The Too Big to Fail Insurers – the next bail outs, another nail in Democracy’s coffin.

You can either believe that we’re all in this together and it’s all getting better. Or you can believe, as I do, that it is getting better for the few (5%) who own 50% of the worlds’ financial wealth and worse for the other 95% of us. Remember, the next time you see the Dow or the FTSE has gone up, that what it means is the wealthiest 5-10% of your nation just started to pull away from you and your children, that little bit faster than they were doing before. It won’t mean they’ll think to pay more tax, or vote for better health care for you, but they probably will soon look into cutting your wages or  off-shoring your job along with their profits.

All in all, it’s a situation which makes whoopey for the few in the short term – which is the only term that counts in finance and politics, where, of course, the 5% live, work and don’t give a fart – and will lead to another crash in just a few years.

I have previously said I think ETF’s will be what accelerates and amplifies the next blow out but not its trigger. I think the trigger could be so many different events it is almost unnecessary to try to guess. In a tinder dry forest, in a long depressing heat wave does it ultimately benefit you to guess from just where the spark will come?

So a good next question would be where will the first fire storms take hold? I think one candiate must be the Insurance industry.

The Insurance industry has just seen the publication by the FSB of the list of Globally Systemically Important Insurers, G-SIIs.  I wrote about the G-SIFI list of banks, and what it meant in Twilight of Justice.

The G-SII list contains nine companies with the expectation that others could be added. The list has, of course, been greeted with a chorus of ‘unfair’ and ‘unnecessary’ from the industry.

Annex I
G-SIIs in alphabetical order as of July 2013
Allianz SE
American International Group, Inc.
Assicurazioni Generali S.p.A.
Aviva plc
Axa S.A.
MetLife, Inc.
Ping An Insurance (Group) Company of China, Ltd.
Prudential Financial, Inc.
Prudential plc

 

These companies will now – unless the unthinkable happens and the plans are eventually watered down after successful lobbying from industry experts – I know, I know only a conspiracy nut would even think it – but if that doesn’t happen then these firms will be expected to hold more capital to buffer any ‘unexpected losses’, be more ‘prudential’ in their management of risk so that these systemically important companies don’t cause a chain reaction of collapses. BUT at the same time they will also be expected to work out a ‘living will’, AKA a plan for how to shut them down in a way that would prevent a chain reaction of contagion when  - sorry  - if, they ever did go bust.

Of course the idea of living wills was dreamt up by our fearless regulators in order to make safe the G-SIFI Banks. In my opnion the Living Will idea is a fatuous creation of the intellectually flatulent – Otherwise known as Congress and Parliament.

The first such Wills were delivered to the FDIC who promptly said – “Err, even we can see these won’t work”. And indeed the plans left out so much essential detail that they  amount to a D-Day battle plan which says, “We will land on the beach and then win.”  The battle plan analogy isn’t just for cheap comedy. The very name ‘Living Will’ is, I think, misleading. Calling them ‘Wills’ is designed to make it seem that resolution of a bloated and unstable bank can be made neat and safe, cut and dried; a series of postumous wishes to be quietly carried out. No such thing will ever happen. You only need read the over all US/UK bank resolution strategy to see it won’t happen.

Instead of calling them nice orderly, ‘living wills’ it would be more more accurate and honest to call them, ‘battle plans’. That would at least convey the truth, that like any battle plan it will be a nice bit of paper you stuff in your pocket whilest you stumble and run through a landmine strewn fog of confusion and mayhem.

But back to the insurers. Since we now know which of them are considered so big that they must not be allowed to fail, perhaps it would be good to see how safe they already are. After all they are the people who are supposed to be so prudent and safe that when disaster does strike, they will be the ones who will defnitely survive so they can be there to help us recover. That is, after all, what we pay them for.

Sadly, if that were true we wouldn’t be needing to discuss living wills for them would we? As it turns out insurers, while not perhaps as wired for disaster as the TBTF banks, are not safe. The Insurers have in fact been rather busy buying some of the risk which previously made the banks collapse. The trade is often called Regulatory capital relief. It is a way of selling the risk associated with an asset, but keeping the asset iteslf. In this case the banks keep their risky assets but get someone else to take on the risk of the asset blowing up.

Who has been keen to buy such risk? Hedge funds and Insurers. I wrote about how it works and who is involved some time ago in, “Where has all the risk gone?”

The thing to keep in mind about the Hedge funds, is that when they buy bank risk they are doing so in order to sell it on to others as an investment. They are not the end investor. So who is?  The Insurers.

This is a quote from an FT article from 2011.

Axa Investment Managers has launched a closed-end fund that will provide junior protection on banks’ loan portfolios. The investment arm of the French insurance group has already raised €80m and is aiming to increase that to €150m by January next year. Axa has previously done deals with some of Europe’s biggest banks.

Alexandre Martin-Min, AXA’s head of structured credit investment, said: “There’s a need for capital for the banks and an incentive for them to do these kind of trades.

“For Axa, it gives us access to a wider universe of investment-grade debt.”

You might notice AXA is one of the too Big to Fail, or Globally Systemically Important Insurers (G-SII).

The interest in this risk trade has only been growing. In 2012, Risk.net reported,

Hedge fund enables insurers to capitalise on bank deleveraging

Hedge fund manager Tenax Capital has raised €250 million (£197 million) from insurers in a fund that invests in corporate bonds and loans that banks are seeking to offload.

And that €250 million has already been snapped up by European insurers. Yet it is just a relatively small sum, you might think, in the grand scheme of the billions we have become used to. But then again, from the same article,

The International Monetary Fund (IMF) predicts that de-leveraging by European banks could see their balance sheets shrink by as much as $2.6 trillion (£1.6 trillion). This could result in €1 trillion of corporate debt coming to market, Tenax estimates.

As the article explains, the insurers want to diversify away from sovereign debt, which they have a great deal of, and stocking up on a bit of bank risk would pay them well. Just so long, obviously, as the risks never actually materialize and turn in to a financial losses.

So we seem to have a brisk trade in Insurers buying bank risk. Oh wonderful.

A trillion in risky assets, the risk from which the banks would love to sell on to an insurer who feels they can ‘manage’ the risk of a loss better than the banks. And the big insurers like AXA, who are the G-SIIs will be among the big buyers. Which means if they did, heaven forefend, get it a tiny bit wrong and blow themselves up – being a G-SII (Too Big to Fail Insurer-style) means we would have to bail them out in the next crunch. Sounds just fine.

Of course Insurers are big and buying bank risk is still more a marginal indicator of where they are headed, and the kind of risks they are flirting with, rather than the core of their prudent business. Which as the article I quoted above mentions, has been very much tied to sovergeign debt – which as we all know is risk weighted at zero…..?!

Yes, that’s right. That was my reaction too. So I had a little look at how exposed insurers are to some of the riskier European sovereign debt and …it’s not great.

It is one thing for an insurer to say , we are prudent, we invest in sovereign debt which pays us very little but is safe, when that sovereign debt is German. But Insurers have been playing the same game as the banks. That is, buying up sovereign debt which is risky – from countries which are in trouble and have to pay a good coupon/interest rate on their debt – but because it is ‘sovereign’ debt, is still classed by the regulators as 100% safe and therefore risk weighted zero.

The figures are from a study entitled Impact of the Eurozone debt crisis on Insurer solvency 2011. So they are slightly out of date (2011), but they’re still broadly accurate so far as I am aware.

According to the study,

Although the rating agencies suggest that the insurance sector may feel only marginal impacts associated with orderly defaults of Greece, Ireland and Portugal, the risks associated with Spanish and Italian defaults are significantly greater and their consequences more unpredictable. Exposure to vulnerable assets and the possibility of contagion is certainly a key concern.

So it is Spain and Italy’s health and the insurers exposure to their debt we should look at.

So how is Spain doing? Well unemployment in Spain is near 28% and expected to rise. 12% of those unemployed have been so for more than a year.  16% of of households now have no wage earner. The length and depth of the recession mean unemployment is now digging down to effect even those better educated 30-50 year olds who are the most likely to have a mortgage. In other words delinqencies are still going to rise.

Which is especially bad news for Bankia, Spains fourth largest bank but its largest holder of property assets at €38 billion. Bankia was formed in 2010 by sewing together parts from the the corpses of 7 dead or dying Caja. The re-animated monster breathed only re-expire a few months after first groaning to life, requiring a transfusion of €19 billion. This lasted it a few years but then it needed billions more and had to be re-bailed, but this time by trying to sell shares to the private sector. No insitution would buy. So the government – members of the Spanish 5%-  told ordinary Spaniards the shares it was offering in Bankia were a perfect and safe investment. Those who listened have now lost 99% of their money. Bankia shares are worth little more than half of one euro a piece.

Italy? Well officially unemployment is a mere 12%. Though among the young it is 28%. So hope is in the air in Italy. Industrial production has shrunk every month for 15 consecutive months and is 25% lower than it was in 2008! Italy’s debt to GDP which the Trioka uses to estimate how much austerity will need to be enforced, is around 130%. And the economy is forecast to shrink at 1.8% next year. On top of which there is an almighty mess at Banca Monte dei Paschi di Siena over its use of derivatives as a way to hide its real financial state which went horribly wrong. Only an idiot would assume this is an isolated case. I think it is very likely there are many other institutions in Italy, both private and public,  feeding tumors of similar origin. They have just not yet erupted.

