2020-06

Retrospective insights from 2020-06

2020-06-29

Gullibility and amnesia makes the world economy go round and round!

I have come to realize this with respect to the following investigations and views concerning human behavior and industrial supply chain economics.

In Nov-Dec 2019 I had forecasted an economic meltdown in North America worse than The Great Depression of 1928-1938. This was in lieu of evidence I had about:

• Carillion's domino effect on public sector companies of UK, Canada and US from July 2018 coupled with
• GM Oshawa Plant shutting down and
• Receivership data from Deloitte Canada.

Domino Effect

The Setup

The most interesting aspect of the Carillion data was that companies like Canadian Linen & Uniform Services (CL&US) had copied Carillion's business model and financial networking (read as manipulation) techniques. One strategy was to get in bed with Canadian civil services while dawning the costume of "a private French maid." The company's somewhat private and somewhat Francophone bosses maintained a roster of clients that were mainly in public companies and few major private companies in

• healthcare,
• long-term care and
• hospitality

By straddling the private/public grey area the CL&US continued to amass wealth for its investors. Like Carillion, CL&US improved its client base and upper margins through networking among elite financial analysts and investors. The company managers did so by showing speculators "impeccable quality of accounts receivables" of public companies while downplaying the role of the accounts receivable of private sector clients. Furthermore, it lowered its bottom line by:

• consistently pushing employees to settle for minimum wages in tough working conditions without appropriate unionization
• avoiding better employee training and better quality equipment.

The Slight Nudge

In Q1 2018 the LIBOR banks chopped up Carillion after it came to light that most of its public and private sector clients had no means of paying the years of uncollected debt that had been carried on Carillion's books. The debt was far too over-leverged and the company collapsed exposing the soiled underbelly of similar companies across UK, Canada and US i.e. companies like CL&US. So what did the local banks, insurers and underwriters do? They doubled down on this set of colapsing companies and forced austerity measures on debtors (poor Oh Canada). Worst of all, they did this while conveniently manipulating daily CAD-GBP rates throughout 2018. The effect of currency manipulation is discussed a little later.

Shattered Atutomotive Backbone

By end of Q1 2019 the GM Oshawa Plant in Ontario had finally shut down most of its operations and had gotten rid of almost all of its employees. It is not easy to shut down an auto assembly plant the size of GM Oshawa. When I interviewed people in Oshawa who were employees and family members of employees I came across a startling view. For many people living within the region of Oshawa to Ajax, it was long anticipated that the plant was past its defunct status. People readily acknowledged that it should have been shut down by mid 2000s. The network effect of the GM Oshawa Plant collapse rippled through heavy industry sector in Ontario in 2019. Coupled to this, in Q2 2019 another major debacle came to light in the automotive sector due to Bombardier's woes. Discussions about the broken automotive anchor companies of Canada echoed throughout financial meetings of every precision manufacturing vendor in Ontario during Q3 2019.

Pirates and Privateers

So how was the retail and entrepreneurial scene holding up in Q2-Q3 2019? Given that the Canadian:

• civil services sector and its network of supply chain was already on the chopping board due to poor business models copied from Carillion and austerity
• heavy manufacturing and precision manufacturing sectors were taking a nose dive even with deals like Dassault's support for Bombardier coming into play

The Canadian retail and entrepreneurial scene was worse than maggot infested dog shit in Q2 2019! Macy's and the likes had already folded their operations and liquidated their inventories in malls of tier-two cities like Kitchener-Waterloo. The likes of Nordstrom, GAP and Forever21 were struggling to generate revenues in tier-one cities like Toronto. The startup scene was preoccupied with nonsense about "gaining the competitive edge by pushing the limits" of artificial intelligence (AI), augmented reality (AR) and virtual reality (VR). This frenzy continued in Q2-Q3 2019 even though none of the existing x86 chipsets used by startups working on such ideas could possibly support the whimsical day dreams of their happy-go-lucky founders. These Canadian startups kept taking on massive debt from US investors. Additionally, an increasing number of large and medium-sized Canadian companies were going into receivership between March 2019 and Sept 2019 as per Deloitte's publicly available receivership data. However, their assets were not being picked up by other small and medium-sized enterprises (SMEs) as noted from the same data set. This indicated that either

• the SMEs did not have liquidity to buy even 10 cents to the dollar worth of amazingly valuable fixed assets and intellectual properties (IPs) or
• these amazingly valuable assets were truly obsolete and weren't worth picking up at even 1/10th the original price from the banks that repossessed them.

Finally The Other Shoe Drops

So how were all these banks and insureres going to recuperate their debt? They weren't, they were simply prepared to ask for a bailout from "the government" because that's the most common and standard play in every capitalist, communist and socialist playbook! But, where was the Canadian government going to get any more money from given that it was about to enact Phase II of its accepted austerity conditions in Sept 2019? Well, we can always get something from nothing can't we?

Let's watch this entertaining and educational video for some enlightenment!

The Canadian government did try to offshed 750 million CAD invented from pure nothingness between December 1st, 2019 and March 31st, 2020 through "social enterprises." However, that didn't really pan out because workers in organizations like Kids Ability were already too strained from years of underpaid, heart-wrenching work while Covid news finally started to register in Canadian minds by Feb 2020. So naturally, as always, when a Canadian company or any government agency looks for liquidity it almost always goes south of the border to the US. The companies try to rais funds by offering shares as equity and government (municipal and provincial) bodies like to offer treasury notes and bonds. In both these cases the assumption is that future earnings of indentured human resources will be diverted to pay off the compounding debt. This assumption is also baked into methods of converting USD to CAD via

• vanilla and exotic put or call options for bonds and shares in the "open marketplace"
• loans with convoluted terms from chartered banks.

