Friday, September 17, 2021

World Bank, don't silence your Doing Business report

Long time ago, briefly, two years, I was an Executive Director at the World Bank.
Nowadays, I do not speak for anyone except, hopefully my grandchildren.


It’s very hard to have the cake and eat it too.
The amount of successful and unsuccessful pressure exercised for tampering the data in the World Bank’s Doing Business Review, clearly evidences its great importance. Between perfection and relevance what's more important?

In other words:  World Bank, if even China exerts so much pressure to improve its ratings, you must know that with the Doing Business report you have something extremely valuable in your hands. World Bank, just because someone mishandled it, and it's not picture perfect, please don't throw the baby out with the bathwater

If the World Bank is not the most appropriate entity to carry out world wide ease of doing business research, who is? Or is such research not needed?  I assure you that, even with all its possible mistakes, we  citizens in all countries striving to objectively improve our rankings in Doing Business, we sure need it.


PS. We read in the report: "If incorporating Hong Kong SAR's data into China's data, China's ranking in Doing Business 2018, would rise to 70, eight spots higher than the previous year... (fifteen places higher than the originally calculated ranking of 85)". If that's not an extremely important contribution for the understanding of the Ease of Doing Business worldwide, what is?

PS. And why not launch a Doing Bureaucracy Efficiently Review? Billions of citizens around the world would appreciate it


Sunday, June 20, 2021

Adjusting to rough-times in the city

There once was a city so nice that even if they only visited it a month a year many owned apartments there. And since those wealthy owners spent lavishly during their short stay, and accepted to pay any normal property taxes, the city and its long-term residents, all benefited greatly.

But then the city fell on hard times and some not too bright city authorities, decided they should impose a special tax on these 2nd home owners.

And as a result, many short-termers, given the city was for the time being just not as attractive as before, decided they were not willing to pay this extra tax, and put many of these properties up for sale… and so the prices on both 1st and 2ndhome apartments fell drastically; and with-it the assessment values; and with-it the city’s property tax income… and, of course, many of the usual visiting big spenders kept away. The city had been placed on a slippery downward slope.

What could otherwise be done? 

What about an offer of, “anyone spending at least two months in their 2nd home in the city, will get a special rebate on their normal property tax”?

What about a reduction in the tax rate applicable to the rental income of all 2nd homes in the city?

@PerKurowski

Saturday, June 12, 2021

No remittances without representation!

The June 8 news article "In Guatemala, Harris offers stern words on corruption" reported extensively on Vice President Harris's travel to Guatemala, where the United States, by offering financial cooperation, hopes to reduce the flow of illegal migration from Central America and stimulate better behaviors, e.g., less corruption.

Though those financial contributions are indeed important, they are peanuts when compared with the remittances sent home by the migrant workers. The reality is that what the migrant workers from many Central American nations earn abroad is often much more than the gross domestic product of their home countries. The sad reality is that their remittances help to keep in power those ineffective governments that made them immigrate and that keeps them from going home.

If the United States really wants to help, then look to politically empower as much as possible those migrants in their homelands. For instance, should they not have an important direct representation in their respective congresses? No remittances without representation!



Thursday, February 25, 2021

If someone sells a tractor to pay a wealth tax, who buys it?

Sir, Diego Laje and Anthony Faiola report that Gabriel de Raedemaeker, a land-rich farmer in Argentina, says he doesn’t have the cash flow to absorb an increased tax burden, and might need to sell a tractor to cover the cost. “Argentina sends its bill for pandemic to the rich” Washington Post, February 23, 2021.

A follow up to that could lead to a long never-ending sequel of articles. Who will de Raedemaeker sell the tractor to? What will the buyer do with it? Produce more or less than de Raedemaeker? And if the buyer had not bought the tractor, what else could he have done with his money? And so, on and on and on!

I’ve always thought that it would be great to read a book that followed the money trail left by Louis XX commissioning in 1500 Leonardo da Vinci to paint Salvator Mundi; and how it flowed through the years, perhaps to a Bill Gates, and in the process generating so much wealth that someone in 2017 decided to freeze $450.3 millions of purchase power on a wall with that painting.

But even if Raedemaeker had the cash, unless it was stashed away under his mattress, that does not either mean it was doing nothing. It might be deposited in a bank that used it to finance the purchase another tractor, that could be extracting even more wealth from the so fertile western Pampas of Argentina.

@PerKurowski

Saturday, January 09, 2021

Big Tech/Social Media & The Political Correctness autocracy, against Trump and the "immature" American citizens


“After close review of recent Tweets from @realDonaldTrump … specifically how they are being received and interpreted on and off Twitter” 

So, Twitter is specifically declaring that Americans are not mature enough to read Trump tweets. I guess we Venezuelans are more mature @maduro_en

Are they still mature enough to vote? Is this a Neo-Inquisition agreement between Big-Tech-Social-Media and the Big-Brother-Political-Correctness autocracy?

