EUCOM Economic Analysis - Part I

[Lewis341]

It is estimated that Poland's total applications for Euro 2012 added up to more than 5 percent of its gross domestic products. Many Polish corporations are now investing just enough to keep enterprises going, but they are holding off on making big-ticket investments in substructure, development or employment.

[Surferbeetle]

Una teora de la clase poltica espaola
, CSAR MOLINAS 10 SEP 2012 - 01:34 CET, El Pais, http://politica.elpais.com/politica/...85_745267.html

En este artculo propongo una teora de la clase poltica espaola para argumentar la necesidad imperiosa y urgente de cambiar nuestro sistema electoral para adoptar un sistema mayoritario. La teora se refiere al comportamiento de un colectivo y, por tanto, no admite interpretaciones en trminos de comportamientos individuales. Por qu una teora? Por dos razones. En primer lugar porque una teora, si es buena, permite conectar sucesos aparentemente inconexos y explicar sucesos aparentemente inexplicables. Es decir, dar sentido a cosas que antes no lo tenan. Y, en segundo lugar, porque de una buena teora pueden extraerse predicciones tiles sobre lo que ocurrir en el futuro. Empezando por lo primero, una buena teora de la clase poltica espaola debera explicar, por lo menos, los siguientes puntos:

1. Cmo es posible que, tras cinco aos de iniciada la crisis, ningn partido poltico tenga un diagnstico coherente de lo que le est pasando a Espaa?
   
2. Cmo es posible que ningn partido poltico tenga una estrategia o un plan a largo plazo creble para sacar a Espaa de la crisis? Cmo es posible que la clase poltica espaola parezca genticamente incapaz de planificar?
   
3. Cmo es posible que la clase poltica espaola sea incapaz de ser ejemplar? Cmo es posible que nadie-salvo el Rey y por motivos propios- haya pedido disculpas?
   
4. Cmo es posible que la estrategia de futuro ms obvia para Espaa -la mejora de la educacin, el fomento de la innovacin, el desarrollo y el emprendimiento y el apoyo a la investigacin- sea no ya ignorada, sino masacrada con recortes por los partidos polticos mayoritarios?

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A European policy outlook: the crisis and beyond, LSE, http://www2.lse.ac.uk/newsAndMedia/v...r.aspx?id=1564

Speaker(s): Pierre Moscovici
Chair: Peter Sutherland

Recorded on 17 September 2012 in Old Theatre, Old Building.

Pierre Moscovici will address both the policy outlook in France and the ongoing crisis management developments at the European level. Pierre Moscovici was appointed Minister of the Economy and Finance on 16 May 2012, following the election of President Franois Hollande. He has been involved in European and international affairs as well as in national politics, in particular on fiscal issues. He was first a member of the European Parliament from 1994 to 1997, and became one of its vice-presidents from 2004 to 2007. In the meantime, he was elected to France's National Assembly in 1997 (and was later re-elected in 2007 and 2012), in the constituency of Doubs in eastern France, and was appointed Minister for European Affairs in the government of Lionel Jospin from 1997 to 2002, where he was specifically involved in finalizing the Amsterdam Treaty in 1997 and negotiating the Nice Treaty in 2000. He was also involved in negotiating the European Constitutional Treaty of 2004 and was a vigorous advocate of its adoption in France. Before holding elected office, he worked for the French Socialist Party, which he joined back in 1984 as an expert on fiscal issues. Pierre Moscovici joined the Audit Court (Cour des Comptes) after graduating from the Ecole Nationale dAdministration (ENA) in 1984.

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Porsche, Daimler Indicate Europes Car Crisis Spreading
By Alex Webb, Dorothee Tschampa and Tommaso Ebhardt - Sep 21, 2012 5:44 AM MT, Bloomberg News, http://www.bloomberg.com/news/2012-0...spreading.html

Daimler AG (DAI) and Porsche AG provided evidence that the worst European car market in 17 years has started to spread to the luxury brands, mirroring a broader recession that has spilled from southern Europe to Germany.

European car sales dropped 8.5 percent in August, the steepest decline since February, the Brussels-based ACEA industry association said on Sept. 18. The group forecasts that European deliveries will hit a 17-year low in 2012. German car registrations fell 4.7 percent in August, pushing the eight- month sales figure to a 0.6 percent decline.

The regions volume carmakers, hit hardest by the European markets downward spiral, are taking even tougher measures. Peugeot agreed yesterday to sell a majority stake in its trucking unit to raise cash. Fiats volume brands are eliminating 20 percent of management jobs in Europe, according to a person familiar with the matter.

[davidbfpo]

An article from the FT, prior to the launch of a report next week by Counterpoint, a London-based European think tank and sub-titled:

Reluctant radicals’ make up the majority of Europe’s rightwing populist voters. But there are ways to win them back

Link:http://www.ft.com/cms/s/2/667b08a6-0...#axzz27C8yOh3f

It opens with:

There is a story about Europe that says we are living in a rerun of the 1930s. According to this narrative, the populist right is rising again as crisis-hit Europeans look for scapegoats. Indeed, rightwing populist parties have polled more than or near one-fifth of the vote during the crisis in countries as tranquil as Finland and Switzerland. Already the populists are poisoning political debate, by pushing mainstream parties to take far-right paranoid, xenophobic views seriously. Now they aim to graduate to government.

