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Generational Dynamics Web Log for 1-Feb-2014
1-Feb-14 World View -- Syria 'peace talks' end in recriminations and accusations

Web Log - February, 2014

1-Feb-14 World View -- Syria 'peace talks' end in recriminations and accusations

Three bankers commit suicide in one week

This morning's key headlines from GenerationalDynamics.com

Syria 'peace talks' end in recriminations and accusations
Eurozone continues spiral into deflation, with 12% unemployment
Three bankers commit suicide in one week

Syria 'peace talks' end in recriminations and accusations

Supporters of Syria's president Bashar al-Assad demonstrate in Geneva on Friday (Reuters)

Supporters of Syria's president Bashar al-Assad demonstrate in Geneva on Friday (Reuters)

The so-called "Geneva II" Syria peace conference in the Swiss town of Montreux ended on Friday with no agreement on peace, no agreement on humanitarian aid, and no commitment to another meeting. According to UN envoy Lakhdar Brahimi, who was conference leader:

"Progress is very slow indeed, but the sides have engaged in an acceptable manner. This is a modest beginning on which we can build.
The gaps between the sides remain wide; there is no use pretending otherwise. Nevertheless, during our discussions, I observed a little bit of common ground – perhaps more than the two sides realize or recognize.
Things have gone so far down that they are not going to get out of the ditch overnight."

The Friends of Syria, a Western alliance that backs al-Assad's foes, said, ""The regime is responsible for the lack of real progress in the first round of negotiations. It must not further obstruct substantial negotiations and it must engage constructively in the second round of negotiations." The U.S. State Department said that the Syrian government "continues to play games."

Syria's deputy prime minister, Walid al-Moallem, gave two reasons for the failure of the conference:

"[One reason was] the non-seriousness and non-ripeness of the other side and its threat of blowing up the meetings many times and stubbornness on one issue as if we come here for one hour to hand them over everything and return and this indicates the illusions they live.
The second reason was the US flagrant interference in the talks and the tense atmosphere through which the US wanted to cover Geneva meeting by its actual appearance and its flagrant intervention in the meeting affairs were also reasons that made the talks don’t lead to tangible outcomes."

Brahimi says that a new meeting is scheduled to begin on February 10, but the Syrian delegation denies that it's agreed to attend.

Debka's subscriber-only newsletter (sent to me by a subscriber) says that its intelligence sources are telling quite a different story. Debka, which sometimes gets things wrong, claims that the meeting in Montreux was just for show for the media, and that the real negotiations are going on at a meeting in Bern, with representatives from the U.S., Russia, Syria, and Syrian opposition representatives. The Mideast Arab countries, Saudi Arabia, Qatar, Oman and the UAE, were not invited. I found no confirmation of this story anywhere, so make of it what you will, Dear Reader. Daily Star (Lebanon)/AFP and Syria Online (Damascus) and Debka

Eurozone continues spiral into deflation, with 12% unemployment

As we wrote several weeks ago ( "9-Jan-14 World View -- Eurozone plummets into deflation"), the eurozone inflation rate has been falling steadily for over a year, raising very real concerns that the eurozone is headed into deflation. The statistics for January are out, and the eurozone CPI was just 0.7%, substantially lower than the 0.9% predicted by expert economists. This raises more alarm bells over deflation, which is often the precursor to a major economic depression. As long-time readers know, Generational Dynamics predicts that we're headed for a deflationary spiral and a major global economic crisis, the worst of which is far from over. CNBC

Three bankers commit suicide in one week

It's hard to know what to make of this, but three bankers have committed suicide in the last week:

Gabriel Magee, 39-year-old VP of JP Morgan's technology department, jumped to his death from the roof ot the bank's European headquarters in London.

William Broeksmit, a 58-year-old former senior executive at Deutsche Bank AG, was found dead in his home, also in London, after an apparent suicide.

Mike Dueker, the 50-year-old chief economist at Russell Investments in Washington state, jumped over a fence and fell down a 50-foot embankment, in an apparent suicide.

It's well known that suicides occur most often around the Christmas holiday season, so it's possible that the timing of these three suicides was coincidental. But it's also true that a number of bankers and investors jumped to their deaths during the Great Depression, usually from hotel rooms, and that the overall suicide rate today has surged even higher than during the Great Depression (usually because of unemployment). A financial crisis sends many people to financial ruin, but more than that, a financial crisis exposes a lot of crime, particularly embezzlement.

John Kenneth Galbraith described what happened during the Great Depression in his 1954 book, The Great Crash - 1929, as follows:

"In many ways the effect of the crash on embezzlement was more significant than on suicide. To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months, or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.) At any given time there exists an inventory of undiscovered embezzlement in -- or more precisely not in -- the country's businesses and banks. This inventory -- it should perhaps be called the bezzle -- amounts at any moment to many millions of dollars. It also varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. In depression all is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks.
The stock market boom and the ensuing crash caused a traumatic exaggeration of these normal relationships. To the normal needs for money, for home, family and dissipation, was added, during the boom, the new and overwhelming requirement for funds to play the market or to meet margin calls. Money was exceptionally plentiful. People were also exceptionally trusting. A bank president who was himself trusting Kreuger, Hopson, and Insull was obviously unlikely to suspect his lifelong friend the cashier. In the late twenties the bezzle grew apace.
Just as the boom accelerated the rate of growth, so the crash enormously advanced the rate of discovery. Within a few days, something close to universal trust turned into something akin to universal suspicion. Audits were ordered. Strained or preoccupied behavior was noticed. Most important, the collapse in stock values made irredeemable the position of the employee who had embezzled to play the market. He now confessed.
After the first week or so of the crash, reports of defaulting employees were a daily occurrence. They were far more common than the suicides. On some days comparatively brief accounts occupied a column or more in the Times. The amounts were large and small, and they were reported from far and wide. ...
Each week during the autumn more such unfortunates were reveled in their misery. Most of them were small men who had taken a flier in the market and then become more deeply involved. Later they had more impressive companions. It was the crash, and the subsequent ruthless contraction of values which, in the end, exposed the speculation by Kreuger, Hopson, and Insull with the money of other people. Should the American economy ever achieve permanent full employment and prosperity, firms should look well to their auditors. One of the uses of depression is the exposure of what auditors fail to find. Bagehot once observed: "Every great crisis reveals the excessive speculations of many houses which no one before suspected." [pp. 132-35]

We have to remember that today there's a tremendous undercurrent of what we might call "unreported crime" going on. Thousands of bankers purposely created and sold trillions of dollars in fraudulent synthetic securities backed by faulty subprime mortgages, and not a single person has gone to jail for these crimes. If there's an increase in suicide rates among bankers, then it's possible that some kind of Karmic retribution is taking place. We'll have to wait and see what's going on. Bloomberg and Business Insider and Global Research (May 2013)

(Comments: For reader comments, questions and discussion, see the 1-Feb-14 World View -- Syria 'peace talks' end in recriminations and accusations thread of the Generational Dynamics forum. Comments may be posted anonymously.) (1-Feb-2014) Permanent Link
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Syria 'peace talks' end in recriminations and accusations

Eurozone continues spiral into deflation, with 12% unemployment

Three bankers commit suicide in one week

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Generational Dynamics Web Log for 1-Feb-2014
1-Feb-14 World View -- Syria 'peace talks' end in recriminations and accusations