FT, for you is an English Language Empire, a too attractive or a too contemptuous idea?

Sir, even if soon two decades ago I wrote an Op-Ed titled “A new English Language Empire” that does not mean I have suggested such thing.

That said I do not understand why, even though you qualify it with that Obama “does not have to spell it out explicitly”, you argue he should “legitimately make it clear that a post-Brexit UK will not be able to rely on an alternative transatlantic or Anglospheric framework of trade and security to replace its connections with Europe.” “Obama tells home truths over the EU referendum” April 21.

Is it because you might feel such possibility could be dangerously attractive and therefore stimulate a Brexit, or is it because you find such possibility contemptuous?

I do not come from an English speaking country but, if Englishman, and if Brexit happens, then I would certainly look with interest at the possibility of a Brentrance into such an Empire.

PS. If Brexit, should EU have the right to keep English, or do you see a fight breaking out between German and French? 

@PerKurowski ©

The environmental problems of our planet are too serious to be allowed being sequestered by unethical vulgar politics

Sir, Martin Wolf’s “An unethical bet in the climate casino” of November 12, exemplifies exactly the main obstacle for the world to start tackling in real problems related to climate change, or, if you wish, problems related with just bad handling of our environment. And that is that the to do or not to do so, is always politicized.

Just read: “The Republican victory in the midterm elections was a triumph for its strategy of sustained vilification of the president and obstruction of his policies. The most important consequence of this election may therefore be to bury what little hope remained of getting to grips with the risk of dangerous climate change.”

I know that when my grandchildren would ask me “Grandfather why did you not do anything” this article of Wolf will, with much sorrow, come in handy.

“Many Republicans seem to have concluded man-made climate change is a hoax.” Does Wolf really think they have concluded that… and not just concluded something political?

“Yet, fascinatingly, the very same people who consider the costs of mitigation excessive wish to lighten financial regulation and so increase the risk of a repetition of the recent calamity… It is no accident that believers in laisser faire are the fiercest climate sceptics. The wish is father to the denial.”

Hold it there! I just know that if the tackling of climate change was to fall into the hands of something like the Basel Committee for Banking Supervision, and the Financial Stability Board, which with their portfolio invariant credit risk weighted capital/equity requirements for banks caused the current crisis… then our planet would be definitely toast L

An unethical tinkering with the casino

My Voice and Noise on the environment

Regulators did not worship at the altar of the new financial capitalism, they helped to build it

Sir, Philip Stephens writes that central bankers “failed dismally [in regulating banks]… during the years before the crash. Their mistake was – all would be well if markets were allowed to operate freely”, “Summers or Yellen? The best Obama can do is toss a coin”, August 12. 

And that is precisely the kind of misunderstanding of what really happened which impedes us to move forward.

The regulators, by means of Basel II stopped the banks from leveraging more than 12.5 to 1 when lending to those considered “risky”, like the medium and small businesses, entrepreneurs and start-ups, but allowed the banks to leverage their equity 62.5 times to 1, or even more, when lending to what was considered “absolutely safe”, like to the "infallible sovereigns" and the AAAristocracy. 

Frankly, does that have anything at all to do with allowing markets to operate freely? Of course not! Regulators did not worship at the altar of the new financial capitalism, they helped to build it, when an overdose of hubris led them to believe they could and should be the risk-managers of the world… and which is precisely that type of “invested with supernatural qualities” problem Stephens refers to.

The sad truth is that if central bankers are now the new masters of the universe, then we’ve got ourselves some really shitty masters, and we better watch up. Really, how can one feel comfortable with a Mario Draghi, who acting as the chair of the Financial Stability Board, saw nothing wrong in banks lending to Greece holding only 1.6 percent in capital/equity?

PS. If Obama heeds Stephens´ advice he better allow a very innocent hand to toss a very well examined coin, live in a TV show. Otherwise no one in this skeptical world would believe the outcome was in the hand of God… and even so.

