26 June, 2013 — The Wolf Report nonconfidential analysis for the anti-investor
1….of staring blankly into space
Everywhere. And everyone. Smartphones. Everybody’s staring at his or her smartphone. Some are staring at their smartphones, multi-multi-tasking I suppose. Or just showing off, as if one flat screen can’t possibly make him or her available enough to all those out there dying to connect. Multiple smartphones. On the first day of Christmas, the true love offers one Blackberry. On the second day, two Samsung Galaxy 4s. On the third, three Iphones. But nobody’s giving anybody Nokias, that’s for sure. There is no Christmas for Finland.
Everywhere. Even in Nice. On the Avenue Jean Médecin. Even on the Promenade where being out of touch, disconnected were more than virtues; were full time jobs, they’re staring at their smartphones.
OK, maybe not everyone. But lots. Lots and lots. Especially the young people. This being France, they have to have something to do with their hands. This being the 21st century, they have to have more than one thing to do with their hands. Smoke cigarettes, access the apps on their smartphones…
Me, personally? I could find better things to do with my hands. I know I did at their age. I still do.
OK, almost everyone. I mean when parliamentarians and ministers tweet their latest actions, doesn’t that tell you something?
Me, personally? It tells me that this is a Donald Trump world, a world of short-fingered posing blowhards whose hands are too small too reach anything, and anywhere, other than a virtual keyboard and into everybody else’s pockets.
Short-fingered, self-advertising, combed-over blowhards. With an audience. With audiences of other short-fingered, self-advertising, combed-over blowhards.
That’s what it’s all about; life oscillating between tweeter and tweetees, between being the tweeter and being the tweetee. Life is a play, tweeted in messages up to 140 characters. I take the stage and broadcast my very own short-fingered, self-serving, self-advertising, combed-over self back at ya.
Copious crocodile tears at the wolf’s lair. You are screwed and forever. See #anglotapes.
2. If only…
On May 29, Schäuble was reported in the press to “fear ‘revolution’ if Europe fails to preserve welfare model.”
France and Germany had unveiled a supposed job program, called a “New Deal for Europe” that would authorize the European Investment Bank to provide billions in loans to companies that would create jobs for young people, but the rest of the EU was a bit slow out of the blocks.
The European Union had agreed in February 2013 on a €6 billion scheme to fund a “Youth Employment Initiative,” with an operational date of January 1, 2014. Youth unemployment in the EU is about 23 percent. In the Eurozone, it’s approximately 25 percent. That worries Schäuble because as Schäuble knows first hand unemployed young people with too much time on their hands might put down that smartphone and pickup a different sort of application. Said Wolfgang, from his wolf’s lair: “We need to be more successful in our fight against youth unemployment, otherwise we will lose the battle for Europe’s unity.” This from the man who has served capital so dutifully in the liquidation of Greece.
Six billion? Six billion? Are you kidding me? Greece’s GDP alone has declined some 30 percent. And then there’s Spain. And Portugal. And Ireland. And Italy. And Britain (for the time being). And all the EU can manage is €6 billion?
Continued our Wolf, a bit sheepishly: (if US welfare standards were introduced in Europe), “we would have a revolution, not tomorrow, but on the very same day.” If only…….. Best justification I’ve heard in a while for sending the US Congress, Supreme Court, and President to the EU, lock, stock and barrels, no returns accepted.
So our Wolf, strapped into his wheelchair, gas mask, helmet and polizeiknüppel properly affixed, fears a revolution by young people, if “US standards” are imposed, while the class he represents, the class for which he does due diligence, dreams of imposing US standards, particularly that standard that has US labor costs declining quarter after quarter, while EU labor costs remain “stubbornly high.”
What’s this all about? Second thoughts by our Dr. Strangelove of the fiscal policy? Look, the bourgeoisie oscillate between fear and greed; they cycle between fear and greed, and sometimes the cycles are so close, of such frequency, that they overlap. In this case, fear is nothing other than greed made self-conscious. “Yes, I’m a ripper,” says Jack the Ripper. “If something isn’t done soon to control the supply of razors, I might get hurt.”
