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  • rogerglewis 11:11 am on July 29, 2015 Permalink | Reply  

    Democratic dialogues: how to communicate with the people of Nuneaton | openDemocracy 

    Democratic dialogues: how to communicate with the people of Nuneaton | openDemocracy

  • rogerglewis 6:40 am on July 21, 2015 Permalink | Reply  

    From Post Hydrocarbon to Post Debt society. Can Capitalism exist without debt? 

    New Eras are usually identified and then defined well after the event, perhaps the most well know example is the Renaissance or Enlightenment another is the Dark Ages.We are already 30 years into the post hydrocarbon renewable energy era part of the reason that eras are defined afterward is that there are overlaps as things change and the difference between half full and half empty is a matter of interpretation and historical spin.

     My own thinking regarding future areas of interest for business is very much focused on post debt and post hydrocarbon solutions. I am still undecided whether capitalism can exist as a  political Economic choice without debt. Our monetary and Economic technology is far behind our technological capability. Time for a reboot!


    Regarding debt technology and monetary backwardness Steve Keen has been calling for a Copernican revolution in economics to recognise the considerable forces mobilised by debt. This shorter video on the alternative to Neo Liberalism is well worth a watch.

    Published on 24 May 2015 ´´When the economic history of our epoch is written, three key phenomena will feature: a period of tranquility giving way suddenly to crisis, rising inequality, and rising private debt. Using my model of Minsky’s Financial Instability Hypothesis, I show that these three phenomena are all related. There is a direct link between rising debt, rising inequality, and the crisis itself. The key to reducing inequality and ending economic stagnation is to reduce private debt through “Quantitative Easing for the Public” or a “Modern Debt Jubilee”. This is the keynote speech I gave to the #IEEP conference in Pula, Croatia on May 23rd 2015 Steve Keen

  • rogerglewis 7:46 am on July 17, 2015 Permalink | Reply  

    Bankers and Skin in the Game? Taleb continued And Samuel Taylor Coleridge, Ezra Pound and Lord Byron? 

    Thanks Juanjo, Regulations will be fascinating. A model start up balance sheet cross referenced to regulatory requirements is what I aim to find. I am sure that such a thing already must exist already the the links you already gave have proved interesting I have been comparing Goldman Sachs and JP Morgan Institution Profile Page Goldman sachs

    88. Common equity tier 1 capital ratio (calculated using advanced approaches)
    10.71% JPM AND 12.61 GOLDMAN

    89. Tier 1 capital ratio (calculated using advanced approaches)

    12.08% JPM AND 14.17% GOLDMAN

    90 Total capital ratio (calculated using advanced approaches)

    13.65% JPM AND 16.33% GOLDMAN

    What these Equity and Capital ratios tell us is that the Capital which is represented by collateral belonging to Borrowers is greater than than the level of Equity represented by shareholder capital at risk which would be termed equity at best there is 30% of real stuff at risk as it were with roughly half of the real stuff being actually the security offered up by the borrowers themselves the rest 70% is frsh air in a fiat money system and in a fiat money system based on debt its thin air at interest.

    Yanis Varafoukis in his comments published on the EU Bail out states that 1 billion of the 87 billion for the so called Greek bail out will represent investment in the Greek economy proper.

    The percentage of Capital ratios stated above does not address the question of what paper instruments count as Collateral for capital formation purposes for instance it takes no account of re hypothecated assets, one suspect there is much more double counting in the system than is health. The best description of this I have ever found is in Samuel Taylor Coleridges published diaries Table Talk. Table Talk.
    this from 27th April 1823.
    The national debt has, in fact, made more men rich than have a right to be so, or, rather, any ultimate power, in case of a struggle, of actualizing their riches. It is, in effect, like an ordinary, where three hundred tickets have been distributed, but where there is, in truth, room only for one hundred. So long as you can amuse the company with any thing else, or make them come in successively, all is well, and the whole three hundred fancy themselves sure of a dinner; but if any suspicion of a hoax should arise, and they were all to rush into the room at once, there would be two hundred without a potato for their money; and the table would be occupied by the landholders, who live on the spot.