“So, we must beware of a tyranny of opinion which tries to make only one side of a question the one which may be heard. Everyone is in favour of free speech. Hardly a day passes without its being extolled, but some people’s idea of it is that they are free to say what they like, but if anyone says anything back, that is an outrage” Winston Churchill

PS. How do you communicate when only either red or blue can be seen? In response to social media’s massive influence, humanity is mutating to suffer specific colors blindness. How far away are Americans from never be able to hear/read/see violet again?

PS. It's now 6:30 pm Saturday night, less than 39 hours away from when Wall Street opens. I just told my wife that Twitter shares will fall 20% at least... and that Jack Dorsey might not survive as its CEO... but, of course, I could be wrong... not the first time... not the last time

PS. If you advertise on Twitter, would you be somewhat concerned?

PS. I just saw Arnold Schwarzenegger comparing some utterly surprised selfie-taking clowns unbelievably being able to enter the Capitol building, with the Kristallnacht Pogrom against the Jews, that which would end with the gassing of millions of them. Mind-boggling!

PS. Instead of allowing Trump to tweet his heart out, they silenced him. Unifying or polarizing? What if Trump’s followers now start taking notice of who advertises on Twitter and Facebook? 

PS. Ron Paul: What if Twitter/Facebook is an old mans only communication with the world, and being able to use these is the only thing that gets him out of bed, is not then sending him to isolate incommunicado down in the basement, an act of sheer cruelty?

PS. Can it be that the Senior Advisory Committee of the Institute of Politics at Harvard does not include even one of those 74 million Americans who voted for Trump? Please tell me I’m wrong.

PS. If the Senior Advisory Committee of the Board of the Institute of Politics at Harvard ignores that Trump got 12 million more votes than when he won in 2016, and except for Biden more votes than any candidate in US history, then perhaps students of politics should ignore Harvard.

PS. Not the first time I have written about the threat of Big-Tech and Big Brother entering into a joint venture.

A different take?

The storming of the D.C. Capitol by some selfie-taking clowns utterly surprised by being able to enter it… is the mother of all tempest in a teapot.

Sunday, November 29, 2020

Van Morrison against lockdowns

If citizens were receiving timely data on Covid-19 cases/ hospitalizations / deaths or other serious consequences; discriminated by age/ gender/ race/ location/ occupation/ other important factors, they could help out with their own informed decisions… 

And if they saw that, e.g. in USA of all Covid-19 deaths 97% were 45 years and older, but that the huge economic/ social/ mental health costs derived from top-down responses will be paid 97% by those under 45 years, then they would understand better what’s going on:

Namely Covid-19 being exploited to the tilt, by e.g. media selling bad news, polarization politicians profiteering, narcissist experts enjoying the ride and, of course, naturally, businesses supplying anti-pandemic armors.

And so, a whole new generation of fans, plus many of us his older fans, will join the chorus exclaiming “Hear, hear Van the Man”

Wednesday, October 21, 2020

All we are saying is give “herd immunity” a chance

Regarding Tom Frieden’s Oct. 19 op-ed, “Pursuing ‘herd immunity’ is the reckless, dead-wrong solution”:

Roughly 90 percent of all novel coronavirus deaths will occur in those 60 years of age and older. Equally roughly 90 percent of the virus’s social and economic consequences will be paid by those younger than 60. That presents us with an intergenerational conflict of monstrous proportions.

In this respect, and though of course I do not propose a reckless “pursuit” of “herd immunity,” especially by we elders, I hold that if there’s a small chance there could be such a thing out there, and if effective and abundant vaccines are not guaranteed to appear in a very short term, we have no right to stand in the way of it finding us. Doing so would be, and I feel it already is, a shameful violation of that holy intergenerational social contract Edmund Burke spoke about.

PS. If John Lennon had still been alive, he would have been 80, and I’m sure he would agree with the title of this post

PS. Let us not forget that while searching for herd immunity, some might also be fighting the herd-docility some few want to impose on all of us.

Sunday, October 11, 2020

CNN, really?

As of October 10, 2020, with John Hopkins University as source of considering total populations, from the data reported by CNN reported that if we consider respective total populations, the USA suffers 5.9 times more Coronavirus cases than the rest of the world; and 5.7 times more deaths.

As of November 14, 2020, now with WHO, CDC, ECDC, NHC, DXY as sources those same figures indicate USA suffers 4.8 times more Coronavirus cases than the rest of the world; and 4.3 times more deaths.


"facts first"? And on December 6, adjusted for population CNN indicates data that Covid-19 causes 6.7 times more cases and 5.7 times more deaths in U.S than in the rest of the world. Really?


Are the previous and current figures really believable? 
Does no one at CNN question these?

CNN has been seriously infected by the ongoing polarization pandemic.


Winston Churchill on herd immunity?
 

On schools in Covid-19 times

Financial and other escape valve in times of Covid-19


Wednesday, July 29, 2020

On schools in COVID-19 times

Sweden kept all schools until 9th grade open. 

