In words of two great Canadian singer songwriters, this is what has, and is happening, to Europe.

After the Basel Committee in 1988 decreed its risk adverse bank regulations, in words of Joni Mitchell’s Yellow Taxi, this is what has happened to Europe.

“Don't it always seem to go

That you don't know what you got 'til it's gone?

They paved paradise and put up a parking lot

Ooh, bop-bop-bop

Ooh, bop-bop-bop (na-na-na-na-na)

They took all the …. and put 'em in a …. museum

And they charged the people a dollar and a half to see them

No, no, no

Don't it always seem to go

That you don't know what you got 'til it's gone?

They paved paradise and put up a parking lot.”

And, if also Leonard Cohen could update his You want it darker, though surely in a more poetic way, it could go something like this:

If you’re the regulator, I'm out of the game

Deciding what banks need, kids will be broken and lame

If thine is the glory, theirs must be the shame

You want it darker

You killed the flame

It's written in regulations

It's not some nonsense claim

Basel Committee told banks

Keep refinancing our safer present

Don’t finance their riskier future

And that’s what our children got

You want it darker

They killed the flame

What has become of Europe (and of you the whole Western world)? Don’t be such a defeatist!

Please free us from imprudent risk-aversion and give us some prudent risk-taking

God make us daring!

USA and Canada beware… all this goes with you too.

 

More important than affordable houses for the young, is for them to afford houses.

A letter sent to The Globe and Mail (not published)

The Inter-American Commission of Human Rights (IACHR) has joined UN Rapporteur in recognizing Canadian Human Rights-Based Approach to Housing. When it refers to the creation of safe and affordable housing during the next 10 years for the Canadian population most in need, such as women and children fleeing family violence, seniors, persons with disabilities, those dealing with mental health and addiction issues and veterans, I cannot but concur.

But, it also makes reference to “young adults” and, in this, as a grandfather of two Canadian girls, I must raise my hand to argue that much more important than allowing the young adults affordable housing, is allowing them to afford houses.

Currently, because banks are allowed to leverage more with “safe” residential mortgages than with loans to the “risky” entrepreneurs who stand a better chance to create the future jobs our young need; and banks therefore earn higher risk adjusted returns on equity with mortgages than with loans to entrepreneurs, Canada, like all countries using the Basel Committee’s risk weighted capital requirements for banks, has put the horse before the cart.

PS. Not sent to The Globe and Mail: What would the price of a house be if there was no financing available to purchase these? Of their current price how much is represented by the intrinsic value of the house, and how much is a reflection of all one-way-or-another subsidized financing allocated to that sector? The sad truth is that our society has ended up financing the financing of houses. When all that low risk weighted mortgaging comes home to roost in a subprime unproductive economy, it will be hellish

PS. Chinese money: What’s the problem with Chinese freezing some of their wealth in Canadian real estate? What’s important is what those selling that real estate do with the money. Or not?

Research project: How much in the current house prices can be attributed to the market having priced in all preferential treatments the society has awarded the financing of houses… like the low risk weights in the risk weighted capital requirements for banks?

@PerKurowski

Many lesser impact sanctions, on many more soft-liners (50.000?) are also needed in Venezuela.

The Atlantic Council has just published a document on the issue of “What US sanctions would be most effective in maximizing pressure on President Maduro’s government while minimizing repercussions for the Venezuelan people?”

It includes to “Extend the use of individual sanctions, and potentially some entity-focused sanctions, to fracture the regime soft-liners from the hard-liners with nothing to lose.” 

I agree, but I do not think that only severe sanctions, of some few very responsible hard-liners, like to “block all property belonging to those individuals and entities subject to US jurisdiction and prohibit US persons from engaging in transactions with them”, will suffice.

Lesser impact sanctions, extended to many more soft-liners, could prove easier to implement and be even more effective.

For this it might suffice with USA, Canada, Europe and all those nations that recently signed a declaration in Lima, informing they were now contemplating issuing a blank prohibition to all members of the Constituent Assembly, and of the National Guard, sort of 50.000 Venezuelans, to access any kind of visa. 

