In the normal financial system, which are banks, the institutions have all owners are represented by the respective boards of directors. These tips caring for their own benefit, not to lend to companies that are insolvent or can be assumed that in future it is found that there are problems, provisions such loans, and proceed to execute warrants that have little if that exist. But the bankers can not do what they want with that handle credit and the bank is not theirs. Are accountable to shareholders, depositors before (because misuse of credit can break the bank and lose all their money) and the public finances if, for example, is considered a loan as an expense in the knowledge that would not be returned.
That was the case of Mario Conde who was sentenced to six years in prison for paying 600 million pesetas for a company, Argentia Trust no guarantee (which later proved that it then distributed the money among various Spanish politicians to influence in governmental decisions in the interests of Mario Conde was not the reason for his detention but he gave the money without collateral Banesto). I know that in recent times and bankers in some countries have ignored these rules and to cap it had not been punished but for the moment in Spain are not in that situation and all the banks are reporting profits.
Unfortunately, the savings in the hands of local politicians, it can grant credit without reserve and without running guarantees, especially political parties, or can not?, Or may not be? If it does occur quite frequently ... And now it is intended that these boxes are made even stronger, uniéndolas. No doubt it is a good solution for their survival (in exchange for thousands of layoffs, though) but also magnify the problem of those entities whose management is so unclear.
The boxes have lost their land, opening branches around the country and even have the largest investment abroad. There is a market Murcia, La Rioja and the Basque, a European level in the category regionalistic no sense. It could be said of its social function, but this is a vague concept which is not quantifiable and spending that could be replaced by an increase in tax relief to certain tasks such as banking sponsorship of culture. If you become the greatest pass two things: whether it is within a community of its economic importance is so great that the economic and political autonomy is even more confused if we unite and boxes of different communities, how to ensure balance, how to unify if the political influence of each region is different, and still remain the same ensuring that Cajamadrid-for example, is just in its social spending with Murcia case to merge with the Fund in Murcia? I believe the management problems worsen.
(more ...)
Written by Droblo on December 3, 2008 with 294 comments
Read more articles on papers.
The black money is one that is not controlled by the authorities and may be either legal activities (the smaller, usually occurs when writing a retail value of the house is actually traded or not declaring income from a rental etc.y is the easiest is detected) or illegal activities, the more damage it does, both the Treasury, because the volume is huge defraudatorio, as by the social implications of such illegal activity.
Outside these two groups have prostitution in most cases is simply a alegal (unregulated) but worth a huge amount of money that escapes the tax (€ 18,000 million a year) and is known for and all accepted. I wonder why? If we know that some people have an income for work they do, why not pay? And we go into the hypocrisy, the obvious collections of laws and so obvious that having social security, contracts and even the very existence of something that seems to many like the inconvenience that some people rent their bodies to others for a limited time .
But the most serious cases are those that include the black money from the trafficking of arms, drug-screen companies that never paid taxes, terrorism and so on. All these crimes and generate some more money, mostly, we know where he is. Yet we continue to prefer to pursue the camel neighborhood or the owner of the club Puti before tackling the root of the problem. I speak of course of the tax.
These are areas (in some countries, sometimes not) to protect the identity of the companies that have and / or bank accounts there. It is clear that the companies that have and / or bank accounts in a tax to the Treasury seeking to hide something in his country. We all know and also what the authorities know. And we should not go too far because there are even within the European Union but outside its jurisdiction as is the case of Gibraltar as a British territory, 1 (in this page you can view the list of tax havens).
Why is allowed to have sites where they can escape the capital would do much good in their respective countries is something we do not know but it is terribly unjust punishment to those who suffer because of our lawful activity and charge for payroll, we ultravigilados by Treasury. However, apart from the actual crime prosecutor, the most serious and most unfortunate, and of course, the most hypocritical, it is possible, because if these paradises exist and could not have control of large flows of money move in the world would be much easier to break the networks of illegal activities. Drug trafficking, as we understand it at present, would disappear, the money diverted to terrorist groups is quickly discovered, that is, win in the economic, social, political ... as not only increase the income of the Treasury, disappearance of entire networks of subversive activities.
