Saturday, October 11, 2008

China masa lalu dan kini



Petugas business center mengirim guide untuk aku berkunjung  ke Mao monumen. Guide itu seorang wanita dengan tinggi di perkirakan diatas 170 cm. Dia mengenakan Baju putih, kerah berenda dan dipadu dengan rok diatas lutut warna merah. Dia kenalkan namanya, Fang Yin. Kalau saja matahari musim panas sedang berbaik hati, rok tipisnya tentu menerawang pula.

Bagiku dia tidak lebih wajah lain dari China sekarang. Kalah dan menang. Komunisme memang telah terkubur secara culture kesehariaan di China. Ia hanya tinggal simbol seperti patung Mao itu dari sekian banyak monumen yang dibangun di China. Walau sebetulnya kematian Mao, komunis juga ikut mati. Namun para elite politik tak ingin komunis kehilangam simbol.  

Bagiku, pesan yang disampaikannya oleh monumen itu bukanlah simbol keagungan Komunisme. Tapi simbol yang pernah membuat pemimpin china menawarkan kebohongan berongkos mahal. Seolah menyediakan anak tangga untuk naik menggapai kejayaan, tapi sejatinya adalah parade prosesi kematian kemanusiaan.

Sepekan menyusuri Changsa cukup untuk menemukan betapa masa lalu, termasuk yang baru saja lewat, beroleh tempat penting. Monumen, mural, artefak museum, teater mutakhir, seni rupa beramai-ramai mengabadikannya dengan saksama. Sepertinya, ada kerja kolektif untuk menjaga ingatan. Semacam saling mengajak waspada. Jakarta adalah lain cerita. Uang dihamburkan untuk lampu-lampu hias, air mancur, patung-patung pahlawan palsu dan monumen-monumen nirmakna. Ketika Changsa dikepung ingatan, Jakarta terkubur kepalsuan dan lupa. Kau tetap mematung menerawang di sana. Di pelataran monumen yang luas dan memanjang sungai Xiang , jarak kami, mau tak mau, dekat belaka.

”Apakah orang inni semua seperti kamu ?”  Katanya. Orang china menyebut indonesia dengan sebutan Inni. Entah mengapa. Mungkin lidah mereka tidak bisa melafalkan secara utuh Indonesia.

” Mengapa kamu tanyakan itu.?”

”Mengherankan juga. Ada yang suka monumen ini, apalagi dari Indonesia.” Batas antara seringai dan senyummu menyembul dari balik payung jingga. Gigimu putih berkilau.

”Memang jelek secara artistik dan arsitektural. Tapi aku suka pesan yang dibawanya. Ajakan waspada pada kembalinya kebrutalan masa lalu. Menjaga ingatan. Melawan lupa.”

”Hmmm….”

”Ada apa dengan orang Indonesia ?”

”Saya suka orang Indonesia karena mereka punya akal sehat dan berani melawan komunis.”

”Wow! Tahu dari mana kamu ? pernah ke Indonesia.

“ Itu yang saya tahu dari buku bacaan dan saya menyimpukan rakyat Indonesia cukup cerdas dan berani bersikap. Suatu saat saya ingin berkunjung ke Indonesia.

”Sekarang giliranku yang mesti heran kalau begitu. Kenapa kau harus bekerja sebagai Guide. Kamu cantik dan tentu tidak sulit dapatkan kerjaan lebih baik ?” Aku menyergah, mengubah posisi.

”Di China orang hidup berkompetisi dan mengambil resiko. Kami tidak ada waktu berpikir dan bertanya mengapa. Kalau ada kesempatan hari ini ya gunakan. Aku butuh kerjaan dan makan.”
Senyap menyergap senja Changsa. Gerimis mulai mereda. Langit merah di sungai Xiang memanggil-manggil malam.

***
Perjumpaan kedua kami adalah pada senja bergerimis berikutnya. Angin tak mau mengajak berkawan. Udara musim panas Changsa pun sedikit mendingin.

”Boleh aku sedikit mendekatimu?”

Permintaanmu tiba-tiba. Dan mustahil kutolak.

”Aku ingin bunuh diri.” Kau pecah sunyi dengan cara yang sama sekali tak kuduga.

”Hah!? Maksudmu?”

”Kurang jelaskah itu? Atau bahasa Inggrisku kurang bagus di telingamu?

”No. No. Inggrismu sempurna. Aku mendengar. Tapi….”

”Ya. Aku sedang berpikir untuk bunuh diri….”

”Bagiku tak masuk akal.”

”Maksudmu?”

”Kau begitu muda. Ranum. Cantik. Cerdas. Dunia membentang luas di depanmu. Di sekelilingmu, perubahan berdentum-dentum. China-mu begitu bergairah. Kau hidup persis di tengah contoh sukses Asia da barat yang terpuruk. Masa depan menunggumu. Tinggal kau jemput. Kau dikepung musim semi daya hidup. Bagaimana mungkin kau justru ingin melangkah ke arah sebaliknya.”

”Oh… Begitukah kami dari kejauhan? Kau terlalu romantis. Kau pikir kematian komunisme adalah berita baik seluruhnya? Setelah komunisme mati, perubahan menghasilkan para penikmat sekaligus korban. Celakanya, aku menjadi yang kedua, korban! ”

”OK. Sorry untuk kenaifanku. Aku siap menjadi pendengar.”

”Ceritaku akan panjang. Ayo kita ke hotelmu saja. Keberatan kutemani dengan cerita panjangku?”

”No. Sama sekali tak keberatan.” Tentu aku menggeleng. Begitu baikkah Tuhan padaku senja ini?

***
Di luar, para pelancong hiruk-pikuk lalu lalang. Suara-suara beragam bahasa dunia menerobos masuk melalui jendela kamar hotel yang kita biarkan lebar terbuka. Seperti suara ribuan lebah yang pandai berganti dendang.

Ceritanya panjang. Lirih. Dan kelabu.

”Aku anak  bungsu dari 4 bersaudara. Dulu  di bawah kekuasaan komunis Mao, hidup menjadi begitu rutin. Ayah dan Ibuku menjadikan kegiatan membuat anak sebagai selingan menantang. Anak demi anak lahir begitu saja. Setiap tahun satu. Berderet-deret seperti pagar. Komunisme memang memanjakan. Negara menyediakan apa saja, mulai sabun mandi hingga roti, dengan tak ada lebih pada seseorang dibanding yang lain. Di bawah komunisme, orangtuaku dan siapa pun tak dibiasakan apalagi didesak untuk berkompetisi. Segalanya tersedia tanpa perlu upaya berlebih. Tapi itulah, hidup kami menjadi manja. Tidak menjadi kaya, tapi dalam kesehajaan yang terpelihara. 

