A clever question finds answer

 

November 5, 2008

That exact day, Queen Elizabeth II visited the London School of Economics.

In the aftermath of the 2008 financial crisis, she asked a question that cut through layers of expertise and authority:

-        - why did nobody see it coming?

It wasn’t just a question—it was a quiet indictment of an entire system of economists, regulators, and institutions that had collectively missed the warning signs.

The moment exposed an uncomfortable truth: that complexity, confidence, and consensus can sometimes blind even the most sophisticated minds.

Worst days would follow and that question would coming back to my mind, again, again and again..

--

During the summer of 2012, at the height of financial uncertainty, the Cyprus Ministry of Finance quietly reached out all parliamentary political parties for ideas—ideas that would confront what many already feared but few were prepared to articulate: the possible closure of Laiki Bank. It was a moment that demanded clarity, courage, and technical understanding. Yet, paradoxically, it was also a moment marked by hesitation and a lack of readiness.

Laiki was bleeding. At the time, there was a striking absence of individuals equipped to tackle such a complex and sensitive assignment. The scale of the problem—deeply rooted in systemic banking weaknesses and the broader European debt crisis—required not only technical expertise but also the ability to think beyond conventional solutions. Few possessed both. Fewer still were willing to engage with the political and economic consequences that such proposals would inevitably carry.

Once again, that huge “why” came to my mind..

--

That night, that discussion, that level of information was shocking.. That was the moment I became certain Emma Zeniou was stealing the students’ grants. It had been going on for years, quietly, almost invisibly, and yet no one ever spoke about it. The silence felt deliberate, as if everyone understood more than they were willing to admit. Whatever was happening clearly involved too many people to be a simple case of misconduct—it was structured, coordinated, both inside the University of Cyprus but also within the National Office. The patterns, the missing pieces, the way transactions seemed to circle back without raising alarms—it all pointed to something far bigger, involving also the European Commission. To me, it no longer looked like isolated theft, but a perfectly engineered money laundering mechanism, both in Cyprus and Brussels, hiding in plain sight.

That moment, instead of “why” I started wondering “who” implemented that scam?..

--

As the investigation went deeper, a series of striking red flags began to emerge. Key European directives appeared to have been deliberately kept out of sight, while lawyers insisted in formal statements that no such regulations existed (Case 1562/2014). At the very same time, however, those same lawyers were presenting internal emails that clearly referenced directive-based claims. The contradictions became even more troubling within the two courts themselves: one judge (Marika Kalligerou) was formally informed that no directives existed or applied, while another (Myria Loizou) received submissions explicitly citing those “not existing” directives. Both statements originated from the same law office (Argentoulla Ioannou)—and remarkably, from the same lawyer (Stavrina Karakatsiani)—raising serious concerns about consistency, transparency, and the integrity of the entire process.

At that moment, the only question was “ how many are involved? ”

--

The way the Cyprus Cooperative Bank was ultimately shut down raised serious concerns and, to many observers, appeared deeply unjust. Closing the Coop in that manner felt almost criminal, as the approach of separating and merging so-called “healthy” and “unhealthy” firms  lacked clear logic and transparency. Rather than providing clarity, the process created the impression that decisions were being made to protect certain interests rather than to ensure accountability. Whatever was truly happening behind the scenes, it seemed as though those involved were more focused on erasing the traces of their own actions and shielding responsibility, leaving little evidence behind and many unanswered questions for the public.

At that moment, I had no question, I was just seeing it happening, once again..

 

Nicos Rafidhias

Book title: All the DOTS you have connected..

 

Order your copy here

 

 

 

 

Trading Game , Part II : The times when the evidence reveal the criminal activities

 

What I observe in the UK today, is what I observed in Greece, after 2004 and what I was monitoring in Cyprus, during 2008-2013. MSN published today that another company entered administration. There is a pattern that explains this trend. People have money and spend, during good times but then people have less money, spend less and too many companies suffer huge losses. If we observe the current situation, the people have to pay increased bills. So their extra choices are becoming too limited. After they spend the money for the bills and the rent, they have to choose between food and heating. Anything else has become luxury.

As far as I remember, in the main avenue of Nicosia, there was a BHS store. It shut down when I was still in primary school. Their merchandise was expensive and to my own eyes seemed outdated, as well. I noticed that two decades later, it collapsed in the UK, entered administration and shut down. In the last few years too many companies entered administration. Woolworths, Debenhams, Wilko, Bodycare. There is an extremely simplified explanation for that. Higher costs, high prices, losing customers. As I remember, there was a customer mentioning “why pay for washing powder 4 pounds in Wilko since the exact same costs 2 pounds in Poundland? “.