So are any of the newly annointed G-SIIs exposed to the actual risks inherent in Italian or Spanish Debt and if so how badly? Here are the insurers most exposed to Italian and Spanish debt. As you’ll see some of them also happen to be G-SIIs.  The figures are from page 8 of the 2011 Willis report on Insurer solvency.

 

Allianz   – also a G-SII

23% of its total sovereign debt holdings is in the PIIGS – which we are now encouraged to call GIIPS. 90% if which is concentrated in Italian and Spanish debt. This amounts to 70% of the total shareholder equity (which means it total assets minus total liabilities, or what its worth to its owners. The figures are gross not net, which would be lower – see the original chart – , BUT I think gross gives you a better indication of real risk, unless, that is, you believe in the netting out fantasy, which I do  not) So a default or re-structuring, even a big bail out, of Italy in particular, would cause a 7 point earthquake at Alliance HQ in Munich. And this doesn’t take in to account that Allianz also owns PIMCO the worlds largest bond manager .

AXA  - also a G-SII

16% of its sovereign debt is in GIIPS. Over 60% of which is Italian and over 30% Spanish. Which amounts to 65.9% of Total Shareholder Equity. Very simialr to Allianz. AXA is a French conglomerate.

Now it gets serious -

Generali  -  alkso a G-SII

44.7% of its sovereign debt holdings are in GIIPS. Of which about 90% is Italian and 5% Spanish. Amounting to 354.5% of Share Holder Equity – or three times all the money they have from their share holders. A re-structuring of any kind, any write down at all and …poof! No more Generali. No more pensions.  Generali is Italian. In 2010 it was the second largest insurer in Europe. Only AXA was/is larger. Mediobanca owns 13% of Generali. So if Generali were to have a seizure, it would be a matter of minutes before Mediobanca followed.

Groupama

Did not provide figures for its total sovereign exposure nor therefore the percentage of that exposue accounted for in GIIPS. But the value of those GIIP bonds as a percentage of Share Holder Value is provided as 304.2% gross, 69% net.  Groupama is French. It is far smaller than AXA, Allinaz or Generali but is one of the largest mutual insurers in the world.

Mapfre

Mapfre is similar in size to Groupama. A collosal and suicidal 75% of its sovereign bond holdings are GIIPS. Of which the bulk is Spanish. In 2011 it was 130% of share holder equity. It is the leading insurance company in Spain.

Zurich

19% of its sovereign holdings were in GIIPS. 50/50 Spain and Italy. Coming to a mere 37% 0f shareholder equity.

So  if I’m right and insurers would be among the fires to be ignited in another credit/bad debt blow out, we now have a first few place names on our map of contagion.

We have a list of 9 G-SII insurers considered too big to be allowed to fail. Of them three appear on our other list of insurers disasterously exposed to Spanish and Italian debt to a degree that it threatens their solvency. Put them together, as we have, and you can see where the fires will appear and who you will be required to bail out teh next time we have a debt/credit blow out.

Of course these TBTF insurers just like the TBTF banks will be required to write ‘living wills’. But like the banks the Insurers’ wills will be a long while coming and they won’t work.

On the list of badly exposed Insurers, Generali and Mapfre are the real dangers simply because they are so hideously exposed. Mapfre is not a G-SII but is still too big for its own nation to bail out. So it may not be on the TBTF list but it will still be bailed. Generali is a G-SII and is therefore not only a ticking time bomb for Italy but for all of us, which means the ECB or some other EU ogre would be called on. Whether they could do it in time is another matter. And whether the German tax payer would agree to pay up to save Spanish and Italian pensions is another again. How do you spell ETHNIC TENSION?

So what does this really tell us? Well, now we know some of the people who ‘will be damned’ if they are going to let the people of Italy or Spain ever chose to restructure. Those companies alone will decide FOR the Spanish and Italian people that austerity is the ONLY choice for them.

You might think no people would chose to let their own pension companies go bust. But who says the only way to protect pensioners and their pensions is to first bail out an insolvent gambling company?

Just as we need banks but not necessarily the failed ones we are being forced to bail out, so the same is true of pensions and pension companies.

Just as with the banks, once an insuramnce company is declared too big to Fail it can then gamble more recklessly than before because it knows it will be saved from its own actions if necessary. Of course regulations will be there ‘to stop excessive risk taking’ – but we can already see risks are easy to accumulate as long as you can convince some stupid regualtor to call a risk, not risky.

I am not saying this will happen. I am saying it is there waiting to happen. And thus it forms part of what our leaders are shackling us to. The list of Globally Systemically Important Banks and now Insurers is a measure of how much of our democratic control of both the Market and the State has been taken from us. The number of institutions from your country on the lists is a direct measure of how much control over vital financial decisions is no longer in your hands or even subject to the rule of law.

Sound over the top? Consider the sudden appearance of ‘technocratic governments’ in place of democratic ones. Consider that MarioDraghi, once of the Bank of Italy and Goldman now of the ECB, is mired in allegations of corruption and mis-management from his time at the Bank of Italy when the mess and possible fraud at Banca Monte dei Paschi di Siena was being incubated and was known about. Will any of the allegations reach him, even if proved beyond doubt? I strongly suspect not. The order of the day is stability comes above the law. If the experts in charge broke the laws or need to again, that is what will be done. Much like paying tax, obeying the law is being increasingly seen by the elite as a voluntary option for them and only really to be applied rigarously to us. They are tools of control now.

I think this point is being made very clearly in Spain. Even the  BBC has noticed. A BBC headline reads,

The EU’s curious silence over Spain’s Rajoy

Mr Rajoy is Prime Minister of Spain. He believes in and enforces the austerity programme required by the Troika. But as the BBC reports, Mr Rajoy is also,

 …facing serious allegations of corruption. The former treasurer of his party alleges that they ran a slush fund fed by illegal donations from construction companies. Some of that money, he says, was passed to Mr Rajoy and other party leaders. He has testified that 25,000 euros (£21,500; $33,000) was handed to Mr Rajoy as recently as 2010.

The article goes on,

The treasurer, Luis Barcenas,.. has provided a detailed record of these transactions which have been published.

These and a host of other squalid allegations with seemingly very strong evidence to back them up – strong enough to get you or I suspended if not in custody – are piling at Mr Rajoy’s door. Yet, as the BBC notes,

Mr Rajoy has dismissed the allegations and seems irritated that questions are being asked. He has repeatedly said he will not stand down. To date he has seen no need to provide a detailed explanation.

And why should he, he is Too Big To Question. No European leader has said a word – The BBC ‘s curious silence. They don’t care that he is in all likelihood a criminal, because he is one of them doing their work – making sure things remain ‘stable’ so that the wealth and power of the top 5% is maintained. You and I obey the laws, they do not. They are a self assembling super elite for whom laws are a laughable formality.

They are above the law, and they are deciding who else, which senior executive positions in which global businesses are likewise above the laws, all laws .

Welcome to your future.

 

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95 Responses to The Too Big to Fail Insurers – the next bail outs, another nail in Democracy’s coffin.

  1. Just me July 26, 2013 at 12:23 am #

    “Unum”

    http://unuminsurance.blogspot.de/

  2. allcoppedout July 26, 2013 at 11:44 am #

    I share the concern David expresses at the end. The ‘technocrats’ are no such thing and are always ideologically neo-liberal-classical. I’m no longer sure we need banks or pension schemes or any private sector involvement in finance as we have it now and suspect the lot is criminally infected. We obviously want something to allow us to exchange goods and services and to allow reasonably comfortable retirement, but things have gone so badly wrong we should probably start again.
    It seems difficult to track down the effects of financialisation and where the ‘dead donkey futures’ have ended-up. Exposure to the GIIPS may not be all and I have seen little attempt to break down UK financial sector ‘debt’ in any realistic manner. One has to guess, given that all the guff that QE was about getting banks to do productive lending and the truth being its was about protecting them from losses and maintaining an asset bubble Ponzi, that real debt is still rife across the financial system. David has given some examples of where it is lurking and there is much more of the weird and wonderful like past losses being counted as Tier I capital because they have value in future claims against tax.
    We have continued to allow banks to use accounting schemes that hide the true nature of their situations – I find at least 55% unaccounted (meaning hidden and impenetrable) when I look. The system is clearly ‘captured’ by a small class of people and probably always has been. Our great leaders have been allowing the truth to be hidden – it reminds me of poker on the rare occasions a lot of people stay in the pot and all the hands are dud.

    What I’d like to see is just how much money the rich have stolen and a change in our notion of moral hazard Essentially we are not convincing large numbers of people. In theory, if in power, I would want to set the cops free to work out the network of fraud. The sky falls at this point.

    We have seen examples in Hillsborough, celebrity child abuse, hacking and various cover-ups that demonstrate just how useless self-regulation is and how establishments are more of less immune to public scrutiny. The financial system is Jimmy Saville and Stuart Hall before the fall, before investigation.

  3. stone July 26, 2013 at 2:27 pm #

    I think it is a mistake to think that any financial institution is too big to fail. If an insurance company goes bust, rather than bailing out the insurance company, it is far better to have the government bail out the claims of people insured by the failed insurance company. A distinction needs to be made between “real economy” insurance claims and financial counter-parties who should not have such a backstop. The economy needs to slough off excess financial overgrowth from time to time. I’ve had a go at posting about this too:

    http://directeconomicdemocracy.wordpress.com/2013/04/28/bail-out-the-customers-not-the-banks/

  4. Diogenis July 26, 2013 at 11:18 pm #

    David,

    Hi my friend.Just one note.Not because I want to say that every thing is great with us PIGS but just to be correct with the numbers:

    http://www.voxeu.org/article/youth-unemployment-europe-it-s-actually-worse-us

    “Moreover, youth unemployment rates have increased in the last 18 months in the OECD, and in the four ‘Club Med’ EZ countries of Italy, Portugal, Spain and Greece. With these remarkable youth unemployment rates, it is striking how limited the social unrest has been.

