Cheap Firms

Dear Followers,

I'm glad to write you about the investigation that I recently made since I have obtained the title of Specialist in Financial Markets Analysis.

I was recently looking for some cheap firms. The multiples that I was looking for was the Price to Earnings Ratio. This is calculated by dividing the Price of the Share by the Earnings per share. The rationale of this ratio is to know how much am I paying for a dollar of benefits of that firm.

The 10 cheapest firms or the top 10 low per of the world are the following:

1- Berkshire Hathaway Inc. - per 0,20
2- Pacific Capital Bankcorp - per 0,25
3- AbitibitiBowater Inc. - per 0,55
4- Newcastle Investment corp - per 0,55
5- Brookfield Residential Properties Inc. - per 1,17
6- Six Flags Entertainment Corp - per 1,42
7- ReneSola Ltd. - per 1,58
8- LDK Solar Company Ltd. - per 2
9- Central Fund of Canada Limited - per 2
10- Revlon, Inc. - per 2,30

With a Combination of Technical Analysis we could try to see the optimal point of entrance in order to minimize losses and maximize profits.

Here there is one recommendation: Berkshire - optimal point of entrance 70. Stop loss 67,80. If Stop Loss is executed, next entry point should be at 66 with stoploss at 64,50. The Stop Profit should be at 87 althought you should be taking part of your earnings at 78, 82 and 85 and never take everything out, you should put a trailing stop of 1 dollar movement once it arrives at 87.

Do not hesitate to write me an email or post a comment on the blog asking for any firm recommendation you may have!

I wish this information is useful for you!

Marc Ramon Hernández

The role of Statistics in the Stock-Exchange Market

The average citizen of Spain spends 1000 euros a year in Lotteries and some other casino games. Nearly 3500 people die in Spain in traffic accidents. Nearly 3000 people die swimming in the beach or the swimming pool every summer and 2 million die because an strange illness in Spain.

The probability to die because one of this reasons is nearly 0%. No one cares about dying as consequence of this illness as the probability is too little. 

But my question is the following: If there's a probability of 3500 / 45000000 of dying in a traffic accident, a probability of 3000/45000000 of dying swimming into the sea or the swimming pool and 2000000/45000000 of dying because an strange illness, why do the people think that they are going to win the Christmas lottery of Spain which has a probability of 1/100000, the primitive lottery (1/10000000) or the Euro-million which has a probability of 1/40M?

Having said that, it would be a rational decision if you stop playing casino games and lotteries. Would you like to have a good retirement whenever you decide to stop working? Good news are that I have a good method of winning a couple of thousand dollars with the 99,9999999999999999999% of probabilities that you are not going to loose anything.

So my recommendation is: Take all the money that you would spend in your whole life playing casino games and lotteries and buy S&P 500, NASDAQ, Nikkei, IBEX 35, DAX 30, FTSE or any other indexes. The history of the stock-markets has shown that in a 30-40 year placement every market has grown, no matter when you had entered into the market. Even if you bought some of those index before the Great Depression you would have been winning money after a 30-40 year placement. There will always be cracks, but you should see a Crack in the economy as a good moment to buy cheap. 

The human people are not rationale, and even if they know that they won't win the lottery they'll play it, and even if they know that in a 30-40 year period the economy will go up they won't buy shares for such a long period. An speculator will earn money betting on the short-run with small firms and they'll win for a couple of years, but even George Soros, an speculator who made the English Bank go bankruptcy failed when trying to depreciate the Hong Kong currency.

There has not been any speculator that has been speculating and winning for more than 10 years. Statistics do not lie, statistics are true, and another big true is that Human mind is not rationale, and people will keep thinking that they'll find a secret method to speculate with the stock-markets and win, they will think that they'll be the first speculator to get billionaire in a period longer than 10 years, and they think they'll be able to win the lottery. People will not follow the advice and they will loose.

My advice is to create a diversified portfolio with big firms that you know they will not go bankruptcy as they can't go bankruptcy because they would cause a break down in the system. Buy stocks from this portfolio, but no more than the money you would spend buying lottery in your whole life. By this way you will win money if the market behaves as always has been behaving, and if it doesn't behaves like this, do not worry at all, as you would have not lost more money than you would have lost buying lottery.

I will post an example of a diversified portfolio and a strategy to go further than the index of any country in a while. 

Thank you for your reading and do not hesitate to contact me or post a comment in the post!

Marc Ramon Hernández

E-FINANCE

Management y finanzas changes name to "E-FINANCE"!

Welcome to the Economy and Finance community!

-Do you enjoy writting and getting your work recognized?
-Would you like to post your essays on internet but you do not have time to create a blog or a page?
-Would you like to open a debate and share your ideas with the rest of the world and see what the others think about you?
-Would you like to be able to see your name on google associated with a finances page when you write E-Finance, finance, management, economy or just your name?
-Would you like to post an essay from your university which you think is valued more than the mark that the teacher gave you?

Good news for you! E-finance has been created to link people from the finances industry! Send us an email to efinance.marc@gmail.com with your essay and we will post it! Once is posted we will add a quizz related to your post so the people will be able to put a mark on your essay!

We hope you learn a lot with this idea. Give us a hand and lets create the nicest community in the world!
__________________________________________________________________________________

Management y Finanzas cambia su nombre a E-Finance!

Bienvenidos a la comunidad de Economía y Finanzas!

-Disfruta escribiendo y le gustaría que sus articulos fuésen reconocidos?

-Le gustaría publicar sus ensayos en Internet, pero usted no tiene tiempo para crear un blog o una página?

-Le gustaría abrir un debate y compartir sus ideas con el resto del mundo y ver lo que los demás piensan?

-Le gustaría ser capaz de ver su nombre en google asociado con una página de finanzas cuando se escribe en la barra de busqueda: E-Fiance, finanzas, administración, economía o simplemente su nombre?

-Le gustaría publicar un ensayo de su universidad que usted piensa que se valora más que la marca que el maestro le dio?

Buenas noticias para usted! E-Finance ha sido creado para vincular a las personas de la industria de las finanzas! Enviar un correo electrónico a efinance.marc@gmail.com su ensayo y lo publicaremos! Una vez publicado vamos a añadir un quiz relacionado con su mensaje para que la gente pueda poner una nota a su ensayo!



Esperamos que aprenda mucho con esta idea. Danos una mano y vamos a crear la mejor comunidad de Finanzas del mundo!


Marc Ramon Hernández
E-Finance
http://management-y-finanzas.blogspot.com/
marcrh.ade@gmail.com;
efinance.marc@gmail.com

The 2.0 Social Network bubble

"The man is the only animal capable to stumble twice over the same stone".

In 2000 many companies went bankrupcy because the speculation in the "dotcom" industries caused a bubble which obliged companies to merge and fire workers.

Ten years later it seems that we are suffering from the same illness, and that no one is going to do anything to regulate this situation. Capitalism in all the senses.

