Skip to content

EU Seppuku as Schadenfreude

August 16, 2015

EU Seppuku as Schadenfreude

Long ago in the fairy tale land of Europe where economic windmills from Netherlands to the beaches of Greece there lived many upon many Don Quixotes, and their name was Eurocracy. Charging forth towards one political windmill unto the next they were set upon by their love for economic growth their ‘Dulcinea’ they began imagining schemes at stimulating it via various improvements. First they created a network of states that used their markets as leverage to pry open other markets and set their rules upon those markets so that only they could succeed there, for it was to their benefit and their benefit only was this network created. Then this network had to expand and expand to put growth on the pedestal of progress and fruition and the ultimate good for not the suffering of humanity but the exponential profit margins of benefactors of the Don Quixotes had to be pleased and respected. Alas, exponential growth may not last, and sooner or later a Europe whole and free, seems broken and indebted with no ‘Dulcinea’ (economic growth) to be found.

This is where the wonderful tools of sanctions under the guise of democracy and freedom for all, more for some than for others of course were brought to bare on other countries that had to just had to give market access and bend to the will of omniscient and wise Eurocrats, countries like Iran, Libya, Yugoslavia, Russia, Ukraine, and so on, for market access for enterprises is the greatest good ever far more important than peoples lives or well being. FREEDUMB!!! FREEDUMB!!! they cried as they bombed Lybia to take over the oil fields for western firms that promoted peace democracy and freedumb.

Alas, Satire or Irony does not do justice to the final act that is about to unfold.

The problem with marginal leverage based upon exponential growth via market penetration is at some point if you are pressed downward by impeding market access your financial system implodes since it was never ready for any pushback or strain.
EU is forging forward into the abyss as it gleefully persuades itself that what is being done is for the greater good. Yet, if one imagines a short interlude that clips trade flows for a period of time that kaleidoscopes Europe into complete and utter insolvency disrupting inter- and intra- national trade in some ways perhaps poetic justice may exist. Granted no solace will be had for millions upon millions of people guided by Don Quixotes, because sometimes the windmill does hit back especially if your charging it with a horse and it weighs a few tons.

Ukraine, Greece, and the Euro-Debt-Trade paradigm.

February 13, 2015

The most important aspect is the tendency at hand. What we have right now is essentially a coalescence of refinancing commitment necessary concentrated focal points. Notice Greece and Ukraine are being refinanced through the ECB and IMF and other venues at the same time as three political processes are ongoing.

My opinion estimates and ramifications.
Ukraine has roughly $150b in debt both corporate & sovereign.
Greece has roughly 350b in euro debt sovereign.
Euro-Zone money supply of the is around ~9000-10000 Billion this is both M1 and M2 (currency and deposits).

Political process A is the Ukraine peace process. Its’ necessity stems from the need of both Euro area banks to get refinanced for their pledged collateral from both Ukraine sovereign and corporate debts. It also increases likelihood of trade sanction being retracted if the peace holds in the proposition and promotion of goodwill creation. Ergo, the March 15th posturing by the countries wishing to return to normal trade ties with Russia will use the peace process as an argument to wind down sanctions and get to business as usual.

Political process B is the Greek debt renegotiation. This has to provide for flow relief for the Greek state which cannot bear the brunt of the outflows imposed by the IMF and the budget commitments/constraints while at the same time Euro banks cannot have the principal that does not exist be eliminated since it is pledged/re-pledged. There is also a deposit dimension that is ignored in the lending to Greek banks so that depositors could have funds via Euro mechanisms that could detonate if there is a disruption in how things get resolved. That is why it seems the Greeks wanted to have infinity bonds which lowered their cash flow burdens with the need to refinance being eliminated and the Europeans couldn’t agree to principal essentially haircut via the mark to market of those renegotiated bonds. The whole point is for Greeks this is a flow argument because they live in the present and for Europeans it is a past/future argument since they cannot have the NPV of the lent funds be marked to reality yet they are far more flexible on the flow of interest payments.

Political process C is the EU-US trade deal push that is being pushed via both the political implementation of the refinancing of Euro banks via IMF backing or freezing of that refinancing to cajole implementation. While using the backdrop of Ukraine and Greek determinism through trade flow disruption via Russian sanctions and Eurosystem dis-integration via a Grexit. This would detonate the money=debt backing of the Eurozone through evaporation of about ~500 billion Euro a negative event for the money supply at the same time removing swap lines and limiting trade flow clearance if progress isn’t being made. The contagion from this implosion is ignored since Euro banks (Austrian, French, Italian, and others) whom have exposure through both operations and capital market in Greece+Ukraine have been swapped out into the system but in my view would likely go insolvent on a push back and there simply is no way to create capital out of thin air to refinance Europe the way it has to be to clear the losses that exist and experience asset deflation in the aggregate that has to be achieved to clear the system for it to function.

If one is extremely cynical then you could argue that the whole point of Minsk was to allow the refinancing of Ukrainian debt by the IMF so that the European banks whom used it as collateral to borrow elsewhere to continue playing the financial game would be able to go on for a little while longer.

