Showing posts with label FNI. Show all posts
Showing posts with label FNI. Show all posts

Tuesday, June 25, 2013

The only hope for Italy is to leave the EuroZone now - otherwise = bankruptcy!

Thousands of workers and unemployed people marched in Rome on Saturday to protest against record unemployment and call on Enrico Letta's two-month-old government to deliver more than empty rhetoric on the issue.
The rally, organized by the country's three largest unions was the first major protest since Letta's broad, left-right coalition took office following an inconclusive election in February.
Italian unemployment rose to 12% in April, the highest level on record, and joblessness among people under 24 is at an all-time high above 40%.
Union chiefs, speaking before a flag-waving crowd estimated at more than 100,000 by the organizers, criticized Letta for what they called a lack of action on an urgent problem.
"We can't accept these continuous promises that aren't translated into decisions that give a change of direction," said Susanna Camusso, leader of the country's largest union CGIL.

Luigi Angeletti, head of the UIL, said the country could not afford the piecemeal approach to policy adopted so far, especially when the ruling coalition is so fragile...The unionists called on the government to intervene to prevent plans by white-goods manufacturer Indesit to lay off 1,400 workers in one of the most recent labor disputes....
Big deficits in time of recession are nothing new. They are not desirable, but calling them "dangerous" is ridiculous. The only way to reduce them is through growth, which isn't going to happen with taking so much money out of the economy. Growth has got its own problems, I don't think a society can run for ever on people/states buying stuff they don't really need with money they have really got, but the present "solution" isn't going to work. It is indiscriminate cutting, with no thought for the cost this "cutting" is storing up for the future. The present crew hasn't got the skills, imagination, intelligence to think out of their narrow ideology. They still think putting state services to tender to private businesses is going to solve all. It isn't....
Mediobanca, Italy’s second biggest bank, said its “index of solvency risk” for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs.
“Time is running out fast,” said Mediobanca’s top analyst, Antonio Guglielmi, in a confidential client note. “The Italian macro situation has not improved over the last quarter, rather the contrary. Some 160 large corporates in Italy are now in special crisis administration.” The report warned that Italy will “inevitably end up in an EU bail-out request” over the next six months, unless it can count on low borrowing costs and a broader recovery. Emphasizing the gravity of the situation, it compared the crisis with when the country was blown out of the Exchange Rate Mechanism in 1992 despite drastic austerity measures.
Italy’s €2.1 trillion (£1.8 trillion) debt is the world’s third largest after the US and Japan. Any serious stress in its debt markets threatens to reignite the eurozone crisis. This may already have begun after the US Federal Reserve signaled last week that it will begin to drain dollar liquidity from the global system.

Tuesday, May 14, 2013

I have been running business's for other people and myself since 1983. Running an economy may indeed be unlike running a household, but it is EXACTLY like running a business. Some of the most famous business's in the world went bust because they could not finance their debts, or were the victim of bad debts where their customers could not finance theirs. You need cash flow, you need working capital, you need a stable exchange rate, you need to keep an eye on all the important ratio's one of which is liquidity and you need to make a profit both as a business and a country. Which is where we could get too deep on financing long term deficits on the balance of payments. Cliches are cliches because they are right.
One cliche is "cash is king" If you have money, then you can buy assets, invest in assets and make some good deals. The world will beaty a path to your door. If you are skint, like Cyprus the world does not beat a path to your door, it bashes your door in.
Here's another cliche: If you owe the bank $50,000 you have a problem. If you owe the bank $50,000,000 the BANK has a problem....The Fallacy of Composition argument that national economies and indeed the global economy as a whole are like a household or business economy and should be run as such was laid to rest thirty seven years ago!.  In summary there are three vital economic ideas politicians and the electorate need to understand to fight recessions and achieve economic growth these are Fallacy of Composition, Sectoral Balances Accounting and Sovereign Currency Creation of Money.... And so the debate trundles on. Austerity or more money printing. I suppose the only way to find out is to suck it and see. Well in fact we are getting a hybrid policy which has elements of both approaches: loose monetary and tight fiscal policy. The upshot, stagflation. Was there ever a more egregious policy mismatch. Anyway we (central banks around the world that is) seemed to have produced a stock market rally and the beginnings of a rally in the housing market. News papers are full of 'soaring' equity prices as a sign that the 'recovery' is firmly in place. Recovery for whom I wonder? All that QE money had to go somewhere and it hasn't gone into productive investment, but hey, the headlines are good.  Unfortunately the whole thing looks like Global Bubble MKII and we can safely predict it will end in the same catastrophic manner as the 2007 debacle notwithstanding all of the media hype.. If it walks like a bubble etc., ... Is this the famed Keynesian stimulus at work I wonder? If so it isn't quite running to plan.  This depression has a long way to run. Like the 1929 slump it began with loose credit and excess demand in the US stock market followed by the failure of the Vienna Bank Credit Anstalt and ran right up to WW2, albeit with a partial recovery. But even as late as 1938 US unemployment was running at 20% and world trade was being stifled by a tariff war which added a further twist to the slump. Sovereign nations with their own currencies were engaged in a currency and trade war against each other to gain competitive advantages in the diminished world export markets. All eerily similar to today's situation.  Here's a prediction, an inflationary upturn with any number of asset price bubbles as the corollary - this is not an accident it is policy - then the inevitable pop and back in the **** only this time even deeper. That is what is on offer from the Treasury and central bank mandarins.

Saturday, October 16, 2010

The most powerful department within the Romanian National Securities Commission (CNVM)

The most powerful department within the National Securities Commission (CNVM) has changed its management: Vladimir Cojocaru, one of the survivors of the SAFI and FNI scandals, has been replaced as head of the General Supervisory Department by Ciprian Copariu, former head of the Issuers Department.The main responsibilities of the National Securities Commission are the supervision and monitoring of investors and companies active on the capital market. Weaknesses in the exercise of these responsibilities have enabled situations like the SAFI Invest fraud, and the historic FNI and FNA bankruptcies to occur, scandals that severely tarnished the image of the local capital market. The move comes only a few weeks after a historic decision of the High Court of Justice in the FNI case. More specifically, on September 22nd the High Court of Cassation and Justice issued an irrevocable and enforceable decision whereby the CNVM, alongside Nicolae Popa, Ioana Maria Vlas, and other accused in the FNI case, is forced to pay damages to former FNI depositors. The amount that CNVM is set to pay for inadequate FNI supervision is 50 million euros, according to some estimates.