    Lord Byron knew a thing or two about Greece I suppose we ought to ignore the neo liberal Economists and consult the romantic poets. Ezra pound curiously, not a Romantic Poet but poet non the less wrote a book A B C of Economics, famously tries for treason supporting Mussolini and Fascism in world war two if you read ABC of Economics you have to ask who are the fascists now? 

    Work without Hope

    By Samuel Taylor Coleridge

    Lines Composed 21st February 1825
    All Nature seems at work. Slugs leave their lair—
    The bees are stirring—birds are on the wing—
    And Winter slumbering in the open air,
    Wears on his smiling face a dream of Spring!
    And I the while, the sole unbusy thing,
    Nor honey make, nor pair, nor build, nor sing.

             Yet well I ken the banks where amaranths blow,
    Have traced the fount whence streams of nectar flow.
    Bloom, O ye amaranths! bloom for whom ye may,
    For me ye bloom not! Glide, rich streams, away!
    With lips unbrightened, wreathless brow, I stroll:
    And would you learn the spells that drowse my soul?
    Work without Hope draws nectar in a sieve,
    And Hope without an object cannot live.

    Turn to fascism, Second World War

    Pound came to believe during the 1920s that the cause of the First World War was finance capitalism, which he called “usury“, and that the solution was C.H. Douglas‘s idea of social credit, with fascism as the vehicle for reform; he had met Douglas in The New Age offices and had been impressed by his ideas.[71] He presented a series of lectures on economics, and made contact with politicians in the United States about education, interstate commerce and international affairs. Although Hemingway advised against it, on 30 January 1933 Pound met Mussolini himself. Olga Rudge had played for Mussolini and had told him about Pound; Pound had already sent him a copy of Cantos XXX. During the meeting he tried to present Mussolini with a digest of his economic ideas, but Tytell writes that Mussolini brushed them aside, though he called the Cantosdivertente” (entertaining). The meeting was recorded in Canto 41: “‘Ma questo’ / said the boss, ‘è divertente.'”. Pound told Douglas that he had “never met anyone who seemed to GET my ideas so quickly as the boss.”[72]
    A number of Pound’s books were published in the 1930s, including ABC of Economics (1933), ABC of Reading (1934), Social Credit: An Impact (1935), Jefferson and/or Mussolini (1936), and A Guide to Kulchur (1938). In 1936 James Laughlin – who had visited him in Rapallo in 1933 as a 20-year-old student – set up New Directions Publishing, and acted as Pound’s agent, finding publications to accept his work and writing reviews.[73]

    • Roger Lewis 10:01 am on July 21, 2015 Permalink | Reply

      ´´any doubling is approximately equal to the sum of all the preceding growth!´´My researches ahve lead me to the Exponential Function. and Doubling Times
      The notion of doubling time dates to interest on loans in Babylonian mathematics. Clay tablets from circa 2000 BCE include the exercise “Given an interest rate of 1/60 per month (no compounding), come the doubling time.” This yields an annual interest rate of 12/60 = 20%, and hence a doubling time of 100% growth/20% growth per year = 5 years.[1] [2] Further, repaying double the initial amount of a loan, after a fixed time, was common commercial practice of the period: a common Assyrian loan of 1900 BCE consisted of loaning 2 minas of gold, getting back 4 in five years,[1] and an Egyptian proverb of the time was “If wealth is placed where it bears interest, it comes back to you redoubled.”[1][3]https://en.wikipedia.org/wiki/Doubling_time.

      I have found a paper that researching money supply growth in the US, Japan and Germany states a doubling time of between 8 and 10 years. If Money supply growth dopubles in 10 years then that is roughly equivalent to all money supply combined in previous periods. looked at it this way it is easy to see how a catastrophic collapse after a particularly large boom in money supply and hence Bank profits would cancel out all previous profit. I think it will take rather longer to reduce the notion back down to some empirical data but it does exist allbeit used to demopnstrate other concerns on money supply mainly regarding inflation and not the consequences of debt.