Linkedin got into the stock market today refusing NASDAQ and choosing NYSE. The result was a an increase in 260 % of its value of the IPO (Initial Public Offering).  Linkedin made an IPO of 45 dollars per share and boosted up to 90 before started being traded in Wall Street secondary market.

During the day Linkedin price of shares picked in 121 dollars per share and dropped down to 101 dollars per share in just 10 minutes after reaching the maximum price. It then dropped down slowly until it reached the closing price at 93,86.

Should be still wait until Facebook gets into the stock-market and regulate its entrance in order to prevent another dotcom bubble? Facebook is now valued higher than Boeing. The easily in which revolutions in arabic countries had been organized thanks to this social network is such that the price of this company is in exponential growth. What is it going to happen once they get into the market?

I want to give you some additional information. Since 2001 there has been a lot of financial engineering innovation which has turned into many risky instruments traded in the secondary markets. This instruments are called derivatives and allow investors to take very risky operations.

CFDs are a good example. This instruments are called Contracts For Difference and enable an investor to leverage their positions mostly to 10:100. This means that an speculator could have bought 1M Linkedin shares for 450000 dollars when they were valued for 45M dollars. This are very risky instruments which can able the investor to have very high returns but also substantial losses. The bad point of this instruments is that if a company goes bankrupcy, this 90% left will have to be repaid by the investors. Could you imagine then a 90% of losses in the system which can't be recovered?

Another point is that Facebook is planning to create a coin which enables you to buy things sold in Facebook. Is Facebook trying to create an economy to get into when the Capitalist economy fails? It's clearly shown that capitalism abuses. Capitalism is about surviving with the higher amount of money possible in oneself pocket. It leaves freedom in the hands of humans, which are not able at all to think rationally and to stop another dotcom bubble in 2.0 version.

It seems that we will have to take another path into the developing of the world. Probably China's path which seems to be the best one in these days by covering themselves from a dotcom bubble. They will be the only ones surviving from this one.

Marc Ramon Hernández

Professional opportunities in Asia

Casa Asia Exposition

The first thing that I want to state is the link of an article which they mentioned more than once, and that I would encourage you to read.
The link is: http://news.in.msn.com/business/article.aspx?cp-documentid=3821475
You can find the high amount of jobs demanded over there. Lots of financials, lawyers, engineers and so on, and very highly remunerated. The most impressing thing is the high amount of opportunities for the entrepreneurs. Which I'm going to explain further on.

The most impressing thing that I heard in that lecture was the statement that more firms are created recently in India than in China. This statement is encouraging yourselves in the future decisions you could take. Another incentive is the high rate of people which speaks english in India, which you can't find in China.

Another interesting data is that the people finishing the undergraduate in Shanghái are way more skilled than the people from Europe and United States. So don't even thing that it's easy to get into the Asian Market. There's lots of competence and more things that I'm going to explain.

The world is changing the perception. The power from now on will be on the Asian Market. While we were speaking about recession, they were speaking about low growing rate over there. We have to take into account that getting into that market is very complicated as it's a very different market than the European one. We have to learn new languages and new culture, but the most important thing to do business in China begins with the "guanxis". "Guanxi" is a chinese word that means relation. "Guanxis" are crucial in order to set up a business and succeed over there. Everyone should take this into account If they are thinking about going over there to begin entrepreneurial acts.

"Guanxis" are even more important than knowledge. The Asian culture is so different that we have to be able to know how they think, in order to get profits from our business. A clear example is an american sweet producer, which wanted to expand to India to sell their sweets. All that he found over there was that people were not buying his sweets. What was the problem then? Indian people didn't like sweets? Well, of course not. This guy should have studied the Indian Market in dept in order to realize that people do not have enough money to buy a whole pack of sweets. He should have had to sell the sweets in individual packets, as people in India don't even buy a 1L. bottle of shampoo. They buy individual shampoos packs because they have money that day. They will think if they have money to buy another individual pack tomorrow.

Another example would be the Coca-Cola strategy to enter into the chinese market, which I have already explained in an article in this blog. They had to change the color to red in order to sell it, as black color meant the death. They also had to change the name of the drink to "ke kou ke le", which means something like delicious happiness.

Although China and India are growing in an spectacular manner and the amount of middle class people has increased a lot in recent years, it's planning to increase exponentially in the next 20 years. Let me put an example of the opportunities standing over there. Just imagine that you could specialize in drawing room tables and that you could sell a drawing room table to the of the 20 hundred million people that are planning to move from the countryside to the city in the next ten years and that they will need to buy this kind of tables. Imagine that you get ten euro cents of marginal benefits for each table. That means 20 Million € that you will earn in the next ten years!

Another example is the amount of people that are in the Indian School of Business, which are the same amount of people that actually live in Catalonia. 7 million people more or less. This Indian School of Business could be considered a city, and don't even have a metro to move around there! That is why multinationals are focusing on getting the bulk of their benefits from over there, as they are the best source of getting them.

No one is going to care about doing business in Europe or EEUU in the next few years. The opportunities land is over there now. Do you want to be billionaire? Well, don't even think about it. Move over there. That's why I'm going to do in a while. The only thing that this countries should repair is the political system, which they will have to take into account in order to get the right politics and freedom according to the economic growth.

OPEN YOUR EYES AND YOUR MIND.

Marc Ramon Hernández
marcrh.ade@gmail.com

Grasp all, loose all

That's what is happening with capitalism. I'm not the one to criticize that, as I would have acted like those in Wall Street if I were there, but my article in here is not about what I would have done, but to criticize what they had done, which wasn't good at all.

I think that someone which is not able to control their greed shouldn't be in this upper positions in the government or investment banks which a collapse in that banks could end up with a collapse in the financial system of the whole world and of all the economies participating in this globalized world.

There are some questions that at some point everyone are asking to themselves and do not find an answer on them. Which are, if the money hadn't been thrown to the bin, who did actually benefit from this crisis? Well, there are two possible and accurate answers to this questions, which I'm going to develop during this essay. The first one is that the individuals responsible for this crisis were the ones who actually got benefit of it, and the second answer would be that at some point, the benefits that actually had arose before the crisis were somehow not real.

Before Bush got into the power, the financial system was so concentrated than ever before he got into the power. They were five investment banks, two financial conglomerates, three insurance companies and three rating agencies. They were all unified by the securitization system, which allow them to actually put into circulation billions of dollars.

The banks were giving mortgages to individuals to buy the houses. This real state mortgages were grouped together with other mortgages, such as student mortgages, car ones and so on, and securitized and sold to investment banks, with the name of CDO, collateralized debt options. The rating agencies mostly valued that investments with AAA rating, the same rating that the government bonds had. The investment banks sold this CDOs to individual investors, and got a commission on selling them. The commercial banks also got a bonus by selling this CDOs to the investment bank, and with the money collected by selling them, they were able to give more loans, and to keep the commissions as benefits for the company and benefits from the CEOs and commercials from that banks.

