A penny and a euro drops

 Bankocracy in action in Europe

Across Europe and the world the penny and the euro are dropping – people who pay taxes, own homes and need jobs where they sell their honest labour realise that the various bailouts of banks are just that – bail outs of the Banks and bankers, not of the economy, not of those who trusted the banks when they bought their homes and not of the Teachers, Nurses, Builders, Transport and Public Sector workers who DID NOT cause the finance created recession and who are now paying the price of others greed.

As I wrote in relation to Ireland a year ago;

“So the € 80 Bn Bailout equates to roundly € 55,000 for every productive worker. Add to this annual interest servicing costs of € 4,960 per annum and you get the scale of the problem, Ireland’s public and private debt is simply unsustainable. Most reconstructions, Bankruptcy and liquidations, involve substantial debt reduction, a write off of debt before you begin a fresh start. Ireland is in unrealistic denial about being able to service its Public and private debt making the hard stop of debt default inevitable sooner rather than later.”

http://daithaic.blogspot.com/2011/02/terrible-default-is-born.html

Across Europe electorates are revolting against austerity and cutbacks not just because they are painful and bad in their own right but out a sense of moral outrage at the risk transfer from the well off and greedy to the poor and needy which underpins these IMF driven “austerity packages.” What moral purpose is served by those who were feckless and amoral transferring their risk to Governments and taxpayers? What form of capitalism transfers loss from those who took the risk whilst still rewarding them handsomely?

After the 1990 Crash all the talk was of banning “Arbitrage”, Banks speculating on their own behalf. Then, under the disastrous George W. Bush, America loosened all controls and the Hedge Fund Boom took off with new Masters of the Universe in ego driven Hedge Funds using derivative instruments originally developed to promote liquidity and provide certainty on future commodity and currency prices on a Titanic scale. This was always a zero sum game, for every trade there must be somebody willing to accept the counterpart, there must be winners and losers.  But once again the Hedgies are rising with their expertise based on (I quote from an actual prospectus) “Deep dish nursery book research on our targeted investment sector.” When you find out what that means, please tell me?

Or consider this current guffitis from a Mayfair based hedge fund grandly entitled Trafalgar Capital who hang their brass plate at 49, St. James next to the Ritz.

“Trafalgar Capital Management (UK) LLP is a boutique investment management firm based in London, with affiliate offices in Hong Kong (Trafalgar Capital Management (HK) Limited), Auckland and Sydney. Trafalgar was established in 2001 and currently manages 3 separate Hedge based strategies. Trafalgar Capital Management (UK) LLP is authorised and regulated by the Financial Services Authority in the UK, is authorised by the Irish Financial Regulator to act as Promoter and Investment Manager to Irish authorised collective investment schemes and is a member of the Alternative Investment Management Association; Trafalgar Capital Management (HK) Limited is licensed by the Securities and Futures Commission in Hong Kong.”

“In 2007, Trafalgar Capital established Trafalgar Copley, a joint venture with David Copley. The joint venture is designed to leverage the experience and expertise of both Trafalgar Capital and David Copley to capitalize on global themes that are expected to play out locally in the Australian and New Zealand markets and our belief in the potential for alternative asset management strategies in the region’s Capital Markets.”

Save us from such ego driven Black Magic “experts” who no doubt move seamlessly from their trading desks to poker schools to Casinos – it’s the same difference.

For those who feel left behind by the Euro crisis David McWilliams, Irish economist, gives us our first lesson in punk economics.

It is a totally brilliant exposition of the Banking driven economic crisis by McWilliams who predicted the crash before it happened, unlike the so-important rating agencies, Captains of Industry (sic) and the Gombeen politicians!