Wednesday, December 21, 2011

What is behind the Hollywood sign and the Merkozy plan?

20 months ago Angela Merkel visited Hollywood and the area behind the famous Hollywood sign.

Read the reportage by Der Spiegel (in English, 15/4/10), especially the exchange between her and Simon Baker, the Aussie star of the US TV series The Mentalist,  and also consider the Merkozy plan 20 months later.

Do you see any correlation, positive or negative correlation, between what Merkel realised behind the Hollywoos sign that day and the Merkozy plan?

Sunday, December 18, 2011

What did Alexander the Great and Diogenis of Sinope have in common?

Philosophise on this (re ways of life, life missions, quests, etc):

Why did Alexander the Great, when he met Diogenis of Sinope (see Wikipedia), say that if he wasn't Alexander he would wish to be Diogenis of Sinope?

In other words, what did Alexander the Great and Diogenis (or their missions in life or quests) have in common? Or what is not a common element but an alter element?

In any case, why did he say it?

The right places for uniformity and diversity: The EU case

For a system like eg the EU to function it needs uniform laws, diversity in rules, uniform language, pluralism in ideas. Not the reverse!

For now, the EU27 has non-uniformity in laws, uniformity in rules (eg Merkozy), linguistic Babel and non-pluralism in ideas! How can it function as a system?

Thursday, December 15, 2011

Dynamics: Nothing to fear

A friend sent me a "Merry Crisis and a Happy New Fear!" season's greeting!

The more we believe that a crisis exists the bigger the crisis becomes. That's the nature of social systemics & economics and finance are social sciences!

We do indeed have nothing to fear but fear itself in these crisis dynamics and aura. They are counting on our fear, they are promoting it, they are amplifying it, to benefit their goals.

Monday, December 12, 2011

European Single Market needs federal income tax

EU policy makers please remember: Creating a single space for firms, workers, free lancers, job seekers, et al to live & work is No1 goal

An EU or Europlus federal income tax to replace national ones is one of the ways towards a real Internal Market for people & firms.

Sunday, December 11, 2011

Can Europlus become Germany times 5 in the global economic arena?

On the post Dec 8 Europlius:

1) A much more spendthrift Europlus would mean less consumer spending too, ie a much stronger exports orientation for the Europlus

2) In other words, turning the Europlus into a lean and mean global exports "machine".

3) That could mean a much more aggressive trade policy for the Europlus with its trade partners (USA China, other BRICs etc).

4) Including less tolerance for hidden and other protectionist barriers by others esp in the G20.

5) So the US admin which already "accuses" Germany of exporting too much & consuming (& thus importing) too little, is probably having a fit!

Friday, December 2, 2011

The Achilles Heel of Western Civilisation?

The Ancient Chinese used the motto "may you live in interesting times" as a curse (not a wish).

Modern "Western civlisation" puts and pays a premium for certainty, especially the middle class.

It's its "Achilles Heel".

Capitalism is in trouble because ...

Capitalism is in trouble because it relies on 2 unnatural (thus inherently flawed) premises: a) Trust b) certainty or the quantification of risk

Monday, November 21, 2011

Euro reminders and solutions

Reminder: The Euro was created to promote intra-EU (intra EU Single Market) commerce & activity in general, not to become a tool for power games.

Reminder (2): The Euro was not created to make Euro members' exports and services like tourism less competitive & Japanese, US, Chinese etc imports more competitive.

Yet the obsessive pursuit by the ECB of the 2% inflation target led to high central interest rates that led a Euro that spent much of the decade at exchange rates that suffocated most if not all of the Eurozone economies.

So some members did benefit from lower rates in their sovereign bonds etc but the effect of the expensive Euro on Eurozone firms, exporters and services such as tourism was a heavy price to pay.

So are "internal devaluations" or even exit the solution?

IMO, No!

The solutions package should include:

a) Immediate: Banning of CDSs (Credit Default Swaps) on sovereigns and of any other speculative tools on sovereign debt (bonds etc). Requires political will by the EU 27 as well as the G20, or the kind of will that is also required for dealing with the issue of tax heavens in Europe and globally.

b) Immediate: An ECB inflation policy that takes into account the effects of the central ECB rate to the Euro exchange rate vis-a-vis the USD, the Yuan, the Yen and other currencies of the EU's main trade competitors.

Inflation curbing in the Eurozone and the EU can be achieved via more dynamic implementation of EU competition law and a much more effective approach towards a real EU Single Market (too many barriers still exist).

c) ASAP: A move to not just fiscal but full political union, that will include inter alia single laws in most if not all areas of policy, to facilitate the micros and SMEs as well as the average citizen.

Friday, November 11, 2011

I am not impressed by alleged 2 speed Euro "theories"

The alleged Merkel-Sarkozy plans for 2-speed Europe or Euro do not impress me.

Why?

They cannot change the EMU part of the existing EU Treaty (via a so called IGC - Inter-Governmental Conference) w/o giving in to Cameron's demands for "repatriation" of certain competencies from EU back to national (or just UK) level!

1) If they offer Cameron what he wants, then other EU members, eg one of the other 9 outside the Euro, but not anti-EU, may raise a veto, ie veto the whole IGC agenda.

2) If they plan a Treaty that works outside the EU Treaties (in a format similar to the original Schengen way/model), then the contents of such Core EU/Euro Treaty can it seems to me can only add, not amend, articles of the existing EU Treaty.

Hence there is a Catch22 of sorts.

So what on Earth are (allegedly) Merkel and Sarkozy talking about?

In an IGC, be it EU or Euro one (see above), all will have to agree, not only Merkozy & "German thinking" others!

Bottom line: Euro membership was/is irreversible, those who do not get that are the ones in denial of legal, technical and other factors!

In speech in Strasbourg, Sarkozy called such plans a mere "intellectual exercise". IMHO they are not a trick. They are just that. Nothing feasible about them.


Saturday, November 5, 2011

Zeus, Ulysses, Pericles, Merkel and central bankers

Read below my comments on "Modern Greece’s real problem? Ancient Greece" by George Zarkadakis in The Washington Post.

I disagree with most of the points of the article/opinion by Mr. Zarkadakis.

IMO the paradox is that Zeus and other Greek gods and goddesses, legends such as Ulysses and Achilles, real life ancient Athenians and mostly politicians even of the Pericles era would probably be considered more "unruly" and "less EUropean and EUROpean material/stuff" than modern Greece/Greeks, in the eyes of "purists" (to say the least) such as A. Merkel, central bankers, conservative US and European media, etc etc etc and of course "some" modern Greeks.

Eurozone moving forward outside the EU Treaty framework? What's new about that possibility?

In the Wintour and Watt blog today, Saturday 5 November 2011, in The Guardian, titled: "Britain turns on 'disreputable' Germany as relations sour over eurozone crisis", I read:

"David Rennie, who writes the Bagehot column in the Economist, has one of the most important scoops of the eurozone crisis this week. Rennie, who has just returned from Berlin, reports that German officials are so angry with Downing Street that they are threatening to draw up a treaty just among the 17 members of the eurozone. This is what Rennie wrote: ..."

What scoop? It seems that since May 9 Spiegel International had "scooped" the scoop, as I posted in early September: "it seems, according at least to my reading of the 09/05/2011 "Divide and Rescue: Berlin Lays Groundwork for a Two-Speed Europe" report in Spiegel Online International that the Treaty that will move the Eurozone towards political union (uniform labour laws, budgetary "unification" (to what extent we shall see), etc etc) will not be an EU one, but, like Schengen (when it was set up), "hors EU"! That means that the UK, unless it joins this 1st speed union (ultra highly unlikely), will not have a say in it or get to vote on it! Any referendums will be by the participating states! Bazinga?!"

Here is full part of my Sept. 7, 2011 post "EU: Who kicked the can down the road? (mach 2)"

"Now, we come to maybe the most interesting bit:

While Cameron supports closer integration if the Eurozone becauses he thinks that the needed EU Treaty changes will give him a chance to negotiate in return for allowing the Eurozone to move ahead, repatriation of certain "competemces" back to the UK (from "Brussels"), it seems, according at least to my reading of the 09/05/2011 "Divide and Rescue: Berlin Lays Groundwork for a Two-Speed Europe" report in Spiegel Online International that the Treaty that will move the Eurozone towards political union (uniform labour laws, budgetary "unification" (to what extent we shall see), etc etc) will not be an EU one, but, like Schengen (when it was set up), "hors EU"! That means that the UK, unless it joins this 1st speed union (ultra highly unlikely), will not have a say in it or get to vote on it! Any referendums will be by the participating states! Bazinga?!

That also raises the issue of the role of the European Commission, the ECJ, the European Parliament, the Council of the EU, etc, as well as the European Council in the operation of the "EU Mach 2". It seems that the Eurogroup plus other, new, bodies, probably lean, will be set up to do the "job". The EU institutions will continue to operate the affairs of the EU27 but the "EU Mach 2" will have its own institutions. Can there be another way considering that:

a) Cameron wants to use an EU27 IGC to get his way, thus a change in the EU Treaties must be avoided by the rest.
b) Not all members of the EU27 will be participating in this "closer union"?

To be continued!

PS. That would also mean that the "hors EU" Treaty of the core union cannot change the EMU/Euro aspects of the EU Treaty, ie exit from the Eurozone/Euro will continue to be not an option. That IMO means that all 17 of the existing EZ members will participate in the core union, unless they figure out a way of having a Euro member not be part of the core union and still have the who thing work! Does not look likely!