In the old system, when a bank gave a loan, they expected the individual who was given the loan to repay it, and as that loan was mostly a long term loan, they checked very good the ability of that individual to pay it back. If that individual didn't payed the loan back, the bank had to assume the losses and re-sell the house, which was more illiquid than getting the loan payed back.

In the new system, banks didn't cared anymore about getting the payment of the loan back, as they sold this packages of loans to investment banks and got a fee out of it. So what it happened, is that banks started giving more sub-prime mortgages, which were mortgages that were not likely to be payed back, as they were securitized and sold, and some one else would have found the problem of the non payed back mortgage. The investment banks payed the rating agencies to put the rating on that securities, and after the subprime mortgages, they were all still giving a AAA rating or an A2 rating.  If that investments were not given an AAA rating, it wouldn't had been so easy to sell them to other investors. The consequences was  massive selling of this CDOs and a massive increase of the subprime mortgages. As the commercial banks were earning huge fees for selling this mortgages, and as investment banks were earning huge fees as well, they didn't had reasons to stop doing that. The prices of the houses start rising up up to 190% increasing in prices.

Goldman Sachs, was the one who was most into it. The reason behind the survive of it, was the buying of the Credit Default Swaps (CDS), of the AIG insurance company. While they were recommending that investments to his clients, they were betting to the failure of this investments with this CDS. They then realized that the amount of Credit Default Swaps that were holding, could even end up with the bankruptcy of AIG, so they started creating some new derivatives which were innovating financial instruments that were betting for the collapse of AIG. By doing so, they would cover themselves to the failure of the CDOs and the possible non paying back of the CDS.

The fact that that money that was pulled out from the system was not real money is the physical materials that were behind that. When the mortgages were given, they were packed as an investment which had a value, that value was subject to the summation of all coupons during the life of that CDO. But if the CDO is not payed back, its all wiped out and the value of that CDO is depreciated. While they could have a value of their assets (I'm just inventing the numbers in here) of 5B $ one day, they could have a value of their assets of just 10M $ the next day. That was the consequence of the collapse of Lehman Brothers and because Goldman Sachs covered itself with the CDS didn't collapse. The only ones who earned that huge amount of money were those ones who knew that was going to happen but that were to greedy to stop earning money in order to safe the system.

I think that this is the consequence of the human nature. Only a 1% of the population in that world would have been able to stop earning 435 M $ in a year, just as the CEO of Lehman Brothers did, in order to safe the world and prevent it to crash. But if we are not able to control that, someone else will have to do it.

When Obama got into the power, the financial sector in EEUU was more concentrated, and the banks remaining were bigger than ever before, Bank of America absorbed Merrill Lynch, Bearn Stearns was bought by JP Morgan Chase and AG Edwards was bought by Wachovia. Obama promised that he would put more regulation to the banks to prevent this to happen again, and that will change the people that was into the power and was responsible for that crash. Everyone was very happy with that, but when the moment of the regulation began, the new regulations were weak, as that is a Wall Street government. The ones responsible for that financial crisis got back into the power, Timothy Geithner was named treasury secretary, Geithner was the president of the New York Reserve Fed before the crisis, and one of the key players on the decision to pay Goldman Sachs the 100% of the bets of the collapse of AIG and the CDS. The new president of the New York Fed Reserve is William C. Dudley, the former chief economists of Goldman Sachs, whose paper with Glenn Hubbard praised derivatives.

Only the ten - fifteen year period time will tells us what will be the performance of this economy. The history tells us that every ten or fifteen years there is a huge bubble that ends up with a crisis, and we will have to see what will be the next one. The person who is in charge of the performance of the country on that year will have in his hands the ability to stop that or to keep going with that. Its very strange that someone who is into the power is not able to see that things and to stop them. Something dirty is behind that and as citizens we should be able to know it. But greedy is greedy, and the individuals who grasps all, not always looses all, but makes some institutions which they are in the charge of them loosing all.

Marc Ramon Hernández

I strong recommend you this film. Nearly all the information from this article is from this film. I hope you enjoy it. http://www.megavideo.com/?s=seriesyonkis&v=97B6SEQO&confirmed=1

The low risk that an investment in the Stock-Market has

I bet that this statement has had a shock on yourselves, but it really is true. Let me explain my arguments:

An investment in the Stock-Market has the pros that any other investment does:

1) You can decide which is going to be your initial investment. You can begin with 3000 € or with 1000000000000000000000000€, while in the rest of businesses you will need a minimum amount of 6000€ of reserves plus the investment.
2) No one is going to say that you have to open your business. If you decide not to open your business whenever you want, the probabilities of loosing all your clients are quite high. But the probabilities of loosing your clients in the Stock-Market are zero.
3) You can put a limit on your losses. You can decide to stop loosing when you have lost 50 €. If you have a restaurant, and you do not sell any menu that week, you will have to throw away all the food because it's going to be rotten. If you want to limit your losses, you will have to limit your gains and buy less food, while if you want to limit your losses in the stock-market, you don't have to care about limiting earnings.
4) You can work for yourself and win a lot of money, and you only depend on yourself. While opening a regular business, you will have to recruit other people and you will have to pay them, and if you decide not to recruit anybody, you will have to work day and night.
5) You can get free credit to operate. If you want to set up a firm, you can't go to a bank and just say: "Dear banker, I want to set up a business and I need 100000€. I have no money, I have no goods to back up my mortgage, and I am not able to give it back to you if something goes wrong... " Oh, well, you can say it to him, and you can cry if you want, but as long as you begin with the first sentence, he's gonna laugh at you. In CFDs you can get financing, with no backed up goods, with no transactions, with no time and with no explanations. If things go bad and you loose the 10% that you had to put as a guarantee when you bought the shares, the broker is going to close your position, and you will stop loosing money.

Dear friends, it's not very difficult to see that this is the best investment you can ever do. But as every investment has to have a knowledge behind, and you may not be the best one to take that business. Why is that the 90% of people end up loosing money in that business? Well, because they are not the right ones for it or they "play" with the capital markets. You have to be a bleakness person. Be able to accept that you've done it wrong, when you have done it wrong, and be able to loose the first 100 euros if anything goes wrong, because if you are not able to do so, you neither won't be able to do it when you are loosing 1000€, and if you keep thinking that soon or late that shares have to go up, you are going to end up in bankrupcy, as it might never go up again, and you will always cry because you weren't able to loose.

The last thing to state is that as every business, you have to know what is going on there. You can't just read "the low-risk that an investment in the stock-market has" and just go through it. You have to study the functioning of the markets, and be an open minded who knows that he's doing wrong and has to change strategy.

You should go to Josef Ajram's course about stock-markets and you will know what I'm talking about...

Kind Regards,

Marc Ramon Hernández

Capturing the world's emerging middle class

It seems that the MNEs will have to take advantage of the exponential growing middle class in order to make exponential growing profits. In this essay, I'm going to explain a little bit the steps that they are taking into account in order to keep growing middle class in mind, a good focus to find new oportunities after the biggest Financial crush of the history, which I'm going to write about this weekend.

