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In the previous article, The Key Factors in an Investment: Circumstances vs. Risk-Return Profile, we have received the following revealing comment from Mangallous which I think deserves a reply in the form of a post:

«I have been reading your work for some time now, and although I have no doubt as to your professional integrity, I have a serious complaint to make.’.
Those of us who’ve been involved in the markets for a few years now are so scared and terrified this year that we don’t know what to think anymore.
All that talk about the time horizon, each person’s risk profile, and where my savings or investments are headed – whilst not entirely untrue – already sounds almost as hollow to me as any sales pitch from a high-street branch sales rep.
Mind you… I’ve used it too, because I’ve also been selling motorbikes in private banking.
What’s interesting for your readers – and I’m one of them – is how you’ve weathered the tsunami, or whether you’re just as badly hit as the rest of us; what you’ve invested in; how you’ve put your foot in it or managed to dodge the blow; what your medium-term outlook is; which stocks are undervalued… The rest is fine for a chat with clients to win over a few over a cup of coffee, or for the foreword to some McKinsey handbook that’s completely useless in the real world…»

As will be clear, Mangallous, I think the only thing we agree on is our admiration for Xavier Sala-i-Martin.

Mangallous, our worlds are different. «All this fuss», as you put it, is nothing more and nothing less than the vast difference between looking at the markets, the competitors’ benchmark and the return as at 31 December (your commendable and, I have no doubt, honest work); and ensuring the proper growth of a family fortune, as our Family Office does. It is a question of perspective: whether to look solely at the year-on-year return on stock market investments, or to work across a myriad of areas such as taxation, property, family circumstances, legacies for future generations, family philanthropy, corporate advisory services, coaching for heirs, the optimal legal structures for each fortune, asset relocation, and a loooooong etcetera that we have been discussing for years and in hundreds of articles which you seem not to have understood at all. And all of this, of course, without forgetting such an important aspect as the financial management of monetary assets, which is where the work of asset managers—such as yourself, for example—comes into play.

You’re, as you put it, «scared stiff, terrified or drenched» because you see your stock market portfolio as a whole universe. That’s why I’m telling you it’s a question of perspective.

It is no surprise, then, that we always protect the bulk of our clients’ assets through fixed-income investments, and always in accordance with the rigorous standards set by the Balance sheet Vital tailored to each individual. Consequently, the extent to which what you might consider a nightmare affects you is greatly minimised, as it should be. Furthermore, the selection of fund managers, funds or portfolios and other derivatives that may potentially be added, depending on the design of each BV, are selected according to criteria based on two fundamental concepts: The historical rigour netos (if any), and the absolute independence of interests, as well as, of course, all the investment selection criteria that are suited to the circumstances for each Customer, as we have already explained in the previous article. Only in this way – through high-risk investments and the proportion of one’s assets allocated to them – can we minimise losses in bad times and maximise profits in good times. But infinitely more important are all the criteria on which the rigorous design of a BV the detail involved in simply selecting the stock market assets that make up your portfolio.

The ups and downs you experience on the trading floor or on screen, in volatile markets, only have a negative impact on the smallest proportion of the portfolio that was jointly designed for this purpose with each client. We probably don’t know how to do your job better than you do (although, judging by your tone, I’d venture to say we may well have more years’ experience of following the markets). But bear in mind that you won’t get the answer you’re asking for, nor will you find it anywhere else, simply because there is no magic formula that guarantees profits in the equity markets these days. No one will give you a foolproof formula that will make money for you and your clients in the future, no matter what happens on the stock market. And anyone who claims to do so is deceiving you. Forget about finding the magic formula. SYou’ll only come across illusions that are extremely dangerous for you and, worse still, for your clients.

Managing a family’s wealth over the years goes far beyond simply year to date (year-to-date performance) or any other short-term performance of any fund or index that you monitor on a daily basis. EI hope you can see beyond the heads of those around you and understand this. I deeply regret that, as you yourself acknowledge, you have been «»selling motorbikes in private banking with empty sales pitches from high-street branch sales staff". And I don’t just feel sorry for you – who’s peddling motorbikes in a way that ought to be keeping you awake at night far more than it actually does – but I feel sorry, above all, for the customers who, over the course of your life, bought the motorbikes you sold them. For you, they were just small commissions and accolades that have propelled you to where you are now, but along the way you’ve ruined the efforts and hopes of many families who trusted you and your smart tie. Of course, you did help some of them make money, but Don’t kid yourself – they were merely collateral damage in your main objective, which was to sell indiscriminately the company’s products, for which you were paid a fixed salary plus a variable bonus. And in these extremely tough market conditions, the consequences for your career must be devastating.

But please don’t see this post as a personal attack on you. We don’t even know each other. What you’ve been doing in your job is common practice amongst bankers and other asset managers. But just because it’s common practice doesn’t make it any less shocking or reprehensible.

I know lots of people like you who, one fine day, insightful and memorable They ceased to be part of the armed wing of the banking and financial sectors. Most of them (though not all) saw their financial and career prospects cut short by this decision, but I take my hat off to them because they chose the difficult but right path. It is essentially a matter of personal and professional ethics, which is not incompatible with success, even if that path is longer and more winding than the financial fishmonger’s ‘motorway to heaven’.

To conclude, I’ll answer your questions: If you’re referring to RV, I have to say that at the moment we recommend holding only a very small amount in portfolios, provided that the BV consider this, placing greater emphasis on US non-financial value and blue-chip stocks. Although this depends on the approval of the mother of all rescues, there may be some financial opportunities. For those BV As for emerging markets, we are focusing on Latin America and Greater China. Our medium-term outlook (if you are referring to the global economy) is very negative, given that the fact that to ensure the system’s survival does not mean that this is not Let it be the Perfect Storm which could wipe out much of the economic growth and prosperity achieved over recent decades. As for the undervalued stocks you’ve asked about, I’d say there are countless examples these days. But only time will tell whether the current apparent undervaluation was not simply the start of these companies’ decline. Therefore, you should never invest more than the amount set out in the BV for value shares, no matter how much they’ve fallen. Even if they’re made of gold, they’re still knives falling from the sky. As you can see, you won’t find a miracle share that will definitely get you – and your clients – out of this situation. And I wouldn’t recommend taking a gamble, for the sake of the assets that depend on you. Readers – and of course you too – must remember that none of the above holds any universal truth without first drawing up your Vital Balance Sheets, and it is only in light of these that our recommendations make sense.

