brainstorming thursday

1. The SOCGEN scam as it all was blamed on one man and the most insane part of the court verdict is that the trader has to pay back 5 bil. thats is how the banksters work always using scapegoats in case it blows up but superiors always get away.

excerpt

Rogue Trader Jerome Kerviel

http://www.spiegel.de/international/business/0,1518,729155,00.html

'I Was Merely a Small Cog in the Machine'

AFP

French rogue trader Jerome Kerviel arriving in court in early October.

The fall of Societe Generale trader Jerome Kerviel became symbolic of the entire financial crisis. In October, he was sentenced to five years in jail for losing almost 5 billion euros of his employer's money. In an interview with SPIEGEL, he says his bank knew exactly what he was doing and that his trades were nothing unusual.

2. A general scam around the world is the deep understatement of inflation within cooked government statistics in general. It is not something one can neglect as inflation determines the interest rate on your savings. Now we have deeply negative interest rates hence you lose money while keeping it with those savings accounts around the world.

excerpt 1

Chinese Researchers Find Official Statistics Massively Understating Inflation

Business Insider | Nov. 17, 2010, 5:24 AM | 1,097 | 11

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With Chinese official inflation accelerating, and the government rushing to implement price controls for food, the inflation statistics themselves are now coming under far more intense scrutiny than before. And failing.

Two weeks ago, a Chinese think tank said that official data had been understating inflation by 7%.

Now this:

Caixin:

Zeng Wuyi, a professor at Xiamen University and deputy chairman of the National Statistics Society of China, thinks the survey method may be hobbled by sampling errors. Overall, he says, survey results tend to favor a CPI that may be lower than real inflation.

In addition, Zeng said, the system of collecting consumption figures may tilt too heavily toward low-income groups. Wealthy and poor families do not spend the same way; low-income families, for example, spend a higher proportion of their income on food.

...

Some economists have even gotten used to tweaking the official CPI statistics in search of more meaningful figures.

One economist at a foreign bank, for example, said he thinks if official CPI is 4 percent, the actual inflation rate could be 6 percent, since the service industry component has a relatively low weighting and, as a result, service prices are underestimated. Moreover, he said, owner-occupied housing costs are not properly included in the data-gathering.

The apparent gap between the real inflation rate and official inflation is underscored by the fact that, according to CPI statistics, prices for medical and healthcare services have been unchanged for the past 10 years. That's impossible.

So it seems safe to assume that inflation is about 50% higher than the official data.

excerpt 2

http://www.shadowstats.com/alternate_data/inflation-charts

Have you ever wondered why the CPI, GDP and employment numbers run counter to your personal and business experiences? The problem lies in biased and often-manipulated government reporting.