PS2. Times are beyond interesting. But at least there is a reversal of direction, from backwards to forward. Unless of course Angela Merkel and/or the CDU change their minds, yet again!"

G7 + G20 = 0

A main dynamic of the era is, alas, not economic cooperation but economic clash between countries, more so than between multinational corporations.

With that in mind, the G7/G8, the G20 and other bodies (including WTO) are of marginal at best real significance.

If one factors into the dynamics and systemics of the era the role of global finance, then that begins to show the chaotic nature of the times.

Saturday, October 22, 2011

Systemics: Time for major re-thinking (Eurozone. EU, world)

If 300-350 bn Euro of debt cause the Eurozone, EU and world economic systems the problems we have seen, then these systems are really flawed.

In other words, the "Greek crisis" exposes how flawed Euro, EU & world (inclusing the US) systemics (economic-financial, business, political/policy, social, etc) are!

Major re-design needed.

United States of Europe sans UK, France & Germany?

An outside the box syllogism, prompted by current developments in European and EU Affairs:

Maybe Europe is not meant to be fully united (ie political union).
Maybe is meant to consist of 5 separate political entities:
1) UK,
2) France,
3) Germany,
4) Russia

plus

5) a United State of Europe new country, comprising of a political union of most of the rest of Europe's countries (ie 24+ federated member states)

Thursday, October 20, 2011

Plutocrats?

I first wrote these thoughts some 7 to 8 years ago, to show the complex and often oxymoronic nature of the "systemics" that exist in the world today. I kept no copy so this is a reproduction from memory. It is more relevant or if you prefer "current" today, in 2011, than it was in 2003/04.

1) A worker is laid off.
2) A TV viewer complains about the quality of content.

They both blame the "system" or various other alleged culprits.

Yet here's the hitch:

1) The worker has been laid off because his/her employer is under pressure by the financial markets - analysts - financial managers to perform better, by cutting costs. The worker has saved or invested X USD or Euros or Pounds etc either directly, via a bank deposit, or a portfolio or money market or other instrument, maybe an IRA (US or similar instrument) or indirectly, via a pension fund, private, semi-private or state operated, in shares or bonds including those of his/her employer. He/she may be aware of that or not.

So in effect, he/she loses his/her job because of the pressure the managers of his money put on his/her employer to perform better and thus give him/her the max ROI possible!

Of course the marginal gain in ROI from the loss of the job is oprobably much smaller than the loss of salary income.

So, in 2011, when we talk of the plutocrats or "the capitalists", do we really know who we are referring to? Do we forget that most investment, money etc managers compete with each other to attract and maintain the "business" of this worker as saver/investor, directly or indirectly? How many investors, be they in the 1% or 99%, investors of 1000 or 1000000 USD or Euros etc choose Socially Responsible Investments or managers who invest their money in such?

2) The viewer happens to be a business owner. His/her company advertises on TV and/or radio and.or new media and/or print. In their effort to attract the widest audience possible and offer his/her company the best return on their ad spend, many/most media put out lower "quality" content than they otherwise would, thus prompting the reaction of the viewer. Little does he/she know that he/she is partly the culprit of the dynamics that lead to the content he/she does not like!

Complicated times. Not suitable for simple models of causality!

So who have the power? The money-crats or the managers of other people's money? Or everyone and no one? Is it a runaway train?

Food for thought.

Tuesday, October 18, 2011

Private and Public Sector: To each their own

As I have argued before, (see eg August 14, 2011 post: EU & USA: The right policies can come from the center) our times call for a system that provides the basics to each human and leaves them free to pursue or not the rest.

As I wrote in said post "Most political parties and political/policy platforms to the right and left of the center miss the concept that some things are better done by the market, some are better done by the public sector (aka the state). Each has activities where it is stronger than the other. Neither the (financial and other) markets nor the state should be an object of political or philosophical worship!"

Eg social security including healthcare insurance and healthcare itself are better provided by not for profit state owned or run systems (aka the European Social Model).

The current crisis in Europe and the US does not mean that European cannot support its Social Model. It means that not only social security but banking as well (except maybe for investment banking) are better run without a profit making goal by the state. If the state is to guaranteee all or most deposits, which it should, then why not own/run the banks too?

As I proposed:
"The center I am referring to recognises both:
a) the need to secure peoples' basic needs and
b) to give people more freedom in pursuing wants and dreams

in their work/economic or social or other aspects of their lives"

That is the basis for policy making in 2011. For the 99%. The private for profit sector is better at doing many many things. But not those that constitute basic needs such as healthcare and banking/savings keeping.



Saturday, October 15, 2011

npthinking Twitter statistics

In the period from September 29 to October 15, according to twocation.com data, the followers map of @npthinking changed as follows.

There was a increase of 4% in the total number of followers, from 1459 to 1521 (+62)

The number of followers living in the Eurozone increased from 636 to 674 (+38) to 44% (stable)
The total number of followers living in the EU increased from 830 to 856 (+26) to 56% of total (stable)
US ones from 436 to 458 (+22)

So USA+EU increased by 48 out of the total +62.

Followers living in native English countries up 887 to 923 (+36) to 60% of total (stable).

These are the % of some country markets on the total (1521 followers) on October 15:
USA 30,10%
Canada 1,70%
Australia 2,80%
UK 11,10%
Belgium 4,70%
Greece 13,10%
Ireland 15,00%
Spain 2,50%
Germany 2,20%
France 2,20%
Portugal 0,60%
Sweden 0,30%
Italy 1,40%
NL 1,10%
Indonesia 0,30%
Ukraine 0,80%
Mexico 0,60%
Cyprus 0,30%
Denmark 0,30%
Estonia 0,30%
Austria 0,30%
Finland 0,60%
Norway 0,30%
Holy See 0,00%
Hungary 0,30%

Largest increases in absolute numbers since September 29:
USA + 32 followers
Belgium +16
France +10
Australia +10
Italy +10
UK +10
NL +5

while largest decreases where:
Portugal -7
Sweden -11
Canada -14

Thursday, October 13, 2011

The real issues in EUrope, beyond London vs Brussels, and EPP vs PES: Polynomy is a key one

Polynomy and red tape, be it "made by Brussels" or "made in Britain" or France or Greece or Italy etc is the No 1 problem for SMEs, growth and jobs.

What do I mean by that?

That the real issue is not the transfer of legislative power or policy competences from member states to the EU or Euro institutions, or the re-patriation of them (see Cameron's EU agenda) but uniform yet better and fewer laws and regulations regarding the real economy of workers, free lancers, micro firms and SMEs of EUrope.

In other others, the problem is an interventionist approach that can be found in most legislation in EUrope, be it made by the UK Labour or the Tories, PASOK or New Democracy in Greece, PP or PSOE in Spain, etc, or a conservative (EPP) or PES (Socialist) majority in the European Parliament, the various Councils of the Council of the EU and the European Council and of course the College of Commissioners (most of them have a political/party affiliation, at least before they join it).

Of course that does not imply a libertarian approach to policy making and legislation. But a quite less interventionist one. More of a matter of philosophy than political ideology, actually.

See also my previous posts:

The recipe for growth and jobs

Can a conservative Europe be a united one?

EU & USA: The right policies can come from the center


Wednesday, October 12, 2011

World (econ/trade) Cup news and dynamics!

""We are in trade war. But today we’re fighting back,” said Democratic Senator Sherrod Brown" after the US Senate passed a "China currency manipulation" bill (See "Senate passes China currency manipulation bill" in The Raw Story, October 11, 2011).

1) "War" is a heavy/loaded word, that I would not use, but Senator Brown is right in that globalisation has turned into a fierce economic/trade World Cup instead of a cooperation "game" of nations. So what was billed as a world championship primarily between multinational corporations (and "local"/national champions (companies)) has gained a second level, the economic competition (World Cup) between countries. With exports (goods and increasingly services), investment, etc as its tools (instead of eg a ball, see football). Countries are ranked by various sources (including the WEF's Global Competitiveness Report, the rating agencies, etc). Based on GNP/GDP, trade or CA balances, etc. The genre of the game is mostly competitive, and mostly fierce, not cooperative.

After the 2008 US subprime driven crisis, some spoke of "over-dependency on exports". Others spoke of "over-dependency on the financial industry" (eg of the UK/London, by a now former German Minister). An equivalent to the US over-dependency on oil that even GW Bush Jr. spoke of?

In more recent months, the US has accused Germany of exporting too much and consuming tooo little! We are also reminded that many economists especially of past times have argued that trade is supposed to be in near balance and that excessive trade surpluses are as damaging to the world economic systemics as trade deficits are.http://www.blogger.com/img/blank.gif

Some have even argued that "good" domestic consumers are a precious asset for a country (eg the US, consumption is 2/3 of the economy). Of course it helps when the market is big enough (eg the US 300 million one) and realy internal and single (unlike the EU not that single after all Single Market and the Eurozone (330 million ie larger than the US in theory, but not as internal as the US in practice). See also my August 29, 2011 post: "Show me your consumers and then I will show you mine!"

2) Back to the bill that just passed in the US Senate, it is not active yet anyway. Merely passed in Senate. Not the GOP majority House of Reps, at least not yet. Normally pro-free trade USA (Bush even tried to create a Free Trade Area for the whole Americas (North, Central and South in Mar del Plata in mid-2000s) but did not inspire most other Americas countries, that are nevertheless into things like Mercosur and the evolving UNASUR, while NAFTA is not too big a success according to all 3 members, and the Democrats in the House and Senate had managed to stall the adoption of bilateral agreements that Bush had concluded) But with 2012 so close, will GOP stand on its pro "free trade" principles or take into account the electoral climate too? By the way, as far as I know, Obama wa never given "fast track" powers like the ones the Democrats led House and Senate had given Bush to negotiate the now shifted towards a "lite" version WTO Doha Round of trade talks.

