eventually felt compelled to <i>take advantage</i> of the foreign boon. Domestic industry suffered; the <b>Textile-Sector </b>first to mothball their looms. Ordinary, hard-working generations of South Africans were subsequently made redundant and became integral to the burgeoning unemployment statistic. Breadwinners became welfare-dependents and their own school-going dependents, expelled by circumstance to earn a crust. Perversely domestic commodities were ruthlessly wrenched from African soil and shipped unrelentingly East.<br />
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Next to go was the domestic <i>white-goods</i> industry. Tariff-free goods <i>Made in China</i> and subsequently dumped in the retail outlets, confounded strategic rationale. Inevitably there were more redundancies; more unemployment - more desperation; more crime. Consumers, bloated on cheap fridges & kettles, pointed accusatory fingers at the Executive for doing less than their crime-mandates had promised. The domestic currency slipped against the basket - and the unraveling began in earnest. Other domestic sectors, drowning in this sea of Chinese goods, adapted as best they could and by the only means open to them - redundancies. Staff-cuts, across the board,was a humanitarian tsunami that struck the core of South Africa's psyche. The rand deteriorated further. Goods became more expensive to import & in the absence of a domestic industry, we had no other choice. As a consequence we started to import inflation and around about then growth began to deflate. Our interest rates remained low - inflation targets notwithstanding. Lacking the economic backbone of a strong domestic industry and an employed workforce, South Africa's ability to stave off the inevitable became academic at best. Ratings agencies sat up and noticed. The rand deteriorated further. The financial-garrote pulled tighter.<br />
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In recent times the once-prosperous mining sector, wholly premised on Chinese-demand, has finally succumbed to fear-induced staff-cuts, the severity of which few people truly comprehend. China's structural over-capacity negates demand, even temporarily and South Africa's reliance on a <i>single basket for all her eggs</i> is a childhood lesson long unlearnt. More redundancies, less consumer-spending; more lay-offs, more bad-debt; bank failure - collapsed rand and so on. Perversely South Africa's recent <i>cap-in-hand </i>visit to Beijing is a suicidal injustice bloated by systemic incompetence. Who knew we could be this pathetic?<br />
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At last we find ourselves at the crossroads of desperation and yet the solution is as obvious as the day burns hottest in Africa. Reinstate national pride by protecting local industry; impose multiple import-tariffs on foreign-manufactured goods and negate China's exploitative reliance on her poverty-controlled people. Let's make knives & forks; stop the export of raw product and value-add our commodities in local industry. Get our people back to work and back in school! Education is an investment for the future. We are a proud nation; a skilled nation and I don't see why we've allowed ourselves to become the economic slaves of a country which less than a century ago lived a rural life, largely uninterrupted by aspiration and an ambition to rule the world. Who's laughing at whom, exactly?<br />
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-74302874828904787002015-09-23T11:52:00.000+02:002015-09-23T11:52:24.708+02:00Investor fatigue<div dir="ltr" style="text-align: left;" trbidi="on">
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Buy when others are selling and sell when others are buying is, on its own, about as realistic as anticipating a no-claims bonus from your insurer after employing a stop at a green light and drive-on through a red strategy. Sooner rather than later you'll get it wrong, very wrong.<br />
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100 monkeys sitting in a tree eating superficially identical fruit; half the fruit poisonous and the other half not. Underneath the tree lie the monkeys poisoned. The last monkey sitting in the tree would have guessed each fruit correctly until he doesn't. Is he smarter? Perhaps. He's just a monkey remember..<br />
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I can't recall a time when retail volumes were so thin. That's applicable across the instrument spectrum and true for most markets. Investment fatigue, a concept birthed in what has become a headlines-driven market, is very prevalent. Hedge-fund gurus of yesteryear, usually wholly reliant on their say-so to influence a market, find little solace in the fact that the average investor just doesn't care anymore.<br />
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What Mr. Buffett really means when he says buy when others are selling and sell when others are buying is this: - buy only when you know what you're buying and sell only when you know why you're selling. If, like many others, you suffer from investment fatigue and are frustrated at consistently poor investment performance don't look to the other monkeys in the tree for guidance. The grass is not greener because it's on the other side. It's greener because it's watered. Now, more than ever, do your own homework. Accept that you won't always be right. Understand that a bad investment can stay that way regardless and do something about it. </div>
Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-73454907176205675162015-09-16T09:22:00.003+02:002016-10-19T08:47:10.924+02:00Europe's world war & a fight for ECONOMIC relevance<div dir="ltr" style="text-align: left;" trbidi="on">
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Speak to an educated, politically astute European and don't be surprised when he / she tells you that Europe is embroiled in a war so bitter that subsequent social divides will take generations to bridge. </div>
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An influential colleague contends that Europe is in a fight to the death and the enemy is none other than Britain and the United States! </div>
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Why have the Europeans been so slow to respond to the EU crisis? It’s a function of an outdated institutional structure and cumbersome <u>Legislative, Judicial & Administrative</u> bodies<i>.</i></div>
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These are just a few of the institutional bodies / individuals responsible for the well-being of the European Union:</div>
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<li><i>Ministers and parliamentary secretary generals.</i></li>
<li><i>Commissions / Committee of regions, economic and social council-BEI (European Bank of Investments)</i></li>
<li><i>FEOGA-(European Agricultural Guidance and Guarantee Funds).</i></li>
<li><i>(EMCF) -European Monetary Cooperation Funds.</i></li>
<li><i>Secretary General of the Council of Europe</i></li>
<li><i>Parliament</i></li>
<li><i>W.E.U (Western European Union)</i></li>
<li><i>EUROCORPS </i></li>
<li><i>E.C.B (European Central Bank)</i></li>
<li><i>O.E.E.C (Organisation for Economic Co-operation and Development)</i></li>
<li><i>The Council of Europe</i></li>
<li><i>NATO (North Atlantic Treaty Organisation)</i></li>
<li><i>CSCE (Commission on Security and Cooperation in Europe)</i></li>
<li><i>The legislative council has powers.</i></li>
<li><i>The commissions and the legislature and the executive for the E.C.S.C. </i></li>
<li><i>E.I.B (European Investment Bank)</i></li>
<li><i>E.B.R.D (European Bank for Reconstruction And Development) </i></li>
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It’s understandable why Europe has responded so slowly to a deliberate, well-coordinated economic attack and why the consequences have been devastating. Germany has alluded to this fact and is demanding structural reforms.</div>
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<i><b>Britain is the enemy</b>… </i><br />
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(A simple example) - Britain proposed the purchase of significantly subsidised New Zealand sheep in exchange for British-made vehicles offered cheaply. The sheep are sold to France at excessively inflated prices and the commission shared…It's open to scrutiny and is a tangible and deliberate attempt by Britain to collapse the EAGGF. </div>