Now, by looking at forex data from 1930 to 2020 it can be broadly categorized that the Canadian dollar is practically pegged to the US dollar with 1 USD = 1.25 CAD (approx). But, and this is a big but, the Trump administration has been peevishly pushing for a stronger USD against:

• GBP, forcing valuation from 1 USD = 0.69 GBP (Sept 2015) to 1 USD = 0.80 GBP (Sept 2020)
• EUR, forcing valuation from 1 USD = 0.90 EUR (Sept 2015) to 1 USD = 0.80 EUR (Sept 2020)

In doing so, the US has been signaling to the global forex markets that:

• when it comes to contract settlements and international trade, the US is superior to EU
• the world ought to treat the UK the way it treats Canada - basicaly ignore UK like Canada

The Brexit trainwreck and LIBOR scandal of manipulating lending rates did delegitimise the influence of London in global markets. However, I would say that the unwealdy ogre called UK is definitely more capable in supporting the British Pound than Canada can support the Canadian Dollar. I would also posit that comparison of US standards and compliance with that of EU is tough. However, in general, EU standards and their implementation are still better than that of US and especially better than Canada when it comes to:

• quality of life,
• per capita income,
• ecological development,
• public infrastructure modernization,
• handling of human rights issues particularly for refugees,
• justice against corruption in civil services,
• people's privacy and security and
• overall financial management.

So what's the point of signaling to the global markets that US currency and underlying norms are more worthwhile than that of any other country? And why do so even after US manaically thrashed its FDA, EPA and intelligence agencies in Q4 2017 after sounding the war bugle against Russia and China? This signal is merely to prevent local US citizens and residents from getting demoralized during the current recession of 2020 coupled with "trade wars."

Here is a truly worthwhile explainer from early Q1 2020 about the current recession and how long-term bond investors have been lying to themselevs and the world at large: https://seekingalpha.com/article/4317724-what-yield-curve-is-actually-telling-investors

In addition to bashing their key federal agencies US has been bleeding profusely because of The Boeing Company. Boeing's 737 fleet had been grounded across the world for faulty software and Boeing was under investigation for knowingly hiding facts about problems with its manufacturing and maintainance of 737s.

Due to all these factors covered in this document, I beleive that the current North American trade and diplomatic missions are merely propped up by posturing for the sake of promoting a useless MAGA agenda by the Trump administration. The current US administration simply doesn't understand how buying international favour and influence with a weaker USD and the supply of foreign aid to various key proxy nations works. This type of currency manipulations practiced in Americas does impact subservient countries like Canada, Haiti, Bangladesh, etc. in a tragic way. For example, to shoreup the US petrodollar, Canada has to pay in USD to pipe crude oil from Alberta-to-Texas and then pay a whole lot more, again in USD, to pipe refined petroleum products from Texas-to-Ontario. While doing so, Canada is also forced to purchase substandard products from US via corporations like Wallmart at the cost of an underdeveloped local food and beverage industry. Consequently, in supporting North America's gasoline addiction, there is still no such thing as "Canadian Cousine" to be found in any educational media.

Such is the tragic S&M relationship between the US and Canada where Canada has been the masochist since World War I. The war bonds peddled by The Dominion Bank in 1917 invariably chained Canada to US millitary ambitions. The Canadian food, drugs and restaurant industry in particular has remained subservient to the whims of entities like John Hancock - Manulife Corp. which gets to gouge these industries via insurance rate manipulations and by renegging on insurance policy payouts.

The Global Economy Is Merely a Centipede Eating Its Own Tail

Industry markers contained within historic and contemporary data as well as anecdotes warned analysits across the world of an economic freefall in Q3 2019. However, US, UK, Singapore and Hong Kong stock markets kept ginning up the idea of a bullet proof economyy! They cited the growing sales revenues of tech giants for a bull market. This was of course complete bullshit and was just a ploy to swindle middle-class mutual funds investors and pension funds! The global debt cycle had begun in Q1 2017 and was predicted to reach its trough in Q3 2019. Every economist worth their salt posted articles that the quantitative easing measures from 2012 had encouraged bad lending and that a situation worse than the 2008-2010 recession was in store for the global economy. While being acutely aware of such reports and publications, US and UK lenders called to redeem 5, 10, 20 and 50 year bonds simultaneously in Q4 2019 and Q1 2020. They knew that this would slash and burn "weaker nations" like Canada and scuttle most of the public sector corporations. In line with these predictions HSBC decided to lay off 35,000 employees by the end of Q3 2019. And around that time, in Oct 2019, is when I first started to notice back channel reports and cables about biochemical warfare brewing between Hong Kong and mainland China. It would be an entire 4 month cycle before appropriate measures would even be acknowledged in Canada about the Covid pandemic that sprung out of a full fledged biochemical and cybernetic war.

So many more shoes have yet to drop!

To be continued...

TODO:

• provide links to:
  • Brexit trainwreck
  • US war bugle against Russia and China in Q4 2017 (the royally botched trade deals concerning waste disposal, 5G telecomms and nuclear power generation)
  • Insurance rate manipulations and insurers defaulting on payouts to customers in Oct 2019 prior to Covid kerfuffle