Fortunately, customer acquisition is now a thing of the past for us, and we have never sold our expertise, either on this blog or in any book. I would simply be satisfied if, through these reflections, I have managed to open your eyes a little and broaden your horizons beyond the losses

That's it, game over, that's the end of the road. Nothing will ever be the same again.

The total figure is approaching the 600 billion already committed, to which must be added the 700 billion from the final plan, that is to say: 1,300,000,000,000′-$ ($1.3 trillion) or, to put it another way, 150,000,000,000,000 pesetas (150 trillion pesetas) is the approximate cost of our excesses. Everyone’s. Because those of us who bought the securitisations or compulsively took out loans in one form or another, whether we realised it or not, are just as jointly responsible as the securitisation firms, the credit rating agencies; or as the companies that recklessly offered mortgages to the insolvent, and they, in turn, are to blame for embarking on the purchase of a house without knowing how to swim or having a life jacket. A explosive cocktail Financial markets, speculators, the credit and property bubbles, with a dash of terrorism and new geopolitical orders, a good splash of oil speculation, and all served up in a long drink glass made in China.

However, it is highly likely that hundreds of billions of dollars could be saved if some Americans were able to keep their jobs and their dignity, and thereby avoid the foreclosure of their partially paid-off homes. Even so, most of the repossessed properties will end up in public or quasi-public hands, which will then put them back on the private market according to criteria that are, for the time being, inscrutable. And they will have more than earned it.

European banks are breathing a sigh of relief because only those that acted like bloodsuckers, exploiting the now-defunct property developers by recklessly concentrating their risks, will disappear from the map. It seems that only the savings banks (mostly Spanish) and the odd reckless, second-rate little bank will sacrificed by the law of natural selection. Banking with a capital 'B' seems to be spared from extinction if Father, Son and Holy Spirit They dry and iron the wet paper they’ve been piling up on their balance sheets. Now all that’s left is the easy part: reinventing their core business, as they have done time and time again, whilst negotiating the upcoming regulations downwards. Beads of sweat were already trickling down the faces of big names in suits and ties in the sumptuous offices of the most prestigious organisations, for example at UBS without going any further. It was only a matter of weeks, or even days, before those beads of sweat became apparent to the general public. And the ground would have given way beneath their feet, and beneath those of their millions of customers too.

Massive interventionism in the name of the most extreme form of liberalism: socialising losses and privatising profits.... these are truisms that will remain just that, but it is essential that we learn from this historic mistake made by everyone. In my view, the action taken by the most powerful nation on the planet is not open to criticism, but rather vital. To judge the solution on the basis of its fairness is to forget that there is no better one. There is no alternative; or rather, the alternative is so harmful and regressive that humanity cannot afford it. It is the only one, although unfair a way for millions of people to survive the widespread poverty and famine that would have led to the collapse of our economic system. The Great Depression of the 1930s would have been child’s play compared to what the whole world would face if the most globalised house of cards in history were to actually collapse, since time immemorial. Even as we consolidate the foundations of the System, at the expense of all the inhabitants of North America and those affected by the coordinated interventions of past and future central banks, we may well have to weather something akin to that depression. But it will be a far lesser evil.

Throughout the 20th century, there was endless theorising about whether or not it was advisable to intervene in Mr Market. There were eminent theories to suit every taste. But they all spoke of a market in its purest form, and none of them envisaged that our own abuses would distort it to the point of absurdity. So much so that market self-regulation would endanger too many lives and make Intervention with a capital ‘I’ imperative. The theory worked until very recently but, as always, reality surpasses fiction. In this case, reality has surpassed economic theories.

Perhaps Obama has lost his appetite for winning the election, and for McCain, defeat would not be quite so bitter if it were to happen. Or vice versa. The fact is, the post-Bush landscape is more daunting than ever for the future most powerful leader on the planet. But the path has been laid out, and now all that remains is the journey through the desert itself.

The identification of loopholes, provisions, coordinated interventions, bailouts, vultures and other developments in the greatest multi-crisis in history were leading us towards the the light we sensed at the end of the tunnel even a year ago, when hardly anyone knew the meaning of subprime. However, let no one be under any illusion: We haven't come out of the tunnel; they've just turned on the lights. Powerful spotlights that reveal its filth, its winding nature and its immense length. We now realise that we would probably never have made it out unscathed, even if we had glimpsed a light at the end of the tunnel. Now we know what lies ahead, and this should serve as a lesson to us not to get ourselves into another dead-end situation again.

Meanwhile, in a grotesque turn of events, those analysts in their suits continue to recommend investments left, right and centre, justifying them with academic reasoning without the slightest sense of the absurd or of ethics.

Call me soft-hearted or naive (or worse), but I am proud of the coordinated global response that has continued to this day and of the action taken by the Trio Calavera backed by the Democratic opposition.

11 September 2001 and 18 September 2008 are two dates that have changed the world. What a 21st century lies ahead of us. A clean slate—unfair and accursed—and a hopeful and blessed new beginning.

What we are about to discuss applies, for the time being, only to the US market and its official bodies such as the Fed. However, we may see similar developments in Europe and at the ECB in the future.

The scene is brimming with hope and a desperate need for good news to lift people’s spirits. Bear Stearns, Mac & Mae y AIG, are, to this day, the chosen ones for glory or rrising stars. On the contrary, for the time being, only Lehman Brothers features on the blacklist of fallen angels. Investment banks, unorthodox mortgage institutions that are difficult to categorise, insurance companies… various types of financial business models, but all with the same outcome: The public bailout or semi-public.

