Sunday, 14 December 2014
Who Regulates The Regulators?
The Ponzi pyramid of self-justification that underpins all free market structures is always a part of the problem rather than a part of the cure.
Who guards the guardians?
Who governs the governors?
Who moderates the moderators?
Who regulates the regulators?
The Financial Conduct Authority (FCA) is not fit for purpose.
Nine out of 12 board members were simply parachuted across from the board of the disbanded Financial Services Authority (FSA) - that's the FSA that failed to suitably regulate the banks prior to and during the 2007/08 crash.
The FSA's regulatory style was so light touch as to be reiki.
Reiki regulation!
The FSA was a prime example of regulatory capture - a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating.
In response, the FCA must be seen to be regulating with the utmost integrity.
Some hope.
Bizarrely, the FCA created a false market in major insurers' shares after botching a press briefing - the share prices of major insurers plunged after the Telegraph published the story.
A 225 page report released this week goes further: "The strategy and manner in which [the media strategy] was pursued was... high risk, poorly supervised and inadequately controlled. When it went wrong, the FCA's reaction was seriously inadequate and fell short of the standards expected of those it regulates."
The regulator tilted the markets!
And the FCA response is to repay some executive bonuses received in an extended window of self-justification and to immediately rush out a long delayed report into the mis-selling of annuities in a blatant display of exactly the sort of public relations and branding that regulatory bodies should not be in business of needing to undertake.
But similar structures are the norm - other recent examples include OFWAT mistakenly overestimating water companies' capital costs when setting price levels and then refusing to impose London Stock Exchange disclosure requirements on non-stock market listed companies, or PricewaterhouseCoopers selling tax avoidance on an industrial scale with the strategy only coming to public knowledge via internal leaks.
Why is it nearly always whistleblowers and (Wiki)leakers but very rarely regulatory bodies and institutional self-policing that reveal the financial miscreants?.
The big picture is one of pure Randian psychopathy - there's minimal red tape to act as an obstacle for the steady flow of sociopathic outsiders to join the psychopathic insiders as cowboy capitalism races to the bottom of its barrel...
... but in the world of football, the situation is worse - neo-Randian!.
Nothing is regulated on any primary level of operation and there are supportive and corrupted flow networks integrated globally to prevent any hope of integrity rearing its head.
All six of the primary bodies allegedly looking into football integrity and matchfixing are compromised in their purpose via their ownership.
Indeed, in certain cases, a more motley crew of interested parties could not have been created even if one had set out explicitly with such purpose!
Fragmented cartels of corruption!
Football governance verges on the non-existent and, even at best, is merely a branding and self-justification process.
Certain entities and structures are systemically corrupt...
... in fact, I'll rewrite that sentence - there are very few bodies and networks in global football that are not systemically corrupt!
Regulation is invisible or malleable self-regulation that equates to no regulation at all - agents, dark pools, betting markets, insider trading, matchfixing, money laundering, third party ownership, mainstream media compliance in a restricted narrative while, once again, whistleblowers and (Wiki)leakers expose, bottom-up, what any decent system would implement top-down.
Inversion capitalism - asset stripping and financial profiteering from the monetising of a brand, tax avoidance and evasion, antisocial competition practices with minimal regulation (for self-justification), alongside state punishment for 5th Estate types who get in the way - the Obama administration has started more prosecutions against whistleblowers than all presidents combined over the last century.
20 whistleblowers have been murdered in India in the last five years.
And the corrupt operations in the distorted infrastructures attract disproportionate investment as investors understand that increased returns are gained by psychopathic control in a lightly regulated marketplace, compounding up the cycles of corruption over time.
FIFA, the FCA, UEFA, PwC, the Premier League, Barclays, the Glazers, the FA Sports Betting Integrity Unit, Gestifute, Goldman Sachs, all these oil companies from interesting geopolitical locations that are buying up British football teams, private equity, dark pools, the control of whistleblowing bodies by those who should be whistleblown, derivatives markets, offshore financial centres and markets, NGO-lite structures etc - pure neo-Bayesian corruption entities beyond the reach of any economic theory as such theory may only be reactive to this juggernaut of inversion free-marketry where there are no rules.
Who regulates the regulators?
And why don't regulators regulate?
© Football is Fixed 2006-2014
Follow us on Twitter @FootballisFixed
Monday, 22 September 2014
State Of The (Football) Nation
Matchfixing corrupts.
Absolute matchfixing corrupts absolutely.
From the mid-nineties onwards, the Asian underground markets exercised total control over English football.
In the last four years, that control has been grasped by a cartel of inappropriates from the UK and its offshore territories.
Neither of these structures is to the benefit of football.
Both create corruption.
- There are referees working with bookmakers and agents to manufacture match outcomes to the financial benefit of their insider trading.
- There are titles and trophies determined entirely by corruption.
- There are managers taking backhanders from agents to pick their clients to mutual benefit.
- There are bookmakers who own football clubs and who utilise this control to fix matches.
- There are individuals within the PGMOL who liaise with criminals and matchfixers in the selection of referees.
- There are individuals passing the fit and proper persons test that are entirely unfit and entirely improper.
- There are crime syndicates and mafia groups who takeover football clubs for fraud, money laundering and matchfixing.
- There are fragmented cartels of football agents who pool their players on the pitch to land huge insider gambles.
- There are broadsheet, tabloid and tv journalists who lubricate these corruptions via public relations abuses posing as journalism.
- There are bookmakers who accept insider trading and matchfixing as such knowledge is regarded as preferential information in the corrupted marketplace.
- There are numerous individuals throughout the game who utilise threats, menaces and coercion as standard business practice.
- There are betting patterns that link these corruptions with their perpetrators.
- There are administrators who facilitate these corruptions in support of their belief in laissez faire capitalism,
- There are many bookmakers who refuse to pay out winnings.
- There are rewards for historical matchfixing and corruptions with a career in media providing disinformation to fans.
- There are rampant abuses of third party ownership by agents which frequently borders on a slave trade.
- There are widespread abuses of performance enhancing substances (and their related masking agents).
- There are a whole array of under the table payments where tax is avoided (either by bungs or the selling of inside information etc).
- There are networks of individuals illegally hacking IT systems in search of valuable information.
- There are numerous examples of referees (and other peripherals) whose wealth is not explained by their legitimate earnings.
- There are a cabal of mainstream television media who accommodate matchfixing and corruption.
- There are more criminalised goalkeepers in English football than any other primary territory in Europe.
- There are no regulations or governmental action preventing these corruptions.
- There are fortunes being made at the expense of the integrity of the game.
English football is systemically corrupt...
... and extensively corrupt in the particular.
We have access via our consultancies to the betting patterns on these events.
And for many dubious penalties/sendings off, for example, there are equivalent betting sources and patterns ensuring profits for the criminals.
Think on this the next time you witness refereeing, goalkeeping, media or bookmaker inputs that appear at odds with the integrity of the game.
Oh, and here is a photo of John Colquhoun.
For many more itemised angles on corruption follow us on Twitter @FootballIsFixed or check out our new blog Omertà on the criminalities underpinning the Premier League and the Scottish Premier League - http://trichotomoustriptychities.blogspot.co.uk/
© Football is Fixed 2006-2014
Follow us on Twitter @FootballisFixed
Tuesday, 19 August 2014
The Ongoing Takeover Of British Football By The New Global Financial Capitalist Elite
One of the most striking features of football in recent times has been the takeover of leading clubs by investors who would not appear, on the surface, to have any real interest in the business of football.
Consequently, the wave of American takeovers of clubs like Arsenal, Manchester United, Liverpool, Sunderland and Aston Villa is the subject of this post.
In the eyes of this particular new breed of owners, it is no longer necessary to win titles and trophies.
The creation of short term cash is everything.
If competitions can be won as well then this is fine and dandy but club performance on the field is always secondary to financial achievement off of it.
This puts such owners at odds with the fans.
Dr Jack Rasmus: "The [global financial capitalist] elite are deepening their control of non-financial companies and are increasingly directing those companies toward profits growth from financial manipulation as the primary corporate activity... Instead of making profits by making real things that require real investment and employ real people, the focus of global capitalism is increasingly toward more financial asset investment."
Thus real profit is being surpassed by generating forms of money capital as profit.
It is the US that is behind the majority of this activity.
Financial gains may be 'created' by manipulation of the US tax code through the utilisation of 'inversion' capitalism and, additionally, shadow bankers and their financial speculators also markedly gain from the structure.
Even greater gains come from financial speculation that benefit other investors, major shareholders and senior management.
Rasmus: "Lower taxes for the US corporation from the inversion means more retained corporate cash on hand, and the prospect of more future earnings as well, all of which in turn drives up the company’s stock price. That makes the company even more attractive to investors like hedge funds and equity firms, which buy up big blocks of both the purchasing and purchased companies’ stock. Banks and shadow bankers that jump into the process at the outset, buying up company stock in the process, also provide original funding for the company’s purchase. Others jump into the stock as the acquisition deal proceeds. Once concluded, early and latecomers both then reap a nice capital gain from the eventual stock price appreciation that almost always follows the deal... So all levels of financial speculators benefit from these ‘inversion’ deals—shadow bank investors, hedge fund managers, big stockholders, and top corporate managers with significant stock holdings and compensation—all realise big capital gains from stock price manipulation that is at the core of tax inversion deals. Again, it is not just about tax avoidance; it is about stock price manipulation and huge capital gains."
Taking Manchester United as our primary example.
The leveraged buyout by the Glazers imposed significant annual interest repayments on the club.
This outflow of tens of millions of pounds annually prevents significant reinvestment in the transfer market with the club being restricted to players in the £20-35m strata as opposed to the level of players being purchased by Real Madrid or Barcelona, for example.
Ronaldo out...
... Fellaini in!
Additionally transfer activity is delayed in a brinksmanship fashion to produce the maximum benefit to short term cash flow. Last season this resulted in the majority of transfer targets failing by end of transfer window and there is now pressure on Ed Woodward to make the necessary purchases this season.
Many of these targets will not arrive as the selling club will price their assets according to Man Utd's 'need'.
But, to the Glazers, Manchester United's failure to purchase star players, land the title, win any trophies, qualify for Champions League or Europa League is entirely trumped by the £750m 10 year Adidas deal that produces lots and lots of cash.
Other takeovers are of even more questionable integrity due to the owners' interests in betting markets.
In these cases, the generation of cash by match manipulation frequently competes with integrity on the pitch.
Inversion capitalism is the lovechild of private equity where short term profits were generated by taking over a company, asset stripping its value and selling on the shell at a significant profit.
Indeed, inversion deals are merely a slightly longer term version of private equity on a global stage.
And there are now copycat structures popping up all over the British game.
If you apply the above template to Celtic, for example, many of the same bullet points appear.
- The selling of players at significant profit (Wanyama, Forster, Hooper, McGeady, Ki, Ledley, Wilson and Watt bringing in £40m gain to the club) without the necessary reinvestment or the strategy of bringing in numerous players on loan without any capital outlay (or future profits). Or club loyalty.
- Refusal to invest for Champions League progression as the financial returns of such investment are uncertain.
- Satisfaction with winning SPL ad finitum rather than strategic planning towards the future European Super League as these potential profits are too far into the future for short-termist thinkers.
- The scheduling of pointless pre-season friendlies all around Europe for financial gains rather than developing a sense of 'home' at Murrayfield during period that Parkhead was hired out for profit. If Legia Warszawa hadn't messed up, this season would be over already in a footballing sense.
- Low wage, minimum wage, living wage issues at the bottom of the club hierarchy.
- The linkage to criminalised agents of highly questionable integrity both with regard to transfer markets and betting markets.
None of these capitalist matrices have the interests of the particular club at heart.
All are geared to the short term financial gains of a criminalised global finance capitalist elite.
But, what the hell do we care?
For many more itemised angles on corruption follow us on Twitter @FootballIsFixed
© Football is Fixed 2006-2014
Follow us on Twitter @FootballisFixed
Monday, 6 January 2014
Crying Child, English Football (Insider Trading And Match Fixing?)
Insider Trading And Match Fixing?
Nottingham Forest opened at 3.20 (11/5) in places for their FA Cup tie versus West Ham United.
By kick off, Nottingham Forest were 1.35 (4/11) at 10Bet.
West Ham drifted from Evens to 9/2.
Turnover was of a level normally seen in Big Six Premier League clashes.
IN OUR DATABASE OF OVER 80,000 GAMES COVERING TWO DECADES OF GLOBAL FOOTBALL WE HAVE NEVER WITNESSED SUCH PRICE DYNAMICS (WITH VOLUME) AS EXISTED ON THIS MATCH.
But...
Over 50% of the pre-match volume was traded before the West Ham team was made public...
... that was the team with 9 changes and three debutants and a 3 man defence where two players were making their first appearances of the season and the other was a midfielder who had been out for a month. A couple of substitutes were also debutants.
Oh, and a change of goalkeeper.
Looking at the betting patterns, that is the very least that the club should be doing.
If any one person involved in the match underperformed due to knowledge of the global gamble then we are dealing with match fixing.
Insider trading or...
... match fixing AND insider trading?
___________________________________________________________________________________
When even youngsters know that they are being ripped off, the insider bettors really do not see reality in the same way as the rest of us.
Meanwhile in a parallel universe, Gordon Strachan, the Ladbrokes ambassador (for feck's sake?!), informed us on the ITV FA Cup highlights show: "The fans know nothing."
Which may be the case but at least they know enough to understand that they have just witnessed the biggest insider gamble for two decades and on a terrestrial televised match just two months into The English Match Fixing Scandal...
... even more audacious if it turns out to be match fixing!
IT IS ENTIRELY VALID TO REST PLAYERS...
... IT ISN'T VALID WHEN KNOWLEDGE OF THIS SELECTION SURFACES VIA SOME PEOPLE IN-THE-KNOW AS A COLOSSAL CO-ORDINATED INSIDER GAMBLE ACROSS THE PLANET.
THE INFORMATION SHOULD HAVE BEEN MADE PUBLIC EARLIER SO THAT ITV DIDN'T PAY TO BROADCAST WEST HAM 3RD TEAM AND FANS DIDNT WASTE THEIR MONEY.
