Wednesday, 25 March 2015

Investment tip: Go long on Jackboots

The clock is ticking for Greece, a new tranche of bailouts has been agreed on the caveat that Alexis Tsipras’ reforms are up to scratch, not something he managed last time. When the money runs out the banks will implode and Greece will default and fall out of Merkel's merry little club and start printing drachma, right? Wrong. My investment tip is go long on jackboots because there are groups in the sidelines rubbing their hands together for a chance to begin their own ‘Project Mayhem’. A wave is coming and it smells of smoke.


Greece's new government will be successful just so long as it can maintain some stability. At the moment, the people are behind them in sufficient numbers, 47% according to a recent Metro analysis poll (but since when have polls been bankable), because they are trying to stand their ground against the austerity measures that have brought the country economically and socially to its knees. But if Varoufakis’ game theory ultimately turns out to be Candy Crush vs Eurogroup’s World of Warcraft, things will change and fast.

The country’s neo-nazi group, Golden Dawn has had its head a little low of late. Its leaders have been in prison and it has fallen back a little in the polls but that does not mean their support has waned. The thing with single policy groups is that they always attract floaters who will align with whoever satisfies that need at that time. The need at the moment is HOPE and Syriza is selling it by the bushel. But, If their ring turns brass, as is inevitably will, the need will be ANGER and for that the far-right is one-stop shopping.

In Germany, the war of words between the Greeks and the Germans has stoked the fires of xenophobia. The German government has been running a surplus which has called for a its own brand of austerity. Wages have not been keeping up with inflation and many are feeling the pinch. The obvious cause of this turn of fortunes is the lazy Mediterraneans and the French who have not been pulling their weight. Many Germans are tired of bailing out the rest of Europe and neo-nazi groups have gained ground.

Nigel Farage’s Ukip seem to be talking to the people despite the derision in the media, they are saying something the people need to hear. The ‘squeeze on the middle’ has made the middle-classes less affluent in real terms and house prices are taking a huge chunk from their incomes. At the lower end, eastern Europeans are believed to be taking unskilled and semi-skilled positions driving wages down to a point where the minimum wage is a standard not a safety net.

In France, Marine Le Pen’s Front National took 25% of the votes in the recent local elections. This is largely due to the Charlie Hebdo and related attacks as well as the struggling economy. The people are looking for action not words, they don’t feel safe and could easily fall into getting more protection than they bargained for.

The right-wing Sweden Democrats have been maintaining a steady presence and are now the third party with 13% of the vote.

So why the comment at the beginning of this article about ‘going long’ on jackboots.

It seems that the current obsession with finance and economics, the bond markets, going long, going short, currency markets and yields has detracted for the reason for their existence. Adam Smith, the grandfather of capitalism in his 1776 seminal work “The Wealth of Nations” focuses on the people, population’s role in wealth and prosperity. Marx built his thesis around the needs of the people vs the aims of industry, JM Keynes with JF Roosevelt built a ‘New Deal’ that focused on putting liquidity into the market (shops and industry) through the workers’ pockets and even Milton Friedman recognised the fundamental role of the population.

‘The markets’ have become narcissistic in their Hubris, a self-serving Matrix with the right to all and responsibility to none. But, worse of all, we and especially the world’s leaders are buying into it. The Banks must be firewalled at all cost and market value is the only value. Our young entrepreneurs are told to seek out venture capitalists, Dragons den and Shark tanks. Work, build and form an exit strategy. Investment is the only real goal. The markets are betting on the Eurozone’s demise and in the bond markets they are trading sovereignty futures.The system is no longer serving anyone but the system.

And, while the world is looking the wrong way, certain groups are flourishing in the peripheral vision. Building networks, brewing hate and offering solutions.

It is often said that Europe sleepwalked into WWI but we couldn’t make that mistake again, after all, we all learned from the past mistakes, didn’t we. Could it be said in the future that we were not asleep just blindsided by the markets and the pursuit of a unified European trading platform.


