Some of my tweets in times of Covid-19

On the response to COVID-19: 2 tweets Jul 27, 2020

Sweden kept all schools until 9thgrade open. Parents of children in 9th grade are almost always less than 50 years of age. In Sweden, as of July 24, out of 5,687 Coronavirus deaths 71, 1.2%, were younger than 50 years.

Conclusion: Keep schools open, keep older teachers at home and have grandparents refrain from hugging their grandchildren. Disseminating data on COVID-19 without discriminating by age, is in essence misinformation.

https://twitter.com/PerKurowski/status/1287748336913719296?s=20

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 youngest, for the longest.

My tweets on debt-to-equity conversions in times of a pandemic

“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?

In Italy, as of August 17, deaths from coronavirus COVID19 are only 0.25% for those under 40 years of age.

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 policy: “I’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.

Entrusting

Paraphrasing Georges Clemenceau’s “War is too serious a matter to entrust to military men”
A pandemic is too serious a matter to entrust to scientists/epidemiologists

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:

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, 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.

On 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

In Washington Post.

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

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?

God make us daring!

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!

The robots will be further empowered:

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

Here are current data of Covid-19 deaths in Sweden that explains the wisdom of keeping schools up to 9th grade open.

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?

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.

Banks, the morning after Covid-19

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?

PS. November 2021: Should we vaccinated not be very thankful for that a group of without preconditions citizens, are willing (heroes) to keep on being unvaccinated (the placebo), and thereby serve the scientist as a control group for Covid vaccines, for the benefit of future generations?

PS. November 2021: Have your national health authorities identified without preconditions citizens willing to keep on being unvaccinated (placebo), and thereby serve science as a control group for Covid vaccines? If not, why? Is such research not a question of national security?

My tweets on debt to equity conversions in times of a pandemic

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.

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

British Museum “Currency in crisis: German emergency money 1914-1924”

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.

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.

It was not the first time my mind was wandering into that direction

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

https://teawithft.blogspot.com/2009/06/but-there-is-minimum-minimorum-reform.html

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

http://subprimeregulations.blogspot.com/2019/07/risk-weights-are-to-access-to-credit.html

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.

http://myubi.blogspot.com/2017/01/my-universal-basic-income.html

Churchill and Covid-19?

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

And March 14, 2020, I tweeted: 

"Endure" Again I visited Churchill War Rooms in London Reading UK’s plans of building up herd immunity against coronavirus, I wonder whether Winston would not have agreed with such stiff upper lip policy “I've nothing to offer but coughing, fever, chills and shortness of breath”

PS. Most specially when the vaccines then seemed to be years away

A battle of our times: Herd Immunity vs. Herd Docility

PS. “Don't be a defeatist dear! It’s so middle class”

PS. My Tweets in Times of a Pandemic

Today we Venezuelans need something very solid to grasp, so as with impetus again believe in the future of our nation.

For Venezuelans to be able to eat quickly, hand PDVSA over to its creditors quickly, so they get the equipment working quickly, so they can collect something quickly, and so that the citizens, not some bandits, can be paid Venezuela’s oil royalties quickly.

Venezuela's legitimate creditors should know that their only chance of collecting anything depends on whether Venezuela manages to raise a reasonable capacity to extract oil again, at a reasonable cost. 

Anyone who arrives to have the responsibility of governing the country should know that without Venezuela being able to raise a reasonable oil extraction capacity, at a reasonable cost, and in a relatively short period, their chances of continuing to have the confidence of the people are nil. 

If most of the net oil revenues (resultas petroleras), are shared equally among all Venezuelans then they will know that, compared to having to bend before authorities to beg for a few Claps, or free gasoline, or foreign currency at preferential rates, they would be in heaven. At last they will be able to feel living in a nation and not in somebody else’s business. 

Because of the above, I'm sure that to raise the soul of our Venezuela, there is nothing better than a great agreement based, for example, in the legitimate creditors during the next 25 years getting 15% of our net oil revenues, the government 34% and citizens 51%.