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<i><b>The United States is the enemy</b>… </i><br />
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(A simple example) - European banks have been driven to the cusp of bankruptcy by a co-ordinated attack by US banks intent on creating problems where there are none in an effort to destroy the Euro. Interbank rates are open to scrutiny and confirm the intent.</div>
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Whichever way you look at it it's certainly a refreshing take on the <i><b>European Crisis</b></i> and perhaps an opinion we should not dismiss too lightly. </div>
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-12362091975801551632015-09-09T12:45:00.003+02:002015-09-09T12:51:57.221+02:00The South African Rand<div dir="ltr" style="text-align: left;" trbidi="on">
Somebody suggested that the South African Rand [USDZAR] would strengthen ['significantly'] in the <b>short to medium</b> term and as these things normally pan out I asked why. '<b>Significant</b>' is subjective at best so I'll assume he mean't '<u>return to the mean</u>'. His definition of '<i>short to medium term</i>' was from a few weeks to a month or two. In that context then:<br />
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Here's his take -<br />
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I'm not going to prattle on about the techs. but within his parameters / definitions / time-constraints / whatever... he's likely to be correct; <u>maybe</u>.. Who knows?<br />
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Here's my take -<br />
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My idea of <i>short-term</i> is three (3) years and my understanding of '<i>medium</i>' is 5 years +. Asked if the South African Rand [USDZAR] would strengthen against the cross over the term, by my definition, the answer is clearly NO; almost certainly, <u>probably</u>..<br />
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If investments are a balance of risk and return would you risk your return on a maybe or a probably? <br />
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-43273118455051206532015-09-07T16:24:00.000+02:002015-09-07T16:38:50.227+02:00Cogito ergo sum<div dir="ltr" style="text-align: left;" trbidi="on">
<i>Cogito ergo sum</i> - <b>I think, therefore I am.</b> [Descartes]<br />
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<b>Africa </b>has lost her pride. Dehumanized, patronized, colonized, enslaved, stripped of her resources and flayed in the international trade-markets, it's a betrayal of a continent's people; a scar on the collective conscience.<br />
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Unless all Africans participate meaningfully in their domestic economies, Africa will remain the pitiful, aid-slaves of international charity.<br />
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Only the weak cannot forgive and in South Africa the outlook is no less absurd. Ethnic perversion is pervasive in leadership and manifest in the consciousness of our people. We claim our own ethnicity and turn a blind-eye to the misappropriation of the collective trust. <br />
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<i> First they came for the Socialists, and I did not speak out</i><br />
<i> Because I was not a Socialist.</i><br />
<i> Then they came for the Trade Unionists, and I did not speak out</i><br />
<i> Because I was not a Trade Unionist.</i><br />
<i> Then they came for the Jews, and I did not speak out</i><br />
<i> Because I was not a Jew.</i><br />
<i> Then they came for me .... and there was no one left to speak for me. </i><br />
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[Pastor Martin <span style="text-align: left;">Niemöller on national complacency when the Nazis came to power]</span></div>
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Ours is a country sickened by public-incompetence. The systemic abuse of political power is premised on personal enrichment. We're a nation hijacked and held ransom by a sponsored <i>tenderpreneur</i>-cartel. In these conditions it's difficult to hope. Under this pall of corruption we, the South African people, all her people irrespective of tribe or ethnic-claim, remain enslaved to our exclusionary past. We say what we don't believe. <br />
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“<i>For to be free is not merely to cast off one’s chains, </i><br />
<i>but to live in a way that respects and enhances the freedom of others.</i>” - [Nelson Mandela]</div>
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Yes we live in sad times. In backyards some pay homage to yesterday's flag; a fluttering symbol of false-entitlement and a moral abomination. Children, born a blank canvas of hope, are khaki-trained, an armed perversion - morally flawed and a false economy premised on mistrust. Others, our young ones, flee this land, some locked-out of the formal markets, a legal penance for the sins of their fathers. More render themselves useless, mercilessly beating themselves on the cross of guilt. Those who will not bend to this whip of self-loathing are declared false-prophets; harbingers of insincerity.<br />
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We live in sad times. On gilded podiums some bask in false victory; a perverted shout for freedom 20 years past. It's a rendered, context-poor homily designed to mould the economically-disenfranchised; an army dehumanized still, made desperate in chains of poverty and a green branch, compliant against the agenda of the very few. Children, born a blank canvas of hope, are denied their rights, gather in the pock-marked streets and are forced to the begging bowl and out of the classrooms as their mentors idle under trees of despair. In the dark of night behind high walls of neighboring wealth lies a false illegal financial freedom; a theft of the collective moral conscience of a people forgotten.<br />
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These are sad times. In the backstreets of sub-urban hell some suffer a despair-dependent narcotics-induced coma. Gun-toting gangs press children, born a blank canvas of hope, into acts of violent confrontation. Fathers mourn sons dead, in cold blood and mothers become mothers, children themselves. <br />
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'<i>When a hyena wants to eat some of its children, it first accuses them of smelling like goats</i>' - an African proverb.</div>
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Industry is a shadow of failed planning, state-interference and poor skills' development. Parastatal jobs are an exercise of executive cronyism. Our mineral wealth is a low-skilled, low-paying extraction; an international export, at cost, and for the benefit of multinational stakeholders domiciled elsewhere. Up-skilled, value-add, <i>commodity-processing</i> is an international monopoly from which Africa is politely excused. Trade-deficit is an unintended import and priced at the currency-gap; rated arbitrarily by the <i>free-market</i> controlled for 'political risk'; an economic boon for Asian and Western surplus.<br />
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Education is mostly a logistics conundrum for the administratively incompetent. Public schools wait <i>two-to-a-desk</i> for books destined ultimately for the black market. Teachers, qualified at the University of No Name, claim salaries from schools they've never seen. Nurses and doctors queue at emigration for a working wage.<br />
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Law enforcement is a toy of public office where the rule of law is a yellow card of restraint rather than grounds for immediate dismissal. Yes it's true. Corruption flows richly in our veins.<br />
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Cheap labour underpins a process of exploitation. The boardroom's Eton-acolytes sign-off a 200 x [20000%] wage-gap ratio; paid in sterling, at the executive-suite, but paid in South African rand at the face; substantively absurd in productivity alone. High-fenced lands lie agriculturally dormant; home to aberrant game for the trophy-pleasure of foreign dignitaries, owned and hosted by absentee lords of the manor.<br />