Hidup terasa mudah belaka sampai kemudian Mao wafat dan seakan komunis juga ikut terkubur bersamanya. Keadaan berbalik seratus delapan puluh derajat. Reformasi Deng  memaksa kami untuk berkompetisi. Negara tak lagi jadi penyantun, tapi membiarkan kami saling sikut untuk bertahan dan saling berebut hidup yang lebih baik.”

Suara-suara bising beragam bahasa dunia yang menyelinap dari balik jendela terbuka mulai perlahan menyenyap. Malam makin sepuh. Kubayangkan, para turis yang mulai letih telah memenjarakan dirinya di kamar-kamar hotel atau menyerbu panti-panti pijat dan klub-klub malam untuk menukarkan penat dengan keletihan yang lebih menyenangkan. Suaramu masih benderang, ceritamu seolah tak berujung, sementara ujung malam beringsut mendekat.

”Ibuku yang terlampau tua di hadapan kapitalisme, tersingkir dan tak lagi terpakai sebagai pejabat di kecamatan. Ayahku terkena program rasionalisasi Deng, yang memangkas lebih separuh PNS  tanpa diberi uang pensiun. Di berhentikan begitu saja. Kakak-kakakku sibuk dengan urusan masing-masing. Hidup yang keras membikin mereka tak lagi saling peduli satu sama lain. Aku terjepit dalam ketiadaan pilihan sampai sebuah tawaran yang begitu manis datang begitu saja dua tahun lalu. Sebuah biro penyalur tenaga kerja menawariku bekerja sebagai pramusaji di Malayasia.”

Kau terdiam. Menunduk. Matamu segera menjadi telaga. Dua sudut bendungan di sisi luar pangkal hidungmu makin tak mampu menahan air telagamu yang membanjir. Air matamu berjatuhan tanpa tercegah. Lalu suaramu menyendat pada pangkal cerita yang rupanya segera tiba.

”Aku ditipu. Aku dijual ke sebuah tempat prostitusi di Bukit Bintan dan Genting. Garis nasib yang kelam mesti kuterima tanpa daya. Badanku remuk dihantam kerja jahanam itu. Kemanusiaanku terbunuh oleh rutinitas itu. Membuka pintu kamar, membiarkan diperlakukan sebagai binatang, memunguti uang yang dilempar begitu saja ke atas tempat tidur sambil mendengar pintu ditutup dan suara sepatu lelaki di lantai menjauh hingga hilang ditelan lobi berkarpet. Badanku hancur, tapi hatiku lebih hancur. Kemanusiaanku makin hari makin tak bersisa. Benar-benar binasa.”

Air matamu membasahi bahuku. Dingin. Kita diterkam senyap yang tiba-tiba menjadi asing.
”Untunglah aku akhirnya bisa melepaskan diri dari enam bulan terpanjang dalam hidupku itu. Kabur dari  Kualalumpur, kembali pulang. Tapi hidup tetap tak bersahabat. Akhirnya kuulang pekerjaan yang sama di sini. Kali ini atas kemauanku. Persisnya, karena aku tak punya pilihan lain. Hingga sampailah aku menjadi guide dari biro tour. Ya… aku ingin bunuh diri. Rasanya aku sanggup menghadapi hidup yang berat dan keras, tapi tidak hidup yang terasa hambar seperti ini….” Sesenggukanmu mengeras. Sebuah cara pilu mengakhiri cerita panjangmu.***

Senja bergerimis. Langit di atas Bandara Internasional Changsa tersapu terlalu banyak kelabu. Birunya seperti malu-malu. Enggan memperlihatkan diri. Kau mematung menopang dua matamu yang nanar. Lagi-lagi bertelaga. Aku nyaris kaku ketika kau bisikkan kata-kata itu….

”Terima kasih banyak Bro. Untuk pertama kali dalam waktu yang sangat panjang, aku sanggup berbagi dan menangis. Kupikir air mataku sudah habis di Malaysia.” Suaramu parau. Aku mengusap-usap lembut punggungmu. 

”Keep in touch ya...” Kataku  seraya berjalan menuju ruang tunggu pesawat yang akan membawaku ke Hong Kong,  seperti memasuki lorong panjang yang asing. Kita menjauh, tapi suaramu seperti makin keras memanggil-manggil. Sosokmu hilang tertelan kelokan menuju ruang tunggu pesawat. Seorang pria bule tersenyum duduk di sampingku. 

“ Tahun 1998 saya datang ke China" kata pria bule itu. "Saya tidak suka orang china. Mereka kasar. Tidak tertip. Sikap yang tertutup.  Tapi kini mereka ambil hampir  semua asset kami.” sambungnya, entah apa maksudnya. Wajahnya nampak muram. 

Sambil menggeleng gelengkan kepala “ Bagaimana mungkin, masyarakat yang tertutup akhinrya bisa jadi kekuatan ekonomi dunia. Dari bank, telekomunikasi , property, dan lain lain orang china kuasai. Itu hanya dua puluh tahun baru kami sadari. Kini negeri kami berhutang lebih dari separuh anggaran kami. “ Kata Bule touris dar Amerika. Saya hanya tersenyum dan tak bergairah untuk menemaninya ngobrol sampai nunggu boarding

Ruang tunggu yang ramai tiba-tiba terasa begitu senyap. Di belakangku, terhalang berlapis-lapis dinding, di bawah gerimis senja Changsa seorang perempuan China sedang menangisi nasipnya. Nun di depanku, dipeluk malam Jakarta, orang orang masih sibuk bicara soal anti china, anti komunis, bersatu karena Sunnah. Masih sibuk dengan politik populis. Masih sibuk membangun mimpi utopia. 

Padahal bukan idiologi atau etnis atau agama penyebab kemakmuran dan kemiskinan. Bukan. Tapi karena mental hebat yang bisa membuat orang bisa berguna bagi orang lain. Karena mental buruk yang membuat orang jadi beban sosial. Karena mental juga orang bisa bertahan dari kehidupan yang memang apa boleh buat tidak ramah, dan cacat atau tersingkir begitu saja dalam amarah dan mimpi utopia. So Change your attitude then success will follow you.


