"I'm a professional. I am 100% right".
So said referee Mark Halsey during the Half Time interval to Ipswich manager Jim Magilton after making a sending off decision that was, in fact, 100% wrong. However, the man is most certainly a professional...
There are two fundamental factors that allow corruption to occur in a financial marketplace. Firstly, one needs a lack of regulatory oversight to enable capitalism and corruption to perform their paso doble unhindered by anything as constraining as the law. If repetitive abuses of the system create the dynamic for a dose of restrictive regulation then self-regulation is the cry that goes up - no red tape unless it is self-administered. Secondly, one requires the key individuals to undertake the strategies of the sectoral power base whether such power resides in a monopoly, a duopoly, a cartel (fragmented or otherwise), an oligarchy or the deep state. Mark Halsey's professional unprofessionalism is a template that exists across the spectrum of shareholder capitalist business structures.
In this post, we look at four areas of corruption that are loosely linked in style but very different in subject matter. We will check the corrupting of both football and politics by racism and greed and we'll revisit (briefly) the abusive mechanisms destroying English football together with the abuse of the global financial system by the US, the hyper power. The markets so addressed are the global football betting markets and the transfer market in African players, the prediction markets for the American election and the subprime market that is currently destabilising the entire financial system. As will be seen, the same corrupt infrastructures and hierarchies rear their heads across the board.
We use two methods to view our subject areas. Mao entertainingly believed in "truth from facts" which was one of his good calls. And, a more principled angle comes from J.K. Galbraith: "There is a dangerous cliché in the financial world [that] everything depends on confidence. One could better argue the importance of unremitting suspicion". Let us suspiciously begin...
Market manipulation is the cause of the subprime scandal, the global slowdown, the credit squeeze, the inter-bank liquidity crisis and the recession that lurks just around the corner. We have posted previously how much of the global macroeconomic agenda is developed at the World Economic Forum held annually in Davos and in numerous offshoots strategies that evolve from this meeting. As the IMF, the World Bank, the Federal Reserve, the Bank of England, the private equity firms, hedge funds and investment banks meet with the chosen heads of business and government to mull over our future realities in this truly non-democratic manner, some individual players develop proprietary hidden agendas. Undoubtedly, the firm that we possess the most professional respect for in this global grey market is the leading investment bank, Goldman Sachs. But this respect is merely professional - their trading style is strictly psychopathic and it is Goldman Sachs who are responsible for the machinations that have created today's momentous recessionary pressures. A little background on Goldman Sachs... Analytically, Goldman Sachs are in a different league to the other investment banks. They have more losing days than the other firms and yet still top the profits table year after year. They are able to achieve this success through a strict culture, excessive use of inside information, much cloned trading and a highly original attitude to risk. To Goldman Sachs, the question is not "am I taking too much risk?" but rather "am I taking enough risk and is it the correct type of risk?". The resultant highly speculative and highly profitable trading strategy is exemplary in its execution. Fair dinkum. Its a competitive market place and Goldman Sachs have the best business model and the majority of the best traders - to this extent, they deserve to win their trophies. However, being a psychopathic organisation, a professional competitive advantage is not enough.
Okay, back to the plot... Its May 2006 and economic incompetent George W. Bush has just sacked economic incompetent John Snow as US Treasury Secretary. Bush approached Hank Paulson, the chief executive of Goldman Sachs, with the job offer. Paulson would agree only if he could implement his own policies without the restraining hand of government (if, indeed, the Bush dynasty does restraining hands...). Desperate to bring genius to his bunch of cow-hands, Bush agreed. Winding forward to January 2007, in Davos and the Goldman Sachs people are telling all and sundry how bullish they feel about the future direction of the financial markets. But, at the same time, Goldman Sachs' analysts were developing a trading strategy which was effectively a proprietary bet that the value of mortgage-backed securities would fall. They have profited handsomely from this contrarian posturing/trading and earnings in the fourth quarter showed a 2% rise on the previous year while ALL of their competitors were being dragged down by subprime related investments. Without the role of Hank Paulson, this might be seen as a slick piece of trading. It wasn't. It was corruption. Goldman Sachs is the investment bank equivalent of AC Milan - the binding motto is "once a player, always a player". Paulson's former Goldman Sachs co-worker, Bob Steel, was nominated as Undersecretary of the Treasury for Domestic Finance and the two men set about the task at hand. Indeed, Christopher Dodd, a Democratic senator, has publicly questioned whether the invisible hand of Hank was behind the macroeconomic manipulations that created a suitable atmosphere for the subprime chaos. Incredibly, Paulson is also a member of the IMF board of governors who recently agreed that the economies of China and India were, in fact, 40% smaller than thought which, at a stroke, further strengthened Goldman Sachs' short positions in the market against the system.
Think about the democratic invalidity of this structure before we leave this global corruption. An investment bank takes over the treasury of the global imperial power to engender a trading strategy which, while raising significant profits for insiders and shareholders, results in a global recession for the rest of us. With considerable chutzpah, Paulson has set up the Hope Now Alliance to help the victims of the trading strategy he himself implemented. Outrageous.