Parents of children in 9th grade are almost always less than 50 years of age. 


Based on that data the logical conclusion should be to keep schools open, keep older teachers at home and refrain grandparents from hugging their grandchildren.

 
In Sweden, 2020, up to 9th grade, including preschool, there are around 1.2 million students. Is the about 1 per 100.000 students under 50 years of age Covid-19 deaths, not really a very significantly insignificant data?

Disseminating data on new Covid-19 cases without data on hospitalizations / deaths or other serious consequences, discriminated by age, gender, race, location or other significant factors amounts to serious misinformation. That impedes citizens to cooperate with their own informed decisions.

Trust! In 2016 Swedish authorities issued my mother a driver license that would expire when she was 103 years of age. Asking about the wisdom of it, I was told Swedes were supposed to know when they were fit to drive or not. Does that not go for Covid-19 behavior/response too?

P.S. Some look to keep the elderly safe, but open up schools and the economy for the rest, so as to perhaps pursuit herd immunityOther seem to want to impose even stricter lock downs. Could they instead be pursuing herd docility?

Saturday, May 09, 2020

I can do social distancing much better than you

“Any distancing you do I can do farther
 I can do distancing much more socially than you”

["Any lockdown you can do I can do better;
I can lockdown anyone better than you"]

[“Any investigation you can do I can do better
I can be much more independent than you”]

 “No, you can't”
“Yes, I can”
“No, you can't”
“Yes, I can”
“No, you can't”
“Yes I can, yes I can, yes I can!!!”



Saturday, April 18, 2020

The capacity to borrow at reasonable rates is a strategic sovereign asset

In his April 13 op-ed, "How economists led us astray," Robert J. Samuelson wrote, "What we conveniently overlooked was the need to preserve our borrowing power for an unknown crisis that requires a huge infusion of federal cash."

Yes, the capacity to borrow at a reasonable interest rate (or the seigniorage when printing money) is a very valuable strategic sovereign asset, and it should not be squandered away by benefiting the members of the current generations or with some nonproductive investments. 

So, when public borrowings are authorized, that should require Congress being upfront that a part of that borrowing capacity is being consumed, which has a cost, and give an indication of who (children or grandchildren born what year) are expected to have to pay back that debt.

Mr. Samuelson also referred to "low dollar interest rates [that] will keep down the costs of servicing the debt." Sadly, those current "low dollar interest rates" are artificial rates, much subsidized in that since 1988, with Basel I regulations, banks are not required to hold any capital against Treasuries, and of course subsidized by the Federal Reserve purchasing huge quantities of Treasuries.

PS. A reverse mortgage on our children’s and grandchildren’s future


Tuesday, March 31, 2020

Financial and many other escape valves/tweets in times of having to respond to coronavirus / COVID19

My tweets:

The economy:
Covid-19, which mostly causes some older to die a little earlier, thereby in a very cruel way alleviating some serious social security deficits, does not really hurt so much the economy
It is the responses to this pandemic that does produce the highest costs, which will be shouldered the most  by the younger, for the longest.

Debt to equity conversions
With so much corporate debt in danger of being pushed down by COVID19 into junk rated territory, both debtors and creditors might need massive debt to equity conversions, in order to buy the time needed to reactivate assets, before these also become junk.

What companies merit help?
For highly indebted companies, whether they are important and viable enough to merit help from taxpayers, from money printers or from banks, by grants and not loans, the proof in the pudding is in first seeing hefty debt to equity conversions.

Dividends? Buybacks?
How much of the investment grade rated bonds that have been downgraded to junk should have to be converted into equity so as to have the remainders of those bonds recover an investment grade rating?

Credit rating agencies, please answer: 
How much of the investment grade rated bonds that have been downgraded to junk, should be converted into equity so as to have the remainders of those bonds recover an investment grade rating, and all before company assets also become junk?

Airlines
How much of airline’s debts should be converted into equity in other to safeguard assets for the benefits of creditors and shareholders alike? 
I mean before some hungry profiteering bankruptcy lawyers move in and turn everything into junk/scrap.

Taxpayers help?
In highly indebted companies, whether they are important and viable enough to merit help from taxpayers, the proof in the pudding is in first seeing hefty debt to equity conversions.

“I’m old, must sell my business”
Those who because of their age do not want to go back to run their business, instead of selling it at depressed prices, could do better finding a capable younger person to run it, and with whom to split any future profits.

Banks, when Covid-19 hit us.
With the intention of making bank systems safer, the regulators based their risk weighted bank capital requirements on perceived expected credit risks, the risks which bankers should clear for; and not on the risk of misperceived credit risk, like 2008’s AAA rated or unexpected events, like a pandemic. Therefore, banks now stand there with their pants down... meaning no capital... at the worse time to raise capital.