There was an interesting story during the collapse of Cyprus Airways and Olympic Airways. At the time we all struggled to attract investors, in order to save those two companies, there was another part, inside each company, trying to save their own benefits. Trying to save their own (and unexplained..) benefits meant that no serious investors would risk to save them. That was the main reason that the UK government gave British Airways to the private sector. There is a moment you are not able to control everything. Greece and Cyprus failed to receive the message.

The collapse of the banking system in Iceland is an extremely interesting example of proper management. You leave the markets to do their own job and at the same time you avoid transferring those losses and other hidden obligations to the people that had nothing to do with the mess. The law did their job, as well, investigated and punished. Cyprus followed a completely different behaviour, a few years later. The major Cyprus Banks (Bank of Cyprus and Cyprus Popular Bank) invested in Russia and Ukraine but the outcome was extremely poor. In the exact same period the Cyprus government used the Social Security Pot for their own salaries and pensions. That also activated and increased the financial instability, known as Ponzi finance. There were clear criminal activities, implemented by the Cyprus administrations during that period of time. Although, in Cyprus the bubbles of the oligarchs are too strong. They protect each other and transfer the bill to the rest of the population. The population realised a few years later that their property (including their houses) were sold to foreign funds, in order to cover the losses caused by the banking gang.

There are two extremely valuable books, describing what happens in Cyprus. THE GANG (2020) and MAFIA-STATE (2022) both written by the Cypriot researcher Makarios Drousiotis, explaining how the former Cyprus president, Nikos Anastasiadis, was involved in the wrong-doing and money-laundering. Those two books are part of my own collection, next to the Trading Game of Gary Stevenson, just because there is a continuity from “The Trading Game” period to the GANG and the MAFIA-STATE. Anastasiadis was indeed involved in money-laundering and there are too many proofs for that. The worst part is that the collection of evidence includes the Tassos Papadopoulos administration (2003-2008) in addition to the Dimitris Christofias administration (2008-2013) as well. What happened in Cyprus is still kept hidden and the time it will be revealed, in detail, it will show something worse, the involvement of the European Commission and their own criminal activities..

Nicos Rafidhias studied Political Science and European integration before and during the creation of the European Union and the Euro Zone. 

LinkedIn: https://www.linkedin.com/in/nicos-rafidhias/

Personal page: www.nicosrafidhias.co.uk

Business page: www.officeofis.co.uk

This article is part of his recent book regarding the boom and bust of corporations and countries. 

END OF PART II

Trading Game , Part I : The times when memories bring also valuable facts from the past

I have to admit that I am a great fan of Gary Stevenson and his podcast series called “Gary’s Economics”. Gary Stevenson was a Citigroup trader. He was extremely successful, according to his own words. I am not able, of course, to verify whether he was a successful trader as it is not relevant to my own purposes or research. Stevenson speaks clearly for the “Whom you know” bubble. The people in the bubbles that control the game. This is my primary interest. The people that play the game, too many times without any valuable skills.

I have also noticed a few third-party posts saying that his claims are not always accurate and that there is a different story in many of his own claims. This is not something I would be interested in investigating further, since it’s not part of my interests or capabilities. My own research involves Gary Stevenson as a book author. Gary Stevenson wrote a book called “The Trading Game”. I was amazed to notice too many little details that allowed me to understand the period that Lehman Brothers, Cyprus and Greece went bust. As a well prepared book, it allowed me to bring back memories related to the Lehman Brothers bust, the stock market industry, the Northern Rock boom and bust, the RBS boom and bust, what happened before and what followed that period.

What is the most interesting issue for my own research and book writing is that he mentions and also explains too many things that I started studying thirty years earlier ; wrong doing and money laundering implemented by the National Governments and their private sector peers and in addition the effects they cause to the increased financial instability of the public economics and the Ponzi financing patterns they create. Greece, Cyprus, Ireland, the UK, France or Germany, they all play the game badly. In the end, every time, the general population received the bill.

In addition to this information, there is great detail regarding the financial markets inside stories and the side effects they cause to the normal and basic economic operations. I was part of this “game” around fifteen years before Gary Stevenson. The story was then exactly the same. Some privileged people, as Gary Stevenson mentions, earned large amounts of money from extended speculation. As happened a few years later with the Greek economy. The Greek economy was “stable” for a decade but the real truth was that it was in a very bad situation for many decades. The Greek governments were borrowing massively. A very common practice of almost every government. The interest during the first period of the Euro was equal to Germany’s for some years but when things went really bad, it was way above the average and that activated and increased the financial instability, also known as Ponzi finance. We all remember what followed.