And while WTO exists with its 150+ members, internationa trade is still not free (only more free than it was 20 or 30 years ago) and according to many studies that there too many "hidden"/covert barriers/protectionist defenses employed by countries (eg many G20 ones) that otherwise partake in the G20 and others' public rhetoric pro-free trade!

4) I have been pondering (and blogging) as per how long before USA and/or EU realise that for them WTO membership has more restrictions than opportunities (& that they can be better served via bilateral agreements between countries, not even free trade areas)?

5) I am not even sure how compatible the US "China currency manipulation" bill is with WTO rules! Could US measures against China activated via this bill lead to China complaint to the WTO that currency manipulation is not covered by WTO rules (and thus not forbidden) and that thus the US measures justify WTO approved counter-measures by China? Not an expert, but wondering.

6) Of course, nowadays, there are only 2 economic super-powers in the world today: China and USA. Russia could be added as a +1 (in a G2+1 instead of G7+1 configuration). The U is not an world economic superpower, unless it unites politically. And the UK, France and Italy have long lost real "G" status (eg G7).

What about Germany, the ex-No1 exporter in the world (now it is China)? Well, Germany is economic/trade champion only in a EU league, not the world league, since most of its exports stay in the EU! Plus Germany (unlike USA, China, and potentially India and Russia) has too small of an internal market to "survive" bumps. That is why it needs EU/Euro.

7) Daring to be different. Not sure how Russia's plans to be a world power via oil and natura gas are working out (calls for a return to the USSR's military superpower status would suggest that the oil and natural gas strategies are not working too well), but Russia is clever in that it puts extra criteria for foreign state (vs private) investments in Russia. And no WTO membership (eve if it is aid to be vetoed by Georgia). Why? Because while USA and Germany had to offer people rebates as a stimulus for their car industries but to be consistent with WTO rules they had to make the rebates available to buyers of made in WTO inports too, Russia, not being a member of WTO merely hiked the tarrifs of car imports!

To be continued in a market near you and around the world!

Tuesday, October 11, 2011

Towards a new paradigm for the "West"?

1st draft of a brief working paper

1) The West's dominant paradigm has failed to gain global approval - appeal

2) It has even failed to gain approval - appeal in a large part of Europe and the EU

3-4) It is now being challenged in some its core hubs (UK, USA) while in Germany and North - North-West Europe it is trying to gain appeal via populism and xenophobia

5) Is there a solution? a) To incorporate other existing paradigms frm the rest of the world & from rest of Europe b) to go back 2 its roots

6) Option B: Go back to its roots & rebuild from there. But which are its roots? Renaissance, Rome, The Hellenistic Times, Athens?

7) What would the paradigm today be if Alexander the Great had not died but had lived to further develop his own "globalisation"?

8) Alexander's prepared the Hellenistic Times by respecting Egyptian, Persian & other cultures and merging them w/ the Classical Greek one

9) It was left up to his successors & lasted not long enough. Had it lasted longer, would Rome have emerged the way it did?

10) Option A: Can West's Times respect & incorporate other world cultures the way Alexander incorporated others to the Classical Greek one?


Monday, October 10, 2011

The effect of US and European polynomy on growth and jobs

US & European polynomy (ie too many laws, regulations and red tape) has suffocated the real economy and especially the micros & SMEs.

Unless fixed, don't expect growth & jobs in the US & EU

The "Vikings Invasion" model for SME led exports!

1. Intro:

Who in Europe has really cared to examine "sur-le-terrain" the real problems of SMEs and micro firms in the EU's or Euroland's periphery and find real solutions to them?

Greece's rebound in growth and jobs can come from a mass/pack of new exporting micros & SMEs that will "invade" with their products and in some cases services, the Euroland, the EU Single Market and world markets as the Vikings ships invaded Europe 1000 yrs ago.

Not via large corporations or large private investors.

2. Business as a revolution:

October 9, 2011: 44 years without Che!
Che, an Argentinian of Spanish and Irish descend, had concluded that Latin America's ingrained economic inequalities were an intrinsic result of capitalism, monopolism,neocolonialism & imperialism.

Which of these variables apply in Europe today?
What would a European Che do today? IMO go to Greece or Ireland or Portugal or the Baltics, the EU's periphery, and start an exporting SME. To the Eurozone/Euroland, to the EU Single Market or even to the global one!

Because I ask you, what is more revolutionary and heroic than starting an exporting SME in the Euroland of 2011, especially its periphery?

Plus: Not tolerating monopolies, oligopolies, monopsonies and oligopsonies is not a Leninist monopoly! Real free market fans share this POV!


3. Scope

It is true that most SMEs are occupied with local and national regulatory, redtape and other issues.

That is precisely the main problem of SMEs. Their local "worldview". That is why I call the model I propose "Vikings invasion"!

The EU27 even EZ17 spaces are alas a bureaucratic swamp where mainly large companies and corporations can "work"/operate! The swamp is created mostly by local/national regulations/polynomy and resulting red tape.

Almost 18 years of BS re the EU Single Market is enough!

SMEs need a REAL Single Market now!

The Europlus Six-Pack is no solution to Europe's growth and job creation problems.

The "Vikings Invasion" SME pack-exporting model is!


4. The "Vikings Invasion" model for SME led exports (and growth and jobs creation)

Look into history texts on how (method) the Vikings invaded and dominated Europe for 3 centuries! The key success factor was the independence of each vessel. Yet these vessels formed a "loose" pack that because of its non-coordinated nature it made it difficult for others to defend against! Viking "SME" vessels, due to their size, used Europe's inland waterways to reach all parts of Europe.

This model is what Greek, Irish, Spanish, Portuguese SMEs and their economies need today!

The "Vikings invasion" model for exporting micros & SMEs can be a solution not only for Greece and Ireland & but other EU/Eurozone economies too!

Friday, October 7, 2011

Money and the European paradigm

The EU's so called "paymasters" have to realise that money does not define the European paradigm.

Wednesday, October 5, 2011

Who was ready for Euro membership after all?

Was anyone but Germany and maybe NL ready for a Eurozone with a fixation on 2% inflation & a Euro >1.3 USD rate?

Not that global, not yet at least!

Whereas it is interesting to read attempts to find a common thread or paradigm to recent social developments around the world (North Africa, Europe, India, USA, etc), I am not yet convinced that such a thread exists at least in the way many suggest. The world is not that "global", at least not yet.

Sunday, October 2, 2011

npthinking blog stats, September 2011

Sept 2011
Top 10 % of total pageviews

US 39.7%
Belgium 14.3%
Ireland 5.6%
Germany 2.9%
France 2.8%
Greece 2.5%
UK 2.3%
Canada 1.3%
Russia 1.1%
Israel 0.9%

Tuesday, September 27, 2011

A solution to the EU and Euro problems?

A number of EU member states can form a political union between them (outside the EU Treaty) and continue to be members of the EU but as a single member state!!

So if let's say all 17 Eurozone members merged into one (federal country) then this new country, let's call it "Federal Republic of Europe" (FRE) could be a member of the EU instead of the 17, in other words an EU with 11 (10+1) member states.

Of course this new "country", FRE, would have its own publlc servants and its own institutions which would probably be staffed by former members of the former national administrations.

If indeed this country consisted of all members of the Eurozone, then that would go a long way towards solving the Euro crisis. It would have a Prime Minister elected in the same or similar way the German PM is, have a federal tax system and a federal "IRS" to administer it, maybe its own army, and of course FRE-wide laws. Its own bonds, etc.

Now, if this new country did not match the current Eurozone in membership, that would not help solve the Euro crisis, ie the Euro would not gain a country, but it would still go a long way towards the destination of European integration. Over the years and decades more European counties, EU members or not, would merge into this FRE country.

That would not be good new for the EU per se, but the EU (much like the EEC) is but a vehicle for European integration. What matters is European integration not the EU per se.

This FRE solution could work irrespective of the future of the Euro, even providing alternative impetus in Euro's worst case scenario (the FRE would not necessarily have a single currency at least at first).

There are other solutions too of course.

Friday, September 23, 2011

The recipe for growth and jobs

If politicians, governments and policy makers want growth and jobs then they must reduce the quantity and improve the quality of legislation, new and existing; so simple and yet so hard to do.

Governing Dynamics: Competition or Cooperation?

Events of the day IMO show that:

a) Countries and their governments have to decide whether the global economy is a competition or a cooperative "game".

b) Markets need to learn to "chillax"

Thursday, September 22, 2011

Even a free trade area does not allow "polyamory" in trade, does it?

The other day I was having a discussion on current affairs and dynamics in Europe and the world with an economist friend. Mind you, yours truly is not an economist but an MBA with 2 more degrees (a BS and an MS in decision sciences).

During the discussion the topic of "customs unions" and "free trade areas" came up. My friend gave me a POV that has proved valuable food for thought: He argued that a customs union between let's say countries A, B and C, implies a clear intent by these three countries to trade primarily between them as opposed to a global scope in trade.

If that is true of a customs union (which is what the UK claims it joined in the 1973 EEC), a "common market" as my 50s plus barber in Brussels called the EEC back in 1992, then that is even more true of a "Single Market" (launched on 1/1/1993).

