It's not a surprise to see Brazil overtaking the UK as the 6th biggest economy in the world. And it shouldn't be to forecast that Germany, France and Italy will slip to the last positions of the world's top ten until 2020. It is a long announced trend. The only way to actually prevent Europe from becoming a peripheral region is a strong economic and federal political union - that would actually act as one and boost the European Union (and its Eurozone) to the top position on the world's economy. Maybe the present crisis is a good wake up call on the need to actually work as one - if it survives all the pressures bearing on the Euro right now.
Tuesday 27 December 2011
Friday 23 December 2011
More work hours or more productivity?
I think this should be the real question, on labor hours in Portugal now, following the proposals that point out that every single Portuguese worker will actually work an additional 23 days next year. But, for me, that is not focused on the real question - putting more hours on the line is very different of ensuring the work done on those hours is actually building enough value. For me, policies in Portugal should be aimed at improving productivity - but, for that, Labor laws should be worked to allow firing for low productivity, and that still seems far away.
Monday 19 December 2011
My silence
I know I have been utterly silent these last few days. I have actually just finished my MBA last week, and am now enjoying a well deserved rest - but I'll be back!
Sunday 11 December 2011
Certificados de Aforro
I just watched a commercial em Spain, promoting the sale of Spanish bonds to Spanish nationals. This is a cheaper and safer bond sale, as the liabilities stay in the country, in the hands of "not very sophisticated" investors. And I can't help but recall the mess the previous Portuguese Government did 3 years ago, changing the cash flow rules of "Certificados de Aforro" (Portuguese National bonds that were sold to the consumer) in the middle of the return period - yes, changing the money investors were expecting to receive. The marginal benefit that was reaped then, was quickly burnt in "limited value added investments", and the credibility of such bonds was destroyed. It would be incredibly invaluable now, to be able to count on this instrument to gather Portuguese investors savings, keeping liabilities in Portuguese hands - at a cheaper price than selling similar bonds to foreigner organized investors. Bravo...
Thursday 8 December 2011
Eurogeddon: the 10 failures
I think this is a too tough title for this article - I am sure the euro will survive and we will be back to growth in 1 to 2 years time. Still, I really think it is worthwhile to read this article in cnn.com, by Nina dos Santos.
One of the things I love about the US...
... is the ability of actually sending politicians to jail or to successfully prosecute the Government. Judicial power is incredibly independent from political one. When I say this, I am not only comparing vs Portuguese Justice, but actually vs European one. Even in most European countries (including France) there is an unwritten protection of politicians. In the US, it is assumed the Justice exists to serve the Constituition, that serves the people - and it works, as we can see when Blagojevich, a former Illinois Governor (almost as powerful as the President of an European country), is sentenced to 14 years for corruption. How many examples like this do we have in Europe or Portugal?
Wednesday 7 December 2011
Dear EU leaders...
... please, stop trying to solve a problem with measures that don't address the real root questions. If you try to only build funds and ransom-deposits, you are not working on the real issue - the only way to grow Europe and pay for the present living standards of European citizens is to build scale through an real economic union and to leverage potential by defining clear productivity and competitive oriented strategies. Please, start addressing that and do it very, very quickly.
Yours sincerely,
European citizen.
Tuesday 6 December 2011
Think positive IV
- Portuguese parents play more with their children than any other parents, according to an Imaginarium study. Personally, I think this is a good sign for the present (as it means they enjoy having quality time with their kids) and future (I am for that this will reflect in the children development) http://www.publico.pt/Sociedade/pais-portugueses-sao-os-que-dedicam-mais-tempo-a-brincar-com-os-filhos-1523953
- Portuguese industrial volume sales are up +2.5%, with exports being the key driver (+14.1%), over-compensating the decline in internal market. http://economia.publico.pt/Noticia/negocios-na-industria-cada-vez-mais-dependente-do-exterior-1523964
- There is a €2000Ms superavit in 2011 public calculations, that will be used to inject money back to the economy.
Friday 2 December 2011
Steer by the stars
There shouldn’t be any doubt about the need to strongly curb public spending in
“It is time we steer by the stars and not the lights of each passing ship” – General Bradley
Wednesday 30 November 2011
Let's be very clear...
It is Europe that drives the environmental agenda, pushing for global climate deals and overall environmental sustainability. The current Euro debt crisis, weakens the European position and is really not positive for the ones who dream of a sustainable and environmentally friendly development and economy. And I think Durban conference will show it very, very clearly...
Monday 28 November 2011
Inflation?
Should the Eurozone consider the possibility of printing out more money, devaluing the currency, as a mean to pay part of its mounting debt and as a way to improve its competitiveness - especially of the small countries? This solution (that was a strong tool in the recent US plan to minimize recessionary effects) would harm Germany's living standard and create inflation. But... with about one third of the Eurozone in severe troubles (and the rest closing on the abyss) and the prospects of a slump in economic growth (prospects? Well, it is more like reality) it should be on the table.
