Financial meltdown:: Monopoly for 1%…Russian roulette for 99%


I am fed up watching whilst politicians, bankers, rating agencies and “the markets” play monopoly! This article (link below) refers to the UK and dates back to 17th January 2011 with links to even older items.

UK Economy: A cynic’s summary

People are realising that we are not in fact all in it together but have, instead, a kleptocracy

What has happened since then is that the stakes are higher, based upon gradual exposure of the sheer scale of bank and sovereign debt – to the purists there is a world of difference to the rest of us any distinction between banker and politician merely reflects what stage they are at in their career – as a result of, at best, mismanagement and, at worst, unadulterated systemic greed.

I was really drawn to revisit this topic because of these pithy comments from TIm Hoad taken from a long-running discussion on Linkedin: “How realistic is the prospect of any country either being pushed out of, or leaving, the Eurozone?” Read more of this post

Creators and casualties of complexity: why banks are eurozone’s fault line [BBC]


The familiar expression that springs to mind is “what goes around comes around” or, in Biblical terms, perhaps befitting the scale of the problem…

“as you sow so shall ye reap”

However, please note the deliberate use of the term “casualties” rather than victims. Because, the ability to socialise the losses renders citizens as the VICTIMS!

Here’s the lethal chain of causality: banks have found it harder to borrow because of their big loans to the likes of the Italian, Spanish and Portuguese governments, and because of fears these governments will struggle to repay their debts; but if one or more of the banks were nationalised, the perceived liabilities of these governments would increase; and that in turn would erode confidence in the ability of other banks to repay what they owe; and so on, till no institution in the eurozone is seen to be sound. Read more of this post

When Will the Euro Collapse? Around Q3 2013


This blog, from our Corporate website, reinforces what we are gradually accepting (I think!?) but puts a timeline on it. However, the most important aspect is the ability that Ontonix deliver, to measure complexity and robustness to such an extent. This is not some overpriced, part quantitative part qualitative, “opinion” but a 100%, objective, quantitative analysis of Publicly available macro-economic data. the full article is here.

Exactly one year ago we published a blog warning that the Structural Resilience of the EU economy had decreased from “Low” to “Very Low”, reaching dangerous levels, at which contagion becomes very likely. In that blog the situation was depicted as in the figure below: Read more of this post

“Government Deficits Could Be the Next ‘Black Swan’” – Taleb, 2010


When is a Black swan not a Black swan???

Image via Wikipedia

Please don’t think ill of me for re-reading one of my own blogs from 2010 because I think this quote justifies it in its own:

The problem is getting runaway. It’s becoming a pure Ponzi scheme. It’s very nonlinear: You need more and more debt just to stay where you are. And what broke [convicted financier Bernard] Madoff is going to break governments. They need to find new suckers all the time. And unfortunately the world has run out of suckers.

NNT tends to be worth listening to even if this conclusion wont surprise too many! Read more of this post

Euro 2011: the “tipping point”


Time is NOT on our side!

Despite the urgency, Europe’s leaders still cannot decide upon the best course of action since all of the available options have potentially serious side effects on the economy and financial system at a time when Europe is already headed for a recession, if it is not already in one.  EU industrial production for October was down 2% while Germany’s ZEW (confidence index) has entered deep recessionary territory.  The leading indicators for Italy and France have also dropped to levels indicating recessions in the past.  Austerity unaccompanied by national monetary policy and the ability to devalue can only exacerbate this negative trend.

The problems appear to be spreading to the rest of the globe as well.  Both Indian and Brazilian industrial production is weakening while their leading indexes are pointing down.  Korean industrial production has been flat all year.  Notably, the developing nations’ economies are heavily export-driven, and Europe is an important customer for their goods, although there are undoubtedly country-specific factors at work as well.

Business Insider

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