The middle class consumers are not only growing in the well known BRIC countries, but also in other ones. This group of people is spending a total amount of $6.9 trillion annually, and It's expected to rise up to $20 trillion during the next decade, which is the double of current USA consumption.

There always has been opportunities to MNEs to take advantage of increasing-level of income groups of people, and so it seems it will happen again in the following years.

But is not everything that easy, as multinational are challenging competition in emerging markets, which have local firms growing exponentially thanks to the known of the market, thereby decreasing political, economical, cultural and currency risk. Local competitors will always have advantage over foreign firms as governments want to increase potential of their own firms, which increases local GDP, rather than giving the opportunity to MNEs to use local resources in order to increase the GDP where the main offices are located.

The potential of this local competitors is not only the government aids, but also the potential to fill the small gaps were MNEs do not arrive, or it's more difficult to arrive. Lets focus on Hangzhou Wahaha for instance, which is a Chinese beverage maker brand which has invested $5.2 billion in order to kick Coca-Cola and PepsiCo out from the low-income markets by selling to rural areas which require low-costs products, require cultural knowledge in order to fulfill their needs, and focusing on patriotism.

Coca-Cola finds this market such a small place that doesn't want to get into it. They prefer to focus on already middle-class markets in order to keep the brand name, keep their marketing image, and do not reduce costs, which would put a black mark on the name of Coca-Cola.

Coca-Cola has performed good in its entrance to the Chinese market though. Even when they knew that black color represented the death for the chinese people, and knew that the occidental name wouldn't get presence in that market, they decided to get into it. But reducing the cultural risks and adapting its product to the chinese market, culture and behavior.

They did so by changing its name to (ké kôu ké lè) which means delicious happiness, and changing its black color to red, by adding some colorants into the drink. What they achieved with that was to get consumer confidence in order to be able to change again to black color some years later once they already had presence in that market and were sure they were not gonna lose it by giving a black color to their drink.

Another strategic way for MNEs in order to get into the foreign emerging markets and succeed is to take advantage of the well-knowing culture of their employees. Although they are not well prepared and so they don't know how to manage a multinational, it seems that MNEs are focusing some expenses in training their local employees by building inside business academies that promote leadership and needed skills in order to succeed on the management of such big projects. It will also be better for MNEs to take advantage of this, as it's way easier to teach a chinese how to manage a business, rather than taking an american and teaching him or her during 30 years about what are the chinese needs, what is their culture, how they act in each circumstance, how they feel and how they are.

A good example of all things stated above is China. The second potential in the world. Chinese government will have to open their mind even more internationally if they want to finish being the first potential in the world. They are restricting foreign brans such as Facebook, Yahoo or Google in order to give strength to local internet brands and local social networks such as QQ, which already have more than $600 Million chinese users.

Chinese governments also give preferences to local potential brains by having rules such as restricting the entrance of MNEs if they don't have a local CEO into the brand. The idea of this model is to get the management know-how of that firms and the high-tech know-how in order to give this added value to local competitors.

In my opinion, China is doing good right now by giving preferences to local brands in order to increase their knowledge, but they'll have to be open-minded once they get the sufficient know-how. As we all know, the more open minded, the more earnings, prosperity and innovation a country gets. But it's not time to this now. Now it's time to give local competitors enough advantage to get into the exponentially growing middle class in order to increase their power to be able to compete against global brands such as BMW, Mercedes, Coca-Cola, and so on.

Let's see how all of this will perform in recent years.

Marc Ramon Hernández
Based on McKinsey Report, Emerging Middle Class

BIAS IN CPI

Bias in CPI

           

Consumer Price index seems to be overstating the cost of living by 0.5 to 1.5 percent a year. This has happened since the beginnings of using this formulation but Bias only appeared recently.

Senate Finance Committee has been investigating this Bias and stated than in the recent years CPI has been overstated up to 1.5 %. This has an impact on the well being of the society as it could have dramatic price increases in the long term.

Bureau of labor statistics has been doing a new research in order to identify this Bias, but it has been diversity of opinions from the different individuals investigating them.

In this text there are stated some difficulties in order to elaborate de CPI correctly, which I am going to briefly explain in this essay.

CPI elaborating by the Bureau of Economic Statistics is deflating personal consumption when constructing National Accounts, which leads to Biased measures of real growth and productivity.

The magnitude of these Biases would bring us consequences of 19% increasing in cost living in a 25-year period, but larger Biases could have an even more problematic change in cost of living.

The CPI measures cost of living from a basket of an average consumption products during a certain period. But this index is based on fixed units from an historical nature, which not allows us to take into account the substitution goods when a good gets more expensive or changes in quality.

One of the practical problems is that direct information on based-period quantities is generally not available; instead, the household surveys provide information on expenditures on categories of items.

The first Bias that I’m going to explain is the Commodity substitution Bias. This Bias reflects the failure of a fixed basket of products. If the price of this product increases, then, we move into the substitute product, which is not reflected into the CPI. There are empirical strategies to estimate substitution Bias. If we take into account that equation, then the increase of price of that product brings us to the exact cost of living.

Diewert (1976) The superlative price index allows us to be taken into account the substitute products. Laspeyres grows a 0,2 – 0,25 % faster each year as doesn’t take into account that Bias.

Reindsorf (1993) has been investigating the price scanner of the supermarket in order to study los-level substitution products for a handful of grocery products. These low-level substitution products should also be taken into account.

CPI grows from 1,5 to 2 % faster than it should grow in a year (Reindsorf 1993). This difference is attributes to the Formula Bias. This Bias gives much weight to an increase of price than a decrease of prices.

The Outlet substitution Bias doesn’t compares directly the old and new outlets. The price in new samples is 1,25% lower in the old samples over a two-year period.

There’s also a Bias named quality adjustment bias. There are some products which changes in quality are not really changed so then it’s easy to compare the prices of old and new products. There are also changes in quality very significant, which allows us to compare the new and old product prices. But there are some products which changes in quality are very significant but CPI doesn’t reflect the information in prices.

Another Bias is the new goods bias. The problem is that the CPI brings the new goods to a timely basis. A change in the Point-of-Purchase in order to use more frequently sample replacements would reduce this Bias. The CPI misses the consumer surplus increase, so some products are highly overstated.

In my opinion, the most important Bias is this related to the substitution Bias. It increases grocery prices by 2% a year, which is where we spend a large number of euros every month. By getting this solved we would get ready of 20 euros less by every 100 euros after 10 years on not having solved this problem


Marc Ramon Hernández

Hong Kong changing workforce

Hong Kong ha estat fins ara ( i encara ho és) l’intermediari principal entre la Xina i la resta del mon degut al seu port, que el convertia en el centre de comerç d’importacions. Cada cop més, les exportacions directes de Xina creixen gràcies al creixement del port Pearl River Delta. Segons un estudi de McKinsey, es preveu que 100000 treballadors de Hong Kong relacionats amb aquest sector passin a treballar a la Xina. Aquests fets suposen un gran risc per a Hong Kong, que té una bona part dels seus treballadors relacionats en aquesta industria, concretament 450000. Cada cop les empreses extrangeres tenen menys interès en muntar la seva logística a Hong Kong. De fet, moltes ja están passant a muntarles a la Xina.