Impossible? No! Our current legitimate creditors would be delighted with the establishment of a repayment source directly related to the income obtained by an increased oil extractive capacity. 

And I'm sure that with the certainty of an institutional agreement like the previous one, it would rain offers from qualified oil companies to make the many investments that are necessary today, after PDVSA has converted its assets into junk. 

And I'm sure that both the World Bank and the International Monetary Fund would be delighted to transparently supervise the correct implementation of such an agreement.

The difficulty? Those hunting the oil revenues and their friends, those who always distribute our oil results to keep the best part for themselves. Again, they will argue that if they manage 34% plus 51%, our Venezuela will be better. Should we keep believing them? No way Jose! 

The faster an agreement like this one is reached, one in which everyone will be rowing in the same direction, the easier it will be to straighten out our twisted and saddened country, in order to give it the necessary encouragement to find solutions to its many other problems. 

In addition, any restructuring of debt has, for simple humanitarian reasons, the duty to seek to provide quick and sustainable responses to the most pressing needs of Venezuelans, primarily those of its malnourished children and those of its elderly painfully abandoned adrift. Humanitarian aid and loans from multilateral institutions help in the short term, but they do not represent a sustainable source of resources. 

Of course, under this redistribution distribution plan it would be much easier to end this economic crime against humanity of giving away gasoline in Venezuela, instead of selling at its opportunity value in the international market. 

I use here the term petroleum extraction since, for decades I have consider it a disrespect to that providence that placed petroleum under Venezuelan earth, to refer to it as producers. 

Translated from Petropolitan

PS. 2026 #AI #ChatGPT – #Grok: How might Venezuela's economic, political, and social evolution have unfolded if the nation's net oil revenues had been distributed directly and equally among all citizens born in the country?

@PerKurowski

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?

When I grow up, I’m thinking of becoming a great vote fisher. I mean one of those anglers who, as a fishing bait, offers to make other, by force, pay for their generous promises.

It seems such a great business, wouldn’t you agree daddy?

Daddy, when I grow up, I’m thinking of becoming a bank regulator or supervisor. It seems such a safe job.

Have you seen what has happened to those jobs since the global financial crisis? It sure looks as the more you fail the more jobs there are.

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

https://www.youtube.com/watch?v=Dug-G9xVdVs

PS. I just remembered... becoming a price regulator is a great option too.

PS. Daddy, when I grow up, I feel I should be a public voiceful admirer of any great “wealthy and powerful transformational leader”. Is that not a great business?

PS. Daddy, when I grow up, should I not aspire to become an artificial intelligence regulator. That sure sounds like the cherry on top of the icing on a cake.

Communicating in a polarized world.

Financial communism

And when reading this, don't just take my word on it:

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"

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.

And after having thereby empowered the Bureaucracy Autocracies, many of those statism profiteers shamelessly blame our difficulties on the usual scapegoat… neoliberalism

And this communist virus, Basel I, fabricated in the laboratories of the Basel Committee, was let loose in the free world 1988, one year before the Berlin Wall fell.

PS. The fact is that I could just as well titled this as "Financial fascism"

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.”

PS. The subsidized risk-free rate

PS. In the case of the Eurozone sovereigns it’s even worse as all these have been by EU/EC assigned a 0% risk weight even though they take on debt that is not denominated in their own domestic printable currency

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

PS. Before the debt ceiling is lifted, which it must be, Congress must dare to at least pose a question.

PS. Was that’s not a valiant, courageous and honorable confession by Paul Volcker? Thanks @PostOpinions for not ignoring it.

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

As an introduction to what follows, you might want to start by reading here what the United Nations wrote about sovereign debts restructuring in 2012.

Here's my 2019 take on the case of Venezuela:

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, should consider the following:

1. Not only for Venezuela’s sake, but also for all the citizens of the world’s sake, before absolutely any restructuring takes plac, exploit Venezuela’s debt problem, in order to establish clear definitions of what should be considered bona fide credits and what odious debts/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.

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. 

A letter published in the Washington Post August 12, 2019

Today we Venezuelans need something very solid to grasp, so as with impetus again believe in the future of our nation.