Page 52(on the paper below) shows exposures as a percent, one has to assume that these are not honest numbers and they changed since then. However, if one were to look up every bank that has over 1% of capital committed to “risky”(insolvent) nations one realizes that a) they raised capital b) in the context of European leverage being 30x or more to 1, a complete wipe out of 1% of capital or more is actually a 1/3rd of all the capital a bank has and likely complete insolvency/wipe out with inability to clear depositors or transactions. Ergo if one assumes that Austrian banks are exposed to 3-5% of their capital in Ukraine a wipe out of that 3% would invariably be all the equity capital those banks have. (Hypothetically but more than likely)

If suddenly 500b of 9140b* Euro goes poof and 9140b in Euro translates into roughly e15000 of GDP then one can consider that the ultimate impact through various multipliers, trade gravity, monetary transactions, etc., would be around ~1.64+ per 1 euro lost, ergo ~820 billion euro less in GDP recognition, however they could also print money and make up this gap and hence we have 1000 (trillion) euro QE which is actually a numerical measure which will simply put numbers into the computer to make up the wipe out seem fine and dandy. Granted none of this money will make it into the real world unless the banks that get to borrow against phantom obligations can get some sort of return somewhere from their machinations. If one throws into this the ~50 billion in Euro trade contraction due to Russia sanctions and the aggregate business impact that has through the Eurozone, the real impact of QE ONE Trillion is actually Nil.

(page 2 of the ECB below has total deposits of ~8789 (I exclude 4[215], 5[324] and 3.4[79] which sum to 618 billion euro) and get 8171+967 (currency in circulation) [I don’t think (4)insurance deposits or (5)government deposits should count along with (3.4)repos].
[page 52 … One has to be cognizant that some banks raised capital since 2010 but taking scope of risk in relation to capital is non-the-less gives a purview.]

“Free the Monster Inside”

October 31, 2014

“Free the Monster Inside”

I have been inspired by everything that has gone wrong in the world. Today on the eve before Halloween the day when people put on mask’s and pretend to frolic in the shadows of the night, only to turn backward into the malaise of their routines at the start of the next day. Imagine all the things you really want, what is stopping you other than yourself? Rules? Regulations? those words are written by old men for the sake of corporations that want a corner of the world onto themselves. THEY FEAR YOU, the dreamer, the doer, the person whom leaves, the person whom comes back, the person whom creates, the person whom upsets. Throw your mind like a spear and follow it, for the prey is on the other end. Weakness is a delusion it does not exist only attempts, further attempts, until you get where you want to be.

Push the road with your mind it will bend. Just take the first step and the barriers will crumble. Free the monster that you can be for all the enemies in your wake. Every social strand of structure is against you succeeding and making yourself happy, tread on all of them as they have done on your dreams. SHOW NO MERCY! Imagine a way and it will be there, just use your brain and make a path that does not exist to get where you want to get.

Sometimes you get that feeling that the world is at a focal point where just a little feather as it falls on the weight scales pushes the future one way or another. You are it, you are that force. CRUSH THE SCALES!

Connect with others that dream what you dream, create with others that want to create with you, bend the world by yourself or make a following, its’ all up to you. All you have to do is simply try, today, little by little, it does not have to be all at once, just one step at a time, step by step by step.

Porn, Meditation, and Motivation

May 29, 2014

Found these two interesting stories

Porn may be messing with your head & Market Playing and Meditation

On some level I can understand why. Basic urges level out the motivational factors and make us dumb and complacent. While practicing mind clearance creates a steady state from which decision making about future monetary bets and their outcomes leads to a place of not caring about outcomes more thus easier judgment about them.

A society of disposable wants and needs with the base core want of monetary enrichment at the forefront of its apex core value if you combine the focal points of the two. Seems an enlightening prospect really. Seeking that which is hard wired into humans and making it filtered with mnemonic suggestion of becoming increasingly dumb. Yet on the other hand pushing ever deeper the clearance of once mind to deeply seek 1s and 0s in the proverbial search for consumable treasures. Neither is really satisfying in the long run and both are seemingly churned in perpetual motion to set a society running after its’ tail over and over again without stopping to think over what the true ideals should be.

Oh Ice cream and consumable gluttony perhaps?

Too fat to fight.



Rules, Ambition, and Reality

May 23, 2014

Have you ever wondered why more and more rules and laws enter our society. Well for the most part it is ambitious people trying to bend reality to how they see the world and professing what works for them should work for all. In some sense the gov’t tries to accommodate this since it benefits in showings its’ ambition towards reality via rule creation.

In the overall cycle of societal decay and resurgence one can almost see that the more a society decays the more moral support and other structural aspects are framed around it via rule-making. You could almost imagine a growing decaying edifice built out of words and ideas supported by beams of truth somewhere at its core but now overbuilt and overburdened by esthetic, morose ugliness, both in intent and spirit because it skews the desires of some and appeals to their sense of art or benefit.