Saturday 26 November 2011
Christmas lights
One of the things i was never able to understand were the christmas lights that are switched on across Portugal this time of the year. They usually draw small crowds every night, to the very centre of the towns. Still, the stores remain close, losing the chance of extra sales...
- enviado de dispositivo móvel.
- enviado de dispositivo móvel.
Thursday 24 November 2011
What have I been saying?
Portugal's problem is an economic one that is then related to a budgetary one. We need to control public spending (no doubts about that), focusing on return of investment in all public investments. But we also need to understand how we will grow sustainably and start doing it. Without this growth dimension, rooted in privat investment and a free competitive market, we don't stand a chance of being successful!
Wednesday 23 November 2011
Power Balance faces bankruptcy
Power Balance is a company that based itself on a claim that it couldn't prove - the claim an electrically charged hologram would provide extra-strength and balance to those who wear it. The company was already condemned to pay minor fines in some countries and to remove some of its claims - something it didn't do. Now, it faces a major law suit and risks bankruptcy. My opinion on that: a company based on a (probable) lie (unless it is able to produce the evidence it didn't so far) should not exist - we shouldn't allow businesses to compete on cheating consumers, but on good and value added products that correctly address consumers needs.
Tuesday 22 November 2011
There are opportunities everywhere
For centuries, Nazare waters were considered blessed for their fish but also doomed for its storminess and deadliness. Now, someone saw an opportunity there...
Nazare was made famous for the impressive images of its fishermen defying death on small fishing boats, rowing to overpower the waves. Now, those same waves might be a blessing, after they have been surfed - and probably considered the biggest waves in the world to have been surfed. Nazare's municipality seems to be (rightly) seeing this as an opportunity:
- to attract the big waves surfing best athletes in a world tour competition, and their entourages and on-lookers;
- attract surfing tourists;
- develop a safety business on search and rescue operations in stormy waters.
Opportunities are everywhere. We just need to understand and how to explore them.
Monday 21 November 2011
Friday 18 November 2011
Sovereign debt
Someone once wrote that "sovereign debt is the only kind of debt that is not paid by the taker, but by its sons". Which I think highlight the importance of Return on Investment, as a decisive tool in State budgeting. Sovereign debt should be taken mainly as a financing tool for long term projects, that have a positive ROI that sets them as priority for development and over pays for the financing it gets (and opportunity costs of the investment). That should be the motto and the rule of action we owe our kids.
Thursday 17 November 2011
At least, we are talking about productivity
Should labor wages go down or should working hours go up at the same cost? How does Justice inefficiencies and tax predictability affect Portuguese productivity? There might not be much of a dialog, but, at least, we are starting to talk about productivity in Portugal...
Tuesday 15 November 2011
Devaluation
I have written it more than a year ago - when we looked at productivity in Portugal and we compared it with Germany, Portugal had lost 20% productivity vs a common comparison point a few years back. This means the Portuguese worker was producing significantly less than a German one - http://my2centsontheworld.blogspot.com/2010/06/on-labour-laws-change.html . As so, it shouldn't come as a surprise the study that says that Portugal needs to devalue its currency on 22%. And if that is not possible, that we should decrease our wages accordingly.
For those that still didn't understand, one of the root issues of Portugal's economical crisis is low productivity. Our workers don't produce enough for what they are paid when we compare vs the other countries in the globe. It is tough to say it - but it is the reality...
Saturday 12 November 2011
Now what?
I must say, I keep looking at what is happening in the Eurozone with lots of anxiety. Especially after Italy finally (unfortunatelly) broke the 7% sovereign interest rate. I think we will have developments this week, and I am not very sure how nice they will be...
Wednesday 9 November 2011
Italy is just another sign...
... that we the euro situation solutions that are being implemented do not address the real problems. Eurozone needs to do 2 things urgently:
- implement an integration plan immediately, consolidating economical governance in Europe towards a single economic policy;
- start growing. Understand and implement a growth strategy focused on productivity (like Germany did) and competitive advantages, instead of inefficient public spending.
Europe is an amazing small region, with the best living standards in the World, and, probably, the most developed social, political and environmental conscious in the world. But, for that, we need to understand how sustainable our economy is to support it. We need to get our economy going!
Monday 7 November 2011
Stepping down
Many times, when a top politician resigns, stability shouldn't be a concern. Actually, that politician needs to stand down to break the stiff situation, to prompt changes, reforms that are much needed. It is not only a punishment - it is a recognition that to move things forward, some key actors need to be replaced.
So, Mr Berlusconi, please, move out...
Friday 4 November 2011
Think positive III
- Guimarães was considered a top 10 destination for 2012, by Lonely Planet
- the shoe manufactury industry in Portugal is a great example of turnaround of an old an uncompetitive industry, thanks a new competitive, global and branded marketing strategy
- Cascais and Estoril area establish themselves further and further as top destinations for sailing, golfing and corporate events.
Thursday 3 November 2011
Why did McDonald's fail?
Yes, it is true. In Bolivia McDonald's didn't succeed and had to leave the country by the back door. The trailer in the link below (all in Spanish) is about that extraordinary event (it is something that is not very usual...), explaining like price and products taste lead to a McDonald's failure.
P.S- Obrigado mais uma vez, Tiago, por me chamares a atenção para este artigo.
On Draghi note
The new BCE supremo, Mario Draghi, stated in a note that the Eurozone countries in difficulties should actually concern more about doing the necessary and adequate economic reforms. Mr Draghi, let me tell you that's exactly what we are doing now in Portugal!
Wednesday 2 November 2011
It is true...
I once read that everytime you take a 30 minutes detour of your way to go to a bargain gas station offering a 0.05 euros discount per litre on gas, you are valuing your time at €5 a hour. Please, check if you actually couldn't be doing something more valuable...
Tuesday 1 November 2011
On Greece's referendum
I fully understand why Papandreou stated it will run a referendum and why Greece wants it on the Eurozone debt pardon and solutions that were negotiated last week. He needs to put the power back on his voters hands. Or, at least make them feel it.
Because, actually, there aren't many solutions. Greece debt level and deficit, its chronical low level of tax revenues vs Governmental spend ruin any smooth solution. Greece is put between 2 choices: if it accepts the Eurozone solution, part of its debt will be pardoned, the country will move out of sovereign debt markets for the next 20 years and it has to live off European assistance; if it rejects it, it will default on its debt, don't get European support and not have money to pay its social policies and current public salaries - in a word, bankrupt.
Still, it is a sovereign decision. And I believe Greeks should do it directly. But it really is a high risk gamble without a positive outcome either way. And trully jeopardizing the Euro...
Sunday 30 October 2011
2 quick lines on books
A standard measure of a people's literacy is the number of books and newspapers it buys. Still, in an era of media transformation, great caution should be exerted, when looking at declining figures. Newspapers, nowadays, are read online (even the big editorial and journalistic articles and stories) and even books are nowadays bought and downloaded for Kindles, iPhones, iPads and the likes. Of the 8 books I bought this year, 6 of them were bought through Amazon - and that means all the traditional regular market studies will never consider them in their stats...
Friday 28 October 2011
Deja vu @ Apple
Some months ago I warned that Apple might letting themselves be cornered, just as they did at the PC wars - the article is this one http://my2centsontheworld.blogspot.com/2011/06/on-ios-and-apple.html . Now, fresh news that Samsung has overtaken Apple has the biggest smartphone manufacturer might be confirming it - the Cupertino brand by insisting on an exclusive and close operative system environment might be limiting its potential to a market niche on the long run. Let's wait and see...
Unemployment rate in Spain - 21.56%
Unemployment rate in Spain is now 21.6%, meaning 5 Million Spaniards are looking for a job and not finding it. This is a huge problem that needs urgently to be solved - it is choking growth, public books,... And it is not only a Spanish problem - all Southern Europe has it. Not solving it in the near future is boycotting the hopes of millions of persons - we need to kick start economic growth in a sustainable way, that allows for job creation and fuels it in turn in a virtuous circle.
Thursday 27 October 2011
Room to breathe
The major resolutions that were announced after yesterday's European meeting, though important and crucial for the eurozone survival, are not the answer to the real problems behind the nowadays crisis. They only provide some room to breathe, so that the root causes can be addressed, namely a deeper integration at political level (from an economical and financial perspective), resulting in stronger European institutions, and a better definition of the path to make the peripheral economies go back to growth whilst addressing the State burden in the economy. If we don't use this "oxygen balloon" to progress in these points, Europe will find itself in the same situation in a couple of months.
Tuesday 25 October 2011
Think positive II
- Portugal has an incredible potential on what regards tourism. From an American perspective, we have all they seek when coming for holidays in Europe - in a combination that is probably only matched by Italy (actually, we might even overtake them...). We have the best beaches in Europe, an incredible history, castles and monuments to atest to it, a friendly country, a tasty cuisine, mountains, forests, romans, arabs, great battles, a friendly and English-speaking people, great wine, incredible landscapes, an amazing town...
- We are one of the safest countries in the World;
- Despite being only 11M inhabitants, Portugal is home to 2 UN High Commissioners, the best Football Manager, 2 of the best Football players of the last 2 decades, 1 Literature Nobel Prize (though recently deceased), the CEO of Lloyds Bank, 1 Olympic Gold medallist, the best female triathlete of all time, 1 Off-Road champion,...
Sunday 23 October 2011
Pardoning public debt? No thank you!
The first thing people have to bear in mind is that a pardon has a cost - and in this case a huge one. Pardoning part of a country's debt will mean that the international sovereign debt markets will be closed to that country, with dire consequences:
- in Portugal, part of the current expenses of the State are being funded directly by debt. Cutting this would mean wages not being paid. It is as simple as so;
- the State would need to live out of its own revenues - as it should. But as it isn't. Doing that all of a sudden, in a hard stop, without any contribution from economic growth would mean the need to impose strong and tough measures - even tougher than the ones already in place (and that I think are already extremely hard and limiting);
- debt exists to fund investment. No debt would mean no investment - because it would need to be funded solely by the State revenues, and those would not be enough. Just ask Argentina how it is - though some people are painting a rosy picture of it nowadays, the curtail of investment is limiting its economic growth.