What does all this mean?

That members of the current EU, the Eurozone, even those who claim they openly want a "free trade area" Europe (UK Tories etc), have to de juris accept that all these are not compatible with a multi-lateral global free trade system (WTO, ex-GATT), that members of non only the EU but also EFTA, ASEAN, Mercosur and the emerging UNASUR must have, explicitly or at least implicitly, the will and view of trading mostly (to say the least) with their partners!

And what is more, if they do not, then they should not be a member of any such entity and rely exclusively on the WTO membership.

Thus:

a) If the UK does not want to export and import mostly within the EU27 Single Market, then it has no place in the EU
b) If Germany sees China and Russia as its key trade partners from now on, then it too has no place in the EU or its Eurozone.
and so on!

Thus, if my economist friend is right, membership in the EU or even as its old EEC or "common market" form presupposes a commitment to trade with mostly the other members (at the expense of global (WTO etc) trade).

Consider that!

Monday, September 19, 2011

In view of the election results in Berlin ....

In view of the results in the state (land) election in Berlin, please read below an excerpt from my post of June 7, 2010 (15+ months ago): Various Thoughts on EU, US and other affairs, June 1-5

.. I re-iterate my view that it would be in Germany's national interest & the EU's for Mrs Merkel to re-do the grand coalition with SPD (2005-09) ...

Friday, September 16, 2011

Europe, Europe, wise up Europe!

A political commentary song on Europe:

Straight out of the Middle Ages?

The budget crises in Europe and the US pose the question: What are the priority responsibiities of a State? On that , my view can be found in my August 14 post "EU & USA: The right policies can come from the center".

What I find astounding is that some European and American politicians' views (re the EU, Euro, the EU budget, non solirity to uninsured people, divorcing Alzheimer's patients) are as if they just stepped out of a time machine straight out of the Middle Ages.

Real human values are not abandoned in difficult times: That is Europe's real deficit and real crisis! Will it default on them (values)? Is Europe going to throw its Social Model (eg UK's NHS) into the Kaiada river (see Ancient Sparta) instead of exporting it to the rest of humanity?

Is Europe returning to its Medieval (brutal etc) past? Or will be surprise us and lead humanity into a new Renaissance

Outside the box: To each his own?

Thinkin outside the box:
Should governments. states & public sector in general only be allowed to borrow from other such entities, ie not from the financial markets?

On Wisdom, Markets, Philosopher-Kings and Philosopher-PMs

Time to pause and realise what has been going on in Europe, USA & the world!

Ponder on this: Sure there are socio-econ-policy-political problems in Europe & the world but it's the role of the financial markets to propose/force solutions?

I may or may not believe there is wisdom in the markets but I certainly don't believe in the wisdom of the financial markets!

We do not need philosopher-kings of Markets, we need philosopher-PMs of democratic States!

Euro or the Social Model?

Is the goal of all this jazz

a) to break up the Euro or
b) to dismantle and priivatise the European Social Model?

Seems both.

I ..... therefore I am?

I think therefore I am?
I feel therefore I am?
Both?

Nowadays there are many out there who are trying to manipulate either our feelings or out thoughts or both. We need the tool to protect our thoughts and feelings from their "games".

Tuesday, September 13, 2011

Can a conservative Europe be a united one?

With so much "noise" in current affairs these days it pays to read yesterday's news (for distance and thus better POV)

I was reading the New York Times article "German Leader Faces Key Choices on Rescuing Euro" of September 12 and it got me thinking: Can an SPD-Greens government make a difference in moving forward?

Of course one can now, in retro, say (as I have argued in tweets and posts in recent months) that a continuation of the 2005-09 Grand German coalition (CDU/CSU-SPD) in 2009-2013 would have avoided many of the mistakes of the CDU/CSU-FDP one. That the coalition with FDP has proved disastrous Germany and Europe. The populist mud slinging toxic propaganda against Greece and the rest of the South has helped no one.

Thus begging the question: Can a united Europe be a conservative one, or rather, can a conservative Europe be a united one (in the sense of a real "European Union" not the current wishy-washy institutional monstrosity)?

Or maybe an EPP/PES "grand coalition" national governments in all/most member states is the solution.

Alas not a liberal one in the ELDR sense because some of its members have in effect neo-liberal or even conservative (politically and philosophically) views (eg FDP, VVD) while some have liberal democrat (ie centrist) ones eg D66.

Bottom line: It seems that a united Europe presupposes a progressive majority ie a mix of mostly PES (social democratic) with the truly liberal democratic/centrist/moderate part of ELDR & some progressive EPP elements.


Sunday, September 11, 2011

Marketing analysis: npthinking stats

1) npthinking tweets

Based on data about @npthinking compiled from http://www.twocation.com


On 16/8, with 1069 followers vs 2/9 with 1213 followers vs 11/9 with 1248 followers

12 countries had market shares higher than 1% on 16/8. 14 on 11/9.

USA
16/8: 29.50% x 1069 = 315
2/9: 34.90% x 1213 = 423 +118
11/9: 34% x 1248 = 424

UK
14.20% x 1069 = 152
12.90% x 1213 = 156 +4
13.30 x 1248 = 166

Greece
12.30% x 1069 = 131
13.10 x 1213 = 159 +28
14.10 x 1248 = 176

Belgium
11.00 x 1069 = 118
7.10 x 1213 = 86 = -32
6.10% x 1248 = 76

Ireland
4.00 x 1069 = 42.8
2.90% x 1213 = 35
2.90 x 1248 = 36

Spain
3.20%
2.90% x 1213 = 35
3.40 x 1248 = 42

Canada
3.20
4.20% 1213 = 51
4.00 x 1248 = 50

NL
2.10
1.30% x 1213 = 16
1.30 x 1248 = 16

France
2.10
1% x 1213 = 12
1.10 x 1248 = 14

Australia
1.90
2.40% x 1213 = 29
2.40 x 1248 = 30

Portugal
1.60
1.30% x 1213 = 16
1.60 x 1248 =

Germany
1.30
1.80% x 1213 = 22
2.10 x 1248 = 26

Sweden
2/9 1% z 1213 = 12
11/9: 1.10 x 1248 = 14

Italy
2/9: 1.10 x 1248 = 14

Mexico
0.50
0.80% x 1213 = 10
0.50 x 1248 = 6

Regional:
Norway 0.30% x 1248 = 4
Denmark 0.50 x 1248 = 6
Finland 0.30 x 1248 = 4
Sweden 1.10 x 1248 = 14
Total 28

Estonia 0.30 x 1248 = 4
Latvia 0
Lithuania 0
Total > 4

Hungary 0.30% > 4
Czech R. 0
Slovakia 0
Austria 0.30% x 1248 = 4
Switzerland 0.50% x 1248 = 6
Slovenia 0
Total > 14

Croatia 0 (I know of at least 1 though)
Bulgaria 0 (I know of at least 1 though)
Romania 0
Cyprus 0.30 > 4
Malta 0

BRICs
Brazil 0.80% x 1248 = 10
Russia 0.30 x 1248 = 4
China 4
India 6
Total >

Ukraine
Lux 0

EU analysis:

Greece 14.10 x 1248 = 176
Belgium 6.10% x 1248 = 76
Ireland 2.90 x 1248 = 36
Spain 3.40 x 1248 = 42
NL 1.30 x 1248 = 16
France 1.10 x 1248 = 14
Portugal 1.60 x 1248 = 20
Germany 2.10 x 1248 = 26
Italy 1.10 x 1248 = 14
Finland 0.30 x 1248 = 4
Estonia 0.30 x 1248 = 4
Cyprus 0.30 > 4
Malta 0
Austria 0.30% x 1248 = 4
Slovenia 0
Lux 0
Slovakia 0

>>>> Total Eurozone: 436 (35% of total number of followers)

UK 13.30 x 1248 = 166
Denmark 0.50 x 1248 = 6
Sweden 1.10 x 1248 = 14
Latvia 0
Poland 0 (altho I know at least 1)
Lithuania 0
Hungary 0.30% > 4
Czech R. 0
Bulgaria 0 (I know of at least 1 though)
Total non-EZ: 192

Total EU
436 + 192 = 628 (50% of 11/9 total)


2) npthinking blog:

Last 30 days
Of total pageviews:

USA 33.8%
France 4.2%
UK 3.9$
Germany 2.8%
Russia 2.8%
Greece 2.7%
Canada 1.6%
Israel 1.6%
Belgium 1.5%
Finland 0.95%

9 countries over 1%.
Top post of the month 4.1% of total pageviews

Saturday, September 10, 2011

Does Europe have the wisdom? Apparently not! Others can rejoice!

Europe is way too old not to have the wisdom needed for federal union.

In his Conscience of a Liberal column at the New York Times today: "Starkness Falls", Paul Krugman, professor at Princeton and former professor at my alma mater (MIT - note: Krugman also has a PhD from MIT, yours truly an SB), paints the most clear picture of the EU and the Eurozone I have read or heard in all the 00000s of pages written on the Euro crisis and related issues in recent months.

Read it here

Two short yet key excerpts:

1) "... the message that there will be no such lender of last resort, that there isn’t enough political cohesion in the eurozone to stand behind countries under market attack"

2) "You little know, my friends, with how little wisdom the world is governed"

(2) Can be dedicated to the leaders of the EU, the EZ & its members (27 and 17 respectively).

Maybe we Europeans do not deserve a united Europe because we lack the collective wisdom and solidarity as well as sense of community.

When in the near future Europe has become irrelevant in the world, historians will focus on this period to tell and explain why.