It is so much easier to look at Government through a lens of art since at its’ core it is a psychological power imperative interplay between infinite societal actors playing with each other and against each other both now and inter-temporally. It is so much simpler to wonder why all this time vampirization is promoted in the government rule making, and the answer is simply that it leaves you less time and ability to question or non-comply with anything thrown out. The problem is that once a constant churn of rule making machinery starts producing it becomes impossible to follow them and society simply lifts its hands in a sigh and does nothing at which point everything comes crashing down. Granted this takes decades or even hundreds of years at its’ core the timeline is the same.

Now imagine yourself God a complete sovereign unto the universe and assume that whatever you do is right and whatever you think is the way thought should be and just live like that and in some way you will be very near to what Gov’t collectively thinks it is, and yet it is simply an imperfect collection of ambition fretting into endless vectors of thought and trying to encompass every venue and avenue of control it has, had, or ever will have. Alas, it is like a bubble once it gets too big it pops and implodes upon itself. Perhaps we are getting closer and closer to this reality.

From Disposable Workers towards a Disposable Society

May 7, 2014

From Disposable Workers towards a Disposable Society

It seems slowly but surely we have reached the point we have strive so hard to attain. When your disposable drink comes with your disposable job based on your disposable education fitting into your disposable station in a disposable society. Everything functions but just is a little too temporary and too worthless. There seems nothing worth fighting for in any sense of the word at least externally that exists in society reflecting its’ wants on ourselves.
The last bastion of identity building in our disposable schools and education system is attempting to clear that core self-knowledge we gain when we learn something we enjoy learning and find out something we want to reach. The whole point it seems is to create mindless sheep slowly moving in circles pretending to be blessed and optimistic looking at kaleidoscopes of pre-determined ideals formed from those ‘whom know best’.

This counter-intuitive society of discontent expects engineers and creators to exist on one hand and have them be mindless hamsters on the other. Sadly that is where we are, when companies try to have disposable engineers, researchers, and other people recycled to extract value and thrown out as soon as the replacement cycle kicks in, or any ideal contamination of what thoughts they should collectively have and profess externally is found. Alas, it seems to be running out, of people and resources to extract value from and this crisis of both identity and resources at large is found foully and wholly inadequate. Sadly any thoughts or discussion on this topic has been so thoroughly ironed out by the media and the minds of the public at large so zombified with cyclical apprehension, bread and circus television that any aspiring answers to be found will simply have massive wave of individuals staring blankly at the wall of inaction as the world crumbles slowly but surely around them.
Congratulations you have reached the finale, do not mind the bankers sycophantically moving zeros around mindlessly from one computer to another in glee as those zeroes become worthless with every passing second both in terms of what you can actually do, and with what you can actually expect.

Vacation as a Journey instead of a Trip

February 14, 2014

Letting go to reach a state of mind.

Have you ever thought why vacations today seem so scripted, almost like a rule book going from one step to another. It almost seems like a prescription description, take three-times daily before each meal, drink lots of liquids and make sure to limit strains on your body. In a way people have become so automated not just for the sake of convenience when they go through a search engine or a trip site to get a deal on hotel, air fare, and few theater tickets but to some degree like a ritual. Bang, bang, bang, you are done vacation blast-off in three, two, one, lay on your back sip some drink snooze, lose, let your worries about the hamster wheel wither away, OK done, now you are good to go back. Congratulations you completed your rest cycle welcome back to work little drone follow the leader, and so on.

Remember when you read a book when you were young. That world you immersed yourself in, the imagery in your mind that is where you’re supposed to go. A journey into not just an environment but yourself your own identity and reflect on nature and let it reflect on you. You are part of it. What about those fishing trips with dad or going to a beach with your family when you were little. The surroundings mattered much less than your intake of them, you felt the exposure to light and water and sand, and everything felt so much more not just real but surreal. You almost felt small changes in nature around you and in people, their little waves of joy or contentment.

Today all of it is still there but it is so compartmentalized and organized, separated into bite sized pieces at ‘affordable’ prices and little venues which simply expose you to a caricature of society where you are your own parody.

Why not let your soul smile for a bit, and just enjoy something simple. Reflect with your mind like the ocean reflects the sky.

Everyone wants to get away and in a way they do until they realize all they are getting away from are themselves. The scenery changes but everything you have you bring with you. All those problems and expectations, the things you did and those you wanted to do, and everything else. The whole point of journeys is to let things go, and start fresh. It is in some sense finding your own self, anew, vigorously looking life in the eyes and accepting everything that is, was, and will be. One journeys to reinforce self, be it right or wrong, it is not just an escape for the body but also something of a sharpening for the mind. You have to think, break out of the cycle of routine, and let things go in your head, just enjoy the thoughts as a spectator for a while, they don’t have to make sense. Just enjoy whatever thoughts you have coming in, they are all good.


Get every new post delivered to your Inbox.

Join 27 other followers

%d bloggers like this: