Category: Sin categorizar

En las últimas horas he leído algunas noticias en prensa norteamericana que muchos no querrán creer o preferirán no haber leído nunca. Otros las leerán y simplemente pensarán que no van con ellos. Pero la cruda realidad es la que es y nos afectará a todos más bien temprano que tarde. El queso ya no está o se va a acabar para muchos, y así está el patio pese a los informes de la banca y las previsiones de la clase política:

Elegí un mal fin de semana para leer la prensa norteamericana. Creo que debo dejar de leer los, cada vez más numerosos, periódicos sensacionalistas. Así no hay forma de centrarse en las oportunidades que surjan, aunque si no los leo quizá vea oportunidades donde no las hay…

Menos mal que en Europa las cosas van mucho mejor.

Bueno, me voy a ver el partido al Bar de Manolo y a echar unas risas. A ver si me deja acudir a su ampliación de capital, porque ¡eso sí que es una buena oportunidad!

«The optimist proclaims that we live in the best of all possible worlds; and the pessimist fears this is true.«

James Branch Cabell (1879-1958) Escritor norteamericano.

In our section of comments received worthy of being published and commented on as articles, and baptised in its day with the name of the first one published (Boquerones Fritos), we copy below an anonymous one that we have received which I think is worth commenting on publicly in the form of a post and which we copy verbatim below:

«I read this publication, what do you think?

Greetings:

The crisis of the Spanish economy will be longer, but less deep than the one suffered in 1993, estimates the research department of La Caixa, which calculates the average fall in Gross Domestic Product at 1.3% this year and forecasts that the unemployment rate could reach 16% in the final stretch of the year. The experts of this entity consider that the number of unemployed will slightly exceed 3.7 million at the beginning of 2010, without reaching the four million mark.
Social coverage and measures to boost the economy will push the public deficit up to 5.5% of GDP in the current fiscal year. And the upturn will be gradual, because in 2010 the increase in GDP will be limited to 11 Q3GDP on average for the year. In conclusion, the acute phase of the crisis will last for five to six quarters, starting in the summer of 2008.
Jordi Gual, head of the savings bank's analysis department, insisted, during the presentation of these projections, on the need to combat excessive pessimism. «We are facing a recession, not a depression,» he said, going on to explain that an economy has its own mechanisms of ‘natural adjustment’ that both puncture the excess of expansion and encourage activity in times of contraction. For this reason, together with the factors that converge in the generation of the economic crisis in Spain - global financial crisis, generalised international recession, adjustment of the real estate sector, high levels of household and corporate debt - he identified the mechanisms that will play in favour of recovery.
If the price of oil falls, as seems likely, from an average of 90 dollars a barrel in 2008 to an average of 60 dollars this year, this factor will allow the fall in gross domestic product to be half a percentage point lower. The reduction in interest rates in the euro zone, which the research department of La Caixa estimates at half a point at next Thursday's meeting and another half a point at the ECB's next monthly meeting, will have an impact on the mortgage Euribor, and will help to reduce the cost of buying a home in the first year - including tax deductions - from 37% of household disposable income to 25%. Inflation will fall from an average of 4.1% in 2008 to 1.2% in the current year.»

In all likelihood, the text is taken from the presentation of the Monthly Economic Report of La Caixa whose news in La Vanguardia you can reread.

I will say that in general I find the text excessively optimistic and that I would therefore be delighted if they were right in their predictions and I were the pessimist who was wrong. I would like nothing better, of course. And this excessive optimism is understandable and can be perfectly explained by its banking origin: the Research Department of La Caixa. Nevertheless, I agree with them on some points, but let's start at the beginning:

In my opinion, the text confuses the Spanish crisis with the global crisis, and at present they cannot be dissociated in any way. The global crisis is so serious that neither the acceptable state nor the shallowness of the crisis by country matters little, with the exception of the emerging countries to some extent. The credit crunch, the energy crisis (in short, the multi-crisis) drags along with it all those countries or areas that enjoy a better local and/or temporary situation. Therefore, supposing that it is reasonable to think that «The crisis in the Spanish economy will be longer, but less deep than in 1993.«The global tsunami will also sink Spain below the depth of its 1993 crisis, which I would place perhaps a year earlier, and probably prolong it well beyond what happened in those years.

