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Lisboa, Portugal
Nasci no dia 11 de Junho de 1964 na cidade da Beira, MOÇAMBIQUE.

A Estação dos CFM, Beira

A Estação dos CFM, Beira
Ex-libris da cidade, 1966

The Euro, as a single currency, should be abolished

Another black and white motion statement leaving me no option but to choose No.
While I agree to the first part I am not prepared to contemplate the idea that the Euro should get abolished.
Abolished? Then what?
All 17 countries now sharing the single currency would revert back to their old monies?
Or a new version of yesteryear's currencies?

Simplistic as I made it out to be packed in a few odd questions, every single serious economic, financial and social consequence is inextricably wrapped up within each.
That is where the stakes are high enough to ensure that the Euro is given a new lease on life.
It calls for closer European integration.
What form and shape this will take is for policymakers and far-sighted politicians to grasp and propose.

It would seem to me that the Euro has many underlying strengths but will not - contrary to the founder's beliefs - assure convergence between all the economies it services. How could it?
The divide has been felt acutely lately (1-2 years) the logical consequence of relevant economic under-performance among member-countries.

There has obviously got to be a political solution rooted in realistic economic fundamentals.
The road traveled so far proved artificially smooth during the first 10 years I dare say but unsurprisingly very bumpy in the last 1-2.
It could not have been otherwise given the structural differences setting these countries apart. And excessive spending pursued mostly by a few Southern European States who could not see beyond the present.
Adherence to the Maastricht criteria never again seemed to be taken seriously once countries landed themselves inside the Euro club. Not to mention Greece that never fulfilled the criteria in the first place or ever bothered to balance its books.

Very disappointing to admit but the Euro Zone is indeed right in the middle of a storm testing its main crews to the limit.
The latest summit decisions seem to indicate that where there is a will there is a way.
It may have just been one first small step in the right direction.

The specifics are very hard to work on.
Yet it would seem to me that the 17-member Euro Zone and the larger EU can hardly afford shooting down the Euro.
The broader picture needs to come into full view.
An hypothetical demise of the single currency would deal another severe blow to Europe's economic fortunes.
Its relative decline vis-a-vis the rest of the world would get a further boost.

I do not like misplaced calls for solidarity from Southerners but would rather see the stronger half of the dividing line realize where their medium-to-long interest lies.
To that end many balances across the Euro Zone need to be restored at the earliest.

Europe agrees a "shock and awe" bailout for Greece

A rescue package of epic proportions, epic challenges for the Greek government and people, epic uncertainties and epic stakes for the single-currency.

It was the Euro's defence that ultimately forced politicians from Germany to Malta to perform a hard balancing act whose overall success is far from assured.Each finance minister has enough reasons to fret and grumble about.It being the Euro as a common currency, because of Greece despite Greece.
Up to now every 'least damaging' approach failed miserably to cool down the financial markets that remained as unimpressed as ever throughout.
For its part Greece is effectively the main winner in this high-finance gamble.The country bought time the markets were not willing to give it once confidence vanished.Precious time desperately needed to restore credibility and good governance at home.
A daunting internal fix with daunting external implications.
Three full years is what the government and Greek society top-down and bottom-up now have to set the record straight in so many ways.
Literally and figuratively.

For the other 15 Eurozone countries - each facing own troubles to varying degrees - keeping fingers crossed would be mild to describe the monitoring of Greece's performance over the coming 36 months.Potentially they are all losers, starting out by losing simply to avoid bigger losses!
There are so many relevant questions that might be asked to which full answers ought to be provided.
They won't get asked or get answered.
Tellingly, each and every single one of them would now seem rhetorical or at best an exercise for academia.

The spectre that haunts Europe

I am still hopeful that Greece will not require a bail-out in whatever form pinning my hopes on the PM's own words.

He did sound very bold and brave in the face of such overwhelming odds but until a deal is actually in place I would rather believe the Greeks can and will take care of themselves.

