We are in the eye of the storm. But not because of injustice or envy of our northern neighbours—no—but because of our own foolishness. That foolishness which has led us in the past to vote for governments of both political stripes, yet with one thing in common: an inability to manage the Spanish economy. We have missed a golden opportunity, given that economic growth and the surge in job creation in the Eurozone allowed us to boast of macroeconomic figures that made even those of France itself pale in comparison. And so Zapatero proclaimed on occasion, although today it is the Mercozy duo who must stifle their feelings in the face of the grotesque and surreal tragicomedy of the current periphery. «Spain is doing well,» we proclaimed to the four winds just a decade ago. Those were years when illusions of grandeur led the presidents of Spain and Portugal to meet in the Azores with the very presidents of the United Kingdom and the United States of America. Aznar, Barroso, Blair and Bush together shaping the plans that were to govern the New World Order. That was only nine years ago, but it seems so long ago…
In many talk shows and in the press, we are hearing voices proclaiming the irrationality and delusion of the markets regarding the state of the Spanish economy. It is argued that the fact that Mr Market penalised Spanish bonds before the most austere budget in Spanish democratic history was made public, and continues to do so after the cuts, is irrefutable proof of the markets« madness. They say this is proof that this country’s economic policies must be set regardless of what the markets might think. That »the dictatorship of the markets’ is something we must ignore and fight against… But no. Let’s look at some of the reasons why we must not, and cannot, ignore Mr Market:
It’s already a
First of all, we must tell you that the subject we are going to deal with today is complex and may offend some professional sensibilities. But that is not our intention at all, but rather our interest is focused on clarifying a situation that is currently generating a lot of confusion and, more importantly, is damaging families with a certain amount of wealth. Both large fortunes and small savers. We will therefore discuss, for example, Santander's convertible bonds, the recent inflammatory statements by Greg Smith (ex-Goldman Sachs), the types of assets that a properly diversified wealth should contain, the Spanish and Luxembourg regulators, banking, EAFIs, Family Office, or how to distinguish between a perverse advice and a perverse advice. comme il faut. We apologise for the length of the post, but we have chosen to publish it in its entirety so as not to lose the thread in the middle of the reflections that follow.
That exceptional measures should be taken in exceptional situations is pure common sense. And the
This week I came across an article published in FundsPeople titled «
Below is an article by a contributor who has asked us to publish some of her articles on this blog. Sofía Sánchez is a writer and a graduate of Florida International University, specialising in writing about politics, economics and labour market trends. Here is her article on these trends in the world of work:
Knowing which types of assets or which companies’ shares are going to skyrocket in the coming months is the pipe dream of those who, rather than investing, speculate. Of those who are hoping for a windfall to bail them out of the financial difficulties they have got themselves into through their own foolishness. But even if Lady Luck were to smile on them, their poor judgement would remain just as bad. Consequently, they will believe themselves to be shrewd investors rather than merely lucky, and their cycle of financial difficulties, windfalls and further difficulties will repeat itself, at best. In the long run, the result for most of them is that their forays as speculators (even though they describe themselves as investors), far from supplementing their income, cost them a significant portion of the wages they have earned through the sweat of their brow over the years. And if at any point they were to make an objective calculation of their gains and losses—something they consciously or unconsciously avoid doing—the balance sheet would reveal the harsh reality: that throughout their investing lives, a large part of their own and their families’ well-being has been taken by Mr Market.
«What would happen if credit rating agencies ceased to exist? It is a question that few of us ask ourselves today, but one that leads to some fascinating reflections.»That’s how it began"