A Covid-19 breather: 
Postponing all capital and interest payment on residential mortgages coming due next 12 months to the end of current mortgages, and allowing banks to hold that refinanced portion against zero capital… would help the economy and stop some bank balance sheet bleeding.

A bad time to increase bank capital requirements
The credit distorting bank capital requirements against residential mortgages should increase to the same level as against loans to SMEs, and entrepreneurs… but in the midst of the coronavirus crisis… for the time being, the latter could be lowered to the level of residential mortgages.

Creative destruction?
Coronavirus / Covid-19 times is not the best time to engage in creative destruction since too little construction can result in a closed down economy. As I see it, both debtors and creditors would benefit immensely from keeping hungry bankruptcy lawyers at distance.

When is there an overreaction?
Yes, the older need to take care, but it is those under 40 years who will for the longest bear the brunt of the economic costs of overreacting.

Winston Churchill

Reading of UK’s plan of building up herd immunity against Covid-19, I felt Winston Churchill would have agreed with such stiff upper lip policyI’ve nothing to offer but fever, coughing, chills and shortness of breath"


Social Media
SARS 2003, Facebook 2004, Twitter 2006, WhatsApp 2009, Coronavirus 2020 
Does this help us to understand the different intensity of how the world has reacted?
Information / attention overload, must have some dangerous unexpected consequences too.

Why are citizens not more enlisted in the fight?
If given timely and easily accessible data on new cases/ hospitalizations/ deaths/ other serious consequences; discriminated by age/ gender/ race/ occupation/ location/ other significant factors, so that they can take their own informed decisions, the citizens are the most effective pandemic combatants in the world.

Global comparisons
Data reported continuously on CNN indicates that, considering total population, USA suffers 6.3 times more Coronavirus cases than the rest of the world; and 5.7 times more deaths.
Are the numbers used really comparable? Is it science or is it politics?


Underlying conditions:

It is that the most dangerous underlying condition of Covid-19, is that it broke out in the midst of a raging Polarization Pandemic, in which way too many polarization profiteers have a vested interest in blocking the development of a harmony vaccine.


A pandemic earthquake?
The Great Barrington Declaration and WHO’s acceptance of that lockdowns are not the way to go, places them sort of more on the side of Trump than Biden. Could that shake rattle and roll up the debate so close to elections?

History repeats itself.
With the intention of making bank systems safer, the regulators based their risk weighted bank capital requirements on perceived expected credit risks, the risks which bankers should clear for; and not on the risk of misperceived credit risk, or unexpected events, like coronavirus.

Now, to allow nations fend off coronavirus with the least societal costs, governments impose on society restrictions derived from perceived risks, risks citizens should be able to clear on their own, and not from risks of misperceived COVID19 risk, or unexpected unknown facts.

Trust
In “socialist” Sweden, when battling coronavirus, authorities seem to trust more their citizens than in America, the Land of the Free and the Home of the Brave.

In April 2016 Swedish authorities issued my mother a driver license that would have expired when she was almost 103 years of age. Asking about the wisdom of such thing, I was told that in Sweden the Swedes were supposed to know when they were fit to drive or not.
That applies to coronavirus behavior too

Conflict of interest 
The 70 years or older, in terms of health, are more a Covid-19 vulnerable group. Since therefore we might unwittingly suggest actions way too costly for those more vulnerable to its socio-economic consequences, perhaps though we should much take care of ourselves we should totally abstain from recommending Covid-19 responses.


Quarantine for those under 40 years of age?
If the percentage of those under 40 years of age that die of all causes, is higher than the percentage rate of that same age group that die from coronavirus/COVID19, how can it make any sense to subject them to a quarantine and its economic consequences?

Don't mortgage our youngers' future
If total deaths from COVID19 to total population is 0.2%, in US that would be 700.000 deaths. 
If of those deaths the younger than 50 years are 5%, that would represent 35.000 deaths of younger Americans 
Take care of the older, but do not mortgage the future of the young


Relevant Universe Bias:
For now, I have four grandchildren, all whom I love dearly.
But, if I had 100 grandchildren, if knowing that safeguarding 2 of them from the worst Covid-19 consequences could bleak the future of the other 98, would I feel the same about what we should do?

And for God’s sake, if there are any moment banks should try to do ‘God’s work’, meaning taking the risks the society needs to move forward, it is now.
The risk weighted bank capital requirements based on expected credit risks, are insane!

And coronavirus will most probably increase the robotization speed of our economies, so now there is more need than ever of decent and worthy unemployments, something which must include the launching of an unconditional Universal Basic Income.

SCHOOLS - Sweden

Higher education:
And our higher education systems must adapt to harsher times, perhaps by making it much more a joint venture between students and professors.

Nobel prizes in virtual online teaching:
At this moment, much more important than a Nobel Prize in Economics, is are Nobel Prizes for the Best Virtual Online Teacher/Professor in the World, in the categories of children under 10, high schools, universities, and of course business schools


What if a coronavirus II / Covid-19 II?
We need to get rid of the perceived expected credit risk weighted bank capital requirements and impose a leverage ratio of 8%-15%; and sack all dangerous equity minimizing leverage maximizing creative engineers and put our banks back into the hands of savvy loan officers. 