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Here 1:3 people persist on - $1.25 pppd; 40000 days equivalent to <i>hunt</i> a cage-bred lion. <br />
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In our streets indebted graduates beg a meal; engineers, mostly; denied their place by transitory Asian construction-gangs, hired on a secret handshake or at the logging-table. Elsewhere Asian-dumped steel, forged from African ore, risks 30000 jobs at the local smelter. Downstream energy-costs treble on '<i>generators' down</i>'; a catch-all for 'unscheduled maintenance'.<br />
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Our economic prognosis is terminal. It's a lethal cocktail of complacency, incompetence and corruption. Unemployment is rising at rates unprecedented in any other comparable, middle-income, developing economy. Labour-market restrictions are tightening. Inefficiencies and falling productivity is pervasive throughout the manufacturing, mining and agricultural sectors. Labour Unions, the current voting base, are more militant, less approachable. In the public sector salaries rise at levels 10 x the inflation-rate whilst 1:3 live below the international poverty-line. Trade & budget deficits are unsustainable. Domestic / foreign capital flight is real; without restraint.<br />
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An inherited infrastructure belies a political indifference to the needs of the unemployed. Political priorities / agendas are largely premised on accumulation rather than selfless service. Social grants are predicated on growth rates currently / inevitably unattainable. The debt-trap is unavoidable. These are dangerous times.<br />
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Africa stands cap-in-hand, pliant and open for renewed, unprecedented levels of exploitation; a co-authored misery and an inevitable harvesting of resources from which we can never return. It's a future bereft of dignity. The incumbent leadership-structure pays homage to the self-styled African Emperor, an Eastern phoenix. It's a morally-defunct empire of intimidation - by design; and predicated on the silence of the voiceless and perpetuated by state-corruption, national complacency and our tolerance for incompetence.<br />
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-8638982563278360812014-12-09T11:42:00.000+02:002014-12-10T09:11:15.930+02:00It's an economic force majeuere..<div dir="ltr" style="text-align: left;" trbidi="on">
Where to from here?<br />
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For one thing we need to appreciate the burgeoning economic ‘disconnect’ from one region to another. Economic disparities, regional and global, are real and here to stay. Here’s how I see it.<br />
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<br />
<ol style="text-align: left;">
<li>The so-called BRICS are all but dead in the water. Aside from China (modest growth) the rest of the team are looking at zero to marginal growth at best. Even Brazil, which raised rates last week in a declining growth environment (historical hyper-inflation jitters), has little chance of beating the average even though they, along with Mexico, are seemingly viewed more positively than all the other economies in that region. </li>
<li>Europe is struggling – period. It’s a self-imposed period of self-loathing rather than a function of external threats.</li>
<li>Asian growth is moderate comparable with their immediate past but moderate nevertheless.</li>
<li>Japan is ‘in trouble’, by ‘Western economic measurements’; has been for decades and yet enjoys a standard of living seemingly at odds with their GDP-growth. It’s an economic conundrum that might possibly be a function of culture ie: non-spending /savings, rather than anything else. Even so, both Japan and Europe have the financial / structural means to artificially boost their respective economies. </li>
<li>The US is coming up for air at last even if the debt-ceiling is expected to limit their festivities in the next few months. </li>
</ol>
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The problem in Russia is exactly the same as the one we face in South Africa. Infrastructural-spend / maintenance has been neglected. Commodity prices have plummeted on a scale unprecedented. It’s rumoured that both the oil and iron-ore markets are being manipulated and from the activity on the respective markets that could quite possibly be true. What we don’t appreciate is the following – lower energy prices are stimulatory; significantly more so than giving money to banks to gamble (ie: invest) in the derivative markets. The benefits of lower energy prices is money in the peoples’ pocket; across the board (On the assumption the benefits are not absorbed into the political ether).<br />
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The other issue both Russia and SA face is cronyism and the long-term prognosis is much more concerning. Infrastructural neglect from non-compliance, apathy or incompetence has the same end-result. It helps very little to bemoan managerial ineptitude, at state-owned / run enterprises (parastatals), if basic-compliance, compelled by the laws of the day, is effectively / serially circumvented or was ignored in times past. On this point the Zimbabwe-lesson is first-hand experience of the long-term catastrophe caused by misplaced loyalties and or cronyism. Incidentally if Putin was caught ‘flat-footed’ by a collapse in oil markets then, quite frankly, he is more of a threat to the Russian people, in the immediate short-term, than he has already been given the credit for. For what it’s worth that’s been on the cards ever since the US shale-reserve came online, so to speak. In SA the nepotism is less subtle and has the same negative consequences for the country as a whole. The underlying difference, however, between SA and Russia lies largely in the extent of their respective ‘cash-in-the-bank’ reserves. Russia has sufficient for the immediate future; SA does not.<br />
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BTW – in my last note to you I said the derivatives market was approximately $600 trillion. I was wrong. It is, in fact, $710 trillion and significantly higher now than it was prior the financial crisis. The risk ‘to the system’ is an obvious code red and the US appreciates the fact. Don’t forget it’s the US banking industry which has the most to lose if the system fails. Hypothetically (ie: for fun) if Putin could /would engineer a black-swan event on global markets or even threaten the US with something along those lines the derivatives market could /would implode. You might be forgiven for guessing that if anything of that sort came to light commodities would recover (remarkably); oil included and sanctions against Russia lifted or lightened.<br />
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On the flipside if Russia had to comply with the dictates of sanity only Putin's pride would suffer. Putin likes to box. As an individual he must appreciate the fact that he’s deep in the twelfth looking for a knock-out just to survive. Why they don’t give Ukraine back to the Ukrainians is beyond all comprehension. Access to the Black Sea via Donets’k is in the bag anyway.<br />
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Here’s my solution to the economic woes of the world and I will use the financial carrot as a catch-all. <i>Homo sapiens</i> is, after all, a creature of logic premised on material comfort –<br />
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<ul style="text-align: left;">
<li>Europe is a ‘welfare-state’ paying good money after bad to protect a lifestyle that is simply obsolete. Siesta time is over. If we are to take Europe seriously then productivity /price efficiency needs redress. Wages must reflect that fact. Protecting intellectual capital is the promise of salvation! The French will revolt..</li>
<li>Close the tax loop-holes for multi-nationals /transnationals eg: Google, eBay, Intel etc which pay as little as 3% in some countries. Spend this tax-revenue on removing the draconian regulations under which legitimate corporate-Europe currently labours.</li>
