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Thursday, 28 August 2014

Green shoots in macroeconomics: Spain GDP rose 0.6% in Q2

Hi my friends! Today's post is about exciting and very positive news from spanish economy. Well, I always have said that austerity is painful, but it works, or at least in this case.

First, the news: Spanish GDP rose +0.6% in the second quarter.

The recovery probably is well underway, but as I wrote in previous posts, only in macro figures. We are still awaiting the real recovery for Spaniards and their microeconomy. I'm still sure that if politicians and economists used expansionary policies instead of austerity, the final result would be the same (recovery) but generating less pain and economic asphyxia for citizenship. Time is very important, especially for those with no time.

But we certainly ought to be pleased with these figures, Spaniards must be pleased at this, because our efforts are giving results.

Now, we must move together, and when the full recovery become a reality, our society will deserve the total restoration of our welfare state.

Enjoy the good news. Congratulations, Spain.


Tuesday, 19 August 2014

Green shoots in Spain? Not for youth...

Hi my friends! I'm on holidays, for the entire month, but I must write once a month at least...In a break, I am going to inform you about the "green shoots" in Spain. Because, yes, there are green shoots in Spain, but only in macro figures. You know, premium risk is low, exports are growing (more or less, the last figures in this area are not good enough...) and the perspective from markets is positive. But I have always characterized by focusing on micro figures, on day-by-day economy.

Here in Spain, political discussions on TV are "on fire". Many channels broadcast debates and a significant proportion of the audience follow these shows. A trend topic is the recovery, real or false? Green shoots?

As I have written a few lines ago, the recovery is real, at least for the national macroeconomy, but the real situation for Spaniards is the same, unfortunately.

Just two examples:

- One of the problems of this country is its business fabric. According to a survey by La Sexta, there are 1.2 million of businesses. Problems arise when the data are analyzed:

  • 60% of Spanish companies have 1 or 2 employees. 
  • Half of the companies are bars, shops and auto repair shops, that do not add value. 
  • Only 0.7% of companies have 250 or more employees.
 Is it possible to compete with this structure?

Nearly 1,000,000 Spaniards under 35 have been forced into exile. 9 out of 10 of those who stay in Spain, have temporary contracts. Today, talent drains, and tomorrow, we won't be able to pay. the pensions. Green shoots!

What about the future?....And, what about our present?....

Green shoots...


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...