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Monday 28 April 2014

YAALA - Information – The Message, Its Interpretative Use and Its Messenger

YAALA Series 2 - In this FPM digest written in a concise nature than our regular exhaustive deliberating posts, we aim to share some of our fund- and investments-related observations and activities.We anecdotally question and challenge established wisdom.

Information – The Message, Its Interpretative Use and Its Messenger
The idea of promoting “diversity” has been mooted by about by many as a positive characteristic. Similar word with such assignation is the word “choice” as maybe used for example in commercial or political marketing. Indeed, sticking with dissection of “diversity”, the word has been promoted by local councils and media as a potent showcase, for example, in demonstrating the multiculturalism of United Kingdom. The positive associations in the use of the word such as ‘diversity’ also embodies emptiness of the phrase in actuality. UK is conveyed as a cosmopolitan society right? Characterised by many religious faiths, food-villages from all over the world, over 250 spoken languages, etcetera. However the reality is less romantic or an ideal! London as prime metropolis comes close to being diverse, as does other UK cities and perhaps SE England. However, do these examples validate UK-wide as cosmopolitan nation?

Take the languages aspect of multiculturalism as an example, while we moot that as positive feature of UK’s historical and current world-wide ties, the reality is that people ONLY SPEAK English ultimately and predominantly. Ethinicity is always marginalised for the sake of the national identity. And further, this multilingualism in schools or culture is not deeply fostered, or at least hasn’t been in the past. Further other languages is derogatively killed-off or made extinct. How many 2nd and 3rd generation Italian descendants actually speak their native language? Or in current migration-terms affecting UK, how many 2nd and 3rd generation sired peoples of UK will speak Polish or Lithuanian? Think also historically of Gaelic, Welsh, Olde English and the many languages that constituted the British Isles before their extinction for the House of Hanover overrule.  

Where he perceived only a mass of undifferentiated humanity, she distinguished individualsAldous Huxley, Point Counter Point, 1928

People brought up and educated in England were proffered the option of learning sister European languages like French or German, as practical. Was there ever an education system, private or public which engendered the immigrant students’ language? By nature in a multicultural nation of immigrants there are other languages relegated as ‘home-spoken’. Children eventually subscribe to the language of their peers, asserted culturally as English even if they are of vague Estonian, Japanese or Sri Lankan origins. How confusing and perplex is it to really understand a lanuage that is generationally not ones mother-tongue? This bewilderment by not having a natural evolved generational language can put a person on the proverbial spot and stuck for cogent reply in a tight spot and being clumsy. Never mind espousing “language is power” and making the world a better place!
 Isn’t diversity of peoples in UK really an economic growth policy by expansion of immigration? While this may not be a popular UK government policy it is nonetheless an unofficial growth policy. As much as UKIP is protest party to vent native frustration but officially they are challenged to upset status quo of middle-line kowtowing politicians.
Without digressing, back to the language of diversity. Put in another way, how many times has anyone seen public signs translated into 2nd or 3rd language? As seen in other countries. Has anyone looked into know what is the 2nd and 3rd widely spoken language of diverse UK is or has been? For graphical representation we have chart below of global languages – it is not mere coincidence that small Country in Europe has spawned into the 3rd widely spoken language. Aldous Huxley, a true Great British liberal of aristocratic learning, speculated that "the heart of England is to replace one meaning with another..."

click to enlarge
So we may use ‘diversity’ in branding and spin as a positive but the conceived reality rather than the rhetoric with a vested and often hidden agenda by its ‘pushers’ is uncertain to most. Even those who think they can read between the lines of propaganda. Or as Friedrich Nietzsche suggests “there are no facts only interpretations.

To surmise we have information conveyed by the word “diversity”, we have an interpretation of an idea and what it signifies and portrays in a context, but what does the messenger really have in ultimate purpose? We refer you to FPM's introduction of the ‘Straw Man Fallacies'. Some may say sinister and dark motives lie behind empty slogans and phrases. Or as Naom Chomsky points out, empty slogans and their meaning, as simply being ascribed to “propaganda”. Recommended reading by Chomsky "Media Control, Second Edition: The Spectacular Achievements of Propaganda  To reaffirm this point, another global icon is quoted; “Yoda” in the archetypal George Lucus “Star Wars” films about good versus evil. The council of Jedi masters (the good guys), were not aware of the emergent Sith force (the bad guys) so Yoda in his subject-object language starts off as:

Hard to see, the dark side is. We must investigate further before drawing a conclusion to the identity of your adversary.Yoda - The Phantom Menance, 1999

N.B. If any non-lateral thinking individual questions how this subject matter is not an FPM article related to investments, we refer you to information arbitraging SAC Capital Advisers which is now facing closure. Or please read our forthcoming speculative escalation towards Scottish Independence – Yes vote and ultimately the premise for European Union disintegration or greater cohesion under German autocracy.