<li>The US political system is defunct. Urgent redress required! Meddling in international affairs is / should be a UN-sanctioned solution. Save the money spent on international peace-keeping efforts and on which moral-legitimacy is worn as a mask for cheaper oil, and reinvest the savings on domestic infrastructure, the manufacturing sector and on national productivity / skills-enhancement programs. </li>
<li>Expel China from Africa with immediate effect. Mine the resources and value-add / up-skill the raw material ie: sell the finished goods at a valued premium. China competes in a lob-sided market, premised on skills bought or otherwise and I’m not sure why that has to be. China has the financial resources to absorb the short-term wrist-slap for the ‘good of all’</li>
<li>If Japan isn’t the perfect example of a nation fed-up with incompetence and mediocrity what is? What Japan has achieved, post WW2, largely hindered by the US btw. is astounding. It’s an example to all that solutions lie in value-add rather than raw product and perhaps, in a more modern context, solutions-driven in technology rather than on human capital alone. Europe’s threat or her obsolescence, if you like, is the forfeiture of technology and other intellectual capital to the East for short-term import-pricing gains at the expense of their own industry.</li>
<li>As for South Africa if the infrastructural decay continues at the current rate and corruption / incompetence / apathy is not addressed, the best is in the past and that's the truth. Paradoxically, South Africa's issues are, however, possibly the easiest to address if the authorities apply themselves honestly and with some urgency. By way of example the first step [also the easiest] is to declare <i>force majeure</i> at Eskom and cancel the '<b><i>electricity at half-price / below cost'</i></b> contract signed with a private-sector multinational more than 20-years ago. This same multinational uses approximately as much electricity as the rest of the country combined... On this basis Eskom's solvency is assured. Nepotism / cronyism next and an emphasis on adding value to our own raw materials and so on.. </li>
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-49818952511391343132014-12-03T09:08:00.002+02:002014-12-03T09:10:23.276+02:00The chickens & the cows<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="color: white; font-family: "Calibri","sans-serif"; font-size: 11.0pt;">'...<i>OPEC manipulating supply to drive US shale producers into non-profit..</i>.'</span></div>
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<span style="color: white; font-family: "Calibri","sans-serif"; font-size: 11.0pt;">Whilst I concede the facts his conclusions
are wrong. Here’s the way I see it.<o:p></o:p></span></div>
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<ol style="text-align: left;">
<li><span style="color: white; font-family: Calibri, sans-serif; font-size: 11pt; text-indent: -18pt;">The US shale industry is here to stay, either in free-float or with Federal
assistance. One of the key policy riders in the US is energy independence.
That’s been the case since WW11. If OPEC depress oil by manipulating
oversupply, to such an extent, that shale producers become unprofitable, the US
Federal government will subsidise the industry. As it is the tax
conditions for US energy companies are being reviewed favourably anyway.</span></li>
<li><span style="color: white; font-family: Calibri, sans-serif; font-size: 11pt; text-indent: -18pt;">The
US, very recently, signed an agreement with the Saudis to buy oil at a
specific price for the foreseeable future. That means this is not a price war aimed
at the US. The price war is, in fact, aimed at Russia. It’s OPEC and the US
squeezing Russia out of the European market, destabilising Putin and deflating
the political escalation along Russia’s borders.</span></li>
<li><span style="color: white; font-family: Calibri, sans-serif; font-size: 11pt; text-indent: -18pt;">What’s more interesting is a sidelined China and an even less vocal Iran. China buys most of its oil from Iran and if I was to guess they have been
appraised of the price war and are being compensated for their cooperation
i.e.: for turning a blind eye. The compensation in Iran’s case is pretty
obvious given the relaxation of Western sanctions against that country. In
China’s case I would submit that a strong Russia on their borders is not exactly
in their best interests. This then their motivation for cooperation.</span></li>
</ol>
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<span style="color: white; font-family: Calibri, sans-serif; font-size: 11pt;">No sir, if OPEC wanted to punish the US the easiest way to do so
would be to demand payment for oil in any currency other than the US $.
As long as the US $ remains the international currency of exchange the US
controls price through debt. A weakening dollar on long-term debt makes the
market progressively cheaper for the US, not so? Get the US to pay in Euros, riyal, Yen or Yuan and we would have a financial Armageddon unlike anything
we have ever seen before. The US would immediately default [be unable to pay
even the interest] on ALL their international debt and we’d ALL be hammered
back to the stone age. </span></div>
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<span style="color: white; font-family: Calibri, sans-serif; font-size: 11pt;"><br /></span></div>
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<span style="color: white; font-family: Calibri, sans-serif; font-size: 11pt;">The financial derivatives market, by way of example and
for interest, has an open-interest value of $600 trillion. That means $600
trillion worth of geared debt, on global exchanges, is held by <i>Big Banks</i> on
behalf of clients. If the markets collapse, as they did in 2008, banks cease to exist, so too global financial structures. By way of comparison US GDP is about $17 trillion and
the US economy is by far and away the largest economy on earth. That means it
would take 35 years to pay off the current derivative debt – an impossibility
obviously.</span></div>
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<span style="color: white;"><br /></span></div>
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<span style="color: white; font-family: "Calibri","sans-serif"; font-size: 11.0pt;">The world has been effectively bankrupt for decades ie: ever
since we went off the 'gold standard' and have legislated the printing of money without asset-backed security. We’ve made it worse by using this
non-asset-based currency for debt and then compounded it further by gearing it
up in the derivatives markets by more than 10 times (1000%).<o:p></o:p></span></div>
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<span style="font-family: "Calibri","sans-serif"; font-size: 11.0pt;"><span style="color: white;">One day both the chickens and the cows will return home; they’ll
have to because that’s what we’ll be reduced to, subsistence.</span><span style="color: #1f497d;"><o:p></o:p></span></span></div>
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-35400552102194793612013-05-15T12:40:00.003+02:002013-06-04T11:23:03.721+02:00South Africa on the cusp of organised anarchy<div dir="ltr" style="text-align: left;" trbidi="on">
When the rules of engagement are rewritten, protagonists must adapt or they lose relevance. South Africa's economic seesaw is teetering in favour of the school-yard bully.<br />
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Militant inter-union tension, tantamount to a declaration of war and fought in mine-shafts around the country, is a significant change of emphasis beyond the usual wage-negotiation techniques the investment world has become accustomed to. That's particularly pertinent at this time of the year when wage-negotiation plays an important role in local media headlines. Freedom of association and collective bargaining is one thing; violence and intimidation is another animal altogether. When unions, motivated by membership revenue, resort to intimidation and violence, then by definition, the legitimacy of collective bargaining, a concept entrenched in law, becomes forfeit. Against this economic anarchy is the equal and opposite force imposed by a mature society which demands the moral legitimacy imposed by law and order. Law and order requires a reciprocal political will to succeed. </div>