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Monday, 23 March 2015

Episode 24: Media Panic

Media Panic
The story behind the truth

Monday morning smelt like the aftermath of the world’s biggest boyscout jamboree, dear blogees. The fires and barbecues had burned all weekend leaving the air seasoned with charred concrete and grilled meat.


The roads were jamming again with shop-keepers, office workers and mechanics inching their way slowly into a new week, a week like no other behind convoys of outside broadcasting vans looking for the story behind the story. Why would anyone set fire to the city’s tax offices, why indeed. Thousands of public employees had been turned away from blackened buildings by a thick perimeter of armed police. Now, with nowhere to go they littered the city’s cafes and snack bars, making everyone very nervous and the cash registers work harder than ever before.

I parked my Vespa on the pavement next to my allocated spot that was taken by a truck with a big white dish on its roof. The rest of the car park was occupied by the usual array of staff cars but, as I soon realised, the town hall was not occupied by their drivers. I passed ungreeted through the lobby and up to my office where I found the sole public employee actually employed in public duty, the well-assembled secretary. She sat behind her PC huffing and puffing. I threw a smile and a jovial good morning her way but it cut no ice, she sighed and told me that they were all at the cafe opposite. We had not been hit by the fire storm but opportunities like this don’t knock very often.

The cafe had been divvied up by the news crews collecting sound bites and talking heads that would support their particular narrative. As I arrived they were fighting over one of my maintenance staff, who always looked woeful enough to suck the cheer from all tomorrow’s parties. It was too late, far too late when I realised the unholy error of my action. I recognised one of the reporters fighting over the spanner monkey and he did not need a double take to spot me. He launched himself with his mic a quivering foil before him, the cable uncoiling behind him as he called my name in that faux-polite way that hounding hacks do. A passing school bus just missed him, fortunately it had already deposited its precious cargo but the trailing mic cable got whipped up in the wheels. The roving reporter’s legs overtook his body and flew into the air. His body hit the yellow bus like a damp towel and only then did the bus begin to apply usual braking procedures. I knew I couldn't stick around but I couldn't kid myself that I would be unseen. There was more foreign press in town than you could shake a shitty stick at, I would be buried. I needed my publicist more than ever and all I had was Socrates. I ran.

Home felt safe, the wife dropped the vacuuming to make some coffee, any excuse. I began hunting for some chemical relief.

“If you’re looking behind the Tolstoy, it’s gone!” She yelled over the sound of the choking peculator. “…and in the Scrabble.”

I was looking in the Cluedo. Shit!

She emerged from the kitchen carrying two steaming cups and still wearing her marigolds but I was not in the mood and I knew she wouldn't be either after I told her what had happened. I was right. I phoned Socrates while she threw expletives at me. He could be here in twenty minutes. When she started throwing solid objects, I prayed he would hurry and ran for the back door and the safety of the garden. I stopped and peered through the window. Had they found me yet? I was stuck between a psychotic wife and a telephoto lens. I chose the wife.

She was telling me how she wouldn’t tell me that she told me so for the God-knows-howmanyth time when Socrates arrived. I was under the delusion that his presence would calm her but I was wrong. There was absolutely no precedent to support this belief, in fact his presence usually made her more inflammatory. But, thank the good lord and all his angels, he was swinging a bottle of Bushmills black. I implored my good lady to be a little more welcoming to our guest.

“Why?” Her face contorted in forced quizzicality. “You don’t want the world to know the ins and outs of your private life’s armpit, you fucking Diva. That’s all you’ve ever lived off, selling tickets to the public washing of your dirty pants!” She was on a roll and I’m not sure about me but Socrates jaw was visibly hanging. “I don’t see what those fuckwits saw in you, prancing around the stage talking about your cock, for hours! I can’t think of anything to do with your cock that would fill a few minutes!” she even wiggled her little finger in the air.

Socrates reeled in his jaw and turned to me. “What is she talking about?” he whispered.

I squirmed, “Don’t know mate, it’s not that small.”