My stance is wholly based not on immediate needs triggered by the Western financial meltdown that led to the economic downturn.This in turn led to a collapse in tax revenues across countries caused by economies shrinking badly.

To a large extent Greece is indeed a one-off case-study for the worst reasons, its latest fiscal deficit the sum total of profligate spending, widespread cultural-rooted tax evasion, underbudgeting, creative accounting, weak notion of public service and duty, etc - all conspiring over decades to bring the country to the brink of bankruptcy.

I am sure many Greeks will have seen it coming and warned their governments in years past.To no avail as even the present government was elected as recently as late 2009 on a platform to increase spending.

According to EMU rules public finances were clearly to remain national responsibilities.A considerable chunk of sovereignty for States to manage through their democratically-elected governments of the day.
Would the Greeks have liked their Finance Ministry to be ruled or dictated to from Brussels or Frankfurt just so the Maastricht-agreed criteria could not have been so despondently ignored?

Current turmoil is the Euro's hardest test ever but one that will also represent a defining moment in the single-currency's future.

It is a fact that Southern European countries are faced with similar issues though not on the same scale and urgency.Others in Northern Europe, the US and Japan also recorded their biggest fiscal deficits and added up noticeably to their debts in 2009.
Each one has its own track-record, however.
This is exactly what sets Greece apart from the rest.
Each country is unique in its own way, there being obviously overlapping between them.

International rating agencies must make the effort to closely monitor and register those differences and then advise financial markets.

After all it is sovereign countries and sovereign debt one is dealing with.

There is much more at stake than strictly soulless bundling of nations.

Arquivo do blogue

quinta-feira, 28 de julho de 2011

TEc "The half-finished revolution" - India moves forward but challenges remain huge

Remarkably well-written and accurate account of India's journey following the 1991 bang.
Looking back on two glorious decades of hefty growth it cannot be missed that 1991 signalled a watershed in India's economic policy. There is definitely a before and after reality.
Going by overall performance - as conveyed by nearly every relevant social and economic indicator - the country surged forward to acquire a distinctly new profile since.
But India will likely forever remain a one-of-a-kind country.
Aren't most countries, to different degrees and on various counts, like that anyway?
To my mind the very fact India has managed to grow displaying considerable resilience bears testimony to a number of in-house strengths.
An economic chaos it still is, largely a social and urban chaos too. But, despite all the odds internally stacked up against itself India is ratcheting up confidently.
Some of the official and street-level rhetoric sounds overly enthusiastic. Boisterous even. Especially if one takes in the sights and sounds around and tries to match it all.
There's more to the place, however. A lot more.
That is India's secret.
To begin to understand it one needs to make the extra effort of looking in from within. A painful exercise at times.
There's plenty of nitty-gritty to do if it is to become a developed country for the majority. The potential remains overwhelming.
Meanwhile, for the booming minority it has never been so good.
For them India is now delivering bountifully.
Then also there are pointers to the trickle-down effect taking place across the length and breadth of the vast country. Unevenly, yet undeniably.
If wealth is created over the coming years as in the last twenty, India will truly be transformed in every sense.
Riding on the back of the demographic dividend there is only one direction the country is set to move: upwards.
No-one can detract from that.
Manmohan Singh can justly intimately feel he has made his contribution towards a modern India.
He was right when he quoted Vitor Hugo that many years ago.

TEc "Interrogating the party" - China's high-speed rail faces safety issues

A first tragic brush with the reality of running a massive high-speed link. Safely, at all times.
It is not for me to jump to conclusions on what exactly happened in this specific accident. I can only hope relevant authorities will spare no effort finding the causes and learning from them.
Often there are teething problems once transport systems move from construction to actual daily running. Unexpected events triggering others in quick succession.
It may be the case that this is at the root of some, if not all, problems so far experienced by China's brand-new high-speed rail network.
Every component should be carefully brought up for review from building standards to overhead power infrastructure to rolling stock to staff training to redundant safety systems in place, etc.
Excitement and natural pride at accomplishments achieved should not deflect attention by appropriate people from core technical issues. This is an ongoing challenge for everyone concerned to rise up to. Never allowing complacency to settle in.
Restoring confidence from the travelling public is as much about being transparent on this serious crash - hopefully a one-off - as it is about ensuring safety is elevated to top priority always.
China's railways may also borrow expertise from across the Sea. Japan retains an unblemished track record running their high-speed system since it was started way back in 1964.