As for bailouts or private mergers and acquisitions, the criteria have naturally been commercial, that is to say, market-driven. There may have been some political influence in the form of personal commitments and/or non-commercial favours, but they have essentially been based—and will continue to be based—on commercial criteria. However, on the basis of what criteria have decisions regarding bailouts and public interventions been made? That is the million-dollar question, and it is likely that those responsible will take some of those criteria to their graves. Nevertheless, we venture to suggest that some are directly linked to the scale and severity of the consequences of letting the angels in question fall. In other words, depending on the damage this might cause to the System, the default or the bankruptcy of those companies, the Fed or whoever is in a position to prevent it will take the necessary action (in conjunction with the Fed). However, I must say that given the current economic climate, I refuse to believe that such decisions could have been influenced by personal interests, political considerations per se, or any other factor other than the pure pursuit of the best solution to the current financial crisis. I sincerely believe that the leaders in question are aware of the extreme gravity of the situation and are working tirelessly and without interference for the global good. That said, if the extent of the damage is the main criterion for deciding on the bailout, we can to jump to conclusions those institutions that find themselves in an extreme situation, such as investment banks, insurance companies, private mortgage lenders or commercial banks themselves. Let me explain. Perhaps the manoeuvres, overtures, flirtations and rumours of deals and rapprochements between private US financial institutions are not strictly motivated by commercial reasons. It’s possible that Wachovia isn’t actually in a position to acquire Morgan Stanley, and in fact nobody knows whether this is a takeover or a merger. Who’s buying whom? Who’s in a worse state? We might well suspect the same of the deal between Bank of America and Merrill Lynch. We’re back to the same old story Where the hell is Wally?, and I doubt the Fed knows for sure.

Perhaps not all the merger or acquisition deals we are seeing now, and will see in the future, will have a viable plan at its core. Nor should they be based on corporate restructuring aimed at optimising resources that are already severely depleted. Perhaps some of these sudden infatuations are simply down to the fact that unity creates pressure, not strength. Under pressure to be rescued by an underfed and overwhelmed lifeguard.

Given the amplified damage caused by the collapse of a macro-entity comprising two or more entities (commercial and investment banks in the cases mentioned), it may be more likely that cries for help will be heeded which, on their own, would be lost in a sea of storms, as happened with the heart-rending cries for help from Lehman Brothers. Machiavellian? Yes, but also likely. And I would venture to say that, in a way, it is understandable given the situation of extreme desperation faced by the shareholder-director-owner, who sees a imminent extinction of its financial institution, with the resulting disaster for creditors, shareholders and bondholders.

With all this flirting and «UTEE”»s" (temporary partnership) strategic (businesses) let us hope that these false vultures do not hinder the work of the genuine ones, that they do not cause amplified tremors that exceed the structural and confidence-based capacity of the system, or the capacity for public bailouts. I will never tire of repeating it: only the public and private vultures can save the system.

Dollars: Those reckless American banknotes that come in different denominations but are all the same size.

Jorge Luis Borges (1899–1986) Argentine writer.

Ojalá pudiéramos disponer de un Waste Allocation Load Lifter – Earth-Class (WALL-E) para eliminar la chatarra financiera y los residuos tóxicos generados por el abuso creditício de la última década. Alguien tierno y con corazón que se ocupe de hacer más habitable el mundo inversor. Pero a diferencia de lo que sucede en la memorable película de Wall-e de Disney, éste debería venir a limpiar el planeta antes de que desaparezca todo vestigio de nuestro Sistema Financiero y no 700 años después. En su ausencia los carroñeros de nuestra civilización de Mercado deben hacer su trabajo, sin interferencias negativas ni menosprecios ajenos. Más bien al contrario, con la ayuda de entidades públicas que jamás agradecieron tanto la labor de los scavengers. Sólo ellos pueden evitar que un Wall-e deambule absurdamente por yermas tierras financieras cuando ya ninguno de nosotros se mantenga en pie para necesitarlo.

Estos carroñeros son tan diversos como necesarios: Desde fondos soberanos de medio oriente hasta simples especuladores que compran cuchillos de oro en plena caída, pasando por los clásicos Buffett, JP Morgan, Bank of America, el mismísimo BSCH o fondos soberanos Chinos. Además entre fusiones y rescates (sobre todo el de Mac & Mae) se beneficia a los grandes tenedores de deuda de las entidades en estado de descomposición que, a su vez, ejercen de muros de contención de la devastación financiera. Entre estos grandes tenedores se encuentran muchos bancos centrales, y esto puede dar una idea de la vital importancia de que la carroña sea debidamente asimilada por scavengers y rescatada por quien esté en disposición de hacerlo, sea quien sea.

A few voices se sorprenden de que los tenedores de deuda de entidades distressed salgan mejor parados que sus accionistas. Quizás sea porque no comprenden que la inversión en acciones y la compra de deuda corporativa son animales distintos, a pesar de que muchos las confundan en cuanto la bolsa se vuelve bajista o simplemente flat (algún idiota incluso las confunde en ciclos alcistas). Señores: El hecho de que los rendimientos de la RF sean circunstancialmente comparables o superiores a los de la RV no significa que se deban considerar herramientas de inversión afines. Es del todo lógico que ante un rescate o absorción más que dudosa, el inversor en acciones pierda el 100% de su inversión mientras que el tenedor de deuda pueda salir no sólo airoso sino incluso especialmente beneficiado. Son riesgos totalmente distintos.