Do all dead from Covid-19 represent the same problem?
When responding to Covid-19 should all those residents and staffers of nursing homes and other long-term care facilities who in US represent about 40% of all Covid-19 deaths, in Sweden closer to 50%, be bundled up with all other? I don’t think so.

PS. This is a post that will be in continued revision

PS. May 16, 2020 I turned 70 and posted this

PS. December 2020: The adequate response to a Covid-190 when hopes for vaccines were two or three years away must clearly differ a lot from the one when it looks like vaccines are only two or three months away. The opportunity cost of not taken precautions has now dramatically increased.

PS. January 2021:Once the most endangered had been vaccinated, would it be so wrong to have an official market, e.g. in the US, where e.g. 30 million vaccines are sold at, e.g. US$ 2.000? That would help pay for 1.200 million vaccines, at least.

PS. February 2021: How many of our elder would still be alive if only expert epidemiologists had said that the elderly care and the senior retirements homes, needed to have independent air conditioning, heating, ventilation units, or have counted with first class air filtering systems?

PS. February 2021: I’m all for obtaining Covid-19 herd immunity, but the terminology makes me somewhat uneasy. It makes me think on whether with the alternative of strict lockdowns, some are looking to impose on humanity, on our Western civilization, some herd docility.

PS. March 2021: 
The battle of our times: Herd Immunity vs. Herd Docility


PS. April 2021: A return to a pre-pandemic world would have little to do with Covid-19/vaccines; much more to do with the responses to it: e.g., clearing all debt-overhangs, changes in work-methods, and many forms of herd-docility profiteering… therefore such a return, in my time, is a mirage.

PS. April 2021: When is a pandemic no longer a pandemic? When is an epidemic no longer an epidemic?

Sunday, March 29, 2020

Notgeld - emergency money, a British Museum exhibition... in times of coronavirus


Notgeld, or ‘emergency money', from the early Weimar Republic, is a powerful illustration of the turbulent years during and after the First World War in Germany.


This exhibition reveals how this temporary currency responded to a national crisis with distinctive designs commenting on German society and politics. These range from the Turnip Notgeld lamenting the disastrous food shortage of 1917, to richly illustrated designs featuring regional landmarks and folk narratives, intended to buoy a population hungry for reassurance.

In its short lifespan, Notgeld's purpose and design changed dramatically. It was introduced as a substitute currency during a coin shortage in First World War, with patriotic and sometimes subversive messages. Popular with German people, it became highly collectible and then, during the hyperinflation of 1923, regained its role as an alternative currency. In the chaotic early years of the Weimar Republic (1919–1933), designs often depicted idealised views of German history and culture as well as exciting travel advertisements, appealing to a people longing to shake off the bitter war years.

Intrinsically bound to German identity and the upheaval that followed the First World War, Notgeld is a fascinating microcosm of public feeling in post-war Germany.

Thursday, March 26, 2020

Does “wasting” money on “an alabaster jar of very expensive perfume, made of pure nard” negatively affect the poor?

March 8, 2020, I went to a mass in my mother’s hometown, Karlskrona Sweden.

That date the Lord’s words was from Mark 14:3-9

3 While he was in Bethany, reclining at the table in the home of Simon the Leper, a woman came with an alabaster jar of very expensive perfume, made of pure nard. She broke the jar and poured the perfume on his head.
4 Some of those present were saying indignantly to one another, “Why this waste of perfume? 
5 It could have been sold for more than a year’s wages and the money given to the poor.” And they rebuked her harshly.
6 “Leave her alone,” said Jesus. “Why are you bothering her? She has done a beautiful thing to me. 
7 The poor you will always have with you, and you can help them any time you want. But you will not always have me. 
8 She did what she could. She poured perfume on my body beforehand to prepare for my burial.
9 Truly I tell you, wherever the gospel is preached throughout the world, what she has done will also be told, in memory of her.”

The preaching that followed was beautiful and true, but I felt it left out something very important of that what Jesus was alluding to.

I refer to: would have that “alabaster jar of very expensive perfume, made of pure nard” even existed, had someone not been willing and capable of paying more than a year’s wages for it? 

And, after more than a year’s wages had been paid for it, what stopped that money from not going to the poor? Those who helped produce that perfume, would most probably be less poor than if they had not have had that chance.

Tuesday, March 17, 2020

My tweets on what the coronavirus should inspire in the USA

Coronavirus inspires:
Immediate elimination of all US health sector discrimination in price, access or quality, between insured and uninsured
As is all get the short end of the stick of non-transparent deals between insurance companies and health sectors

The elimination of risk weighted bank capital requirements that so dangerously distort allocation of credit in favor of sovereign and “the safer”, thereby disfavoring “the risky”, the always so much needed, and so much credit needing, SMEs / entrepreneurs

It marks a beautiful opportunity to introduce an unconditional universal basic income UBI, a citizens’ dividend, that could be funded with high carbon taxes and a tax on the advertising revenues derived from exploiting the citizens’ personal data.