TEc "The 11th. hour" - US debt comes in for scrutiny...and political wrangling

Cheers to the Congressional Quarterly for producing such an easy-to-read user-friendly chart.
Kudos to The Economist for smartly choosing to insert the link to it.
I had always wanted to know in greater detail who America's creditors were and have now seen that wish filled.
China, although the single largest foreign holder of US debt is well below what might be considered politically undesirable.
For now, that is.
US addiction to debt is a pointer to how unbalanced America's economy has become. It helps that every figure in the country is huge, dwarfing all others around the world.
Percentage-wise the situation should be seen for what it is though: Critical. Not even a mammoth economy can afford piling up debt indefinitely. And then raise the ceiling to suit the needs of the day.
Lastly, if ever there was a clean justification it must be now-2011 following the 'adjustments' made owed to the 2008/9 financial meltdown.

domingo, 24 de julho de 2011

TEc "Have Europe's leaders saved the Euro?" - For the moment yes.

Too early to send up the fireworks.
What the Euro Zone troubles have taught us since long is how intricate, complex and unpredictable they are. More so as seen by financial markets or investors lumped together as a single entity.
This time round political determination appears to have won the day but only after the threat shifted to a major economy such as Italy's. And looked real.
One thing is quite clear from the start, however:
Greece, Ireland and Portugal need to tidy up their houses - broadly ensuring public accounts are permanently brought under control.
Ultimately the key challenge is to kick-start the economy restoring growth at the earliest.
A lot of strategic thinking will have to translate into actual policy that promotes a healthy path to drive economic growth.
Macro imbalances generated by huge trade and current account deficits are no longer sustainable.
To my mind they never were, only briefly and irresponsibly disguised while the going was easy and nobody seemed to care...
Structurally weaker economies have to keep the focus on wealth creation through knowledge, production and exports.That's the only way to attaining growth while keeping a check on debt levels and interest-on-debt payments.
In the meantime political leaders need to rejig the whole Euro edifice to follow up on the monetary union.
To achieve desired stability across the Euro Zone the current deal has bought much-needed breathing space and time.
However, only time will tell if this signals the beginning of a new cycle for the single currency.

TEc "Armied to the hilt" - Europe's dwindling army numbers compared to many.

What the chart clearly shows is how Europe's armed forces have retreated continuously over the years.
The latest scaling down announced to total strength of the British Army will further underscore that retreat.
In all likelihood there will have been a White Paper to justify current political decisions.
A small professional army equipped with the latest technologically advanced gadgetry and ordnance and so forth...
Do manpower numbers no longer matter in peacetime?
Or is this acknowledgment that Europe's overstretched budgets coupled with debt-ridden economies can no longer afford the military?
Whichever the case I think it sad to witness once formidable fighting forces - both in troop strength and hardware - like Britain's or France's facing relentless downsizing.
In peacetime the military institution has a major role to play in society. For the most part it does play that role.
Their contribution cannot be underrated or dismissed as expensive redundancy... until the next unforeseen trouble crops up, that is.
Am I all right Jack?

TEc "Cleaning the yard" - A respected police force must know its place.

The Met Police would better ensure that they are not drawn into this media scandal any more than they already are.
One thing is for a newspaper to go under due to its own wrongdoing.
Quite another is for an hitherto trusted police force - indispensable as it is in a democratic society - to observe the highest standards all-round at all times.
To that end dangerous liaisons with the media have no place within an institution wishing to earn respect from the public permanently.
I hope action will be taken swiftly and efficiently.

TEc "The popular press" - Popular yes, vulgar no.