He gurned and shook his head and I fell in, feeling a little smaller than her little finger now.
She hadn’t paused her tirade for a breath but now she changed tack. “Ahh! Yeah tell him, tell him what the press found out. Tell him why you’re hiding from them. Tell him before I blow the fucking doors off your little scam.”

“Now, now missus, there must be a way we can—” He was beginning to squirm as bad as me, my wife is good at that.

She was now pointing fingers at us both and I was trying to find the words to explain something I hadn’t really understood myself. Dr. Alex had helped me come to terms with so many things during our sessions but I still had far to go. I drew breath to begin but she cut me off, thank God.

“Your boy here, used to be a big celebrity back in Britain until he lost it. What did they call it?”

I mumbled an answer at the floor. She thrust her finger at me and I turned to Socrates and said. “Messiah complex.”

“Got himself sued by the Vatican!”

“How was I to know they had the rights on Messiahs?” I protested.

Socrates deflated, “Oh! Is that it?”

“Sued us out of house and home, this was the only place we could afford to live!” She was building up to the full story. “Then he went anad a Soo public fucking breakdown—” She stopped and turned to Socrates, a smile grew on her face. “You sneaky little bastard, you knew, didn’t you?” He had gone back to a squirmy denial stance but the wife had her bone and no intention of letting it go. “You manipulative shit. You knew all the time!”


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Where it all began Episode 1 

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Friday, 20 March 2015

What will Greece do after the GREXIT

Last night Alexis Tsipras entered talks with Angela Merkel, Francois Hollande and select members of the Eurogroup for yet more discussion on what is essentially how to do what fewer and fewer people want and what more and more fear; keeping Greece in the Eurozone. The result wasn't much different to the previous summits; we'll wire the money if you play ball. Tsipras has not played ball and it seems just a matter of time before one side or the other calls time on this game of ping pong. So what will Greece do after this push/jump scenario plays its logical conclusion.
Eurozone tug o' war
Game Theory: Candy Crush vs World of Warcraft
In a recent interview with Costas Lapavistsa, Economist at London's SOAS and Syriza MP he said they were 'Flogging a dead horse'  he added that Syrizas' strategy had come to an end and it was time to negotiate an amicable departure from the Eurozone. Indeed, after a huge show of strength by Tsipras and Varoufakis it seems that Yanis' famous game theory has been but Candy Crush to the Eurogroup's World of Warcraft. The question on everyone's lips now is what will the bankrupt nation do after default or a negotiated withdrawal from the single currency system. The one would leave Greece with cleared debt but no line of credit with international financiers, the other with a huge debt hanging but maybe some line of credit. Recent example of these scenarios being played out are Argentina and Iceland, two quite different cultures that resulted in very different outcomes. 
Yanis Varoufakis, Greek finmin and self proclaimed Erratic Marxist subscribes to the theory of growth through massive public investment, the Keynesian approach to economic development. This is the same strategy that brought the US's New Deal which many believe brought the country out of the Great Depression in the 1930s under Roosevelt. But this was a programme implemented by a country with huge resources in a time very different from now, when people's expectations from the state were almost non-existent. We now live in a world of state benefits, healthcare and education, undeniably progress but also costly. Varoufakis believed that this strategy could be successful from within the Eurozone but it is obvious that this is not compatible with the Eurozone's strategy. In fact, Germany has been tightening its purse strings with its own people. Their idea of a New Deal is Quantitative Easing (QE), pumping money into the top and preying that it will reach somebody grateful. The Keynesian approach is to pump money into projects that put money in the public's pocket so they will share it with each other and industry.  
The common misconception with Keynesian capitalism is that it is a spendfest. The Greek government is historically bad at making free with capital. Tsipras has already committed to re-bloating the public sector and while this may put a few more Euros (or Drachma) on the high street it will do little to stimulate industry or entrepreneurial activity. On the contrary, a more populous public sector tends to increase bureaucracy to keep the bodies busy. This has traditionally been Greece's major obstacle for foreign investors as well as local entrepreneurs. 
So, where could the money, if there were any, be spent to get the country's economy moving.
AGRICULTURE: Investment in farming could boost the economy, there are few places as fertile and the quality of its produce is world-class. But, the industry will need to change fundamental attitudes. This has already begun but years of unrealistic state compensations have made it more viable for many producers to be less competitive. A turnaround in approach with higher productivity could well save the country’s ailing fortunes. Farming has traditionally been viewed as peasantry but food technology is a growing and the world needs food, not just from mass consumption but also premium quality, something that Greece could do very well at.
RENEWABLE ENERGY: Greece has more than twice the sun-hours per year than the UK. While there has been huge investment in solar farms in recent years, changes in policy and the national electricity company reneging on contracts has made this area much less attractive. Farming and domestic waste could also be a good source of fuel for anaerobic digestion plants that may not be an export but they would take the pressure off imports of oil and gas from Russia.
MINERAL RESERVES: Greece has untapped reserves of gold, rare-earth metals while speculation of oil and gas reserves have yet to be fully explored. The exploitation of these may be another way forward but this must be approached cautiously as there is a lot of resistance from groups that maintain that the ecological impact could damage tourism, Greece’s major income. It must also be ensured that profits find their way into the Greek coffers and not Swiss banks.
NEW TECHNOLOGY: Greece has one of the highest levels university graduates in Europe and a thriving entrepreneurial community but the lack of jobs and funding has caused a huge haemorrhage of graduates and young entrepreneurs abroad. Their startups ultimately contributing to the GDP of other countries, their skills acquired and paid for by Greece, working for foreign interests. This trend needs to be reversed with support, funding and stripped-down bureaucracy for new ventures. 