For Venezuelans to be able to eat quickly, hand PDVSA over to its creditors quickly, so they get the equipment working quickly, so they can collect something quickly, and so that they can pay the citizens, not some bandits, Venezuela’s oil royalties quickly.

Venezuela's legitimate creditors should know that their only chance of collecting anything depends on whether Venezuela manages to raise a reasonable capacity to extract oil again, at a reasonable cost. 

Anyone who arrives to have the responsibility of governing the country should know that without Venezuela being able to raise a reasonable oil extraction capacity, at a reasonable cost, and in a relatively short period, their chances of continuing to have the confidence of the people are nil. 

If most of the net oil revenues (resultas petroleras), are shared equally among all Venezuelans then they will know that, compared to having to bend before authorities to beg for a few Claps, or free gasoline, or foreign currency at preferential rates, they would be in heaven. At last they will be able to feel living in a nation and not in somebody else’s business. 

Because of the above, I am sure that to raise the soul of our Venezuela, there is nothing better than a great agreement based, for example, in the legitimate creditors during the next 25 years getting 15% of our net oil revenues, the government 34% and citizens 51%.

Impossible? No! Our current legitimate creditors would be delighted with the establishment of a repayment source directly related to the income obtained by an increased oil extractive capacity.

And I am sure that with the certainty of an institutional agreement like the previous one, it would rain offers from qualified oil companies to make the many investments that are necessary today, after PDVSA has converted its assets into junk.

And I am sure that both the World Bank and the International Monetary Fund would be delighted to transparently supervise the correct implementation of such an agreement.

The difficulty? Those hunting the oil revenues and their friends, those who always distribute our oil results to keep the best part for themselves. Again, they will argue that if they manage 34% plus 51%, our Venezuela will be better. Should we keep believing them? No way Jose!

 

The faster an agreement like this one is reached, one in which everyone will be rowing in the same direction, the easier it will be to straighten out our twisted and saddened country, in order to give it the necessary encouragement to find solutions to its many other problems. 

In addition, any restructuring of debt has, for simple humanitarian reasons, the duty to seek to provide quick and sustainable responses to the most pressing needs of Venezuelans, primarily those of its malnourished children and those of its elderly painfully abandoned adrift. Humanitarian aid and loans from multilateral institutions help in the short term, but they do not represent a sustainable source of resources.

Of course, under this redistribution distribution plan it would be much easier to end this economic crime against humanity of giving away gasoline in Venezuela, instead of selling at its opportunity value in the international market.

I use here the term petroleum extraction since, for decades I have consider it a disrespect to that providence that placed petroleum under Venezuelan earth, to refer to it as producers.

 

Translated from Petropolitan

@PerKurowski

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

http://subprimeregulations.blogspot.com/2019/03/my-letter-to-financial-stability-board.html

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.

I saw Netflix’ documentary on Alexandria Ocasio-Cortez

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?

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. 

I have some ideas about what could compete with Facebook/Twitter

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 (most apply to Twitter too):

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?

https://perkurowski.blogspot.com/2017/11/those-bothering-us-and-wasting-our.html

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)

Three tweets on the Greek Tragedy

What if Alexis Tsipras and Yanis Varoufakis, while negotiating the debt of Greece with the Troika of the European Commission, the European Central Bank and the IMF, had brought up EU’s “Sovereign Debt Privileges”, and then argued: 

Though our debt is in a currency that de facto is not a domestic printable one, you assigned Greece 0% risk weight. That meant European banks could lend to us against zero capital. You expected our governments to resist the temptations of too easy credit 

http://blogs.reuters.com/hugo-dixon/2013/10/07/bundesbank-right-to-focus-on-doom-loop/

And now you want our children and grandchildren to pay for all the need of bailing out your banks? Have you no shame? 