So, stay away of public debt pardons. We will need to fend it by ourselves, honoring our commitments.
Friday 21 October 2011
We need growth!
No doubt about it - so, let's be clear from the start. I support the measures that were taken to reduce the weight of the Public sector in the economy - both from a State Machine (you don't know? Go to my previous post) and privatizations point of view (ok, there might be a few that, in my opinion are disputable). But, I feel something is missing - we also need a growth policy. I am saying it very clearly here and there - we need to understand how we will put this country back to growth. Not by running into debt, but by being productive. And this is actually the only way to put the budget under control. And to generate employment. And to start a virtuous circle of growth.
Thursday 20 October 2011
Reducing the State
Many persons claim that the Portuguese State Machine (the administrative machine that runs the country from an executive point of view) is too big for the size of the country - and they are right! But people should understand what it means - it means to cut Public employees wages and benefits, to dismiss a relevant number of them, to cut committees, cabinets, ... and the people that work there. This is necessary and will happen - and it will mean unemployment, at least until the Private sector generates enough growth to absorb a number of these people!
P.S- It will also mean that people that remain working in the State Machine (is this my own expression?) will need to work more. Unavoidable and logical. Period.
Tuesday 18 October 2011
Think positive - I
- Ericeira is one of the first areas in the world to be declared global surf reserve;
- Portuguese wines are (finally) getting the attention and worldwide recognition they deserve, winning several international prizes;
- Azores is being constantly highlighted in travel magazines and blogs as one of the best nature vacation spots in the world.
- Portuguese wines are (finally) getting the attention and worldwide recognition they deserve, winning several international prizes;
- Azores is being constantly highlighted in travel magazines and blogs as one of the best nature vacation spots in the world.
All of these means pride! And it also means opportunities!
Friday 14 October 2011
On Consumption
Reading yesterday's Portuguese Government announcement on new measures ( http://economia.publico.pt/Noticia/principais-medidas-anunciadas-por-passos-coelho-1516383 ) I actually started feeling a chill. For personal reasons (not only for myself, but especially for the persons I really care that live in Portugal) but also for economy reasons. I think that the biggest question now is - how will Consumption hold?
Public servants wages were cut 14%, taxes are raising steadily, public investment is dropping - how will Portugal's GDP behave? Of course there will a contraction - the question is how big will it be? Consumption is key to GDP behaviour!
We shouldn't doubt that it was necessary to break the overheaten cycle of Portuguese Consumption - based on debt and not on productivity. We simply were spending too much above our own capacity - and that would clearly backfire. It was just a matter of time. But this strong break is a very heavy one. If Consumption breaks too hard, it might affect Portugal's (tiny) productive muscle (tourism, restaurants, specialty agriculture,...) and cause severe unemployment, causing social unrest, bla bla bla...
Some people (and see the attached post - http://www.portugalvistodefora.com/2011/10/distribuir-o-mal-pelas-aldeias.html ) argue it would be best to cut straight and fire 14% of public servants - that would enable a leaner and more efficient Public Administration (a much needed one, actually). I think the Government decided not to do it, not only because of civil unrest, but also for concerns on the effects of Consumption and unemployment subsidies - meaning a possibly stronger break on Consumption and no short-term adjustment on Public Spending, as subsidies would be paid still for one year. So, a possibly sharper decrease on GDP (and that means less taxes and higher unemployment) and a negative effect on Government budget evolution. Not a good measure then, though I thoroughly agree on the need to a sharper and smaller Public Administration.
But I am really worried. I feel the break we are applying to Consumption might be to strong and send us to a vicious circle we can't escape. My view on solutions? See it in the next few days.
Wednesday 12 October 2011
Soros appeal
If even George Soros appeals for a concrete political solution for the European crisis, politicians should listen. After all, the Hungarian made part of his fortune exploring the weaknesses of European common currencies, and, as so, knows very well what he is talking about when he shares his opinion on what is to come. Europe, the solution for these problems is integration - please, move in the right direction!
Tuesday 11 October 2011
Systemic crisis
I do have to agree with Jean-Claude Trichet - the inability of European politicians left this crisis spiral to become systemic, now jeopardizing European stability and economy. The question is, apart from words, what is being done on this?
Wednesday 5 October 2011
Time is time, right?
A very interesting article (thanks Tiago) on time management, that really pops up a "I recognize this" sign in my head. Worthy to have a look at, especially as it hints at time management from a "Return on Time" perspective - http://www.entrepreneur.com/article/219553
Monday 3 October 2011
Tiger Woods - how brilliant would that be?