FANS PAY THEIR AUSTERITY-BITTEN EARNINGS TO WATCH FOOTBALL - NOT A BETTING SCANDAL UNFOLDING.
THIS INSIDER GAMBLE MASSIVELY DISTORTED AND CORRUPTED THE MARKETS FOR PRIVATE PROFIT.
AND IF THAT ISN'T ILLICIT INSIDER TRADING THEN WHAT THE FECK IS?
BUT THE LIQUIDITY SUGGESTS THAT SOME PEOPLE WERE IN NO DOUBT AS TO THE OUTCOME AND THAT MAKES THIS EVENT SOMETHING FAR MORE SIGNIFICANT.
And even if this is solely an example of sociopathic insider trading...
... in financial markets in Britain, insider trading used to be regarded as a perk of the job before regulation was introduced.
Now people are occasionally jailed for such psychopathy.
Why is insider trading on football seen differently?
Or have we become so inured to the corruption in the game that fans also see insider betting as merely being a perk of the job?
When bookies see such insider volume, the markets should be suspended as they are corrupted. All bets should be cancelled. End of...
Instead, the bookmakers trade it elsewhere for private profit.
And that makes little boys cry!
___________________________________________________________________________________
Meanwhile the authorities focus their concerted attentions on accusing some Black men of getting booked deliberately...
DJ Campbell Is Innocent...
... Relatively.
___________________________________________________________________________________
This blog post is no accusation against any individual or grouping of individuals.
But some insiders, those in-the-know, people in the loop, exploited inside knowledge to profit from a compromised market.
Our primary point is that this opportunity should not exist.
It is a loophole.
Bookies pass the knowledge around the world in a pyramid scheme of insider exploitation of the market until some offshore layer is left holding the liquidity parcel when the music stops.
This isn't a legitimate market.
It is a poker play.
But you cannot blame people for exploiting opportunities that come their way...
... it is the infrastructure of the game architected by the authorities that allow this casino to exist.
Until global betting markets are regulated, globally, and there is a compulsion for club officials to make public new knowledge that impacts upon the markets, these farces will recur recurrently.
Football markets are highly liquid global markets and should be treated as such.
If the information had been made public then ITV wouldn't have covered the game, bookmakers would have priced the market correctly, advertisers wouldn't be peeved about viewing figures, the FA Cup brand wouldn't have been tainted and, most importantly of all, West Ham fans wouldn't have wasted their money on a 3rd team game away from home with defeat a certainty.
After all, a debutant, a seasonal debutant and a midfielder who has not played in a month in a three man defence in front of a new goalie still perfecting his English is a given if you are in receipt of the knowledge!
http://footballisfixed.blogspot.co.uk/2013/12/how-to-solve-match-fixing-once-and-for.html
For many more itemised angles on corruption follow us on Twitter @FootballIsFixed
© Football is Fixed 2006-2014
Tuesday, 31 December 2013
Celtic Schisms
Introduction
Celtic FC has a history and a network like no other.
The Irish Republican politics, the ground-breaking Lisbon Lions, the intense support (ask Messi or Maldini), the global fanbase, the web of talented individuals who have given and still freely give their time, money and expertise to advance the club strategically...
... or, in the case of John Keane, to save the club from financial oblivion.
All of the great global football teams have this linkage with history and political purpose and a sense of community.
But the impact of the current fallout between the Celtic financial hierarchy and the real owners of the club, the fans, is a major dysfunction that must be solved immediately before it creates yet more harm for the club.
Unfortunately, in postmodern football, history and politics are problems
For five days in September, I had the very best job in the world - a high level consultancy with Celtic to enable passage to the 2nd Phase of the Champions League this season.
Unfortunately Peter Lawwell, in his own heroic way, pulled on the deal.
The holistic of the consultancy was to protect Celtic against corruptions that occur to undermine the strategies of the club in the Champions League.
The irony of the failure to conclude the agreement is obvious.
We are a cellular grouping of forensic analysts revealing corruptions and Celtic are a football team owned by a bookmaker, Dermot Desmond (Betdaq supremo).
We have been informed that it was deemed too risky to proceed with the consultancy in case we came across internal issues in our monitoring of the external.
As a result, the club strategy for this year's Champions League Group Stage was diabolical in the early stages (http://footballisfixed.blogspot.co.uk/2013/09/one-love-art-of-war.html).
And it did not improve thereafter.
The same strategic errors were repeated as last season with some new ones thrown in for good measure. No lessons have been learnt and the structure is simply one of the blind paying one another to lead one another blindly.
Nobody within the club hierarchy nor any of the agents leeching onto the club have any perception of UEFA hidden agendas and internal power-plays and linkages etc etc.
The club do not possess the template to even start planning any strategy for Champions League and future European Super League success.
As we are no longer willing to work with the club under the current regime, we are limited as to the solutions that we are able to offer in this place.
But we have found four areas worthy of discussion without impinging on any of our isolationist thresholds.
1. Club Interests Versus Private Agendas
We originally approached Celtic when we were informed via a contact within UEFA that the European governing body were going to be taking a very close look at the Champions League Qualifier between Cliftonville and Celtic in case any politics were seen in the UEFA sphere.
The UEFA Champions League, by and large, is a marketing process.
It is not feasible for Celtic to celebrate their past as this does not fit in with the UEFA brand - pony-tailed ball skills with a pirouette are preferred to anything approaching political reality.
Part of my discussions with Lawwell centred on this very point - he understands totally that the fans are the biggest asset of the club but wishes to cleanse them of their history to optimise European performance and cashflow.
One could call this a strategy (even if one views it as an inappropriate one)...
... but the club then sell short of achieving that 'optimisation' by focus on their own private agendas and connections.
When it comes to push versus shove, club versus self, enlightened self-interest wins the day.
If the club hierarchy are going to sell out on the fans, the history, the raison d'etre and grasp a share of this UEFA nirvana for the Celtic Brand, then surely they need to focus on the success of this brand absolutely rather than allowing their own private considerations to come into play.
At the moment, this is not happening.
__________________________________________________________________________________
2. Politics
Bobby Sands MP, representing the Anti H-Block party, was elected as a member of the British parliament in 1981.
30,493 people voted for him in the Fermanagh and South Tyrone constituency.
There was an 86.9% turnout.
Sands had a public mandate to fight against inappropriate state power and terror...
... exactly the same as Nelson Mandela who was eulogised by UEFA after his death.
When the club were being punished by UEFA for displaying political imagery, why didn't the hierarchy point out the equivalence between the politics and strategies of Sands/IRA when compared with Mandela/ANC?
After all, Cameron wanted Mandela to hang, Thatcher thought him a terrorist and the US agreed by keeping him on their list of global terrorists until 2008 before he was whitewashed into someone else.
Instead the club have allowed their club brand to be demoted in the UEFA marketing pyramid without offering a stout defence.
__________________________________________________________________________________
3. Club Ownership
As we have pointed out before (http://footballisfixed.blogspot.co.uk/2013/12/how-to-solve-match-fixing-once-and-for.html) there are potentially issues of integrity when bookmakers own football clubs.
We have NO evidence of inappropriate fixing of Celtic matches due to Desmond/Betdaq link but this is a structure that should generally be regarded as one being primed for shenanigans.
And we are always wary of bookmakers that, like Betdaq, do not allow winning accounts as, after all, if you are not allowed to win off a bookmaker then the business interaction is something else entirely!
There must be occasions when Desmond's personal financial focus is different to that of the club...
... and this must be a concern.
When board members and club agents are known to bet on Celtic matches, is it invalid to express concern that people higher up the hierarchy might conceivably share a similar inclination?
And, as a background, there is something vaguely distasteful about Desmond being £2 million in pocket, Lawwell annually heating his driveway with £700K while the club refuses to pay a Living Wage at the bottom of the pyramid.
__________________________________________________________________________________
4. A Way Forward
The atmosphere at the recent Hearts match was truly depressing.
Things need to change.
And fast.
From our position, we might suggest a discussion based around very basic foundational areas:
Who owns the club? The financial hierarchy or the fans? How might co-ownership be achieved? What happens when the needs of the club differ from those paid to manage it?
Decisions made in the imminent future will determine the future of Celtic for decades to come.
Time to get strategic.
__________________________________________________________________________________
__________________________________________________________________________________
For Celtic to be self-harming in this window of massive monopolistic competitive opportunity in Scotland is a crying shame.
To waste all this energy turning inwards rather than planning for a brighter future in the European Super League is only helping one team, Sevconians.
And Lawwell was wrong on this too...
... Sevconians are not an imitation of a reality in the sense of Rory Bremner doing Tony Blair, because the real Tony Blair (unfortunately) still exists while the comedian performs his parallel.
Sevconians are actually a posthumous tribute act - just like a Michael Jackson one or an Elvis one...
... only with weaker songs.
Rangers no longer exist and Sevconians merely allow a little nostalgia and reminiscence for those who still care.
Rangers are the past. Not the future.
Just mock them.
Hail Hail Hogmanay!
© Football is Fixed 2006-2013
Celtic FC has a history and a network like no other.
The Irish Republican politics, the ground-breaking Lisbon Lions, the intense support (ask Messi or Maldini), the global fanbase, the web of talented individuals who have given and still freely give their time, money and expertise to advance the club strategically...
... or, in the case of John Keane, to save the club from financial oblivion.
All of the great global football teams have this linkage with history and political purpose and a sense of community.
But the impact of the current fallout between the Celtic financial hierarchy and the real owners of the club, the fans, is a major dysfunction that must be solved immediately before it creates yet more harm for the club.
For five days in September, I had the very best job in the world - a high level consultancy with Celtic to enable passage to the 2nd Phase of the Champions League this season.
Unfortunately Peter Lawwell, in his own heroic way, pulled on the deal.
The holistic of the consultancy was to protect Celtic against corruptions that occur to undermine the strategies of the club in the Champions League.
The irony of the failure to conclude the agreement is obvious.
We are a cellular grouping of forensic analysts revealing corruptions and Celtic are a football team owned by a bookmaker, Dermot Desmond (Betdaq supremo).
We have been informed that it was deemed too risky to proceed with the consultancy in case we came across internal issues in our monitoring of the external.
As a result, the club strategy for this year's Champions League Group Stage was diabolical in the early stages (http://footballisfixed.blogspot.co.uk/2013/09/one-love-art-of-war.html).
And it did not improve thereafter.
The same strategic errors were repeated as last season with some new ones thrown in for good measure. No lessons have been learnt and the structure is simply one of the blind paying one another to lead one another blindly.
Nobody within the club hierarchy nor any of the agents leeching onto the club have any perception of UEFA hidden agendas and internal power-plays and linkages etc etc.
The club do not possess the template to even start planning any strategy for Champions League and future European Super League success.
As we are no longer willing to work with the club under the current regime, we are limited as to the solutions that we are able to offer in this place.
But we have found four areas worthy of discussion without impinging on any of our isolationist thresholds.
1. Club Interests Versus Private Agendas
We originally approached Celtic when we were informed via a contact within UEFA that the European governing body were going to be taking a very close look at the Champions League Qualifier between Cliftonville and Celtic in case any politics were seen in the UEFA sphere.
The UEFA Champions League, by and large, is a marketing process.
It is not feasible for Celtic to celebrate their past as this does not fit in with the UEFA brand - pony-tailed ball skills with a pirouette are preferred to anything approaching political reality.
Part of my discussions with Lawwell centred on this very point - he understands totally that the fans are the biggest asset of the club but wishes to cleanse them of their history to optimise European performance and cashflow.
One could call this a strategy (even if one views it as an inappropriate one)...
... but the club then sell short of achieving that 'optimisation' by focus on their own private agendas and connections.
When it comes to push versus shove, club versus self, enlightened self-interest wins the day.
If the club hierarchy are going to sell out on the fans, the history, the raison d'etre and grasp a share of this UEFA nirvana for the Celtic Brand, then surely they need to focus on the success of this brand absolutely rather than allowing their own private considerations to come into play.
At the moment, this is not happening.
__________________________________________________________________________________
2. Politics
Bobby Sands MP, representing the Anti H-Block party, was elected as a member of the British parliament in 1981.
30,493 people voted for him in the Fermanagh and South Tyrone constituency.
There was an 86.9% turnout.
Sands had a public mandate to fight against inappropriate state power and terror...
... exactly the same as Nelson Mandela who was eulogised by UEFA after his death.
When the club were being punished by UEFA for displaying political imagery, why didn't the hierarchy point out the equivalence between the politics and strategies of Sands/IRA when compared with Mandela/ANC?
After all, Cameron wanted Mandela to hang, Thatcher thought him a terrorist and the US agreed by keeping him on their list of global terrorists until 2008 before he was whitewashed into someone else.
Instead the club have allowed their club brand to be demoted in the UEFA marketing pyramid without offering a stout defence.
__________________________________________________________________________________
3. Club Ownership
As we have pointed out before (http://footballisfixed.blogspot.co.uk/2013/12/how-to-solve-match-fixing-once-and-for.html) there are potentially issues of integrity when bookmakers own football clubs.
We have NO evidence of inappropriate fixing of Celtic matches due to Desmond/Betdaq link but this is a structure that should generally be regarded as one being primed for shenanigans.
And we are always wary of bookmakers that, like Betdaq, do not allow winning accounts as, after all, if you are not allowed to win off a bookmaker then the business interaction is something else entirely!
There must be occasions when Desmond's personal financial focus is different to that of the club...
... and this must be a concern.
When board members and club agents are known to bet on Celtic matches, is it invalid to express concern that people higher up the hierarchy might conceivably share a similar inclination?
And, as a background, there is something vaguely distasteful about Desmond being £2 million in pocket, Lawwell annually heating his driveway with £700K while the club refuses to pay a Living Wage at the bottom of the pyramid.
__________________________________________________________________________________
4. A Way Forward
The atmosphere at the recent Hearts match was truly depressing.
Things need to change.
And fast.
From our position, we might suggest a discussion based around very basic foundational areas:
Who owns the club? The financial hierarchy or the fans? How might co-ownership be achieved? What happens when the needs of the club differ from those paid to manage it?
Decisions made in the imminent future will determine the future of Celtic for decades to come.
Time to get strategic.
