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Tuesday, 30 June 2015

The ‘C’ Word in Capitalism: Crash!

On dismissing financial analysis behind, due to ‘GIGO’ principles based on corrupted manipulated statistics, and spotlighting policy makers’ move we hit on Greece. Yes, Greece is one of the pertinent factors to markets’ animal ‘spirits’ as is Climate Change issues (gargantuan impact on energy, airline and consumer industries). The saga is dragging on and unsettling the predictive market participants, whom are both directionless and intuitively awaiting the big catalyst for secular economic progression. From FPM’s last post “By Whatever Name Geopolitics Is Still Market Risk” we are underpinning Greece as the big ideological catalyst for the much heralded economic fundamental shifts, that happens in 25-30 years cycles[1].

Yet another date, Tuesday June 30, is due for Greece to repay IMF’s stranglehold debts. Make no mistake, it is “stranglehold” by the scrotum or neck! As ‘troika’ threatens Greece with dire financial / bankruptcy consequences if it does not cooperate with modus operandi of the last thirty years[2] of runaway excessive capitalism by the moneylender / financier classes organising, in effect our daily lives. And through ever-pervasive globalist trade pacts (GATT, CETA, TTIP and TTP), these powerful pullers of the strings behind the scene, which are corporations and their billionaire entrepreneurs, aim to shore up status quo and control money, hence the world.

Greece represents a more than the proverbial spanner in the works to the last 30 years of deregulated business climate – remember ‘openskies agreements’. In a way, The Reagan / Thatcher era shift has left nation-states without identities and suckered into a mode of capitalism, which as its sickly insidious terminal side-effect, is causing climate change, great wealth inequalities and essentially re-organising humanity and society run by stealth global plutocracy. Not democracy at all – wake up people! Hence, back to Greece being an epochal and pivotal policy maker in the global theatre of socio-economic politics, once again 3000 years or so later. If you don't believe our interpretation, look at the market indicator of volatility spike, ^VIX.
Volatility S&P 500 (^VIX) -June 30th at Open
For example, we mentioned the ‘Open-Skies Agreements’ which degregulated nationalistic ‘flag-carrier’ airlines starting in the 1980s and henceforth; well we can see the consequences of that towards international tourism, where holiday-makers and other various travellers are merrily zig-zagging the planet as ‘strangers R us’ pulling along their wheelie luggage, and ferrying around by taxi, plane, boat etcetra. Happy days one may think – yet more burning of carbon fossil fuels, in this mass people transport business dubbed tourism, has well-known dire ecological consequences. Those inconsiderate enough to not bear, or take responsible mitigation for the chain of climate catastrophe events that is impending, are selfishly ignorant. Yet the corporations and media communicators peddling this and other type of ‘consumerism’, are and were always ruthlessly and exploitative. Similarly tobacco giants were long-ago aware that selling cigarettes causes harm and death.

The secular economic progression or investment theme / trend FPM espouses reverses or roles back the last 30 or so years of greed-capitalism. An enterprise crafted and forge lovingly patiently towards evolving a more humane ethical equitable and sustainable enterprise ecology. The business climate is changing undoubtedly and perpetually through a healthy process of creative-destruction. New age entrepreneurs should NOT accept being like the blinkered content horse that was portrayed by human liberationist George Orwell in his satirical comment on humanity via “Animal Farm”. Small- and Mid-sized Enterprise (SME) proprietors should understand that the global and regional trade pacts only serve to preserve the higher-up capitalists’ status quo of big business executive profitability with lure of trickle-down impression.

For example, if you’re an entrepreneur who bought into the idea of fracking for fossil fuels as alternative energy source to supplement dwindling oil / gas reserves, then you’ve been manipulatively had! The reality-check is that if we use JUST USE 20% of the OPEC and big-oil cartel reported EXISTING reserves of oil / gas, or other forms of fossil fuels, we will irreversibly exacerbate the ecological balance of planet Earth. Average global temperatures have risen by one Celsius degree since the industrial revolution, with “democracy” levels of consumption of the Earth’s resources, by just a few western nations[3]. One does not need to be a ‘rocket-scientist’ or fortune-teller to imagine and extrapolate the future impact from the current Western brand of democracy and capitalism. Aside of weighed-up benefits of travel, a model of wasteful and excessive consumption, increasingly foisted on the new and developing countries and, sponsored by self-vested oil-rich countries, which can ultimately and willfully lead to a scorched Earth or few habitable parts of planet earth. This dire  doomsday ecological predication is evidently possible within 50 years henceforth.