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As an interim measure, whilst the broader labour complexities are addressed, corporate South Africa must address the productivity risk associated with labour unrest. In South Africa's mining industry, where operational security is broadly at risk from external pressures imposed by organised labour, mitigating that risk justifies a moral departure in the boardroom and more expenditure on mechanisation. The subsequent socio-economic consequences of an inactive workforce is a risk to the political<i> status quo</i> the country simply can't afford. Given South Africa's reliance on the mining industry as a whole, protecting that industry is, therefore, essential to the country's economic and social fabric. </div>
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It's time <i>collective-bargaining</i> revisits its roots and returns to the negotiating table in its legitimate form. The alternative is unimaginable. </div>
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-81893324443827062912012-10-08T10:16:00.001+02:002012-10-08T11:46:50.540+02:00It's stockmarket silly season<div dir="ltr" style="text-align: left;" trbidi="on">
Let's get straight to it. Here are the facts:<br />
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<ol style="text-align: left;">
<li>The stockmarket crash of 1929 took place in October;</li>
<li>1987's 'Black Monday' crash took place in October;</li>
<li>The financial crisis of 2008, specifically October, recorded the worst ever volatility and 5 of the 10 worst point-drops in the Dow's 100 years of history...</li>
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These are NOT the facts; just interpretations* of data:</div>
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<ol style="text-align: left;">
<li>'Cyclical P/Es, using 10-year earnings as the divisor, suggest the S&P is currently somewhere between 30 & 50% over-priced..' (Doug Short)</li>
<li>'Expect markets to drop 90%; starting now.. '(Robert Wiedemer). For those of you who don't know, Wiedemer predicted the 2008 crash.</li>
<li>'Greatest debt bubble in history..' (Harry Dent) - 'markets could fall as much as 60% in the next few months..'</li>
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With respect to these authors these few examples (of many) have been written and re-written; rehashed and remixed and interpreted in some cases, as many would argue, as a means to an end. There's nothing new here. It's the same each year. You might even call it '<i>cyclical negativity</i>' or even '<i>Red October</i>' (with apologies).. Even as I write this I can't help but feel a little bemused by my own interpretation of these interpretations. I can, however, predict with some confidence, that somewhere between now and the future, the markets will crash and somebody, perhaps even one from the few I've mentioned here, will have predicted the crash; accurately. Play red long enough; have enough capital and you'll be a winner, at least once and that too is a fact. </div>
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-59853354278816513642012-09-19T11:46:00.000+02:002012-09-19T12:03:14.377+02:00Romney & Obama - a dearth of riches<div dir="ltr" style="text-align: left;" trbidi="on">
In the US it's another bout of <i>Let's get ready to ramble</i>* (* with apologies to Michael Buffer) and let's agree, to date at least, not much has been forth-coming from either Presidential-hopeful; the incumbent or the challenger..US voters, ordinary men and women in the main, are faced with a <i>damned if you do, damned if you don't</i> leadership conundrum.<br />
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Yes it's easy, as an outsider, to point fingers. There are, of course, many constraints, mostly real, some imagined. Even so, there are too many inherent failures on both sides of the political-farce to lend much hope for a US economic revival in either the short or medium -term. The combination of party ineptitude and the untidy, less-than-witty presentations of their chosen presidential - spokesmen doesn't fill many with much enthusiasm and therein lies the rub.<br />
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Perhaps less articulate than he's given credit for, most market-participants grudgingly agree, in broad terms perhaps, with Marc Faber's assertion that the Fed's policy of printing money will '<i>destroy the world'</i>. The FED therefore, by definition, cannot <i>lend-lead</i> the US economy out of decline. I say <i>lead</i> because that's whats needed here. Leadership is seemingly a global commodity in short supply... Sound political leadership; effective government; restraint on political-pandering and a good deal of strategic forethought is the only hope for the millions of Americans who find themselves either unemployed or under-employed.<br />
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Half-way around the world, in South Africa, we face a similar situation, only less dynamic. Leadership, as a concept, is a premise long since lost. Entitlement, corporate ineptitude in the face of crisis and political philandering is commonplace, if not entrenched. It's symptomatic of self-absorbed-largesse, the excesses of the elite and like everything else and without belaboring the point, usually at the expense of the ordinary citizen.<br />
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-51448887242807557502012-09-03T12:12:00.001+02:002014-12-12T11:44:03.006+02:00Taxing Paul to stimulate Peter to pay Paul..<div dir="ltr" style="text-align: left;" trbidi="on">
Order in the <i>Financial System </i>is as fragile as the atom; the hitherto basic unit of matter. Paradoxically, the word 'atom' is derived from the Greek word <i>atomos</i> or 'indivisible', which is, as we know, not exactly accurate. <br />
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Now, if the ancient Greeks gave us <i>atomos </i>and the Romans gave us <i>fissio </i>or 'fission' and modern Greece gives us sovereign ineptitude; is modern Italy the next economic catalyst of global consequence? If today's <i>Financial System,</i> against which we measure modern evolution, is wholly reliant on stability to hold its form, would it be foolish to imagine a systemic financial fission in our immediate future? If change comes from crisis we could, as we speak, be witness to the dawn of a new financial energy.</div>
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If <i>the System</i> taxes Paul to stimulate Peter to pay Paul which is as it is, why shouldn't Paul have the option to write down Peter and pay less tax? If the<i> Financial System</i> has promised Peter that he could be Paul with a little stimulatory luck, then <i>the</i> <i>System</i> needs Paul to make good its promise to Peter even though Peter can never be Paul. If Paul needs Peter or he wouldn't be Paul but Peter and if Peter becomes Paul then Paul is no different from Paul and shouldn't be taxed because Peter is no more.. Now if Paul is not Peter and Peter can never be Paul then Peter lives under a financial illusion conjured up by <i>the System</i>. Seems to me things would be far easier if Peter stayed Peter and Paul was left to be Paul because only <i>the System</i> says Paul is better than Peter.. </div>
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-26814942332785363582012-08-31T11:32:00.001+02:002012-08-31T11:32:39.338+02:00Jackson Hole - Snake or honey-pot..?<div dir="ltr" style="text-align: left;" trbidi="on">
In Africa we'd council you not to poke your arm into a crevasse or tree-cavity lest you disturb the snake that lives therein and unless <i>you think you can dance</i> at the end of a screwdriver jammed vigorously into the electrical box of life, you might not enjoy the experience if you do! <div>