You know when a player has won everything there is to win, was cheered by all the fans of that sport and is incredibly beloved by everyone and cast as an example? How much excitement can a guy like that still bring, how much extra interest and revenue can he still generate? If he wins, it was expected, if he loses he played bad - nothing very crowd grabbing, though! Or, even worst, he is an incredible player, has done all of the above, and suddenly, he loses his face due to ethical reasons and everybody starts hating him - if he keeps winning, how much interest can he get, how many sponsors could he still draw in?
Now... let's imagine that man talent seems crumbled to pieces, he can't get back on the winning track again, he loses, he slips out of the top players list, he becomes a mess! Isn't that the set for a great comeback? One that could energise the world of that sport, to gain him the focus of attentions, to ressurrect him in front of his fans, to make them forget all his moral and ethical problems and draw sponsorships again? Wouldn't that be a great story, Mr Tiger Woods?
One of the most evident...
... messages from the current Euro crisis is that the European governance model doesn't work. It is too slow, bureaucratic, costly, with too much room for interpretation and not enough weight on the common decisions. Almunia is right on his address, and, if we don't act on it, then the Euro will be a weak and failed project - and Europe will slip on its global importance, with all the consequences that will have from a quality of living standpoint...
Friday 30 September 2011
On credibility
When I look at the words said by Isaltino Morais (a Portuguese politician accused and sentenced on corruption charges, that stills awaits arrest on a technicality), I have to think on the credibility of the other clients he represents. Many people don't understand the importance of credibility of its image to their business - and Arthur Andersen was amongst those. On businesses like consulting and law, an image of rigour, independence, and honesty is as essential as competence. And some associations and words are just bad to the business (if anyone in Portugal has any doubts on this, look at Romeu Francês...).
http://www.publico.pt/Local/isaltino-morais-esta-preso-mas-defesa-alega-erro-do-juiz_1514376
Friday 23 September 2011
How does Skype make money?
It was a big question for me? Paid calls are only a fraction of free ones, there is no visible advertising,... so, how do they make money?
This link is a bit old, but (thanks Gaurav, for sharing) it answers some of the questions.
http://voiceontheweb.biz/2009/03/skype-business-model-revealed-at-ebay-analyst-event/
Now, we can discuss its sustainability when competition is looming...
Thursday 22 September 2011
At last!
It seems the Portuguese Government is to propose changes in Labor Law. The main change is to allow firing an employee who fails to meet objectives. This is a game change alteration - aimed at (finally) give Portuguese productivity a strong push forward! A must do!
Wednesday 21 September 2011
No new news
The study that states that China is buying Europe (through debt and companies acquisition) is hardly a surprise. And it only shows how by not embarking fully on a common project, Europe is slipping steepily to irrelevance in the global arena...
An interesting and very relevant question
Should Government members be criminally responsible for bad country management? This is a very interesting and relevant question, especially in Portugal, where a number of situations is becoming visible, namely on huge budgetary deficits that were hidden and very doubtful top management nominations in state-hold companies. I am actually for a different wording. I am for holding legally responsible politicians not on bad management (a dubious expression on its own, subject to subjective interpretation, difficult to prove and that might be used to obscure political intentions), but on its processes - I am for legally prosecuting hiding relevant information from the public, for actually going after corruption cases,... And most of it is already put into law - we don't need new ones on this, we just need to act on them!
Monday 19 September 2011
A good example
If we looked at the Portuguese shoe industry 15 years ago we would step into a problematic sector. Though usually considered as a stronghold of good quality products, the absence of a marketing strategy impelled the manufacturers to only sell shoes to some international brands, that would rebrand them as their own and sell them at a premium - capturing most of the margin. It was a huge problem, as the Portuguese manufacturers margins were thus being mercilessly squeezed...
When, I look at what some Portuguese companies have done, I feel proud. And I feel even more hopeful than I usually am. They listened and learned. They've built brands, anchored in the good quality products they were manufacturing. They introduced design. They were innovative. They relied in an extremely experienced and cheap labor force. And they started building operations that would allow them to go directly to their markets and sell the products directly to retailers. They won clients by meeting their demands, by adapting to their requests. They directed their efforts not to less demanding and easier markets (like Spain), but to the really difficult and demanding ones, like Germany and Holland - knowing if they could make it there, that would be a good business card everywhere in the world. They are winning! And I feel proud of them!
Friday 16 September 2011
Attention, Europe!
While it makes all the sense to solve the public spending problem (that arises from inefficient expenditures), I think you are forgeting about the other side of the problem - and you can't repair the budgetary problem without solving this. So, Europe, what are you planning to do to revamp growth? I recall you that growth (efficient growth, ok?) will generate jobs, well being, more taxes and will diluite your existing debt. The main problem in Europe is lack of growth - an economic problem. The budgetary one is just a consequence. So, please, don't forget to (whilst addressing inefficient spending) focus on how to generate good and sustainable growth, will you?
Regional expenses
It is interesting to understand that in both Portugal and Spain the regions are spending well above the central State (on a per capita and GDP basis) and are actually a severe obstacle to the public administration reform. When you look at Madeira in Portugal (its public debt level / capita is twice the Portuguese average...) or that 12 out of 17 regions in Spain are above its deficit targets, it is difficult not to think that maybe those models need also to be redrawn - and, beyond any doubt, better controlled.
