Board now or baggage off

I know thee not

You can imagine as I walked to the iris scanning system I put in my card and it let me through to the iris scanning machine which after 1 minute of thinking decided it could not identify me.

So, I gave my passport and boarding pass to the backup alternative, the human customs official who checked everything and let me through.

I did not realise that my gate number required I go through another customs check because I had come out on the wrong side and as I passed through that check I was accosted and asked where I was coming from – strange question, I thought – I am coming from Amsterdam and I am going to Berlin I said.

Named for my journey

As I looked at my watch, it was well past the initial boarding time and just as I got to the gate my name was mentioned on the Tannoy asking I board immediately or would have my baggage unloaded.

The flight was smooth apart from the purser mixing up his destinations about us approaching Hamburg when we were going to Berlin, meanwhile, I wanted sparkling water and the host was offering everything but – when I insisted, he eventually heard my request and sought out the sparkling water for me.

I have always considered Berlin Tegel Airport a very efficient and customer-friendly airport, you were through the airport in no time, the efficiency that accompanies baggage reclaim usually means you are off the plane and in a taxi in less than 10 minutes.

Struck by strikes

Today offered a few surprises, in exasperation I finally said aloud, this is the longest I have had to wait for my baggage, even the tardier Amsterdam Schiphol does not take this long; almost after an hour of arrival, I heard the baggage handlers were on strike until 19:00 hours which would be in a few minutes time.

I do believe that unionism has its benefits for the working class and for the leverage of demands for fair working conditions – sometimes, I sense a kind of recalcitrance between management and the unions that lead to avoidable disputes that should better be resolved with discourse and maturity.

Negotiations and compromise

Having mostly been self-employed all my working life, I suppose it is difficult for me to appreciate some of those needs, one has to live by ones wits, skills and negotiating acumen rather than commit those negotiations to some socialist truculence battling with capitalist indifference.

Whilst, I am not pleased to find myself at the wrong end of an industrial dispute, I do hope that whatever has brought this about does not degenerate into the debacle that the British Airways dispute has become.

Long live the compromise and coexistence of socialist and capitalist aims for the maintenance of just, fair and orderly societies.

Paulson: Burying the dead and ignoring the murderers

Bones of the bull

That was really the week that was and just as we were about the pick the dry bones of the bulls [1] slain by the plague of lack of confidence in the desolate Wall Street the great chiefs of capitalism prophesied the breath of socialism upon the bones and the cows live again to milked dry by blood-thirsty hyena cubs.

No, certainly, the events of the last week cannot have passed anyone by and I kept my counsel for as long as I could till I flipped through the pages of the Economist that arrived in the post this afternoon.

The elevenses

Just after the letters and on page 11, eleven being the number of the chapter that Lehman Brothers wrote at the beginning of the week, a firm whose existence has been swallowed in the sands of time with an 11^th hour buyout was reliving its past in an advertisement that proclaimed Merrill Lynch connects capital to opportunity.

It ended with “Our 94-year history of leadership in the financial industry has been a source of confidence for our clients in both good and challenging markets”.

I had to check if my magazine was current, it was, the advert had been paid for and basically the Economist was putting it out despite the fact that that 94-year existence had been terminated a few days before.

Dishonourable things abound

Now, if I were unaware of the events of last week, I suppose I would be expected to buy that bull with horns protruding like ones off a devil’s face mask and throw my money into the opportunity to see it swallowed up in great loss.

It was just over a year ago when I wrote about Baling Out Trust [2] which lamented the way the basic foundation of business following the dictum “My Word is my Bond” and its counterpart of trust had been eroded by dishonest, corrupt, vice-ridden and dishonourable practices.

In December I talked about how we were Fixing Capitalist Errors with Socialist Favours [3] ending my comment with the thought that these actions would create more problems in the future and that none of it had yet begun to unravel.

People were not focused on where the problem was as they got distracted with the idea black holes would be created by the Large Hadron Collider which is since been shut down [4], a more menacing black hole was busy swallowing banks and financial institutions in the United States in the United Kingdom.

Cleaning up a no-crime zone

Whilst these events require a lot more analysis what I see is simply this – guys with big guns came into town with a swagger and 10-gallon hats banging on tables, ordering the most expensive drinks, cavorting in wanton orgies with the women and having a raucous moment allowing the occasional tips to the locals who dared to join in.

Along the way there was something approaching complete social breakdown and a few of the guys were brought in for questioning, smacked on the wrist and let go.

By the time we knew it there were a good few dead bodies on the street and no one could do anything about it that it raised up the foulest stink everyone stayed indoors.

The sheriff walks in and says “We need this to be clean and to be quick”, and we need to get it in place [5], we’ll clear up the dead and bury them in the community playground, that may clear up the stink – meanwhile no one is worrying about the murderers, they are still walking around with big guns, probably with a little less ammunition, drinking less and having a low profile around the bar.