The press may be popular.It may cater to popular interest.
It need not be dirt cheap, vulgar and poisonous.
At the end of the day that is indeed - just about - the only real issue.
People can and do have multiple tastes in a free society.
Newspapers may pander to them ranging from in-depth analysis to superficial skimming of unfolding stories as seen by each.
What none is allowed is to take up the unelected role of 5th power. Unruly, unaccountable, ever ready to prey on anyone deemed public persona.Or simply anyone who might make a big hit and run story that sells while it lasts.
To then, most often than not, play out a disgustingly overblown distortion - if not omission - of any relevant facts.
In civilized society the media should know its place and not play into the hands of the powerful when it suits them. Only to throw them out to the dogs once they are no longer appealing.
It has long been a double-edged sword, a mirrored game that has often caught up with many a politician in their rise as well as in their downfall.
Standards is the keyword.
How lowly is some press willing to go in their relentless quest for readership?
Should I say more to the point advertising instead?
In the midst of added competition and falling circulation?
I have always thought the British tabloid press to be more aggressive than most.
Current scandals prove that a line must be drawn clearly setting out what is acceptable from that which definitely is not.
This is mainly about self-imposed rules of decency as I do not expect much from watchdogs who never seemed bothered at all!

sábado, 16 de julho de 2011

The WallStreetJournal - "Time for flush Germany to put Europe first" - What about rating agencies?

While I broadly agree with the title to this article there are several layers (of political and economic responsibility) to be considered when discussing the Euro Zone's current predicament.
A lopsided crisis it is, an asymmetrical shock, a three-speed European Union that truly always was.

The logic of financial markets has so far proved overpowering brushing off to a distant corner politics and politicians no matter where-from. Unchecked rating agencies have had the upper-hand all along, theirs a role that remains shadowy at the very least.
The astonishing assessments produced on the eve of the 2008 financial meltdown hardly dented their standing. Credibility? Who cares?
Their behavior resembling three narrow-minded shroud sisters driven mainly by self-interest and opportunity. If one makes a pronouncement the other two follow suit regardless.
Moody's has downgraded Portugal' debt to below junk status sending ripples through the LSE, even bruising the Euro slightly. As I write it is not known what the other two are thinking.

This has been a severe blow on a country that within a month of staging a general election has had a working government showing strong will and determination.
It is in the very nature of things that results will not show overnight.
But the benefit of the doubt is entirely deserved of a new administration with a hands-on approach.

Germany may have profited the most from the Euro Zone, even from currently unfolding woes. These have so far been dictated exclusively by financial markets often ill-advised by the three maverick sisters.
But the system needs an upset, a severe one at that, if politics is ever to retake center-stage again.
Peripheral countries have had their share of sins in the past but it would be naive to believe they are the only ones to have committed them.
I would not enter into prophesying what will happen next with sovereign-debt.
The writing has been on the wall since long that it is in Germany's interest, the EU's, Europe's and the World's to smother those agencies. 
Or perhaps that may start happening next month after a downgrade to US debt (?).

TEc "Now it is an earthquake" - Widespread phone-hacking comes to light dictating the end of a newspaper.

Will not comment on the ongoing phone-hacking scandal. That is for decent people to stamp it out, root it out and jail every single mercenary journalist mercilessly.
The British press has long been a distinctly divided house. Perhaps reflecting a wider societal divide that lives on to this day.
On the one side serious in-depth newspapers that remain worthy of their long acquired reputation. On the other, a cheap, sensational press that made teats and cheats their mainstay dwelling endlessly on any story that sells quickly and handsomely.
Over and again they have bent every elementary rule of decency in hot pursuit of profit disguised as a search for the truth.
That which arouses the interest of the public is not necessarily in the public interest. In fact, most often than not common-sense judgement would have it that there are limits to what truly belongs in the public domain - as opposed to fast-selling naked voyeurism and cheap thrills.
Anyway, devoid of context the end of an age-old newspaper is to be regretted.
(Not so if current owners took their greed too far by stripping targeted people of the right to their intimacy and privacy.
Not to mention use of illegal tools and methods to achieve their goals. Undeserving of any comment, really...)