Monday 12 September 2011
Highlight the differences
Portugal needs to make it very clear that is on a very different route, when comparing to Greece. Portugal needs to highlight that we are actually starting to succeed in putting a halt to the uncontrolled deficit, that we are all taking our sacrifices to solve this issue, according to a layed down plan, that aims to economic transformation. And we need to make this very clear to all the global stakeholders (as Ireland is doing!). Because... Greece is probably going to bankrupt...
Tuesday 6 September 2011
Comparing costs
In the end, actually, it should all come down to this - what is the cost and the benefit of supporting the Euro. And an UBS study says it all - it costs less to help Greece, Portugal and Ireland that all the associated costs of terminating the Euro. And, as the same study points out, besides costing less, it also doesn't hinder future European growth - actually, it opens over-recovery perspectives. I am strongly for this opinion - agree with it completely!
Thursday 1 September 2011
Best Guerrilla Marketing company in the World
Apple has one of the most efficient guerrilla marketing strategies in the world. After company fueled rumours and leaks on technology and gadgets media and blogs, now, another Apple worker forgot a iPhone5 prototype in a bar...
But, the fact is it works! Apple is probably the best marketing company in the world (sorry Google and Coke), as it is able to create an incredible hype and demand to their new launches - whilst blocking cheaper and equivalent competition. The brand loyalty Apple created over the last few years is amazing - and so, kudos to them!
Tuesday 30 August 2011
Limit to deficit level in the Spanish Constituition
Spain announced that is considering a Constituitional amendment to limit the annual deficit percentage - a move that is naturally welcomed by the sovereign debt markets. My only point is that they should avoid to fall in the same trap as the US. Though there is a Constituitional debt level (as part of the Laws to protect the future Citizens of the country), that level is permanently raised whenever it is necessary, rending it inoperational - see this article for more information http://my2centsontheworld.blogspot.com/2011/07/us-debt-limit-angle-of-thought.html
Now, of course a deficit and a debt level limits are different, but, in the end, it will always come up to how well will that be operationalised in the real daily world. And how will Spain make the economy grow without the debt doping...
Wednesday 17 August 2011
Have Sarkozy and Merkel been reading this blog?
I doubt it...
Still, as you might have already realized, I look at the "stronger financial european government" point with good eyes. My only concern is that they link it altogether to a new tax - and, Mr Sarkozy and Mrs Merkel, if you would read this blog, you would know that we should primarily strive to cut unproductive government and european expenses...
Tuesday 16 August 2011
That would be a very bad signal to the markets, Mr Soros
George Soros stated that Portugal and Greece should move out of the Euro. In a way, I understand his perspective. But we shouldn't have any doubt - if the EU does it, it is passing a terrible sign to the market. The sign that it will allow attacks to break up the currency union and generate speculative moves against the Euro and the new coins. It would be an incredible feast for currency speculators... The real answer is exactly the opposite move - further union, moving to "de facto" financial and stronger political "europeization".
Buffett's scream
Warren Buffett's cry on The New York Times, concerning the tax benefits that favour American millionaires is a mild surprise - though everybody knows of the filantropic concerns of Buffett's and his sense of justice and opportunity, it is still not very common to see someone asking for more taxes on himself... Still, Washington politicians should really listen to this cautious (remember hte dotcom craziness? He said that he would never invest in a business model he didn't understand. The bubble burst proved him right) and opportunistic (he loves to buy during recessions) man, the third-biggest forune in the world. If he cries for more taxes for the super-rich, it is because he believes the benefits will far exceed the costs - and he usually knows what he is talking about...
Thursday 11 August 2011
Riots
A few months back, looking at youth unemployment situation throughout Europe, I warned that troubles would be coming if Governments didn't find a way to act on. Spanish 25M movement (that is largely peaceful) and Britain's riots over the last few days are (unfortunately) confirming it - and may be only the first, if countries don't act to solve the underlying economical (lack of perspectives for a large group of young people) and social issues. It is up to everyone to demand not only swift justice (we can't forget that in the UK, crimes are being commited and the people practising them should be brought to trial) but also to address the motivations behind them. Not on a paternalist way - just on a pragmatic and democratic fashion.
Tuesday 9 August 2011
W
For many months, a discussion was raging, on the path to recovery after the 2009 financial crisis - would it be linear, steeper or smoother than predicted, and so on. We now know its shape - since this weekend, the path for recovery is a "W", with a new recession following a number of months of recovery. But it is important to remember that a "W" also ends in a high note. Though we are probably heading now to a few more months of recession, in the end, we will readjust and grow.