Transaksi keuangan Rahasia



Di Hong Kong ada tempat namanya Financial Club yang berada di Ritz Carlton Hotel. Tidak semua orang bisa masuk ke dalam club ini.Setiap orang yang ingin jadi member harus mendapatkan rekomendasi sedikitnya 3 orang CEO Lembaga Keuangan yang telah jadi member. Setelah dapat rekomendasi maka nama calon member ini akan ditempatkan di Board di samping pintu Club. Nama ini akan ada di board selama kurun waktu tertentu. Apabila salah satu member keberatan maka otomatis calon member itu akan delisting. Namun apabila tidak ada yang keberatan maka calon member akan menjadi member resmi. Dia harus menanda tangani kerahasian.Tidak boleh membawa wanita. Aturan dalam club dibuat oleh kesepakatan antara member. 

Dalam pasar keuangan dunia ada juga yang disebut dengan 144a SEC. Ini dikenal dengan another world. Apa itu ? ini adalah wilayah pasar uang dengan putaran gigantik. Multi triliunan dolar berbagai global bond diperdagangkan , dari private sampai negara.Transaksi dilakukan dengan kerahasiaan tingkat tinggi. Semua transaksi non disclose (tidak boleh diungkapkan atau dibocorkan ke publik) Siapa yang terlibat dalam transaksi ini ? Hanya qualified institution (QI).Apakah kriteria qualified itu ? tidak ada yang tahu pasti. Pra syarat untuk jadi member harus punya uang tunai minimal USD 100 juta. Harus mendapat rekomendasi dari 3 lembaga keuangan first class. Jumlah member 144aSec ini tidak lebih 10,000 instititusi yang terdaftar dinegara bebas pajak. Capitalisasinya mengalahkan GNP Amerika. Bahkan GNP china dan British tidak ada artinya.

Mereka adalah elite yang tak tersentuh dan tidak diketahui siapa sebetulnya mereka. Transaksi menggunakan database online. Tanpa warkat. Semuga digital.Setelah selesai  settlement ,mereka bisa menghapus sendiri file yang ada sehingga kerahasiaan terjaga.Setiap members punya qualifikasi berbeda beda yang ditandai dengan level dari 1 sampai dengan 7.Level tertinggi adalah 7. Setiap level hanya bisa deal dengan level yang sama. 

Level 7 hanya ada 4, namun mereka memiliki saham dihampir semua Top Corporate 500 Fortune. Siapakah yang bertindak sebagai bank custodian dan pengedali dari system ini ?  Mereka adalah NM Rothschild (London), Rothschild Bank ( Berlin) Warburg Bank ( Hamburg), Warburg Bank (Amsterdam),  Lazard Brothers ( Paris), Kuhn Loeb (Bank of New York), Israel Moses Seif,  Bank of Italy, Goldman Sachs (New York)  dan JP Morgan Chase Bank (New York). Dari kalangan Individu yang juga pengendali utama adalah Schauf Lists William Rockefeller, Paul Warburg,  Jacob Schiff ( kepercayaan dari Kuhn Loeb) dan James Stillman ( Kepercayaan dari pemilik  Citigroup  yang menikah dengan klan Rockefeller.

Semua Top 25 Prime Bank disuluruh dunia bertindak sebagai settlement agent untuk menggerakan portai keuangan global seperti Euroclear ( London) , clearstream  ( Frankfurt ) dan  DTCC ( New York). Ada ribuan Lawyer,financial analisis, fund manager , asset manager berkelas dunia sebagai hulu balang. Karena mereka punya clearing house sendiri dengan kapitalisasi melebihi putaran transaksi antar Negara maka praktis merekalah pengendali keuangan global.

Dari tahun 2007 sampai 2009 mereka memberikan pinjaman kepada pemerintah Amerika mencapai USD 2,2 triliun. Itu sebabnya ketika FOMC ( Federal Open Market Committee ) berencana menetapkan suku bunga the fed, seketika Negara emerging market demam karena terancam dana asing kembali ke Amerika. Jadi merekalah pemilik sesungguhnya skema terbangnya uang panas dari Negara emerging market ke Amerika. Merekalah elite yang menjadi the second god bagi dunia kapitalis yang membuat mata uang dunia melemah atau menguat. Merekalah yang mengatur kemana bandul ekonomi dan politik dunia harus bergerak. 

Setiap krisis politik regional maupun krisis moneter global atau regional terjadi , tidak bisa dilepaskan dari peran mereka. Banyak pemimpin Negara menjadi proxy mereka dan menjalankan agenda mereka untuk menguasai dunia secara virtual. Melalui jalur yang rumit mereka membiayai ratusan ribu LSM diseluruh dunia yang membungkus diri lewat program kemanusian, agama, seni, budaya, riset .Mereka aktif membiayai program beasiswa bagi jutaan mahasiswa cemerlang diseluruh dunia agar pemikirannya berkiblat kepada kepentingan jangka panjang mereka menguasai dunia. Inilah yang menjadi biang ketidak adilan dunia dan membuat dunia selalu dihantam krisis politik maupun ekonomi dengan korban negara dan rakyat , namun mereka mendulang laba tak terbilang.

Apakah Indonesia masuk perangkap jaringan 144 A Sec ? Selama tahun 2008 era Presiden  SBY, pemerintah Indonesia menarik dana sebesar USD 3,2 miliar melalui !44A SEC. Peraturan badan sekuritas Securities and Exchange Commission (SEC) melarang pemerintah untuk membuka informasi ke publik sebelum obligasi diterbitkan.Artinya legitimasi DPR sebagai pengawas perbendaharaan Negara di eliminit oleh kekuasaan 144 A SEC. DPR tidak berdaya karena ketika itu Indonesia mengalami deficit anggaran sementara situasi pasar keuangan global konvensional tidak mendukung menyerap global bond RI. Karenanya pemerintah dan DPR tidak punya pilihan kecuali harus masuk dalam 144 A SEC yang mempunyai unlimited financial resource di dunia ini.

the next crisis




This afternoon, I listened to Axel Leijonhufvud give a very interesting (and scary) talk at the Graduate Institute in Geneva about the financial crisis. He spoke about many things, but his account of the "unexploded bomb" of credit default swaps disturbed me. Others have written on CDS, but until today I didn’t really get it. Here is how I make sense of it.

Fact one—there are several dozen trillion dollars of these things out there—an amount that makes Paulson’s $700 billion look like a rounding error.