Please, if we are to stand a chance, we must not allow the fight for less environmental damages to be politicized

Sir, with respect of the threat of climate change, or, ‘the just plain huge environmental damages of which we do not know what consequences these will have though we might presume these will not be overly positive’, I do not agree with Clive Cookson’s conclusion that “a second Obama administration seems certain to do more [reducing carbon dioxide emissions] than a President Mitt Romney”… that is unless he considers taking a baby aspirin is a solid way to fight a tumor, “It shouldn’t have taken Sandy for US to debate science”, November 3. 

In fact given that the environmental challenge needs the cooperation of everyone if we are going to stand a chance, including by the way that of the poorest of the poor, the worst thing we can do is to politicize it, or allow the solutions to become the exclusive domain of some self defined especially conscientious high income earning groups. 

That we need accurate forecasts no one doubts; that governments are the best fitted to provide these services is probably true, but, as citizens it behooves us to always and continuously explore alternatives, like what if all money publicly spent was used for premiums to the 100 most accurate and important weather prognosis provided to the public each year… with a charge to all service providers for the 1o most important weather prognosis mistakes. 

When Cookson writes that “Mismanagement and under-investment threaten the US weather satellite programme”, I am quite sure that neither he nor I, have the faintest idea of how much of the threat corresponds to each of the two factors he lists. 

On a more personal note, for many years now, I have expressed surprise over the fact that those who seem most concerned about the environment, and thereby as I see it should be the most concerned with how scarce resources are used to meet the challenge, seem the most willing to throw resources at it with no contemplation at all given to how do that more efficiently.

Après Martin Wolf, le deluge!

Sir, Martin Wolf opines “A stronger recovery from a steeper plunge is hardly a better outcome than a slower recovery from a milder plunge” and follows it up with “The great achievement of policy was to limit the severity of the post crisis recession”, “A slow convalescence under Obama” October 11. 

From it one can only get the sensation that what he wishes for is a sort of “get me a couple of years more at hospital hooked up to life support, and, perhaps, after that, I don´t mind”. In other words an Après Wolf, le deluge. 

Wolf completely ignores the cleansing effect that a contraction produces. Since all that has been achieved is kicking the can down the road, no real term contraction has been avoided, and fat and flabbiness, are substituting for muscles and sturdiness day by day. 

Again Mr. Wolf, the US did not have a real estate bubble. What it had was its real estate values increased by means of the triple-A bubble which resulted from regulators allowing banks to hold assets so rated against extremely little capital. That has now morphed into banks holding sovereign assets against extremely little capital which, in somewhat colloquial terms, amounts to … just the same shit! 

And the reason for it all, are the so distorting financial regulations which, by allowing banks to hold much less capital when lending to “The Infallible” than when lending to “The Risky”, allow banks to earn immensely higher risk-adjusted returns on equity when lending to “The Infallible” than when lending to “The Risky”. 

And why are US banks seemingly better than European? Easy, Europe applied that principle much more… it even allowed banks to lend to Greece against only 1.6 percent in wishy-washy capital. 

PS. In respect to this letter I would like to refer to a letter I wrote in response to one of your editorials, and which you published before I fell out of favor with you.

President Obama and the US Congress are debating the debt ceiling blindfolded

Sir, with respect to the current debate in Washington on lifting the US debt ceiling it is important to reflect on the fact that had there been no quantitative easing programs, or bank regulations that favor so much sovereign debt, the interest rates on US debt would have long ago been so much higher so as to make perhaps this debate completely superfluous. 

In essence, because of the interference, the President and the Congress they do not know what the real market interest rate is on the US public debt, and they are therefore debating blindfolded.

PS. Loony bank regulations explained in an apolitical red and blue!

Obama heads in the absolute wrong direction!

Sir Tom Braithwaite reports “Obama to renew call for stricter capital levels” February 19. This is just what the US, and the world, least need now.