As for the unemployment figure, it is a simple dance of local numbers which, as we have already said, will matter little as soon as the world, globally, emerges from the murky depths into which we are plunging. But it seems to me that this 16% can be exceeded by at least two more points with chilling ease. As for the public deficit, it will also depend on the great volatility we may experience in the oil/gas price, but I would probably correct that figure upwards as well. Regarding GDP, growing 1% or below, will be a matter of pure macroeconomic statistics that will only serve to keep some distinguishing between technical recession and non-recession in the midst of depression, something that is vital for the recovery of confidence and optimistic sentiment so necessary for banking. According to the report: «The 5 or 6 quarters that started last summer would therefore last until the last quarter of 2009 as acute phase of the crisis«. But while it is possible that we may see the worst over the next 12 months, I would be cautious to think of the whole of 2010 as a year of severe macroeconomic crisis. From then on, the depression would continue but with perhaps alternating between periods such as those 8 or 10 quarters and some quarters of mild recovery, as happened in the 1930s.

Regarding the recessionary and not depressive opinion of Jordi Gual, chief economist of La Caixa and PhD in Economics from the University of California (Berkeley), with all my respect and sincere admiration, I am afraid he is wrong. We are not facing a one-off recession but a full-blown depression, with its possible known (Great Depression) or probable unknown (without previous references) phases. However, I agree that the economy has its own natural adjustments to weigh up both the excesses of prosperity and to bail out when the water reaches the eyes (above the neck and nose). And especially this phenomenon has occurred in recent years, when we see how globalisation spreads viruses such as subprime, but also how it can amplify and globalise the anti-depressive effects that may emerge in the coming semesters in emerging countries.

Obviously, tax and rate reductions are a condition for the sine qua non to survive this multi-crisis any longer, and a moderation in the oil price to levels of 60 $ will make the difference between life and death for the sick. But it seems to be clear to the producing countries that, like God, they must squeeze but not choke, for if they overdo it they will starve the very demand. Of course, inflation will already be at rock bottom and we may even see it periodically go negative in the purest deflationary style.

To conclude, I would like to make a final reflection. Notice that in this article and every day in more and more opinions and statements, long-term solutions, sustainable solutions or Solutions in capital letters are being completely neglected. And the focus is on short-term survival, the bread for today. We talk about reducing rates to zero so that debt can circulate and revive, about oil at levels low enough to continue burning it massively, about a longed-for inflation that will pull us out of the clutches of depressive deflation, etc... And I am not saying that this is not the right thing to do now, since we are not in a position to improve the world we left behind a year and a half ago, but rather to seek survival. When we have achieved this, we will talk about sustainable economic policies, the re-founding of capitalism (which we must begin to outline and apply in an incipient way), alternative energies and expansionist models, Austrian or otherwise. But now we just have to try with all our might to keep Darwin away from us in the coming years. That's how bad we are, in spite of all the brainy, eminent and biased reports from a banking sector whose future depends on the recovery of confidence. Perhaps the bad thing would not be for readers to believe it, but for the authors themselves to do so.

Let’s take a look at a few charts relating to the US property market. And although we may feel detached from what is happening to US property and its toxic subprime mortgages, we Europeans (and Spaniards in particular) must follow this market with great interest, as it foreshadows what will happen to all of us a few months down the line. The fact is that, paradoxically, the New World foreshadows the future of the Old Continent.

The first graph illustrates the dramatic shift in home ownership trends in the US. The latest figure stands at 67.91% for the third quarter of 2008, which is on a par with the summer of 2001. Leaving aside those who are homeless or crammed into relatives’ homes (and there are more and more of them every day), this decline in home ownership is inevitably offset by an increase in the proportion of people living in rented accommodation.