Thus, there is no excuse. Why wait?
PD - The official liaison USA every month we see the source of the flows of foreign money to invest in assets that country. It is very interesting in itself but what is striking is so high because they receive the "Caribbean bankings (tax course where many Americans have invested their capital assets without paying taxes in their country of Treasury)
Written by Droblo on November 26, 2008 with 336 comments
Read more articles on papers.
Personal comment.
On Friday, the markets appeared to throw a sense of strength: General Motors touched lows and reported that no government assistance would go to the bankruptcy and unemployment in the U.S. grew in two months in more than half a million people and yet the stock market rose. However, if one takes into account that since 1896 he had never lost in both the Dow Jones three days after a presidential election, the SP down together on Wednesday and Thursday is the highest in two days since 1987 and the rebound technical after he was so down-low volume, and could give an explanation and it was feared an exception to the weekly trend. The large package of measures the Chinese government of the weekend (from $ 600 billion is the fifth of GDP, which would be another and a few cartridges) extended this feeling positive in Asia and Europe on Monday morning with the exception of Ibex. There's no joy until the afternoon of Thursday in USA.
The bank Santander on October 28, at the mouth of its CEO Alfredo Sáez, denied need more capital. On November 10 announced an expansion. In these few days has been convinced of the impossibility of selling the Bank of Venezuela, shared ABN assets, Cepsa, the fund management and insurance, the price demanded. In short, he has bought unsold before and now has met with a liquidity problem ... (safe somewhere caught in a mortgage-bridge that sounds something) and expanding it is costing all shareholders million in market capitalization euros. And serve to illustrate what is happening with the economy and that makes this crisis only: no matter how much lower interest rates, including EURIBOR, if that cheaper finance is not paid and if there is interest in using this possible liquidity to invest. Until Santander wants to sell assets and unable to do so raises the liquidity of its shareholders or attempts to capture new ones. Santander can do that, but how many companies can do the same, how much funding will get lower rates?
I attached two charts USA, with shading on the cycles of recession, one is the unemployment rate in the U.S. and its forecast to reach 8%
The other is the ISM manufacturing index:
In Spain the situation is similar at other times we have seen much worse economic data and if the figures do not even the bank bad debt is still worrying (http://www.economistas.tv/la-morosidad-oficial-no- is-so /) As shown in the figures economic cycles have been more desperate, it might be a cyclical crisis and give more reason to feel optimistic that you can leave it in months. But it is necessary to recover the credit market, without this condition will worsen and data, as we have seen this week, the suspension of payments that began in financial, banking and then went on to insurance companies, will reach shops and industrial companies.
And that perception is destroying the economy and stock markets, the beneficial effect of lower interest rates. If we add to that the fact that I said the need to sell assets in order to have lost value of cash, accounts for the balance of the week. The best quality of the bag-your-liquidity now is one of the greatest obstacles to the upward trend since it is one of the few markets to draw cash if needed, even at the level of citizens is even easier to sell shares to lose a lot to try to sell another property. As positive aspects of this bad stock weeks, two factors: the low volume decreases (although it can also mean that we remain far from the capitulation later also from the ground) and the finding of the telecoms sector as a safe-to-date available. Now we have to have faith in the famous reunion this weekend but particularly in the aspect I have more faith in market potential manipulation bullish next Friday 21 expiration of the effect of some future (which is the Ibex) and options almost all indices. In fact, statistically the next weeks is a very friendly bags.
Finally, it is very important, despite the rebound yesterday afternoon, falling crude oil (although the effect of the weak € and other causes less understandable its effect on the price of a liter of fuel is less noticeable), gas natural and, in general, all the raw materials. This is no longer seen as something positive because it's getting the bags in many economies where there is much money ... the most important example is Russia. You may see manipulative maneuvers to prevent the oil-icon of all raw materials and lower-stop-confident person to make a speculation in a possible rebound in oil prices and gold. (More ...)
Written by Droblo on November 14, 2008 with 337 comments
Read more articles on papers.