During the last act, the Greek government had to ask for a bailout from the TROIKA.

The TROIKA approach failed exactly like any IMF approach in the past.

You need extremely high skills to design and implement a viable restructuring model and according to my own research both TROIKA and IMF have no interest in that. Their goal, at that moment, was to save the exposure of France. A combination of failures including the trading giants and the public sector inner gang. The government of Greece played the game. Also badly.

The instability in Greece eventually caused a hidden instability for both Germany and France. Here is the main observation I was interested in. Under the normal and basic operations of any unit, meaning a house or a company, you need to have balanced economics and limited exposure. It is not possible to keep imbalances for long. Eventually, you will be out of the economic circle and the competition will buy your business or steal your market position.

This is why “The Trading Game” is an exciting reading. We can see when the traders take advantage, the time the circle of a company or a country is completed and how much hidden cost the ordinary people have to pay without even noticing it. Both directly and indirectly. Yesterday was Portugal, Italy, Ireland, Greece and Spain. Cyprus followed. Today we have reached the core of the problem, the UK, France and Germany. What happens at the moment and what I expect to follow will be explained in the following part where I will remember the days of the Yellow vests..

Nicos Rafidhias studied Political Science and European integration before and during the creation of the European Union and the Euro Zone. 

LinkedIn: https://www.linkedin.com/in/nicos-rafidhias/

Personal page: www.nicosrafidhias.co.uk

Business page: www.officeofis.co.uk

This article is part of his recent book regarding the boom and bust of corporations and countries. 

 

END OF PART I

The times real experts are needed

 As the UK is now copying the pattern that both Greece and Cyprus followed between 2006 and 2015, the lesson is the exact same ; you never put amateurs to do the job of professionals.

After thirty years in business, I find that the most valuable modules I ever studied were the Financial Instability Hypothesis and the Minsky Moment.

Funny detail ; those modules were studied because of my personal curiosity and my personal business activities.

Although most Universities tend to offer the typical modules of Political Science, Political Economy, Marketing, Management and Human Resources, the people that do that extra mile always get knowledge that makes the difference.

Today's CITY AM (post shared earlier) admits that the industry of education brings a dangerous combination of problems to the most recent graduates ; debt and unemployment. The industry sells a generic service that stopped providing any benefit.

During my Bachelor's studies in Political Science (around 20 years earlier), I was lucky to have a lecture by the UK Ambassador in Athens, Greece. The Ambassador described the UK business system as extremely stable, in comparison to the Greek system. Long term job positions, building careers in comparison to the short term job model of Greece.

Although the Ambassador was right on his observation and analysis, at that timeframe, around ten years later I found out that the UK unfortunately copied the model of Greece ; short term job positions, freezing the salary of the low income population and covering the gap through the Universal Credit pot while multiplying the salary of the politicians and the public administration, paid by continuous loans.

This long-term policy, followed not only by Truss but by several previous administrations including Thatcher, caused the Minsky Moment during Liz Truss 45 days in power. Since then, Truss repeatedly stated that she did nothing wrong, despite Kwasi Kwarteng's repeated statements, admitting the mistakes they made.

How Liz Truss caused a Minsky Moment ?

Liz Truss decided to give extra free money to peers from a country already facing collapse. All previous administrations provided free money to their peers ; Truss made that little extra effort.

Why did Rishi Sunak and Keir Starmer continue the same pattern ?

Both Sunak and Starmer are part of a huge circle of politicians with extremely limited knowledge on how to run a country or a union. They never had any courses on the field because if they had they could notice and correct the red flags. The majority of the politicians I met, all gave promises to their supporters including free money and benefits, like Boris Johnson did with Michelle Mone.

The Financial Instability Hypothesis and the Minsky Moment explains the day that you give everything and you now operate on increased loans and multiplied interest rates.

This is a phase where real experts are needed.

Are we able to monitor and control success and failure ?

 Are we able to monitor and control success and failure ?

Back in 1989 a young student bought his first shares

in the stock exchange.

In the next 20 years he was lucky to evaluate

the potentials of around 2000 more companies in Cyprus, Greece

and the United Kingdom,

monitoring also what went wrong for those that shut down.

When the Cyprus Stock Exchange collapsed and billions of pounds were lost , without any obvious reason, that was a red flag that for an aspiring professional on fraud investigation would be repeated

As a Bachelors studies student, the same person, 

made a couple of assumptions regarding the EU design, stability and future failure.

Unfortunately, today we monitor the most negative

of those scenarios happening. The people that implemented and monitored the procedures of European integration had no idea on how to do it properly. This is why today we are discussing the models of a soft disintegration.