El margen de maniobra del comprador de deuda ante un credit event, especialmente ante un default, es nulo. Y su buen fin no depende tanto de los balances sino del grado de incertidumbre de su futuro como entidad, al contrario de lo que suele ocurrir con el precio de la acción. Ante una absorción o rescate sólido la deuda queda exenta de duda, mientras que los fundamentos contables y en definitiva la esencia del corporate sigue siendo muy incierto. Tanto como el valor de sus acciones. En ese escenario sólo se habrá disipado la duda de que la acción pueda alcanzar el valor cero, pero a partir de ahí la incertidumbre para el accionista suele seguir siendo total tras una fusión o rescate. Además las circunstancias de dicho rescate público o privado probablemente distorsionen los futuros fragmentos de la empresa hasta límites irreconocibles. Por tanto ¿qué certeza podemos encontrar en el precio de sus acciones? Sólo su supervivencia. Sin embargo el potencial windfall puede llevar a la acción a un 1000% del valor de compra pre-rescate en apenas unos días, y eso es algo que los tenedores de deuda no conseguirán jamás por muy beneficiados que se vean del proceso de absorción, intervención o rescate, como ha sucedido con Bear Stearns. Repito, son animales distintos. De hecho, alguno que yo conozco bien compró acciones de Lehman Brothers en la apertura del 11-S (con dos c… y perdiendo más del 18% en un sólo día a la espera de ese pelotazo), en cambio su deuda corporativa sigue otra vía incierta pero muy distinta. Pero como explicaremos en un próximo artículo, la bondad de una inversión depende de tres variables: Rentabilidad, Riesgo y las Circunstancias de la Inversión, siendo ésta última la más importante de las tres.

Volatilidades estratosféricas aparte, hasta el momento los rescates públicos, las absorciones y las ofertas privadas para ventilarse cuerpos financieros en descomposición se vienen dando suficientemente. Y que no falten. Es cierto que la honestidad o deshonestidad de las ofertas son directamente proporcionales al grado de descomposición de la carroña, la gravedad de la situación global y a la sequedad del mercado carroñero, pero hasta el momento donde no llega el scavenger privado lo hace el público. Y eso da confianza al Sistema para que muchos comiencen a ver oportunidades históricas en lugar de colapsos histéricos, favoreciendo así la aparición de nuevos carroñeros sobrevolando nuestro dantesco escenario financiero. Jamás sus sombras sobre nuestras cabezas fueron tan reconfortantes.

Esperemos que nuestro tierno Wall-e no tenga que verse como una ánima en pena deambulando entre escombros inertes de lo que en otra época fue una Economía de Mercado. Haciendo una tarea de limpieza ya absurda e inútil, eliminando restos de bancos de inversión e hipotecas que en su día arrastraron consigo el resto de créditos al consumo. Un endeudamiento que murió de éxito allá por los inicios del s. XXI.

«Cuanto mayor es la riqueza, más espesa es la suciedad»

John Kenneth Galbraith

P.D. Comunicado oficial de Lehman Brothers 24h después de escribir este artículo:

For Immediate Release

LEHMAN BROTHERS HOLDINGS INC. ANNOUNCES IT INTENDS TO FILE CHAPTER 11 BANKRUPTCY PETITION;

Fue más apetitosa la carroña de Merryl que la de Lehman. Game Over…

«Our economy and our markets will not recover until the housing market correction is behind us»

Henry Paulson – US Secretary of the Treasury.

This statement was made at the same time as the announcement of the bailout was made public (once again on a Sunday) the strange couple. Or rather, his legal guardianship, politically correct euphemism. This bailout finally puts a face to the amorphous and mysterious monster that is the credit crisis. In one fell swoop, we learn on whom the survival of the financial and mortgage system largely depends, we are able to quantify it and, furthermore, we lay the foundations for a bailout as viable as the US government itself can be.

At whose expense?… the answer is obvious to everyone. The law has never been the same for everyone. Especially for those who are so strong and powerful that their disappearance would shake the very foundations of the System. We are facing the most costly injustice in modern history. But many of us believe that, despite everything, it is the least traumatic solution. Perhaps the only one.

The consequences may be predictable, but that does not mean they are inevitable. Those of us who have experienced the markets and have been in this business for several decades know this only too well. Many analysts will see this state intervention, from the most liberal of states, as heralding a bleak future for the dollar, which will have to be printed in vast quantities. And consequently, a bleak outlook for the equity markets as well. But the benefits of dispelling much of the uncertainty that has accompanied the credit crisis since its inception are inscrutable, as well as the The ways of the Lord, as a preacher might say. That said, Paulson’s pithy remark quoted at the beginning takes on a whole new meaning.

Indeed, right in the middle of European crisis tsunami, watch the light at the end of the tunnel The US dollar could have a very powerful stabilising effect. It could even more than offset any short-term weakness in the dollar, which may gradually fade in the medium to long term, provided that the necessary financial support is provided to the two companies under supervision. The markets may also gain confidence from the fact that we have finalised or even almost finalised the problem of credit crunch.

We’ve identified the criminal by name, he’s been arrested and brought before the judge, who has effectively granted him a reprieve, and we’ll all have to foot the bill for his rehabilitation programme. But the truth is that we all feel safer walking the streets now that the villains Mac & Mae They’re no longer on the loose. They’re now in legal guardianship the most expensive and most benevolent in history. But let’s not condemn them without taking a look in the mirror. As my grandmother used to say: «Opportunity makes the thief», and we made it all too easy for this pair of prodigal «delinquents» in our eagerness inversopata. Let he who is without sin take the first loan or the first «safe investment» at LIBOR + 2.25%.

Perhaps this odd couple with a name like an ice-cream brand ((Freddie & Fannie’s) stifle the growth potential of the world's leading power for many years (The size of the lump does matter). And its currency, which has already taken a beating, could well spring a few surprises. Such an injection of banknotes will have to be accompanied by new paper money, which is likely to be a major driver of inflation. But as M1 is included in M3, we must also bear in mind that this increase in M1 improves the ratio of physical money in circulation to the outstanding credit gap, dispels many doubts and, at the same time, strengthens the system. And that is a good thing, especially given the massive global deleveraging that we have been forced into. It is therefore clear that this colossal bailout would shatter any affected currency and cause macroeconomic indicators to plummet and of all kinds, has many unintended consequences. For all these reasons, the reaction—our reaction—to this unprecedented situation strikes me as one of the greatest unknowns in this multi-crisis involving credit, energy and confidence.

The timing of the sacrifices has practically been decided for the odd couple: There will still be slight increases in portfolios linked to mortgage loans until the end of 2009 (which appear to be inevitable), followed by forced reductions of 10% per annum. On paper, a viability plan for two companies that were born and will die unnatural, given that this plan is a bailout paid for by everyone, the only possible happy ending for which can be its abolition. As we have already said, this death cannot be natural because it would take too much with it, and we must save them to later execute them by lethal injection. Without suffering, without screams, without agony, without splatter, minimising collateral damage as much as possible. Aseptically, with a cool head and the lesson learnt. Perhaps its remains, cut up and recycled, will be of use to scavengers who are genuinely committed to the future.