    But as pointed out by Steven Hill in the Financial Times earlier this year, youth unemployment rates are a flawed basis for outrage because of their methodological shortcomings (Hill 2012).

    Unemployment rates are calculated as the share of people in the labour force (i.e. employed or looking for work).
    A large share of the youthful cohort is still in school and hence not in the labour force, at least in industrialised countries where educational opportunities are widely available.
    This means that the actual percentage of unemployed people is lower than it appears.
    For example, if 70% of the age group from 15-24 years in Spain and Greece are enrolled in education2, and just 30% is employed or actively looking for work, a 50% unemployment rate would be estimated as 50% of the 30% in the labour force, or a 15% share of the total. That is not healthy by any means, it is a lot better than suggested by a 50% headline number. It also helps explain why there has not been more social unrest since 2010.”

    Again.This is not for saying that things are not really ugly in south europe.But youth unepmployment CAN´T be 38%,50% or even 60% if for example 70% of all young women and men in greece till the age of 24-25 are still in school or university.

    Not quite sure why there is a “let´s make things even worse” with the PIGS-newscoverage.But there is obviously a purpose behind it.

    • Golem XIV July 27, 2013 at 10:03 am #

      Good point,

      I had neither thought of nor understood that. It makes sense. Now I see the difference between the reported ‘rate’ and the more accurate ‘ratio’. Thanks. I’ll use the figures in your link to amend.

      • mh505 July 27, 2013 at 11:57 am #

        Not so fast, David. This arguments holds only on paper. Let’s have a look at the reality on the ground.
        First, it is highly doubtful if not entirely unbelievable that 70% of the 18-24 age group in the PIIGS are in school which at that age overwhelmingly would mean university. In the OECD the percentage of the youth population getting a university degree was less than 30% in 2013. Even assuming that 50% of all student beginners drop out eventually, that would leave the total number of student population much less than 70%; probably closer to 40%.

        But let’s take that 70% at face value and believe for once that whatever statistic this is based on is correct. Then the big question is: how many of these students can afford to live on their parents’ money, if any? I will put forward that a large percentage of them – and this is true not only for the PIIGS but even in countries much less effected by the crisis – will have to work to support themselves.

        To make a long story short: the 66% youth unemployment in Greece, for instance, is much closer to the truth in real terms than the government mouth piece statisticians will have you believe

        • Golem XIV July 27, 2013 at 12:35 pm #

          Hello mh505,

          welcome and thanks for taking the time to think this through.

          From my own aquaintances I can think of a number of people form whom the decision to remain in further education was at least in part because they wished to put off entering the without-work force.

          And it was a sensible decision. But as you say while not technically unemployed in the sense of drawing benefits they are reliant on their parents, making their parents situation that bit tighter.

          Which is relevant to judging how ‘bad’ things are for people trying to get by.

        • Andrea July 30, 2013 at 12:09 pm #

          These youth unemployment stats are very tricky. All kinds of categories are not counted, or wrongly counted. Ex.: unpaid internships that go on and on – working black (in Greece and Portugal, often for family) – working grey (i.e. 10 hours a week paid, rest in the pocket at lower rate) – shady, criminal, undeclared work (prostitution, drugs, smuggling). There are also heaps of false students, for ex. in France. They inscribe, never show up, sit exams which they fill in blank, then transfer to another faculty, etc., which process can last quite a while. They do it to get the student stipend. I know many young ppl (France, Italy) who have three or four activities or ‘statuses‘ at the same time. Their official status (“student” / “job seeker” / “maternity leave” / “disabled” / “working” (as an unpaid intern) etc.) doesn’t have much to do with what is going on in their lives.

        • Diogenis August 1, 2013 at 12:35 am #

          @mh505

          As this journalist says..you will not find masses of young people hanging around..the beaches are empty of young people.This 60% jobless rate for young people is as silly as the 28%-jobless rate in generell:
          http://www.ethnos.gr/article.asp?catid=22770&subid=2&pubid=63770020

          The people who declared officially their joblessness and are “searching” for work with the help of the state are less than 800.000.This is 16% of the countries work force (this would be the “german way of statistics”) and not 28% which you hear in the news claiming that greece has 1,5 million jobless people.

          I can tell you a dozen more false numbers.Numbers of homeless,suicide rate etc.All of them with the only purpose to make us feel bad,depressed and fearfull allthough the same rates in germany in relation to their population size are much,much worse.

          The funny thing is that even “the leftists” every where in europe are using these numbers from the south with out to look at WHY and HOW these numbers were made.The chief of the greek statistics agency is a former IMF-employee.

          Thinking about this issue I would say that the “bad psychology” for the south is the best “medicine” for the north,The interest rates for germany are low because most people see it as safe haven,the only safe place in europe and not only.This is only one possible effect.Another positive effect (for germany) is that germans really believe that they are not as badly affected by the crisis as the “PIGS”.Being in germany for the last weeks I can say that it works.They have 5 million officially social care takers but as this article says:
          http://www.finanznachrichten.de/nachrichten-2013-06/27267183-iab-bis-zu-4-9-millionen-menschen-in-deutschland-leben-in-verdeckter-armut-003.htm

          ^^5 million germans COULD claim social care because they are poor but they dont do it because of several reasons.

          It becomes more and more clear that there is a divided way of media coverage in the north and south of europe.

  5. allcoppedout July 27, 2013 at 12:37 am #

    The actual unemployment figures can be found here:
    http://www.social-europe.eu/2012/07/youth-unemployment-is-overstated/
    and Diogenis is more or less right.
    What is very worrying is that the education we have has little to do with getting work.

    I don’t think the insurance and bubble scams are widely understood for what they are. The first is that they are largely criminal and the second is they are largely economic rents down to a financialisation that cannot work.

    If you look at the accounts of big banks and finance houses there is normally about 45% you can explain as I might teach university finance. The rest make more or less no sense and lead me (as company doctor) to questions we might call ‘requests to visit the assets claimed’. We are denied this access. We are also tending to forget the “crisis” has become the new normal and how long it has lasted. Mark to market is now mark to unicorn.

    We have also forgotten that such as pensions are never really paid for. We rely on the work of younger people once we stop and in some circumstances primitive cultures just kill the old. Money is not really how to buy decent treatment by the young and we now have them pinned between a rock and a hard place in demands on what they can keep from their work. In short we have lost sight of structural operations and reality.

    I doubt people have worked out that even if all the lying stuff being done like QE will not work even if it keeps the lid on. It is not that we did not save enough money for our pensions, but that we invested so little in the next generation by letting the rich bandits take over. This economic system does not work and could not work.

    We need some radical moves to remove debt, probably more than Steve Keen estimates. The potential knock-on effects need to to recognised and these include a big knock down on asset prices which would affect pensions and savings. We could see this years ago, especially in the US as companies struggled against those abroad with no provision for oldies and so on. I’d say the current system is so bad we have to go for a controlled explosion.

  6. John G July 27, 2013 at 8:04 am #

    “Allianz also owns PIMCO the worlds largest bond manager”

    Well I didn’t know that until now.

    That’s quite a revelation. Ouch.

  7. Just me July 27, 2013 at 1:54 pm #

    George Quinn says:
    July 24, 2013 at 17:29

    lucy wangari decourcy says:
    July 27, 2013 at 12:42

    http://dpac.uk.net/2013/05/hardship-paymentsbudgeting-loans-and-short-term-advances/#comment-18064

    You couldn’t make it up.

  8. El Sid July 27, 2013 at 5:58 pm #

    Just to clear up a slight misconception: When we say “we’re all in this together”, we mean US not YOU.

    http://i.dailymail.co.uk/i/pix/2012/07/28/article-2180095-144023C8000005DC-858_964x637.jpg

    • Golem XIV July 27, 2013 at 6:22 pm #

      I feel ill.

      • patma2003 July 28, 2013 at 11:20 pm #

        Yeah, grotesque.

    • backwardsevolution July 29, 2013 at 6:59 pm #

      El Sid – not being from England, did these fellows become leaders in government?

      • Phil (Mcr) July 31, 2013 at 10:44 pm #

        They did.

  9. Buck Turgidson July 27, 2013 at 6:29 pm #

    Yes the “Living Will”

    The living will brings to my mind a scene from the movie Butch Cassidy and the Sundance Kid.

    Paul Newman’s character ask for a clarification of the rules for a knife fight. When his opponent say’s ” rules? there are no rules in a knife fight” He promptly gets kicked in the balls.

    Living Wills = Rules in a knife fight.

    https://www.youtube.com/watch?v=NPqhm36sjVE

  10. Just me July 27, 2013 at 9:51 pm #

    “A previous article discussed Thatcherism. It’s Chicago School fundamentalism writ large. It’s financial terrorism. It’s hugely exploitative.”

    “It’s forced-fed austerity. It’s corporate welfare. It’s mass privatizations. It benefits business and society’s wealthy. It’s government of, by, and for privileged elites alone.”

    http://rinf.com/alt-news/breaking-news/escalated-thatcherism-in-britain/53719/

  11. allcoppedout July 27, 2013 at 11:25 pm #

    Most of us know that the debt to gdp ratio took off in a bad way around 1965. An easy interpretation is we have been spending what we can’t afford – if one thinks of a domestic budget run by Mrs Beaton. This is not the real case as we were clearly able to produce what we consumed. The real issue becomes who owns the debt and how they were able corner the money system in this proportion – instead of us being able to pay as we went along from wages.