What the outcome of the 2008 crisis has proven for sure

was that PIGS cannot fly if monitoring and controlling is left to people with limited skills and experience..

The collapse of Portugal, Italy, Greece and Spain

opened the Pandora Box

for the United Kingdom, Germany and France, but the red flags were not obvious unless you had studies and experience on the topic of Ponzi finance.

This is why today all governments wonder how to fix the problems they caused but in fact they have absolutely no idea on how to do it.

The pattern is identical and whoever can observe it, is always one step ahead but the majority of the population will pay a huge bill.

This is because both the Project Managers and the Fraud investigators failed to do their own job properly, when they should.

Ten years earlier I wrote a post regarding the upcoming problems of France. Today everyone discusses those problems but fails to understand the necessary solutions. In the meantime, the United Kingdom has left the European Union, in order to fix their own issues. This is how inevitable that choice was.

Based on the evidence, coming from cases such as 

- Overend, Gurney and Company,

- Northern Rock,

- Royal Bank of Scotland,

- Lehman Brothers,

- Cyprus Popular Bank (MARFIN Laiki) Group,

- the Cyprus and the Greek bust,

and the most recent cases of :

- Wilko and

- Poundland,

I have recently created a series of modules

focused on the necessity of monitoring, controlling and re-designing,

during the periods that things go really bad.

Based on the case studies and the evidence, I follow

the routes of how the money disappears each time and

who are the organizations

that will allow the system to restart again.

This research allows the participants to understand

how important it is to make a functional design and implementation,

especially during the periods that the society needs stronger support,

in order to recover sooner.

An important module, allow my learners to understand Ponzi schemes in the 21st century era

and the importance of Hyman Minsky and the Ponzi Finance theory

in order to identify and evaluate the health condition stages of any private and public body.

As a professional on the field, I am always looking to train the organizations and the teams that plan to be the problem solvers of tomorrow and I offer the best available knowledge.

So when I read articles blaming Keir Starmer, Rachel Reeves, Emmanuel Macron I can instantly understand which parts of the analysis are accurate and which parts are misleading, based on the personal perceptions of the writer. What I could say as a general rule is that each leader brings good things among bad things, during their administration. Unfortunately, it takes too much time to evaluate whether the majority of their actions were good or bad and it’s always too late to fix the damages that were caused.

This is where Political science meets Project Management and Fraud investigation, in order to provide the best possible solution.

If you have some examples to share, please share your own comment or example.

The Cyprus bankruptcy - The "before" and the "after" (part III)

 

In a similar situation, the British government faced a shocking devaluation of the Sterling pound during Liz Truss' administration, losing markets’ trust. What was the difference in that incident? Due to the danger of the Sterling pound to be plunged for good and for the long term and of course due to the danger of losing their seats due to the election that looked inevitable, they forced Liz Truss to resign.

The period of Liz Truss' administration brought to my mind the administration of Demetris Christofias in Cyprus, ten years earlier. As I assume, Liz Truss never heard of Demetris Christofias or ever paid attention to what happened to Cyprus ten years earlier. She just planned to increase the debt level of the United Kingdom that unfortunately for her had already reached the Ponzi levels, where nobody is willing to lend more. Liz Truss, even today claims that there was nothing wrong with her governance. Although, whoever has experience of Ponzi financing can easily understand and connect the practices of Christofias administration with what happened ten years later in the UK.

Those two financial crises prove the fatal mistakes of each private or public administration. Every administration claims to hire or appoint the best. Although, each administration hires or appoints based on friendly relationships or political benefits, translated as votes.. As a result, the administration is full of incompetent members or fraudsters that sooner or later create chaos. Cyprus is a perfect example. We all know that people in the public administration are appointed in exchange of votes and they cover fraud practices like money-laundering and in recent years the sale of passports to international criminals.

Mafia-State is a whistleblower evidence of what was happening during Anastasiades' administration. Anastasiades was repeatedly linked with international fraudsters and money-laundering practices that shaken the European community. Even worse, the whole European community infrastructure is designed in a pattern that one century ago led to the collapse of the “Latin Monetary Union” that today nobody dares to mention.

One hundred years ago, the European people had another monetary union that because of fraud, corruption and incompetence had to be left to collapse in silence.

As history repeats first, first as tragedy and second as farce, Greece was expelled from LMU from 1908 to 1910 and they faced the same pattern a century later. This time Cyprus was added to the story. When you spend all your (national) money, someone will have to loan you some more, in order to keep the (monetary union) illusion alive. But, just because a loan is always a loan, you are first out of the Union unofficially, but you are out a few years later, officially..