Friday 5 August 2011
Wrong
Whoever is blaming the Euro crisis for the recent drop in stock prices is (at least to some extent) wrong. The concerns about the Euro are only partially to blame. In my opinion, the markets are actually more worried about the
http://economia.publico.pt/Noticia/wall-street-com-pior-queda-desde-fevereiro-de-2009_1506265
Wednesday 3 August 2011
A few thoughts on US Sovereign debt
"Is US debt sustainable?" This is the question that is in everyone mind these past weeks. With a 90% of GDP plus debt, a struggling economy and huge Governmental spending, the answer is probably not. And that drives a few thoughts on itself:
- how was it possible to move from a Governmental surplus in the Clinton era to this situation? Well, the answer combines tax cuts (done by the Bush administration on top income) and an escalation of costs, namely military - all the show-off on anti-terror efforts and fighting 2 wars in Iraq and Afghanistan have huge costs! That drove the US budget towards disaster... And enhance that with a complete lack of attention to American competitiveness and economic situation.
- So, this actually means that the true responsable for this situation is really the American voters. Congratulations for prefering George W Bush to Al Gore and for reelecting him when you already had all the information about this huge disaster...
- What to do? Actually Obama started by doing the right thing in some dimensions - he was able to coordinate the pull-off from Iraq and he is doing the same thing in Afghanistan. He is also trying to stimulate the economy - but through subsidies. The problem is that US is losing competitiveness fast, and needs strategic direction - but how can you do it with a split Senate and Chamber?
- If US debt is not controlled, we should expect to see debt rating degradation. Actually, nowadays, US debt is probably already overvalued - I strongly doubt that it should be an AAA title. But debt degradation will mean that interests would rise - and the consequences would be devastating for all the individuals that have massive credit (housing, cars, personal goods - and we know how americans are indebted), banks that borrowed them (we should expect individuals defaults to hit new highs) and companies (both from a crash in consumption of goods, but also due to higher investment costs). A debt degradation of the US economy would throw it off a cliff. The point is it seems unavoidable...
Wednesday 27 July 2011
Portugal's justice problem - a conceptual view
This is a great interview published to the Scientific Coordinator of the Portuguese Permanent Justice Observatory in Publico, a few months back. It offers a very clear summary of the issues that now hamper Portugal's justice development. It is in Portuguese - but is a great and recommended reading.
Are rating agencies using the same criteria?
I think this is a very valid question when you look at US and European debt situations.
Actually, US situation is not that different from the EU, namely when one thinks:
- US Sovereign Debt vs GDP was 92% in 2010, actually the same as Portuguese one (91%) - source IMF;
- The situation is especially critic in some of the States - with parcial Governmental services closures in California and total closures in Minnesotta in July;
- Unemployment rates are climbing or at highest levels;
- Many US States actually have strong competitiveness issues, that are only masked away by the others strength (like what is happening in Europe, with Germany and Portugal, just as 2 examples);
- A single currency in both regions don't allow for Monetarian adjustments to boost competitiveness (oh, I am sure Louisiana would love to be able to depreciate its currency, aren't you?);
- Federal political inabilities are hampering the speedy resolution of the underlying issues jeopardizing the economy.
So, if actually the US are not that different from Portugal, Ireland and Spain, are rating agencies actually using the same criteria? I believe the reasons that hamper US Sovereign Debt rating degradation, but I am really feeling that though European economies have issues, they aren't as bad as justifying the current ratings given by Moody's, S&P and Fitch...
Tuesday 26 July 2011
US Debt agreement failure - consequences in a nutshell
So, a default on the World's largest economy and debtor?
I think we would see a credit rating degradation of US bonds and therefore consequences on credit cost would that would rise in the US (and on other regions in the world that are exposed to US sovereign debt), making it more expensive to get credit. But this would also affect current credits, as most of their spreads are set vs floating indexes. This could then prompt a new wave of defaults by individuals as well as businesses, creating a possible recession.
This is the simple scenario - and we all hope not to understand if it would be like this.
Saturday 23 July 2011
On the importance of justice
A very good set of articles in "Portugal visto de fora", about the importance of Justice and why it is hampering Portugal's development. You will need to read Portuguese... I will just be highlighting two of these articles - but they are six of them, and all very good!
http://www.portugalvistodefora.com/2011/07/porque-democracia-e-menos-importante.html
http://www.portugalvistodefora.com/2011/07/democracia-e-menos-importante-que-o.html
The right answer
"You will not destroy us. You will not destroy our democracy and our ideals for a better world." - Jens Stoltenberg, Norway's Prime Minister, on the wake of yesterday's terror attack.
This is the best answer. And we must always walk the talk, especially on such a strong statement from whoever attacked Norway.
Friday 22 July 2011
Is this enough?
A number of measures were agreed yesterday at an European summit to put a halt to the continuous climbing of interest rates in Southern economies and thus protect the Euro. Those measures though important for the concerned States, are but baby steps. The only solution to the nowadays crisis comes in the form of an European-wide economy - including an European Finance minister and coordinated policies, namely taxes, incentives and so on. The root cause of nowadays crisis is that lack of unified economy - and we need it if we want to keep a single currency.
http://economia.publico.pt/Noticia/banca-empresta-37-mil-milhoes-para-nova-ajuda-a-grecia_1504156
Thursday 21 July 2011
Normal?