The following graph provides an interesting insight, as it shows the percentage of vacant properties – that is, those that have been unoccupied – over the last 50 years. In the first two decades, we can see that the average stood at around 1.51%, whilst in the last 20 years and up until approximately 2006/7, the average remained at 1.71%. Since then, the percentage has soared to almost 3% today.

But why are there more empty homes now, when it seems there are more tenants looking for a place to rent? The answer is clear: The owners de facto These vacant properties are owned by financial institutions. And these do not allow mortgage defaulters to continue living in the property. However, as the mortgage foreclosure process (foreclosure) and is currently under foreclosure, it cannot be let to anyone either. Nor will that be the future intention of the entity that ultimately takes ownership of the property. It will remain vacant until a buyer is found, whether scavenger or end users. Nor are owners of distressed properties—those struggling with financial difficulties who have fallen slightly behind on their multiple debts but are still relatively far from facing repossession (by several months)—willing to rent out their homes. In these cases, only a sale – even at the price of the debt – can get them out of the hole. Sales that, in many cases, will never take place before foreclosure, and even if they do materialise, they will not prevent many multiple property owners (whose properties and mortgages are worth more than their current market value) from falling into widespread household defaults.

So far, it matters little that the wicked Mac & Mae have set off as we reported back in October 2008:

«Over the next two, three or four years, we are likely to see the worst of it. In other words, these will be the worst years for the governments that will have to absorb the loans, which are now turning into foreclosures that cannot be liquidated; but there is an aggravating factor that will make them radically different: Unlike the lending institutions that sold the loans, the state or the ad hoc quasi-public bodies will not be able to afford the mass repossession and eviction of their population. Social solutions may be adopted to keep tenants in what were once their own mortgaged homes in exchange for rents well below market rates. They may also have limited options to buy in the future. But what seems unthinkable is that the enforcement of mortgages by public bodies would create a social and human problem for millions and millions of people. A genuine housing subsidy in the truest popular style (that of the Chinese Communist Party, not the PP). »Against a backdrop of lean times and rising arrears, the number of vacant properties is rising steadily, despite the increase in demand for rental housing.»

And finally, a chart showing the number of properties to let. Occupied spaces are shown in blue, and vacant spaces in red:

As is clear to see, over the last four years the number of units has risen, reversing the trend that began in 1995. More than 3.5 million units have thus been added to the US market; however, only 1 million have been built for the rental sector. In other words, 2.5 million homes have shifted from the owner-occupied market to the rental market. And among them we find a variety of motivations: investors buying properties to let and generate rental income (a risky practice in falling markets unless the properties are of the very highest quality), second and third homes whose owners need to let them out and which until now had been kept for their own use, property developments converted during construction due to the foreseeable inability to sell, individuals less burdened by debt who are entering the rental market whilst waiting for sale prices to reach the value at which they have mentally anchored themselves, etc. If all these properties had gone on to swell the supply of properties for sale, the collapse in property prices would have been far more severe.

In short, we are likely to continue to see falls in property prices, rises in the vacancy rates for owner-occupied homes and, to a lesser extent, increases in the vacancy rates for rental properties as well. Looking on the bright side, we might expect that forced owner-occupier vacancies will generate sufficient rental demand to offset the migration of owners into the rental market. But personally, I believe we won’t see this for another three or four years, with rental prices remaining fairly stable or even falling slightly in the short term.

Despite what some optimists or politicians might say, the outlook for property owners is cautious. And we've been saying for a long time. The anxiolytics They’ve always been bad travelling companions if the recession drags on. Welcome to the Depression. Cheer up.

Regular readers of this blog know that we never like to talk about politics, but rather about the economy, and this article should be read from an economic perspective, as we do not wish to engage in debate over political or trade union positions.

The other day I read some comments by Jose Mª Álvarez, General Secretary of the UGT in Catalonia which left me absolutely stunned. And I can’t have been the only one, given that a few hours later, on television, this man reiterated his views in an interview in an even more vehement and crude manner.