Since he is no longer the "gold standard" and a ticket does not represent anything physical but simply faith in the issuer has formalized the old adage that says the economy is based on trust. While there is confidence the economy may be good but there are points "dark." Why? Because if consumers and businesses and banks to create a good future, spend, invest and provide and this will generate well-paying jobs so the virtuous circle will continue to operate and continue to spend, invest and banks to finance projects future.
For the trust do not miss the speeches of political and economic are mostly reassuring because if you lose falling economic growth and enter a vicious circle: consumers do not spend, companies earn less and reduce their investment and banks because they get the credit delinquencies increased. The order may be reversed as is happening with the current crisis: banks reducing credit to the outbreak of the housing bubble and late payment by bad investments, under the credit to businesses and consumers, scared by all this, spending less and therefore less to buy companies that reduce their profits and, ultimately, generate unemployment. Besides the problem in society that this generates, it is evident that if unemployment rises and companies and banks earn less income is lower because of the administration are paid less taxes while increasing spending on social needs.
All this is very basic and there is nothing original but a factor that can undermine trust and that usually goes unnoticed: the veracity of official data. Not because they are true or not, but for how to calculate them. And it would take pages to explain how such industrial orders data is distorted USA orders each month with government war machine or the management of the Department of Labor with the monthly employment data ... there are many examples. However, one of the most striking to me is the calculation of the CPI.
Take the example of Spain, whose CPI in 2007 was 4.2%, which should mean that average prices rose by 4.2% but it is clear that a television, for example, do not shop every week or even every year but the milk (which rose 31%) is almost daily, or bread (+14%) and fuels (+16.2%). Some say that the perception of these costs-to-be everyday makes us believe that inflation is higher than what it is but I think that is the weighting system which is not fair.
How is it possible that when home prices rose an annual 30% inflation was only 3% if half of the household budget is going to pay your own? Let us go further: In the 20s, share prices in the U.S. rose an average of 3.5 times in five years, but prices of consumer goods did not vary significantly. Should we conclude that there was no inflation? Why? Why exclude the inflation rates, for no reason, financial assets? If low interest rates we had in Spain in recent years have afluido, rather than mortgage credit, to consumer credit, the CPI would have fired (instead of housing prices) and it would have suffered Official inflation.
Current weights based 2001 and adjusted slightly each year. The latest data available are these:
| Groups | CPI, base 2001
2002 weights | CPI, base 2001
2003 weights | CPI, base 2001
Weights 2004-2005 | CPI, base 2001
2006 weights |
| 01. Food and non-alcoholic beverages | 21.86 | 21.93 | 22.60 | 22.28 |
| 02. Alcoholic and snuff | 3.22 | 3.18 | 3.17 | 3.07 |
| 03. Clothing and footwear | 9.93 | 9.90 | 9.73 | 9.25 |
| 04. Housing | 11.03 | 10.68 | 10.69 | 10.71 |
| | | | |
| 05. Tableware | 6.36 | 6.41 | 6.41 | 6.17 |
| 06. Medicine | 2.81 | 2.75 | 2.68 | 2.72 |
| 07. Shipping | 15.58 | 15.32 | 14.40 | 14.91 |
| 08. Communications | 2.57 | 2.73 | 2.99 | 3.28 |
| | | | |
| 09. Leisure and culture | 6.73 | 6.83 | 6.76 | 6.78 |
| 10. Teaching | 1.74 | 1.67 | 1.67 | 1.68 |
| 11. Hotels, cafes and restaurants | 11.27 | 11.18 | 11.23 | 11.45 |
| 12. Other goods and services | 6.91 | 7.39 | 7.39 | 7.72 |
| | | | |
| TOTAL | 100.00 | 100.00 | 100.00 | 100.00 |
With these data we can see that inflation affects the poorest who are based mainly in their first paragraph.
Now that every reader see if this table is in line with their charges and found that this calculation is very similar in all countries around us, is very subjective ... But, as we believe the data and back to the issue of confidence - everything will be fine and we accept that our salaries and pensions go up each year, the official CPI and so we think that we do not lose purchasing power.