__________________________________________________________________________________
__________________________________________________________________________________
For Celtic to be self-harming in this window of massive monopolistic competitive opportunity in Scotland is a crying shame.
To waste all this energy turning inwards rather than planning for a brighter future in the European Super League is only helping one team, Sevconians.
And Lawwell was wrong on this too...
... Sevconians are not an imitation of a reality in the sense of Rory Bremner doing Tony Blair, because the real Tony Blair (unfortunately) still exists while the comedian performs his parallel.
Sevconians are actually a posthumous tribute act - just like a Michael Jackson one or an Elvis one...
... only with weaker songs.
Rangers no longer exist and Sevconians merely allow a little nostalgia and reminiscence for those who still care.
Rangers are the past. Not the future.
Just mock them.
Hail Hail Hogmanay!
© Football is Fixed 2006-2013
Monday, 16 December 2013
How To Solve Match Fixing Once And For All
Yesterday, Liberal Democrat MP Sir Bob Russell said that English
professional football is "rotten to the core" and that a Royal
Commission is required to clean up football with "parasitic agents"
being the major problem.
If any such Royal Commission is to work then it will need to thoroughly address the six points outlined below.
Otherwise the game is up.
Also yesterday, UEFA announced that they are drafting an 11-point plan aimed to eradicate match-fixing, labelling it their 'top priority'.
Unfortunately, skimming over the pitch put forward by the aptly named UEFA general secretary Gianni Infantino, we can only expect peripheral tinkering akin to that achieved by the British government's select committee who reported last summer.
__________________________________________________________________________________
We are employed by clubs as leech consultants.
We protect clubs against systemic and particular corruptions against their interests.
We analyse the zeitgeist of corruption.
To us, the most astonishing aspect of the match fixing 'crisis' is that when we have seen that government, the mainstream media, investment banking, the police, retail banks, the utilities, many other sports are all corrupted, there is this religious belief that, somehow, top level football is not tainted.
Football has taken over from religion - everybody is 'Something FC 'til I Die'.
And we don't want our New Deity to be killed off just yet.
But if football really wants to save itself from the neohyperrealities of the present systemic corruptions, it needs to implement every single one of the points below in their entirety.
No pseudo-11 point plan but an overhaul of an entirely corrupt mechanism from top to bottom.
But starting at the top.
_________________________________________________________________________________
1. The Betting Markets and Insider Trading
The primary concern are the global betting markets.
There are three levels of market activity - the public markets, the Dark Pools and the illegal underground markets based largely but not exclusively in South East Asia.
With a global network of this type, there has to be global regulation with jail sentences and life bans for miscreants.
The global betting market turnover on football is thought to have reached £1 trillion.
£1 trillion is 40% of the Britain's annual GDP!!
All markets must be public.
All trading by insiders must be registered with a Commitment of Traders body to prevent inside knowledge being exploited.
All players, referees, agents, managers should be banned from betting entirely.
All suspicious betting must be reported to forensic analysts to detect fraudulent behaviour - the current level of expertise exhibited by Early Warning, Interpol/ Europol etc is not professional enough (we are able to detect insider betting and match fixing in many more games than 0.7%!!).
All spot-markets should be banned.
All Dark Pool activity must be regulated and made public, the same with the Asian underground and the developing undergrounds in Dubai, the Caribbean, numerous British offshore territories, Moscow, Tel Aviv, Tbilisi, Nigeria, Australia, the US and Canada, Brazil, Mumbai etc.
2. Agents and the Markets
Every single football agent that I have ever met has been criminalised!
Agents are a lubricant in the game and, in addition to leeching money from the sport, they facilitate corruptions relating to both the betting markets and the transfer markets.
Ownership of goalkeepers, linkage with referees (see below), multiple ownership of players in a game, even more extensive multiple ownership via linkage with other agents in a fragmented cartel of illicit match fixing and betting market activity.
Accordingly agents not only distort, corrupt and profit from the betting markets that they exploit, they degenerate the sport and impact upon trophies being won and relegations/ promotions etc.
The careers of players are also affected by these corruptions and the fan is forced to watch events where the outcome is clearly visible in underground betting markets pre-match!
Agents corrupt Champions League games at the highest level and yet UEFA do nothing.
Agents also, as is their wont, exploit the transfer market via 3rd party ownership.
There is no regulation for agents.
And no regulation or self-regulation is pointless.
Agents distort every single aspect of the sport and often utilise business practices that border on the slave trade when it comes to footballers from Africa and certain South and Central American countries.
Coercion of players relating to the betting markets is a major issue.
Additionally, under the table payments are the norm and ownership networks are structured similarly to the Tor proxy server concept!
Agents must be regulated.
3. Club Owners
Surely it is asking for trouble if club owners double as bookmakers.
There will inevitably be occasions when the financial self-interest of Mr Bet 365 The Bookmaker will trump the interests of Mr Bet 365 The Football Club (Stoke City) - the only issue is whether such self-interest is implemented.
Additionally, this incentive to fix can result in club owners stopping their own teams from winning to the absolute detriment of the fans who are paying the wages and the integrity of the game.
All club ownership should be open rather than underground and opaque.
Fit and proper persons rulings should be robust and thoroughly implemented - the Championship in England is a veritable Hotch Potch of Inappropriates when it comes to club ownership...
... and the Premier League is only marginally better.
4. Referees
Referees are an issue.
Relatively underpaid in a millionaire's paradise, they are ripe for corruption.
Referees are chosen from too small a pool (only 18 for the Premier League - the most liquid betting market on the planet, for example) and have very long careers.
Market ownership of a referee is a big earner for both parties.
Referees are additionally 'owned' by other participants in the game - clubs, mafia, even UEFA chooses referees relating to its own annual marketing plan AND the importance of allegiance to the G14(18) power base of clubs.
If referees were selected meritocratically then corruption from this source would be harder to implement.
To this end, the ratings of referees need to be made public and the implementation of video technology (see next point) will enable 'under-achievers' to be rooted out and discarded.
5. Video Technology
It is more critical for football to have video technology than cricket, tennis or rugby yet the authorities refuse to introduce anything more than goalline technology. Why?
An incorrect wicket in cricket, line call in tennis or try in rugby is rarely match changing yet those sports guard against such occurrences by using technology ...
... in football a goal or a penalty or a sending off very frequently is a match changing event and yet we have virtually nothing.
Up to 40 wickets in a Test Match, 240 points in a tennis match, half a dozen tries in a game of rugby...
... and one goal.
Furthermore, because professional footballers are well aware of the corruptions taking place, once a referee signals his intent, there is a psychological deflation in the victim team.
The most striking aspect of watching cricket or rugby is how fan conversation always relates to the game itself due to the utilisation of video technology for virtually all contentious decisions.
This serves to produce the correct result, massively reduce corruption and act as a measurement of performance of referees and umpires.
The argument that it would slow down the game is fatuous.
It would add excitement if marketed correctly.
UEFA and the Premier League would be able to bombard us with messages from their media partners while we waited to see if it is a penalty or not!
6. Whistleblowing Hotline
When we have meetings with administrative bodies, chief executives, football managers, club owners, analysts, bookmakers, many fans, there is acceptance that football is corrupt but that nobody is going to do anything about it due to both financial self-interest and fear.
Remember Mike Newell? He soon disappeared from the game!
A global whistleblowing hotline needs to be set up to allow knowledge of match fixing to be made available to the various bodies that will need to be established for Points 1-5 to be achieved.
This must be anonymous and rewarded.
We are taking serious existential risks to disclose these neohyperrealities of modern football.
THIS IS NOT HOW IT SHOULD BE.
__________________________________________________________________________________
NB: Please note that myself or other members of our cellular body are available for media in this window.
You can reach us via a Direct Message at Twitter (@footballisfixed) or via email (footballisfixed02@googlemail.com).
© Football is Fixed 2006-2013
If any such Royal Commission is to work then it will need to thoroughly address the six points outlined below.
Otherwise the game is up.
Also yesterday, UEFA announced that they are drafting an 11-point plan aimed to eradicate match-fixing, labelling it their 'top priority'.
Unfortunately, skimming over the pitch put forward by the aptly named UEFA general secretary Gianni Infantino, we can only expect peripheral tinkering akin to that achieved by the British government's select committee who reported last summer.
__________________________________________________________________________________
We are employed by clubs as leech consultants.
We protect clubs against systemic and particular corruptions against their interests.
We analyse the zeitgeist of corruption.
To us, the most astonishing aspect of the match fixing 'crisis' is that when we have seen that government, the mainstream media, investment banking, the police, retail banks, the utilities, many other sports are all corrupted, there is this religious belief that, somehow, top level football is not tainted.
Football has taken over from religion - everybody is 'Something FC 'til I Die'.
And we don't want our New Deity to be killed off just yet.
But if football really wants to save itself from the neohyperrealities of the present systemic corruptions, it needs to implement every single one of the points below in their entirety.
No pseudo-11 point plan but an overhaul of an entirely corrupt mechanism from top to bottom.
But starting at the top.
_________________________________________________________________________________
1. The Betting Markets and Insider Trading
The primary concern are the global betting markets.
There are three levels of market activity - the public markets, the Dark Pools and the illegal underground markets based largely but not exclusively in South East Asia.
With a global network of this type, there has to be global regulation with jail sentences and life bans for miscreants.
The global betting market turnover on football is thought to have reached £1 trillion.
£1 trillion is 40% of the Britain's annual GDP!!
All markets must be public.
All trading by insiders must be registered with a Commitment of Traders body to prevent inside knowledge being exploited.
All players, referees, agents, managers should be banned from betting entirely.
All suspicious betting must be reported to forensic analysts to detect fraudulent behaviour - the current level of expertise exhibited by Early Warning, Interpol/ Europol etc is not professional enough (we are able to detect insider betting and match fixing in many more games than 0.7%!!).
All spot-markets should be banned.
All Dark Pool activity must be regulated and made public, the same with the Asian underground and the developing undergrounds in Dubai, the Caribbean, numerous British offshore territories, Moscow, Tel Aviv, Tbilisi, Nigeria, Australia, the US and Canada, Brazil, Mumbai etc.
2. Agents and the Markets
Every single football agent that I have ever met has been criminalised!
Agents are a lubricant in the game and, in addition to leeching money from the sport, they facilitate corruptions relating to both the betting markets and the transfer markets.
Ownership of goalkeepers, linkage with referees (see below), multiple ownership of players in a game, even more extensive multiple ownership via linkage with other agents in a fragmented cartel of illicit match fixing and betting market activity.
Accordingly agents not only distort, corrupt and profit from the betting markets that they exploit, they degenerate the sport and impact upon trophies being won and relegations/ promotions etc.
The careers of players are also affected by these corruptions and the fan is forced to watch events where the outcome is clearly visible in underground betting markets pre-match!
Agents corrupt Champions League games at the highest level and yet UEFA do nothing.
Agents also, as is their wont, exploit the transfer market via 3rd party ownership.
There is no regulation for agents.
And no regulation or self-regulation is pointless.
Agents distort every single aspect of the sport and often utilise business practices that border on the slave trade when it comes to footballers from Africa and certain South and Central American countries.
Coercion of players relating to the betting markets is a major issue.
Additionally, under the table payments are the norm and ownership networks are structured similarly to the Tor proxy server concept!
Agents must be regulated.
3. Club Owners
Surely it is asking for trouble if club owners double as bookmakers.
There will inevitably be occasions when the financial self-interest of Mr Bet 365 The Bookmaker will trump the interests of Mr Bet 365 The Football Club (Stoke City) - the only issue is whether such self-interest is implemented.
Additionally, this incentive to fix can result in club owners stopping their own teams from winning to the absolute detriment of the fans who are paying the wages and the integrity of the game.
All club ownership should be open rather than underground and opaque.
Fit and proper persons rulings should be robust and thoroughly implemented - the Championship in England is a veritable Hotch Potch of Inappropriates when it comes to club ownership...
... and the Premier League is only marginally better.
4. Referees
Referees are an issue.
Relatively underpaid in a millionaire's paradise, they are ripe for corruption.
Referees are chosen from too small a pool (only 18 for the Premier League - the most liquid betting market on the planet, for example) and have very long careers.
Market ownership of a referee is a big earner for both parties.
Referees are additionally 'owned' by other participants in the game - clubs, mafia, even UEFA chooses referees relating to its own annual marketing plan AND the importance of allegiance to the G14(18) power base of clubs.
If referees were selected meritocratically then corruption from this source would be harder to implement.
To this end, the ratings of referees need to be made public and the implementation of video technology (see next point) will enable 'under-achievers' to be rooted out and discarded.
5. Video Technology
It is more critical for football to have video technology than cricket, tennis or rugby yet the authorities refuse to introduce anything more than goalline technology. Why?
An incorrect wicket in cricket, line call in tennis or try in rugby is rarely match changing yet those sports guard against such occurrences by using technology ...
... in football a goal or a penalty or a sending off very frequently is a match changing event and yet we have virtually nothing.
Up to 40 wickets in a Test Match, 240 points in a tennis match, half a dozen tries in a game of rugby...
... and one goal.
Furthermore, because professional footballers are well aware of the corruptions taking place, once a referee signals his intent, there is a psychological deflation in the victim team.
The most striking aspect of watching cricket or rugby is how fan conversation always relates to the game itself due to the utilisation of video technology for virtually all contentious decisions.
This serves to produce the correct result, massively reduce corruption and act as a measurement of performance of referees and umpires.
The argument that it would slow down the game is fatuous.
It would add excitement if marketed correctly.
UEFA and the Premier League would be able to bombard us with messages from their media partners while we waited to see if it is a penalty or not!
6. Whistleblowing Hotline
When we have meetings with administrative bodies, chief executives, football managers, club owners, analysts, bookmakers, many fans, there is acceptance that football is corrupt but that nobody is going to do anything about it due to both financial self-interest and fear.
Remember Mike Newell? He soon disappeared from the game!
A global whistleblowing hotline needs to be set up to allow knowledge of match fixing to be made available to the various bodies that will need to be established for Points 1-5 to be achieved.
This must be anonymous and rewarded.
We are taking serious existential risks to disclose these neohyperrealities of modern football.
THIS IS NOT HOW IT SHOULD BE.
__________________________________________________________________________________
NB: Please note that myself or other members of our cellular body are available for media in this window.