The source of the controversy is the redundancy plan that Sony is set to announce for its factory in Viladecavalls (Barcelona), which will affect 275 of the 1,600 people who work there. Furthermore, these redundancies confirm once again the policy of cutbacks and redundancies affecting more than 8,000 jobs, which the company announced months ago. But however unfair and unexpected this may be, a trade union leader cannot threaten the company or attempt to turn public opinion against it. At least, if I put myself in the shoes of the workers who have been lucky enough not to be on the blacklist of the 275. If I hear such threats from the General Secretary of the UGT, who is supposed to be defending my job, in a global crisis such as this, I’d feel like covering his mouth and telling the Sony executives, «Forgive him, for he knows not what he says.» Here’s an excerpt of what the trade unionist spouted:

«If they push things too far, they could face retaliation from their customers.". We’re right in the middle of the Christmas shopping season, and Sony needs to realise that it has a brand—and that it’s a brand that sells well in this country. And that »If he keeps rubbing people up the wrong way, they might switch brands."

Jose Mª Álvarez, General Secretary of UGT Catalonia.

Just a few weeks ago, this same union leader led several protests demanding «more work quotas» for the Nissan factory, which was set to announce another redundancy plan affecting 1,680 workers. They called them «gangsters» and demanded that the redundancy plan be withdrawn because he considered it a «threat» prior to negotiations. Aren’t threats to boycott brands and withdraw redundancy plans against those who must drastically cut production and costs just to survive far more typical of low-life gangsters? Making things difficult for those who must cut costs to maintain some level of activity is tantamount to begging them to cease operations entirely and relocate their business (whether residual or not) to other countries that make fewer demands, hurl fewer insults and issue fewer threats. It is not a question of trade union or social justice, but of job security in times of severe crisis.

I find it extremely dangerous that someone like this should be defending the interests of the few workers who will continue to work in these companies. The economic outlook is devastating, yet the General Secretary of the UGT in Catalonia continues to treat business leaders as if they were stealing money from the workers. Just as vehemently, if not more so, than at the height of the economic boom, when he had to defend pay rises and reductions in working hours to offset the billions in profits that companies were making.

The fact is, this union leader continues to in Disneyland, in the welfare state, and hasn't realised that the world has changed radically.

But for heaven’s sake, can’t you see that the business situation—and consequently the employment and social situation—is extremely serious? It is telling and paradoxical to «demand more working hours», but for this to come from someone who has spent their life demanding cuts in working hours is simply unheard of. The fact is, Mr Álvarez, the world has changed – and for the worse, in case you haven’t noticed. Whereas you used to demand (a curious concept, that of ‘demanding’) fewer hours, you now demand more hours (even more curious). At least enough to be able to earn a wage. But business conditions are radically different, and multinationals are no longer striving to maximise their profits but to survive as companies through cuts in production, costs and relocations. Only a few will succeed, because many will fall by the wayside and their redundancy schemes will affect 100% of the workforce. And if the proportion is significant, governments will face a serious problem that they will pass on to all of us, both those who have lost their jobs and those who have kept them. As long as the trade union leaders who are supposed to defend workers’ interests fail to realise the world we have been living in for almost two years, they will continue to make fools of themselves. In this new global and economic landscape, we need new trade union policies and arguments. Otherwise, the global crisis and the severe recession we are only just entering will sweep away those foolish trade union leaders who remain wedded to concepts that were valid in times of economic expansion, but which today are not only useless but also extremely dangerous to the interests of workers and the local and regional economy.

We cannot blame the current economic situation on the 35- or 40-hour working week, not at all. But what is clear is that, to avoid zero-hour contracts, the way forward lies in a massive increase in productivity. And not even that solution has managed to pull Japan – a country as productive as they come – out of a depression lasting more than two decades. Personally, I find the 65-hour working week that Europe rejected a couple of weeks ago excessive, but the answer cannot be the Eurosclerosis as we know it today. The labour policies needed to tackle the challenges ahead are going to be very tough. Perhaps comparable to those our grandparents experienced, because economically – but above all socially – the regression is going to be tremendous. Nor do they guarantee success, but it is clear that, faced with such a scenario, trade union leadership must also be rebuilt, or it will be highly detrimental to the interests of workers and the economy. After all, dissociating the two – workers and the economy – leads to an absurd collapse that is obvious to almost everyone.