The price of (1) is and will be paid by all Europeans, to varying extents and degrees.

All members are at fault in varying degrees and ways.

a) The UK, France and Germany (and maybe Italy and Spain) are guilty of using the EEC/EU for grandstanding. One can only be reminded of the UK-France, France-Germany, Germany-UK Summits. Plus the 12/10/2010 "US Diplomats in the EU: Manipulating the Political Dwarves of Europe" report in Spiegel International is telling of this. So is the fact that they have kept their individual membership "cards" at all international organisations, including the UN Security Council, the G7/8, etc!


b) the other member states, are guilty of not calling out the big 3 on their behaviour and of not uniting to demand a real community and eventually union.

What the markets have done (since the CDSs invented in the last 90s came into play as major tools) is expose the nakedness of the European project due to lack of real community.

The EU and EZ have proved to be a group of scorpions and frogs (see the relevant fable) in this crisis.

SO with 3-5 members grandstanding & the rest lacking a sense of true community, the EU & EZ have come to this. China, US, Russia et al including of course the "Markets" can rejoice. Although they will too feel the effects. But a potential major node in world affairs is imploding. And Europe will continue to be a loose group (a un-organised "park") of quaint "villages" for tourists to visit. And for the world's true major powers to play games on, economic and other.

Europe has not managed to use its history to wise up. Including 2 wars that became world ones in the 20th century and hundreds in its history. Maybe a real community spirit was too much to expect from a group that includes so many former Imperial or colonial powers. Too many to mention out of the 27.

So, the reality is that Europe does not have what it takes to become an A-List entity in the world. But the world .(Earth) turns and will continue to. With or without "Europe".

Brave old Europe.
Better start learning Chinese.

Sur-le-terrain of the European reality show

In the meantime, sur-le-terrain of Europe, SMEs need uniform European laws in order to have a REAL single market not this Single European Act Babel of 1992.

To work for independents, micros and SMEs the EU SIngle Market needs uniform/single laws, a single tax system, ie full political union.

It's a disgrace 4 the European "union" tht double tax avoidance inside the EU is based on bilateral agreements of the 27! EU federal tax is needed now.

An EU-wide "NHS" would have the economies of scale to survive the hawks attacks on the European Social Model.

An EU-wide income tax system would make intra-EU, intra-Single Market relocation, mobility etc more practical for the average person & firm

EU-wide operators of landline & mobile telephony wld make for a better functioning single market. Same for energy, water & other utllities. And of course banks with offices all over the EU27 territory are needed for a real single market.

A one policy fits all need not be a straight-jacket

The Germans have a problem with the direction of ECB (see "Juergen Stark in surprise resignation from ECB" on bbcnews.com)? If so, then what should the PIIGS say re ECB's Bundesbankish inflation phobia?

Rigid, antiquated, dogmatic economic thinking is putting European integration in peril (along with populist politicking)

Has the ECB inflation policy 2002-present reflected an equilibrium of the needs of all parts of the Eurozone or just a few of its members?

More Operations Research techniques and POV have to be applied to policy making. Europe needs more decision scientists in policy making (has more than enough politics, economics and finance)

Use of multivariate and Regression analysis in policy making can help Europe avoid a new recession and adopt a uniform economic policy that is an equilibrium of the need of the parts of the whole. That is what happens at national levels already, not a rocket science!

Plus since policy is a bundle of measures, it can it calibrated so as to maximise the benefits for the parts of the whole as well as the whole.

That is why I say, bring in the decision scientists in the policy making "room".

Wednesday, September 7, 2011

EU: Who kicked the can down the road? (mach 2)

This is a follow up (part or is it mach 2) of my September 5 post:
EU: Who kicked the can down the road? Merkel and Sarkozy or their predecessors?

First of all, one clarification. According to an article (September 7) in emirates247.com "Battle under way for soul of 'United States of Europe" it is not that clear after all if the German Minister of can be counted among the fans of a United States of Europe. According to the last 3 paragraphs of the article, he wrote a column in the Financial Times, in which he "laid bare "my unease when some politicians and economists call on the eurozone to take a sudden leap into fiscal union and joint liability."" According to the same article "... and that the answer to the crisis, despite it being politically painful, is for states to live within their means.".

In the meantime, the Council for the Future of Europe of The Berggruen Institute issued (September 6) a Statement by the Council for the Future of Europe: EUROPE IS THE SOLUTION, NOT THE PROBLEM" (PDF) The conclusions include:

"Supporting European integration is not a matter of solidarity but of enlightened self-interest. It is time to address the big questions in order to preserve the unique European balance of individual freedoms, market economy and systems of social protection. For us, Europe is the only solution."

"Them" includes Tony Blair, Jacques Delors, Felipe González, Mario Monti, Gerhard Schröder,
Matti Vanhanen, Guy Verhofstadt, Nicolas Berggruen, Mohamed El Erian, Niall Ferguson, Anthony Giddens (father of the "Third Way"), Alain Minc, Robert Mundell, Nouriel Roubini and Joseph Stiglitz (Nobel in Economics).

Yet as emirate247.com reports, "former prime minister Matti Vanhanen broke from the group's agreed statement and admitted: "I'm not so fond of federalism as such.""

Here is my POV. What Europe, the EU, the EU Single Market ie not only the Euro need is a single political entity, in federal form (eg like the US of America or the Federal Republic of Germany). The fiscal vs transfer union is IMO a pseudo-dilemma because political union means the creation of a federal budget financed mostly by a federal income tax (US style) on persons and companies, administered by a federal (IRS like) authority.

As I have argued before, in tweets mostly, it is actually the cheapest solution out of the crisis, for the average German, Finn, Dutch etc taxpayer. in that via a federal tax by a federal "Euro IRS" the burden will not be falling on "paymaster" countries and their taxpayers anymore but n=on high income earning persons and companies inside the federal union irrespective of nationality or state of residence within the federal union!

IMO Eurobonds alone are not the solution. Or fiscal or transfer union. Only full union. Clear and straight, to be understood by the citizens, without any of the traditional EU or member states' fuzz! For more on this, see my May 9, 2011, post "The EU's No. 1 problem is .....".

Now, we come to maybe the most interesting bit:

While Cameron supports closer integration if the Eurozone becauses he thinks that the needed EU Treaty changes will give him a chance to negotiate in return for allowing the Eurozone to move ahead, repatriation of certain "competemces" back to the UK (from "Brussels"), it seems, according at least to my reading of the 09/05/2011 "Divide and Rescue: Berlin Lays Groundwork for a Two-Speed Europe" report in Spiegel Online International that the Treaty that will move the Eurozone towards political union (uniform labour laws, budgetary "unification" (to what extent we shall see), etc etc) will not be an EU one, but. like Schengen (when it was set up), "hors EU"! That means that the UK, unless it joins this 1st speed union (ultra highly unlikely), will not have a say in it or get to vote on it! Any referendums will be by the participating states! Bazinga?!

That also raises the issue of the role of the European Commission, the ECJ, the European Parliament, the Council of the EU, etc, as well as the European Council in the operation of the "EU Mach 2". It seems that the Eurogroup plus other, new, bodies, probably lean, will be set up to do the "job". The EU institutions will continue to operate the affairs of the EU27 but the "EU Mach 2" will have its own institutions. Can there be another way considering that:

a) Cameron wants to use an EU27 IGC to get his way, thus a change in the EU Treaties must be avoided by the rest.
b) Not all members of the EU27 will be participating in this "closer union"?

To be continued!

PS. That would also mean that the "hors EU" Treaty of the core union cannot change the EMU/Euro aspects of the EU Treaty, ie exit from the Eurozone/Euro will continue to be not an option. That IMO means that all 17 of the existing EZ members will participate in the core union, unless they figure out a way of having a Euro member not be part of the core union and still have the who thing work! Does not look likely!

PS2. Times are beyond interesting. But at least there is a reversal of direction, from backwards to forward. Unless of course Angela Merkel and/or the CDU change their minds, yet again!

Monday, September 5, 2011

EU: Who kicked the can down the road? Merkel and Sarkozy or their predecessors?

That is a favourite expression of some commentators re the stance of EUropean policy makers in the Euro crisis.

According to the Irish Times (September 3, 2011), Wolfgang Schäuble "reportedly told a parliamentary party meeting of the ruling Christian Democrats (CDU) that solving the euro zone crisis was not possible without a successor to the Lisbon Treaty, “even though we know how difficult a treaty change will be”".

It is envisaged that a new European treaty who have to handle far-reaching finance and fiscal powers to Brussels institutions.

Only a few days earlier, Helmut Kohl had this time publicly criticised his former right-hand-person and current German PM, Angela Merkel for her policies re Europe. So had Helmut Schmidt, Kohl social democrat predecessor in the Chancellory of Germany (ie former prime minister). Especiallu about a Germany others could not "depend on"!

In the Irish Times article mentioned above it is also reported that a new poll showed on September 2 that almost two-thirds of Germans say they want more common decision-making in Europe. 53% reject a “United States of Europe”. "Richard Hilmer of the Infratest/dimap polling agency said the results showed a clear aversion to looming euro zone rescue and reform measures. ...“But Germans remain at heart positively disposed to Europe and have nothing against further integration”"

A few hours ago (September 3), Gerhard Schröder, the social democrat German Chancellor (Prime Minister) from 1997 to 2005 (who succeeded Kohl), in an interview with Der Spiegel was kinder to Angela Merkel and spoke in favour of a United States of Europe.

What does this all mean?