Staying with the world's one remaining primitive culture brings us to that triumph of democracy - the US presidential election. Following the vote in Iowa, there is considerable momentum building behind Barack Obama to win both the Democratic (sic) nomination and even the race for the White House itself. Intrade are currently setting their binary market at Obama 55.2-56.9 and Clinton 40.0-42.5 on the Democratic nomination. Prediction Markets are becoming very popular platforms for the trading of binary markets - a binary market is one that may be reach equilibrium at 100 or 0, such as an individual being elected or not, the FTSE finishing the day higher or not etc. Political Prediction Markets are considerably more accurate than standard opinion polls as people lie to pollsters but stay true to their cash (making the assumption that traders are rational beings). In this current marathon US campaign, the gap between the money and the polls is greater than usual with the markets downplaying the likelihood of an Obama victory compared with the pollsters. Why so? Racism is a core competency of the shareholder capitalist agenda. Both abroad and at home, US policies increase income inequality based on a colour chart of prejudice. The Barack Obama campaign is highlighting this fundamental feature of much of what the US claims is society. Lets look at a few facts. The Republicans are desperate for Obama to get the Democratic nomination as their analysts are more than aware that the racism inherent in society will tilt the presidential fight in favour of the right if he wins. Clinton is a much scarier option as the Clinton campaign will use equivalence in gutter tactics. A non-democratic peculiarity in some states adds to this farce of an electoral system. Some key states of the union allow citizens to vote for both Democratic and Republican nominees regardless of their political inclinations which is a structure primed for tactical voting. Furthermore, huge swathes of the Black population are disenfranchised from the US electoral system. Non-registration, depoliticisation on a party level and a constant national agenda to imprison as many Blacks as possible, thus removing their right to vote, makes the Black vote nowhere near as strong as it deserves to be. America, after bowing briefly to civil rights in the 60's, has spent most of the last 40 years developing strategies to deny the vote to Black people (check the prison profiles of predominantly Black crack arrests compared with predominantly white cocaine arrests). Furthermore, the divide-and-rule policies imposed on the ghettos leads to little parity of purpose between the Black and Hispanic underclasses. So, this free democracy (sic, again) will produce an election costing over a billion dollars which will merely serve to demonstrate the racist culture of the hyper state. The fact that there are some major market operators choosing to make money out of this systemic racism is simply another odious example of the markets as an ideology at work. In 1964, Malcolm X wrote: "...they'll call you an extremist or a subversive, or seditious, or a red or a radical. But when you stay radical long enough and get enough people to be like you, you'll get your freedom". Unfortunately, he reckoned without the impact of the deep state.
Racism impacting upon the markets is also the basis of our third example of corruption - the transfer system for African players into Europe. On the eve of the African Cup Of Nations finals in Ghana, there is an excellent article in today's Observer newspaper highlighting the plight of young wannabee footballers in West Africa who are being tricked by rogue agents and dumped on the fringes of western Europe after perilous journeys across to Las Islas Canarias or Malta (see: http://football.guardian.co.uk/News_Story/0,,2234283,00.html). The misery of the reality of life for the people of the Heavily Indebted Poor Countries (HIPCs) produces huge incentives for these kids (and their families) to pawn everything on the very remote chance that they will soon be in one of the top European leagues. The regulations, or lack of them, allow unregistered agents, largely from the Middle East and Eastern Europe, to rob the poorest on the planet while FIFA stands buy with the usual useless platitudes. This modern day slave trade destroys already miserable lives. Of far less importance but also worthy of note is the fact that this human trafficking distorts the transfer system. Although there are a few properly regulated academies in Accra sponsored by north European teams, the vast majority are not accredited. It would be an optimistic thing to believe that Ghana might be helped to clean up its act to celebrate the continental tournament which they are about to host but don't hold your breath. The shareholder capitalist system is built on incentives. Despite the lies of purchasing power parity, the situation at the bottom of the pile is worse than ever and the incentives to take these lottery-esque probability risks on the off-chance of something approaching an existence is a damning indictment of an abusive system and a sport that does not care about its poorer brethren.
Which brings us to the corruption in football in England. The Football Is Fixed blog attempts to demonstrate the parallels between corrupt infrastructures with a lack of regulatory restraints in football and to compare with the similar structures in other areas of the global financial system. The real human impact of Mark Halsey favouring Portsmouth is insignificant alongside a global recession, a modern day slave trade or systemic racism in the empire but by focusing on the templates of corruption in a simple sport we, with some success, demonstrate that a standard psychopathic agenda underpins all corrupt edifices. Consequently, it should not be seen as unusual that there are also parallels in the solutions to the excesses of these psychosystems. All markets require full disclosure, no insider trading, no private markets, proper regulation that fights corruption rather than ignores it. In football, this requires an end to the illicit nature of the underground betting markets in Asia together with a desire to ensure that the outcome on the pitch resembles reality rather than a reflection on the betting liabilities of a bunch of bookmakers. Our main Chinese contact believes that the European firms lack strategic vision and suffer from internal discord which impedes their credibility as thinking organisations. Indeed, the Chinese market makers have a clear understanding of both the institutional structures and fissures in the European marketplace but are prevented from fully exploiting this market advantage in a meritocratic marketplace by the refusal of the Europeans to allow an open market.
Something needs to happen soon. The main feature of the world's allegedly favourite competition this weekend has been the massive empty spaces at all the grounds even when the visitors are semi-glamourous. People might not yet understand the full extent to which they are being shortchanged by the corruption of the national game but they do understand that somebody somewhere is taking the piss big style.
Of course, overseeing this corruption across both the political and footballing arenas is the dark shadow of the Murdochracy which defines the spectacular realities on which you are expected to focus. The Murdochracy doesn't discuss racism or political corruption or slavery or rigged football matches. But it does do Republicanism in all its shades. And corruption too, while, in the words of John Pilger, the Murdochracy is devoted to the promotion of "war, conquest and human division".
If his parents hadn't called him Rupert, perhaps he would have turned out less psychopathic...
© Football Is Fixed/Dietrological
