If Marine Le Pen gets knocked off by the last-minute (so to speak) appearance of a shadowy former Rothschilds banker, wouldn’t that pretty much confirm everything her people had been warning us of?
Posts tagged ‘finance’
When a series of roadside bombs hit a bus carrying members of the Borussia Dortmund football club last week, it was easy to assume that this was somehow related to islamist causes, which have been responsible for — or, at least, eager to claim credit for — much of the most prominent random violence in Europe in recent years. But this attack turns out to be linked instead to the age-old prime mover in random violence against civilians: Finance.
The accused is believed to have acted for profit, attempting to kill or injure as many members of the Borussia Dortmund team as possible with the bomb. According to the investigators, he hoped to profit from a fall in the value of the team’s stock… The suspect had opened a [€40,000] consumer credit line and purchased 15000 put options.
Is this really illegal? I’m sure he just needs the right academic economist to explain to the investigators how important it is to increase liquidation in the market. It’s reminiscent of the scene in Catch 22 where Milo Minderbinder explains the logic of private enterprise:
One day Milo contracted with the American military authorities to bomb the German-held highway bridge at Orvieto and with the German military authorities to defend the highway bridge at Orvieto with antiaircraft fire against his own attack. His fee for attacking the bridge for America was the total cost of the operation plus six per cent and his fee from Germany for defending the bridge was the same cost-plus-six agreement augmented by a merit bonus of a thousand dollars for every American plane he shot down. The consummation of these deals represented an important victory for private enterprise, he pointed out, since the armies of both countries were socialized institutions. Once the contracts were signed, there seemed to be no point in using the resources of the syndicate to bomb and defend the bridge, inasmuch as both governments had ample men and material right there to do so and were perfectly happy to contribute them, and in the end Milo realized a fantastic profit from both halves of his project for doing nothing more than signing his name twice… It was an ideal arrangement for everyone but the dead man in Yossarian’s tent, who was killed over the target the day he arrived.
I’m skeptical of the claim that “This seems to be a crime without precedent in German history, and may represent a completely new phenomenon.”
The Guardian reports on UK government posturing to back out of its financial commitments to the EU, ahead of next week’s formal
collapse start of the Brexit negotiations:
The EU scrutiny committee chairman, the Conservative MP Sir Bill Cash, urged the UK negotiators to point out during the talks that the UK wrote off half of Germany debts after the second world war, and as a result did not owe the Germans anything politically or legally.
Cash said the UK had been “net contributors for many decades” and the “massive contributions” paid to Brussels would offset any divorce fee demanded by officials. He urged the government to remind Europe’s leaders of the 1953 London debt agreement, “where Germany, for all its malfeasance during the second world war” and unprovoked aggression, had half its debt cancelled.
Cash said that given Germany’s dominant role in the EU, it might be worth “tactfully” reminding people “that there is a realistic position here that we really don’t owe anything to the EU, whether it’s legal or political”.
Well, that already sounds pretty tactful to me, backing out on financial commitments to all of Europe because of Germany’s “malfeasance” in the first half of the 20th century. It’s funny that the British didn’t mention how strongly they felt about this back when they were applying for membership in the EU. You would have thought their memories would have been fresher.
We now have Donald Trump’s final argument for his election, which basically amounts to saying that manly man Donald Trump will beat down the foreigners and Jews — George Soros, Janet Yellen, Lloyd Blankenfein — who are secretly pulling the strings behind the political establishment. (Speaking of Janet Yellen, I have to confess that I hadn’t noticed that the Federal Reserve had been led by
elders of Zion Jews — three of them Republicans — for all but nine years since 1970.)
I think often of a public lecture that Yale history professor John Boswell gave in the 1980s with the title “Jews and Bicycle-riders”. The title came from a celebrated anti-Nazi joke of the 1930s: A Jew is pushed off his bicycle by a Brownshirt, who looms over him and screams “Who is responsible for Germany’s misfortunes?” “The Jews,” replies the trembling Jew, “and the bicycle riders.” “Why the bicycle riders?” asks the Nazi. And he replies: “Why the Jews?”
Boswell’s lecture was mainly about homosexuality, pointing out that prejudice against gay people had risen and fallen over the past two millennia, and tended to parallel the ups and downs of antisemitism, and to be promoted by the same people. The joke suggests that antisemitism is irrational and arbitrary, and has nothing really to do with the Jews; Boswell extends this to say that antisemitism and homophobia are both targets of convenience for what is really an anti-urban, anti-cosmopolitan agenda.
(The bicycle-riders in the joke are supposed to be an obviously ridiculous target of discrimination. Boswell might have been amused to know that in the febrile politics of the 21st century, bicycle-riders have also become a frequent target of right-wing abuse — for example, Colorado Republican who called Denver cycling initiatives “part of a greater strategy to rein in American cities under a United Nations treaty” and Rob Ford in Toronto: “What I compare bike lanes to is swimming with the sharks. Sooner or later you’re going to get bitten… The cyclists are a pain in the ass to the motorists.”)
Obviously part of the point was that the credibility of antisemitism was at a low point in the mid-1980s, while discrimination against sexual minorities was decidedly respectable. From the perspective of 2016 things look decidedly different. Homophobia us barely tolerated in polite circles, while antisemitism is ascendant. I’m sure I thought in 1985 that the downward trajectory of antisemitism was inevitable — it was so obviously irrational — while the rights of gay and lesbian people seemed to need fighting for. In retrospect, I see that no matter how marginalised they may be, both of them are always capable of recolonising the body politic when the right conditions return. Somehow this seems to me more obvious and intuitive with regard to homosexuality than with regard to Judaism; Boswell’s link helps to clarify the danger.