  • rogerglewis 9:09 am on July 16, 2015 Permalink | Reply  

    On Skin in the Game. An interesting question Talebs claim 5 Trillion of losses = total wipeout? 

    According to Nassim Taleb, in 2009, the banking sector lost in 18 months all the profits it ever made since the beginning of banking. Is this true?

    Is the sector as a whole up now since, say 1950? By how much? I can’t find any good data on this.

     Join the discussion here.

     This is a question I also wished to find data for and as with Javier´s answer I also remember Buffet saying the same thing about the Airline industry. My question arose out of a wish to establish how much skin is there in the game when Banks Bail out sovereigns and vice versa? To a large extent it would seem that neither in fact have much skin in the game and Taleb´s interview with the Library for Economic freedom and liberty examines this question and he again makes the claim of Banking over its history returning a net loss. So How much Skin do the Troika have in the Game..

    Javier GonzalezJavier Gonzalez, PhD in economics from the University … (more)

  • rogerglewis 11:44 am on July 15, 2015 Permalink | Reply  

    So How much Skin do the Troika have in the Game. 

    My question to myself this morning was this €85 Billion sure is a big number but how much of that is real? The Greek Islands and other hard assets supposed to be administered by a Bank in Which Dr Shoebel is a director are real enough but essentially what the Greek Government gets in return are a multiplication of Credits based on that collateral . Who is granting those credits and what is behind them , this is the measure of what skin do the givers of the credits have in the game?what do they have to lose. and if lose it they should who gets what and what was pledged in the first place by the ultimate beneficiary.

    I am of course talking about Financial Skin, either property or assets bought and paid for and held ´´free and clear with tax paid´´, as an old client of mine would often stress when stressing the reality of his High Net worth ( he did mean just in financial terms I don’t think he meant it gave him a higher worth as a human being.).

    I was delighted to find a very interesting Interview with Nassim Taleb on the Library of Ecnomics and Liberty Web site which addresses some of my question and has a wonderful transcript to quote from.

    I will not quote from the transcript except for this one mind boggling quote from toward the end of the Interview.

     ´´Hence, people overpay for financial options. Hence let’s sell[?] remote probabilities in finance. Well, anybody who has a brain would realize that banks aren’t engaged in the business of selling small probabilities in finance. And they lost $5 trillion in 2008. More money than they ever made in the history of banking. So therefore, that statement, that people overpay for protection in finance, is false. Russ: When you said the number $5 trillion, for a minute I just thought you meant a lot of money, like a zillion. But it actually is close to $5 trillion, right? Guest: Yeah. That’s what they lost before the government bailed them out. But $5 trillion is a lot of money. So what I’m saying is that instead of doing a lot of experiments, look at the variables themselves. Insurance companies haven’t really made money till recently. All it takes sometimes is one event. And insurance companies are involved in very complex fat-tailed things, typically. Except for reinsurance. So look at the banks: bets on small probability events by financial firms have proven disastrous in history. And wealth came from bets on open-ended remote-probability events, namely entrepreneurship.´´

    So the Banks had losses of FIVE TRILLION DOLLARS in 2008, more than all the profits they had ever made before in the history of Banking. Think about that. So where is the money coming from for the Greek Bailout and what is Austerity paying for exactly and who is paying it. It seems to me that The Skin in  the game is being flailed from the backs of people who had no benefit in or part of the hubris leading up to 2008 and are being asked to continue to fund the same hubris and business as usual  by Politicians and Bankers who literally have no Skin in the Game anymore since 2008 at least if they ever have had. The thing about Banking is that we always assume banks have a lot more at stake than they actually do, if it were so we would not constantly be being thrown into the turmoil that characterises Economic life for most of us.