And don't forget: Greece is a fabulous winter destination with history, clement climate and even skiing. Visit this site for ideas 
It is painfully obvious that the Euro has failed on so many levels but mostly it has failed the people it was supposed to serve, the European citizens. Instead of unifying a continent it has bred mistrust and acrimony. 
The Greek exit will be traumatic, as will be the exit of other members. But, it is good management that will make the difference. Iceland made a quick turnaround but Argentina continues to suffer and I fear that Greece has more in common with the latter.
I believe that the Keynesian approach is the way forward, Hayak/Friedman's free market neo-liberalism has already devastated many nations at a social level (let's forget the markets for one moment). Good management is the key, funding needs to find its way to stimulation of GDP not the deficit.


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Friday, 13 March 2015

Jeremy Clarkson just wants out!


Top Gear in deep water
Top Gear - All at sea

There is one man caught up in the middle of  all of the present Top Gear harangue, a man who has invested almost his entire career in the show, one man, who without Top Gear will have to face a fundamental re-evaluation of his next steps. Jeremy Clarkson, the Marmite man, loved and loathed in equal measure. The man who may have the most to lose if BBC axe him from their schedules. So why have his politically incorrect bollock-ups become more frequent and more abrasive. Simple fact is, according to an ex-member of the Top Gear team, Ian Morris, he may just have gotten bored.


There are few who have not found themselves at the wrong end of his tongue from Marina owners (the car, that is) to suicides, From Mexicans to Asians. Yet there is something that keeps him at the top of his game. Jack Whitehall, while on the 'Star in a reasonably priced car' feature once described Clarkson as the coolest dad at his school. Clarkson is a guilty pleasure who, in many ways, like Nigel Farage voices the unvoiceable. We may not agree with what he says but sometimes we are a little smug that they've been said, while still reserving our moral superiority. 

Jeremy Clarkson says Bollocks
Is this Clarkson?
Clarkson is a cheeky schoolboy in jeans and a sports coat. His grey hair and beer-girth simply cushion the impudent child. The Viz character in real. And, if you buy that then the rest falls into place. Clarkson is bored. He has been actively trying to get out of his contract for sometime now and the BBC have not been able to bring themselves to do it. His transgressions have become more and more frequent and maybe he knows deep down that the time has come to change gear. 