If that prohibition could, at a later moment, perhaps also be extended to include all their close relatives, it would ignite many serious discussions and doubts in the homes of the soft-liners.

Canada: A Universal Basic Income, should never be more than a step-ladder to help reach up to the real economy.

Had Venezuela’s oil revenues over the last 15 years been distributed directly to the Venezuelans by means of a (in this case a variable) Universal Basic Income (UBI), instead of by redistribution profiteers, the poorest of my homeland would have received at least six times more of it, and the country would not be so close to being a totally failed state.

Be sure, the best way to increase the efficiency of our citizen-to-citizen solidarity, everywhere, is to avoid the redistribution profiteers’ tolls.

I am not a Canadian but I have two Canadian granddaughters, and so I have a vested interest in Canada’s future. I firmly believe that a UBI is a very important tool in order to meet many actual and future social and economic challenges.

But the number one objection to a UBI, and which your local redistribution profiteers will try to argue in order to keep their franchise, is that it could reduce the willingness for work.

In this respect, and referring to Andre Picard’s “Basic income is not just about work, it’s about health” Globe and Mail, November 8, I believe that the UBI to be tested, should not be set as is proposed as 75% of low income measure before tax (LIM-BT), $1,320, but as a percentage of the salary you could obtain working, for instance 60% at the minimum salary level. As I calculate it, that would yield $1,100.

For me the biggest benefit of UBI is as a step-ladder that facilitates reaching up to that gig-economy that seems to have arrived as a fixed feature. We do need worthy and decent unemployments.

UBI should never be seen as lifting anyone out of poverty but allowing millions to lift themselves out of poverty.

UBI has much less to do with human rights, "doing good", than with an intelligent society organizing itself for challenging times, "doing smart".

UBI should always be a beautiful citizens to citizens affair. At no moment should it be soiled by referring to it as a government handout. 

Of course UBI has to be funded with real money, no cheating paying it with inflation or public debt. Besides natural savings in the redistribution costs, one interesting alternative is the use of revenues from high carbon taxes. That would align the incentives between the fights for a better environment and against inequality.

PS. Joking but not really joking: Perhaps a payroll tax on robots and driverless cars could also be used as funding mechanism; that would also help us humans workers to be able to compete on a more level playing field.

http://perkurowski.blogspot.com/2016/04/the-wealthy-and-poor-should-all-be.html

http://perkurowski.blogspot.com/2016/10/how-to-start-discussions-and.html

Growing difficulties to enjoy the booty

During the recent meetings of the World Bank, as a result of the current mess surrounding its president Mr. Wolfowitz, some issues were unfortunately relegated to the background.

One of them refers to the announcement of the Initiative for the Recovery of Stolen Assets, which, together with other agreements such as OECD’s against corruption, shows how the world progresses, very slowly but safely, on the path of better global governance.

The ease by which until now thieves managed to hide their loot is shameful; sometimes even under the noses of their victims. There is of course still a long way for an initiative like this to become an effective instrument ... but perhaps in less time than what the outlaws in the world suspect.

Parallel to official initiatives, the technological advances that allow access, archive and send information is converting civil society, citizens, whether we like it or not, into real-time investigators. It’s not they are searching, but when they do see a knowingly corrupt, and have their cell phone with camera in hand, they will take a photo of him in his moments of enjoyment, which will swell the truth-files until these explode.

In the same way, all those concealment of ill-gotten goods services, to which some corrupt countries have been dedicated are becoming more expensive; as that international community of civil societies develops and understands they have all better row in the same direction, if they are to have a chance for survival on an ever shrinking planet.

Finally and observing how in Canada an ordinary court recently began a trial on violations of human rights (the genocide in Rwanda), the day should not be far away when one of those millions of emigrants in the world who have been much forced to emigrate as a consequence of corrupt acts by their rulers, could successfully sue one he finds enjoying ill-gotten money in their new alternative country. The tests you would need to enter your claims, would all be sent to you on the web.

Does the above threaten the sovereignty of nations? Sadly yes! So therefore it is always much better for nations to free themselves, sovereignly, from their own corrupt.

One of the 4,292,466 shadow citizens of a shadow nation. (Insolently there are still records to be scrutinized)

Translated from El Universal