In my opinion, it means that we are slowly picking up pace in reversing the current malaise in Europe and in taking the only road that is available, the road to political union in Europe. A US of Europe (or federal republic) that will stand tall next to China, the US, etc. (read Schröder's interview, in German).

Now, as I have written before (and tweeted many time more) the Maatricht European Summit (now European Council) which met in the form of an Inter-Governmental Conference to amend the EEC Treaty in Maastricht in December 1991 made a crucial error by deciding Economic and Monetary Union (the latter meant the Euro creation, the former is yet to materialise) without the foundation of a political union. In other words it decided to create a new currency but one without a country. I have also argued that political union and the single federal laws it comes with, see eg Fed Republic of Germany, a federal head of government (Germany) or state (USA), a federak income tax administered by a federal authority (in the US: the famous IRS), is a necessary foundation not only for a single currency but a single market as well (see the incomplete state of the EU Single Market 19 years after its launch on 1/1/1993).

Those public comments by no less than three (!) former heads of German government, two of which, Schmidt and Kohl, along with Mitterand, Giscard d'Estaing and others, are considered political giants of recent European history have come at a time when it is popular to accuse the current political leaders such as Merkel, Sarkozy, et al as lacking in leadership.

And, indeed, I must admit, reading the comments of Kohl reminded me of an era, not so long ago where one felt that political leaders were leaders and did not govern by looking at the opinion polls all the time or phobic of political cost.

Then I realised that it is some of those giants of European politics that did not manage to decide political union in 1991, when the EEC (then EC/EU) had only 12 members (thus in theory decision making was easier than then with 15, then 25 and now with 27). Who are the 12 heads or state or government that met in Maastricht in December 1991?

They were:
For The Netherlands: Prime-Minister, Mr. Rudolphus Lubbers.
For Belgium: Prime-Minister, Mr. Wilfried Martens.
For Danmark: Prime-Minister, Mr. Poul Schlueter.
For Germany: Chancellor, Mr. Helmut Kohl
For Greece: Prime-Minister, Mr. Constantin Mitsotakis
For Spain: President of the Council of Ministers, Mr. Felipe González
For France: President, Mr. François Mitterrand
For Ireland: Taoiseach, Mr. Charles Haughey
For Italy: President of the Council of Ministers, Mr. Giulio Andreotti.
For Luxembourg: Prime-Minister Jacques Santer.
For Portugal: Prime-Minister Aníbal Cavaco Silva.
For the United Kingdom: Prime-Minister John Major.

(source: General Secretariat of the Council of the European Union)

Chapter 8 of europedia.moussis.eu that contains an online version of Nicholas Moussis' well known book: Access to European Union law, economics, policies, shows that (IMO monstrosity) was devised at Maatricht as a compromise. Moussis explains: "... The compromise solution that was found there and then was the partition of European integration into two Treaties (one on the European Union and one on the European Community) and into three construction pillars: the European Community - the first and main pillar; common foreign and security policy (CFSP); and justice and home affairs (JHA)...". Oh my. A legal/institutional monstrosity, something which was/is alas not a new thing for the EEC/EC/EU in the effort to reach compromises, ie in "kicking the can down the road". Read more of Nicholas Moussis' analysis of how this mess of tied up via the next 3 EU Treaties!

So, who is kicking/kicked the can down the road? Merkel, Sarkozy et al or their predecessors?

The least those who are still able to, can do, is speak up now, explain to the public opinion, and thus help their successors lead Europe where it is destined to go.

Thursday, September 1, 2011

Speculators, liquidity, rainy days, capitalism, Marx, Rand, mobility

66% of 2011 gone. 8 months flooded with hyped up doom and gloom

Is there an economic system that is immune to barbarism?

Many years ago, my now late mother went to a stockbroker to sell my stocks (I think it was banks'). She indicated a range of prices she would be OK with, around the current price, and had to wait for days until a buyer was found. Speculators. We were told that they provide liquidity so that the rest of us can find a buyer or seller at any time, not have to wait for days like my mother did. Well, if that is indeed the contribution of speculators to the functioning of the financial markets (or even the real estate and other ones) then obviously what we have seen in recent years is a "runaway train". Not worth the benefit of liquidity my mother could not benefit from.

Now, on a related topic. People do need a way of storing value in days of :"sunshine" for "rainy days". Are the ones available nowadays via the current "version" of "Capitalism", suitable for that job?

How much of the funds speculated around the world every day are actually savings not entrusted to managers for greed, but for maintaining "nest eggs" for "rainy days"? In that sense is the European Social Model capitalism's biggest enemy? One that must be destroyed so that people will have to depend on that markets for "safekeeping" (!) their "savings" for "rainy days"? Oh my!

Thus:

Key question: Do speculators speculate with their own money or using the money of people & orgs who have no idea what their money is used for?

Now, moving on:

Beyond Marxicm, Randism etc:

How much does 2011 capitalism have in common with 1850 capitalism? 1910? 1950? Even 1980? Please address the problems of 2011 capitalism!Using 2011 tools not 1850 or 1950 tools or even worse, antiquated economic & ideological dogmas!

Too financial times:

Do you realise how many people are sick and tired of financial and economic issues being at the forefront of current affairs? Many more than those who are sick and tired of party political news!

Politicians should stop offering voters simplistic models re what is happening & why! If they themselves don't know, should ask people who do.

Finally, ponder on this:

Bureaucracy does not like mobility (of people, workers, companies). Yet mobility, more of it, can help solve many public policy problems.

Tuesday, August 30, 2011

How bad public policy destroys growth and jobs

I have worked with the owners of quite a few SMEs and I have experienced first hand that they spend more time & energy understanding new regulations than complying to them!

This is also what a survey by the UK's FSB (Federation of Small Business) concluded a couple of years ago!

When an SME also exports, imagine doing that for more than 1 countries/bodies of law/regulationss!

That is one of the reasons why IMO the EU Single Market needs Political Union in order to "work" for the SMEs and micro firms. Instead of the Eurozone being a playground for US, Chinese and other multinationals due to the low prices of their products in the Eurozone due to the expensive Euro! But that is another post (or posts, see my archive and labels on this blog).






Monday, August 29, 2011

Show me your consumers and then I will show you mine!

The way things are going, it seems that the US may have to leave the WTO system (same for the EU).

Leaving the WTO means relying on existing and new bilateral agreements for trade with other countries. Avoiding the plenary negotiations by the WTO 153 country members (153 includes the EU 27).

Of course leaving the WTO is not in the best interest of US & EU firms that produce cheapo in China! They may have to focus more on the US and EU internal markets respectively. especially if the BRICs and other developing economies maintain the tariffs they impose (it is consistent with WTO rules) on US and EU industrial goods.

Complicated, interesting times. The Ancient Chinese were right, they are a curse for the average person. Are the modern Chinese right, actually their government, in not fostering domestic demand? How much longer are the US and the EU (with the exception of Germany) going to be offering access to their consumers to the exporters of the rest of the rest of the world who do not (like Germany in the EU) do not reciprocate? One way to be protectionist is to raise barriers to imports, official or sneaky/unofficial ones. The other is to have public policies that discourage domestic consumption.

In today's oxymora, net importing economies/countries are more rare than exporting ones. In supply and demand terms, that makes them more "valuable" than before. Will they negotiate using this extra value?



Friday, August 26, 2011

Thoughts on the current state of the EU: Alexander the Great, city-states, Cpt Kirk

The strategic mistake of Alexander the Great was that instead of uniting the 200+ Greek city-states into a permanent federal union, a kind of United City States of Greece, he decided to unite the world that was then known to him. and beyond

He thus embarked on a grand campaign that united Greece, Asia Minor, Egypt, creating a marvelous melting pot ("Hellenistic Times") and then some, continuing like a Cpt Kirk to uncharted territory, running out of steam and dying without ever returning home!

An epic of course. But what he left behind was a globalization of sorts (see my post "Globalisation, today and in 300 BC") that lasted for a while. But was not sustainable. Had he focused on uniting the 200+ Greek city states into a permanent entity, History could have been quite different (especially that of Rome).

Lessons for 2011 Europe?

Thoughts on the current state of the EU: trailer parks, China, greed, threats culture, parochialism, Babel, Socrates, national champions

This is my rambling about the sorry state of EU affairs, more or less as I tweeted to night (late Thursday night, early hours of Friday, August 26):

The EU reminds me these days of a trailer park. A building is needed to house the members but no one wants to pay for it. Some even want collateral. I like trailers and trailer parks. But not trailer park unions (eg current state of the EU).

Did you read that almost 50% of Chinese exports are made by Chinese firms? THAT is the Greed that US & Europe are already paying dearly for!!

When Europeans decide to unite I am afraid that it may be too late for Europe. But maybe that is the way things are meant to be, a stoic could argue.

Because for many centuries European countries have been grandstanding in the world, Europe is still acting like a spoiled child in spite of its age, while the rest of the world is turning, one way or another, Europe is asleep or in denial. I am afraid Europe may be beyond repair!

And that at the end of the day the average European is, alas, more parochial in thinking than a tea-partier! Europe is in urgent need of philosophical leadership ie of philosophers who like the Ancient Greek ones will speak to the people and help them THINK.

The Ancient Greek philosophers as well as the famous play writers (Sophocles, Euripides, etc) produced mass market intellectual products ie their works were not addressed to the elites! Same with Shakespeare! That did not prevent their work from being top quality. Analyse that!

