Monday, 31 August 2015

The present in the words of Indra Nooyi

"Every morning you have got to wake up with a healthy fear that the world is changing, and a conviction that, to win, you have to change faster and be more agile than anyone else"

Wednesday, 26 August 2015

Cutting bank reserves to stop a bubble burst is dangerous

Because it fuels investment by making money easily available. Now, that is exactly what the Chinese government wants, as it tries to smooth the current stock market bubble burst. And I would say that is ok - but it can also be dangerous if this stimulus is not temporary (and we have seen how addicted to growth China is). Because with more money at hand, banks will do good and bad investment, with lower returns (like the big "ghost towns and malls" in China). And that can mean the Chinese banks will then bubble on their own and generate a burst like we have seen in the west from 2008 to very recently.

Monday, 24 August 2015

There is nothing wrong with state controled capitalism...

I always said that economic long-term oriented social-democratic liberalism (with regulation favoring free market and protecting key areas that should remain under the sovereign eye of the state, and, additionally, free access to information and the power to do one's choices) is the perfect complement for a democracy, because it empowers citizens on their future. But some people argued that there was nothing wrong with China's stance on economics being dictated by the Government - now, after months of confusing messages, trying to cover the basics (a big market bubble in many sectors, powered by over optimistic projections), some investors are even being barred from selling stock positions they believe are over-valued. Capitalism needs a free democracy and free access to information to thrive. Easy.

Saturday, 15 August 2015

Paretto refugees

I will never understand a world that beats up a doctor to prevent him from selling sunglasses in a train station. The same world that pushed that doctor away from home and into selling those glasses, fleeing from war, corruption, misery. The world is far from a Paretto efficiency, and it should be our responsibility to improve it, maximizing every single person's potential and recognizing them as human beings.

Friday, 17 July 2015

A usual behavior when high currency devaluation is feared

It happened exactly the same in Argentina, during the 2000's crisis. People would opt to spend their money on luxury or durable goods, in order to secure the value of their current savings, instead of keeping it and face a possible massive devaluation. Businesses typically also do the same in these circumstances, opting to stock goods instead of keeping liquidity, for the same reason - securing the value of the money they have.

Wednesday, 15 July 2015

Brewing the perfect storm

Massively injecting money in the economy and cutting interest rates to prevent an already over-heated market to auto-correct is like brewing the perfect storm for an economy. Now, you do that on the third biggest economy in the world (I am considering the Eurozone as the first one, though most of the people would dispute me) and you are creating a really big global bomb. Let's see if China can come out of this one.

A spot on analysis on the Portuguese situation and what structural reforms still need to be done

From Augusto Mateus, former Economy Minister.