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Most technical analysts, extrapolating from last year's events in and around this time, are calling for a decline of up to 6% in the near-term on most major indices. Quite 'unlike' our own <i>traditional African doctors</i> who divine the future from old bits of tin and a lion bone or two, these paragons of advanced investment science do the same from past performance and behind stochastics & a bollinger band or two. In Africa we say '<i>Siyavuma</i>' in response to the diviner behind the bones which means '<i>we agree</i>'. Whether you chant <i>siyavuma</i> or choose to remain silent in response to the technicals is not important. The point is the analysis is broadly similar in consensus and in the public domain. I know it, other traders know it and so should you. </div>
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Prophesied market eventualities come to pass only when cash flow drives the price. Today's negative market prophesy needs a macro trigger to ebb the equity-flow. Given that most of us know what the prophesy claims, it is by definition self-fulfilling and who wants to be left behind the curve, <i>siyavuma</i> or not! Now, if Ben Shalom Bernanke doesn't stir the stimulus pot later today at Jackson Hole, you might find a snake at the end of your arm for the prophesy is clear; equity is dear..</div>
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-75396434649240055542012-07-27T11:12:00.000+02:002012-08-23T13:17:31.041+02:00Anglo American - a modern tragedy<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="background-color: black; color: white;">I can't help but feel a little sad each time Anglo American <b>CEO</b> <i>Ms</i>. Cynthia Carroll takes the stage. By all account, she's functionally competent and in the main, a decent executive. Even so, she's not family and therein lies the rub. There's no sense of history or culture or an appreciation of the blood, sweat and tears shed by millions of South Africans on whose backbone Anglo currently strides the international sphere. It's also shameful that not a single worthy South African put up his / her hand to lead, what is ostensibly, an AFRICAN company. </span><br />
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<span style="background-color: black; color: white;">I concede that globalisation has forever changed the face of business. Companies operate across cultural nuance and geographical divide. That's true. Notwithstanding, when <i>The Board</i> fails to elevate or tap into the beating heart or soul of a company the management team will always under-perform. That too is a fact.</span><br />
<i><span style="background-color: black; color: white;"><br /></span></i>
<span style="background-color: black; color: white;"><i>Modern management theory</i> measures performance on the basis of an isolated evaluation of a set of financial statements. It is, however, a gross simplification, particularly in the mining industry. A superior operation is not its projection chart or its cash flow statement. It's about it's <i>people </i>and <i>relationships </i>both inter-company and inter-industry. It's also about <i>experience;</i> not at board level but at the coal face. It's a <i>sense</i> of <i>history</i> which drives a <i>culture</i>... Ignoring<i> culture</i> as an old-fashioned premise, at board-level, nullifies the <i>history</i>, negates <i>experience</i>, breaks down<i> relationships</i> and demotivates <i>people</i>.. *As a result production <u>suffers</u>, revenue <u>falls</u>, financial statements reflect the change, projections are <u>cut</u> and wholesale<i> change</i> is instituted from middle-management down.. ; which <i>demotivates</i> people, <i>breaks down</i> relationships, <i>negates</i> experience and <i>nullifies</i> history. Quite candidly, therefore, dismissing the CEO of the platinum division for poor performance when 30% of production is sold to crisis-stricken Europe is<i> callous </i>leadership and is<i> ignorant</i> of experience.</span><br />
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<span style="background-color: black; color: white;">Applying <i>modern management theory</i> to Anglo American we'd note, simplistically of course, a 46% decline in eps. which is an oddity given that commodity prices have declined by an average of 20% over the same period.. There's some slippage thereabouts... I wonder why?</span><br />
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-84605410488740814122012-07-18T10:44:00.000+02:002012-07-18T10:44:51.779+02:00What's your legacy?<div dir="ltr" style="text-align: left;" trbidi="on">
South Africans and our friends around the globe celebrate the birthday of Mr Nelson Rolihlahla Mandela (aka MADIBA), a Statesman, our <i>National Treasure</i>, a global icon and a gentleman extraordinaire. His is a living legacy, a beacon of hope, past and present and most importantly, proof sufficient that triumph in adversity is the sweetest of them all.<br />
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Today's politicians would do well to <i>lead, follow or get out of the way. </i><br />
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<i>It always seems impossible until it's done - </i>Nelson Mandela<br />
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<br /></div>Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-43797114286401878572012-07-12T10:27:00.001+02:002012-07-12T13:40:23.988+02:00Minutes to win it...<div dir="ltr" style="text-align: left;" trbidi="on">
Buying equity anticipating post-meeting minutes to reflect one or two words in the right order is just about as useful as learning to balance 5 ping-pong balls on your nose. Failing to appreciate that the odds are stacked against the trade is similar to a bout of inconsolable hysteria after failing to bounce a dime into an open-necked bottle at 30 feet.<br />
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Hoping against hope that Germany will fund delinquent excess whilst Merkel teeters on the political abyss presumes that PIGS<i> will fly in the middle of July</i>..<br />
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There are some fearsome odds we seemingly ignore. $600 trillion approx. is the size of the global derivatives market. Romney vs Obama for the world's most important economy is a David vs David contest. Where's Goliath? Companies have retrenched, are retrenching and will continue to retrench extraordinarily large percentages of their work force. Consumer spending resilience under those conditions is probably ephemeral at best. Internal controls at the world's largest financial institutions are either lax or deliberately misleading. Global youth unemployment, the Arab spring and the Asian Tiger struck low with cat-flu virus are fairly strong signals that all is not well. When 27000 words of legislation regulate the<i> planting of a cabbage</i>, who can honestly claim surprise when the Europeans disagree to disagree? <br />
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If Buffett's form holds true, '<i>risk-on</i>' is just around the corner; the music's stopped and the exit is jammed. Ping-pong anyone?</div>Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-48988388684900031362012-07-11T10:28:00.000+02:002012-07-12T09:29:12.899+02:00Anti-theft lunch bag fools the playground<div dir="ltr" style="text-align: left;" trbidi="on">
Two little boys running mad<br />
Rajoy & Monti; from spendthrift fame<br />
Both little boys thoroughly bad<br />
The rules they break, they play a game<br />
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Onto the playground they have run<br />
To steal the lunch off Merkel's mum<br />
Her lunch bag in hand and off they dash<br />
Their celebrations, prematurely rash<br />
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The bag wide open, they see the mould<br />
Back to Merkel they must scold<br />
The bag's disguise in mould is sham<br />
Under the plastic is good ham<br />
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Wrapped in court for many a week<br />
Merkel's lunch is still her own<br />
Rajoy & Monti will you moan<br />
Off to class they must sneak<br />
<br /></div>Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-91772129110052278042012-07-10T12:45:00.001+02:002012-07-10T12:45:20.172+02:00All Tuckered out<div dir="ltr" style="text-align: left;" trbidi="on">
Paul Tucker's testimony to the Treasury Committee was either a masterclass in <i>talking a lot & saying very little</i> or confirmation that just about anybody, with the right 'connections', can ascend to the position of <b>Bank of England deputy governor. </b><br />