    ´´´Capitalism has a built-in asymmetry, in the sense that bankruptcy has a zero in it, there’s no negative for a company. But you still can have skin in the game by forcing people to lose a little more money. It doesn’t have to be unlimited. So, you have unlimited profits and limited losses, but still maintain skin in the game. And I think we are reaching that equilibrium in economic life, outside of course of government intervention, banking and bailouts. You have that equilibrium. In other words, the builder isn’t put to death. There are financial penalties. When you go to a doctor, if the doctor amputates someone and he takes the wrong leg, you don’t take the doctor and amputate his leg in return. But there is a penalty, you see. So, we’re not worried about places in which this equilibrium has been discovered heuristically, bottom up. I am worried about modernity. I am worried about bureaucrats causing hyperinflation, affecting savers and citizens but not harming them at all. I’m worried about that kind of stuff. We’re not worried about contracts between individuals that can find equilibrium in some way or another.´´

    Taleb on Skin in the Game | EconTalk | Library of Economics and Liberty  photo taleb.jpg

  • rogerglewis 6:48 am on July 13, 2015 Permalink | Reply  

    Bricks Without Straw. Pharoh Merkel 

    The story of the Euro is found here at Wikipedia as good a place as any to start.


    Here are some charts which look at money supply in narrow M0 and broad M3 measures since the introduction of the Euro in 2002.

     photo greece-money-supply-m0.jpg  photo greece-money-supply-m3.jpg  photo greek german money supply.jpg

    What will be apparent is that narrow measures of money remain in step across the EURO area including Greece .Where there is a huge problem is in  the broader measure which sees money supply in Greece falling off a cliff and in Germany M3 growth outstripping the euro area on average. You can make your own charts here at trading Economics.
    Why this is important and the basis of my assertion that austerity is akin to asking Greece( or anywhere else under this banking model) to make bricks without straw. Where money is absent in the economy in sufficient quantity in its different forms exchange becomes a problem. As we rely on Bank credit to supply 97% of our money as debt if they do not do it there is a problem. Some would call banks refusing to lend  market discipline others would call it an undemocratic determination of policy according to one narrow agenda revolving around private profit ,  the Agenda we are presently obliged to follow is that of  the Banks Politicians and government are subservient to Bankers when it comes to creating the money and this flows into other areas of public policy.

     Essentially this is the debate at the heart of the Positive money campaign and historically falls under the banner of Honest Money or social credit. In the interests of keeping this brief I will not go into the arguments but a good place to start is this video by Positive money and then head over to their web site if your interest is piqued.


    For more on this area of Economics you can do a lot worse than Googling Steve Keen and Minsky Hypothesis.

     Greek Debt is unsustainable under the EURO arrangements  the problem runs deeper than that on a wider European level and also a world level to paraphrase Bill Clinton, ´´Its the money creation system stupid´´

  • rogerglewis 10:40 am on July 12, 2015 Permalink | Reply  

    Bricks without Straw. Economic recovery without money? Greece 

    I recalled the old story from the Bible about Pharoh asking the Israelites to make Bricks without Straw as punishment for seeking liberation.. https://en.wikipedia.org/wiki/Bricks_without_straw In Exodus 5 (Parshat Shemot in the Torah), Moses and Aaron meet with Pharaoh and deliver God’s message, “Let my people go”. Pharaoh not only refuses but punishes the Israelites by telling his overseers, “Ye shall no more give the people straw to make brick, as heretofore: let them go and gather straw for themselves”, but still requiring the same daily output of bricks as before. The Israelites complain to Moses and Aaron that they have now made things worse for them, and Moses in turn complains to God that every time he has gone to Pharaoh on behalf of the Israelites, things have gotten worse for them. God replies to Moses that the time will come when Pharaoh himself will actually drive the Israelites out of Egypt; and that on behalf of his covenant with the Patriarchs, God will redeem the Israelites “With a strong hand and an outstretched arm”, so that they will know him.

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