Part of the European malaise is the "philosophy" that what is commercially successful & mass appealing is de facto low quality! That the less successful commercially something is, the more "quality" it has to be! A very "esoteric" approach to making anything! Having a linguistic Babel in Europe suits the mentality of the national champions in many fields b they from small, midsize or large states! That is my theory re why American pop culture has been dominating Europe for decades now! The left overs in each national European market seem enough for the native "industry" that even prefers, it seems, this situation than having to compete with other Europeans in a single European market! Am I wrong? I wish I am.

Europe is like a dys-functional family. Very LA!

A (European) management guru once told me in private that in Europe uncertainty is viewed as a threat, never an opportunity.

See how many European countries still cling to past glory (as colonialists, empires, etc)! Makes it, alas, hard for them to live in unison! We Europeans (a large majority of us), irrespective of nationality, are "united" (how ironic!) in thinking that we are so "sophisticated" compared to the US & others. So sophisticated that we can remain a trailer park of a (European) union and still be considered (so we think) "important" by the rest of the world. We better wake up!


Competition, pricing, inflation, interest rates and the EU SIngle Market

In business school I was taught that when a company is thinking of a new product or service, it must estimate costs, then research what the market is willing to pay, if larger, price at max. But many companies use a costs + % profit expectation = price system.

In Economics I learned that prices go up when companies see more demand and decide easier to raise price than expand capacity. Of course, in Services expanding capacity is ceteris paribus and in theory easier/cheaper than in Manufacturing.

In practice market structure (and enforcement or lack thereof, of competition law) plays key role in pricing decisions and in inflation. I suspect that is one of the reasons the Euro interest rate set by ECB is 1.5% in order to curb inflation compared eg to USA (0-0.25%): Less competitive markets than eg the US ones. That merely what I suspect. . As well as more regulations that tie the hands of business to adjust to the ups and downs. And of course a very imperfect 19 year old EU single market!

I even recall some analyses ib the last 2-3 years that said that EU single market works better outside the Eurozone than inside! Makes one wonder!

Cassandran Economy

They name storms. Why not name economic events too?

Cassandra (would be a good name for this economic crisis. So many prophecies



Thursday, August 25, 2011

Reminder:: Economics is a social science

At the end of the day (and the beginning actually) & in spite of fancy math & formalae, Economics was and is a social science.

The appeal of economic developments

Seems to me there are a few thousand people in the world who care too much about (macro) economics and the rest 6.9bn do not give a ....!

As per all that finance jazz, even fewer!

Merkel, CDU, Obama. East Asian Tigers, leadership, Political Union

Tuesday, August 23, 2011

The Achilles Heels of "Western Civilisation"?

Are determinism and low tolerance for uncertainty the Achilles Heels of the so called "western civilisation"? Is it the fault of the (Ancient) Greeks, the Romans or someone else?

See Max Weber, maybe?

Food for thought.

The TOS stu....! Fewer rules and better rules!

Think of a country as a social medium (used to call them online communities) and its laws as the terms of service (TOS) of that medium/community. Would you want to live in a SM/community with a 10000000 pages TOS?

Or a condominium with a 10000000 pages book of rules for its tenants?

Or buy a TV set with a 10000000 pages manual?

Now take 27 social media or communities. How can people through-out those communities when each has its own 1000000000 pages of rulesbook? Now assume that in some areas, the rules are common, some not, but each community transposes those rules that they develop and vote together on its own? Can you easily cross between each community/social medium?

Now take 200+ social media or online communities with each its own 100000000 pages rulesbook.

That's the world (planet) we average people and the average company (micro or SME) tries to live, work, venture, growth, do things in.

See the problem?

Fewer rules, better rules, and above all, common rules. For a planet we can all live better on it.

Sunday, August 21, 2011

Entrepreneurship in Europe

A few years ago I was participating in an online discussion (remember the online forums with the "threads" of topics?) about business and entrepreneurship.

I was arguing that the world, at least the western one, was from into a Services based economy (and intangible goods and knowledge, etc) and that unlike the manufacturing world, one did not need much money to start a company/business that dealt in either Services or intangible (aka intellectual or grey matter) goods/products.

Still, finding the money to get started in such a business is a problem argued one of other participants. I think he was from the UK but in any case from Europe.

Why don't you ask for family and friends to each either lend you some or become shareholders in your company, I proposed. I was not expecting the reaction I received, which I thought and still think is indicative of the problems of entrepreneurship and business culture in Europe.

"What, put my family's and friends' money at risk? You got to be joking, man!" was the fellow participant's reaction.

Analyse this.



Wotk in the present and future

Do not ask people what they do for a living.

Ask them how and why they do it.

The present and future of work

No work is shameful when done for the right reasons.

Every work is shameful when done for the wrong ones.

Saturday, August 20, 2011

Germany: Where is the grand coalition government of 2005-2009 now that Merkel needs it?

In recent days the FDP has continued to validate my view of many months ago that Merkel, Germany, Europe & the world would be better off with a German grand coalition government as in 2005-09!

Thursday, August 18, 2011

Euro: Reality and realities and other global dynamics

An analysis of current affairs issues.
In vlog format. 10 minutes.

Euro scenarios: The realistic option.
US downgrade, Merkel-Sarkozy, Bear markets, etc!




See also (in text): The real reality of the realities re the Eurozone


The real reality of the realities re the Eurozone

For quite some time now one can read or watch analyses, commentary, predictions about the Eurozone.

Here are some excerpts from my tweets today on the subject of all the doom and other jazz about the Euro or re exit of country X or Y or Z or XYZ or s splut in two Euros (!!), etc etc etc.:

The only realistic solution, albeit "controversial" is move to political union. That is the reality. All other solutions are not realistic.

The Euro is, by design and nature, like "Hotel California" (see Eagles' song). Ij other words, once there, there us no exit. It is technically impossible inter alia plus there is no provision is the EU Treaty for Euro exit, only EU exit.

Hence, the only solution left is political union.

Now, break up of the EZ or EU could be a realistic option only if WTO world trade was advancing. The opposite is the case. Thus no break up.

Thus: The reality, albeit hardcore, is that the EU or EZ have only one direction to move: Political Union. C'est la vie! Denial won't change it.

Exit of any country from the EZ is neither feasible nor technically & Treaty-wise possible. Thus discussing these options is a waste of time and energy.

It is high time the EU and the EZ face the real reality & not the one fabricated by financial market makers, populism, ad hungry media & sci-fi!

The Euro is not a straight jacket. And monetary, interest rate and currency policy that accommodates all members the best way possible is feasible. The only "straight-jacket" is ECB's unrealistic inflation target leading to overpriced Euro

In addition: There is no need for any exit (but which, remember, is technically infeasible & not in EU Treaties) eg if the ECB/Bundesbank adopt an interest rate that leads to a Euro below 1.2 USD.

PS1. Does anyone think that the German exporters like a Euro at 1.4 or more USD? See what the Swiss ones are saying about theirs.

PS2. The (financial) markets may or may not view a move to political union as a more stable "state". But reality is based on total systemics for what the financial markets think.


See also my vlog (10 minutes):
Euro: Reality and realities and other global dynamics

Which competitions do you watch? Barca vs Real or USA vs China or Markets vs Euro etc?

Barca vs Real
or
US economy vs Chinese economy
or
Agorocracy vs Democracy
or
Markets vs Euro
etc?

In the following video (in vlog format, 2 mimutes 33 seconds) I am making some analogies between sports and economic and political competitions that are "on" these days:


The American Dream: Employee, Corporate Executive or Entrepreneur?

I just read an August 8 article titled "The End of Jobs in America" in PlanetPOV.com. I recommend reading it.

Among other things, the article quotes a U.S. Commerce Department stat according to which "U.S. multinational corporations, which employ a fifth of all American workers, cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million. In contrast, in the 1990s, they added 4.4 million jobs in the U.S. and 2.7 million abroad".

Now, before I proceed to my comments, here is a prediction re jobs in America: See Table 1. in BOL's ((US) Bureau of Labor Statistics) "Occupations with the fastest growth in the Occupational Outlook Handbook, 2010-11: Overview of the 2008-18 Projections"
Note that occupations ranked No3 and 4 (in the Top 20) in predicted growth rate are:

At No. 3: Home health aides with an expected +50% growth 2008-2018 translating into 460,900 new (extra jobs) in 2018 compared to 2008 with a median 2008 annual salary of just USD 20,460 and short-term on-the-job training as an education/training requirement.

At No. 4: Personal and home care aides, with +46% translating into +375,800 jobs at mdian 2008 USD 19,180 (also "short-term on-the-job" education/training requirement).

These two occupations, which are valuable to Society (in my personal experience and view), no mistake about that, but alas fall into a wider low skill - low pay category that according to other predictions I have read in recent years constitute the bulk of new jobs expected in the US!

Noe that in 2008, about 1.74 million people occupied jobs of the above 2 types and another 847000 expected ti by 2018.

The list of largest % growth does include college degree or graduate degree requiring and medium and high pay occupations, but the volumes of these occupations are relatively low. Indicative: None of the 18 other in this list is expected to create more than 200,000 jobs by 2018. Only 3 had a 2008 median annual salary of more than USD 80k and none over 100k.

See also:


Thus, here are my comments:

The so called American Dream was not a dream of being a career employee or even a high flying corporate executive. It was of working hard upon arrival in the US (washing dishes, etc), often an employee but eventually starting your own company, ie being an entrepreneur.

There is a lot of fuzz as to what a multinational (or global or international or ....) company is. Does it really have a "nationality"? I mean, it has to have its global HQs in some country, but a real multinational is it a "national" of that country?