We know who, where, when, how much and how, and all of this points to serious sacrifices and consequences. The greatest in history. But we know so many things that were previously unknown to us that the effect of so much light may dazzle many markets and blind many unwary investors. Let us be more wary than ever of analyses lacking in humility.

The economy probably won’t recover until the housing market correction is behind us, Mr Paulson. But I wouldn’t be so sure that the markets won’t do so in a fragile, premature and—who knows—perhaps short-lived manner. As for currencies? Today more than ever, they are the mother of all speculation, given that their volatility is skyrocketing amid the historic events we are witnessing. Incidentally, between one bailout and the next, the 9/11 and its Bin Laden options, ...the years just fly by. I love this game!

Here is the video that the Chief Risk Officer (CRO) of Freddie Mac and Fannie Mae, Mr Justin Norisk, sent to Mr Henry Paulson this summer:

Expansión publicó hace unos días un revelador artículo: «Cómo sacar jugo a 30.000 euros en plena crisis», con gráficos en versión papel, en el que se hacía una comparativa de las estrategias aconsejadas por ocho entidades de inversión para conseguir «carteras rentables y de bajo riesgo», según citaba textualmente dicho artículo. Las entidades eran las siguientes: Inversis, Dexia, Atlas Capital, Tressis, Banif, Abante, Unicorp Heritage y Lloyds TSB Spain.

A estas entidades se les pidió una estrategia para conseguir rentabilidades para 30.000 € de entre un 5 y un 10% a un año vista «sin asumir elevados riesgos». De entrada ya debemos decir que el primer error de planteamiento es no definir más detalladamente qué significa «sin asumir elevados riesgos». Por otro lado las estrategias de inversión no deberían recetarse sin tener en cuenta la situación de cada inversor: Sin saber si esos 30.000 € son una parte importante o ínfima de sus patrimonios, si están sobrecargados o no de inmuebles, si obtienen rentas fijas, inmobiliarias, corporativas o laborales más o menos cuantiosas, si su capacidad de ahorro es nula o abundante, si su situación familiar tiene que afrontar obligaciones económicas crecientes como por ejemplo atención a enfermos y/o personas mayores, si su nivel de gasto familiar es cuantioso o austero en proporción a sus activos, si realizan donaciones filantrópicas, si su interés se centra en el crecimiento patrimonial, en las inversiones de uno u otro tipo o en el disfrute de sus recursos, si sus objetivos vitales son abordables en sus actuales situaciones patrimoniales, si quieren legar sus bienes de una forma u otra (todo un mundo), si tienen mayor o menor aversión a la fiscalidad (otro mundo), si… en fin mejor no os aburro más, mismamente lo que contempla un PGR. Lo que es evidente es que estas ocho entidades se han limitado a recetar una medicina mediática y no terapéutica para todos los lectores del artículo en cuestión, sin importarles nada más. Pero lo peor es que la mayoría de lectores leerán ávidamente sus consejos sin ni siquiera plantearse la mitad de las cuestiones que hemos citado ni, por supuesto, tomarse la molestia de comprobar si los consejos que leyeron el pasado año fueron acertados. Y si no aprendemos de nuestros errores, jamás nos los quitaremos de encima ni mejoraremos.

A pesar de todo, vamos a obviar los errores en el planteamiento fundamental y pasemos a analizar las directrices dadas por estas entidades. Lo primero que nos llama la atención es que todas ellas aconsejan invertir en bolsa entre un 30 y un 42%, a excepción de Banif que no precisa porcentajes (sic), y de Atlas Capital que propone un 20% de bolsa y cuya propuesta nos parece la más distinta, como iremos viendo más adelante. También es destacable que la mayoría aconsejen invertir también en US$, algunos proponen RV americana por aquello de que deberían salir antes a flote que Europa y otros RF corporativa investment grade, criterios ambos que compartimos. Pero otros como, otra vez, Atlas Capital, proponen incluso una inversión en un monetario puro y duro en $ en una clara apuesta por la recuperación de la divisa americana (aunque de dudosa eficiencia puesto que otras inversiones en USD podrían aprovechar el factor divisa y conseguir mejores rendimientos durante el plazo señalado de 12 meses). Además ésta última entidad es la única que incluye un 5% de la cartera propuesta en intereses japoneses, a través del fondo Invesco Japanese.

Otro hecho destacable es que todos, a excepción de Lloyds TSB España, aconsejan invertir al menos un 14% en gestión alternativa. Esas inversiones, como ya hemos comentado en otros artículos, son inclasificables por diversas. Y no siempre las elevadas volatilidades (y comisiones) se ajustan a las necesidades de la cartera. No obstante hemos de decir que en un escenario de RV flat o bajista y con la RF en serios problemas, determinados tipos de la llamada gestión alternativa pueden ser una buena opción, pero nunca de forma indiscriminada como propone, por ejemplo, Banif que invertiría el mayor porcentaje de cartera (una vez más sin especificar) en este tipo de inversión.

También cabe destacar que la mayoría se quedaría «en liquidez» con porcentajes que oscilan entre un 30 y un 45%, ya sean fondos monetarios o bonos, aunque la liquidez de estos últimos deje mucho que desear. Aquí vemos dos claras excepciones: Banif que propone renta fija a 1,66 años, otra vez sin porcentajes, con yields inferiores al 5% (comisiones de compra-venta y custodia aparte); y en el lado opuesto otra vez Atlas Capital que propone un 50% de la cartera en realistas depósitos a un año con tipos superiores al 5%.

Todos, sin excepción, barren para casa escandalosamente. Algunos como Atlas Capital con un 20% de la cartera en un fondo propio de bolsa, pero otros de forma mucho más burda como Dexia, que los únicos euros que deja escapar de la compra de sus fondos son el 5% que propone dejar en liquidez; o Banif que aconseja toda su batería de armamento y comisiones pesadas nada menos que de gestión alternativa.