Fact two—they are basically insurance policies on bond defaults that are written without regulation, so the usual insurance-industry practice of setting aside reserves does not apply. Oh, and while the premia enter as bank income the pay-out obligations are not on their balance sheets.

Fact three—the large banks think they are hedged since they have "insurance policies" on both sides of the default events. Hedged? In normal times, perhaps. But imagine if one big issuer of these insurance policies went broke at roughly the same time that one of the insured bonds went bad—say, for instance, Ford bonds and a major Wall Street bank headquartered in Europe.

The Ford bond default would trigger a call for a huge payout by many banks, but the disappearance of one of the major issuers would wipe out the hedge that many other banks thought they had. This would leave banks liable for a huge payout for which they would have no reserves. This could trigger a wave of failures that would be very hard to stop given the size of the market.

Here is an account on Eurointelligence (from February 2008) of where the CDS' "unexploded ordinance" problem stands. Satyajit Das writes:

The CDS market entails complex chains of risk. This is similar to the re-insurance chains that proved so problematic in the case of Lloyds. … Over the last year, securitisation and the CDO (collateralised debt obligation) market have become dysfunctional. As the credit crisis deepens, the risk of actual defaults becomes real. Analysts expect the level of defaults to increase. The CDS market is about to be tested. While there have been a few defaults, the market has not had to cope with a large number of defaults at the same time. CDS contracts may experience problems and may be found wanting.

I hope the geniuses in the American and European governments are working on a contingency plan for a meltdown in the CDS market. Given the size of this unexploded ordinance, let’s hope they are working on it together.

Thursday, October 9, 2008

Will the US dollar collapse?


As we mentioned in The ABCs of hedging, the first step in hedging our investments is to subject our portfolio to ‘war-games,’ where we work out how it may perform under various economic what-if scenarios and come up with strategies to counter the unfavourable outcomes.

Today, we look at one possible scenario—the decline (or collapse) of the US dollar.

Lately, we are again hearing that central bankers are murmuring about diversifying their foreign reserves away from the US dollar. Does it mean that there is an imminent liquidation of their US dollar reserves? Well, this is not the first time they murmured about it and it is definitely not in their (including the Federal Reserve’s) interest to see a collapse of the US dollar. The Chinese, with their US$1 trillion of reserves, would not want to see their stockpile of US dollars to lose significant value. The same goes for the Japanese and the oil-rich Middle-Eastern nations. The US too, would not want to see their dollar collapse as that would result in soaring inflation in their homeland. Therefore, we do not expect mass selling of US currency reserves by central bankers in the near term.

On the other hand, it is open knowledge that the status quo is unsustainable. This morning, we heard that Alan Greenspan (the former US head of Federal Reserve) warned investors in a business conference in Tel Aviv to expect a few years of dollar weakness. He further said that is imprudent to hold everything in one currency. This prompted a further slide of the US dollar against the Euro. The US has the dubious honour of having the world’s greatest trade deficit. If not for the fact that the US dollar is (maybe ‘was’ is the more appropriate word) the world’s reserve currency, the US would be consigned a banana republic long ago. The world cannot lend to the US indefinitely. Sooner or later, they will demand a pay back. The moment they decide that the US will not and is unable to repay its debt, what will happen to the US dollar? What will happen to the global financial system when that happens?

Thus, this situation is akin to an individual owning the bank money. If he owes the bank a million dollars, he is in trouble. But if he owes the bank a billion dollars, the bank is in trouble—if he goes bankrupt, a large portion of bank’s loan portfolio will be wiped out, rendering the bank insolvent. The US owes the rest of the world so much money that they cannot afford to let the US go ‘bankrupt.’ But the rest of the world knows that sooner or later, the US will go ‘bankrupt.’ (Of course, a country cannot be bankrupt in the same way as individuals do because there is always the option to print money to remain solvent. But the end result will be just as horrible—hyperinflation.) What can be done?

We are all living in a precarious situation. We shudder to think of the day when a black swan event happens. On that day, whoever owns gold will have a lot of friends.
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Wednesday, October 8, 2008

Business Risk


STEP 1 - Risk identification and analysis

STEP 2 - Risk allocation

STEP 3 - Risk management

Risk Identification and analysis
The project sponsors will usually prepare a feasibility study, e.g. as to the construction and operation of a mine or pipeline. The financiers will carefully review the study and may engage independent expert consultants to supplement it. The matters of particular focus will be whether the costs of the project have been properly assessed and whether the cash-flow streams from the project are properly calculated. Some risks are analyzed using financial models to determine the project's cash-flow and hence the ability of the project to meet repayment schedules. Different scenarios will be examined by adjusting economic variables such as inflation, interest rates, exchange rates and prices for the inputs and output of the project. Various classes of risk that may be identified in a project financing will be discussed below.

Risk Allocation
Once the risks are identified and analyzed, they are allocated by the parties through negotiation of the contractual framework. Ideally a risk should be allocated to the party who is the most appropriate to bear it (i.e. who is in the best position to manage, control and insure against it) and who has the financial capacity to bear it. It has been observed that financiers attempt to allocate uncontrollable risks widely and to ensure that each party has an interest in fixing such risks. Generally, commercial risks are sought to be allocated to the private sector and political risks to the state sector.

Risk management
Risks must be also managed in order to minimize the possibility of the risk event occurring and to minimize its consequences if it does occur. Financiers need to ensure that the greater the risks that they bear, the more informed they are and the greater their control over the project. Since they take security over the entire project and must be prepared to step in and take it over if the borrower defaults. This requires the financiers to be involved in and monitor the project closely. Such risk management is facilitated by imposing reporting obligations on the borrower and controls over project accounts. Such measures may lead to tension between the flexibility desired by borrower and risk management mechanisms required by the financier.

Types of risks
Of course, every project is different and it is not possible to compile an exhaustive list of risks or to rank them in order of priority. What is a major risk for one project may be quite minor for another. In a vacuum, one can just discuss the risks that are common to most projects and possible avenues for minimizing them. However, it is helpful to categories the risks according to the phases of the project within which they may arise: (1) the design and construction phase; (2) the operation phase; or (3) either phase. It is useful to divide the project in this way when looking at risks because the nature and the allocation of risks usually change between the construction phase and the operation phase Construction phase risk - Completion risk.
Completion risk allocation is a vital part of the risk allocation of any project. This phase carries the greatest risk for the financier. Construction carries the danger that the project will not be completed on time, on budget or at all because of technical, labor, and other construction difficulties. Such delays or cost increases may delay loan repayments and cause interest and debt to accumulate. They may also jeopardize contracts for the sale of the project's output and supply contacts for raw materials.

