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Thursday, 10 July 2014

Gowex fraudulent revenue recognition: Who's next?

Hi my friends! "A long long time ago...I could still remember [as the song goes] when I wrote posts everyday...". Joking aside, I have been very busy, you know, time before holidays is always absolutely overwhelming...

One of most important news from Spain in the last weeks, is the bankruptcy of Gowex. Well, really is not a total bankruptcy, because the regulator suspended trading when the share price was 7.92€...but if you are a shareholder, I am sorry, but your money is equal to zero.

First of all, before digressing about the causes or the fatal consequences of creative accounting, who is (or who was) Gowex? Gowex in its webpage describes itself as an expert in Free WiFi and B2B telecommunications, and its main business is to "reinvent and transform our cities into a Wireless Smart City". Great idea, but...free wifi? free? What should be the revenues of this company? Maybe advertising? Public contributions? What?

Unfortunately, companies with virtual businesses are the perfect candidates to massage their accounts. Yeah, it's fault of the Board of Management and CEO, but ALWAYS (I say always) there is a regulator who did things badly. Remember Enron, WorldCom, Parmalat, Mercx, ...? You know, most of financial scandals have a common link: revenue recognition.


I studied about this in the Executive Master in Finance @ IE Business School. It's easy to change a balance sheet and a P&L account inflating revenues. A total monitoring by regulators is essential.


Wednesday, 11 June 2014

My experiences in Business Schools

Hi my friends! Today's post is personal, it's about my personal experiences, impressions and results, and let it be said, my modest advices. As you can read in my profile (<-- left side of the screen), I studied in various Business Schools around the world, and I have an opinion on them.

First, I would like to stress three key points in relation to Business Schools:

  • Quality of the Programs
  • Expectations
  • Impact on the Professional career
The quality of the programs is beyond doubts. Nowhere in the world you will be able to learn more and more effectively, especially on Finance, Marketing, Business Administration and Entrepreneurship. A lack of management and communicative skills in university-level education is clear. Business Schools will transform you into a new person, will give you a better perspective of the business world and will enriche you culturally and personally. 

Most often, the expectations created are fulfilled. It is important to choose the programme which is right for you: level, required experience, ... You need to understand that one of the key skills is the teamwork: your classmates expect the best. 

And what about the impact on the professional career? I would describe it as a discreet impact. Do not expect miracles. Career Services are good, but here in Spain, with a 26% unemployment rate, neither Companies nor Headhunters are queuing to hire you. My personal opinion is: My professional career would be the same? YES. Shall the courses, MBA and MFin change my career in future? I AM SURE.

Education is always useful, isn't it?


Monday, 26 May 2014

Podemos : The new spanish party and its ten economic proposals

Hi my friends!!!! What a long time!!! My parental duties and the worktime collapse me!!! It's time to write a new post, and this is about the new surprising spanish party, Podemos (We Can, in spanish).

Podemos is one of the parties result of the 15-M Movement (you know, also called spanish revolution, or the "Spain's Indignants"). Remember that this protests began a few years ago due to social dissatisfaction, unemployment, the crisis and the corruption. This movement seemed to be dormant, but awoke yesterday with an unseen democratic virulence in the European election. More than 1.2 million votes, 5 MEPs.

But, what are the 10 key proposals made by Podemos in economy? These:

  1. Debt default, but only the 'illegitimate part'.
  2. Retirement age to 60 and 35-hour working week.
  3. Prohibit layoffs in companies with benefits, and annul the labour reform.
  4. Eliminate the ETTs (Temporary job agencies) and introduce a wage cap.
  5. Pension reform (increase pensions).
  6. Public control of strategic sectors.
  7. Employees' participation in boards of companies.
  8. Taxes on the big fortunes and eliminate the SICAVs.
  9. Increase penalty imposed on tax offences.
  10. Set up a Basic Income Grant.
What do you think about these proposals? 


Sunday, 13 April 2014

The Economist: Essay - The Financial Crises

Hi my friends! I apologise. It has been a busy month, and I had not had the opportunity to write another post...

Today's post, it's about a very interesting essay published in The Economist (the original one, not me haha). "The Financial Crises" is intended to illustrate a comprehensive explanation of the Financial crises in History, and the analysis of banking crises since 1792 shows a conclusion: all banking and financial crises are resolved with a systematic increase in public debt and a bailout of private entities. In the current case of Spain, the public debt will reach 100% of GDP this year. The pattern since the eighteenth century is the same: the Bank never loses.

Read the essay here. Enjoy it!


Thursday, 20 March 2014

EU Banking Union Completed! Q&A from FT

Hi my friends! Sorry for the delay! I think that I should work less hours... Right! Today's post is about great news from Brussels! After long hours negotiating, the terms on the Unified System for handling crises were finally settled.

This agreement is important enough to analyse the different aspects of this much-desired banking union.
If you are a FT subscriber, read this article, Q&A: How the banking union plan will work. If not, I am going to try to summarise it. FT, do not be offended, it's free advertising!

Is banking union now complete? According FT, "Eurozone governments will no longer be the sole masters of their big domestic banks; they will be policed centrally and if they are failing they can be shut down against the home state’s wishes, using funds from a common €55bn pot.". Well, I would like to add that only biggest banks will be supervised by EU, not the smallest.

How does this relate to the eurozone debt crisis? "The teeth of the European Central Bank, the new central supervisor, are already being felt in its health check of big eurozone banks. [...] The banking union will bolster confidence but it is principally aimed at coping with the next financial crisis, not solving this one.". True. The current crisis is past. So wherever the next crisis occurs, EU will be united (in banking issues, at least).

Surely they will be discussing reforms to the reforms soon enough? "Probably. Once big concessions are made in Brussels, the path to more centralisation is smoother.". But EU  is very heterogeneous, and don't forget that Germany still governs Europe...



Thursday, 6 March 2014

EU removes Spain from list of countries with excessive imbalances

Hi again my friends! New post! This post is about the good news from Brussels. The European Comission, the executive agency of the European Union, removed Spain from its list of countries with excessive macroeconomic imbalances, saying the Iberian nation had made significant progress in addressing its economic challenges.

According to the EC, "Spain is experiencing macroeconomic imbalances which require specific monitoring and decisive policy action. In several dimensions, the adjustment of the imbalances identified last year as excessive has clearly advanced and the return to positive growth has reduced risks".

Good news! But, at what price?

As I wrote in previous posts (here, and here), the spanish way to emerge from crisis, you know, is reducing wages to boost competitiveness (...all this without forgetting the cuts in our welfare system, and the unbearable tax burden).

Right, we can accept salary cuts for the common good. We can even accept higher taxes. But not forever.

A new way: Ok, do not reduce wages, reduce labour costs for enterprises. But seriously, please. We don't need patches*. Fortunately, many experts think as I do.


*Patch: Employers will have to pay only a flat fee of €100 a month for each permanent hire in the first two years. That would replace the current system, in which employers make contributions that vary with workers’ earnings.