La dificultat i costos en mobilitzar els productes a la Xina (cues al entrar a la frontera, l’espera de les gestions, i sous que tripliquen als de la Xina) faràn que el decreixement del comerç de Hong Kong sigui important. Per tant, Hong Kong haurà de formar als seus nous treballadors cap a un altre sector, i això costa temps i diners.

¡ Señores, España va mal !

LA CULTURA ESPAÑOLA Y SUS DEFECTOS.

¿Cuándo saldremos de la crisis? Lamentablemente nadie tiene una respuesta para esto, y quien diga tenerla miente. La pregunta no debería ser cuándo saldremos de la crisis, sino, ¿Cuándo harán los políticos algo correcto que nos permita salir de la crisis?

La crisis española no solamente viene dada por una crisis de sistema financiero sino por una crisis de cultura. Últimamente España, con el soporte de la señora Merkel se las ha arreglado "bastante" bien en términos financieros. El gran defecto de España es la cultura, las tradiciones, los principios.

El gran problema de España es la política que se viene implementando desde hace tiempo. No hablo ni de PP, ni de PSOE en concreto pero si de los dos. Hablo de políticas que prohiben que un niño repita curso aunque no cumpla los conocimientos básicos (no sea que se nos traumatice el pobre), de políticas que benefician a los parados cada vez más (con una décima parte de lo que benefician en Italia por ejemplo), de políticas y subsidios que permiten a miles de personas del sur estar viendo lo mal que va España por la televisión y echando la culpa a los bancos en vez de hacer algo por arreglarlo, hablo de crisis de ambición (salir de fiesta de jueves a domingo y empalmar con la resaca e ir a la universidad el lunes), hablo de crisis de cultura (cambiar CNN+, por Gran Hermano 24 horas), y hablo del esfuerzo de algunas partes de España (Cataluña, País Vasco y Madrid) por mantener a las miles de personas de España (en concreto las del sur).

Esta es la crisis que padece España y no se arregla en dos días, ni en dos meses, ni en dos años, ni en dos siglos si no hay alguien que lo arregle.

Los políticos están más ocupados en que todo parezca bonito en el corto plazo y ni eso saben hacer. España requiere un gobierno sólido, que vele por el futuro y no se deje influenciar por lo que la gente quiere.

1- Mano dura en la escuela secundaria. Un joven que va a entrar en la Universidad debería ser capaz de dominar derivadas parciales, totales ... ¿Cuántos de los jóvenes son capaces de decir que saben hacerlas?

2- Más primas a los buenos estudiantes. Subsidios dedicados a los alumnos con más media de 7,5 en vez de dedicarlas a comprar portátiles para todos los niños de las escuelas públicas del sur o a subvencionar el carné de conducir a una persona mayor de 50 años andaluza.

3- Subsidios a los empresarios jóvenes emprendedores. La actitud del gobierno aquí es más que cuestionable. ¡En vez de beneficiar al empresario emprendedor, se lo cargan con 40% de tasas! ¿Quién está dispuesto entonces a emprender? La respuesta es: ..........

4- Propugnar la cultura y el valor del esfuerzo. Señores, ¿cómo vamos a hacerle sombra a Alemania o China si mientras ellos están estudiando, haciendo prácticas, trabajando nosotros salimos de fiesta y nos convertimos cada vez en una sociedad más alcohólica?

5- Como vamos a crecer si cuándo Cataluña pide más capacidad para endeudarse y crecer más rápidamente, saltan las otras comunidades autónomas pidiendo también más, para gastárselo en subsidios que propugnan la holgazanería y reducen los motivos para que una sociedad se esfuerce?

Los otros países ya ven todo esto, como también ven la incapacidad de España de reducir su tasa de desempleo. Es imposible tener una tasa de desempleo baja si antes de la crisis ya era de más de un 10 %. Este es el motivo por el que la deuda española se paga a un interés mucho mas elevado que la italiana por ejemplo. Porque los dos países tienen la misma productividad y un nivel de PIB por capita similar, pero la tasa de desempleo, es el único indicador en el que España sobresale por delante de todos ( 20,2% , sólo superado por Sudáfrica 24% ).

En resumen, un país no puede ir bien cuándo en las 4 cosas en las que es líder son: desempleo, fracaso escolar, consumo de drogas y, eso sí, FUTBOL.

Como el Muy Honorable ex-President de la Generalitat Jordi Pujol dijo: "Somos una sociedad muy poco trabajadora. España saldrá porque es un organismo fuerte, y sobretodo, porque hay gente a la que no le interesa que se vuelva débil (el resto de la UE)."

Personalmente, veo una solución para que España pueda salir de la crisis siguiendo llamándose España y con el mismo terreno que tiene ahora:

Un cambio radical de cultura, protagonizado por POLITICOS BUENOS, es decir, ningún incompetente como los que tenemos ahora o los que tendremos siguientes.

Marc Ramon Hernández

Adquisició de Volvo per part de Geely

Oportunitats

Amb l’adquisició de Volvo per part de Geely, sorgeix l’oportunitat per a Geely de satisfer el creixent sector d’automòbils de luxe a la Xina.

Geely tindrà l’oportunitat d’aprofitar el sector d’investigació de Volvo per a millorar els seus propis cotxes i aportar tecnologia innovadora al mercat xinès, que és el que els manca.

Un altre fet que podrà aprofitar Geely de Volvo es el fet de poder vendre els seus propis vehicles a través dels concessionaris de Volvo als països desenvolupats, sota els requeriments de seguretat necessaris.

Tindrà l’oportunitat d’aprofitar economies d’escala produint els seus cotxes a Europa, ja que ha promès que no tancaria les filials d’allà.

D’altra banda, pot decidir obrir noves plantes de Volvo a les plantes manufactureres xineses per a reduir costos (35% menys de costos respecte als països desenvolupats) i tenir més marge de beneficis per cotxe. Haurà de decidir si li surt més a compte aprofitar les economies d’escala o els baixos costos a la xina, és un gran dilema per a Geely.

Geely és un productor local i pot aportar al govern l’alta tecnologia de Volvo, facilitant la inversió de Xina a altres països, a demés de normalitzar una mica el fet de que les empreses xineses n’obtinguin de occidentals i així incrementar el progres tecnològic.

Geely, com a productor local ho té relativament fàcil per carregar-se a la competència, ja que ha rebut el finançament del govern xinès per a fer-se amb Volvo, i per tant això representa un risc país per a les altres marques estrangeres que vulguin invertir a Xina.