Thursday 10 April 2014

NSWF: Litany of Litigation and Proceedings

FPM have been urged by its financial and non-financial relationships to prescribe that the SAC-saga should not fizzle out but go with a bang! SAC Capital (or yesterday renamed Point72 Asset Management LP) and Steven A Cohen are the search-tags for those not familiar with this story. Towards an end with a BANG we are still inviting the integrity of the US legislative and political establishment concerning the financial sector to step forward. If the career professionals are not too entrenched in cynical plutocratic values and have adherence to integrity then the US establishment can step-up-to-the-plate by validating its bona fide seriousness in policing its capital markets via the Securities Exchange Commission fairly and effectively. With co-operation from the other Federal agencies in the widespread insider trading probe started at the time of the Great Recession financial crisis in 2007-08, we urge a climatic finish to SAC prosecutions and earnest persistent efforts to weed-out and stamp-out the rife insider trading.

In FPM’s enterprise programme entitled “No Smoke Without Fire: Of Reputation Risk”, we campaign for: a) making a warning example of Steven A. Cohen as a proper deterrent; and b) towards long-term solutions to a perennial loophole in securities law which rewards cheating. This and such other financial fraud perpetrators are not committing victimless crime – pay attention to changes in your savings portfolio valuation!

SAC Capital's Litany of Litigation & Proceedings

Mr Cohen aged 57, is at the helm of his eponymous firm’s ignominy through a litany of insider trading investigation and litigation, shown above.  Clearly he is not tenuously linked to that litany but responsibility-wise tethered, despite he himself being not held accountable and charged by US Government prosecutors - so far!

If today’s headline guilty plea and overall US$1.8 bn settlement for SAC Capital and its entities are separately approved by Judge Laura Taylor Swain of Federal District Court of Lower Manhattan, even then the SAC-saga is still not put to bed! Assuming the details, as extracted and shown below, of Department of Justice attorney Preet Bharra’s settlement is not merely for a show of justice then we can still hope of real justice. Hope that actual enforcement for ANY suspected and investigated systematic cheats will ensue, and that “Too-Big-To-Prosecute” is no longer a valid “get-out-of-jail” card.

 “…this agreement does not provide any protection against prosecution or other enforcement action against the SAC Entity Defendants, any owner, shareholder, or employee of the SAC Entity Defendants or any other person… the agreement provides no immunity from prosecution for any individual and does not restrict the Government from charging any individual for any criminal offense and seeking the maximum term of imprisonment applicable to any such violation of criminal law.” Source: Court Documents SEC Attorney, Preet Bharara

FPM principals believe that encouraging the US enforcement authorities and publically profiling the “high watermark” SAC insider trading case can practically be a useful protest. Though SAC-saga case study dilettantes are not organised and visibly demonstrating outside Mr Cohen’s head office at 72 Cummings Point Road in Stamford, Connecticut - yet!  The SEC Enforcement Division under the lead of the US DoJ and its haranguers has convicted and mostly plea bargained with 80 insider trading ‘big wigs’ and conspirators, since first arrests in October 2009. While principals at FPM believe in indignant public protests, our enterprise aim is to embark on filling and complementing the void and model left by the DoJ in monitoring suspicious trading patterns. SAC investigation and prosecution lead to total US$2 bn plus earned for the US taxpayer and current and potential class-action members. There must be many institutions ready to join class actions unless those executives fear drawing attention to their own illicit trading activities. which are on the losing trade-position side of the much vaunted 22-years old asset manager in the crooked SAC-mould. FPM respondents have asked how much of the multi-billion reported settlement will actually be set-aside for compensation of SAC-trading counterparty victims and how much towards filling holes in US government finances?

Stop Press! As if on cue to support the FPM campaign the cavalry trumpet can be heard in the distant, viz: SEC Lawyer on Goldman CDO Case Describes How the Agency Wimped Out! (Hat tip Yves, Naked Capitalism!) This is a MUST MUST READ article about the enforcement apparatus prevalent in US Justice regarding “too-big-prosecute” billionaires, by a senior attorney insider. In this most revealing article, a US securities regulator veteran with 28-years SEC-service James Kidney, has a parting snipe, describing the institutional culture there:

 an agency that polices the broken windows on the street level and rarely goes to the penthouse floors… On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening… Source: Naked Capitalism, James Kidney April 2014, an excerpt of his retirement speech.