Commonly employed mechanisms for minimizing completion risk before lending takes place include: (a) obtaining completion guarantees requiring the sponsors to pay all debts and liquidated damages if completion does not occur by the required date; (b) ensuring that sponsors have a significant financial interest in the success of the project so that they remain committed to it by insisting that sponsors inject equity into the project; (c) requiring the project to be developed under fixed-price, fixed-time turnkey contracts by reputable and financially sound contractors whose performance is secured by performance bonds or guaranteed by third parties; and (d) obtaining independent experts' reports on the design and construction of the project. Completion risk is managed during the loan period by methods such as making pre-completion phase drawdown of further funds conditional on certificates being issued by independent experts to confirm that the construction is progressing as planned.

Operation phase risk - Resource / reserve risk
This is the risk that for a mining project, rail project, power station or toll road there are inadequate inputs that can be processed or serviced to produce an adequate return. For example, this is the risk that there are insufficient reserves for a mine, passengers for a railway, fuel for a power station or vehicles for a toll road.

Such resource risks are usually minimized by: (a) experts' reports as to the existence of the inputs (e.g. detailed reservoir and engineering reports which classify and quantify the reserves for a mining project) or estimates of public users of the project based on surveys and other empirical evidence (e.g. the number of passengers who will use a railway); (b) requiring long term supply contracts for inputs to be entered into as protection against shortages or price fluctuations (e.g. fuel supply agreements for a power station); (c) obtaining guarantees that there will be a minimum level of inputs (e.g. from a government that a certain number of vehicles will use a toll road); and (d) "take or pay" off-take contacts which require the purchaser to make minimum payments even if the product cannot be delivered.

Operating risk
These are general risks that may affect the cash-flow of the project by increasing the operating costs or affecting the project's capacity to continue to generate the quantity and quality of the planned output over the life of the project. Operating risks include, for example, the level of experience and resources of the operator, inefficiencies in operations or shortages in the supply of skilled labor. The usual way for minimizing operating risks before lending takes place is to require the project to be operated by a reputable and financially sound operator whose performance is secured by performance bonds. Operating risks are managed during the loan period by requiring the provision of detailed reports on the operations of the project and by controlling cash-flows by requiring the proceeds of the sale of product to be paid into a tightly regulated proceeds account to ensure that funds are used for approved operating costs only.

Market / off-take risk
Obviously, the loan can only be repaid if the product that is generated can be turned into cash. Market risk is the risk that a buyer cannot be found for the product at a price sufficient to provide adequate cash-flow to service the debt. The best mechanism for minimizing market risk before lending takes place is an acceptable forward sales contract entered into with a financially sound purchaser

Risks common to construction and operational phases participant / credit risk
These are the risks associated with the sponsors or the borrowers themselves. The question is whether they have sufficient resources to manage the construction and operation of the project and to efficiently resolve any problems which may arise. Of course, credit risk is also important for the sponsors' completion guarantees. To minimize these risks, the financiers need to satisfy themselves that the participants in the project have the necessary human resources, experience in past projects of this nature and are financially strong (e.g. so that they can inject funds into an ailing project to save it).

Technical risk
This is the risk of technical difficulties in the construction and operation of the project's plant and equipment, including latent defects. Financiers usually minimize this risk by preferring tried and tested technologies to new unproven technologies. Technical risk is also minimized before lending takes place by obtaining experts reports as to the proposed technology. Technical risks are managed during the loan period by requiring a maintenance retention account to be maintained to receive a proportion of cash-flows to cover future maintenance expenditure.

Currency risk
Currency risks include the risks that: (a) a depreciation in loan currencies may increase the costs of construction where significant construction items are sourced offshore; or (b) a depreciation in the revenue currencies may cause a cash-flow problem in the operating phase. Mechanisms for minimizing resource include: (a) matching the currencies of the sales contracts with the currencies of supply contracts as far as possible; (b) denominating the loan in the most relevant foreign currency; and (c) requiring suitable foreign currency hedging contracts to be entered into.

Regulatory / approvals risk
These are risks that government licenses and approvals required to construct or operate the project will not be issued (or will only be issued subject to onerous conditions), or that the project will be subject to excessive taxation, royalty payments, or rigid requirements as to local supply or distribution. Such risks may be reduced by obtaining legal opinions confirming compliance with applicable laws and ensuring that any necessary approvals are a condition precedent to the drawdown of funds.

Political risk
This is the danger of political or financial instability in the host country caused by events such as insurrections, strikes, suspension of foreign exchange, creeping expropriation and outright nationalization. It also includes the risk that a government may be able to avoid its contractual obligations through sovereign immunity doctrines. Common mechanisms for minimizing political risk include: (a) requiring host country agreements and assurances that project will not be interfered with; (b) obtaining legal opinions as to the applicable laws and the enforceability of contracts with government entities; (c) requiring political risk insurance to be obtained from bodies which provide such insurance (traditionally government agencies); (d) involving financiers from a number of different countries, national export credit agencies and multilateral lending institutions such as a development bank; and (e) establishing accounts in stable countries for the receipt of sale proceeds from purchasers.

Force majeure risk
This is the risk of events which render the construction or operation of the project impossible, either temporarily (e.g. minor floods) or permanently (e.g. complete destruction by fire). Mechanisms for minimizing such risks include: (a) conducting due diligence as to the possibility of the relevant risks; (b) allocating such risks to other parties as far as possible (e.g. to the builder under the construction contract); and (c) requiring adequate insurances which note the financiers' interests to be put in place.

Tuesday, October 7, 2008

Our moral crisis


America faces a leadership crisis and institutional decay. As manifest in the public backlash against the bailout package, many citizens mistrust our political, economic and cultural elites. Despite dire warnings - from the president, the treasury secretary, the chairman of the Federal Reserve, leaders of both parties in Congress, Wall Street and the mainstream media - the electorate remains skeptical that a $700 billion infusion is needed to stabilize the nation's credit markets.

Voters understand that the legislation is a monstrosity. It is the greatest expansion of government in recent history - a form of socialism that will lead to more corruption, sky-rocketing debt and long-term economic debility. The bailout also rewards the reckless behavior of large investment firms, banks and subprime lenders. It signifies the triumph of crony capitalism and bureaucratic corporatism.