Traient tot això, Geely ha adquirit Volvo per una sisena part del que la va adquirir Ford a 1999, pel que sembla ser una adquisició relativament barata.

Riscs

El primer gran repte amb el que s’enfrontarà Geely és poder fer que Volvo sigui rentable, ja que des de que Ford va adquirir Volvo aquest ha començat a disminuir les vendes. Un gran repte serà buscar una estratègia per a augmentar el marge i incrementar vendes tenint en compte la gran competència que hi ha.

Una estratègia possible es aprofitar economies d’escala de les fabriques que ja té. Si es trasllada a la xina, els costos seran un 35% més barats, però perilla la imatge de luxe que dona la marca Volvo. S’han de continuar produint els cotxes de la marca Volvo a les plantes europees (assemblatge) però amb les peces produïdes a la Xina perquè són més barates. D’altra banda, s’aprofitaran economies d’escala introduint models barats de la marca Geely sota el nom de Volvo, ja que hi han peces que són iguals per a tots els cotxes i produint-ne les de les dues marques a l’hora aprofitaran la reducció de costos via economies d’escala.

Si fos CEO de Geely, em centraria en treure un nou model de cotxe gran, luxós, amb acabats molt bons i confort, per poder fer front als S series de Mercedes i als 700 series de BMW amb un preu no més baix a 70.000$ per incrementar la categoria de luxe, però, sobretot, amb una distinció dels altres cotxes com BMW i Mercedes, la seguretat que Volvo transmet, fent un bon màrqueting en aquest tema. El marge negatiu que té Volvo el compensaran amb la reducció de costos esmentada anteriorment. A demés, poden introduir una gamma de cotxes elèctrics per al sector de baix cost dels Geely (sempre sota el nom de Volvo). Seria una bona opció per dues raons. La primera es que el govern xinès dóna moltes subvencions a aquells que es dediquin al I+D d’energies alternatives. La segona es que cada cop la preocupació pel medi ambient creix més al món, i cada cop la gent n’està més conscienciada per a actuar. De moment no es una característica que es pogués introduir al sector de luxe ja que normalment, una persona que es compra un cotxe de 70.000 euros no és per reduir les emissions de CO2. A mesura que anés passant el temps i que aquesta preocupació acabés passant també a aquest sector de persones, es podria introduir fàcilment perquè inspiraria la confiança de que ja porten temps fent-ho amb els cotxes barats.

Considera que l’adquisició de Volvo per part de Geely ha estat una manera ràpida i barata d’obtenir tecnologies punteres per part de la industria xinesa del automòbil? ¿Creu que les ajudes/subsidis del govern xinès dirigides a assegurar la rentabilitat de Geely són un ús encertat dels fons públic?

L’adquisició de Volvo per part de Geely efectivament ha estat una manera ràpida i barata d’obtenir tecnologies punteres per part de la industria xinesa del automòbil. Ha adquirit Volvo per una sisena part del que valia i ara podrà incorporar tota aquesta tecnologia i mesures de seguretat de Volvo per a produir els seus propis cotxes també. Amb el plus dels baixos costos de la Xina i la tecnologia existent de Volvo a nivell de seguretat, Geely podrà començar a vendre els seus cotxes a països desenvolupats i competir en el sector d’automòbils barats, entrant sota el nom de Volvo. Això facilitarà l’entrada de la Xina a altres països amb la única cosa que tenen feble fins ara, que és el nivell tecnològic.

Respecte a la segona pregunta, els subsidis del govern xinès dirigit a assegurar la rentabilitat de Geely són un ús encertat del fons públic, ja que podran entrar en el mercat dels països desenvolupats sota el nom de Volvo i amés amés, adquiriran el knowhow de tecnologia puntera per a les marques locals, un gran avanç per al sector automobilístic xinès que, com molts altres, requereix de productes d’alta tecnologia per convertir-se en una potència mundial.

Opina que Geely ha fet un bon negoci amb l’adquisició? Argumenti la resposta

Geely ha fet un gran negoci amb l’adquisició de Volvo. Analitzaré els beneficis d’aquesta adquisició per a les dues bandes, la marca Volvo i la marca Geely.

Geely podrà aprofitar la tecnologia de Volvo en quant a requeriments de seguretat, millorant així la tecnologia en el sector de l’automòbil xinès. Geely produeix cotxes barats però amb poca seguretat. Per això fins ara havia venut bé a la Xina però era impensable obrir-se a l’exterior amb aquest model de cotxe. Amb l’adquisició de Volvo obtindrà els beneficis de la tecnologia i la infraestructura de Volvo per a vendre als països desenvolupats, sota el nom de Volvo i aprofitant aquells concessionaris. Podrà fer front a la competència en el sector de cotxes barats pels baixos preus de portar les peces des de la Xina als assembladors europeus.

Per part de Volvo, haurà de guanyar competitivitat en el sector de luxe traient un altre model més car, però no només això, sinó que aprofitarà la producció de cotxes més barats (models de la marca Geely) sota el nom de Volvo per a reduir costos via economies d’escala. Això serà possible ja que hi ha moltes peces de cotxes que són les mateixes, com els vidres de les finestres, els fars de llum, els volants, les llantes... Per tant, encara que no guanyés gaire quota de mercat en el sector automobilístic de luxe amb la introducció del nou model de Volvo de luxe que he esmentat anteriorment, ho faria amb la venda de cotxes Geely a la Xina, i cotxes Geely als països desenvolupats (sempre sota el nom de Volvo) i per tant, no augmentaria ni reduiria el preu dels altres vehicles que té, ni guanyaria més vendes en el sector luxós (si no funciones el model luxós nou), sinó que augmentaria el marge de beneficis, i per tant, la rentabilitat que havia perdut fins ara.

Como seleccionar al socio correcto

La selección del socio es una parte vital para el éxito de la alianza. Se recomienda encarecidamente a las empresas inexpertas, paciencia y disciplina durante el proceso de selección del socio, así como resistir la tentación de hacer el trato lo antes posible.

El encaje estratégico entre tu y el socio potencial, los puntos fuertes de cada organización, junto con las debilidades y operaciones prácticas, el futuro de la relación, la consideración de cómo la cultura de cada socio puede chocar o complementar al otro, el grado de compromiso y, finalmente, la química entre la gestión de las dos compañías, son factores a considerar durante el proceso de selección del socio para que sea adecuado.

Dentro del proceso de selección del socio, es muy recomendado usar herramientas objetivas o métodos que faciliten el asesoramiento totalmente imparcial de los candidatos socios. Si se mira todo de color de rosa, resultará perjudicial a largo plazo.

Los principales motivos por el que una alianza fracasa son además de una estrategia muy poco definida, el pobre proceso de selección del socio. No importa si es usted quién proactivamente quiere buscar un socio o si una compañía se lo ha mandado hacer, porque de todos modos, cae sobre su responsabilidad el usar el tiempo y recursos suficientes para analizar detenidamente los socios potenciales y encontrar las mejores oportunidades.  Dependiendo de la complejidad de la alianza, podría ser que pasen unos cuantos meses y incluso unos cuantos años antes de encontrar al socio adecuado para llevar a cabo el trato.