Prosperity in 2009 is something we all hope for, but it will not materialise, barring a few notable exceptions. Therefore, those who seek happiness in material things will, for the most part, feel very unhappy. And it is possible that not even the coming years will bring a substantial improvement in the great difficulty that families will face in growing their wealth. For many, it will be a pipe dream to even manage to maintain their current level of wealth, and indeed many fortunes, large and small, have already suffered severe declines in 2008.

Those who will succeed in 2009 are, naturally, those who know how to make the most of the opportunities that arise. And as in any crisis and times of change, the opportunities are and will be substantial, but difficult to spot. Only a privileged few, those who know how to discern where did the value go, finding it and making the most of it will be possible. The future belongs to them. And for the rest of us mere mortals, this crisis will have wiped out—and will continue to wipe out—the efforts of many years, even of generations: Cash invested in the markets, business losses, a sharp fall in the value of their properties, etc. All of this forms part of a grim calculation that we can all make if we really want to take the red pill that makes us see the reality of the current and future development of our heritage. However, many, on the contrary, will prefer to take the blue pill y look to the future with confidence immediately right at the heart of the global financial matrix.

I wish you all happiness for 2009, but most of you shouldn’t look for it in career or financial advancement, because both will come at a high price this year and probably for years to come. It would be better for many of you to shift your mindset away from consumerism towards a more spiritual outlook; otherwise, the fall will be too harsh. The hard times our grandparents knew are already here and are set to stay for a few years. Either we adapt by working hard, lowering our expectations and finding happiness and value in new places and ways, or we’ll have a very hard time of it. Even if we rediscover courage or seize opportunities, it will be a good exercise to view the world and the modern economy in a different light. After all, we create it ourselves, day by day.

Happy 2009, but prosperity is a given for most people for a few years. We’re squandering our future over the past few years, and we’ve written off loss-making investments in securities and property, impulse buys and luxuries that should have taken years (or a lifetime) to pay for, and corporate debts that rely on that frenzied cash flow to prop up their credit pyramids. Unfortunately, we cannot return to the future from which we draw the wealth we have lost today, but we will have to cross the desert of 2009, 2010, 2011, 2012… who knows. And just as in life itself, we must enjoy the journey, even if it is through a desert.

My very best and most sincere wishes to those on the blue pill who cling to the illusion of an imminent prosperous oasis. To those on the red pill, I also offer my solidarity and admiration; see you in the desert – I’m getting by.

A promise is a promise, and here is our account of the unfair treatment that exists between various autonomous communities regarding inheritance tax, with Extremadura and Catalonia being the worst affected compared to others that benefit far more, such as Madrid, the Basque Country, Valencia, Navarre, etc. Tax relocations will be the order of the day as long as the differences remain substantial. The gap is enormous, and from here we humbly join the claim brought by Putabolsa.

http://www.tv3.cat/videos/913359

Abracadabra, goat's leg…

Ahora que se cree que lo peor de la crisis crediticia ya ha pasado, son muchas las voces que se han apresurado a recomendar la entrada en bolsa porque «los precios son muy bajos y las oportunidades, muchas». Hay que tener en cuenta, sin embargo, que la mayoría de estas generosas voices son las mismas que hace unos meses, en pleno vendaval bajista, seguían sugiriendo unos porcentajes de renta variable entre abultados y exageradamente desmesurados. Obviamente, los incentivos que movían en aquel entonces sus recomendaciones (y ahora) son muy distintos de los objetivos y las circunstancias de la gran mayoría de patrimonios, por eso hay que ser cuando menos escéptico ante este tipo de amables recomendaciones.