We need to get rid of the stink because no one is coming out unto the streets, nothing else matters.

The whiff of nothing

The funny thing is the dead are still in the streets, the stink is still there but in expectation of the clear-up – the stock markets are already behaving like the town is as pristine as a spring garden.

Well, in fact, let us pretend there has been no murder because by the time we do the forensics we would only have bones to exhume.

We are back to where we started and the vicious circle begins again and no one really paid for the crimes of the past rather the community lost their playground to an impromptu cemetery and anyone who dares to go out to play at night knows never to go out there again.

Source

[1] BibleGateway.com - Passage Lookup: Ezekiel 37:4-5; Reference to a passage where Ezekiel prophesied to the dry bones in the valley

[2] Baling out trust [akin.blog-city.com]

[3] Fixing Capitalist Errors with Socialist Favours [akin.blog-city.com]

[4] BBC NEWS | Science/Nature | Hadron Collider halted for months

[5] Paulson: Plan Needs To Be "quick" And "clean", By Patrick O'Connor - CBS News

Fixing Capitalist Errors with Socialist Favours

Reset and elevated

Prologue: I am not an economist, this is what I understand of the issues with an opinion of how it affects me.

I had done mental calculations but it was yesterday that I saw the exact figures as my account yielded what was literally a 50% hike in monthly mortgage payments after a reset which had me enjoying a fixed payment for two years and cumulative reductions of about 35% over the last 6 years.

I am thankful for the providence that allows for these obligations to be met, the matter is one has diligent kept up the obligations come rain or come shine.

The sub-prime mortgage problems generated by greed, dishonesty and suspect economic ideas in the United States is very much like a 10.0 magnitude under-sea earthquake creating tsunamis on shores so far away.

Northern Dust to dust

For example, the pulverisation of Northern Rock to Northern Dust was not so much about their being exposed to these sub-prime mortgage instruments but because banks had lost basic trust, confidence and transparency between each other – not knowing how exposed their co-banks were to these problems they were wary of lending to their fellow banks just in case the money went down a black hole.

Some banks could not even place a clear cost or value on the assets affected by sub-prime exposures such that the ability to meet obligations was almost indeterminate that banks have to cover these uncertainties with write-downs that would probably crest $400 billion.

When people then queued up round branches of Northern Rock Bank to take out their money as people had rightfully lost confidence in the bank to function and protect their savings, it was almost impossible for the government and financial regulatory institutions to allow economic realities to dictate the course of events as the market coughed up poor management strategy and liquidity controls – they stepped in to guarantee everyone’s deposits and now that is GBP 25 billion lent to a bank that might not be able to paid it all back.

Technically, the bank has been nationalised even though we are being regaled with tales that takeover bids are the better face-saving deal to safeguard taxpayers’ money.

Shareholders are wary of anything that would make them lose money, but half the problem is the relentless drive to grow shareholder value and the forces exerted by the markets to perform or lose market viability – their market model fell short and government intervention has been nothing short of a socialist solution to a capitalist problem.

Liar loans made true

The source of all these problems is driven by “liar loan” mortgages made in America to people who have over-stated their incomes and means, banks that have not properly verified the data provided and loans made on the thinnest of leeway for repayments so as interest rates have increased, fixed rate mortgages have come into an upward reset period where many would be blown-out by their inability to meet their obligations leading to difficulties and foreclosures.

This debt has been traded on as sliced-up deals called Collateral Debt Obligations and fancied up by ratings agencies as A-grade instruments which financial institutions have soaked up - the tendency for people to default on these loans means this A-grade instruments are beginning to look worthless.

The President of the US along with is economic team have forged this plan to help certain house-owners who meet a certain credit score but are without the full means to keep their homes by freezing interest rates on adjustable mortgages for 5 years.

This big-time big-government intervention does not really address the core issues and may not save the homes of many who would not be able to scale the hurdles needed to qualify as those who have been prudent and smart about their mortgages like myself get hard done by – The Economist in March asked for markets to resolve this rather than politics.

One must not forget however, that Hillary Clinton – the aspiring Democratic Party Presidential contestant had asked for something to be done about this sub-prime crisis in March.

One can only say this move to fix capitalist errors with socialist favours will lead to more long-term problems – this case has not begun to unravel yet.

References

Subprime: first a crunch, now a catastrophe? – www.thisismoney.co.uk

British banks to reveal credit crunch hit – www.thisismoney.co.uk

The US Housing Bubble Timeline – WikiPedia

Bush details housing rescue plan – BBC

Credit losses 'may reach $400bn' – BBC

Sen. Clinton calls for subprime mortgage action – Reuters

Beware Miracle Cures – Economist

In subprime meltdown, lots of blame to go around – Reuters

White House unveils subprime rate freeze plan – The FT

Critics from all corners quick on the draw – The FT

Dishonest lending clue to market tremors – This Blog