Se puede dar el caso que después de una búsqueda exhaustiva encuentre a dos clientes buenos. En esta situación, usted debería valorar que cliente está mejor posicionado en cuánto a tus necesidades estratégicas. Muchas pequeñas compañías aceleran éste proceso de selección del socio porque no tienen tiempo y les urge aliarse para no quedarse sin fondos. Cuando esto pasa, esta pequeña compañía puede encontrar un socio que pueda parecer interesado pero que lo esté o no, no cumple sus necesidades estratégicas. Sea cual sea la escusa, este tipo de decisiones precipitadas no se considerarían correctas a la hora de fundar una alianza. Querer fundarla no es suficiente – el socio debe cumplir sus necesidades.

Las pequeñas compañías pueden verse abrumadas si es una gran empresa la que le propone asociarse. Aun así, la reputación de esta gran empresa o la imagen de verse asociada con una gran empresa  no debería ser motivo para que ésta no cumpliera con el proceso necesario de evaluación del socio e identificación de sus propios objetivos estratégicos. Siempre se debe llevar a cabo un detenido proceso de selección.

Fragmento de "Strategic alliances that work", traducción; Marc Ramon Hernández

China - Africa business connection

Standard Bank group is Africa's largest financial institution by Assets. It all began, for obvious reasons, in South Africa and it had not only expanded northward into the continent but also stablished presence in Hong Kong, Russia and South America. Before October 2007, it could not be considered as a high profit bank on the world financial stage, but that changed when it sold 20% stake to the Industrial and Commercial Bank of China for 5,5$ billion.

Even if we take into account that because Africa is a relatively small economy should grow more rapidly than other countries and regions. Not like the BRIC ones, but faster than south Africa and developed economies.

The OPPORTUNITIES that merge in Africa are those ones related to sectors like food, infrastructure, telecommunications, commodities and energy in markets with high consumption as it could be Nigeria. This sectors are increasingly growing at the same time that Africa grow, as there's also more people who are able to consume obviously. 

But in this region, there are some challenges that need to be met, so despite some costs will be higher, the size of the opportunity is huge as there's lots of potential over there.

The Advice that Jacko Maree, CEO of Standard bank is that you have to be committed with the communities over there. Himself, as a CEO of a bank, can't say that the service that is bringing over there is just helping them with financing requirements and transactions.  

Another advice from Jacko Maree was to look for a good partner over there, who understand the risks and culture from over there, politics, commercial risks and so on so for. For instance, when coca-cola moved to China, had to look for a good name, and a good color which wasn't the black, as black color does not give a good impression to Chinese. So they gave a name which was kêkôukêlè, which is translated as delicious happiness. They also had to change the colour of the drink to red, in order to gain the individuals commitment. Once they've gained the confidence of all the chineese people, they were able to change the name against to coca-cola and put the black colour to their drink. 

That is the role that a multinational should take into Africa's region and it's countries over there. First gain the individuals support by making a good service to the community, and, just afterwars, centering in huge amounts of cash. A local partner should always understand better what to do and why, what are challenges, opportunities, competence, how to face all this things and WIN.

The first role that us, as developed economies should take into account when settling up a new business, is an international overview. Making questions such as: ¿Where should we operate in order to have the highest profits that we could? ¿How should we go there? 

-We should operate in non-developed economies such as emerging economies like China, India, Brasil, Russia, or just short economies with potential, such as Africa's ones. The first think we have to take care in order to operate over there is knowing the language we are going to use. It's not the best thing to have a translator beside you which tells everything the chinese guy is saying, as you are more well appreciated if you have putted interest in talking with they're language and this is well-seen in countries such as China for instance.

My advice is, go for the third language, is not enough to know Spanish and English, but also another one. Try to differentiate, and have an international view. By this three steps, you will increase possibilities to success

Marc Ramon Hernández

Mundo Capitalista - Fusión Deutsche Boerse & NYSE Euronext

En un mercado capitalista como en el que estamos, uno no se puede permitir quedarse atrás ni en la cola del cine. Individuos, familias, pequeñas empresas, medianas empresas, multinacionales, líderes en tecnología, líderes en mano de obra barata, países desarrollados, subdesarrollados, potencias emergentes, bancos comerciales, bancos de inversiones y cajas, todos luchan con un fin, pasar por encima del otro.
No han sido menos la NYSE Euronext y la Deutsche Boerse de Francfort, que se han visto obligadas a fusionarse con el fin de crear el mayor operador bursátil del mundo a nivel de ingresos y beneficios, y el mercado de derivados más grande del mundo.
¿Porqué ahora y no hace unos años? Bien, la respuesta es sencilla. Todo empezó con la fusión de la Bolsa de Toronto y la Bolsa de Londres, que dio lugar a la mayor bolsa mundial en número de empresas cotizadas.
¿Dónde queda el orgullo nacional? Desde siempre, Wall Street llena nuestras mentes de palabras como, centro de finanzas, compra-venta, especulación, dinero, etc. Palabras que nunca desaparecerán aunque la sede central de dicha fusión se instale en los Países Bajos (60% Deutsche Boerse y 40% NYSE Euronext) y se abandone su respectivo nombre. Repito la pregunta, ¿Dónde queda el orgullo nacional? y respondo con otra pregunta, ¿Y a quién le importa? Como bien ha dicho el presidente de la NYSE Euronext y futuro CEO de la fusión, la fusión tiene sentido. Señores, estamos en un mundo capitalista como he puntualizado al principio, y aquí no hay orgullo nacional que valga, y menos tratándose de un país como los Estados Unidos de America.
Al parecer, los inversores no opinan lo mismo. El día que se dio la noticia, la NYSE cayó un 2,5% y la Deutsche Boerse subió un 1,6%. Esto es debido a las repercusiones en un lugar y el otro, a la desconfianza y a la sorpresa. Aun así, ya está disponible para todos el mayor mercado de futuros y derivados del planeta. Los derivados son unos instrumentos financieros sofisticados que están sujetos al valor de un activo y se usan para especular. Por ejemplo, el precio de las materias primas. ¿Quién puede predecir el precio del petróleo? Muy poca gente o nadie. Aunque fueran buenos meteorólogos y pudieran predecir el tiempo que haría de aquí a un año con tal fin de deducir su precio, siempre podría aparecer algún otro pozo que hiciera que su precio cayera nuevamente.

Señoras y señores, no se queden atrás. Vivimos en un mundo capitalista "Business, is Business".