You can reach us via a Direct Message at Twitter (@footballisfixed) or via email (footballisfixed02@googlemail.com).
© Football is Fixed 2006-2013
Monday, 2 December 2013
The Dirty Dozen - The Role Of Agents In The Criminalisation Of Football
How Agents Are Destroying Football
1. Many firms of agents have an interest in the global betting markets. Some firms specifically target goalkeepers, for example. A very high percentage of the sixty plus betting scandals to be currently under investigation feature agents as facilitators due to the way in which agents seemlessly lubricate the system.
2. Betting interest soon morphs into market control. preferably in-house otherwise in a fragmented cartel. There are a variety of tipping points where the critical mass of the control of a match corruption is reached. Matches are fixed via participants on behalf of their agents. Agents target both club and international matches.
3. Player loyalty to club is increasingly a rare factor in football nowadays. Players have an agent for life (pre to post career) and any number of clubs. Badge-kissing is simply marketing the brand of the self. Clubs that employ several players from the same firm of agents or from a web-like cartel of agents risk losing control of their matches although some of the better run clubs limit such exposure as a matter of strategy e.g. FC Bayern, Milan, Barcelona and Blackpool.
4. Once control of a very liquid betting market becomes the focus of agents/ cartel of agents' attention then control of those lily-livered reprobates, the referees, becomes the primary strategy. At the poker table of postmodern football, one goalkeeper + the referee is a very strong hand indeed. Referees are underpaid outliers with football envy - psychologically many referees are desperate for 'acceptance' within the game. Media silence and retirement hush money aid any shenanigans.
5. Once an agent/ cartel is seen to be influencing market outcomes, market makers and bookmakers enter stage right. Hence surface level criminalised trading migrates to the European and Asian underworlds, undergrounds and offshore financial centres. It is not surprising that a £1 trillion annual market attracts such intricate infrastructures.
6. Agents bleed the game of money that should be going to grass roots projects. For the year ending September 2013, agents took virtually £100 million from the Premier League (over £2.5 million for every round of games).This was a 25% increase and elicited no mainstream media attention in a week where the words 'agents' and 'match-fixing' kept appearing in the same sentences.
7. Due to loyalty to self/ agent rather than club, a perverse incentive means many players will perform fully only when playing in live tv matches with massively increased global exposure. Similarly, 'injuries' and choice of timing for operations etc are determined by agent not by the club.
8. Agents always boast about the black market sides of their job - the under-the-table illicit payments to drop interests in a player, the insider gamble that the bookies couldn't stop. Agents take far more than £100 million out of the English game in the grey and black market sectors.
9. Agents undertake mainstream media control for the promotion of their clients, the suppression of inappropriate news and reality leakages, the advancement of transfer strategies and, in the case of the Guardian, the 'creation' of an entirely fictitious neohyperreality in the form of the Secret Footballer. How apt that, with editorial involvement, a newspaper that robbed the secrets from Wikileaks and Snowden should create their very own imaginary secrets via a fake entity linked to a leading football agent!
10. There is no regulation of agents. Consequently, all agents eventually, if not initially, become linked to mafia - this is the only evolution feasible in Friedmanian capitalism in a sector that is entirely non-regulated. Market Maturity = Monopolistic Mafia. Although agents police themselves, a whole variety of mafia groups police the agents.
11. Third Party Agreements are not only still the norm but Fourth and Fifth Party ones exist too. Self-regulation means, in effect, no regulation as agents create the necessary infrastructure to allow them to optimise their operations.
12. Top agents have links to government in Britain (both Labour and Tory). Bizarrely, agents and (the limited) control of a hugely liquid global financial market that they bring are one of the few hyperreal growth areas in our austerity-wrecked post-imperial wasteland of a fake-service economy. Of course, government cannot boast this economic success story: "our match-fixing and market distortions are bringing jobs to Britain..."
When a former player-turned-agent Delroy Facey was named as a key operator in Invisiblegate - the English match-fixing scandal which allegedly happened last week - we expected an imminent media blackout, a separation of the Premier League from any allegations of match-fixing and a markedly legitimate weekend in the Premier League. And that is what we got. It was just like the old days. No sendings off and just one penalty (to Manchester United, of course). No controversy. We cannot find any other weekend in our databases with so little referee influence. What a remarkable fluke!
For many more itemised angles on corruption follow us on Twitter @FootballIsFixed
© Football is Fixed 2006-2013
1. Many firms of agents have an interest in the global betting markets. Some firms specifically target goalkeepers, for example. A very high percentage of the sixty plus betting scandals to be currently under investigation feature agents as facilitators due to the way in which agents seemlessly lubricate the system.
2. Betting interest soon morphs into market control. preferably in-house otherwise in a fragmented cartel. There are a variety of tipping points where the critical mass of the control of a match corruption is reached. Matches are fixed via participants on behalf of their agents. Agents target both club and international matches.
3. Player loyalty to club is increasingly a rare factor in football nowadays. Players have an agent for life (pre to post career) and any number of clubs. Badge-kissing is simply marketing the brand of the self. Clubs that employ several players from the same firm of agents or from a web-like cartel of agents risk losing control of their matches although some of the better run clubs limit such exposure as a matter of strategy e.g. FC Bayern, Milan, Barcelona and Blackpool.
4. Once control of a very liquid betting market becomes the focus of agents/ cartel of agents' attention then control of those lily-livered reprobates, the referees, becomes the primary strategy. At the poker table of postmodern football, one goalkeeper + the referee is a very strong hand indeed. Referees are underpaid outliers with football envy - psychologically many referees are desperate for 'acceptance' within the game. Media silence and retirement hush money aid any shenanigans.
5. Once an agent/ cartel is seen to be influencing market outcomes, market makers and bookmakers enter stage right. Hence surface level criminalised trading migrates to the European and Asian underworlds, undergrounds and offshore financial centres. It is not surprising that a £1 trillion annual market attracts such intricate infrastructures.
6. Agents bleed the game of money that should be going to grass roots projects. For the year ending September 2013, agents took virtually £100 million from the Premier League (over £2.5 million for every round of games).This was a 25% increase and elicited no mainstream media attention in a week where the words 'agents' and 'match-fixing' kept appearing in the same sentences.
7. Due to loyalty to self/ agent rather than club, a perverse incentive means many players will perform fully only when playing in live tv matches with massively increased global exposure. Similarly, 'injuries' and choice of timing for operations etc are determined by agent not by the club.
8. Agents always boast about the black market sides of their job - the under-the-table illicit payments to drop interests in a player, the insider gamble that the bookies couldn't stop. Agents take far more than £100 million out of the English game in the grey and black market sectors.
9. Agents undertake mainstream media control for the promotion of their clients, the suppression of inappropriate news and reality leakages, the advancement of transfer strategies and, in the case of the Guardian, the 'creation' of an entirely fictitious neohyperreality in the form of the Secret Footballer. How apt that, with editorial involvement, a newspaper that robbed the secrets from Wikileaks and Snowden should create their very own imaginary secrets via a fake entity linked to a leading football agent!
10. There is no regulation of agents. Consequently, all agents eventually, if not initially, become linked to mafia - this is the only evolution feasible in Friedmanian capitalism in a sector that is entirely non-regulated. Market Maturity = Monopolistic Mafia. Although agents police themselves, a whole variety of mafia groups police the agents.
11. Third Party Agreements are not only still the norm but Fourth and Fifth Party ones exist too. Self-regulation means, in effect, no regulation as agents create the necessary infrastructure to allow them to optimise their operations.
12. Top agents have links to government in Britain (both Labour and Tory). Bizarrely, agents and (the limited) control of a hugely liquid global financial market that they bring are one of the few hyperreal growth areas in our austerity-wrecked post-imperial wasteland of a fake-service economy. Of course, government cannot boast this economic success story: "our match-fixing and market distortions are bringing jobs to Britain..."
When a former player-turned-agent Delroy Facey was named as a key operator in Invisiblegate - the English match-fixing scandal which allegedly happened last week - we expected an imminent media blackout, a separation of the Premier League from any allegations of match-fixing and a markedly legitimate weekend in the Premier League. And that is what we got. It was just like the old days. No sendings off and just one penalty (to Manchester United, of course). No controversy. We cannot find any other weekend in our databases with so little referee influence. What a remarkable fluke!
For many more itemised angles on corruption follow us on Twitter @FootballIsFixed
© Football is Fixed 2006-2013
Saturday, 19 October 2013
Give The Man A Gong For Being Wrong
Eugene Fama was selected as one of the three Nobel Prize for Economics recipients this week.
His hypothesis regarding the efficiency of financial markets is indeed elegant (which sometimes is enough for an award to be made) but it is also utterly and completely wrong.
Not particularly impressed with his Fama-French Three-Factor Model either (but more on that later).
If there were no government interferences, no psychopathies, no behavioural irrationalities, no corruptions nor criminalities and if market sectors didn't always evolve towards maturity, he would be right.
But as these inputs drive all markets, the laureate is surely wrong.
Fama's Efficient Markets Hypothesis was put forward in 1970 and formed an intellectual basis for the shock doctrine disaster neo-capitalism that the world has experienced since.
By being a part of the "intellectual" framework gathered as an neo-con edifice at the University of Chicago, Fama bears some responsibility for this sociopathic system.
So, what is Gene's hypothesis and why is it incorrect?
The Efficient Markets Hypothesis is split into three levels - strong-form, semi-strong-form and weak-form efficiency.
Strong-form suggests that market prices reflect all information, public and private, and it is not possible for anyone to earn excess returns.
In semi-stong-form, prices adjust to new information rapidly and rationally.
While weak-form structures, prices simply follow a random walk.
Before we go any further we need to look at the architecture of markets.
The public markets are just the top of an iceberg of submerged Dark Pool markets - there are hundreds of unregulated Dark Pools where insiders trade against insiders in markets that the public only sees when an excess of over-enthusiasm occurs. It is in these markets that the big market plays are made not the public ones.
For all assessments of Fama's Hypothesis, therefore, it will need to be addressed on two levels - the public markets and the Dark Pools.
1) The most dominant input to the wrongness of Fama's Hypothesis is behaviouralism.
Work in the sixties by Daniel Kahnemann, Amos Tversky, Paul Slovic and Richard Thaler had already introduced psychology to the market and, in 1979, Kahnemann and Tversky developed Prospect Theory which represented the final psychological nail in the coffin of Efficient Markets. Investors do not behave in a rational manner in the marketplace for a whole continuum of different reasons that both exist within themselves and also interact in complex ways between themselves to produce the behaviours that we project. Market prices represent mass human psychology far more than they do unproved economic fundamentals.
So by 1979, Fama's Hypothesis should have been put to bed...
... unfortunately, it took the blinkered Chicago School until 2007 to acknowledge the impact of behaviouralism in markets, attempting to convince us in the meantime that an efficient pricing infrastructure underpinned the alleged validity of Friedmanian late capitalism..
Slavoj Žižek: "The problem is today when you have chaos or disorder, people lose their cognitive mapping."
2) All of the information is not in the market. Even if behaviouralism did not exist and we were all perfectly rational in all of our decision-making, efficient markets would be compromised on all three levels of Fama's efficiency hierarchy.
Public markets are largely inefficient being too far from the core Dark Pools to be benefiting instantaneously to the flow of real information. The public markets offer a distilled filtered form of this driving underground Dark Pool marketplace. Dark Pool trading strategies become converted into a holistic market strategy as Dark Pool liabilities are hedged in the public sphere.
What about the Dark Pools?
Are they a proof of Fama efficiencies?
No.
Behaviouralism is a "plug in" in any market, public or Dark Pool.
Additionally, the information flow in Dark Pools is, by its very nature, opaque.
Proxy trading, algorithmic distortions, hidden players away from the table, consortia strategies, disinformational trading, cornered markets etc etc.
At any given time, the market tends to inefficiency.
As mature markets might evolve into anything the primary operators desire, the price can be anything too.
Mature markets (and these are the ones most traded in the Dark Pools) are largely under the absolute control of a small grouping of operations, think OPEC. Individual members of OPEC have their own hidden agendas over and above the shared agenda with fellow members. Even when the structure is held in place with extra robustness due to government scaffolding around the market, the major player(s) is/are still able to make the market whatever they desire whenever they desire.
In effect monopolistic corruption distorts any semblance of efficiency in the market while duopolistic or cartel behaviour offers a slightly diluted version of the same.
3) Disaster capitalism undermines any efficiency in any financial market.
The Friedmanian disaster capitalism complex thrives on chaos. When a disaster strikes or, as in the case of Chile, is created, the Chicago school Hayekians move in with their shock tactics to further destabilise an already destabilised people. As US security entities move into the vacuum, the markets are utterly chaotic. Although some efficiency and robustness is added to the marketplace ironically by the strategies of these security operations (the same template being micro-adjusted from territory to territory) the holistic performance of the markets are driven by irrationalities and the efficiencies fall off the bottom of Fama's ratings chart. Andrew Haldane, who should have been made Governor of the Bank of England, refers to this inability to judge risk as "disaster myopia".
Disaster myopia in a disaster capitalism complex!
4) Private information is introduced to the market in a variety of strategies that, by their very nature, imply market inefficiencies being created for the advantage of Dark Pool operations.
Knowledge within a company, governmental or central bank policies, trading disinformation for future profits, competitive market poker play all are based around the possession of the ultimate power play for the marketplace. Just think of the variety of ways in which, say, Ben Bernanke could have utilised his absolute knowledge of the variables related to quantitative easing. An individual, with evolving strategies, could make money without the full reality hitting the market by placing trades laterally and peripherally.
Noam Chomsky would call this "cogntive regulatory capture" and it is a structure typical of late capitalism.
5) The most obvious way in which financial markets are inefficient is by their refusal to accept the cost of externalities in the price of an asset.
How on earth can a price be efficient in the holistic sense if externalities are not included in the calculation? The price can only be considered in any way efficient in short time frames as, when the true costs are included, the asset value is very different indeed. The timing of this market implosion can be an unknown variable.
Friedmanism underprices risk and ignores externalities.
The eventual impact of these externalities is infrastructurally significant.