3. A bridge too far…
Finally, someone has explained the theory and practice of finance capital in everyday language. On June 25, 2013, the Financial Times newspaper reported “Dublin reels over bank crisis tape.” It seems two executives at the dying Ango-Irish Bank, John Bowe head of capital markets, and Peter Fitzgerald director of retail banking, were determined to avoid the fate of Lehman Bros. They also were recorded in flagrante delicto:
Bowe: Yeah and that number is seven [€billion] but the reality is that actually we need more than that. But you know the strategy here is you pull them in, you get them to write a big cheque and they have to keep–they have to support their money.
Bowe: If they saw the enormity of it upfront…they might decide, they have a choice. They might say the cost to the taxpayer is too high.
Fitzgerald asks how the €7 billion figure was arrived at.
Bowe: Just, as Drummer [former CEO] would say, picked it out of my arse. This is a €7 billion bridging loan. So you know it is bridged until we can pay you back which is never.
Later, Bowe is recorded singing “Deutschland über Alles.”
Outcry in the Dail. “We were had,” say Fianna Fail and the Sinn Fein.
“We pretend to dupe you. You pretend to be fooled. What’s the problem?” responds Bowe.
The Anglo-Irish debacle cost €35 billion.
Wolfgang is not amused.
4. Of numbers and asses…
After years and tears, in 2012 the European Union finally established its European Stability Mechanism (ESM), providing a cool €500 billion to defend the euro and to “bailout” the governments bailing out the banks and bankers who had spent so many years with their heads up their asses looking for numbers to be pulled out.
Now in the negotiations to establish the ESM, several issue were not addressed: like could, and should, the ESM provide resources directly to failing financial institutions rather than through the governments “overseeing” (nominally) those institutions, thus reducing the burden on the government budget and perhaps saving a member country or two from the fate of… Greece, Ireland (see above) Portugal, and____________ (fill in the blank). Also, if it was agreed that the ESM could lend directly to financial institutions, could such action be taken retroactively, thus alleviating say the governments of Greece, Portugal, Ireland (see above) from the burden of this fine art of bridging.
Important questions, no? Well just days after Wolfgang got all teary-eyed about the dismal prospects for the young people of the EU, and just days before transcripts of certain phone calls had Wolfgang seeing, you should pardon the expression “red,” the Eurozone finance ministers met to consider and resolve these problems.
Motivated, as always by his concern for the young people of the EU, and the destructive impact when governments collateralize the lives of those young people to secure the terms of the bailouts, Wolfgang and the FMs decided that the ESM could provide direction injections to financial institutions not to exceed €60 billion. So of its €500 billion largesse, the ESM could contribute about 12 percent directly to financial institutions, thus sparing a national government, its taxpayers, and its young people. Or not…because the home government of the financial institution being so aided would still be required to 1) assume responsibility for the bank meeting minimum capital requirements and 2) commit itself to underwrite at least 20 percent of any recapitalization.
Still… €60 billion is serious money, certainly more serious than the €6 billion, the EU FMs (also known as the EU MFs) committed to their “New Deal” for the youth of the union. “Serious” is a measure; all measures are relations, so what does that €60 billion in direct financial assistance relate to? First, it relates to the non-performing debt of the moribund, bad, zombie, dying banks, an amount that exceeds €1 trillion. So the direct injections might relieve governments of 1/16th of the mountain of non-performing debt that weighs like a nightmare on the brains of the living.
Wait, there’s more, or actually, there’s less, because the so-called healthy, good banks of the EU are estimated to hold another €1 trillion in non-performing debt. So the generosity of Wolfgang and the FMs is half of what it even appears to be, if it ever appears at all.
As for making this big-heartedness, this compassion, this kindness retroactive….no chance.
5. No deal…..
What is not now needed is what was not needed then. No New Deal is needed. No ESM. No TARP. No QE 1 or 2. No nationalization of banks by governments, “workers” or otherwise. No peoples’ banks financing expanded investments. No public works managed by those committed to doing for capitalism what capital is committed to not doing. No “investment programs.” No retooling of the living and accumulated components of capital so that the liquidation of assets appears as the accumulation of capital. None of that. No deal.
All that is need is the expropriation of capital. The abolition of the class of capitalists and their agents, ministers, mediators. The expropriation of their property. The liquidation of that social relationship called capital. The razor’s in the street.
June 26, 2013