TEc "Selecting default" - The Eurozone remains as brittle as ever

I'm picking on somebody else's line who appropriately wrote "a chain is only as strong as its weakest link".
There could hardly be a shorter sentence to best sum up the Eurozone after running a full year (plus) of trials and tribulations.
Maybe we should consider the very fact the Eurozone is still intact to be the cherished sole achievement.
But is is too little, too feeble, too hopeless, too costly and too flimsy to begin to call it an achievement of any sort.
The whole unfolding situation remains unbelievably decadent, starkly exposing multiple rots that gathered over a decade of fanciful merriment.
How else can one understand it all?
The lenders, the borrowers, the politicians, the businessmen, traders, governments, institutions, rating agencies, regulators, formal and informal whistle blowers, influential members of society - all failed to timely flag that something was inherently wrong with unhealthy economic growth in some countries.
Sovereign debt is now under attack like it never was before. Governments - with willing accomplices on all sides - allowed it to grow to become unmanageable throwing entire nations into the hands of financial markets. What will happen next is very much anybody's guess.
In a flawed tussle or perhaps simply an arm-wrestling contest between markets and politicians it is not clear yet who will emerge the ultimate winners.
For years on end investors cheaply provided rope to governments to tie their country's necks with. What the markets have been doing since last year is to tighten the noose quickly.
Rating agencies ensure that the execution is carried out efficiently.
In an increasingly financially-driven world, responsible common-sense politics has been losing ground steadily.
The Eurozone's unfolding case study will surely present further unpleasant twists.
Until eventually settling into something unknown to this day.

TEc "Less paper, more iron" - British manufacturing has seen a steady decline since long.It should be halted.

Excellent article that does justice to a long overdue debate in Britain.
The country that gave rise to industry - making a powerful contribution to show the world how to create wealth through mass production - strangely seems to have grown tired(?) of it.
To believe finance plus associated services and other might permanently sustain a nation of over 60 million always appeared short-sighted to me.
No matter how highly specialized, the City and its outgrowths in the Southeast cannot provide most of government revenue and the jobs required.
The UK economy definitely needs rebalancing such that manufacturing is not seen to be continuously slipping at the very least.
I'm not sure that its share of GDP can increase quickly enough. Structural changes that occurred over the last 3-4 decades would make an arrest to the decline a feat deserving of celebration.
A reversal would call for a much bigger party.
George Osborne has got it right if he and other politicians push for a revival of production in Britain.
British business should take heed harnessing the country's still vast resources both in capital and skilled manpower to answer the call.
It should go without saying but this is - or should be - a post paper economy world...

TEc "The outsiders" - On the growing problem of youth unemployment

Shameful chart that goes some way to prove how harmful deregulated capitalism has been to most. The youngest now ready to join the labour market have all but been shut out from it. Worse still is the prospect that it may take 5-10 years for job markets to eventually absorb them in meaningful numbers.
That said, Germany has seen a drop in youth unemployment from Q1 2008, with populous Turkey showing remarkable stability.
No small achievement for either country.
Labour laws only tell part of the story as flexible working environments struggle to create new jobs too.
Fundamental changes have taken place in the world economy that spelt the end of many trades in mature economies.
How to find gainful employment to so many youngsters now and in the future?
A political answer must be found at the earliest lest societies accept already existing big chasms to widen beyond fixing.
If it should need mentioning - I believe it does - those two-shade bars in the chart showing percentages are about millions of individuals.
Each one with a proper name, surname and a dream!

TEc debate motion (3) "This house believes that an economy cannot succeed without a big manufacturing base" - A simple observation..