Although Dark Pools are displaced up the efficiency hierarchy due to lack of time lag and the primary element in the insider trading, the markets increase in efficiency is only marginal and only due to corrupting inputs being introduced to the market price.
If all corrupt inputs in a mature market could be known and assessed both singly and in association with one another, only then might a corrupt market approach strong-form efficiency and in a non-regulated marketplace this is simply not going to occur.
Which brings us to the conclusion of yet another aspect of the fake of Friedmanism.
Fama's only other claim to fame is the already mentioned Fama-French Three-Factor Model.
This attempts to replace the old Capital Asset Pricing Model (which, by the way, is also inadequate).
Needless to say the Three-Factor model doesn't work as it ignores corruption and behaviouralism.
Entertainingly, Foye, Mramor and Pahor (2013) have shown an improvement in the performance of the Fama-French model if one of the terms is replaced by a term that acts as a proxy for accounting manipulation!
These papers are amongst the first tentative steps of economics crawling towards holistically analysing the hyperreality.
Benoît Mandelbrot: "Financial economics, as a discipline, is where Chemistry was in the 16th century: a messy compendium of proven know-how, misty folk wisdom, and unexamined assumptions and grandiose speculation."
As a former pupil of Mandelbrot, Fama should know better...
... grandiose models, unexamined inputs, misty economic wisdom mixed with the status quo.
And, anyway, as economics in rather dubious fashion claims to be a science, let's address it as such...
Michel Foucault: "If one recognises in science only the linear accumulation of truths or the orthogenesis of reason, and fails to recognise in it the discursive practice that has its own levels, its own thresholds, its own various ruptures, one can describe only a single historical division, which one adopts as a model to be applied at all times for all forms of knowledge."
For many more itemised angles on corruption follow us on Twitter @FootballIsFixed
© Football is Fixed 2006-2013
His hypothesis regarding the efficiency of financial markets is indeed elegant (which sometimes is enough for an award to be made) but it is also utterly and completely wrong.
Not particularly impressed with his Fama-French Three-Factor Model either (but more on that later).
If there were no government interferences, no psychopathies, no behavioural irrationalities, no corruptions nor criminalities and if market sectors didn't always evolve towards maturity, he would be right.
But as these inputs drive all markets, the laureate is surely wrong.
Fama's Efficient Markets Hypothesis was put forward in 1970 and formed an intellectual basis for the shock doctrine disaster neo-capitalism that the world has experienced since.
By being a part of the "intellectual" framework gathered as an neo-con edifice at the University of Chicago, Fama bears some responsibility for this sociopathic system.
So, what is Gene's hypothesis and why is it incorrect?
The Efficient Markets Hypothesis is split into three levels - strong-form, semi-strong-form and weak-form efficiency.
Strong-form suggests that market prices reflect all information, public and private, and it is not possible for anyone to earn excess returns.
In semi-stong-form, prices adjust to new information rapidly and rationally.
While weak-form structures, prices simply follow a random walk.
Before we go any further we need to look at the architecture of markets.
The public markets are just the top of an iceberg of submerged Dark Pool markets - there are hundreds of unregulated Dark Pools where insiders trade against insiders in markets that the public only sees when an excess of over-enthusiasm occurs. It is in these markets that the big market plays are made not the public ones.
For all assessments of Fama's Hypothesis, therefore, it will need to be addressed on two levels - the public markets and the Dark Pools.
1) The most dominant input to the wrongness of Fama's Hypothesis is behaviouralism.
Work in the sixties by Daniel Kahnemann, Amos Tversky, Paul Slovic and Richard Thaler had already introduced psychology to the market and, in 1979, Kahnemann and Tversky developed Prospect Theory which represented the final psychological nail in the coffin of Efficient Markets. Investors do not behave in a rational manner in the marketplace for a whole continuum of different reasons that both exist within themselves and also interact in complex ways between themselves to produce the behaviours that we project. Market prices represent mass human psychology far more than they do unproved economic fundamentals.
So by 1979, Fama's Hypothesis should have been put to bed...
... unfortunately, it took the blinkered Chicago School until 2007 to acknowledge the impact of behaviouralism in markets, attempting to convince us in the meantime that an efficient pricing infrastructure underpinned the alleged validity of Friedmanian late capitalism..
Slavoj Žižek: "The problem is today when you have chaos or disorder, people lose their cognitive mapping."
2) All of the information is not in the market. Even if behaviouralism did not exist and we were all perfectly rational in all of our decision-making, efficient markets would be compromised on all three levels of Fama's efficiency hierarchy.
Public markets are largely inefficient being too far from the core Dark Pools to be benefiting instantaneously to the flow of real information. The public markets offer a distilled filtered form of this driving underground Dark Pool marketplace. Dark Pool trading strategies become converted into a holistic market strategy as Dark Pool liabilities are hedged in the public sphere.
What about the Dark Pools?
Are they a proof of Fama efficiencies?
No.
Behaviouralism is a "plug in" in any market, public or Dark Pool.
Additionally, the information flow in Dark Pools is, by its very nature, opaque.
Proxy trading, algorithmic distortions, hidden players away from the table, consortia strategies, disinformational trading, cornered markets etc etc.
At any given time, the market tends to inefficiency.
As mature markets might evolve into anything the primary operators desire, the price can be anything too.
Mature markets (and these are the ones most traded in the Dark Pools) are largely under the absolute control of a small grouping of operations, think OPEC. Individual members of OPEC have their own hidden agendas over and above the shared agenda with fellow members. Even when the structure is held in place with extra robustness due to government scaffolding around the market, the major player(s) is/are still able to make the market whatever they desire whenever they desire.
In effect monopolistic corruption distorts any semblance of efficiency in the market while duopolistic or cartel behaviour offers a slightly diluted version of the same.
3) Disaster capitalism undermines any efficiency in any financial market.
The Friedmanian disaster capitalism complex thrives on chaos. When a disaster strikes or, as in the case of Chile, is created, the Chicago school Hayekians move in with their shock tactics to further destabilise an already destabilised people. As US security entities move into the vacuum, the markets are utterly chaotic. Although some efficiency and robustness is added to the marketplace ironically by the strategies of these security operations (the same template being micro-adjusted from territory to territory) the holistic performance of the markets are driven by irrationalities and the efficiencies fall off the bottom of Fama's ratings chart. Andrew Haldane, who should have been made Governor of the Bank of England, refers to this inability to judge risk as "disaster myopia".
Disaster myopia in a disaster capitalism complex!
4) Private information is introduced to the market in a variety of strategies that, by their very nature, imply market inefficiencies being created for the advantage of Dark Pool operations.
Knowledge within a company, governmental or central bank policies, trading disinformation for future profits, competitive market poker play all are based around the possession of the ultimate power play for the marketplace. Just think of the variety of ways in which, say, Ben Bernanke could have utilised his absolute knowledge of the variables related to quantitative easing. An individual, with evolving strategies, could make money without the full reality hitting the market by placing trades laterally and peripherally.
Noam Chomsky would call this "cogntive regulatory capture" and it is a structure typical of late capitalism.
5) The most obvious way in which financial markets are inefficient is by their refusal to accept the cost of externalities in the price of an asset.
How on earth can a price be efficient in the holistic sense if externalities are not included in the calculation? The price can only be considered in any way efficient in short time frames as, when the true costs are included, the asset value is very different indeed. The timing of this market implosion can be an unknown variable.
Friedmanism underprices risk and ignores externalities.
The eventual impact of these externalities is infrastructurally significant.
Although Dark Pools are displaced up the efficiency hierarchy due to lack of time lag and the primary element in the insider trading, the markets increase in efficiency is only marginal and only due to corrupting inputs being introduced to the market price.
If all corrupt inputs in a mature market could be known and assessed both singly and in association with one another, only then might a corrupt market approach strong-form efficiency and in a non-regulated marketplace this is simply not going to occur.
Which brings us to the conclusion of yet another aspect of the fake of Friedmanism.
Fama's only other claim to fame is the already mentioned Fama-French Three-Factor Model.
This attempts to replace the old Capital Asset Pricing Model (which, by the way, is also inadequate).
Needless to say the Three-Factor model doesn't work as it ignores corruption and behaviouralism.
Entertainingly, Foye, Mramor and Pahor (2013) have shown an improvement in the performance of the Fama-French model if one of the terms is replaced by a term that acts as a proxy for accounting manipulation!
These papers are amongst the first tentative steps of economics crawling towards holistically analysing the hyperreality.
Benoît Mandelbrot: "Financial economics, as a discipline, is where Chemistry was in the 16th century: a messy compendium of proven know-how, misty folk wisdom, and unexamined assumptions and grandiose speculation."
As a former pupil of Mandelbrot, Fama should know better...
... grandiose models, unexamined inputs, misty economic wisdom mixed with the status quo.
And, anyway, as economics in rather dubious fashion claims to be a science, let's address it as such...
Michel Foucault: "If one recognises in science only the linear accumulation of truths or the orthogenesis of reason, and fails to recognise in it the discursive practice that has its own levels, its own thresholds, its own various ruptures, one can describe only a single historical division, which one adopts as a model to be applied at all times for all forms of knowledge."
For many more itemised angles on corruption follow us on Twitter @FootballIsFixed
© Football is Fixed 2006-2013
Saturday, 12 May 2012
In The Lap of the Big Bang - A Post from 2008
Why Free Market Capitalism Cannot Work; Why It Is Pointless To Reform Something That Cannot Work; Why Nobody Believes In Free Markets Anymore Although We Want To Maintain Appearances; Why It Is Time For A New Equilibrium State
Fractally speaking, all of our existences are to be determined to a major extent by the Physics of the Big Bang.
For financial economists, this is a pretty large externality to have left out of your risk assessments!
And, yet, that is exactly how flimsy is the intellectual rigour underpinning Friedman, Hayek and the Chicago School so mighty in ObamaWorld.
Of course, all other externalities are stripped out of the pricing system too, in order that psychopathic growth may be achieved despite the production of Real Super-Systemic Risk.
Carcinogenic Capitalism.
Occurrences that have already happened, some in the dim and distant past, are affecting the dynamics, trends and movements in the financial markets today.
Behaviouralism and Darwinism are primary drivers of the financial markets and yet such structures as 'Moral Hazard' (where market operators take excessive risk safe in the knowledge that there is no personal downside to such risk) were built into the very fabric of the free market model.
None of this Fractal Mathematics, Psychology of Finance or Behaviouralism has been utilised by regulators, government or the financial system despite such knowledge having been freely available for half a century - Mandelbrot, Kahneman and Tversky published in the early sixties.
Benoît Mandelbrot: "Financial economics, as a discipline, is where Chemistry was in the 16th century: a messy compendium of proven know-how, misty folk wisdom, and unexamined assumptions and grandiose speculation."
Through the provision of a psychopathic regulation-lite template where individuals were rewarded for public displays of their psychopathy in action, we should hardly express surprise that the elevation of such antisocials up the economic, financial and political ladders has produced systemic psychopathy in the atmosphere of the system.
Short-termism leads to a lack of strategy which increases risk.
Refusal to accommodate externalities produces feedback loops that also engender systemic and super-systemic risk.
And while these characters were filling their pockets while we were all still focused on all that smoke and all those mirrors, they were basing their illusion on prehistoric 'science'.
Neo-classical economics is pre-Galilean in its simplicity. Multi-disciplinary it is not!
Then there are the chartists and the technical analysts, believing in their candlesticks and their head-and-shoulder formations, all blinkered to any Holistic Reality but following the same data, the same prices, the same (dis)information, plotting the same lines on the same charts utilising the same off-the-shelf software which, if it were of any Real value, would be being used in a proprietary trading environment for isolationist profit. Actually...
Then came the Idiot Physicists - Econophysicists - to spread disaster far and wide.
Holistically challenged, this new breed of trader possessed all the professional inadequacies of their predecessors but with a new twist - black boxes.
Algorithmic analysis has grown exponentially in the last decade.
Curiously enough, this neatly coincides with the onset of the Permanent Depression which, as we all know, began in 1997, or thereabouts.
Black boxes are perfect for shenanigans.
You feed in the inputs.
You train your black box to recognise patterns in this data.
You mock trade the black box.
You build the black box into your overall trading portfolio.
And cybernetics works, to an extent, but not if any econophysicists are involved it doesn't!
It is all dependent on the quality of the inputs.
There are many additional issues with relying solely on black box technologies for trading including different pattern relevance in different market phases and the impacts of Black Swans, for example.
The key charges laid on the Chicago doormat are damning in their veracity - archaic theory, non-multidisciplinary, no Real risk assessment, unsustainability as a core competency, belief in 'magic' technologies, an absence of any atmospheric analysis and engendering super-systemic catastrophe scenarios.
Meanwhile, our Chicago Economist In Chief, Barack Hussein Obama Himself, doesn't understand the basic concept of the price-earnings ratio, thinking it is termed the 'profit-earnings ratio' in a Friedmanian Slip.
This cannot be a good thing.
Before entirely deconstructing this nonsense, we need to take a closer look at the Real reasons why such a system can NEVER work.
Gosh! This is pretty exciting for a Monday morning, I can tell you :)
On October 19th 1987, Wall Street fell by 29.2% in the biggest daily decline in a century.
The probability of Wall Street falling this amount is 10 to the power of 50.
Mandelbrot: "You could span the powers of 10 from the smallest sub-atomic particle to the breadth of the measurable universe - and still never meet such a number."
Free market capitalism underprices risk.
In fact, it frequently excludes risk from the equation entirely.
The outcome of this blinkered approach to all of our Realities is that, in the words of Mandelbrot: "The odds of financial ruin in a free, global market economy have been grossly underestimated."
October 19th 1987 simply should not have occurred.
The 2008 Crash should never have happened either.
But they did and such Black Swans will continue to blight this myopic system until it is nicely deconstructed and put away in its box, under the bed.
Fractal Mathematics are the key here, obviously.
Butterflies flutter and hurricanes hit mainly Black areas, only to be ignored as an Unreality by government.
Decisions are made, systems developed, regulations changed, globalisation created, insider trading enacted, markets are cornered, monopolies allowed, cartels fragment, the state gets involved, new financial markets are established, private markets and Dark Pools established etc etc etc. Each of these quantums of influence set in process the fractal future.
Every single quantum Reality impacts on the future market price.