Enough doom merchant forecasting let us see what we can do with the the next 10-20 years, of ecological foresight. In order to make an omelet you have to break some eggs, so we believe some bad old habits of Western way of life has to be broken and entirely abandoned. The prospect of these similar habits being continued by the 3 to 4 billion new capitalists of the BRIC nations i.e. capitalistic consumption via fridges, air conditioners, heater, cars, travel etc is the game changer. Pretext of globalisation in trade has resulted in this widespread consumption malaise. A cross-fertilization through global television and media, supported by multilateral agency oversight is the underpinning of our cross-fertilised culture.  Unsustainable lifestyle habits will inevitably have to be disregarded, sooner or later. The sooner the global transition to sustainable living standards the better for everyone! Naturally, the status quo of big oil and big retail etc will not necessarily relinquish their prominent position built nationally and expanded overseas in their respective industries easily. Instigated by American hegemony billionaire status quo class, who are scrambling to do secret deals inter-regionally around the globe via positive-sounding international trade agreements, such as “Trans-Atlantic Trade and Investment Partnership” (TTIP) aligning USA and European Union legislation to favour corporatism over statesmanship. Trade agreements or pacts are designed to shore up countries from operating as independent jurisdiction of law. And therefore bought under some multilateral agency supervisory control. Done as altruism but effectively to enrich the already rich and preserve status quo global wealth inequalities – sheer satanic evil! Otherwise IMF, World Bank, WTO, GATT, NAFTA, UN etcetra would have eradicated world food hunger by now – duh! To see this vivid and blatant harm done, with auspices of doing good, enquire in microcosm at your local food supermarket chain about the daily wastage of food stuff casually thrown away by migrant worker from poor countries – fostering Western hypocrisy globally.

The will for this great change in the face of impending raping of the planet earth should expectedly come from western politicians. Sadly these and other politicians have become blatant captive audience of the “greed-is-good” corporate capitalists, and to their lobbying / pressure-group arms towards cosy employment prospects or ‘revolving-door’ relationships. Asserting 'politicians are criminals' who are corrupted from their noble and elected ideals of representing the people – see Dame Vivienne Westwood's campaign slogan here.

In terms of FPM’s secular economic progressive investment themes, these transitions will result in Western public policy alignment in many sectors of business and lifestyles, at least in these following sectors:

Oil and coal divestment

Carbon Capture and Storage

Nuclear and Solar Technologies

Tourism and Migration

Generational Lifestyle Changes

GMO Foods

International Trade and Transport

As we digress on the exposition about ‘C’ in Capitalism is for ‘Crash’, we have joined-up what a Greek exit from the European Union would be in terms of impact for reversing globalist economic capitalistic trends. Economic inertia and impact, as much as the break-up of 300 years-old uncomfortable union of Scotland and England forming United Kingdom, would have likely had. Their Union divestment ideal was narrowly defeated in the September 2014 Referandum. So no need for Scottish people now to be mockingly re-dubbed “Brave Farts”, as play on traditional heroic reputation of “Brave Hearts”.
So FPM hope the Greeks play-out a drama which is ultimately to their benefit.

“This is not about politics, it’s about math.” Puerto Rico’s governor, Alejandro Garcia Padilla on June 29th, 2015 on pondering about his American Commonwealth country’s $72 billion debt default with a population of 3.5 million people.

Puerto Rico and the bigger nation Argentina have defaulted on their sovereign debts. Iceland also faced braved decision and decided NOT to bail-out capitalism – see here  Cyprus had ‘bail-in’ to the detriment of mostly Russian savers in its country’s bank via ‘hair-cuts’ from deposits. So on and so on is expected of sovereign debt default in the Great Crash of Capitalism, as anticipated by FPM’s polemic assertion. This worsening of the current Great Recession into a something as grotesque as the Great Depression of the 1930s was sensationally peddled in financial circles by economist, authour and ex-banker Satyajit Das a few years back: where he suggested individual and corporate debt default and insolvency was expected to spread into sovereign debt problems and so on. So while Greece and Puerto Rico sovereign debt problems maybe small-change, the contagion effects of debt default on France and Italy would be significantly monumental.

To reiterate, making an omelette requires ‘crashing’ some eggs: we think Greece and its proud people, as a historically veritable proud nation, can re-assert it epoch making touch-paper. We are talking about that catalyst event in the Referendum on 5th July 2015, on how to respond to EU’s terms of debt stranglehold. Any such default has significant market impact – see above Pre-Open US Market price of Greece proxy ETF and intraday, 29th June, down from US$11.78 to US$9.93 at FPM’s data capture plays. The Greece investment fund proxy closed the day US$9.42, down more than 20%. FPM bought stock as panic selling from Greek exit from EU, but realising that in the intermediate term that exit is which will structurally and fundamentally fix the ailing basket-case economy of Greece.


[1] Kondratieff Cycle
[2] FPM have been validated by Iceland President
[3] See Bill McKibben “Do the Maths” and Naomi Klein “This Changes Everthing”

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