Friday, February 28, 2020

Churchill and Covid-19?

February 27, 2020, I visited again London’s Churchill War Rooms

Reading then of UK’s plan of building up herd immunity against Covid-19, I felt Winston would have agreed with such stiff upper lip policy:

“I’ve nothing to offer but fever, coughing, chills and shortness of breath”

PS. Most specially when the vaccines seemed to be 3-4 years away







Tuesday, October 08, 2019

Wouldn’t you agree daddy?

When I grow up, I want to be a candidate in as many elections as possible, in order to use social media creatively, including threats, and solicit donations from millions at a zero-marginal cost. 
It seems such a great business, wouldn’t you agree daddy? 

When I grow up, I’m thinking of entering the polarization business. Being as extreme as possible and using social media at a zero marginal to solicit donations from those I can convince I’m their best chance. 
It seems such a great business, wouldn’t you agree daddy? 

When I grow up, I’m thinking of becoming a redistribution profiteer. Offering to tax the wealthy the most, could create great opportunities for me, whether with the wealthy or with the poor, or perhaps with both
It seems such a great business, wouldn’t you agree daddy?

Absolutely son, these are so much better businesses than plastics.

Wednesday, September 11, 2019

Financial communism

Is the current ultra low or even negative interest rates on sovereign debt something weird? 

Of course not: a) take away all central banks purchases of public debt with QEs, which helped to keep the saving glut intact or even increase it; b) get rid of regulations that assign the lowest risk weights and thereby the lowest capital requirements for banks to the borrowings of the sovereign monarch; c) take away liquidity requirements that have banks buying sovereign debt; d) stop making pension funds and insurers having to buy “safe” government debt irrespective of the price; and e) stop central banks from paying negative returns… and you would not see public debt bought and sold at ultra-low, much less negative rates.

What we are really suffering from is a well-disguised and utterly creative and non-transparent financial statism of monstrous proportions, which impedes the markets to signal what the undistorted interest rate on sovereign debts should be. 

The difference between the interest rates sovereigns would have to pay on their debts in absence of all above mentioned favors, and the current ultra-low or even negative interests they pay is, de facto, a well camouflaged tax, retained before the holders of those debts could earn it.

And, if ignoring the risk of inflation, one could argue sovereign debts issued in their own domestic/printable fiat currency is safer, and should therefore have lower capital requirements, but, the other side of that coin, is that it really implies that government bureaucrats would know better what to do with bank credit they're not personally responsible for, than for instance private entrepreneurs who sign their own name on bank loans to them.

So if we consider the non-transparent regulatory subsidies for sovereign debt, and the effects of central banks purchasing so much of it, as we should, the already so scary fiscal deficits are even larger than reported

I have the nagging feeling that the market value of sovereign debt much more accurately represents the real debt burden faced by those sovereigns than the par value of it. And that that market value  could currently be a scary number in relation to GDP.

Paul Volcker’s statist confession… that shall not be heard.
Assets for which capital requirements were nonexistent, were what had most political support: sovereign credits A simple ‘leverage ratio’ discouraged holdings of low-return government securities"

And then so many shamelessly blame our difficulties on the usual scapegoat… neoliberalism


PS. 2004, in a letter published in the Financial Times I wrote: “Our bank supervisors in Basel are unwittingly controlling the capital flows in the world. How many Basel propositions will it take before they start realizing the damage, they are doing by favoring so much bank lending to the public sector.

Friday, August 30, 2019

My four long-time held principles for a good restructuring of Venezuela’s/Pdvsa’s debt.

A restructuring to be initiated when its corrupt, inept criminal and human rights violating regime has been thrown out and law, justice, democracy and respect for private property has returned.

1. Not only for Venezuela’s sake, but also for all the citizens of the world’s sake, exploit Venezuela’s debt problem in order to establish clear definitions of what should be considered bona fide credits and what odious credits, and what different treatment should be given to these.

2. Align the incentives of the creditors so as to work for having Venezuela’s economy grow instead of extracting from is economy whatever they can. In Venezuela’s case that is quiet straightforward. Have the creditors identify and help finance who can in the shortest-term possible, increase the oil it extracts and exports.

3. In order to align the incentives that will allow such debt restructuring to take place in peaceful and sustainable terms, have all the nations’ net oil revenues to be shared out 15% to its creditors, 34% to Venezuela’s central and local governments, and 51% equally among all Venezuelans.

4. Before the three aforementioned conditions have been formalized Venezuela should thankfully, gratefully accept all humanitarian help given but should not waste one cent of all those bridge loans from here to there that it could be offered, for instance by the IMF.