Behaviouralism cuts across all these feedback loops as a further fractal input.
As Slavoj Žižek states: "The problem is today when you have chaos or disorder, people lose their cognitive mapping."
Chaos reigns.
Take volatility.
There were more daily swings of 5% or more in the FTSE 100 in November 2008 than in total since the Second World War.
Were the market hyperrealities really more volatile in November or was Mass Psychology at play?
All fundamental, systemic, regulatory and cybernetic fractals are massively disordered by the impact of the Behavioural.
Although listed under their sub-sections of Gestalt or Psychoanalysis or whatever, there is a Darwinian dynamic to the manner in which markets evolve.
This, of course, brings us back to the 'animal spirits - psychopathy' doublespeak.
And this is why super-systemic risk is being so massively underpriced in the financial system.
While all of the free market ideologues and their apologists in the seats of power are shuffling the papers, printing the money, pretending that there is another boom-and-bust possibility in this game yet (which, unfortunately, there probably is) and extending this pretence to the territory of carbon markets and cap and trade schemes, each fundamentally flawed fractally in their Ponzi capitalism, there are super-systemic fractals that might just be worthy of closer inspection.
And not just by climate change scientists either...
Fractals are the most worrying aspect of the whole array of worrying factors that make up the subject of climate change.
If fractals can do 10 to the power of 50 with financial markets when destabilisation takes hold, imagine what fractals could achieve in an eco-system that is no longer in a sustainable equilibrium state!
Mandelbrot: "The two poles of human experience - deterministic systems of order and planning and the stochastic or random systems of irregularity and unpredictability."
The latter of these poles dominate the analysis today both in financial markets and in climate change.
Better frame the argument around the issue of bankers and their bonuses then...
Jean Baudrillard: "These systems, even when they are based on radical indeterminacy (the loss of meanings), fall prey, once more, to meaning. They collapse under the weight of their own monstrosity."
Andrew Haldane describes the inability to judge risk as "disaster myopia" - a lack of awareness of the network externalities in combination with misaligned incentives.
But this is merely the first layer of "disaster myopia".
The feedback loops, the fractals, the super-systemic risk, the quantuming between different equilibrium states would combine in a second layer - more "catastrophe myopia" really...
If free market snake-oil salespeople included the primary and secondary levels of externality in their pricing system, the entire edifice comes crumbling down under the weight of its own "monstrosity", a monstrosity based on inconsequence of intellectual input to the issue at hand.
There is no growth once externalities are built into the equation.
Once one takes the holistics into account, the trickledown effect, already entirely illusory, becomes, instead, a Cinderella-fantastic fairy tale of a neohyperreality.
There is no such entity as a sustainable Ponzi scheme.
And the weight of monstrosity is the gravity.
Every free market capitalist infrastructure is Pure Ponzi - from Albanian peasants to credit default swaps.
And, because the people who have been receiving excessive bonuses for the last quarter of a century made the selfish decisions that they did, even to the detriment of their own lines of offspring (psychopathy again), we are now in what Sun Tzu might have called the Worst Variety of Ground.
The fractals yet to be unleashed, the toxicity still to surface, the mass delusions and engendered mass psychologies yet to spiral out of rationality, will all come to fruition against the backdrop of a super-systemic lack of stable equilibrium.
So, a 'system' that produces negative growth if the externalities are included, produces this deficiency of utility on a foundation that spontaneously combusts repeatedly and fractally due to historical indiscretions.
These foundational externalities have been magnified by the Greed of the Great and the Good of the last centennial quartile.
They tell us that tax doesn't have to be taxing which, in self-application, would suggest that the Great and the Good would be more than willing to return all of their ill-gotten gains so that we all might start to implement a sustainable strategy that just might provide us with the remote feasibility of halting man-made climatic change.
Free market sorts, when still willing to defend their myths, frame their discussions around new regulation and innovation and growth and other words that have no directly Real meanings in our lives.
Free market sorts are enacting massive systemic ructions on the global financial architecture without any methodology or strategy whatsoever.
Big Butterflies produce Huge Hurricanes.
But their big thinking always stops short of being out-of-the-box; big ideas exist within the walled gardens of their illusory system.
We don't need tinkering.
We need deconstruction, thank you very much.
And sustainable negative growth, economic contraction, stopping breeding, the promotion of instincts for freedom, those sort of things...
But, in the meantime, to keep your pecker up, why not wander out into the spring sunshine and anarcho-happy-slap a banker today...
Arghhhh!!! The minutiae! Don't get wrapped up in the minutiae...
© Football is Fixed 2006-2012
Friday, 24 February 2012
When Is A Third Party Agreement Not A Third Party Agreement? - A Flashback
Nearly three years ago, we produced the below post on third party arrangements and the manner in which Richard Scudamore and those in control of his actions avoided the rules, the law, morals, ethics, integrity and normal practice in the interest of all shady shades.
ScudamoreWorld remains an Adhocracy within the Murdochracy.
___________________________________________________________
On Friday July 13th, Football Is Fixed posted that the Carlos Tevez transfer was a done deal with the only remaining obstacle being how to construct a "reality" that would accommodate the multifarious public stances taken by the protagonists. That the final resolution has taken until yesterday to complete was solely a result of further non-strategic foot dragging by the Premier League. The deceleration of this process has merely served to make both their posturing as an organisation and the incompetence of chief executive officer (CEO), Richard Scudamore, more apparent to more people, as the delay has merely produced more damning column inches that have allowed more individuals to discern the Premier League's truly Orwellian fabrication of crime and punishment.
Briefly looking at the overview of this blatant piece of spectacular society corruption, we'll take each of the key participants in turn.
We stated just a couple of days ago that Richard Scudamore has more than passed his sell-by date. His mismanagement of the English game both within the public arena and away from the prying eyes of probity has been abysmal. When one compares his decision making with the interests of the more crooked elements that are corrupting our game to its core, we find a far-too-revealing positive correlation (which obviously occurs entirely by chance). However, his psychic ability to parallel Premier League strategy with the black and grey market's agenda is one of those spooky coincidences that has to be resultant in unemployment if such individuals were accountable to watchdogs. But they're not. The Premier League's accountability axes lead to some rather unsavoury loci.
Scudamore has been the media face that has projected his and his organisation's incompetence onto the footballing public in the Carlos Tevez affair. They dug themselves into a hole and just kept digging when strategic oversight would have preferenced a negotiated settlement. In financial markets, a key behavioural factor is testosterone. The male-dominated marketplace repeatedly throws up instances of testosterone-driven individuals undertaking strategies that are to their own and their associates disadvantage rather than selecting alternative options that might produce a small gain for all. The Premier League have behaved similarly. One of the problems for the likes of Scudamore is when the spin gets out of control. The conjunction of a variety of separate media realities results in people getting cornered in nightmares of their own chaotic creation. So it is with Scudamore. Quest and bungs, the influence of Zahavi and Berezovsky, the takeovers by Shinawatra and Yeung, the Carlos Tevez transfer and the West Ham non-relegation, mismanagement or what? And this are only the tip of the iceberg that is available to public eyes. Insiders also are able to detect the other machinations that are totally undermining and destabilising the game to the financial advantage of a smallish number of very corrupt entities.
Specifically with regard to Tevez and West Ham. By clearing and, indeed, financially rewarding the Hammers for their corrupt practices related to third party agreements, the Premier League set in motion the very public decline of their executive authority. The crisis was spun from Day One as the Premier League sought to achieve their aims with an abusive template. The other parallel stories conspired to establish a typical damage limitation infrastructure where each of the options open to Scudamore's brigade was a losing position. The scenario whereby the third party contracts never existed legally would have been overturned in the High Court to the accompaniment of excessive public awareness of the Premier League's murkier activities = LOSE. Or the scenario where the third party agreements did exist and were legal calls into serious question how the Premier League could possibly not relegate West Ham = LOSE. Keeping the various plates spinning in a spectacular creation of endless contortions until the media loses interest = LOSE. Or, the choice that the Premier League eventually arrived at, reach an out-of-court settlement with all the parties. Despite the fact that this settlement is conclusive proof of the corruption undertaken by the Premier League on a range of different levels as they repeatedly break (and allow others to break) the rules that they are supposed to oversee, pretend that you are still in control of the process while avoiding any cross-referencing between the final solution and any of the executive decisions preceding it = LOSE.
In non-sophisticated sectors like football, the tone of the press releases following these type of tiffs are always revealing. The Premier League's entirely desperate attempt to paper over the chasms states: "The decision of the board, having received leading counsel's opinion, is that the agreement reached is compliant with the rules of the Premier League and consistent with the undertakings given by West Ham United to the Premier League board at various times since 27th April 2007".
No, the agreement is not compliant with the Premier League rules and what about undertakings given by West Ham United PRIOR to April 27th?
Sack the bastard...
When there is a very very big loser, there is usually more than one big winner. In this particular little scam, everybody wins big except the Premier League (who could not have played their hand less expertly) and Sheffield United. Disturbingly, two of the winners should, with judicial equivalence, actually be losers.
In the last two years, it is difficult to find any aspect of the business realities of West Ham United that have even approached the area of ethical behaviour. The illegal transfers of Tevez and Mascherano; the cosy ties with Brooking at the FA; the "interesting" choice of sector links - ask any market analyst; the takeover battle between MSI and Iceland's dodgiest businessman; the undermining of Pardew; the crowning of mr nice guy, Alan Curbishley; the £30 million payment as punishment; having the cheek to spend that money on transfers; accepting the £2 million pay-off from Manchester United that proves the illegality of their historical operations. And, yet, Magnusson's men march into the 2007/08 season in a very strong position with, approximately, £26.5 million worth of assets illegally gained. This is quite a weight advantage in the Premiership Handicap Chase 07/08.
As this tawdry affair has developed, there has been an ever-increasing amount of media flak thrown at the real winners of this confrontation, the really dodgy people - Joorabchian, Zahavi, Berezovsky, MSI Group Limited and Just Sport Inc (JSI). The Quest inquiry, the match fixing scandal at Corinthians and the money laundering charges in Brazil against Joorabchian and Berezovsky are all indicative of the sectors in which these people choose to operate. It is common practice in South America and Africa for slave-like contractual conditions to be the norm as players are tied to criminal operations. The fact that this particular operation has come to light is just another tip of just another iceberg. The football authorities, on the whole, accept this illegal trafficking in legally non-represented human beings - the contracts are heavily tilted in favour of the owners of the player's registrations. Looking at another iceberg - the one representing the financial gains to MSI and JSI - shows exactly how much these dodgy operators have profited from Tevez and Mascherano. Manchester United will pay £10 million to these people for loan playing rights for the next two seasons and then United will have an option to buy. MSI have consequently gained financially from these players at every step of their career entirely illegally and totally without internal policing within the game. And we won't even venture anywhere near the influence that these crooks have on the global football betting markets...
The only parties to have behaved with moral rectitude are Manchester United and Carlos Tevez, himself.
Throughout the process, Man Utd have remained as inside the legal boundaries as was feasible when one is dealing with a rotten edifice. Like Liverpool with Javier Mascherano in January, United have skillfully taken advantage of a slimy corruption to gain competitive advantage. The two year loan deal with an option on outright purchase is a gem of a deal. But, just a point, aren't Manchester United entering into an illegal third party agreement in establishing this loan deal? Just a point... We expect to see the hyper owners hovering around the corruptions, even those corruptions not directly under their influence, as a frequent backdrop to the future English Premiership.
Tevez is a bit of a hero. His life story from day one has entertained Maradona-esque escapades with his existence being anchored by his immense football talent. It is absolutely not only the financial terms of this deal which makes it so massive - Tevez is the business. He has already shown that he can hack it at speed in Argentina, at Corinthians (it is incredibly difficult for any Argentinian footballer to make an impact in Brazil both due to the difference in playing styles and their treatment from opponents, officials and, even, team-mates), for his country in the 2006 World Cup, for a relegation threatened bunch of scallies and, soon, no doubt on the premier footballing stages of Europe. This speedy adaptation to new and alien environments at great rapidity is the very hallmark of a top player. And, to achieve all this against a backdrop of corruption, uproar and criminality = astonishing... Tevez or Torres. Get a grip...
Unless the Premier League determines that another spectacular cataclysmic implosion might best serve their interests, the final word on this corruption should go to one of the biggest losers out of this affair, Neil Warnock. Following the High Court's decision to back the relegation of Sheffield United while acknowledging the efficacy of their legal position, Warnock stated: "so much for the integrity of the Premier League. So much for fairness and justice in English football". Fair dinkum...
© Football Is Fixed/Dietrological
ScudamoreWorld remains an Adhocracy within the Murdochracy.
___________________________________________________________
On Friday July 13th, Football Is Fixed posted that the Carlos Tevez transfer was a done deal with the only remaining obstacle being how to construct a "reality" that would accommodate the multifarious public stances taken by the protagonists. That the final resolution has taken until yesterday to complete was solely a result of further non-strategic foot dragging by the Premier League. The deceleration of this process has merely served to make both their posturing as an organisation and the incompetence of chief executive officer (CEO), Richard Scudamore, more apparent to more people, as the delay has merely produced more damning column inches that have allowed more individuals to discern the Premier League's truly Orwellian fabrication of crime and punishment.
Briefly looking at the overview of this blatant piece of spectacular society corruption, we'll take each of the key participants in turn.
We stated just a couple of days ago that Richard Scudamore has more than passed his sell-by date. His mismanagement of the English game both within the public arena and away from the prying eyes of probity has been abysmal. When one compares his decision making with the interests of the more crooked elements that are corrupting our game to its core, we find a far-too-revealing positive correlation (which obviously occurs entirely by chance). However, his psychic ability to parallel Premier League strategy with the black and grey market's agenda is one of those spooky coincidences that has to be resultant in unemployment if such individuals were accountable to watchdogs. But they're not. The Premier League's accountability axes lead to some rather unsavoury loci.