Many were surprised when he sold his shares in the franchise some years ago but that may have been the first pointer to the recent acceleration in his scandal-baiting behaviour. He knows that his presence is already a majority share in the show. The show's worldwide reworks including USA, Australia and Korea have not captured audiences like Clarkson in the British version and Russia's attempt was cancelled due to woeful viewing figures. He is the show and despite rumours of high-profile replacements like Chris Evans, nobody is under any illusion that he could be replaced

With contracts up for renewal at the end of this month, I think that it is time to let him go or we will see more petulant behaviour from a man who simply needs a change. What he would do with that freedom is anyone's guess but I can't see him straying too far from the path he has beaten. Who knows, maybe he'll surprise us all, I'm sure that's what he wants.   


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Monday, 9 March 2015

Driverless cars: Who pays when people get killed?

Cute until it bites

The motoring industry is in a frenzy at the moment and for once it is not driven by the Top Gear crowd’s appetite for hypercars and horsepower. The car is on the tipping point of a new era that will put motoring one step closer to the imaginings of science fiction. The driverless car will soon be with us and with it comes the promise of freedom, comfort and safety. But anyone who has relied on technology, whether it be trusting their files to a cloud server or taking directions from navigator systems will know that tech will eventually let you down and when that happens people will get  hurt. And when that happens who will take responsibility.

Human error accounts for more than 80% of road traffic accidents and while this may depend on where you live or your age or social status the fact remains we are the cause of most injuries, deaths and material damage on our roads. According to WHO’s 2013 figures, around 1.24 million people die each year as a result of road traffic accidents.
Key facts
  • About 1.24 million people die each year as a result of road traffic crashes.
  • Road traffic injuries are the leading cause of death among young people, aged 15–29 years.
  • 91% of the world's fatalities on the roads occur in low-income and middle-income countries, even though these countries have approximately half of the world's vehicles.
  • Half of those dying on the world’s roads are “vulnerable road users”: pedestrians, cyclists and motorcyclists.
  • Without action, road traffic crashes are predicted to result in the deaths of around 1.9 million people annually by 2020.

So the reasoning is perfectly simple, remove us from the equation and we have safer roads for everyone. Removing key factors contributing to road deaths and injuries.

Speeding
Around 400 people a year are killed in crashes in which someone exceeds the speed limit or drives too fast for the conditions.

Drink Driving
Around 280 people die a year in crashes in which someone was over the legal drink drive limit.

Seat Belt Wearing
Around 300 lives each year could be saved if everyone always wore their seat belt.

Careless Driving
Around 300 deaths a year involve someone being "careless, reckless or in a hurry", and a further 125 involve "aggressive driving".

At-work
Around one third of fatal and serious road crashes involve someone who was at work.

Inexperience
More than 400 people are killed in crashes involving young car drivers aged 17 to 24 years, every year, including over 150 young drivers, 90 passengers and more than 170 other road users.

Failed to Look Properly
40% of road crashes involve someone who 'failed to look properly'.

Loss of Control
One third of fatal crashes involved 'loss of control' of a vehicle.

Failed to Judge Other Person's Path/Speed
One in five crashes involve a road user failing to judge another person's path or speed.
Above figures are from ROSPA so regard accidents in UK with a population around 64 million with one of the best road safety records in the world but are still representative of the major areas of human error. The implied promise of this technology is that by removing these factors thousands of lives will be saved, not to mention the millions in costs to the health service and material damages that are incurred in every shunt. But despite its almost qualified God complex, Google is fallible and fails us on a regular basis. When this happens and it will, will they be culpable for the loss of life, injury of damage.

A point raised by Jeremy Clarkson, only half-jokingly, on BBC’s Top Gear recently was that in the face of a complex ethical decision like which way to swerve, onto a mother with a pram or a to certain injury or death of the occupant. which will the computer choose. A human driver may succumb to instinct and err on side of self-preservation but the decision is made by an individual with accountability. The point is that there is a responsible party who could be judged culpable and face the consequences. When the same happens in car controlled by its internet connection.