IMO, a genuine "multinational", not! It has to have a citizenship (aka HQs) in one country (there is no "global company statute" (yet at least) and I am not sure what happened to an old proposal for a "European company statute" that was caught in the EU's legislative pipeline for ages in the 80s and 90s). But its shareholders are from all over the world, the shares can be traded in many stock markets around the world, its board can include nationals from all over the world, so why would one expect that the mere HQ location of a multinational in the US (one of its states) or the UK etc makes it a "US or UK multinational" ie a contradiction in terms?

These days, having a multinational have its HQs in your country may give you the advantage of being able to tax a portion of its global income (via transfer pricing via HQ fees charged to its subsidiaries around the world, licensing and royalties etc) but a multinational to be a multinational has to spread its production and its employment around the world. It is an integral part of what makes it a "multinational". Otherwise, it is merely an American or British etc company with international sales! In other words, a bid difference from a multinational.

Thus the key statistic is how many Americans are employed in corporations that export (thus provide the US with revenue in addition to jobs).

So the US Dept of Commerce stats above simply reflect a transition of US corporations with international sales to multinational ones!

The bulk of US jobs should be expected and encouraged to come from companies that are dynamic, provide meaningful employment thus salary and, why not, are competitive by spreading their sales around the markets of the world. Multinationals will provide some jobs, but where and of what type, that is a matter of their multinational/global shareholders, board, stakeholders to decide or be concerned. No country owns a multinational corporation, many can benefit from its existence in different ways, but no "national allegiance" should be, rationally expected.

That is what makes the BOL predictions re occupations more relevant and puzzling.

PS 1. As I have argued in other posts (and tweets) the best way for the US and the EU to regain manufacturing in large numbers is via leaving the WTO. The EU and the US were losing manufacturing to the East before China joined the WTO (December 2001) but since it did, they kissed manufacturing capacity and jobs goodbye! Can green tech and emission trading schemes help them regain it? IMO, no.

Tuesday, August 16, 2011

Marketing analysis for the npthinking tweeting and blogging






Based on the programme twocation.com which calculates where the followers of a Twitter account are located, I received (16/8/2011, followers 1069) the following raw data which I then compiled as follows:

(%)

USA 29.50 (No. 1 overall)
Canada 3.20
Mexico 0.50
-----------
Total NAFTA 33.20%

Eurozone17:
11 of 17 reported followers:

Greece 12.30 (native) (No 3 overall)
Belgium 11.00 (No. 4 overall)

Ireland 4.00
Spain 3.20
NL 2.10
France 2.10
Portugal 1.60
Germany 1.30
Italy 0.80
Austria 0.80
Finland 0.50
------------
Total Eurozone 39.70%

EU27 - Eurozone17:
5 of 10 reported followers:
UK 14.20 (No. 2 overall)
Sweden 0.80
Denmark 0.50
Latvia 0.30
Hungary 0.30
------------
Total EU-EZ 16.10%

Total EU (16 of 27) = 39.70 + 16.10 = 55.80%

Other Europe (7):
Serbia 0.50
Jersey 0.50
Switzerland 0.50
Holy See 0.30
Russia 0.30
Turkey 0.30
Armenia 0.30
------------
Total Other Europe 2.70%
Total Europe (26 countries >0): 55.80 + 2.70 = 58.50%


Other countries:
18 more countries:
Australia 1.90
China 0.80
India 0.50
Japan 0.50
Pakistan 0.30
Singapore 0.30
Costa Rica 0.30
Panama 0.30
Paraguay 0.30
Argentina 0.30
Brazil 0.30
South Africa 0.50
Indonesia 0.50
Taiwan 0.30
Thailand 0.30
Tunisia 0.30
Greenland 0.30
New Caledonia 0.30
--------------------
Total 8.30%

The total is 97.30%, which leads me to assume that only 2.70% was not attributable to a country/location. 23 European plus 21 more countries (3 NAFTA plus 18 other) show followers of @npthinking.

Note also:
BRICs (Brazil, Russia, India, China) = 0.30 + 0.30 + 0.50 + 0.80 = 1.9%
PIIGS (Portugal, Ireland, Italy, Greece, Spain) = 1.60 + 4.00 + 0.80 + 12.30 + 3.20 = 21.90%
To adjust for native country effect, let's use for Greece the same as of Portugal (same population), then PIIGS(2) = 11.20%

EU Big 5 (Germany, France, UK, Italy, Spain) = 1.30 + 2.10 + 14.20 + 0.80 + 3.20 = 21.60%
1 of 5 followers are from the Big 5 EU member states, but 2/3 of that is from the UK.

Top 10 (excluding native country):
1. USA 29.5%
2. UK 14.20%
3. Belgium 11.00%
4. Ireland 4.00%
5. Spain 3.20%
5. Canada 3.20%
7. France
7. Netherlands 2.10
9. Australia 1.90
9. BRICs 1.90

Since 95% of the posts is all in English, let's see the native EN speaking share of the whole:
USA 29.50% + UK 14.20% + Ireland 4.00% + Canada 3.20% + Australia 1.90 = 52.80%

G7 (to be calculated)
G20 (to be calculated)
UNASUR (to be calculated)


Notably, these follower stats for @npthinking vary considerably from the page views stats of the npthinking blog (provided by blogger.com to each blog account for free).

Thus: To be continued!

Update 24/8 (+8 days)
1117 followers from 1069

Updated stats:
USA 31.10% up
UK 14.20% stable
Greece 14.20% up
Belgium 8.40% down
Canada 4.20% up
Ireland 3.90% down 0.10
Spain 2.40% down
Australia 1.80% down 0.10
Portugal 1.60% stable
Netherlands 1.60 down
France 1.60% down
Germany 1.30% stable
Mexico 1.10% up

---------------------------------------------------------

Update No 2 > 28/8 (+12 days, 4 since last)
1182 followers +65 since 24/8, +114 since 16/8 (+10.7%)
13 countries (same as 24.8) with shares >1% but most are down (as %) compared to 24/8.

Updated stats:
USA 33.90% up x 1182 = 400,6 followers
UK 13.70% down x 1182 = 161.9 followers
Greece 13.40% down
Belgium 7.80% down X 1182 = 92.1 followers
Canada 3.80% down
Ireland 3.20% down x 1182 = 37.8 followers
Spain 2.60% down
Australia 1.90% up 0.10
Portugal 1.60% stable
Netherlands 1.60 stable
France 1.10% down
Germany 1.60% up
Mexico 1.10% stable

Reminder, on 16/8, with 1069 followers, the % where:
12 countries had market shares higher than 1%
USA 29.50 x 1069 = 315,3
UK 14.20 x 1069 = 151,7
Greece 12.30
Belgium 11.00 x 1069 = 117.6
Ireland 4.00 x 1069 = 42.8
Spain 3.20
Canada 3.20
NL 2.10
France 2.10
Australia 1.90
Portugal 1.60
Germany 1.30
(Mexico 0.50)

That means
+114 followers from 16/8 to 28/8
+86 US followers, from 315 to 401
+10 UK followers from 152 to 162
-26 followers from Belgium based followed from 118 to 92.
- 5 Ireland followers, from 43 to 38.

I love maths, stats, the full monty. I miss it (used to do a lot of that number crunching in the old days). So I am going to input some of the data so far into a spreadsheet and take the marketing analysis 1 level up from this very basic one. Will be fun!

OK then, bottom line today, +10.7% followers in 12 days, the ranking of the top 12 has been the same in spite of changes in the market shares (Mexico went from 0.5% to 1.10 by 24/8, that making the number of countries with market shares above 1% 13)

In absolute numbers, USA+UK account for 96 of the 114 net gain in followers (on Twitter).
22% of the Belgium based followers have been lost in those 12 days. Potential causes? Could be the wider content of @npthinking since the revamping, approximately 1 month ago, that now includes not only EU and other policy but applied philosophy, music, poetry, etc. which was also communicated via the @change of the username from the old @nppolicyanalyst. In the 30 days since these changes, the pageviews for the npthinking blog have gone up (more stats on that in the coming days) and the volume of followers of npthinking on Twitter has jumped from approx. 820 to 1182, ie 362 (+44.1%!!). As you can see from the graph at the top of this post, this jump improved on an always significant rate of increase in the last 3 months. Eg from 665 on May 27.
In effect @mpthinking following has "naturally" (no "fertilisers") grown 77.7% in 3 months (May 27 to August 28)!

To some extent, the growth of @npthinking followers in the last 30 days is due to the attempted merger of two accounts which was not executed as well as planned and which led initially to a 20% or less move of the followers of the second account to @npthinking (note: there was though a significant number of overlaps in the followers of the two accounts). One week after the merger (via deletion of the second account and notices to followers to move to the other one), from Aug 24 to Aug 31 the following of @npthinking had increased by a less than 25% of volume of followers of the other account, ie from 825 to 964. A gain of 139 "only" (considering the merger). Now, a month after the merger, the gaiu stands at +362 (+139 + 223). And on non-systematic inspection of the usernames of the new followers, it seems that most did not come from the other account).

The US was and remains the No1 market not only for my tweets but my blog posts as well.
US has 34.9% of the pageviews in the last 30 days (according to free blogger.com stats that come with the blog). That share is close to the US share in Twitter followers (both around 1 on 3).
No2 share of pageviews comes from the UK, but with 4.6%. The spread in npthinking blog pageviews in the last 30 days is wider across countries than thar of @npthinking tweets.


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