En resumen, si echáis un vistazo al artículo de Expansión veréis como todas las propuestas parecen directamente sacadas de sus panfletos propagandísticos, quizás con la salvedad de la propuesta de Atlas Capital que modera su afán vendedor, aunque incluso ésta cae en los tópicos más indeseables de carteras modelo (conservadora, mixta, dinámica) en cuanto se visita su web. Visto lo visto, me temo que poco variarían las ofertas de todos ellos fuera cual fuese la premisa inicial de perfil inversor.

Si una propuesta estará más acertada o no pasados 12 meses, sólo lo dirá el tiempo. Pero no se ha definido si hablamos de blindar un patrimonio o de hacer crecer 30 mil euros, ni nada de lo referido en un PGR. Por tanto estas ocho propuestas son poco más que hablar por hablar, salir en la foto publicitaria y estar entre los ocho publicados con mensajes que regalen los oidos de sus posibles presas. Es obvio que las entidades consultadas se han limitado a la pregunta de cómo sacar jugo DE nuestros 30.000€ en lugar de cómo sacar jugo A nuestros 30.000€. Nuestro colega Sherpa ya trató el tema del dinero que no trabaja estrictamente para nosotros.

Lo cierto es que parece que, ante la incertidumbre reinante y el panorama previsto, la RV europea no parece tener buen aspecto según nuestro criterio. La norteamericana pinta mejor, pero quizás no antes de 12 meses, si ese es nuestro horizonte inversor. Sin embargo mirando a más largo plazo, los intereses económicos en EE.UU. parecen más atractivos. No sólo en cuanto a RV, sino también en Real Estate prime e incluso RF corporativa no financiera. La consigna wait and see nos parece prudente para crear un asset allocation que blinde un patrimonio sin prisas, y para ello unos meses en depósitos y una buena selección de RF puede ser el buen camino. Dentro de un criterio más allá del blindaje, determinada gestión alternativa debe tener su lugar, pero conociendo qué se va a hacer con nuestro dinero y qué volatilidades vamos a asumir. Uno de nuestros males actuales es que en ese cajón de sastre cabe todo, incluso la necesidad de cubrir desesperada y ciegamente las espectativas que la RV ha frustrado en los últimos meses. Si además diversificamos la inversión alternativa indiscriminadamente, saber que hacen con nuestro dinero será como buscar una aguja en un pajar. Ante la incertidumbre actual parece que la gestión alternativa vaya a solventar todos los problemas de nuestra cartera, y destinar un cuarto de nuestros activos a un universo desconocido es francamente imprudente.

La mayoría de entidades de inversión sabrán sacar el jugo a nuestro dinero, pero quizás no lo lleguemos ni a probar y sin embargo nuestro patrimonio quedará exprimido.

«Pobre hombre… Jamás sabrá lo que es ser joven, porque nació banquero.»

Mayer Amschel Rothschild (1744-1812)

As with any bull or bear run in any market, the rise in the price of crude oil is also experiencing a correction downwards. For many, this will be a typical technical correction, whilst for others it may mark the peak of the price rally and energy speculation. However, let us analyse the fundamentals behind this moderation in prices:

Following a breathtaking bull run over the last three or so semesters (2007/2008), a number of concurrent factors are now coming together to cause the easing in prices we have been seeing in recent weeks. Namely: the absence of unforeseen geopolitical tensions, an increase in supply and a slowdown in the rate of growth in demand, as well as a possible easing of outright speculation driving these prices.

The first circumstance is very fleeting, and we could describe it as sa sense of normality amidst the chaos, although I personally believe that the exploitation of recent geopolitical crises (since the 11 September 2001) has led to a certain degree of market immunity to these factors (see the virtually negligible impact that the latest spasm has been having Russian-Georgian). As for the increase in supply, this is estimated as the net figure between the start-up of new extraction operations and the decline in production due to the depletion of old wells. Finally, the slowdown in the rate of growth in demand is driven by various factors: the destruction of demand caused by high prices, the impact of the economic crisis in the developed world, and a certain moderation in the rate of growth in emerging economies, also due to the knock-on effects of the crisis in the developed world. However, it should be clarified that the growth in demand from these emerging economies is still far from being offset by the slower growth in demand from the developed world; this is why we speak of a slowdown in the rate of growth of demand rather than a decline in demand itself.

For all these reasons, according to a recent report by the International Energy Agency (IEA), the forecast for the balance between the increase in demand and the potential for supply growth clearly favours supply. But bear in mind, this is only for 2008 and 2009, as the IEA anticipates that the crisis situation in industrialised countries will begin to improve from 2010 onwards, at which point the balance will even out. What will happen from 2011 onwards? You’ve guessed it: the Agency forecasts a clear shortfall which will undoubtedly send prices soaring once again to record highs.

In our view, the period of recession in the industrialised countries could extend well beyond 2009 and 2010, but in any case a medium-term rebound in oil prices seems inevitable, due to the enormous consumer demand from emerging economies. Consequently, the crisis in the developed world also seems far from being a short-lived one, as it has a very significant first-round inflationary component in the macroeconomic figures; but unfortunately (or perhaps not), this crisis appears to do little to encourage a moderation in future energy consumption.

The technical correction we are currently experiencing appears to be nothing more than that: a correction within a rally, the fundamentals of which continue to point towards rising oil prices in the medium to long term. And the worst thing is that there does not seem to be palliative care tools beyond simply moderating consumption and the pursuit of what is, for the time being, the pipe dream of abundant and cheap energy. Let us hope that speculation does not even sweep away the respite offered by the correction before its time. Nevertheless, there are several voices predicting the benefits of the energy crisis through greater efficiency brought about by scarcity. And we will always have the joy of being poor but efficient, in contrast to the excesses of the rich and the oil producers… or was it the other way round… what a mess.

«When you jump for joy, make sure no one pulls the ground from under your feet.»