    It is difficult to shift people’s minds from the domestic/household/personal budget on these matters and we are hardly helped by politicians who must know they are lying when they present their homilies.

    The situation is made much worse by the ‘answer’ that we need to grow and consume much more. The answer is that we need to consume much more sensibly and actually direct investment to what is needed. The actual answer raises great fears about who will decide and direct the investment – some dire Soviet state etc. and we don’t seem to connect the filthy rich as such a state.

    The whole idea of financialisation is bad and wrong. No sensible business would set up such a massive and inefficient system of money. It’s obvious. If 20 of us set to turn an acre of pasture to corn with spades and a man-drawn plough we would not allow 5 people to sit by as we toiled to take half the crop and the land-rights using a Monopoly game to apportion and tell us this game was essential for our farming to work. In reality, this elite group also take the rest of our crop to pay off losses in another Monopoly game elsewhere.

    The likelihood is that we are now massively efficient in producing the human basics (though miserable at distribution) and need only 20% of population in production (maybe smaller) and haven’t worked out at all how to enjoy this situation. We should be able to say to the financiers that we want a simple system that runs in line with money exchanged in what we consume. If they can’t work for the reasonable pay the rest of us get, we need to replace them. There are no smarts other than criminal smarts in finance.

    The debts or losses in the financial accounts are no longer real and need fresh accounting methods. We are not, in any real sense, borrowing from the future and seem to have lost understanding of why we do shared production at all. In the main the contract is that we look after our children and they then look after us. We don;t seem to be able to see the difference between an innovation like a petrol from air machine or agricultural robot and some piss poor non-application of the Gaussian copula to insurance and trading fraud.

    But fear not folks – the UK economy grew 0.6% and our Chancellor is learning to drive a forked lift truck!

    • Penny Bloater July 28, 2013 at 1:35 pm #

      ‘Most of us know that the debt to gdp ratio took off in a bad way around 1965′.

      Not so. In 1965 the debt to GDP ratio stood at 87%. Before the 2008 crash it was 44%. It is since the point of the GFC that it has grown substantially to reach over 70% today, while next year it will exceed the 1965 figure.

      http://www.debtonation.org/wp-content/uploads/2010/06/Fiscal-Consolidation1.pdf

      Of course the real elephant in the room is private debt levels which continue to hold any nascent demand, that would power economic recovery, in check. It’s a simple case of ‘stripping out’ any remaining state provision in the real domestic economy (outside ‘Keynesian’ central London and the SE) and holding up the values of fictitiously priced assets in the financial sector.

      Remember, as David mentions regarding ‘living wills’ nothing at all has been done to change or restructure the disastrously imbalanced financialised economic model that has been built up over the last three decades in the UK.

      Otherwise, I pretty much agree with your post.

  12. Just me July 28, 2013 at 2:57 am #

    “200,000 victims of Equitable Life collapse may miss out on compensation after Atos slips up again ”

    http://www.independent.co.uk/money/spend-save/200000-victims-of-equitable-life-collapse-may-miss-out-on-compensation-after-atos-slips-up-again-8732807.html

  13. Phil T. July 28, 2013 at 6:52 am #

    Slightly off topic – but connected to the Insurance Industry … Peter Buffet (son of Warren Buffet) writes an intriguing Op-Ed entitled The Charitable Industrial Complex.

    http://www.nytimes.com/2013/07/27/opinion/the-charitable-industrial-complex.html?src=me&ref=general&_r=0

    • Phil (Mcr) July 28, 2013 at 6:09 pm #

      Good post, and fair play to the guy for recognising the problems – he just doesn’t seem able to make the next step which is that we need economic democracy.

      • Phil T. July 28, 2013 at 6:54 pm #

        Excellent point … and in further support, it is not clear how much the NYT editorial board cut from Peter Buffet’s original Op-ed prior to publication.

        That said, I believe that allcoppedout articulates a very valid and necessary perspective on the mega-rich …

        i.e. –

        …The actual answer raises great fears about who will decide and direct the investment – some dire Soviet state etc. and we don’t seem to connect the filthy rich as such a state…

  14. Roger July 28, 2013 at 10:33 am #

    A musical commentary from a New band(To Me) Angle Spit

    Dip my tail in blood ink
    Write it down in red
    Scribe the words “Happy meal”
    Right across your head

    Tired of getting walked on
    Treated like a sheep
    Don’t blame me for all the years
    That you were asleep

    [Relax
    God is in control
    Watch the dot
    Take your meds
    Obey my demands
    Trust my dog
    Time for surgery
    Relax
    God is in control
    Watch the dot
    Take your meds
    Obey my demands
    Trust my dog
    Shut your eyes you're dead]

    Televised mass poison
    Spitting at the screen
    Keep the masses deluded
    With fabricated dreams

    Powdered God in a bag
    From the Vatican
    I want you to fuck off
    As hard as you can

    [Chorus]

    Heaven has burst open
    Now it’s raining bones
    The chaos will erode you
    Breeding little clones

    Born of a fallen rib
    From the monkey’s womb
    Overcooked by cathode rays
    Evolved to consume

    100% [4x]

    Eating from the butcher’s slab
    Becoming what they meet
    Restrained and roasted while they gorge
    Strapped into the seat

    Bathing in your arrogance
    Dining will ensue
    God made me a cannibal
    To fix problems like you

    [Chorus]

    100% [2x]

    Last time was the last time…
    This time, you’re 100% [3x]

    Last time was the last time…
    This time, you’re 100% fucked

    • Phil T. July 28, 2013 at 5:13 pm #

      Brilliant Roger ! New to me as well … that one.
      Of course, you are probably familiar with the 1991 poem/song linked by clicking my orange moniker above … it might well be more relevant now than when it was released !

      Best wishes …

    • patma2003 July 29, 2013 at 12:29 am #

      Cheers mate. They’re Aussie too! We’ve a really solid history of socially and politically conscious bands, with Midnight Oil probably being the most recognisable on the international stage – you only have to listen to their track US Forces from 1982 to understand how unchanged the status global quo is.

      But I havent lived there for 10 years, so I am well out of the Aussie musical loop, so it’s really nice for me to know we have some sound artistic minds getting creative for a cause.

      History shows artists are able to do battle with rhetoric and narrative with ease and provide an unmatchable front that can cut straight to the heart of the matter.

      So nice to hear something like this.

      For those who don’t know Midnight Oil lead singer peter Garret has been a member of parliament in Australia since 2004 under Kevin Rudd’s Labor leadership. However, after Rudd reassumed control of the Labour party leadership last month from Julia Gillard, Garret resigned from his cabinet post, then announced he would not be seeking reelection.

      Midnight Oil – Short Memory (1983)
      http://www.youtube.com/watch?v=hgukduYJZ44
      If you read the history books you’ll see the same things happen again and again
      Repeat repeat short memory they’ve all got it
      When are we going to play it again
      Got a short, got a short, got a short, got a short
      They’ve got a short must have a short they’ve got a short aah
      Short memory, they’ve got a.

      Midnight Oil – US Forces (1982)
      http://www.youtube.com/watch?v=NaFT48Nl9rA
      US forces give the nod
      It’s a setback for your country
      Bombs and trenches all in rows
      Bombs and threats still ask for more

      Divided world the CIA
      Who controls the issue
      You leave us with no time to talk
      You can write your own assessment

      • Roger July 30, 2013 at 5:42 pm #

        Great stuff, it wasn’t my memory at that time I simply was not paying attention.
        It is only the last 4 years or so probably less that i started listening to other opinions and giving them some attention. I was somewhat surprised to find that I had been living in a parallel universe doing most things back to front and against my own interests a lot of the time. I became quite well off financially at one point for an extended period and didn’t understand why, one. that was so and secondly, why I was so bloody miserable.
        I think I have a better idea now and have different priorities in life and a different concept of what i would like reality to look like, Ghandi again, I learned to be the change I would like to see in the world.
        My own story is not so different to that of many others I was very fortunate that I had what the system required me to return, following Epictetus, dictum say never that you have lost anything only that you have returned it. I find today I returned what I thought I wanted quite happily and I am grateful that it lead me to learn more about the financial system which is the root of so many problems with the construct that is the Washingtoin consensus.