Además, el hecho de que, de momento, se haya logrado contener la debacle del sistema financiero actual no debe confundirnos y hacer que dejemos de tener presente el hecho de que la depresión que se avecina va a ser larga y, para bastantes empresas, difícil de superar. De momento, en el horizonte no se vislumbra la luz, más bien todo lo contrario (escándalo Madoff, posibles nuevas olas de impagados, esta vez provenientes de inmuebles de uso comercial, etc), por lo que conviene obrar con precaución y humildad.
Esto no quiere decir que en el entorno actual no haya buenas oportunidades de comprar empresas de alta calidad a unos precios con los que hace año y medio habríamos soñado pero, ojo, no es oro todo lo que reluce. A la hora de seleccionar los valores que pueden ser interesantes es muy importante estudiarse bien el balance de la empresa, la capacidad que tiene de generar dinero, la posición competitiva que tiene en sus principales mercados, así como las ventajas competitivas que le blindan frente a sus competidores, huir de empresas con una deuda grande en comparación a sus activos, y aún así, ser excesivamente cauteloso, y aplicar una reducción al precio objetivo que nos salga, para dotar de una mayor seguridad a la inversión, y siempre considerar nuestras circunstancias personales, para finalmente decidir si dicha inversión se adecúa a nuestras necesidades y las de nuestro patrimonio.
Leo una cartera consenso sobre bolsa española, compuesta por 10 valores y elaborada por 25 analistas, en la que no me sorprende la presencia de los grandes clásicos, Telefónica, Santander, BBVA, Iberdrola, Repsol (otro día comentaré los incentivos que mueven a los analistas a recomendar siempre los mismos valores «big cap»). A esto me refiero con estar con los ojos bien abiertos y saber distinguir entre oportunidad o trampa. ¿El hecho de que el Santander haya bajado tanto supone una oportunidad? ¿Y si no mantiene el dividendo al mismo nivel? ¿Podrá Telefónica seguir su crecimiento con las malas perspectivas actuales en España y Argentina?

Como seguidor del value investment, estoy convencido de que siguen existiendo empresas infravaloradas que pasan desapercibidas para el gran público, pero eso no significa que por tener un PER ridículo o una alta rentabilidad por dividendo (proyecciones basadas en datos pasados que pueden cambiar de la noche a la mañana) una empresa ya sea candidata a engrosar nuestra cartera. Como muestra, un botón. En un escenario tan cambiante como el que estamos viviendo, la aparente oportunidad se puede transformar en trampa en apenas un trimestre. Del mismo modo que al fijarnos en las cifras de paro en España (y en otras cosas) no podemos pensar en otra situación económica futura que no sea la de depresión, al analizar una empresa hay que situarla en el contexto de la coyuntura económica y en función de la calidad de la misma y las perspectivas que tiene actualmente, decidir si es una buena inversión. Y, como últimamente decimos, probablemente las mejores oportunidades estén al otro lado del charco.

2009 has come and gone, and no one knows how it went. Whilst some watch in astonishment as it collapses first-round inflation to make way for deflationary depression, whilst others dismiss those who mention the word ‘crisis’ or ‘crash’ as exaggerating. There will even be a few who continue to based at Disneyland. But the dark cloud is hanging over us, both for those of us who sense it and for those who buy a flat because it’s a bargain…

The lottery will plug the gaps At the end of 2008, more than ever, because almost everyone’s finances are in a shambles. Nevertheless, that sudden wealth will come to nothing in record time. The economic and social crisis, of which we are seeing only the beginning, will ensure that those lucky winners of the Gordo and the top prizes lose their fortunes within a few years. The same old story will repeat itself, both now and in the future, with even greater ferocity.

In short, a world that bears no resemblance to the one we left behind in the summer of 2007. I would even go so far as to say that we left it behind on 11 September 2001. How we long for the end of the 20th century at a time when our main concern was international politics.

The multi-crisis we are facing is so serious that it has overshadowed the oil crisis we were experiencing just a year ago. Here is the article from last Christmas. It seems like only yesterday that we were sending you our best wishes, saying:

Merry Christmas and a Happy New Chaos.

We wish you a Merry Christmas and a Happy New Year. And in that order: good health and money.