The European Union needs to clarify its vision of the Euro:
- what will be its role and strong points
- what will be the monetary and European tax policies behind it
- what will be the governance model behind it
- what will be the shape of the Eurozone and the role of each of its states
Without this, the Euro will be doomed to fail - because nobody will understand what is it for...
http://economia.publico.pt/Noticia/presidente-do-bce-pede-aos-responsaveis-europeus-clarificacao-do-futuro-do-euro-1548328
Thursday 31 May 2012
Tuesday 22 May 2012
Transport Tycoon?
In Portugal ,
the transport sector is dominated by the State, who owns the only infrastructure
railroad company, the only railroad transport company, the major bus companies
operating in the major cities, the metro systems, the boat transport in Lisbon , the major
airline,… Except for TAP (the airline) that has been worked on to be privatised
and that is efficient (far from a good example, but a fair one,
never-the-less), all of them are crippled by strategic indefinition, lack of
sustainable business models, being a pawn in political games, politically based
management teams, unproductive unions, and the list goes on and on… This
perfect storm of indefinition has actually driven these companies to be
numerous and incredibly inefficient, sinking them into heavy debt – that has to
be supported by the State (aka the taxpayers, aka all of us). It is thus urgent
for the State to actually start the redefinition of its presence in the
transport sector, merging companies, terminating others, streamlining its
structures, putting professional and capable managers running them,
liberalising prices. And, actually, understanding what role it wants to play in
the transport area – which for me, seems quite clear: the State should not own
any operator, but should consider staying in the infrastructure area. Those are
my 2 cents on the State as a transport tycoon in Portugal .
A quick line on Facebook shares
Facebook lost around 11% of its value on a single day after it went public. This is probably reflecting concerns on monetization of its consumer base - a long anticipated problem (that actually should only raise eyebrows on why to additional shares at the high-end of the price range). And a problem that is still not exclusive of Facebook - most of the big digital and social companies are still struggling to ensure revenues that match its consumer base (we are talking about names as Twitter, Pinterest,...). That is why I always talked about a possible bubble looming in these area of trade. Warren Buffett once said that you shouldn't invest in a company with a business model that you don't understand how to it is making money - a very good warning that if nobody knows how the company is making money, then, probably, share price gains are being made through speculation. Which is not good...
It will be interesting to follow Facebook over the next few months and understand market trust on the company. But let me disclose it to you - yes, there is a share price that will make me buy Facebook shares... (I will just not tell you which).
Monday 21 May 2012
8th
Portugal is the 8th European country in terms of tax burden - and that is having dire consequences in terms of choking economic growth. The solution can only be one - decrease the size of the State and its weight in the economy. We need that to ensure future growth - but it is a painful and long process...
Thursday 17 May 2012
You know I agree with him
Europe needs a growth strategy, as Hollande and Moscovici are saying. And I agree with that. But that shouldn't be understood as a way to invest in lax ROI projects. Budget rationality should still be at the core of investment.
http://economia.publico.pt/Noticia/franca-nao-ratifica-o-tratado-orcamental-sem-medidas-de-crescimento-1546464
Wednesday 16 May 2012
White Elephants in Spain - a reminder
This week's Time is highlighting Spain's white elephants - the cheer number of expensive cultural centers, airports, high-speed rail connections... I have already talked about them here
http://my2centsontheworld.blogspot.co.uk/2011/06/spanish-elephants.html . But I think it is useful to remind them, as symbols of what happens when there isn't a strong Governance spending process - most of them were actually built and promoted by autonomic regions budgets, based on lose assumptions and with regional pride and voters as their main aim. And what happens when projects don't have a Return On Investments menthality at their core, supported by sound calculations and educated assumptions. It is a common mistake - but with dire consequences. And in 5 years time, we should still remember this lesson.
Tuesday 15 May 2012
A benefit of global teams
Working with people from all over the world, all seated at the the same table, holds an amazing benefit - we can understand how different countries, cultures, people feel and live the same situations. Listening a Greek and a German talking about the euro crisis, understand the Indian - Pakistani riff is not that important for the people, share the hardships of non-European nationals to travel to so many countries. It is an amazing and eye-opening experience!
Friday 4 May 2012
Henrique de Castro's interview
It seems I am in a positive mood. Again, I identify with many of the points Henrique de Castro (one of Google's Presidents) highlighted. Namely the need to rethink the return Portugal offers investitors, the need to refocus university work towards output and importance of private investment and initiative and of free-will. It is a good interview - very pragmatic.
Thursday 3 May 2012
Yes, I agree with Mario Draghi
As you know, I believe Europe needs to reduce non-productive expenses, while supporting higher competition and consumer power and defining new productivity and growth strategies. Let's do it?
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