The US presidential election is now just 4 days away. It seems to me that people are not taking the danger seriously. In particular, last week, in the hour after the FBI started its intervention to bring on the apocalypse (more work for them, I suppose), it was reported that the S&P500 stock index fell by about 1%. If we suppose that the FBI’s announcement made a Trump victory 2% more likely, that suggests an expectation that Trump would wipe 50% off the value of the stock market. Yet that doesn’t seem to be incorporated into the current value of the markets. It’s almost as though investors are in denial: When forced to focus on the Trump danger they rate it apocalyptic, but as soon as the news quiets down — within minutes — they go back to treating the probability as 0.
I’d like to believe Sam Wang’s projections, that the election result is all but certain for Clinton. Nothing is all but certain, least of all the future. Nate Silver’s reasoning, leading to about a 2/3 chance for Clinton, seems to me very sound: Trump will win only if he wins about half a dozen states where he has about a 50% chance. That sounds like about a 2% chance, except that they are unlikely to be independent. The reality is likely to be somewhere between 2% and 50%. Where it is, is almost impossible to judge. I’m slightly more hopeful than that because I believe in the power of Clinton’s organisation. But how much more?
But even 2%, for the risk of a crybaby fascist as president, is far too much. It’s not clear to me how the US can come back from this disaster, even if Trump loses.
All this discussion of Donald Trump’s nearly-billion-dollar losses and multiple bankruptcies reminded me of my own intellectual debt to Mr Trump. I remember reading about his bankruptcies back in the 1990s, and being genuinely confused and shocked. A mathematician inclines to think of wealth as a number, in a well-ordered place on a number-line. Positive numbers represent assets and negative numbers debts, and total wealth is the sum of all of them. A person with a million dollars has a lot more than a person with nothing, but the person with nothing — I thought — has much more than the million-dollar debtor.
That was wrong, and the Trump bankruptcy first made me realise this.
Wealth isn’t a line, it is a circle, with the large positive and large negative numbers much closer to each other than they are to zero. The person with nothing cannot get to a million or minus a million (except by fluke chances, like winning a lottery). The mogul is used to talking in units of millions, and everyone around him takes it for granted. When Trump found himself unable to meet his obligations in 1990, the banks didn’t just seize his assets. They loaned him more money, on the condition that the banks name someone to actually run his business, and he constrain his personal spending to a $450,000 a month allowance.
Imagine that: A formerly rich man finds himself with less than nothing, and the banks give him the money with which to keep paying them their interest, and himself a monthly stipend of $450,000. The condition is that he stop doing any work. And then he managed to flee his creditors into bankruptcy five years later anyway, while cheating a load of equity investors.
It’s like Napoleon being allowed to take a retinue with him to become ruler of Elba. Just because he had been a sort-of king, you couldn’t leave him with nothing. It would be too cruel, even though there are millions of people who never had anything, and didn’t have the guilt of having plunged the Continent into chaos.
And you can’t expect a rich man to suddenly get a cashier job at the supermarket. Even while you recognise that his contribution to his companies and the wider world has been purely negative. It would be too cruel. He’s one of “us”.
I suppose, as with Napoleon, they worry about the danger of a scorched-earth defense if they try to take what is owed to them in a frontal assault. The person with millions in debts (or better, hundreds of millions) can move his assets and debts around so that the positive never collides with the larger negative. And the creditors, afraid that they’ll end up with nothing, will be eager to make a deal that lets most of the negative disappear.
Democrats need to work harder to keep their attacks on Trump consistent. On the one hand, they say that his income tax proposals would selfishly benefit himself and his family. But now they point out that he doesn’t pay any income tax anyway. So he doesn’t stand to gain personally. Contradiction!
A proposal for a partial unified theory of Trump scandals.
There has been considerable speculation about whether Donald Trump’s $916 million loss from 1995 may be something other than unadulterated “economic genius” (as Rudolf Giuliani called it, because that’s what you usually call it when someone manages to lose nearly a billion dollars in a single year). In particular, some commentators have suggested that these were not real losses, but an example of “debt parking”: Instead of allowing the losses in his bankruptcy to be written off (in which case, the debt write-down would count as income, cancelling the tax benefit of the loss) it got transferred to an offshore entity controlled by Trump
But here’s another possibility: What if the offshore entity is not controlled by Trump, but by Vladimir Putin and/or the Russian state. Since he hasn’t gone through personal bankruptcy, the debt remains valid, and the creditor can choose to demand repayment at any time. They would essentially own him. That would explain a lot.
I remember reading, back in the late 1990s, an article in Spiegel, about the dubious decision of the Euro finance ministers to create a 500 euro banknote. Since the only people who use cash in significant quantities in this millennium tend to be shy people eager not to be singled out for their achievements by prosecutors, the question was raised, why would you want to create a unit of currency that enables law-abiding citizens (and others) to pack five times as much currency into a suitcase as the former favourite $100 bills?* The answer given by Edgar Meister, one of the directors of the Bundesbank, was that Germans had gotten used to having a 1000 Mark banknote, and that if the largest Euro banknote were worth less, people would think this new currency was a weakling.
Eine Währung, die es sich leisten kann, mit so hohen Noten herauszukommen muß wertbeständig sein.
A currency that can afford to produce such large banknotes must be solid.
As everyone knows, that’s why Germany produced this 50 million Mark note in 1923: (more…)