That should help Venezuela’s legitimate creditors to recover their loans, its government to have to rely more on what the citizens pays it in tax so as to be held more accountable and, foremost, allow Venezuelans to live in a nation and not just in somebody else’s business.

Monday, August 12, 2019

Misunderstanding socialism

The heartbreaking Aug. 9 front-page article “Venezuela’s most vulnerable join the exodus” referred to Venezuela as a “disintegrating socialist state.” I am not a socialist but I have friends who are, and I know many of them have difficulties accepting that in reality, they were hoodwinked by criminals who, because it provided them cover, marketed themselves as socialists to lay their hands on Venezuela’s enormous centralized oil revenue, which many years represented 97 percent of all its exports.

Analysts said some European nations “consider the Venezuelan crisis, in contrast, a remote and politically driven byproduct of the standoff between the Trump administration and [President Nicolás] Maduro that is less likely to affect them.” That is part of the problem, as too many leaders in Europe still have Che Guevara T-shirts.

When the poorest 40 percent in Venezuela received less than 15 percent of what they should have had Venezuela’s net oil revenue been shared equally, as in Alaska, how can that be socialist? When gas is sold at less than one-millionth times the price of milk, how can that be socialist?

U.S. sanctions? Yes, on the margin they might make some things harder, but they would still explain much less than 1 percent of Venezuela’s sufferings.

Per Kurowski, Rockville

PS. The "[President Nicolás]" was inserted by WP, they placed it within brackets, for me Venezuela's legitimate President is currently Juan Guaidó. 

Thursday, July 04, 2019

My Fourth of July 2019 tweets to the United States of America

This Fourth of July 2019 here are two tweets in which I expressed, to that United States of America that I admire and that I am so grateful to, some very heartfelt concerns.

In 1988 America signed on to the Basel Accord’s risk weighted capital requirements for banks. 
These gave banks huge incentives to finance what was perceived as safe, and to stay away from the “risky”. 
It is so contrary to a Home of the Brave, opening opportunities for all.

And regulators decreed risk weights: 0% sovereign, 100% citizens
That implies bureaucrats know better what to do with credit than entrepreneurs
That has nothing to do with the Land of the Free, much more with a Vladimir Putin’s crony statist Russia

PS. Why “grateful”? Had my father, a polish soldier not been rescued by American’s from a German concentration camp April 1945, I would not be.
PS. As one of those millions Venezuelan in exile, I know my country’s future much depends on America’s will to support its freedom.

Tuesday, June 18, 2019

I saw Netflix’ documentary on Alexandria Ocasio-Cortez


It is a great type of Hallmark flick, made by and for anti their establishment progressive activists.

Don’t get me wrong, I love Hallmark movies, and I am quite a bit of anti establishment myself, but, sadly, it takes much more than Hallmark happy endings, to help provide real and good solutions to our many real Main Street problems

Problem: Our economy, much because of regulatory distortion of the allocation of bank credit, has over ingested an unproductive debt. How to come down from that debt high is a mindboggling challenge.

Problem: Politicians who support minimum wages support the class of working people that have a job. But what about the not-working class, the people that do not have a job or do not want to be displaced from a job by artificial intelligence or robots?

Problem: The excessive importance given to house ownership and the excessive ease of financing of house purchases so as to make these affordable have caused houses to morph from being homes into being investment assets. So what about the class with no houses?

Problem: We face serious environmental challenges but how can we afford to face these when so many are out to profit financially, politically or by just feeding their narcissism, from the fight against climate change?

Problem: Being able to feed messages of hate, envy or just fake news, at zero marginal cost on social media, is polarizing to death our societies. How do we solve that without it all of us just ending up in the hands of a Big Brother? 

Problem: Growing inequality and poverty. How can we face those challenges without causing the economy to shrink? The sole redistribution of wealth is clearly not the answer, since all after tax income that produced the wealth, is now frozen in assets 

Problem: Student debt is a great problem. But how can we solve it without the solutions, like debt forgiveness, creating moral hazards and just opening space for further increases in educational costs?

Problem: How can we be able to launch a so needed unconditional Universal Basic Income when so many redistribution profiteers will fight with tooth and nails against seeing the value of their franchise decrease? 

Problem: And if you think only America has problems just have a look at the European Union with its ticking 0% Risk-Weight Sovereign Debt Privilege bomb. That is truly scary stuff.

PS. Among AOC’s first actions was, thinking that tax cuts meant giving away money to Amazon and not just to take less money from it, to help scare away Amazon with its 25.000 well paying jobs. That was like telling New York, "The City That Never Sleeps", to take a Big Siesta. Given its shaky finances, I have a feeling that was not much appreciated by her general constituency, so there might not be a sequel to this documentary.

PS. Who can stand up better for the future of our grandchildren than we grandparents?