Scudamore has been the media face that has projected his and his organisation's incompetence onto the footballing public in the Carlos Tevez affair. They dug themselves into a hole and just kept digging when strategic oversight would have preferenced a negotiated settlement. In financial markets, a key behavioural factor is testosterone. The male-dominated marketplace repeatedly throws up instances of testosterone-driven individuals undertaking strategies that are to their own and their associates disadvantage rather than selecting alternative options that might produce a small gain for all. The Premier League have behaved similarly. One of the problems for the likes of Scudamore is when the spin gets out of control. The conjunction of a variety of separate media realities results in people getting cornered in nightmares of their own chaotic creation. So it is with Scudamore. Quest and bungs, the influence of Zahavi and Berezovsky, the takeovers by Shinawatra and Yeung, the Carlos Tevez transfer and the West Ham non-relegation, mismanagement or what? And this are only the tip of the iceberg that is available to public eyes. Insiders also are able to detect the other machinations that are totally undermining and destabilising the game to the financial advantage of a smallish number of very corrupt entities.
Specifically with regard to Tevez and West Ham. By clearing and, indeed, financially rewarding the Hammers for their corrupt practices related to third party agreements, the Premier League set in motion the very public decline of their executive authority. The crisis was spun from Day One as the Premier League sought to achieve their aims with an abusive template. The other parallel stories conspired to establish a typical damage limitation infrastructure where each of the options open to Scudamore's brigade was a losing position. The scenario whereby the third party contracts never existed legally would have been overturned in the High Court to the accompaniment of excessive public awareness of the Premier League's murkier activities = LOSE. Or the scenario where the third party agreements did exist and were legal calls into serious question how the Premier League could possibly not relegate West Ham = LOSE. Keeping the various plates spinning in a spectacular creation of endless contortions until the media loses interest = LOSE. Or, the choice that the Premier League eventually arrived at, reach an out-of-court settlement with all the parties. Despite the fact that this settlement is conclusive proof of the corruption undertaken by the Premier League on a range of different levels as they repeatedly break (and allow others to break) the rules that they are supposed to oversee, pretend that you are still in control of the process while avoiding any cross-referencing between the final solution and any of the executive decisions preceding it = LOSE.
In non-sophisticated sectors like football, the tone of the press releases following these type of tiffs are always revealing. The Premier League's entirely desperate attempt to paper over the chasms states: "The decision of the board, having received leading counsel's opinion, is that the agreement reached is compliant with the rules of the Premier League and consistent with the undertakings given by West Ham United to the Premier League board at various times since 27th April 2007".
No, the agreement is not compliant with the Premier League rules and what about undertakings given by West Ham United PRIOR to April 27th?
Sack the bastard...
When there is a very very big loser, there is usually more than one big winner. In this particular little scam, everybody wins big except the Premier League (who could not have played their hand less expertly) and Sheffield United. Disturbingly, two of the winners should, with judicial equivalence, actually be losers.
In the last two years, it is difficult to find any aspect of the business realities of West Ham United that have even approached the area of ethical behaviour. The illegal transfers of Tevez and Mascherano; the cosy ties with Brooking at the FA; the "interesting" choice of sector links - ask any market analyst; the takeover battle between MSI and Iceland's dodgiest businessman; the undermining of Pardew; the crowning of mr nice guy, Alan Curbishley; the £30 million payment as punishment; having the cheek to spend that money on transfers; accepting the £2 million pay-off from Manchester United that proves the illegality of their historical operations. And, yet, Magnusson's men march into the 2007/08 season in a very strong position with, approximately, £26.5 million worth of assets illegally gained. This is quite a weight advantage in the Premiership Handicap Chase 07/08.
As this tawdry affair has developed, there has been an ever-increasing amount of media flak thrown at the real winners of this confrontation, the really dodgy people - Joorabchian, Zahavi, Berezovsky, MSI Group Limited and Just Sport Inc (JSI). The Quest inquiry, the match fixing scandal at Corinthians and the money laundering charges in Brazil against Joorabchian and Berezovsky are all indicative of the sectors in which these people choose to operate. It is common practice in South America and Africa for slave-like contractual conditions to be the norm as players are tied to criminal operations. The fact that this particular operation has come to light is just another tip of just another iceberg. The football authorities, on the whole, accept this illegal trafficking in legally non-represented human beings - the contracts are heavily tilted in favour of the owners of the player's registrations. Looking at another iceberg - the one representing the financial gains to MSI and JSI - shows exactly how much these dodgy operators have profited from Tevez and Mascherano. Manchester United will pay £10 million to these people for loan playing rights for the next two seasons and then United will have an option to buy. MSI have consequently gained financially from these players at every step of their career entirely illegally and totally without internal policing within the game. And we won't even venture anywhere near the influence that these crooks have on the global football betting markets...
The only parties to have behaved with moral rectitude are Manchester United and Carlos Tevez, himself.
Throughout the process, Man Utd have remained as inside the legal boundaries as was feasible when one is dealing with a rotten edifice. Like Liverpool with Javier Mascherano in January, United have skillfully taken advantage of a slimy corruption to gain competitive advantage. The two year loan deal with an option on outright purchase is a gem of a deal. But, just a point, aren't Manchester United entering into an illegal third party agreement in establishing this loan deal? Just a point... We expect to see the hyper owners hovering around the corruptions, even those corruptions not directly under their influence, as a frequent backdrop to the future English Premiership.
Tevez is a bit of a hero. His life story from day one has entertained Maradona-esque escapades with his existence being anchored by his immense football talent. It is absolutely not only the financial terms of this deal which makes it so massive - Tevez is the business. He has already shown that he can hack it at speed in Argentina, at Corinthians (it is incredibly difficult for any Argentinian footballer to make an impact in Brazil both due to the difference in playing styles and their treatment from opponents, officials and, even, team-mates), for his country in the 2006 World Cup, for a relegation threatened bunch of scallies and, soon, no doubt on the premier footballing stages of Europe. This speedy adaptation to new and alien environments at great rapidity is the very hallmark of a top player. And, to achieve all this against a backdrop of corruption, uproar and criminality = astonishing... Tevez or Torres. Get a grip...
Unless the Premier League determines that another spectacular cataclysmic implosion might best serve their interests, the final word on this corruption should go to one of the biggest losers out of this affair, Neil Warnock. Following the High Court's decision to back the relegation of Sheffield United while acknowledging the efficacy of their legal position, Warnock stated: "so much for the integrity of the Premier League. So much for fairness and justice in English football". Fair dinkum...
© Football Is Fixed/Dietrological
Wednesday, 18 February 2009
The Predator State
"The Predator State" is the title of the latest publication by Professor James Galbraith (son of J.K.).
In the words of the man: "The Predator State refers to the takeover of state power by private interests masquerading behind conservative principle and basically acting for private clients and private profit."
This is the crux of the matter.
As The Economist states: "In a fight, the regulators have the legal power. But the financiers have the political power."
This post, which is a sequel to "¡Que Se Vayan Todos! - All Of Them Must Go" that we churned out last week, addresses the progression from where we stand now on the cusps of Depression to the Real demise ahead, and assesses the mechanics of decline as well as the paucity of intellectual robustness behind the free market capitalist model.
Reflexivity, Behavioural Economics, Psychopathic Personality Disorders, Fractal Mathematics, an Analysis of Shadow Banking and Markets, the Instability of Government Finances, the Black Market, Global Regulation, and Darwinism and Markets are all incorporated into a Collective Scenario Analysis of the state of play.
And we use the word "play" deliberately.
For that is what this crisis represents to the insiders - a game, a competitive and volatile opportunity where serious money may be made by correct market timing.
Ah! The Dichotomy of the Insider - informing all and sundry that everything is hunky dory when, in Reality, Hanky Panky and his hocus pocus ensured that everything is, in fact, Something Awful.
Friedman Is Fixed
Icelander, Gudrun Jonsdothir: "I don't trust the government, I don't trust the banks, I don't trust the political parties, I don't trust the IMF."
Marching Italian students: "We won't pay for your crisis."
The whole unsound foundation of the idiocies of Milton Friedman and the free market model is based on neoclassical economics.
This is a pseudoscience.
We might as well base our financial system on readings of the I Ching.
Neoclassical free market sorts base the fake solidity of their ideas on the rationality of the marketplace.
This is inadequate for two reasons.
Firstly, human beings are hardly rational and, secondly, by allowing an anything-goes environment, individuals with psychopathic and antisocial personality disorders (APDs/ PPDs) come to dominate the system.
Hence, there is a systemic instability in the model.
George Soros on Reflexivity: "... a two-way feedback loop, between the participants' views and the actual state of affairs. People base their decisions not on the actual situation that confronts them, but on their perception or interpretation of the situation. Their decisions make an impact on the situation and changes in the situation are liable to change their perceptions."
But, this is only part of the Real Reality.
Behavioural Economics originated over forty years ago but is only now being taken seriously by some of the more enlightened free market ideologues. Greed and stupidity blinded this myopic grouping to the true state of the game for nearly half a century.
As one may see, free market economics is most certainly not a science, dismal or otherwise.
Neither is is an art or an -ology.
It is a scam - a Giant Pyramid Ponzi scheme for the enrichment of the privileged and the psychopathic.
We are all a bundle of different personality styles and disorders. Each particular style/disorder possesses its own portfolio of associated perversions of rationality.
Magic Thinking, the Representativeness Effect, Adaptive Attitudes, Regret Theory, Cognitive Dissonance etc etc etc all combine to produce a cumulative effect.
Although individually these cumulations are, largely, neither here nor there, in accumulation, the mass psychology of the marketplace is something altogether more worrying.
So, when a system is primed for the advancement of individuals with APDs and PPDs, the result is a spiralling of the behavioural attributes linked to such characters.
Soros argues that the "market fundamentalism" of Alan Greenspan and his ilk, especially their assumption that "financial markets are self-correcting", was an important cause of the current crisis.
We would go further than this.
Friedmanism was the ONLY cause of this Depression.
The Here and Now
We have covered the present in the prequel to this monologue but there are two other infrastructural inadequacies to which we would like to draw your, no doubt, already waning attention.
Firstly, let us return to the deep thinking of the good Prof Galbraith.
The fiscal stimuli being rolled out globally will not work unless the banking stimuli work. Furthermore, for the latter to be addressed on any level, a meticulous audit of the banking assets needs to be undertaken before any government takes on such toxicity. The taxpayer must not take full responsibility for the psychopathy of the financial sector.
For, when you are dealing with a bank that is already underwater then "the risk capital is worth nothing. It [the bank] is being held up only by the expectation of Federal bailout."
The Reality is that many US, British and other global banks may already be insolvent.
Galbraith: "But so long as you're dealing with the old management and so long as you're dealing with old practices, so long as you don't have a clean audit of the books, the chances are that the bank is going to behave in ways that are not constructive, which do not contribute to the growth of the economy, and which leave all types of suspicions present in the system about the integrity of the institutions and of the regulatory process. And that's the problem that the Treasury Department seems determined not to face. And so long as it doesn't face it, we're not going to get out of this."
The second infrastructural fallacy of the free market is represented by the IMF - the International Misery Fund.
The US and its client state, the United Kingdom, dominate the IMF with their free market principles (sic). By forcing indebted countries to accept Friedman, the IMF ensures that financial crises will repeatedly return to haunt us.
Due to the psychopathic capital flows globally, ALL poor countries must build up reserves and savings to insure against the boom-and-bust cycles that Slack Jaw told us that he had terminated.
These savings are then regarded as a problem by the IMF as they distort, in their eyes, the various current account balances around the world.
The poorest people are supposed to get out there and spend and take risk so that those at the top of the Ponzi scheme may continue with their greed.
But people, and even governments, learn.
Consequently, the Most Idiotic are currently blaming China for both saving more and being less reckless. The Most Idiotic claim that the Chinese yuan is grossly undervalued (it isn't - all reasonable economists would agree that any undervaluation is less than 5%, and this miniscule matter has absolutely no relevance to the Reality).
For, as The Economist states: "The currencies of virtually all low income countries are undervalued, since prices are generally lower in these countries."
Then the ideologues at the paper get onto a sticky wicket regarding their fallacy of purchasing power parity (PPP). But things progress. At least, The Economist now regard PPP as merely an "idea" rather than immutable theory.
Although the Reagan, Bush and Clinton Regimes must bear the primary responsibility for the Depression, ObamaWorld hardly offers any respite.
Despite the inadequacies of the fiscal approaches, the same class of ideologue are making the same choices based on the same invalid model.
It is interesting aside here to note that nothing has changed under the Agent of Change.
Noam Chomsky: "As for current policies, I think Obama looks more aggressive and violent than Bush. The first acts to occur under his administration were attacks against Afghanistan and in Pakistan, both of which killed many civilians."
Oh! And the silence over the slaughter in Gaza.
If Obama were Black, he might choose to focus on Real change closer to home rather than illegal campaigns against "friendly" nations.
As the excellently named Benjamin Jealous of the National Association for the Advancement of Coloured (sic) People (NAACP) says: "Young Black people in the US are the most incarcerated people in the world."
The Predator State better elect a black man then...
The Onset Of The Real Depression
The parallels between 1929 and today are ominously expansive, both in the form of the crisis and in the lack of an holistic response to the crisis.
As we have stated before, the only difference is one of orders of magnitude.
We were being economic with the truth here.
There is another major difference - the specifics of the mechanism that will engender the full-blown Depression.
In 1929, market traders were dependent the ticker-tape. In a pre-IT world, all trades were manually recorded by armies of under-privileged people. There was no other option.
When the Crash occurred, the ticker-tape operators were unable to keep up with the tsunami of "sell" orders. Consequently, the ticker-tape started to fall behind time. Traders (and normal human beings too) were selling stock without being able to gauge the price at which they were selling their assets, as the prices were out-of-date and everybody understood that there was a run on.
This led to Panic.
This led to various Behavioural Exponentialities being energised.
The Panic became a self-fulfilling process.
But, let us step back a pace or two and take a bigger picture overview of this situation.
When the monster from the deep was first checking out the crisis in 1929, the historical equivalents of the financial elite (sic, once again) moved in to support the market.
Quoting from J.K. Galbraith in his book "The Great Crash 1929": "A decision was quickly reached to pool resources to support the market... Word had already reached the floor of the Exchange that the bankers were meeting, and the news ticker had spread the magic word afield. Prices firmed at once and started to rise. Then at one-thirty Richard Whitney [the vice-president of the Exchange] appeared on the floor and went to the post where steel was traded. Whitney was perhaps the best-known figure on the floor... As he made his way through the teeming crowd, Whitney appeared debonair and self-confident... At the Steel post he bid 205 for 10,000 shares... He continued on his way, placing similar orders for fifteen or twenty other stocks. This was it. The bankers, obviously, had moved in. The effect was electric. Fear vanished and gave way to concern lest the new advance was missed. Prices boomed upwards."