But perhaps we worry too much. A fascinating new report by Counterpoint, the London-based research and advisory group, provides an unhysterical analysis of rightwing populism in Europe today. Merging recent data on voting in France, Finland and the Netherlands with previous surveys from around Europe, Counterpoint identifies who is voting for these parties and why. The report helps us see what strategies the populist right will use to grow – and what strategies we can use to counter them.

[Fuchs]

The U.S. brands of right wing extremism are something that's likely more troublesome in the long term than whatever sugar high the European right wing(s) might get from the economic troubles.
Luckily, Americans have troubles crossing the English Channel language-wise.

Another long term problem with right wing ideology stuff might stem from Russia, Belarus and the Ukraine. Nationalism and jingoism appear to be part of what fills the void left by communism in those countries. This could turn ugly sooner or later (even more so in East Asia, where the Chinese, Koreans and Japanese have some outright ridiculous nationalistic ideas).

The only area in Europe where the economic crisis could give a decisive push to nationalism is in my opinion Catalonia.

[Firn]

Catalonia warns EU that million-strong march cannot be ignored

We had this discussion before and for the first time I have seen numbers for this wealth transfer:

Mas has threatened to call elections if that is done in Catalonia, believing it would provoke a wave of nationalist sentiment. Catalans pay between € 12bn and € 16bn more in taxes each year to Madrid than they receive back, with the excess going to poorer regions such as Andalusia and Extremadura.

For 7.2 millions this means roughly 2000 € per capita.

"I identify with the popular outcry," he said, adding that only his responsibilities as regional prime minister had prevented him from joining the demonstrators. "Catalonia needs a state," he added. "For years we thought it could be the Spanish state."

But just as northern Europe was getting fed up with the south, and vice versa, so Catalonia and the rest of Spain were now fed up with one another, Mas said.

He implied that one way for Rajoy to dampen the surge in separatist feeling would be to agree to a change in funding, allowing Spain's wealthiest region to hold on to more of the tax it generates.

Catalonia wants to be able to collect its own taxes and send a share to Madrid, rather than the other way around. That would make it different from most of Spain's other 16 regional government, but similar to the northern Basque country.

Mas will see Rajoy next week to discuss what he called an issue of "fiscal sovereignty". Popular outrage at Catalan money going elsewhere amid health and education cuts was fuelling the thirst for independence, he suggested.

Italy has very distinct regions with greatly differing languages and dialects but nothing like this heavy-weight.

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The Shiller P/E or P/E 10 is rather low for most European countries with some exceptions like Germany, where stock prices have been resisted and current PE is relative low due to strong earnings. The Dividend yield is high and for rougly 3 years now superior to the bond yields, for the first time in almost 50 years. The ROE is in general good despite some relative poor earnings. In this case the Eurozone crisis has been good for investors has it has enabled us to buy a seemingly good prices for quite some periods. While I'm firmly long with a roughly 65% in equity, nominally with good capital gains I have sold quite a bit in the recent weeks. Sadly yesterday I was not able to do so, but who knows where and when...

Considering that I'm a net saver and should remain so for a couple of years those low valuations are positive. Even more so is volative nature of the stock market which allows one to buy cheap and sell some high if one wants to. Certainly Mr. Market has been very helpful lately, giving in my opion sometimes a good margin of safety. I just hope that by generally sticking to my sweet spots and rules I did not comit too many blunders. Recounting the ones made in the last 6 months is already quite a bit painful

Instead of thinking of the current crisis why not enjoy some of the best qualities of good old Europe? Schubert, Trio op. 100 - Andante con moto .

P.S: I can not resist to write that accroding to a study presented in the Corriere della Sera the Italian savers got slightly less the half of the overall yield of their investments. More then 50% went to "helpers" as Buffet calls them, in very costly fees. This is nothing but shocking and a good reminder why I have pushed hard to get the personal as low as possible. Low-cost index funds (ETFs etc) are part of this package. Sadly selling expensive products can be a good deal of the bank who enables the helpers to get enough money to help the bank to help the saver paying them in generally far too much for the performance they offer.

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[Fuchs]

Catalans pay between € 12bn and € 16bn more in taxes each year to Madrid than they receive back, with the excess going to poorer regions such as Andalusia and Extremadura.

This does not fit together. Lots of central state expenses don't go to regions, such as military, border control etc.

Besides; all those figures that float around are unofficial, unconfirmed.

[Firn]

This does not fit together. Lots of central state expenses don't go to regions, such as military, border control etc.

Besides; all those figures that float around are unofficial, unconfirmed.

Well spotted - add another one to those blunders. Thinking more does sometimes help. I also did not openly express doubt about the numbers which I should have.