Monday, May 27, 2019

If I had been elected a first time EU parliamentarian

If I was a newly elected first time European Union parliamentarian, the following is what I would ask in order to leave a clean historical record of my presence there:


Fellow parliamentarians: I have heard rumors that even though all the Eurozone sovereigns take on debt denominated in a currency that de facto is not their own domestic printable one; their debts, for the purpose of the risk weighted bank capital requirements, have been assigned a 0% risk weight by European authorities. Is this true or not?

If true does that 0% risk weight, when compared to a 100% risk weight of us European citizens not translate into a subsidy of the Eurozone sovereigns’ bank borrowings or in fact of all Europe's sovereigns?

If so does that not distort the allocation of bank credit in the sense that the sovereigns might get too much credit and the citizens, like European entrepreneurs, get too little? And if so would that not signify some regulators, behind our backs, have imposed an unabridged statism on our European Union?

And if so, does that not mean that some Eurozone sovereign could run up so much debt they would be seriously tempted to abandon the euro and thereby perhaps endanger our European Union?

Finally, was Greece awarded such a 0% risk weight? If so was this monumental fault by EU authorities taken in consideration when restructuring its debts? And if not, does that not show a basic lack of solidarity with a EU member?

Who should answer these questions? The European Commission?
Oops... it seems that it was the European Parliament through a "Council on prudential requirements for credit institutions and investment firms" that concocted the  idea.

PS. In March 2015 the European Systemic Risk Board (ESRB) published a report on the regulatory treatment of sovereign exposures. In the foreword we read:

"The report argues that, from a macro-prudential point of view, the current regulatory framework may have led to excessive investment by financial institutions in government debt. 

The report recognises the difficulty in reforming the existing framework without generating potential instability in sovereign debt markets. 

I trust that the report will help to foster a discussion which, in my view, is long overdue. Mario Draghi, ESRB Chair"

So Mario Draghi, as president of the European Central Bank since 2011, what have you done about it, or is it your intention to leave that very hot potato to your successor?

PS. In that ESRB report there are references to "domestic" currency but not to the fact that the euro is not really a domestic currency of any of the eurozone sovereigns. 


Thursday, May 09, 2019

I have some ideas about what could compete with Facebook

Chris Hughes, a co-founder of Facebook, a co-chairman of the Economic Security Project and a senior adviser at the Roosevelt Institute opines in the New York Times:

“No one knows exactly what Facebook’s competitors would offer to differentiate themselves.”

I have some ideas:

1. That it guarantees that I am always messaging or receiving messages from parties that I can clearly and absolutely accurately identify, with ease.

2. That I am targeted in an at least a 95% perfect way, so that my already way too scarce attention span is not being further wasted away by irrelevant/useless advertising/information.

3. That it shares with the participants 50-50 all advertising revenues generated by exploiting their data. Either to each one his respective production quota, or by means of helping to fund a universal basic income.


4. That it does it utmost to keep out all those redistribution or polarization profiteers whom, with their messages of hate or envy, can destroy our societies.

5. That it swears never ever to form any type of joint venture, with any type of Big Brother.

PS. Should we at least, as a minimum-minimorum, not require all social media with over a million followers, to openly publish the algorithms they use to maximize their ad revenues?


Monday, April 08, 2019

A brief comment on Joseph E. Stiglitz “The EURO: How a common currency threatens the future of Europe”

Professor Stiglitz correctly describes many of the challenges the Euro poses, most of which were known from get-go twenty years ago, like the problem derived from having fixed exchange rates within the Eurozone.

In the introduction to the paperback edition, Stiglitz also briefly brings forward something that should have been understood but seems to have been much ignored. That is that although the Euro is for most purposes the domestic currency in the Eurozone, it is de facto not a truly domestic currency for any of its sovereigns, since none of these have the right to individually print the Euros it wants or needs. Without that right, the Eurozone’s sovereigns’ debts are all, de facto, denominated in a quasi-foreign currency.

But what the book does not mention, is what came afterwards, I do not know exactly where and when; something that here and there is referred to, in hush voices, as Sovereign Debt Privileges. These translate into that the EU authorities (European Commission?), for the purpose of the risk weighted capital requirements for banks, assigned all Eurozone nations an insane 0% risk weight. 

That distortion in favor of Eurozone’s sovereign’s accesses to bank credit has impeded the markets from sending the correct market signals with respect to the interest rates for each sovereign.

One of the consequences of this has been the tragedy of Greece. Especially since Greece was then forced up to pay up basically on its own for this EU mistake, so as to bail out German, French and other Eurozone banks. What a Banana Union!

As for Professors Stiglitz opinions on Brexit I might resume those I my own words as “If there's a Remain there might not be a EU in which to remain”, something that would be very sad as EU was, and still can be, a very beautiful dream.

But let me be clear. I do not hold the EU authorities as solely responsible for the consequences of their 0% risk weighing of the Eurozone Sovereigns. Already in 2011, in a post titled “Who did the Eurozone in?” I argued that the extraordinary low risk weights that the Basel Committee assigned to sovereign debt when compared to what it assigned to the private sectors would end in tears. (And that goes not only for the Eurozone)