This crisis places a spotlight on the failure of government to protect the people. For decades, Congress has been awash with political contributions from government-sponsored lending giants, such as Fannie Mae and Freddie Mac, as well as corporate behemoths like Goldman Sachs, AIG, Bear Stearns and Lehman Brothers (among others). Most members of Congress are beholden to high-powered lobbyists; politicians ensure that their clients' vested interests are advanced in exchange for campaign cash and perks.

Our politicians are for sale. Therefore, the needs of the wealthy and powerful trump those of the people. America is being transformed from a representative democracy into a corporate plutocracy. The answer, however, is not social democracy or increased government intervention. Rather, it is to scale back the size of the federal government and devolve power to the states.

Small government is vital to sustaining strong democratic institutions. Big Government is the road to a kleptocracy; greater bureaucracy and red tape inevitably breeds more corruption. If there is less money sloshing around in Washington, there will be less opportunity for the legalized bribery that passes for lobbying today. The Democrats' argument that the financial crisis stems from deregulation and the "excesses of capitalism" is false. The crisis is a result of poor oversight and political cronyism. Many on Capitol Hill - including leading Democrats, such as Sen. Christopher Dodd of Connecticut and Rep. Barney Frank of Massachusetts - turned a blind eye to the source of the virus: the shady, irresponsible lending practices of Fannie and Freddie. Their frenzy of bad loans created the housing bubble, which in turn contaminated the financial markets.

Instead of being propped-up, Fannie and Freddie - along with the Wall Street investment firms who peddled bad securities-backed mortgage debt - should be allowed to fail. In the long run, the economy and the country will be better off. Let the marketplace exercise the power of what Joseph Schumpeter called "creative destruction": the sweeping away of sclerotic, poorly managed corporate entities. The result will be enhanced economic efficiency. Other lending and investment institutions - better, smarter ones - will fill the vacuum. The sky will not fall; there will be no Great Depression.

Ultimately, however, we must address the deeper roots of this financial crisis. There is a moral crisis that infects every aspect of our society. Since the 1960s, American popular culture has waged a relentless war against ethical absolutes and Judeo-Christian morality. This has been replaced with a shallow secular humanism, which champions materialism, consumerism and individual gratification. In short, our culture has done everything to destroy what used to be called "character." What happened to individual restraint, thrift and personal responsibility? These are the virtues that built the most impressive capitalist economy the world has ever created.

We are now facing more than just a financial mess; almost every other major institution is under threat. The political system is adrift; public schools are failing; the borders are porous; the intelligence agencies are dysfunctional; the inner cities are infested with drugs and gangs; the family is broken; and millions are fleeing their churches.

In most of our institutions there is poor leadership. A survey by Harvard's Center for Public Leadership revealed 77 percent of Americans believe the country faces a leadership crisis; this is prevalent across 12 different institutions and leadership groupings. In the survey, Congress, the executive branch, the business community and the media ranked in the lower echelons. Democratic capitalism is based on widespread social trust - especially, trust in leaders. Without this confidence, the whole system threatens to unravel. The solution is not more government regulation; it is moral and spiritual renewal.

Don't expect to hear any of this from Sen. Barack Obama or Sen. John McCain. They are our leaders, after all.
@ Washington time

Monday, October 6, 2008

Non Depletion Account


Di sudut kota Blackburn ada  taman. Itu kali pertama aku datang untuk bertemu kamu. Ketika senja cahaya merah terlihat dari hamparan penuh rerumputan, pohon-pohon, aku melihatmu, duduk bersandar di bangku, menatap kosong pada titik cakrawala tempat terbenamnya matahari.  Aku tidak pernah lupa bagaimana perkenalan kita, pertemuan di satu titik rapuh. Ketika itu perkawinan kamu di ambang kehancuran. Sedangkan aku di ambang kerakusan bisnis menaklukan bursa London. Bagiku, istri pertamaku tetaplah bisnisku. Dan bagi kamu, keluarga adalah segala galannya. Namun bagiku, tetaplah Tuhan segala galanya. Dalam banyak hal kita berbeda namun dalam satu hal kita sama sama penakluk di lantai Bursa dunia.

“ Aku tidak akan bertanya lebih jauh soal dokumen dan informasi dari kamu. Aku sudah berikan dokumen itu kepada George. Kita lihat nanti” Kata kamu. Bagiku itu lebih baik. Walau aku sadar tidak mungkin kamu akan bicara kepada George karena dia adalah suami yang telah berkhianat kepadamu. Seminggu kemudian kamu datang menemuiku di Dockland London di suatu cafe. “ George ingin kamu datang ke kantornya. Dia tertarik dengan informasi kamu. “
“ Oh ya.” Kataku tanpa ada kesan aku senang.
“ Dia bilang semua informasi itu semua valid. Ayolah kita segera ke kantornya. Engga jauh dari cafe ini.” katamu kemudian. Kitapun bersegera keluar dari cafe itu. Jalan kaki satu blok ke kantor George. 
“ Apa yang kamu harapkan dari kami ? Kata Geroge kepadaku. Tanpa melihat kamu ada di sampingku. George menyebut “ kami”. Karena disampinya ada pria bermata elang dan hidung sedikit bengkok, berwajah dingin.
“ Saya hanya butuh bukti uang sebesar USD 500 juta. Komisi sebesar Rp. 2 % per tahun. “
“ Hanya itu ?
“ Ya. “
“ Bisa jelaskan bisnis kamu apa?”
“ Anda percaya, kita bisnis. Kalau engga, kita sudahi meeting.” Kataku.
“ OK lah. Saya sudah pelajari proposal anda. Client saya akan bertindak sebagai collateral atas lending asset kepada bank first class di sini. Anda sudah dapatkan investor untuk memberikan pinjaman atas lending asset tersebut. Mengapa saya bertanya apa bisnis kamu, karena resiko clients saya sebagai penyedia collateral tidak ada. Karena ada stop loss gurantee dari bank di China. Akhirnya saya maklum karena sistem moneter di China memang tidak mudah melakukan cross border transfer uang. Jadi ini sebenarnya adalah jalan anda medapatkan dana dari China sebagai undertaker untuk pembiayaan bisnis anda” Kata George berusaha memaklumi rencana bisnisku

Setelah itu aku terlibat dalam proses perikatan hukum atas transaksi itu. Setelah pananda tanganan kontrak itu, aku dan george bersama clientsnya berangkat ke bank  untuk membuka Non depletion account. Sebetulnya itu rekening berisi deposito berjangka sesuai kontrak. Semua nama rekening tetap atas nama Client George. Namun perusahaanku yang terdaftar di Isle of man ditunjuk sebagai mandatori terbatas sesuai dengan kontrak. Hak tanda tangan atas rekening itu tetap ada pada clients George. Aku juga menempatkan escrow 2% sebagai jaminan pembayaran fee per tahun. Sebulan kemudian kamu mengatakan bahwa kamu harus kembali kepada George. Karena George berlutut di hadapanmu memohon maaf atas kekhilapannya.  Aku berjanji akan menemui kamu setahun kemudian, ditempat sama.