Allowing the private banks to help out the economy by lowering their capital requirements now, even at the risk of more bailouts tomorrow, is much better than having government bureaucrats do the lending or decide on fiscal spending.

A dollar spent by a bureaucrat is a tax dollar spent but a dollar lent by a banker does not necessarily mean a future tax dollar spent and this is what anyone concerned with a fiscal deficit should know by now.

To get the real jobs you have to also be willing to take on the real risks on main-street.

Sir Jeffrey Sachs in “Obama has lost his ways on jobs” November 11, makes very clear and relevant observations, from a central-planners point of view. That said there are many other difficulties on main-street, and these should not be forgotten. Our real job creating machines, the small businesses and entrepreneurs, are being crowded out from access to bank credits, while the banks are rebuilding their capitals, and the financial regulators, even while they were so recently cheated, insist on their love affair with what they think are “low-risk clients”.

When banks lend to a triple AAA rated corporation they are required to hold 1.6 percent capital but, when they lend to a BB+ or lower rated risk or an unrated entrepreneur, the banks are required to hold 8 percent, in other words 400 percent more capital.

The difference of 6.4 percent in bank equity, if the cost of bank equity is 15 percent represents about a one percent regulatory tax on perceived risk, and which has to be added on to whatever interest rate spreads the market already charges for perceived risks. This, unlawful, discrimination against risk, is something that Jeffrey Sachs would do well to add on his list.

We need at least one urgent change in the financial rule book.

Sir it matters little how you arbitrate a game if the rules in the rulebook don´t make sense and therefore, in matters of financial regulations, the Obama administration is right concentrating on what you title “Redesigning the financial rulebook”, June 18, before “rebuilding the regulatory structure”. I just hope they really change that truly crazy rule of the minimum capital requirements for banks that the Basel Committee concocted.

How would you arbitrate a game of hockey if depending on how some external consultants perceived the strength of the players to be each player had to carry different protective gears? The strong AAA players would have less protection, exposing them to additional risks, while the poor BB- weaklings would have to carry more protection weighing them down even further. And, if a hockey reporter how would describe the team? The protective-gear weighted strength of it?

Let the American motorist pays 50 cents per gallon of gas for new equity in their automobile industry

Sir is Clive Crook panicking? It is hard to draw a different conclusion from his “A question of first things first” December 8. Of course we need some fiscal stimulus and of course we should not procrastinate getting it out on the street… but what is wrong about thinking on the future in terms of what the stimulus should stimulate and what not, and about how to pay for it all?.

The truth is the sooner the market gets a feel for the full circle, “this is what we spend and this is how we pay for it”, in ways that make sense, the faster it will regain the confidence it needs.

For instance I am proposing that the American motorists subscribe and pay for fresh equity in their automotive industry with 50 cents per gallon of gas, as a tax. That should help to raise more than 70 billion dollars a year to take care of the current problems of their industry and finance the green retooling they must embark on. If at the end of the exercise the equity is not worth what the motorists paid, it is still only right that those who drive should primarily carry the burden of rescuing the automobile sector.

The sale of healthcare should follow stricter standards than the sale of timeshares

Sir, Brad DeLong in “Obama can remedy an ailing healthcare system” (why only Obama?), June 4, says that “the US spends twice as much as Western Europe for little benefit” but then continues writing only about the need of increasing the health-insurance coverage and which presumably could only increase health-spending.

I am a foreigner and no expert in the area of health assistance in the US (probably thankfully) but, from the little I have seen the number of uninsured is large, but so are also the costs they are charged.

Whatever you do there should be no place for timeshare selling procedures in healthcare and there should be a rule that clearly states that you are not allowed to charge someone without coverage, more for medicine or any health service than what you would charge a covered patient.

By the way, and before you lose all sense of social solidarity, please develop an insurance that covers any additional costs because of what could be discovered in your DNA when gene tested.