Exactly the same process is being attempted in today's computerised trading environment. In Britain, officials are buying into the market to inflate prices - the FTSE 100 is 5% inflated in this neoreality.
The next part of the story is of far greater concern and represents the Real beginning of a proper Crash, Noughties-Style.
In 1929, the officials who bought into the markets to inflate prices and to establish a positive psychology in the marketplace had a self-preservatory ace up their collective sleeves.
These officials understood that Finance Was Fixed.
These officials knew that the fake rise in prices was temporary and hyperreal.
These officials knew that, at some point, there was a selling opportunity to lock their own profits in, while driving the rest of the market to rack and ruin.
These officials profited by utilising the inadequacies of the ticker-tape.
Once the operators at the top of the Ponzi scheme decided that the fake price summit had been reached, they sold across the board and extensively.
The next layer of insiders below reacted similarly.
But the ticker-tape meant that the Reality was lost on the general trading population until it was too late.
Exactly the same mechanism has been put in place today.
The recent establishment of Dark Pools, where huge levels of institutional trading are taking place both off-exchange and away from any regulation whatsoever, are the modern-day ticker-tape. Dark Pools facilitate insider trading without any of the regulatory rigours of the Commitment of Traders Reports.
Once officials start to short-sell their illusory positions in the marketplace, there will be a time-asymmetry between these insiders and the rest of the planet. The Real price (although there is, in Reality, no such publicly available price) will be hidden from the market until, once again, it is too late.
The Friedmanists will continue to game the Depression for proprietary profit.
The Dark Pools and the associated Shadow Banking System (Offshore Financial Centres and the like) are the mechanisms.
Impostures new...
And we, through our Predator States, are paying for this ruse - we are buying the poker chips that are being traded in the Dark Pool Casino.
The timing of the Ponzi sell-off is difficult to determine without access to the hidden pricing system of the Dark Pools (effectively non-regulated private markets equivalent to those that have destroyed the integrity of football).
American banks have exposures to Alt-A mortgages (one level up from sub-prime) equivalent to $800 billion, for example. As Guy Cecala of Inside Mortgage Finance states: "The mortgage storm's first wave was sub-prime. Now we have been buffeted by Alt-A. But a bigger wave is on the horizon, and it cuts across all loan types."
But, whatever the trigger, we should rest assured that the insiders who created this Depression will also profit nicely from it's eventual formation as a full-blown Crash.
_____________________________________________________________________________________
As is rather too frequently the case, keyboard diarrhoea (I love the sound of my own keys!?) has resulted in my having to delay an assessment of the role of Darwinism and the conclusion of this rather excellent post until a later date.
But it will be worth waiting for as it will be an entirely top conclusion that will alter the way that you think about your hyperrealities.
It will be a Big Thought :)
Forget our arrogance.
Feed on our arguments.
© Football Is Fixed/Dietrological
In the words of the man: "The Predator State refers to the takeover of state power by private interests masquerading behind conservative principle and basically acting for private clients and private profit."
This is the crux of the matter.
As The Economist states: "In a fight, the regulators have the legal power. But the financiers have the political power."
This post, which is a sequel to "¡Que Se Vayan Todos! - All Of Them Must Go" that we churned out last week, addresses the progression from where we stand now on the cusps of Depression to the Real demise ahead, and assesses the mechanics of decline as well as the paucity of intellectual robustness behind the free market capitalist model.
Reflexivity, Behavioural Economics, Psychopathic Personality Disorders, Fractal Mathematics, an Analysis of Shadow Banking and Markets, the Instability of Government Finances, the Black Market, Global Regulation, and Darwinism and Markets are all incorporated into a Collective Scenario Analysis of the state of play.
And we use the word "play" deliberately.
For that is what this crisis represents to the insiders - a game, a competitive and volatile opportunity where serious money may be made by correct market timing.
Ah! The Dichotomy of the Insider - informing all and sundry that everything is hunky dory when, in Reality, Hanky Panky and his hocus pocus ensured that everything is, in fact, Something Awful.
Friedman Is Fixed
Icelander, Gudrun Jonsdothir: "I don't trust the government, I don't trust the banks, I don't trust the political parties, I don't trust the IMF."
Marching Italian students: "We won't pay for your crisis."
The whole unsound foundation of the idiocies of Milton Friedman and the free market model is based on neoclassical economics.
This is a pseudoscience.
We might as well base our financial system on readings of the I Ching.
Neoclassical free market sorts base the fake solidity of their ideas on the rationality of the marketplace.
This is inadequate for two reasons.
Firstly, human beings are hardly rational and, secondly, by allowing an anything-goes environment, individuals with psychopathic and antisocial personality disorders (APDs/ PPDs) come to dominate the system.
Hence, there is a systemic instability in the model.
George Soros on Reflexivity: "... a two-way feedback loop, between the participants' views and the actual state of affairs. People base their decisions not on the actual situation that confronts them, but on their perception or interpretation of the situation. Their decisions make an impact on the situation and changes in the situation are liable to change their perceptions."
But, this is only part of the Real Reality.
Behavioural Economics originated over forty years ago but is only now being taken seriously by some of the more enlightened free market ideologues. Greed and stupidity blinded this myopic grouping to the true state of the game for nearly half a century.
As one may see, free market economics is most certainly not a science, dismal or otherwise.
Neither is is an art or an -ology.
It is a scam - a Giant Pyramid Ponzi scheme for the enrichment of the privileged and the psychopathic.
We are all a bundle of different personality styles and disorders. Each particular style/disorder possesses its own portfolio of associated perversions of rationality.
Magic Thinking, the Representativeness Effect, Adaptive Attitudes, Regret Theory, Cognitive Dissonance etc etc etc all combine to produce a cumulative effect.
Although individually these cumulations are, largely, neither here nor there, in accumulation, the mass psychology of the marketplace is something altogether more worrying.
So, when a system is primed for the advancement of individuals with APDs and PPDs, the result is a spiralling of the behavioural attributes linked to such characters.
Soros argues that the "market fundamentalism" of Alan Greenspan and his ilk, especially their assumption that "financial markets are self-correcting", was an important cause of the current crisis.
We would go further than this.
Friedmanism was the ONLY cause of this Depression.
The Here and Now
We have covered the present in the prequel to this monologue but there are two other infrastructural inadequacies to which we would like to draw your, no doubt, already waning attention.
Firstly, let us return to the deep thinking of the good Prof Galbraith.
The fiscal stimuli being rolled out globally will not work unless the banking stimuli work. Furthermore, for the latter to be addressed on any level, a meticulous audit of the banking assets needs to be undertaken before any government takes on such toxicity. The taxpayer must not take full responsibility for the psychopathy of the financial sector.
For, when you are dealing with a bank that is already underwater then "the risk capital is worth nothing. It [the bank] is being held up only by the expectation of Federal bailout."
The Reality is that many US, British and other global banks may already be insolvent.
Galbraith: "But so long as you're dealing with the old management and so long as you're dealing with old practices, so long as you don't have a clean audit of the books, the chances are that the bank is going to behave in ways that are not constructive, which do not contribute to the growth of the economy, and which leave all types of suspicions present in the system about the integrity of the institutions and of the regulatory process. And that's the problem that the Treasury Department seems determined not to face. And so long as it doesn't face it, we're not going to get out of this."
The second infrastructural fallacy of the free market is represented by the IMF - the International Misery Fund.
The US and its client state, the United Kingdom, dominate the IMF with their free market principles (sic). By forcing indebted countries to accept Friedman, the IMF ensures that financial crises will repeatedly return to haunt us.
Due to the psychopathic capital flows globally, ALL poor countries must build up reserves and savings to insure against the boom-and-bust cycles that Slack Jaw told us that he had terminated.
These savings are then regarded as a problem by the IMF as they distort, in their eyes, the various current account balances around the world.
The poorest people are supposed to get out there and spend and take risk so that those at the top of the Ponzi scheme may continue with their greed.
But people, and even governments, learn.
Consequently, the Most Idiotic are currently blaming China for both saving more and being less reckless. The Most Idiotic claim that the Chinese yuan is grossly undervalued (it isn't - all reasonable economists would agree that any undervaluation is less than 5%, and this miniscule matter has absolutely no relevance to the Reality).
For, as The Economist states: "The currencies of virtually all low income countries are undervalued, since prices are generally lower in these countries."
Then the ideologues at the paper get onto a sticky wicket regarding their fallacy of purchasing power parity (PPP). But things progress. At least, The Economist now regard PPP as merely an "idea" rather than immutable theory.
Although the Reagan, Bush and Clinton Regimes must bear the primary responsibility for the Depression, ObamaWorld hardly offers any respite.
Despite the inadequacies of the fiscal approaches, the same class of ideologue are making the same choices based on the same invalid model.
It is interesting aside here to note that nothing has changed under the Agent of Change.
Noam Chomsky: "As for current policies, I think Obama looks more aggressive and violent than Bush. The first acts to occur under his administration were attacks against Afghanistan and in Pakistan, both of which killed many civilians."
Oh! And the silence over the slaughter in Gaza.
If Obama were Black, he might choose to focus on Real change closer to home rather than illegal campaigns against "friendly" nations.
As the excellently named Benjamin Jealous of the National Association for the Advancement of Coloured (sic) People (NAACP) says: "Young Black people in the US are the most incarcerated people in the world."
The Predator State better elect a black man then...
The Onset Of The Real Depression
The parallels between 1929 and today are ominously expansive, both in the form of the crisis and in the lack of an holistic response to the crisis.
As we have stated before, the only difference is one of orders of magnitude.
We were being economic with the truth here.
There is another major difference - the specifics of the mechanism that will engender the full-blown Depression.
In 1929, market traders were dependent the ticker-tape. In a pre-IT world, all trades were manually recorded by armies of under-privileged people. There was no other option.
When the Crash occurred, the ticker-tape operators were unable to keep up with the tsunami of "sell" orders. Consequently, the ticker-tape started to fall behind time. Traders (and normal human beings too) were selling stock without being able to gauge the price at which they were selling their assets, as the prices were out-of-date and everybody understood that there was a run on.
This led to Panic.
This led to various Behavioural Exponentialities being energised.
The Panic became a self-fulfilling process.
But, let us step back a pace or two and take a bigger picture overview of this situation.
When the monster from the deep was first checking out the crisis in 1929, the historical equivalents of the financial elite (sic, once again) moved in to support the market.
Quoting from J.K. Galbraith in his book "The Great Crash 1929": "A decision was quickly reached to pool resources to support the market... Word had already reached the floor of the Exchange that the bankers were meeting, and the news ticker had spread the magic word afield. Prices firmed at once and started to rise. Then at one-thirty Richard Whitney [the vice-president of the Exchange] appeared on the floor and went to the post where steel was traded. Whitney was perhaps the best-known figure on the floor... As he made his way through the teeming crowd, Whitney appeared debonair and self-confident... At the Steel post he bid 205 for 10,000 shares... He continued on his way, placing similar orders for fifteen or twenty other stocks. This was it. The bankers, obviously, had moved in. The effect was electric. Fear vanished and gave way to concern lest the new advance was missed. Prices boomed upwards."
Exactly the same process is being attempted in today's computerised trading environment. In Britain, officials are buying into the market to inflate prices - the FTSE 100 is 5% inflated in this neoreality.
The next part of the story is of far greater concern and represents the Real beginning of a proper Crash, Noughties-Style.
In 1929, the officials who bought into the markets to inflate prices and to establish a positive psychology in the marketplace had a self-preservatory ace up their collective sleeves.
These officials understood that Finance Was Fixed.
These officials knew that the fake rise in prices was temporary and hyperreal.
These officials knew that, at some point, there was a selling opportunity to lock their own profits in, while driving the rest of the market to rack and ruin.
These officials profited by utilising the inadequacies of the ticker-tape.
Once the operators at the top of the Ponzi scheme decided that the fake price summit had been reached, they sold across the board and extensively.
The next layer of insiders below reacted similarly.
But the ticker-tape meant that the Reality was lost on the general trading population until it was too late.
Exactly the same mechanism has been put in place today.
The recent establishment of Dark Pools, where huge levels of institutional trading are taking place both off-exchange and away from any regulation whatsoever, are the modern-day ticker-tape. Dark Pools facilitate insider trading without any of the regulatory rigours of the Commitment of Traders Reports.
Once officials start to short-sell their illusory positions in the marketplace, there will be a time-asymmetry between these insiders and the rest of the planet. The Real price (although there is, in Reality, no such publicly available price) will be hidden from the market until, once again, it is too late.
The Friedmanists will continue to game the Depression for proprietary profit.
The Dark Pools and the associated Shadow Banking System (Offshore Financial Centres and the like) are the mechanisms.
Impostures new...
And we, through our Predator States, are paying for this ruse - we are buying the poker chips that are being traded in the Dark Pool Casino.
The timing of the Ponzi sell-off is difficult to determine without access to the hidden pricing system of the Dark Pools (effectively non-regulated private markets equivalent to those that have destroyed the integrity of football).
American banks have exposures to Alt-A mortgages (one level up from sub-prime) equivalent to $800 billion, for example. As Guy Cecala of Inside Mortgage Finance states: "The mortgage storm's first wave was sub-prime. Now we have been buffeted by Alt-A. But a bigger wave is on the horizon, and it cuts across all loan types."
But, whatever the trigger, we should rest assured that the insiders who created this Depression will also profit nicely from it's eventual formation as a full-blown Crash.
_____________________________________________________________________________________
As is rather too frequently the case, keyboard diarrhoea (I love the sound of my own keys!?) has resulted in my having to delay an assessment of the role of Darwinism and the conclusion of this rather excellent post until a later date.
But it will be worth waiting for as it will be an entirely top conclusion that will alter the way that you think about your hyperrealities.
It will be a Big Thought :)
Forget our arrogance.
Feed on our arguments.
© Football Is Fixed/Dietrological
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