Tiga bulann kemudia Clients George  datang ke Hong Kong. Ketika aku temui dia berwajah masam. “ Deal kita tidak fair. “  Dia marah besar.
“ Saya tidak melanggar kontrak. Fee saya bayar. Uang anda aman. Kontrak berakhir tanpa ada satupun pihak yang dirugikan. Salah saya dimana ?
“ Stop loss guarantee itu bohong. Dana dari China sebagai undertaker juga tidak ada. Semua bohong.”
“ Itu persepsi dari George sendiri. Saya tidak pernah bilang begitu. Dalam kotrak tidak ada pasal soal undertaker China. Kontrak hanya berisi jaminan keamanan secara hukum atas dana anda. Salah saya dimana? 
“ Mengapa anda bayar fee kalau kontrak itu tidak dimanfaatkan”
“ Itu masalah saya. Engga perlu saya jelaskan alasan saya. “ 
“ Mengapa tidak dibatalkan saja kontrak itu. Dan saya kembalikan fee yang sudah  anda bayar” Kata Clients George.
“ Kontrak itu irrevocable. Anda sendiri yang meminta pasal itu. Bukan saya. Jadi tunggu sajalah sampai berakhir kontrak.” Kata saya dingin.
“ Mr. B. Saya muslim. Kami keluarga kerajaan. Dididik tidak boleh menerima uang tanpa alasan yang jelas. Mengertilah”
“ Mengapa anda tidak gunakan saja fee itu untuk amal. Itu kan pahala.”
“ Engga perlu ajarin saya soal amal. Saya butuh jawaban”
“ Engga ada jawaban. Ok end conversation” Kata saya berdiri keluar dari kamar panthouse nya.

***
“ Aku senang kamu akhirnya menepati janji untuk menemuiku kembali di taman ini” katanya.
“ Apa aku pernah tidak menepati janji?
“ Ya ya. Aku tahu. “
Kami terdiam menatap senja memerah. “ Aku sudah kirim uang ke rekening kamu. Terimakasih untuk semuanya” Kataku kemudian.
“ Ya terimakasih my dear. " Katamu menggengam tanganku. " Hebat kamu bisa leverage uang clients George tanpa dia menyadari sama sekali. Bahkan aku dengar dari lawyer London, mereka tidak bisa gugat kamu. Karena kamu tidak melanggar kotrak. “ 
Saya hanya tersenyum. 
“ Ternyata Vini Vidi Vici ya” katamu tersenyum. 
“ Bagaimana dengan George ? Kataku.
“ Dia ceraikan aku sejak tiga bulan lalu. Dia kecewa karena aku kenalkan kamu ke dia. Katanya kamu itu pemain hedge fund. Predator bursa. “ 
“ Maafkan aku”. Kataku berempati.
“ Aku senang, Ternyata pernikahan kami hanya pernikahan kapitalis. Perceraian itu aku sukuri. Sekarang aku orang bebas dengan uang jutaan dollar. “ katamu tersenyum dan akhirnya kami tertawa. Senja di Blackburn tak pernah bisa aku lupakan, terutama tentang kamu. I miss you..

***
Penjelasan sederhana.
biasanya non deplation account itu  ada yang 7 hari, sebulan, tiga bulan dan ada yang setahun.  2% itu premium fee yang kita bayar pada saat kontrak. Karena  mandatory rekening itu adalah perusahaan offshore maka  itu sekaligus sebagai asset protection untuk kita masuk ke pasar CDS. Jualan CDS. Engga ada resiko. Karena pada waktu kita jual, kita juga terbitkan bond untuk beli CDS ke perusahaan asuransi. Kalau terjadi gagal bayar, ya asset protection itu ditukar dengan bond yang dijamin asuransi. Nah selisih antara kita jual dan beli itu berkisar 1 sampai dengan 3 %. Kalau kita lakukan itu sehari 2 kali, hitung aja berapa kita dapat sebulan. Berapa setahun.

Jadi kalau di analogikan sederhana seperti ini. Kamu punya harta banyak. Walau harta itu tidak dicairkan dan tidak pindah sebagai jaminan. Namun kamu punya hak menjual janji menanggung resiko atas gagal bayar utang orang lain. Caranya? Kamu bisa terbitkan credit link Note. Orang percaya.  Karena terbukti memang kamu penguasa atas rekening cash dalam jumlah besar. Nah ketika orang beli  janji itu, mereka bayar premium kepada kamu. Pada waktu bersamaan kamu juga beli pertanggungan resiko kepada pihak lain agar kalau gagal kamu tidak perlu bayar. Yang bayar pihak penanggung terakhir, perusahaan asuransi. Selisih jual beli itulah laba. 

Pertanyaan terakhir apakah mudah?  tidak. Itu ada hitungan matematika yang rumit ( ada aplikasi komputer yang jago ngitung dalam hitungan menit). Kita harus menghitung pasar CDS untuk bisa membeli CDS sebagai dasar penerbitan bond dan setelah tahu pasti, barulah kita jual CDS. Jadi resiko nol. Artinya, sebelum kita beli kita udah jual lebih dulu. Siapa yang korban? ya asuransi. Tetapi asuransi pun di bailout oleh bank central dengan cara membeli surat utang mereka. Nah surat utang asuransi itu, nanti ketika  bank central mau kurangi asset surat utang mereka, kita goreng lagi CDS nya. Gitu aja  terus muter.