The debate is now closing with voting remaining largely unchanged from when it kicked off.
Arguments on both sides have been powerful but the floor's unconvinced that manufacturing may be permanently downplayed.
My view rests on the simplest observation of all.
Unless we collectively give up on cherished durable goods that are vital to our well-being there is no case for dismissing manufacturing.
Then, there are also other strong reasons going for it by way of multiple to-do technical skills and trades that would otherwise be lost.
An economy's ultimate success is measured not only in terms of financial billings, assuming that a country can balance the books relying mostly on services. It is also about overall balance achieved by the three sectors that make it up.
While one could be the mainstay, a strong country/economy/nation/society is one that masters the primary, secondary and tertiary sectors at the same time.
Therefore manufacturing will continue to play a pivotal role that no amount of services - no matter how highly skilled or worth in added-value - may displace in the foreseeable future.
If anything, events from 2008 showed that countries which neglected manufacturing industry became increasingly unbalanced and more vulnerable.

It is not possible to leap-frog a founding element of the modern age when the model itself has not fundamentally changed.

segunda-feira, 4 de julho de 2011

TEc debate motion (2) "This house believes that an economy cannot succeed without a big manufacturing base" - I agree for every sound reason I can think of.

Challenging debate that highlights sharply contrasting views on a world that has come a long way to arrive at present-day post-industrial era:
in parts of the developed world because elsewhere industry has been fully embraced recently.
While services make up by far the biggest chunk in advanced economies the relevance of a strong manufacturing base has in no way been diminished.
Shoving aside issues to do with understandable national pride in trade-able tangible goods - with all that implies upstream and downstream - manufacturing will inevitably rank high as long as people rely on and crave for material stuff to improve their living standards.
Whereas small island-nations or countries of a few millions may get by affluently, selling a sound composition of services, larger countries holding larger populations will not balance their economies without manufacturing.
It would in some way miss the point of this debate to mention specific countries to push my viewpoint harder.
Economies now thriving - above all showing that they are structurally remarkably healthier - combine big service sectors with strong manufacturing.
Agriculture though not the prime issue here cannot be sidelined, however.It may not make a large enough contribution to employment or as a share of GDP but its relevance cannot be underestimated. Ever.
Economies, large or small, require overall balance for countries/societies to move forward in a sustained pattern.A relatively large or small country that plays down manufacturing ends up with an unmanageable structural trade deficit.In most cases financial services and other forms of revenue do not compensate entirely.
Striking a balance is therefore essential to have a sound economy able to grow and allow for higher living standards.

As this debates nears the end I am particularly thrilled that the overwhelming majority voted the way it did.
Unsurprising indeed especially following the defeat of the paper economy that made a few millionaires overnight while causing hardship to millions.

TEc debate motion "This house believes that an economy cannot succeed without a big manufacturing base" - I agree for every sound reason I can think of.

I have made my contribution towards a resounding yes-vote win out of a deep-seated longtime-held conviction that manufacturing remains of the essence.
As long as the social, economic and development paradigm that got built is geared to consumption of goods (and services) it won't ever become indifferent where those goods are manufactured in part or in full.
Indeed it is no mere coincidence that economies performing strongest in the wake of the latest finance-triggered slump of 2009 are those that retained a sizable manufacturing base throughout.
How else could it have been?
It only takes each one to look around and identify the durable goods we live on, big and small.
The countries supplying them have entered our lives permanently. Importantly, they created tangible wealth in their respective economies.
An economy may succeed without manufacturing for a given period but I fail to see how it can sustain itself growing soundly over a longer run.
A balanced mix would be the best make-up of any economy anywhere with strong primary and secondary sector inputs highly valued.
Broadly, the tertiary sector would then process riches generated in the first two.
From the eighties on Anglo-Saxon type capitalism favoured financial services with the UK in particular, and the USA, embracing it wholeheartedly.
I believe this cycle was shattered by the 2009 debacle that pretty much brought to an end a time of over-reliance on the rightly-called paper economy.
Even if a resurgence in manufacturing is not witnessed in countries that drifted away from it, their relative vulnerability is now starkly exposed.
As long as I need a chair to sit on - so does everybody else - it won't be irrelevant, ever, where that chair is made. In part or in full.
High time for manufacturing to kick in once again.