        I did a blog today feeding the 5000 ( nod of the cap to Crass) who I did listen too as a teenager back in 1978 ( I was 14 then) and just didn’t get it, My freid Adam Tickell who had their forst Album when it came out did and he is now pro vice chancellor of Birmingham University and a Professor of Economic Geography these days I think I get Crass better than my old mate Adam, he’s a decent type and a good freind but I do think academic independence has gone down the toilet with so much else. Sold to the highest bidder.

        http://letthemconfectsweeterlies.blogspot.se/2013/07/feeding-5000-bejebus.html

        • Debra July 31, 2013 at 9:20 pm #

          Hi Roger.
          A recommandation that I gave to Toby : I recently read an article by a man named Paul Kingsnorth, a fellow UK person who is currently writing, and teaching people how to use a scythe. Kingsnorth espouses what he calls Dark Ecology, which is very similar to where my little head has gotten me in thinking through the topics of discussion here.Maybe you can still see the article at http://www.orionmagazine.org, in the January/February edition. Very very good. Among other things that Kingsnorth recommends is withdrawing in order to be able to reflect on our situation instead of immediately reacting.
          This summer I am rereading “Hamlet”, as one of the literary cradles of our civilization, and the Western mind. Highly recommended.
          On the insurance companies… several years ago I realized that they were a key part of the enormously bloated antirisk edifice that we have constructed to protect ourselves from even the thought that we are mortal.
          It is extremely… logical that when “we” realize that we have taken a wrong turn… “we” go bonkers/bust.
          A lot of people get hurt when “we” go bust. It happens more often than we would like to believe, because we think that we are much more sophisticated, and smart than our ancestors were. (Look at all our “progress”, huh ?)
          But… nobody ever said that we were supposed to live in a Walt Disney film that turns out all right at the end..
          Do you realize what that means ??
          I have had a hard time getting a grip on the myriad ways in which we firmly believe that life is a Walt Disney film, or that it should be, at any rate…
          A book recommandation, by Paul Veyne : “Did the Greeks believe their myths ?”
          Veyne has interesting insights on the “truth/lie” trap, and espouses the idea that there are multiple truths that have bearing on multiple.. universes. And we live in multiple universes. There is not.. ONE reality/truth… any more than there is.. ONE God…

    • Buck Turgidson July 30, 2013 at 3:03 am #

      Singing is OK

      Violence is against the law

      This time you’re 100 percent Fucked

      • StevieFinn July 30, 2013 at 4:52 pm #

        You mean for the little people, as for being fucked that may be true, but isn’t it kind of tragic that those who are already fucked in the head should involve us all in their greed earned nemesis. Simply because they reduce the meaning of human existence to nothing more than feasting, as if they were bloated crocodiles.

        I don’t think Roger or most of the people who visit this place want violence & neither do I. My experience of it has shown me that it generally makes things worse, although having said that, if it came to protecting those I love, I would not act like a pacifist.

        I take heart in the events during the velvet revolution in Czechoslovakia in which the communist government held back from unleashing it’s paramilitary dogs to slaughter thousands of their own people. If peaceful protests can achieve this against those nasty Commies, then surely it can be achieved within those countries that supposedly value Democracy, Liberty & Freedom. If that is not the case then we are all indeed fucked & the World will be left to the biggest dog that can eventually fuck or eat all the other ones, including you my friend.

        • Roger July 30, 2013 at 5:23 pm #

          I do not promote a violent approach either Stevie but like you will always protect those who it is within my ability to do so from violence I am not much on standing on the sidelines.

          I had this clarification regarding Ghandis position on violence offeren in a discussion regarding moral relativism today.

          @Roger

          “while I think in my heart of hearts that Ghandi is right and violence is never the right answer and yet I am human and all to fallible”

          A complete misunderstanding of Ghandi, he was no pacifist. In his own words:

          “I do believe that where there is only a choice between cowardice and violence I would advise violence,” Gandhi, Doctrine of the Sword.

          He continues:

          …When my eldest son asked me what he should have done, had he been present when I was almost fatally assaulted in 1908, whether he should have run away and seen me killed or whether he should have used his physical force which he could and wanted to use, and defended me, I told him that it was his duty to defend me even by using violence.”

          Its an interesting discussion for anyone that is interested heres a link.

          http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&discussionID=261220221&gid=78660&commentID=153382372&trk=view_disc&fromEmail=&ut=0shFjKQntkKRQ1

          • steviefinn August 4, 2013 at 10:38 pm #

            Thanks Roger, it made me realise how little I knew about the great man. Attenborough’s film, a few quotes & articles were the full extent of my knowledge of this terrorist by today’s standards. I remember reading this article which illustrated that he was in my opinion fortunately, very human like the rest of us :

            http://www.independent.co.uk/arts-entertainment/books/features/thrill-of-the-chaste-the-truth-about-gandhis-sex-life-1937411.html

            Something else I don’t know much about is how we evolved from apes. The established view seems to match Kubrick’s version, whereby a bunch of hooligan chimps invent a tool for caving other chimps heads in while being watched disapprovingly by a stone slab.

            According to this there might be an alternative to having evolved from an early version of Donald Rumsfeld, namely Bonobo’s who appear to live a lifestyle not too dissimilar to the ideal of a late sixties commune. Maybe we are a mixture of both or just further advanced domesticated chimps, but the piece does make me wonder what this World would be like if we had evolved from apes that possess empathy, who are definitely not conservative & live in a society where Gandhi would have, but for his disapproving block of stone, fitted in quite nicely :

            ( They would have made the bone into a guitar )

            http://www.laphamsquarterly.org/essays/our-orgiastic-future.php?page=all

  15. bill40 July 28, 2013 at 12:10 pm #

    Golem,

    Good article and fills a gap in my knowledge as insurance companies seem a bit off radar on the MMT front which is what I mostly follow. You can add me to the group who was astounded to learn that PIMCO isn’t a private company in it’s own right. I’m going to go off topic now but I hope you read this.

    What the hell happened to the country I grew up in? As an ex pat and outsider looking in, why has our national psyche changed so much? Why has our kneejerk reaction swung from decency and an instinctive sympathy for the underdog to blaming the victim for his or her plight? I simply don’t understand how we came to this or why when I come home, I feel like a foreigner in my own country. What happened to our compassion? What happened to the country that when the government said we can’t help the Vietnamese boat people we rose up virtually as one and said oh yes you bloody well will. That’s the UK I remember.

    Now some time back (please put a Google search box on the blog) you came up with some proposals about what we can actually do. can’t say I greed with it much at the time but I have heard another proposal, that again I didn’t agree with at the time, but combine the two we could be on a winner.

    John Ward over at the slog has proposed the Unaligned Front for Decency (UFD). It isn’t perfect but would it be beyond the realms of possibility that you two could team up on this? I’ll repost this on the slog and see what happens.

    I want to come home and I want my country back.

    • Golem XIV July 28, 2013 at 4:32 pm #

      I want it back to and I am going to get it.

      http://www.golemxiv.co.uk/2012/05/a-way-forward-a-modest-proposal/

      This is the idea.

      I will talk to John.

      • Joe Taylor July 31, 2013 at 12:08 pm #

        David, of all your blogs that was the one that meant most to me.

        I’ve put it up again in NatCAN here http://bit.ly/17TeZ1n

        So far there has been another 70 viewings.

        • bill40 July 31, 2013 at 10:03 pm #

          Hi Andy,

          Stick a post on here if anything comes up, having IP problems at the mo.

    • AndyCFC July 28, 2013 at 5:13 pm #

      Hi Bill
      hope you are well fella?

      Right insurance companies seem off the MMT radar. Going to share this on the FB groups and find out what ppl think.

    • Mike Hall July 30, 2013 at 12:28 am #

      bill

      “Century of the Self” (Curtis) happened (& continues)

      “Thinking, Fast and Slow” explains much too.

  16. Robin Smith July 28, 2013 at 12:18 pm #

    Good piece thank you. But what use democracy, when all of us, you too, are in denial of reality, that a child can see with clarity? An extremely negative and hopeless mind set.

    “AKA The tyranny of the majority. This is why democracy, per se, is not only powerless. The more democratic a society, the more intensely the denial will be upheld by it.”

    Dependency Culture
    http://www.meltfund.com/2013/07/dependency-culture.html

    Remember: MeltFund is not making a judgment here or saying any of it is right or wrong. We are pointing out knowledge for our valued clients, so they can affirm the reality of it compared to others in denial, and thereby exploit the system to the max.

    Lets be clear about this: MeltFund is not religious nor does it believe in anything nor have we any political affiliation. We just want to know about how to find life, and then wealth.

    Q1) What is causing many of the largest social problems?

    A1) Everyone is in deep psychological denial that we are Rent Seekers. Persistently selecting an economy that compels us to get the wealth of others without giving our own in a fair exchange. The mother of pyramid sales, all perfectly legal.

    Q2) Why do we do this when universal laws guarantee it to be unsustainable?

    A2) Because we’re scared the world is running out of stuff or there are planetary limits.

    Q3) Why are we all so neurotically fearful like this. Clearly there is more wealth and fewer limits today per person than ever in history?

    A3) Because we have forgotten who we are, where we came from, and where we are going. We think life begins and ends in the material world so is a free for all of survival of the fittest. We are aware of the miracle of civilisation, but do not yet trust her justice. Evidently 10,000 years is still not long enough.

    Q4) Why does no one address it. Why is the denial so deeply collective?

    A4) Denial is the best defence mechanism for any obligation, duty or commitment avoided and offset onto others. The pioneer who does ask for it to be scrutinised is in grave danger of losing what they already have, no matter how poor or wealthy. The majority, in danger of being forced to face reality, will close ranks against anyone who tries to point it out, protecting the systemic denial. [1]

    This is known as psychological circular psychosis. The collective mind set is self reinforcing in the denial, and it becomes unconsciously harmful not only to the self but others too.

    People in general believe wealth is more important than love. Though we do not have the courage to admit this. We are scared of genuinely improving ourselves and who we can be, exchanging the positive sum opportunity of mastering ourselves for the zero sum of dependency on an external master.

    Ancient texts symbolically call this knowledge of self mastering “finding life”, and submission to another as “death”. Its not religious. It is knowledge.

    There is nothing new, that is important, even in the modern world. This collective neurosis has always been with us. “Poverty you will always have with you, but you will not always have me”. Poverty in spirit. The question is, do we want to improve and free ourselves, or not?

    Here is an extract sent over by a MeltFund partner recently showing how this neurosis will grow the culture of dependency; even more welfare and taxation, involuntary employment, voluntary unemployment, fakecharity, jobcreationism and planet saving.