Environmental crisis




The sub-prime mortgage scandal is only a factor in the continuing financial crisis. Indeed, the financial crisis is the manifestation of a global financial system (called unfree market finance capitalism, or just finance capitalism) which is fundamentally flawed and about to collapse. The flaws ensure that the system cannot:

• avoid economic cycles• avoid the build-up of the cycles into bigger ones• prevent rich-poor division• solve global poverty• provide social and economic justice• address the major problems of the environment

The biggest factor in the crisis is what conventional economics claims is the secret of the ‘free market’s’ purported success, namely, conventional endogenous loan money. This loan money:−
• is created out of nothing (by the pressing of computer buttons) by the banking system
• has interest (as distinct from administration cost) added
• is not directed at the development and spreading of productive (together with the associated purchasing) capacity so as to achieve a Say’s Theorem (Law) balance of supply and demand (with producers and consumers being the same people) while, at the same time, forwarding social and economic justice. In short, finance capitalism concerns itself with the making of money out of money and NOT with the true purposes of the real economy and society.

Contrary to popular belief and continual propaganda, banks do not lend their own money or that of the depositors. Instead, lent credit is new money which is created out of nothing (by the mere pressing of computer buttons) and, on repayment, the principal of the loan is cancelled.

“The actual process of money creation takes place primarily in banks.” (Federal Reserve Bank of Chicago (1992), Modern Money Mechanics – a Workbook on Bank Reserves and Deposit Expansion.). In the UK around 97% of the new money supply is created in this way and there are similar figures for other countries including the USA.

However, when the banking system creates the loan money out of nothing it creates sufficient money for the principal to be repaid but no money is created for the repayment of the interest. Therefore, if the overall money supply is not to shrink, more and more interest-bearing debt must be created. The result is that there is a continuing pressure for more and more interest-bearing debt to be created and that is the fundamental mechanism which lies behind the build-up of individual, town, corporation and national debt.

Conventional economics claims that the system of interest-bearing money serves the needs of the economy by efficiently allocating resources. But this is not true - the banking system money does not allocate its interest-bearing money to new productive capacity and its spreading. Instead, it allocates it to derivatives; to the bidding up of existing asset prices (such as house prices); to consumer credit; to putting individuals, companies and societies into debt, indeed, to anything but the real, productive economy. Moreover, the paying of interest diminishes the capacity of borrowers to repay and diminishes their capacity to consume.

In addition, conventional endogenous money requires two lots of financing (one for production and one for consumption when only one lot − for both production and consumption at the same time − is necessary). The result is that there is continued inflation. Because it has detrimental effects and does not serve the purposes of a true, fair, free market, let alone the purposes of society, conventional endogenous loan money must be gradually eliminated. This can be done by a gradual rise in banking reserves eventually to 100%. Banks will then be left with the duties of lending (as they are supposed to do) their own capital and (with permission) the deposits of their customers; and of administering interest-free loans stemming from the national bank.

Other factors in the financial crisis include:-• computerisation• off-balance sheet creations and the unregulated, largely unseen, derivatives market• the elimination of legislative constraints (e.g. repeal of the 1933 Glass-Steagall Act which ensured that banking, stockbroking, mortgage provision and insurance had to be separate activities)• the ending of proper banking reserves• the reliance only on interest rates as the basic controlling mechanism• corrupt lending practices and valuations• the vacuous belief that the ‘free market’ is Perfection Manifested (and soon everything returns to the most perfect equilibrium).

All of the factors contributing to the crisis take place against a background of deceitful propaganda and deception about the ‘free market’. The truth is that the ‘free market’ is not free, not fair and not efficient and there cannot be true democracy unless all individuals (whether or not in conventional jobs) have their own independent productive capacity giving them their own income.

Furthermore, throughout the world, capital ownership is concentrated – in some ‘free market’ countries only a handful of families own most of the stock market (in Indonesia fifteen families own around 60% of the stock market). Over-concentration of economic power and the prevention of the operation of a true free market (in which producers and consumers are the same people) are prime causes of autocracy and poverty.

The justification for the present system of the banking system creating money and lending it at interest is that, by so doing, it is furthering the allocative purposes of an efficient ‘free market’. However, in reality, it does not allocate resources efficiently and, since interest is also unnecessary where productive capacity is concerned, the whole justification for the present system collapses. On top of which, the present system (unlike binary economics) is incapable of achieving a proper balance of supply and demand with producers and consumers being the same people as required by Say’s Theorem (Law) and the requirements for social and economic justice.

Some of false assumptions of mainstream neoclassical economics. Indeed, mainstream neoclassical economics is fundamentally flawed and that is because it is based on many false assumptions. This is a matter of considerable importance because if only one assumption is false (or, at the most, two or three assumptions are false) then the whole structure of neoclassical economics becomes invalid.

Because of the interest which compounds, debtors are under continual pressure to repay and, on the international scene, whole countries are effectively colonised by having to repay amounts many times the original loans. Also, because of interest, much frenetic activity is engendered and poor people without material security cannot be expected to moderate their claims on material prosperity unless they have a fair deal like everybody else.

But binary economics gives the fair deal - it spreads productive (and the associated consuming) capacity so that all individuals in the population - including babies, carers and those not normally in conventional employment - have at least some form of secure, independent income.

Moreover, at present, virtually everyone has either had a scarring experience of poverty or has a perception or fear that they might fall into poverty. In short, people feel insecure and that is one of the main factors in explaining greed. The insecurity - and the associated aggressive consuming attitudes - will only disappear if ALL people have material security and, at the same time, all people in some degree earn in exactly the same way as do others (i.e. at least part of their individual income should come through capital ownership). Only then will there be hope of people voluntarily minimising their greed. Moreover, as between individual countries, fairness between populations is essential if there is to be willing co-operation.

Greed is also caused by the present financial system which creates sufficient money for the principal of interest-bearing loans to be repaid but does not create sufficient money with which to repay the interest. The result is that more interest-bearing money has to be created (with more inflation and more people going into debt) and more frenetic activity in the endeavor to try to make repayment. Worse, the system favors the short term destruction of natural wealth rather than its long term maintenance. Unless the role of interest in the financial system is substantially diminished not only is the environment at risk but so is the stability of the world financial system.

It is also the case that populations stabilise when there is a reasonable standard of living, good education and health and at least some status for women. Binary economics provides these things and is essential if the present growth of the world’s population is to be moderated.Lastly, there is now an extraordinary range of ‘alternative’ green technologies capable of generating clean electricity but which cannot be used because, in the present system of interest-bearing money, they are not financially viable. Examples include tidal barrages, tidal lagoons, and large-scale solar structures. However, with interest-free loans they will become viable. The world must have clean electricity generation and that means the use of interest-free loans to introduce the technology.