Stanisław Jerzy Lec

Bad news and misfortunes are easier to bear if they are delivered in manageable doses. Even our ability to respond and find solutions depends on crises not taking us by surprise. We need time to come to terms with bad news and respond effectively. The timing of crises is crucial.

On 12 August 2007, in the midst of the credit crunch, we wrote this article in which we analysed the contagion process surrounding subprime securitisation: mistrust in corporate debt, interbank lending and, finally, equity market volatility. At that time, we did not anticipate that the extremely serious situation unfolding with the credit crunch could be exacerbated by oil prices at $150 per barrel. Had that been the case, the panic that ensued in August 2007 could have severely damaged the foundations of the system, which remain intact today thanks to the gradual release of the bad news we have been absorbing over the course of a whole year. Indeed, the System has had time to absorb one piece of bad news after another, and today’s macroeconomic figures bear no resemblance to those we had in August 2007. And the current figures are likely to be much better than those for next summer 2009. In any case, we are where we are after a year of hard-to-digest realities that have allowed the System to survive. Now it is society’s turn to face these hard-to-digest realities.

Many of us believe that we are only seeing the tip of the iceberg when it comes to the social crisis and macroeconomic figures. But it is very encouraging that we are all now fully aware that we have collided with a massive iceberg and that the bow of our Titanic is taking on water irreversible. No one is dancing gracefully to the orchestra’s music in first class anymore, as most people were still doing last summer. There is nothing worse when facing a crisis than ignoring it.

The longer a disaster drags on and the more it becomes blurred over time, the greater the capacity to respond. If the Titanic sinks very slowly, the evacuation and subsequent rescue operations will be carried out with a greater chance of success, and the damage can be mitigated to a greater extent. It is true that the energy crisis is like a wave that complicates the emergency protocol, whilst at the same time accelerating the sinking. But at last the orchestra has stopped playing and has set to work to assist with the evacuation and rescue. And that benefits the attitude and willingness of the rest of the passengers in the face of the crisis. For the music to keep playing and for the crew (political and economic) to talk to us of a mere slowdown not only solves nothing but makes us far more vulnerable to the shipwreck.

How distant now seems the day we set sail on this luxurious maiden voyage. And how reckless were the words of the captain, Edward John Smith: «»I can't imagine anything sinking modern ships; modern shipbuilding is far more advanced than that.'. Or those of the company’s president, J. Bruce Ismay, who was travelling on board and refused to slow down in order to complete the crossing in record time. They were just as reckless as we have been, taking advantage of an absurdly low price to mortgage our lives and live on credit in a first-class cabin with an orchestra included. An orchestra that has now stopped playing.

We must not view the lifeboats as a traumatic reminder of what we have long since left behind, but rather as a unique opportunity to learn from our mistakes and our arrogance. At the same time, they mark the start of a new voyage towards a world full of opportunities, albeit one that is currently marked by hardship and devoid of music.

As published WSJ, a Citi has had no choice but to negotiate the repurchase of seven billion $ (some sources cite more than twice that amount) of long-term debt instruments with auctionable interest rates or Auction Rate Securities (ARS), which sold with allegedly «malpractice»to its customers. The New York Attorney General's Office, the SEC and other federal authorities, have not ceased to pepper Citi with lawsuits until it has atoned for its sin, which is no less common than a cry to heaven. Citi sold instruments that with the credit crisis have dried up and become totally illiquid, as well as being left with a solvency as dubious as its own degraded underlyings today. The bank pushed to their clients to buy such instruments by assuring them that they were «insurance, liquid and near cash equivalents«The New York Attorney General Andrew M. Cuomo himself said, in his own words.

According to the US judicial system, it appears that Citi could be charged with «...the crime of fraud".«malpractice and poor advice«. Something that, on the other hand, is more than obvious and of simple Common Sense, but not at all obvious if we want to extrapolate it mentally to what our national bankers have been doing with all of us since private banking is private banking, and even in simple commercial banking. In addition to the 7 billion, it will pay another 100 million in fines.

The US is the country where «anything is possible», for better or worse. And among the good, we have seen how a giant such as Citi has been forced to buy back billions of illiquid product now in the hands of its clients and customers, to whom it sold the bike. An example to follow, despite the fact that it has only been possible after several lawsuits, threats and a heavy hand from the corresponding official bodies. But undoubtedly exemplary.

Some of you may be thinking: Why is it Citi's fault that we have been hit by a credit crisis that has wiped out the liquidity and solvency of countless financial instruments? The answer is, as did UBS, In the case of the latter, these sales took place on a massive scale when the entity was already aware that was placing some instruments that burned in the balance sheets of the bank. Even with sales insiders of the top management who took the dead body off their hands before anyone else without caring about the damage that would be suffered by their clients and purchasers. But even on the unrealistic assumption that these entities had not been aware of the problems of these securitisations, it is still a malpractice. Their incompetence cannot massively harm clients who have relied on their advice, and they must be compensated, even if only through judicial pressure. Something similar to what happens with medical malpractice, even if the error is unintentional. The sale of instruments based on subprime debts that have undergone the engineering of securitisation as liquids, insurance and near cash equivalents, The liability is a responsibility that should be debited to the bank's accounts and not to the customer's. Fortunately, it seems that UBS and Merrill Lynch will be added to the list. Fortunately, it seems that the list of entities that will be forced to compensate for their abuses will be completed with UBS and Merrill Lynch, for the time being... ?Will we one day see a European bank lobbied by European bodies on this list? I am afraid not.

It is an old, unfortunately familiar story. Already at the time of the Argentinean debt crisis we were forced by various commitments to intervene with banks to defend the interests of helpless savers who had hitherto only trusted their personal bank manager. We have seen how they had sold Argentinean debt pre-corralito, leveraging the life savings of widows and pensioners. The bank's arguments at the time were limited to phrases along the lines of: «...".«Who would have thought that Argentina would have such liquidity problems. We have never seen anything like it»and other such nonsense. Banks just sell as much as they can, without caring whether the buyer is an informed investor or a widow who blindly trusts the handsome tie-wearing clerk who sits as you enter the office on the right. Much less do they care whether they are risking their late husband's life savings or the recurring income of a well-off rentier. Oh, and the latest in customer information (MIFID), serves only to protect the institution from potential customer lawsuits and not the other way around, as you rightly said. Echevarri in its day.