Written by: Marc Ramon Hernández

Cuando se pierde, se pierde - CRISIS SUBPRIME

De Xavier Sala i Martín

Supongo que muchos de ustedes no juegan regularmente a la ruleta y, si lo hacen, apuestan cantidades moderadas porque saben que si juegan demasiado acabarán perdiendo mucho. Pero, ¿qué harían si el gobierno decidiera devolverles el dinero cada vez que no sale el número apostado? Si me permiten, yo les recomendaría que se fueran corriendo al Banc Sabadell, pidieran un crédito de millones de euros y se fueran directos al casino: cuando los números les salieran de cara, se forrarían y cuando no, el gobierno se lo devolvería todo. Naturalmente, ese programa tendría dos consecuencias. La primera es que nos convertiría a todos en jugadores patológicos. Y la segunda, que en pocas semanas el gobierno se quedaría sin un euro.

Absurdo, ¿no? Pues eso es precisamente lo que proponen algunos políticos norteamericanos para salir de la incipiente crisis financiera. La historia empezó hace cinco años cuando, al ver que los tipos de interés eran anormalmente bajos, algunos financieros listos vieron una oportunidad de negocio en las familias consideradas “peligrosas”. Es decir, familias poco solventes, con rentas bajas o con un historial de impagos catalogados como “clientes de baja calidad” (o, en inglés, “subprime”). Al no haber competencia de los bancos normales ya que no quieren tener nada que ver con esos clientes peligrosos, los nuevos financieros podrían concederles créditos hipotecarios a un tipo de interés elevado. El negocio consistía en pedir dinero a los bancos normales a tipos bajos y prestar a clientes peligrosos a tipos altos. 

Para hacer más atractivo el paquete, ofrecían programas de repago con cuotas muy bajas durante cinco años. En realidad, era como si inicialmente dieran tipos de interés subsidiado, un subsidio que pensaban cobrar con creces a partir del quinto año.

Pues bien. Estamos hoy en el quinto año, las cuotas han subido y, como era de esperar, una parte de esas familias “peligrosas” no han podido afrontar sus pagos y los financieros se han visto obligados a quedarse con sus casas. El problema es que los precios de esas casas han bajado y los tipos de interés han subido con lo que esos financieros se han quedado sin negocio y con una enorme cartera de viviendas que no pueden vender. Muchos de ellos, amenazados de quiebra, están despidiendo a sus trabajadores, cerrando locales y reduciendo dramáticamente sus actividades. Es la llamada “crisis de los créditos subprime”. 

Como siempre que ocurren crisis de este tipo, ya han aparecido los políticos que reclaman la intervención del gobierno y de la Reserva Federal para que facilite dinero barato a esas empresas con el objetivo de evitar que se vayan al garete. Eso sería un error: una de las bases del sistema financiero es que los beneficios elevados se consiguen sólo si uno asume riesgo. Es decir, el retorno es el premio para quien se arriesga a ganar mucho… o perder mucho. Y los financieros sabían que recibían un interés más elevado de lo normal, única y exclusivamente porque estaban prestando a clientes “peligrosos”.Si la cosa hubiera salido bien, ellos se hubieran quedado el dinero. Ahora que ha salido mal son ellos, y no los contribuyentes, los que deben pagar las consecuencias. Salvarlos ahora de la ruina tendría los mismos resultados que el programa de devolver el dinero a quien juega a la ruleta y pierde: aparte de malversar recursos públicos, aparecerían muchos nuevos financieros con ganas de especular con riesgos excesivos porque sabrían que, en caso de que las cosas salieran mal, el gobierno les salvaría el trasero.

Todo esto no quiere decir que el gobierno no deba intervenir. Lo debe hacer en dos áreas distintas. Primera, si la crisis se contagia al resto de la economía, entonces y sólo entonces, deberá bajar los tipos de interés. Pero no como una cosa especial, sino siguiendo las mismas reglas que utilizaría la crisis hubiera sido causada por un aumento de los precios del petróleo, un ataque terrorista o una recesión en China. Segundo, el gobierno debe asegurarse que las familias no fueron engañadas con el anzuelo de intereses subsidiados al principio seguido de intereses usureros a partir del quinto año. Si las familias sabían y entendían lo que estaban haciendo, no hay problema. Pero si fueron inducidas al engaño, los timadores deben ser perseguidos. Y para impedir que futuros financieros abusen de los clientes siguiendo esa estrategia, el estado podría aprobar una ley que permitiera a cualquier cliente devolver el resto de la hipoteca en cualquier momento y sin penalización. De este modo, si un financiero decide subsidiar los intereses durante cinco años, allá él: los clientes aceptarán encantados ese regalo porque, llegado el quinto año, podrán pedir otro préstamo a tipos normales y devolver el dinero al usurero con lo que éste se quedará sin negocio.

Dicho esto, lo que no debería hacer el gobierno es imponer regulaciones y barreras que impidan la aparición de nuevos empresarios financieros que se arriesguen e innoven. Al fin y al cabo, aunque todo esto acabe en una crisis, el episodio del crédito “subprime” ha permitido que millones de familias pobres pudieran comprar casas. Y, de hecho, el 97% de ellas ha resultado ser lo suficientemente solvente para devolver el dinero e impedir que eso pueda volver a suceder sería un error. Ahora bien, el gobierno debe dejar claro que, como diría el gran filósofo e inventor de la técnica de la obviedad con mensaje profundo, Johan Cruyff: cuando se gana, se gana, y cuando se pierde… se pierde.

Is GDP a good indicator to measure propsperity?

GDP is a very useful economic indicator but it isn’t the only one to measure prosperity. This indicator has been used to measure social welfare but many things important to the society are not included in the GDP. There are many examples that brings us to this conclusion. There are actions that although they are not included in the GDP indicator produce more welfare tan some others which increase the value of the indicator we are talking about.

GDP doesn’t measures the distribution of the welfare, sustainability, education, pollution, health, life expectancy, domestic work, volunteering… Even when there’s a catastrophe that should be repaired, the GDP measures the expense maid by this repair increasing the GDP.

So then, is GDP a bad indicator to measure welfare? No it isn’t. It is a good indicator to measure it, when it’s taken into account with some other ones, which do take care of the things stated in the upper paragraph.

Recent studies about the comparison of income and happiness from “La Caixa” had talked about the positive relation that both things have. The strange thing is that not always have the same intense causality. The happiness increases more when the difference between the incomes that one family gets in relation to the others is higher. This happiness increases but in a more intense manner when we talk about a poorer family. Once the income is higher, an increase of it doesn’t really get reflected on the happiness of them. That’s because despite money is necessarily to live, once the family can cover all their necessities they are happy, but then the goods that they can buy with that money, since are not completely necessary and they don’t really need them, there are lots more important things that they could get instead of more income, such as wealth, love, stability in emotional lives…

Another important statement founded on “La Caixa” report is the way unemployment harms happiness. As some studies show, unemployment makes us feel upset, but not that upset if everyone is unemployed. Of course our happiness does get affected by the fact that we are unemployed in Spain despite there’s 24% of unemployment, but a person who gets fired is more likely to become depressed if he is in a country were there’s a low rate of unemployment like EEUU, rather than a country like Spain.

written by: Marc Ramon Hernández