    The rise, progress, and phases of human slavery – how it came into the world and how it shall be made to go out – James Bronterre O’Brien, 1885.

    [snip]

    On dependency culture (p. 29)… “The slaves, on their side, appear to have been perfectly reconciled to slavery as an institution. The writings of the ancients have left us nothing to countervail this opinion, but, on the contrary, much to confirm it. We can nowhere discover any evidence to show that the slaves of antiquity regarded slavery in any other light than as an institution natural in itself, and neither unjust nor unreasonable, provided they (the slaves) were well treated. It is true they often complained of their lot, and sometimes rebelled, too, in order to change it; but, in so doing, it is to be observed, they never complained of slavery as an institution, nor invoked the principle of Equality as the end and object of their complaints or rebellions. Their complaint was, not that slavery existed, but that they, themselves, and not others, were the slaves. And when they rebelled, it was not in order to put down slavery and establish liberty for all ; it was to exchange conditions with their masters, or else to secure their own freedom at the price of taking away other people’s. The idea of making common cause with other slaves, in order to emancipate all slaves, never entered their heads. Principle, or love of equality, had nothing whatever to do with their movements. The principle of liberty for all was too sublime an idea for them. Equality before God and the law was still further beyond them. Slavery, as a principle, they had no fault to find with; they complained only of the accident that made them slaves and others free. Even of this the vast majority never complained, because the vast majority (there is reason to believe) were content with their lot, and satisfied with their masters’ treatment of them. Indeed, the whole tenour of what we read of in history respecting slaves leads to this conclusion. The vast majority were content with their condition. In general they were kindly treated; and as they knew no other state, and saw nothing unjust or unreasonable in slavery, they were attached to their masters as to benefactors (regarding them as the authors of their comfort), and might, mayhap, as a general rule, be pronounced happy.”

    “In the following chapter we shall endeavour to account for this, and show that, as a general rule, the slaves acted wisely, in preferring to remain slaves (when they knew so little of real liberty) to becoming “free and independent labourers,” without arms, votes, lands, money, -or credit, after British fashion.”

    What is MeltFund?
    Contact MeltFund

    [1] AKA The tyranny of the majority. This is why democracy, per se, is not only powerless. The more democratic a society, the more intensely the denial will be upheld by it.

    • Roger July 29, 2013 at 7:57 am #

      A nice bit of Kant never did any harm, to the self at least.

      http://www.youtube.com/watch?v=B6UoXfplE5I

      https://en.wikipedia.org/wiki/Critique_of_Pure_Reason

    • Debra July 31, 2013 at 9:34 pm #

      Very interesting.
      I think that you should take a look at Paul Veyne, in translation.
      He is a major French intellectual, hellenist, writing about Antiquity.
      He has an inquisitive mind, and likes looking at things from different perspectives.
      I have concluded that we THINK we know what our Greek/Roman ancestors believed, and how they lived, but… we are light years away from them, despite the fact that we have regularly appealed to their.. authority and legitimacy in order to refound our thought.
      And our language(s) have a tremendous debt to Greek and Latin… we are still coining words with the etymons of “dead” languages.. Mind boggling, huh ?
      For one thing, Judeo Christian thought has colored our perception of our Greco/Roman heritage, and that has a lot of consequences that we don’t see.
      On.. reality.
      It is a word that I don’t like very much.
      Think about it : you are currently living in René Descartes’ utopia, which he fervently called for in around 1600 or so.
      Was Descartes… in denial at the time ??
      Basically, I have concluded (and I am an ex shrink…) that “denial” is a word which currently means that one speaker is exasperated because another does not share HIS view of the world, and his opinions.
      “Reality” is a monolithic word that does not take into account how many multiple realities are out there in our world.
      Some people think that I am nitpicking when I say stuff like this.
      I think.. not.
      Because our ideas are behind our entire social structure.
      You can see them at work at your dinner table by the way if you are looking for them in the right ? place… ;-)

      • steviefinn August 4, 2013 at 11:04 pm #

        Debra

        Perhaps this has got something to do with it, maybe there was a touch of chemical enhancement in their vision, their fascinating collection of Gods & those ‘ Winner takes it all ‘ olympics :

        http://www.alternet.org/drugs-addiction-1?page=0%2C2

  17. orville July 28, 2013 at 1:13 pm #

    Hi David – thanks for another great article – really eye opening and prescient.

    Have you thought of having a message board on the site? There are so many great comments and links here it that are not always on the topic of your latest piece. It would be a fantastic resource.

    Just a thought – apologies if it has already been mooted and I’ve missed it.

    Cheers

    • Golem XIV July 28, 2013 at 8:50 pm #

      It’s a good suggestion. Perhaps other people would also suggest how they would like this site to evolve.

  18. Kimo July 28, 2013 at 5:22 pm #

    “Too Big To Question”. I shudder.

  19. ambrosius July 29, 2013 at 9:58 am #

    ” But I would about lay it down as an axiom that empires do not get knocked apart from outside until they are plum gone rot in the middle . ”
    [Ezra Pound. ]
    Funny that such whoring activity as ” insurance ” only became essential to our economical way of life after our agreeing to the fallacy that ” matter ” is all that is. By now we have this toe sucking alliance with it and cannot remember when we volunteered for this assignment.
    Has it always been thus ? That we believe we can determine the tomorrow by measuring and weighing mainly biased data today ? the science of probabilities and all that. ?
    Have no fear… it’s definitely not going to pounce on you……promise.
    Since insurance can insure itself , wishful thinking becomes king.
    Very profitable for insurers who like politicians and bankers deal in make belief.

    ” the future is always open until the probabilities begin to collapse , such as now.”

    Industrial civilisation is in vertical fall , gathering speed so drastically that only ass holes believe they will be safe…. in Paraguay. If only one could be insured. This deliberate trashing by the power of the purse, once game theory got going , most certainly uses “Insurance” as part of their arsenal for absorbing the wealth of the world ; to lead us to world rule. The suckers have authority since we fell for it. Again.

    Thanks for sharing.

  20. John Souter July 29, 2013 at 10:57 am #

    The number of ‘nails in the coffin’ is an irrelevance, as is the the name they give the ‘body’ within it.

    In this case the name is ‘democracy’; but that is now a proven sham, created by the Master’s to support and maintain their own parasitical omniscience.

    However it’s a coffin that will never be buried due to the fact the comatose corpse they have interred within it is the only means of sustenance for the virus they have induced to create the coma.

    In simple terms, the Master’s believe they have survived the financial scam. Nothing has radically changed and the collateral damage to a few of their institutions will prove, in the short term, a price worth paying for the long term supremacy of psychopathic power and propaganda over induced confusion, bewilderment and the apathy generated by negative frustrations.

    Allow this to continue and death will be the only ‘democratic’ process the vast majority of humanity will ever experience.

  21. allcoppedout July 30, 2013 at 12:32 am #

    Thanks for the link Penny – I’ve downloaded to have a detailed look later. I have some graphs that make my 1965 case, but I find available material difficult to sort. Moves are afoot to increase GDP by including more as we speak.

    • Penny Bloater July 31, 2013 at 1:28 pm #

      I’ll look forward to that. Your 1965 figure has me thinking, do you mean private debt to GDP ratios because you would probably be correct in that respect. As you probably know the private banking system had been chaffing at the bit for deregulation of credit creation since that period, to be ‘let off the leash’ in 1971 in the UK. Ironically, from that point onward, spending could be determined in advance of taxation as we have a free floating sovereign currency not tied to any international monetary agreement.

      • allcoppedout August 6, 2013 at 11:39 pm #

        I was thinking private debt from 65 – but didn’t say so. Steve Keen has more than a few charts that tally with my look. I’m a biochemist by training and find the lack of ‘books of standards’ I can trust difficult. Frankly, I wouldn’t start with ‘numbers’ – the cop in me sees control fraud everywhere I look (police statistics are almost the paradigm case, juked through nodding, cuffing, skewing ) and the classic control fraud in history is ‘debt’ – both monetary and indebting ideologies (like debts of allegiance to the Crown, water-gods and myths of origin). I’ve taught economics in universities from a business perspective, but could never stomach neo-classical stuff as anything other than performance management (what a performance)!
        I was about 5000 words into conference preparation, so your intervention made me realise I hadn’t defined terms well! Thanks for that.
        ‘Forces’ operating in animal systems with regard to energy exploitation include slavery, rebellion against it, waggle dance communication, fearful screeches against dissent and altruism rather like Captain Oates saying he might be gone some time – scare quotations on all should be assumed. Such ‘human hive’ behaviour seems missing in economics, along with ‘big data’ intuitions that test our aggregates, averages and median modes of explanation in favour of control theory examination of actual behaviour by lots of individuals.
        David is to be congratulated that many of the comments here are as interesting and sometimes more so than his original prompting.

        The contradiction I’m trying to work on is the decline in productive profits (marxian stagnation) and the rise in finance returns – broadly incompatible as financialisation should be subject to the same competition (there is nothing ‘clever’ in finance – indeed the evidence is finance is less inventive than production). I know we know – so the question turns to how the ideology involved persists when it is in the interests of a tiny few indebting the rest of us, in the presence of substantive critique. The big metaphor around concerns the crimogenic and the financial world as mobsterism, smuggling (tax theft) and piratism (Bill Black plus if you like). If we were working hard in fields we wouldn’t take well to a few slackers claiming that them sitting round all day playing Monopoly was key to our production.