This official website you can calculate how much the CPI has risen from official dates (data from 1961):
PD - Still others are doing worse, look at the figures of the country most inflationary in the world:
Press Summary:
Written by Droblo on November 13, 2008 with 428 comments
Read more articles on papers.
The Springfield Nuclear Power Plant where Homer works, shows us an excellent opportunity to discuss the monopolies and competition.
In this monopoly, it has been primarily by two factors. First by the high barriers to entry (not exactly cheap to build a nuclear plant and will need several decades to be paid off) and second because there are no substitutes (for Springfield have total dependence on electricity produced by the plant).
In one of the best episodes of the Simpsons (who shot Mr. Burns, Part 1). Montgomery Burns, the owner of the nuclear learns that one of the substitutes for the electric light was threatening its dominant position by buying and solves the competition:
Smithers: Well, sir, certainly has defeated all his enemies: the school, tavern, residence for the elderly ... should be very proud.
Burns: [looking at the money from his wallet] No, not while my great nemesis continue offering our customers free light, heat and energy. I call this enemy ... The Sun since the beginning of time man has yearned to destroy the sun. Siguiete ... And I will block it.
Smithers: Very good!
Bums: Imagine, Smithers: Electricity and heating power running all day
Smithers: But sir! All plants and trees will die, we no longer deaf owls ... and the sundial of the people will be useless. I do not want to be part of this project is inconceivably evil.
Monopolies are not always as excessive, dangerous and unfair. Sometimes it is more of a company with the creation of a "cartel". One of the best known is made up of the major OPEC oil-exporting countries (75% control of oil reserves) which will cut production enough to cause a price increase. That is the basis of a monopoly, its ability to influence the price of goods.
Sometimes monopolies are simply make good business, as was the case of the agreement between Google and Yahoo! finally broke last week because of the pressures that were legal. Another good example was the aggressive distribution strategy from Microsoft that led to the European courts for more than 10 years.
In the interbank, there is no monopoly, but sometimes I feel that act as a cartel What is not explained whether the Euribor is marking a difference with respect to such a high official price of money?. Remember that the official price money in Europe is at 3.25%, we are talking about a differential of more than 1.25%. The number of operations recently in the interbank cross is so low that if a few banks are able to agree the value of the top Euribor above its natural value. (more ...)
Written by Carlos Lopez on November 12, 2008 with 291 comments
Read more articles on papers.
The other day I read that the figure that the U.S. state is being spent on trying to resolve the financial crisis is already 2.7 billion dollars, and that in a country that even before all this and much needed money. He also knew the number of jobs: 524 thousand new unemployed in two months. And I looked for information on the actual situation of finance USA. Let a couple of numbers and put all the zeros, that more than one trillion translates as billions and trillions when we lees and I had to document only American websites:
- On November 11 days to 09.14, the debt is U.S. $ 10.635.794.969.002 amount that increases second to second, and in fact there is a ticking clock that will (http://en.wikipedia.org/wiki / National_Debt_Clock) and discussed here not long ago that going from 9 to 10 billion had to fix it. Currently increases 500.000.000.000 month since October, a figure that is expected to increase sharply reduced because it is what they grew on average annually since 2003. In September, the U.S. government extended, very appropriately, the limit of debt from 10.6 trillion to 11.3 but it seems that it fell short in 2009
- The estimated GDP for 2007 is U.S. 13,800,000,000,000, then the current debt is around 75% of GDP and it seems to get worse closer to 90% just by increasing the debt, if we also take into that GDP may actually be reduced if there is recession, this could be even worse. The highs are not as shown in the chart but we must remember that only exceeded 100% due to World War:
However, many countries are worse off and for years (from the "big" Japan is close to 200%, and in Italy, Belgium and Greece around 100%) the big problem is that this is only the debt State which is a fraction of the total debt of banks, families and American businesses is estimated that approximately 50,000,000,000,000, nearly 5 times more than the public and more than 3 times the entire GDP. In Spain, where we have this feeling of total debt private debt is double the GDP. (More ...)
Written by Droblo on November 11, 2008 with 243 comments
Read more articles on papers.