Much has already been made of the privacy element of driverless cars. Google already knows more about us than our Mums they will now have the ability to track our movements in the real world. 

The question is, are legislators ready to hold them accountable when things go wrong? 


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Monday, 23 February 2015

Is Greece ready for the New Drachma

On Friday 20th February Tsipras, Varoufakis and the Greek people found themselves between a rock and a hard-place. The rock was supplied by Wolfgang Schäuble who has been quite gloating in his intentions to break the Greek delegation and continue with EU's strategy for the Eurozone. The hard place was supplied by the Greeks themselves as the announcement on Greek media that around €20 billion had hemorrhaged from Greek bank deposits since December and the scene was set for a full-on run on the banks. Of course, telling people that their deposits may not be safe can have but one result; their deposits will not be safe. An insolvent banking system would be politically disastrous for the most popular government since ousting the junta in 1974. Finally Tsipras ad Varoufakis had no choice but to capitulate and return home with their tails between their legs.

           

Tsipras has vowed that if he doesn't get a fair deal he will leave slamming the door so hard that the whole house will fall in. Has that time come. The win that has be lauded, in lieu of anything else to say is that the Eurogroup has agreed to see a list of proposals for exactly how they intend to bring the economy into check, this is seen as a positive but we must also consider that while the knot has been loosened, it is also possible to wriggle the noose tighter still. There is no way that the Eurogroup (Schäuble) will be satisfied with the proposals this whole exercise is a last ditch demoralisation tactic, maybe even to force Tsipra’s to play his hand. The backlash has begun with the most audible coming from within Syriza’s own ranks, Manolis Glezos has accused Tsipras of trying to get away with calling meat fish with reference to the lexical realignment of the Eurogroup agreement.

Are the Greeks finally ready to bite the bullet and embrace the Drachma again.

There have been no reliable domestic polls on a Grexit and return to the Drachma and none could possibly done as merely putting the question to the people would cause the mother of all runs and a collapse of the economy before anything could be done. I have been trying to gauge public opinion here on the subject and the first impression took me by surprise, people are reluctant to talk about it. This is strange for a people who have always had a preoccupation with politics, taken relish in criticising the government and more recently the governments of its European partners but now starting the conversation provokes nervous fiddling with smart-phones, shoulder-shrugging or irritated changes of subject. So tired by hope against hope, so weary of broken plans, many have shut down completely. Their last burst of excitement spent, they are resigned to a new status quo and are trying to get on with breathing again. The world outside the political rallies and euro zone negotiations is calm detachment. According to Robertson and Bowlby’s attachment theory Greece has come to the third stage of ambivalent attachment, a survival stage that avoids any further emotional investment and the pain that accompanies disappointment.

Is Greece ready to embrace a new drachma. According to Bowlby, Robertson and even Naomi Klein’s Shock Doctrine, Greece is neither ready nor resistance to anything any more and those who feel powerless will just get on with breathing regardless of the flavour of air they are given. 

The one thing I have realised is that for the first time the Greeks have leaders to rally behind and that could just make the difference. 


UPDATE: WHAT WILL GREECE DO AFTER THE GREXIT


Thursday, 19 February 2015

Europe needs counselling


Forget game theory, what is going on in Brussels is an acrimonious divorce with Germany playing the stoical male role while Greece is the emotional wife trying to get the best for her kids. The passion has gone and it is a relationship that has been reduced to mere financial dependence, a situation that will be familiar with many frustrated spouses. The eurozone is a dysfunctional family that is in desperate need of reconciliation counselling if it is not to pull itself apart causing generations of bitterness and trauma.


If this divorce goes through, the Fatherland will keep the house and cars.
Twitshot


She just won't listen!
We, especially in northern Europe are are conditioned to rely on the head to make important decisions, logic is good. The financial institutions are playing this role, crunching numbers and coming up with plausible reasons why Greece is being histrionic and unreasonable to expect concessions that might allow the family to flourish as a stable and contented union. Wifey just doesn’t understand the pressure that he is having at work and needs to get on with keeping a thrifty home. But Dad’s work has become an obsession with him and while it was originally intended to be a good source of income to feed and clothe his family, it is now beginning to take the place of the family. He has become so defined by this role that it has blurred all perception of purpose. The Euro is a medium of exchange, a facilitator existing only to service the family unit and yet as it fails to satisfy this purpose it is the family who are made to adapt, it has become the only thing of importance.