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Either way and what's difficult to comprehend is why someone in Tucker's position would volunteer and publicly affirm, indirectly perhaps, a level of incompetence unbecoming of his position. Even with the benefit of hindsight, it's still difficult to justify Tucker's contention that the BoE had little reason to suspect irregular behavior in the LIBOR market. Minuted evidence from meetings Tucker chaired does, in fact, suggest otherwise. His indefensible contention, when pressed by the committee to answer directly, that he might have 'misinterpreted the signs' as early as 2007, does little to alleviate the negative public opinion.<br />
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Whether Tucker's self-preservation instincts motivated a '<i>massage of the truth</i>' or even if he failed to show up at the LIBOR free-for-all at all, there's little justification or evidence sufficient to restore the level of competence his position demands. </div>Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-51208634698544773402012-07-04T11:24:00.000+02:002012-07-04T13:09:19.994+02:00Out of Ashes, An Opportunity!<div dir="ltr" style="text-align: left;" trbidi="on">
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The rate-fixing scandal is quite simply a systemic cultural failure. London burns and the ramifications are difficult to quantify. Even so, you cannot deny the gift-wrapped opportunity for the US. Opportune US regulators can now, at last, justify / demand or fix associated trade in US dollars. The expected shift in trading and jobs away from London to New York should, if nothing else, convince the global community that Europe's star has waned.<br />
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As for the individuals specifically implicated in the so-called rate-fixing scandal, whether they emanate out of Whitehall, the BOE or from the formal financial community only, there are a range of criminal sanctions and punitive guidelines covered by legislation. Deliberate attempts to rig or manipulate interest rates allow for little justification and although there is evidence of unsubstantiated mudslinging, the ramifications for the individuals so implicated, are dire.<br />
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In a remarkable quirk of timing, today's testimony by a <i>US-born ex-CEO of a UK bank</i> could denote a banking shift away from London to the US. Free at last?<br />
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Wishing our US friends a safe and Happy 4th of July. </div>Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-9284604867796911532012-07-03T09:54:00.002+02:002012-07-04T09:43:51.943+02:00London loses its 'Global best practice' tag!<div dir="ltr" style="text-align: left;" trbidi="on">
It's not surprising that Barclay's Diamond has resigned. Even so, further scrutiny and full disclosure could well vindicate or indeed confirm his fall from grace. Time will tell. What was a surprise was the reinstatement of Agius as Chairman. It's difficult to comprehend and cynically symptomatic of the financial services industry generally. Then again it would be wholly irresponsible for Barclay's to continue to function without both its CEO and Chairman.<br />
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Complicity or collusion is by definition inclusive of other parties which raises a number of important questions. Aside from the corrosive taint hanging over the UK's arcane banking and regulatory industries and the associated reputational risk to London's claim of '<i>global best practice</i>', the threat to the UK's economic prospects cannot be discounted. Endemic complicity is never victimless. In practice, as a consequence, retail investor abuse is both systematic and common.<br />
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If complicity is confirmed, the '<i>Barclay's-event</i>' mutates into an industry-wide issue which opens up the industry, rather than the company or the individual, to civil claim. The threat of a civil claim must, as a consequence, threaten the balance sheets of the banks involved. You could argue that the banks involved, protecting their cash reserves in fearful anticipation of a fine and or a general civil claim, might not be INCLINED to function appropriately in the retail lending markets. The stifling effect on an already unstable economy in desperate need of stimulus cannot be denied.<br />
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THIS IS NOT HOW YOU SUPPORT ECONOMIC GROWTH and or REPAIR the reputational damage to the global financial services industry post the events of 2008.<br />
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<br /></div>Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-89997595242535730632012-07-02T09:26:00.003+02:002012-07-02T16:50:40.971+02:00Shoddy mistreatment of clients & shareholders<div dir="ltr" style="text-align: left;" trbidi="on">
It's time and past time to <b>FIRE / DISMISS</b> the executives who either directly or indirectly contribute to market manipulation in any or all its forms and who by virtue of their appointment <u>only</u> hold a mandate from shareholders / clients to exercise oversight with due care and vigilance. Accepting the resignations of these individuals offers an avenue of escape which avoids the social blight they clearly fear most. It's a tacit acceptance of flagrant misconduct and or blatant incompetence both disgraceful and an insult to the market and the service-ethos at large.<br />
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A Savile-row tailored suit and a disproportionately high wage does <u>not</u> absolve any individual from negligence, INTERBANK-COLLUSION, malfeasance, misconduct, incompetence or blatant stupidity!</div>
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By the way Diamond, Dimon and Agius, aside from your obligations prescribed under fiduciary duty, it's your <b>job</b> to exercise due care, oversight and control! It's time to institute an international civil claim against these (b)ankers directly. </div>
</div>Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-87632062446042800812012-05-03T11:55:00.000+02:002016-01-25T08:57:09.273+02:00Murdoch, The Media & The Art of War<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: inherit;">Success demands an understanding and practical application of the <i>pian</i> (chapters) proposed in Sun Tzu's 孫子兵法. Mr. Murdoch (herein after '<i>the Master</i>') is obviously a studied practitioner of the Art.</span></div>
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<li class="MsoNormal"><span lang="EN" style="font-family: inherit;"><b>Plan- </b></span>Having been given a lengthy time to assess the allegations and apply due consideration, <i>the Master</i> has had the latitude / leeway to calculate his best chances of victory. </li>
<li class="MsoNormal"><b style="font-family: inherit;">The Challenge- </b><i>the Master's</i> successful campaign requires the limitation of the cost of competition and conflict. Accepting personal blame limits further conflict / interrogation / discovery and deflects conflict away from the business. </li>
<li class="MsoNormal"><b style="font-family: inherit;">Attack by Stratagem- </b>Powerful 'friends' pursuing personal interests openly support <i>the Master</i>, a definition of 'independent' opinion and the epitome of unity rather than defiance via legal strong-arm tactics pillared by limitless company funding.</li>
<li class="MsoNormal"><b style="font-family: inherit;">Positioning- </b>In the first hearing <i>the Master</i> defends & denies, successfully buying time to consider his options before advancing in relative safety (ie: for t<i>he Company</i>). <i>The Master</i> has recognized and seized a strategic opportunity, deflated the "enemy's" contention through a process of self-imposed blame and squashed any further opportunities of attack - conflict averted.</li>
<li class="MsoNormal"><b style="font-family: inherit;">Directing- </b>Who can credit <i>the Master's</i> (hitherto bombastic and arrogant) creativity and timing in shameful acquiescence of personal blame. By anyone's definition completely out of character.</li>
