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
Getting closer to the most powerful sector in the world ...
sábado, 16 de abril de 2011
sábado, 9 de abril de 2011
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
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
domingo, 3 de abril de 2011
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
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
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