It is true that among those who will be bought back there will be some well-informed people who knew what they were risking, just as a smoker must know the risk he runs with his cigarettes. But the person who is supposed to look after your health, i.e. your doctor, should never tell you that smoking will not harm you or even improve your general condition, especially if he or she has your absolute, blind and exclusive trust, as is usually the case. In the event of future harm, in my opinion, it is possible to claim for liability, with the aggravating factor that in the case of the doctor/smoker, financial compensation is not enough.

Let Sinners pay for the Just for once in their lives. But the accountability process in the US is, for the moment, only possible in the country where anything is possible. In the meantime, here, those affected by domestic sales of similar products will have to settle for an annoyance that will make them change their manager or, at most, their institution. The downside is that after each bank butchery, the weight of the customer in the new entity will be lower and therefore the «good investment opportunities» will be offered to preferential customers. What a pity.

Asking an employee of a financial institution that sells products to be a good advisor to its customers is like asking the Big Bad Wolf to give dinner to the Three Little Pigs, put them to bed and tell them a bedtime story. Oh... and in most cases the Piglets wouldn't even have been able to build themselves a little house of straw, but they refuse to pay for a professional babysitter because the Wolf doesn't charge them...

If you don't fight to end corruption and decay, you will end up being part of it.

Joan Baez.

The 2008 Beijing (or Peking) Olympic Games are now ready to begin. Official rhetoric is rife and tension is at its peak. This tension is officially justified by the high risk of terrorist attacks, but in reality it stems from the risk that something might slip out of the organisers’ control. all-powerful party. Ensuring the smooth running of the Olympic Games in a country as vast as China is a very difficult task, but a vast amount of human and financial resources has been allocated to maintaining absolute control over everything. Information is controlled, as is the image presented to the outside world, internal discipline, and so on… The self-censorship practised by millions of Chinese people this summer will be absolute, and without it, the state could not succeed in exercising such control.

Propaganda-laden speeches are the order of the day, and a prime example of this can be found on the official website itself:

«The Olympic Games fulfil the dream of all Chinese people. The 2008 Beijing Olympic Games have brought great expectations and inspiration to the world. For those who enjoy life, the Olympic Games are not merely seen as a first-class sporting event, but as a festival created and celebrated by the whole world. No matter where you are, you will be swept up in the Olympic spirit of “faster, higher, stronger” during the Games. Then the joy of “peace, friendship, multiculturalism and win-win” will blossom in your heart.

China is a country steeped in history with a rich cultural heritage. We Chinese are a hospitable people and we are filled with anticipation and enthusiasm at the magnificent occasion that is the Olympic Games. This ancient Eastern civilisation will come into close contact with the world during the 2008 Beijing Olympic Games. It is you, our friends from all over the world, who will bear witness to this momentous occasion! For this reason, BOCOG has set up a dedicated department to serve Olympic spectators. We look forward to providing you with an extraordinary experience and an unforgettable journey to the Olympic Games, with our sincere smiles and wholehearted service.

(...)

Visiting other Olympic cities is also a good idea. In the “Spectator Services” section, we’ll introduce Qingdao, where the sailing events are being held; Hong Kong, where the equestrian events are taking place; as well as Tianjin, Shanghai, Shenyang and Qinhuangdao, where the football matches are being played. You can visit these places to watch the Games or simply to travel. We’ll also provide you with information about them.

»How delighted Beijing must be to see friends coming from so far away! Today’s Beijing is preparing to welcome friends and guests from all over the world with a new look.”

That’s great! Not only do they allow us to travel to certain areas and go beyond simply attending sporting events, but they also encourage us to do so, provided it is considered «good idea«The Piarist Fathers are so wonderful…!’

From the COJOB (Beijing Organising Committee for the XXIX Olympic Games) now comprises more than 30 departments that have been set up since its establishment in 2001. All of these are theoretically intended for the organisation of the Olympic and Paralympic Games, but are primarily devoted to controlling the information and image presented to the world. Departments have been created that are quite unusual for other Olympic Games, such as a General Planning Office, a mysterious General Office, an Environment Department, an International Liaison Department, a Games Services Department, a Legal Services Department and an Audit and Supervision Department, to name but a few.

The following are also well worth a look: official notices which always unfold at breakneck speed and make up the imposed, erratic schedules of accredited journalists. In the purest tradition of despotism and secrecy:

«BEIJING, 3 August (COJOB website) The Main Press Centre will organise a visit to Tiananmen Square on 5 August (Tuesday), from 14:00 to 16:00, to view the state of preparations at the square. During the visit, officials from the Beijing Landscaping Administration will give a general presentation on the decoration process.”.

Foreign journalists accredited for the Olympics are invited to this event. To attend, they simply need to send a fax with their proof of accreditation before 10.00 am on the 5th to the following fax number: 010-84371065

On the day of the visit, simply wait at the designated entrance at 1.30 pm

Contact persons: Tang Hui, Liu Xiaohui
Tel.: 66625259 66625258
Fax: 84371065″

A form of paternalism to which 1.3 billion people are accustomed, although I find it hard to believe that, in the remote and deep-seated rural areas of China, they have managed to motivate the population, however hard they may have tried. I fear that in the parts of China not visible to the international media, people will continue to struggle to escape poverty, and they will do so completely oblivious to the 2008 Beijing Olympics and its patriotic megalomania.

Nevertheless, from our summer seats we’ll be able to enjoy live what will undoubtedly be a spectacular sporting event on a national scale – the sort you don’t see much of these days.

The question is: How has China managed to prevent its Olympic Games from being boycotted, as happened with Moscow ’80 and Los Angeles ’84? Diplomacy or democratic concessions are not the answer. The key lies in the economic power of the up-and-coming leading power worldwide. The fact is that Western democracy is crumbling in the face of the financial support like an ice cube in my summer red wine whilst I lose a game of Monopoly with my children.