Shall we take you to court? Shall we inform your constituency about your insane 0% risk weighting of Greece? Or shall we renegotiate?

https://teawithft.blogspot.com/2018/09/in-case-of-greece-eu-violated.html

My tweet on IMF loans to Venezuela

If IMF and friends would give loans around $60bn to Venezuela to help it recover, a big chunk of it, about 35%, should go in cash to all its citizens, e.g. $60 per month each, allowing the markets freely respond to their needs, without any bureaucratic intermediation from above

Si FMI y amigos diesen préstamos tipo $60 mil millones a Venezuela para su recuperación, gran parte, aprox. 35%, debería ir en efectivo a sus ciudadanos, p. ej. $60 por mes c/u, permitiendo que los mercados libremente respondan a sus necesidades, sin intermediación burocrática

There are two de facto class wars, which seemingly shall not be named

One between those working with salaries defined by minimum wages, and those looking for any job.

Another between those who own houses as investment assets, and those who just want to be able to afford a home.

On these where do you stand? Do you take a side, or do you prefer to conveniently ignore it?

Redistribution profiteers have a vested interest in hindering people from reaching the pot they promise will be there waiting for them, at the end of their Marxists rainbow.

"From each according to his ability, to each according to his needs"

In the Marxist view, such an arrangement will be made possible by the abundance of goods and services that a developed communist system will produce; the idea is that, with the full development of socialism and unfettered productive forces, there will be enough to satisfy everyone's needs

I do not agree.  First and foremost because I believe that free markets (capitalism) has by far the greatest capacity to extract the most from the citizens’ abilities. 

But also because, while traveling on such Marxist route, some few would have to redistribute any production of goods and services that is insufficient to satisfy the demand. And those taking the decisions fall too much in love with the political and financial profits such redistribution franchise can produce. As a consequence, the redistribution profiteers will never want to let loose of their power and their interference will never allow the production of abundance.

That said, as a citizen, I can nonetheless see the need for some redistribution of income and wealth to occur, not only in order to keep our society at peace but also out of simple plain need of social justice. For that I firmly believe the redistribution should primarily be done, not top down, but bottom up. 

An unconditional universal basic income would do so and it would also be the best way of keeping the distortion of the productive forces of a free market at minimum. 

That societal dividend would have to absolutely meet two criteria:

Be large enough to help you out of bed but never large enough to allow you stay in bed.

Be 100% fiscally sustainable, nothing of having our grandchildren pay for our income today. 

It should be easy to understand why the redistribution profiteers abhor the UBI… and one of their arguments against are precisely: that it will inspire laziness and keep people in bed; and proposing that it should be so big so as to guarantee its fiscal unsustainability, so that they will have to be kept in their role as redistributors.

There are many funding sources for an UBI. In an oil exporting country obviously those oil revenues should be a prime source, as already done in Alaska.

Though in Spanish, below is a short YouTube in which three important members of the Chavez/Maduro Bolivarian Revolution, confess their need of keeping the poor poor: 

Tareck El Aissami, former Vice President and current Minister of Industries and National Production: “The poorer people are, the more loyal to the revolutionary project they are, and the more love for Chávez they have"

Héctor Rodríguez, a former Minister of Education and currently the Governor of Miranda: "It is not that we are going to lift people out of poverty into the middle class so that they later aspire to be scrawny (a derogatory term used for the opposition)"

Jorge Giordani, four times Minister of Planning, “Our political strength is given to us by the poor, they are the one who votes for us and that’s why our discourse of defending the poor. The poor will have to remain poor, we need them so.”

Here’s the moment it struck me that if Brexit falls apart, there might not be a EU for Britain to remain in.

It’s now twenty years since the Euro was introduced, more in order to strengthen a union than the result of a union. As I wrote in an Op-Ed at that time, it brought on important challenges to its 19 sovereigns. First it meant giving up the escape valve of being able to adjust their currency to their individual economic needs and realities, and second, much less noticed, also by me, was that they would hence be taking on debts in a currency that de facto was not denominated in their own domestic (printable) currency.

To face those challenges required the Eurozone to extend much more the Euro mutuality to other areas, like to monetary and fiscal policies. In that respect there’s no doubt that way to little has been done.

For more than a decade I thought the Eurozone applied Basel Committee’s Basel II standardized credit rating dependent risk weights in order to set the capital requirements for banks, when lending to sovereigns. I never approved of that because I considered those risk weight way too statist, tilting bank-lending way too much in favor of the sovereign and against the citizen... and that should do the Eurozone in. 