        I looking for theory and evidence – something like Fred Soddy I notice by absence in economics – but find myself cornered by desire to produce a tour de force based on Wittgenstein’s ‘putting the question marks in deep enough’ – a move so radical I doubt much we now discuss would survive. It has to be simpler than that because I am!

        Somewhere in between private debt also correlates with global wage arbitrage and the drop in liquid assets held by ordinary folk with aspects very similar to the control systems of the Nazis and Mao. I wonder if the figures are so clear we deny the explanation of cause because it is so terrifying and leaves one as a conspiracy theorist.

  22. allcoppedout July 30, 2013 at 12:34 pm #

    Academics are talking about alternatives to bail out and bail in. Nothing has caught my eye, the general recommendation being to shut bad banks over a weekend, transfer ownership to a holding company, weed out the trash and re-open on Monday.
    http://neweconomicperspectives.org/
    http://www.frsn.de/fileadmin/research/analysen/2013/BIS_Template%20recapital%20TBTF_6-2013.pdf

    We used to talk seriously on structural change. Humpty-Dumpty had a great fall and no one could put him together again. It’s obvious we aren’t fixing what matters – decent jobs for all, pensions, homes, countries, planet burning … and I haven’t seen anything accurate on what derivative or other financial “debt” really is.

    We were discussing today’s problems in the early to mid-80′s as this review illustrates:
    http://www.uvm.edu/~fmagdoff/DebtandSpeculation.pdf
    There are charts in the article on the decline in manufacturing profit and the rise of finance as the place for profit margin. Magdoff’s and Sweezy’s now old thesis—that there is an implacable drive toward stagnation in mature capitalist economies— is discussed in recent statistics. Although there is no exact relationship between debt creation and economic growth, in the 1970s the increase in the GDP was about sixty cents for every dollar of increased debt. By the early 2000s this had decreased to close to twenty cents of GDP growth for every dollar of new debt.

    I know we know, but what is scary is how long we have known and been able to do nothing but see things get worse. We put real effort into lean efficiency in coal, steel, cars and trucks, shipbuilding and textiles (the latter two I had personal involvement in) and I can’t remember thinking it was ever more than a rearguard action.

    I’d like to see the development of a ‘machine’ other than current economics and money, formed after a re-think on comparative advantage. I’m just back from Porto and Guimares and the situation is pretty depressed and ‘restive’. Debt almost demands Wittgensteinian in use analysis as in bail in and outs and QE it amounts to ‘pay up for these loans you never took out or guaranteed’.

  23. Just me July 30, 2013 at 4:31 pm #

    “80 percent of U.S. adults face near-poverty, unemployment, survey finds”

    http://www.cbsnews.com/8301-201_162-57595861/80-percent-of-u.s-adults-face-near-poverty-unemployment-survey-finds/

  24. Just me July 31, 2013 at 1:19 am #

    “Christie’s appraises the Detroit Institute of Arts collection for possible sale”

    http://www.wsws.org/en/articles/2013/07/30/chri-j30.html

  25. Phil (Mcr) July 31, 2013 at 11:06 pm #

    And as Bradley Manning goes to prison for telling the truth, a former Fraud Squad officer writes that the money launderers, despite all the bluster over HSBC, still have little to fear.

    http://rowans-blog.blogspot.co.uk/2013/07/if-uk-fca-financial-crime-supervision.html

  26. Diogenis August 1, 2013 at 12:37 am #

    @mh505

    About the “statistics” about the youth unemployment..

    As this journalist says..you will not find masses of young people hanging around..the beaches are empty of young people.This 60% jobless rate for young people is as silly as the 28%-jobless rate in generell:
    http://www.ethnos.gr/article.asp?catid=22770&subid=2&pubid=63770020

    The people who declared officially their joblessness and are “searching” for work with the help of the state are less than 800.000.This is 16% of the countries work force (this would be the “german way of statistics”) and not 28% which you hear in the news claiming that greece has 1,5 million jobless people.

    I can tell you a dozen more false numbers.Numbers of homeless,suicide rate etc.All of them with the only purpose to make us feel bad,depressed and fearfull allthough the same rates in germany in relation to their population size are much,much worse.

    The funny thing is that even “the leftists” every where in europe are using these numbers from the south with out to look at WHY and HOW these numbers were made.The chief of the greek statistics agency is a former IMF-employee.

    Thinking about this issue I would say that the “bad psychology” for the south is the best “medicine” for the north,The interest rates for germany are low because most people see it as safe haven,the only safe place in europe and not only.This is only one possible effect.Another positive effect (for germany) is that germans really believe that they are not as badly affected by the crisis as the “PIGS”.Being in germany for the last weeks I can say that it works.They have 5 million officially social care takers but as this article says:
    http://www.finanznachrichten.de/nachrichten-2013-06/27267183-iab-bis-zu-4-9-millionen-menschen-in-deutschland-leben-in-verdeckter-armut-003.htm

    ^^5 million germans COULD claim social care because they are poor but they dont do it because of several reasons.

    It becomes more and more clear that there is a divided way of media coverage in the north and south of europe.

    “Bad”-psychology for the south.”Everything is fine”-psychology for the north.

    • Diogenis August 1, 2013 at 1:02 am #

      The example with the homeless:

      http://crisis.med.uoa.gr/elibrary/13.pdf

      Some 20.000 homeless in greece.At least half of them refugees.

      http://www.share-international.org/archives/homelessness/hl-abGermany.htm

      860.000 homeless in germany.Some 600.000 of them are german citizins.

    • Roger August 1, 2013 at 6:58 am #

      Here is Toby Russels blog on the hunger strike of Ralf Boes who protests the Hartz V
      pass laws that are inherent to the hart iv legislation on German Social Security.

      http://thdrussell.blogspot.se/2012/10/ralph-boes-update-plus.html

      Toby wirtes compellingly on many issues related to sustainability and the post industrial society

      Here I read about whats up, at Econosophy I read a lot of what I would like to see next. ( Not Hartz IV)

      But
      http://thdrussell.blogspot.se/search/label/guaranteed%20income

      • Geowaverider August 1, 2013 at 5:43 pm #

        We’ve been saved “fracking new source of cheap energy” so says Michael Fallon on Newsnight 31/07/2013.

        Oxymoron comes to mind.

        Does that mean I’ll be able to afford to turn my central heating on again some time soon?

        Mind you I’m resident in the desolate northeast so at least they won’t have to ship it far :-).

        Brian

        • Hawkeye August 1, 2013 at 5:53 pm #

          Brian

          I smell a rat! Mr Fallon has always had a fishy aroma surrounding him. Putting 2 + 2 together, it wouldn’t surprise me if Mr Fallon and some of his lobbying chums were behind the appalling excuse for journalism provided by Mr Shukman a couple of weeks ago:

          http://www.bbc.co.uk/news/science-environment-23280894

          This was so bad, that I’ve complained to the BBC twice on this subject! Still no reply after 2 weeks, so here is a copy of my latest complaint:

          —————————- Submitted 1st Aug

          On the 17th July I registered a complaint on the BBC website, in relation to David Shukman’s article on the “Receding threat from peak oil”. I wish to supplement that complaint with further information which came to light subsequent to my initial correspondence. On the 23rd July, the Guardian published an article called “Peak oil lives, but will kill the economy”:

          http://www.theguardian.com/environment/earth-insight/2013/jul/23/peak-oil-bbc-shale-fracking-economy-recession

          The subtitle of that article says: “Hype around peak oil’s demise is premature, though you wouldn’t know that if you believed BBC misrepresentations”.

          Further in the Guardian article is a passage relating to the same segment of Mr Shukman’s original article, in which I stated he had not accurately reflected the content or conclusions from an EOS paper on Peak Oil. This corroborates my complaint, by asserting that Mr Shukman has uncritically regurgitated industry hype. This appears both appalling standards of journalism, as well as giving the impression of bias.

          Also, on the 19th July the UK Government announced generous tax breaks for the shale gas industry. A highly cynical person may conclude that Mr Shukman appears to have been softening the public mood before this potentially controversial announcement from the Government. Please reassure me that nothing but the highest integrity and impartiality was undertaken by the BBC News team in relation to these stories on Peak Oil, Fracking and Shale Gas.

          ——————————–

          • Just me August 1, 2013 at 7:24 pm #

            The BBC…

            Keep going down the links…

            http://www.craigmurray.org.uk/?s=BBC

          • old dog August 1, 2013 at 8:29 pm #

            Saw Michael Fallon on newsnight -

            ” we owe it to future generations to start fracking now”

            where do you start

  27. Just me August 1, 2013 at 5:51 pm #

    “Vanishing Treasures: Tomb Raiders Exploit Chaos in Egypt”

    http://www.spiegel.de/international/world/tomb-raiders-in-egypt-exploit-political-chaos-to-steal-antiquities-a-914058.html

  28. Just me August 1, 2013 at 5:55 pm #

    “The majority of Spain’s bankrupt local councils are to be found along the Mediterranean coast, particularly in Andalusia and Valencia, which were badly hit by the collapse of the construction and property-development market.”

    http://elpais.com/elpais/2013/07/22/inenglish/1374496783_970511.html

  29. Just me August 1, 2013 at 9:19 pm #

    “Double-Feature: “Bradley Manning Verdict Convicts Washington” and “Hiding Economic Depression With Spin” — Paul Craig Roberts”

    http://www.paulcraigroberts.org/2013/08/01/double-feature-bradley-manning-verdict-convicts-washington-and-hiding-economic-depression-with-spin-paul-craig-roberts/

  30. Robin Smith August 2, 2013 at 9:13 am #

    Can you affirm this knowledge. I realise its an extremely tough challenge, particularly if not conscious of it:

    Concern for the Future
    By J.G. Bennett (from a lecture in London, 1972)

    THERE IS A CRISIS, and it is a crisis of people. We are not able to live in such a way that we can avoid the troubles that threaten us. Therefore, if we’re going to think and talk about the future, we must first think and talk about people. What kind of people are we? Am I the kind of person who is responsible for there being wars on the earth, for there being injustice?