<li class="MsoNormal"><b style="font-family: inherit;">Illusion and Reality- </b>having diverted the conflict away from <i>the Company</i> by assuming personal blame, <i>the Master</i> creates the illusion of personally-imposed regulatory deviance rather than Company non-compliance. This cleverly engineered change of environment* provides <i>the Company</i> the legitimacy it doesn't necessarily deserve. (*Who will discredit <i>the Master's</i> intended illusion of <i>Company-</i>innocence given his undisputed history of interference. <i>The Master's </i>age wraps the illusion nicely for only an old dog loses the will to bite..)</li>
<li class="MsoNormal"><b style="font-family: inherit;">Manoeuvering- </b><i>the Master</i> has understood the dangers to <i>the Company</i> and has avoided further conflict by interposing himself between the process of discovery and <i>the Company</i>. </li>
<li class="MsoNormal"><b style="font-family: inherit;">Variation in Tactics- </b><i>the Master's</i> flexibility and change of tactic from outright denial to an unexpected, unequivocal acceptance of personal blame is wholly successful. <i>The Company </i>remains intact. </li>
<li class="MsoNormal"><b style="font-family: inherit;">Moving The Force- </b><i>the Master</i> currently waits for the 'enemy's' next move. Any new allegations will be carefully evaluated and referred back to <b>'Planning</b>' for response. </li>
<li class="MsoNormal"><b style="font-family: inherit;">The Use of Intelligence - </b><i>the Master</i><b> </b>will CONTINUE to develop good sources of information / intelligence for, one reason and one reason only; Success depends upon it.</li>
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<span style="font-family: inherit;">Global corporate management is full of artful deflection. Knowing why is the key to your own success...</span></div>
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-27653274057554445182012-04-25T11:37:00.003+02:002012-04-25T11:43:27.708+02:00Trickle-down innovation & your Apple iPad / iPhone...<div dir="ltr" style="text-align: left;" trbidi="on">
Very rarely companies '<i>beat-the-street</i>' (ie: profits exceed expectations) <u>significantly</u> on the <b>upside</b>. Last night Apple Inc. did just that. It's testament to brand strength and the dedication of the 'post-Jobs' management team. What does this mean for the price of Apple stock?<br />
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Market participants have been less inclined to hold onto their Apple investments lately which isn't surprising given the stock's astronomical price-rise in the last few years. Additionally, the untimely passing of Steve Jobs, Apple's <i>innovation-genius</i>, adds some credence to the 'sell-your-Apple' call. Has Apple reached its zenith in terms of product-development / product-innovation?<br />
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It doesn't take too much digging to reveal a sales-strategy so diabolically clever that, if true, consigns the premise that 'the iPod was Steve Jobs' <i>greatest achievement' </i>to the trash-bin. It's a sales-strategy so ephemeral, so revolutionary that it rewrites marketing theory. 'Those in the know' will tell you Apple's future is bright, <u>very bright</u> and it's Jobs' real legacy. It's a legacy not necessarily beneficial for Apple-users but it certainly will be for Apple shareholders, at large, around the globe.<br />
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'Those in the know', if pushed, will tell you that long before the <i>release</i> of the iPad2, Apple's engineers had already developed the iPad 5, 6 and 7. (similarly the iPod & the iPhone). In a perfect world we'd believe the truth of 'what they've said'. We'd accept that Apple spared us the iPad10 because we were, quite frankly. not quite ready for it. We'd admire Apple's redefinition of <i>reverse-engineering</i> or <i>trickle-down innovation</i> and accept, at face-value, Apple's strategy to reveal it's revelation to us 1 version at a time, each version 'advancing' a small step or two. We'd understand that <i>brand-push pressure</i> would have us reaching for our wallets at each '<i>new release</i>'. We'd understand, accept and admire! We'd also be mesmerised by the brand; we'd buy; we'd replace; we'd replace again and we'd spend some more. It's a lasting, innovative and admirable legacy built to drive Apple's profits well into the future.<br />
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Then again, this is the real world and 'what they say' is hardly ever based in reality.<br />
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<br /></div>Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0tag:blogger.com,1999:blog-107850058420410620.post-90155101573943976842012-04-24T11:04:00.001+02:002015-09-16T09:20:40.973+02:00Europe's next World War is one of ECONOMIC relevance<div dir="ltr" style="text-align: left;" trbidi="on">
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Speak to an educated, politically astute European and don't be surprised when he / she tells you that Europe is embroiled in a war so bitter that subsequent social divides will take generations to bridge. </div>
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An influential colleague contends that Europe is in a fight to the death and the enemy is none other than Britain and the United States! </div>
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Why have the Europeans been so slow to respond to the EU crisis? It’s a function of an outdated institutional structure and cumbersome <u>Legislative, Judicial & Administrative</u> bodies<i>.</i></div>
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These are just a few of the institutional bodies / individuals responsible for the well-being of the European Union:</div>
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<li><i>Ministers and parliamentary secretary generals.</i></li>
<li><i>Commissions / Committee of regions, economic and social council-BEI (European Bank of Investments)</i></li>
<li><i>FEOGA-(European Agricultural Guidance and Guarantee Funds).</i></li>
<li><i>(EMCF) -European Monetary Cooperation Funds.</i></li>
<li><i>Secretary General of the Council of Europe</i></li>
<li><i>Parliament</i></li>
<li><i>W.E.U (Western European Union)</i></li>
<li><i>EUROCORPS </i></li>
<li><i>E.C.B (European Central Bank)</i></li>
<li><i>O.E.E.C (Organisation for Economic Co-operation and Development)</i></li>
<li><i>The Council of Europe</i></li>
<li><i>NATO (North Atlantic Treaty Organisation)</i></li>
<li><i>CSCE (Commission on Security and Cooperation in Europe)</i></li>
<li><i>The legislative council has powers.</i></li>
<li><i>The commissions and the legislature and the executive for the E.C.S.C. </i></li>
<li><i>E.I.B (European Investment Bank)</i></li>
<li><i>E.B.R.D (European Bank for Reconstruction And Development) </i></li>
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It’s understandable why Europe has responded so slowly to a deliberate, well-coordinated economic attack and why the consequences have been devastating. Germany has alluded to this fact and is demanding structural reforms.</div>
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<i><b>Britain is the enemy</b>… </i><br />
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(A simple example) - Britain proposed the purchase of significantly subsidised New Zealand sheep in exchange for British-made vehicles offered cheaply. The sheep are sold to France at excessively inflated prices and the commission shared…It's open to scrutiny and is a tangible and deliberate attempt by Britain to collapse the EAGGF. </div>
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<i><b>The United States is the enemy</b>… </i><br />
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(A simple example) - European banks have been driven to the cusp of bankruptcy by a co-ordinated attack by US banks intent on creating problems where there are none in an effort to destroy the Euro. Interbank rates are open to scrutiny and confirm the intent.<br />
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Whichever way you look at it it's certainly a refreshing take on the <i><b>European Crisis</b></i> and perhaps an opinion we should not dismiss too lightly. </div>
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Mark Kirkhttp://www.blogger.com/profile/00948795734935192351noreply@blogger.com0