But then, by mid 2017, I found out that it was all so much worse. EU authorities, most probably the European Commission, I really do not know who and when, assigned all Eurozone sovereigns a 0% risk weight, even though none of these can print euros on their own.

I could not believe it. That meant that European banks could hold sovereign debt, of for instance Greece, against no capital at all. How could something crazy like that happen? That basically doomed the Euro. What would have happened with USA if it had done the same thing with its 50 states?

How on earth can it now get out of that corner it has been painted into, especially when Europeans sing their national anthems with so much more emotion than EU’s anthem, Beethoven’s Schiller’s “Ode to Joy”

And that’s the moment it struck me that if Brexit falls apart, there might not be a EU for Britain to remain in.

My November 1998 Op-Ed "Burning the bridges in Europe"

PS. When Greece fell into the trap then EU authorities had it sign a Versailles type treaty.

We citizens need a clear global definition on what constitutes odious credits to sovereigns.

A letter to the Washington Post (not published)

I refer to Washington Post’s “Jaw-dropping corruption” recounting illicit investment relations between China and Malaysia, January 12.

It shows that though there have been discussions on odious debts, odious credits merits perhaps even more attention.

For decades I have begged for the establishment of clear and defined international rules that, either because of corruption or too nonchalant credit analysis or due diligence, should declare credits as odious, and therefore null, or at least not enforceable through normal channels.

In 2004 I published an Op-Ed titled “Odious Credit” in El Universal, Caracas. Can you imagine how much odious financing Venezuela could have avoided to contract with China, had such regulations been in place?

There’s way too much global camaraderie between governments all interested in taking on debt. We need much more global camaraderie between citizens interested in their governments not contracting odious debts. 

PS. A Public Sector Lending Charter is needed

The Chavez/Maduro Bolivarian Revolution, has confessed its need of keeping the poor poor

Though in Spanish, below is a short YouTube in which three important members of the Chavez/Maduro Bolivarian Revolution, confess their need of keeping the poor poor: 

Tareck El Aissami, former Vice President and current Minister of Industries and National Production: “The poorer people are, the more loyal to the revolutionary project they are, and the more love for Chávez they have"

Héctor Rodríguez, a former Minister of Education and currently the Governor of Miranda: "It is not that we are going to lift people out of poverty into the middle class so that they later aspire to be scrawny (a derogatory term used for the opposition)"

Jorge Giordani, four times Minister of Planning, “Our political strength is given to us by the poor, they are the one who votes for us and that’s why our discourse of defending the poor. The poor will have to remain poor; we need them so.”

PS. So that the riskier small businesses and entrepreneurs who need credit, will need us more, and therefore vote for us more, we, the regulators of the Bureaucracy Autocracy, must set the risk weighted bank capital requirements especially high on loans to them.

The statist Basel Accord should be anathema to the American Constitution.

Charles Krauthammer once wrote the American Constitution “stands for the pillars that define a limited government with enumerated powers, whose mission is to preserve liberty and individual rights”, “The enduring miracle of the American Constitution”, Washington Post, November 30.

In 1988, one year before the Berlin wall fell and so many thought the world had freed itself from communism, America, and much of the developed world, signed up on the Basel Accord. That accord, for the purpose of its risk weighted capital requirements for banks, awarded the sovereign a 0% risk weight, while imposing one of 100% on unrated citizens.

If Krauthammer is right when he wrote of a reverence for the Constitution “so deeply ingrained that we don’t even see it; we just think it’s in the air that we breathe”, I cannot understand the American silence on what clearly is a statist concoction; which I believe goes against everything America and its Constitution stands for.

That seriously distorted the allocation of bank credit in favor of governments and has now painted America into a very dangerous corner; in 1988 America’s public debt was about $2.6 trillions, now it owes around $21.7 trillions and still has a 0% risk weight.

@PerKurowski

PD. Here is what AI, in 2025, thought about what the Founding Fathers would opine.