    I may think I am not that kind of person. I am not a belligerent person, I don’t even wish to have any thing to do with war. I have not wish to impose myself on other people. But if I look at my behavior and I see that I take more than my share of what there is in the world, let us say that I am able to eat all not only that I need, but even all that I want of food, that I am able to provide myself with comforts that couldn’t possibly be available on the same scale to everyone else in the world, then I am contributing to the whole injustice of the world.

    All of us are in this position of making our contribution to the intolerance, injustice, and imbalance of the world and essentially there is no difference between us. We may see exaggerated manifestations and we may condemn those in whom these manifestations are so violent that we see the consequences of them. Say this group of people is responsible for the killing, that group of people is responsible for intolerance, another for taking undue advantage of material power, but essentially we are not different. Not in so far as we also take advantage of our strengths to the extent that we are able to do so under the social constraint of fear. We can’t make a start unless we are prepared to see ourselves and recognize that everyone of us – the most just, the most tolerant, the most pacific is making his or her contribution to the total injustice and intolerance of the world. Unless we see this, then we haven’t really a starting point. Because if we think that we can solve the world problem in terms of other people being different while we remain the same, we shall certainly get nowhere.

    • Just me August 2, 2013 at 9:43 pm #

      I think if the truth be known its many trillions of debt!. I remember reading on another blog a few years ago that said it was globally 500 trillion, dollars, pounds sterling , does it matter, we are in the realms of monopoly money and have been for a long while. Time will tell.

      • steviefinn August 4, 2013 at 11:10 pm #

        JM –

        You are correct – 1 trillion is a small patch of ice on the deck of the Titanic.

  31. nell August 3, 2013 at 4:52 pm #

    I know that most people on this blog are totally au fait with the levels of private sector debt and the macro-economic consequences, but I thought it worth sharing this link to Dirk Bezemer’s videos explaining the relationship between money, credit and debt, productive debt, speculative debt, asset bubbles, wealth and income, so that more of us could be sharing the link. If more people understood that our economies are straining under a burden of private sector debt which is depressing demand and that this problem is not being addressed then pressure could be brought to bear on our politicians. As it stands, politicians across party lines and across nations are all caught up in decrying government sector debt. The media is promulgating the same message ad nauseum and the macroeconomic environment continues to deteriorate. Tie this in with a UK government that is hellbent on inciting xenophobic conflicts amongst the people of Britain, the future is looking grim indeed.
    http://ineteconomics.org/institute-blog-0/dirk-bezemer-debt-good-bad-and-ugly

    • Phil (Mcr) August 3, 2013 at 11:34 pm #

      Thanks Nell.

  32. Phil (Mcr) August 4, 2013 at 12:53 pm #

    ‘US regulators ‘find evidence’ of banks fixing derivative rates’

    http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10219333/US-regulators-find-evidence-of-banks-fixing-derivative-rates.html

  33. Phil (Mcr) August 4, 2013 at 12:54 pm #

    ”Taxpayer-owned Royal Bank of Scotland (RBS), which was bailed out after the financial collapse in 2008 with £45bn from the government, is another that has invested in the high-cost credit sector (pay day loans).”

    http://www.thebureauinvestigates.com/2013/06/13/the-money-pouring-into-a-boom-for-consumer-loans/

  34. Joe Taylor August 4, 2013 at 5:27 pm #

    The new Positive Money video is short (3 minutes) and very much to the point.

    http://bit.ly/13FjE3E

    Cheers, Joe

  35. Phil (Mcr) August 4, 2013 at 10:13 pm #

    I’m not going to apologise for New Labour but austerity is bollocks.

    http://www.theguardian.com/business/2013/aug/04/labour-economic-record-clean-bill-of-health?INTCMP=ILCNETTXT3487

  36. Just me August 5, 2013 at 9:37 am #

    “Ireland seeks ongoing financial support after end of bailout”

    http://www.wsws.org/en/articles/2013/08/05/irel-a05.html

    “British government steps up plans to sell off Royal Mail”

    http://www.wsws.org/en/articles/2013/08/05/mail-a05.html

  37. Joe Taylor August 5, 2013 at 6:43 pm #

    Phil (Mcr) put me on to the ‘Great Tax Robbery’ by Richard Brooks. I’ve just finished reading it. I feel like drinking hemlock.

    It’s hard to imagine how we’ve come to this state of affairs until you grasp how the Treasury and Inland Revenue have been subject to corporate capture:

    “Even giving some credence to the overblown notion of ‘tax competition’ among nations, quite why the world’s seventh largest economy should sell itself so cheaply looks like a mystery (but is in fact explained simply by the corporate capture of tax lawmaking).”

    “The most infuriating aspect of this to those of us who like to report the furtive capture of the machinery of government by powerful vested interests is that there’s no secret about it. The Treasury’s mission is unashamedly to adjust the framework of tax legislation to suit large business.”

    “British taxation policy really had been so comprehensively captured by the world’s biggest corporations that screw-the-poor policies like these could be written into the statute book at their whim, without a pang of conscience being felt anywhere in Whitehall.”

    And the hypocrisy is stomach churning:

    “In the same August 2011 week that Prime Minister David Cameron promised Britain’s rioting feral underclass ‘we will track you down, we will find you and we will punish you’ and magistrates jailed a youth for stealing £3 worth of water, it was with a special kind of upper-class insensitivity that the Prime Minister’s fellow Bullingdonian George Osborne granted immunity from prosecution to the feral financial classes who were looting the economy of billions.”

    I’ve put up quotes from the entire book here http://bit.ly/15YAMTY

    Happy reading

    Joe

  38. Patricia August 6, 2013 at 11:34 am #

    Thank you whoever it was that recommended the book “treasure Islands”. Even if only half of it is absolutely accurate it paints a terrible picture of the ends that people will go to to make money. Their only purpose is to launder money or make money without paying any taxes or minimum taxes. It seems to be getting worse not better. I have often wondered whether income tax has had its day. There are so many industries that exist for the sole purpose of avoiding it that surely there could be a better method for Government to get an income. Nicholas Shaxson, the author, recommends a land tax to get some tax from such people. In addition I have wondered if income tax were abolished and replaced with a type of tax that took x amount out of every dollar deposited in the bank then such a tax would be more efficient and would render such parasitic industries obsolete. A sort of turnover tax. On deposits not withdrawals. But I would impose such a tax on all withdrawals where money was sent out of the country. Maybe such an idea wouldn’t work either in the banking world as it is today. I have very little knowledge of how international banking operates and perhaps there are ways to avoid such a tax. What do you think?

    • desmond August 6, 2013 at 3:13 pm #

      Patricia I’m with you on land tax.. Henry George writes about it in an understandable way. It is perfectly simple and applies to everyone the same.

      • Joe Taylor August 6, 2013 at 6:20 pm #

        Couldn’t agree more about Henry George.

        Quotes from Poverty & Progress here http://bit.ly/Upk6iL

        example:

        In short, the value of land depends entirely on the power that ownership of land gives to appropriate the wealth created by labour. Land values always increase at the expense of labour. The reason greater productive power does not increase wages is because it increases the value of land. Rent swallows up the whole gain.

        That is why poverty accompanies progress.

  39. Joe Taylor August 6, 2013 at 12:11 pm #

    >Thank you whoever it was that recommended the book “treasure Islands”.

    That was Phil (Mcr) too

  40. allcoppedout August 7, 2013 at 2:52 am #

    Dirk Bezemer (Nan – above) puts what we know very efficiently. Our governments saved the banks instead of fixing the problems they created. The real solution is to stuff the banks, reduce them to utility and bring in new rules to prevent Ponzi bubbles – Simples except stuff like pensions now depend of the value of assets this solution would crash. It should not be beyond us to come up with a spreadsheet for redistribution and productive investment that pays for itself.

    One can see other problems to do with the comparative state of countries after the levelling and who gets to do what to recover. It’s so simple ne has to wonder why Japan didn’t do it. In cognitive overload searching for (private) debt/GDP I found this on zerohedge:
    http://www.zerohedge.com/node/477285 – a World Bank summary of decreases and increases in private debt/GDP changes between 2007-2012 – most increase being in the BRICKS. It’s China approaching a Minsky moment sort of stuff and much worse than US/UK.

    Of course, none of us is in debt if someone can’t call in the boys to come round and enforce it, as Nietzsche once quipped to remind on what bourgeois morality was based on. Henry George was my introduction to economic rent and I’ve long wanted to know how such matters as inheritance operates in such fields as debt. Titles promising such have tended to disappoint in non-explanation – ‘Babylon’s Banksters’ (Joseph Farrell) was not the promised alchemy of deep physics, high finance and ancient religion promised – etc. How much of today’s debt might be proceeds of what most of us would consider crime like slavery or government heroin traffic such as that run by the British and Dutch or ‘Red Rubber’? An answer to this might change our notion of moral hazard. We do tend to treat capital as neutral, itself a moral hazard when we allow investment of stolen capital, potentially on a massive scale if we could do a sum over histories.

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