End of part III

The Cyprus bankruptcy - The "Before" and the "after" (part II)

 

It was a sunny Saturday morning. I woke up and went on my weekly shopping route. Before that I went to withdraw some money from the ATM but my transaction was declined. It was really awkward, I knew that there were enough funds in my account, so I tried one more time. Transaction was again rejected. People in nearby ATMs faced a similar situation, as I could now observe. 

Suddenly my mobile phone rang. Sylvia Papamakariou, my Cyprus Green Party main liaison, informed me that Cyprus was bankrupt, banks were shut down and I had to go to our headquarters for a brainstorming meeting regarding the next day. It was the moment I could see in real time that “IT” happened once again, as Hyman Minsky wrote a few decades earlier. Unfortunately, in Cyprus nobody wanted to listen and nobody wanted to speak, even after it was too late.. That was the rule then, that is the rule now..

As the rest of the population were celebrating the Carnival period, mostly in Limassol, that first and then during the second weekend a team of experts were trying to develop scenarios of what to do, what to avoid and what to save. We then had no idea of the real corruption levels of Cyprus, we just assumed that something would and should change. Illusions as we realised later..

The corruption levels in Cyprus are huge and unfortunately almost everybody is involved. The huge benefits of the public sector and the politicians that form each administration were always coming from a financial alchemy. The savings of the Cyprus Social Security pot were immediately transferred to serve the Government expenses so every new expenditure and pay rise meant that there will not be any kind of safety pillow in case of any emergency. That means also that in case we needed to cover any kind of emergency like saving our Banks would be achieved only if our European partners were willing to lend us more money. And they had no reason for that since our Banking system ws another alchemy ; giving higher interest rates in order to attract more deposits and create new bonuses for the Bankers..

So, in a simplified analysis, if Cyprus were still having the national currency of the Cyprus pounds and each Cyprus pound was equal to 1 euro, that weekend we could agree to devalue our pound so possibly 1 euro could buy 10 Cyprus pounds or even 50. In such a period that the national economics are just reckless, the evaluation of the national currency is defined by the markets. Luckily, Cyprus was already in the Eurozone. That meant that our government was able to steal as much as they wanted, since the people would pay the debt in a future period. 

That’s a flaw of monetary unions that lead to their collapse sooner or later. Just to make it more relevant to the recent period, both Turkey and Argentina, two countries that have their own currency, observe the continuous devaluation of their national currency against others.

End of part II

The Cyprus bankruptcy - The "Before" and the "after" [part 1]

 

The most common question I am repeatedly being asked, since I moved my base to England is :

“Why does a Cypriot decide to leave Cyprus for England? “

We all agree that Cyprus is an amazing place for vacations. Good weather, amazing food, quality amenities.. But how about living permanently and working there? Is it as good as England? For sure, it's not.. Let's see why..

Cyprus gained a very bad reputation during the recent years. What all investigations show is that Cyprus is linked to illegal activities like money-laundering and supporting financial crime..

I have no reason to disagree with those publications, at all. On the contrary, I was observing the pattern, at least fifteen years earlier. I started investigations, I verified what was happening and, even worse, I verified that what was happening couldn't change because of the corruption inside the core of the governance.

Let's observe a few details. Cyprus got bankrupt during 2013. The public treasury was empty, the two core banks collapsed and the third, most healthy financial institution went bust a few years later. Would we agree that it doesn’t sound like normal practice for anyone, anywhere? 

Let's get a little bit more specific. The public service was paid by funds transferred from the social security pot. The social security pot was permanently empty so there was no safety pillow for last resort purposes. Public sector was paid by Ponzi financing practices.

Same period , both Bank of Cyprus and Laiki Bank heavily invested in Greece, the rest of the Balkan peninsula, Ukraine and Russia. All those investments collapsed so both institutions needed recapitalisation. That was part of another Ponzi financing practice but unfortunately nobody dares to talk about Ponzi financing practices in Cyprus..

Since the problems were well known at least one year earlier, we were asked to make scenarios for the next day. Who were “we” ? During that period I was a member of the Cyprus Green Party, acting as Commissioner for Finance, what in the UK is called shadow minister. The exact same time I was studying my Master’s degree so I had access to all similar cases, worldwide. I personally developed a scenario where both banks were split to smaller pieces and sold to healthy institutions, more or less what the UK did during 2008 when they faced a similar situation.

I was amazed by the fact that nobody paid attention to my proposal so I developed my personal scenario for the next day ; a bank account with emergency funds that could be used in order to move to the UK when nothing could be saved..

End of part I