In 2011, I had he pleasure to meet the now Belgian finance minister, Johan Van Overtveldt. In his 2011 book The end of the Euro, he points out that the single currency was doomed from the outset as an economic union was foisted on a group of nations that had not established a political union on which to base it. Like a marriage of convenience where the couple had not had adequate time to establish a sound understanding and mutual admiration before deciding that his job prospects were sufficient to base a life long bond. So arrogant have the world’s bankers become that they really feel that money makes the world go round. They expected the common currency to be the leverage in European political unification under the logical auspices of the German banking system. This, as Overveldt predicted is blowing up in their faces now and Greece is being offered up as the unstable mother, unfit to care for her children.

The Fatherland is presenting a face of maturity that casts aside the humanistic aspect of government as folly and whimsy. Their focus is on balance sheets and policy that has been (badly) designed to support a currency system that will eventually condition the population of Europe to serve it. This is an autistic mindset that cannot contemplate the uncountable. We are being expected to side with the validity of this argument as it is irrefutable with logic.

The mother of democracy is harping on about how badly she has been treated and that she cannot support her children. She is not getting the right kind of support from her partner. Yes, he gives her money for the home but it’s how he gives it, the demands he makes on her, the disapproving frowns when she tries to make herself nice, the silence at the dinner table when she serves something a little simpler because she has evening classes. She has a point but her argument can get a little confused with ideas that are less easy to quantify as they are off-balance sheet considerations.

We sympathise with Mum but Dad makes more sense because he is logical.


What is needed is a mediator who can reconcile this difference of language. Yanis Varoufakis is arguing socio-political aspect of the relationship, a strategy for growth while the Eurogroup president Jeroen Dijsselbloem insists on strict adherence to the austerity programme, a financial paring intended to support the medium of exchange at all costs.

Relationships of all kinds are dependent on understanding and evolution. I spoke to psychiatrist, Dr. Alexios Lappas, he said that successful relationships are based on similarities and differences, the prior form the core of shared goals while the differences maintain interest. However, as the responsibilities and strains of routine bite, the interest begins to wane and they regress into survival mode. The differences begin to be viewed as betrayal, by the anxious survival mode mind and they look for endorsement from friends (common ground relationships) who will tend to agree with their friend and support an exit from the relationship. It will not be long before irrevocable differences are cited and the family will split into those on dad’s side and those who support mum.



It is too late to impose a retro-fit political framework to underpin the eurozone’s fiscal policies but if the relationship is to develop through the present crisis it will need to be forward facing. The present negotiations in Brussels is an opportunity for growth but in order for that to happen Dad is going to have to loosen his tie and open himself up to some uncomfortable new feelings.  

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Monday, 16 February 2015

Alexis and Yanis are screwed

And it came to pass that in Europe’s darkest hour came forth two horsemen from an ancient land to slay the dragon and free the good and the pious from servitude. These dashing knights held aloft the swords of righteousness and wisdom to hack away at thorn and bracken to bring hope and light. And now deep in the dragon’s lair they fear no evil, for they have been summoned in the hearts of men to right wrongs. We shall all feast on roasted beast, my brothers, before spring blossoms the trees.


Alexis Tsipras and Yanis Varoufakis are these brave knights who bring hope of a renaissance of classic Greek democracy once more unto a world that has lost its way. But irrespective of what happens in Brussels in the coming weeks, they are screwed.