Should we, voters and taxpayers, consider it normal that elected politicians can earn not only their rightful salaries but also pensions proceedings? Just a question, as it comes out of our pockets...
Tuesday 19 July 2011
The US debt limit - an angle of thought
One of the things I don't understand on the American budget discussion is actually the point that is central to the discussion.
So, the US have a law (it is an amendment to the Constituition, right?), that imposes a debt limit. Actually, that makes sense, because (theoretically) it forces Governments to keep their operational expenses under control and public investment productive. In a way, it would be a preventor to what we are seeing in some European economies.
Now, it seems for years, that actually the US Governments (don't blame it only on Obama's) didn't care too much about this law and its limit. And now, the focus is in raising the limit, without attacking the underneath causes. We are even seeing (the dreaded) rating agencies asking for that raise.
The point is - ok, the US now needs to raise the limit. But shouldn't the US focus on actually understanding how to keep their (huge! - % is not that different from the Portuguese one...) debt under control?
Thursday 14 July 2011
Not a surprising move
As expected, Banco Espirito Santo, one of the biggest Portuguese banks and the one who retaliated Fitch rate cut a few months ago, has started contacts to be rated by Dagong, the biggest Chinese rating agency. Not a surprising move in my opinion, given the latest moves by the American rating agencies - it is actually better to also diversify the portfolio of rating agencies to spread out biased evaluation risks...
P.S- And I have written something similar relating to the European financial sector - it is a few posts below...
Turkeys
Oh no, another quote! Yes, it is true - I've learnt it today, thanks to Alistair.
"Turkeys don't vote for Christmas" is a great sentence to apply to so much on Politics...
Wednesday 13 July 2011
Juggling balls
"Imagine life as a game in which you are juggling some five balls in the air. You name them – Work, Family, Health, Friends and Spirit and you’re keeping all of these in the Air.
Thanks for the quote, Wayne!
You will soon understand that work is a rubber ball. If you drop it, it will bounce back.
But the other four Balls – Family, Health, Friends and Spirit – are made of glass. If you drop one of these; they will be irrevocably scuffed, marked, nicked, damaged or even shattered. They will never be the same. You must understand that and strive for it.” Bryan Dyson (CEO of Coca Cola)
Monday 11 July 2011
A shout!!!
The only way Europe is gonna climb out of this mess is to move forward on economical integration! We need an European Finance minister! And we need eurobonds now, to stop the degradation on Spain and Italy's finance! And now is now!
What should Europe do with the rating agencies?
Actually, probably the only thing Europe can do is to (how ironic is the world, right?) support Asian rating agencies right now, whilst ensuring support for its own European sponsored agency that would need to come next year (too late?)...
Sunday 10 July 2011
Unions
The present crisis situation in Portugal, with high unemployment, job benefits cuts and an overall recession should be considered the perfect fuel to enhance union power recovery in the country, reversing the years long decline in the number of associates. Still, for that to happen, unions should have gone through a major transformation years ago - the fact is the rhetorical speech without any concrete and modern proposal only undermines their position. Adding to that, the fact that the general work population doesn't trust unions, as they are seen more as a political tool for some parties than actually working and defending the interests of their associates. As so, the next few years will probably be another lost chance for Portuguese unions.
Friday 8 July 2011
Portuguese Parliament - contacts
A key concept in democracy is that deputies are exactly that - they are just the representatives of the People in the parliamentary assembly, and, as any employee, should be held accountable. As so, let me include here a number of key contacts, publicly available through the Portuguese Parliament website. I strongly encourage you to contact these groups, and hold them liable for their actions.
| Grupo Parlamentar do Partido Socialista | Palácio de S. Bento 1249-068 LISBOA | |||
| Tel.: (linha verde) / Fax: 213917444 | ||||
Enviar e-mail  |
| Grupo Parlamentar do Partido Social Democrata | Palácio de S. Bento 1249-068 LISBOA | |||
| Tel.: (linha verde) Fax: 213917443 | ||||
Enviar e-mail  |
| Grupo Parlamentar do Partido Popular | Palácio de S. Bento 1249-068 LISBOA | |||
| Tel.: (linha verde) / Fax: 213917433 | ||||
Enviar e-mail  |
| Grupo Parlamentar do Partido do Bloco de Esquerda | Palácio de S. Bento 1249-068 LISBOA | |||
| Tel.: (linha verde) / Fax: 213917459 | ||||
Enviar e-mail  |
| Grupo Parlamentar do Partido Comunista Português | Palácio de S. Bento 1249-068 LISBOA | |||
| Tel.: (linha verde) / Fax: 213917432 | ||||
Enviar e-mail  |
| Grupo Parlamentar do Partido Ecologista "Os Verdes" | Palácio de S. Bento 1249-068 LISBOA | |||
| Tel.: (linha verde) / / Fax: 213917424 | ||||
Enviar e-mail  |
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