The whole of Europe if not the world is beguiled by these two men who have seemingly sprung from nowhere to take on the might of the Eurozone policy makers (Read: Angela Merkel). Not since Barack Obama’s first campaign in 2008 has a political leader evoked such idolisation, before him it was Tony Blair, delivering a desperate Britain from Thatcherism in 1997. History is littered with similar stories. And, herein lies the problem. Each of these beacons of hope have ultimately disappointed, exposed as flawed men in a near impossible situation (and maybe I’m being kind). 

Alexis Tsipras came from left-wing student activist roots to pull off a democratic coup in the Greek parliament. Despite not managing an overall majority in the house his support has snowballed spreading far beyond national borders to garner support from throughout the austerity-stricken Eurozone. He has vowed not to wear a tie until his mission is complete, a sentiment that his finance minister, Yanis Varoufakis has taken to heart and run with. This is a man who embodies the Greek economic situation; he needs growth, not a haircut, his charismatic presence belies his true stature and he is definitely not dressed for the bank. He has proved to be an inspired choice. An academic Goliath, highly respected by his economist peers, has a penchant for game theory and a dynamic youthful demeanour rarely seen in his position. The two of them have become the Kirk and Spock of modern politics showing up many for the out-of-touch dinosaurs that many believe them to be.

To all intents and purposes though, the Eurozone is Angela’s game, its her ball and she will be captain, she can even decide to adapt the rules should anyone get out of step. Then along come these two upstarts from a cigarette kiosk of a country telling her she’s off-side. The task ahead of them is formidable and the chances of walking away with all they ask is a snowball’s chance in hell.

The real problems begin when they get back home. Let’s say that they get the majority of what they ask for. Which, if you follow Varoufakis is not a haircut but a restructuring of debts, something akin to consolidating all your credit cards into one low interest loan with a manageable payment plan. But what they really want is to be freed from the conditions of the loan, the austerity measures that have forced Greece's economy to shrink a 1/4 in the last few years and the selling off of public assets to foreign investors. This is the real bone of contention. For while Greece has been forced to take loans to pay the loans which pay the interest, the economy has had its laces tied together by a series of cuts that have forced anorexic shrinkage of an already troubled economy. If they get all this then they have to make it work and be seen to work and that means that people are going to have to magically pop back into full employment, debts accrued during the last years will have to go away and taxes will have to return to being an avoidable nuisance. Things will have to go back to the good ole days (during which everyone would tell you they had never been so bad) things will have to be right for everyone and they won’t.

They have promised to reinstate public employees who were sacked over the last government's term. this is part of what put an unsustainable burden on Greece's resources in the first place and had come about due to successive governments trading votes for jobs. Its result was a public sector bloated with the wrong, unqualified people who didn't give a jot about solving your problem because they had tenure. They have also vowed reopen the state TV and Radio channel ERT, a popular move but will need to be well-managed if it isn't to fall back into the habits of its public sector peers. These are expensive promises, though and neither of them are growth catalysts.

So much is being expected of these two men that there is no way that they won’t disappoint. The best that can be expected is for them to return from Brussels with their dignity and integrity intact carrying the means to create an environment where businesses can begin to build on stable ground. There is still a lot of hard work and sacrifice ahead but what many are going to have to digest is that it will not be only Tsipras’ and Varoufakis’ hard work and sacrifice but their own. They can only do so much and there is still so much domestic reform that needs to take place before the benefits of the concessions that can realistically be expected can take hold.

There will be a backlash. Not only from the Greek people, but all the other nations watching closely to Greece for sign of light at the end of the austerity tunnel. When things do not work out as they hoped or as they chose to believe that T & V had told them. They will cast aside Tsipras and Varoufakis in a wave of told-you-so wisdom. Such is the fickle nature of the people. This will allow the next wave of cure-all promises from whoever has the public ear.

The world has taken these two men to their hearts at a very vulnerable phase in its history. Expectation will be unrealistically high. I hope you have factored this into your game plan, Yanis. 


UPDATE: After more final hours and more renegotiations and more broken promises, the general consensus is getting closer to just roll over and let it happen, already. People are tired and I feel that they are ready to vote back the old order if only to let the screwing be done and lubricate appropriately.
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