Friday 21 September 2012

«μην απολύεις τον δούλο σου δέσποτα»

Λοιπόν: 11,5+2 δισ. λείπουν. Είμαστε 5-6 εκατομμύρια φορολογούμενοι, οι μισοί δεν πληρώνουν ή δεν έχουν εισοδήματα. Άρα 13,5 δισ. προς 3 εκατομμύρια φορολογούμενους, ίσον 4,5 χιλιαρικάκια στον καθένα, δηλαδή 9.000€ ανά νοικοκυριό (2 φορολογούμενοι). Άντε να ξεμπερδεύουμε….
Η Τρόικα: Δεν ξέρω, δεν είδα, δεν άκουσα!
ΥΓ. Καταλαβαίνει κανείς το μέγεθος του προβλήματος: με 9.000€ έξτρα φόρο ανά οικογένεια, ίσα ίσα που επαναφέρουμε το πρόγραμμα στον ίσιο δρόμο (στόχος 120.5% Χρέος προς ΑΕΠ το 2020). Και αυτό μόνο για τις αστοχίες του 2011-2012. 
«Πρόσχωμεν»

Tuesday 18 September 2012

A Glimpse of Optimism

Finally, after months of pessimism, a glimpse of optimism has emerged! I shall explain myself.
For months, the policy mix has been striving for an internal devaluation. That has resulted to massive wage cuts in both the public (fiscal tightening) and the private sector (devaluation for competitiveness gain) affecting GDP by devastating consumption. However, although demand has dampen the supply side (product and services – retail) has been very reluctant to cut prices, pressured by VAT, income tax and other rising costs (fiscal tightening). So far, many commentators, analysts and economists and some politicians (liberal mostly) have been arguing that the free markets are stalling, not working properly.  

The glimpse of optimism

First of all, for the free markets to operate as such there is a need for free competition (from the supply side) and rational buyers (from the demand side). A rational buyer will ask for a lower price, in situations like these and in a competitive environment the supply side will respond in order to protect market share and survive the depression by lowering its operating costs and retail prices while trying to retain some profit margin. This, in our case has been a very slow process. “And yet it moves” as Galileo allegedly whispered after publicly renouncing his theory that the Earth moved around the Sun.
In our office building block, there are two coffee shops at the street side. The one is an older establishment, over a decade old and the other, the newer one, has opened soon after the first signs of the recession at a time when sentiment was still out of contact with the realities. Those corner-shops, because they offer quick launch options at below restaurant-range prices have mushroomed in the downtown area during the past two years, as for each one closing almost two were emerging.
Their coffee prices have followed this paradoxical trajectory that drove many to the hasty conclusion that markets don’t work. In the begging months of the crisis prices were rising adjusting to their increased operating costs. Then, for many months, deeper into this depression, they kept those prices stable absorbing the latest VAT hikes and other operating cost increases. However, none of them was yielding to any price reductions, the sort of thing you expect in a situation like this (the case for duopoly and cartel like pricing). Then, one day, the older one decided to cut 10% from delivery price for a cappuccino coffee. A week later, the newcomer responded with a significant cut in its coffee price, some 31% reduction. For a day or two, nothing happened. Some customers switched to the cheaper one but many others remained seemingly unimpressed by the move until one day.
Today is that day. In the morning, as I was passing through, I heard some saying “Kostas look, we buy our coffee from you for ages but you see the other one is much cheaper now and as things are, we are not in a position to ignore it anymore as our salaries have been cut, twice (in some cases) and we need to save as much as possible.”
An hour later, the delivery boy from Kostas’ coffee shop arrived with a message: new price for your company. A mere 31% discount! (Matching the lower price of the competition) At last, free markets work, indeed! It might take a while but it has to have both sides taking part; the supplier with its price power and the customer with its power of choice and furthermore the willingness to exercise this power and negotiate for a lower price. However, this is effective only in a competitive environment with many products and services that are substitutable.
This doesn’t mean we are out of the woods, yet. GDP will further fall as a result of this internal devaluation but lowering the price will help turn consumer sentiment and this will be the catalyst for the re-start in the economy. This is part of the bottoming process. It is a new begging, a glimpse of optimism at last!   
PS. The cost of a cappuccino coffee is still pricy at €1.50 

Monday 17 September 2012

Ξύπνησε το Ηφαίστειο!

Μήπως να ξανά-διαβάζαμε την ιστορία του σύγχρονου Ελληνικού κράτους; Αυτή που δεν διδαχθήκαμε ποτέ στο σχολείο (εκτός των της 3ης δέσμης, ίσως), γιατί ήταν πολύ πρόσφατη και δεν έχουν περάσει ακόμα 2-3 αιώνες… Γιατί μεγαλώσαμε μέσα στην αμάθεια και την μυθοπλασία, ο καθένας με την ιδεοληψία του (αντί ιδεολογία του).
Σε αυτήν την ανάγνωση, λοιπόν, θα βλέπαμε ότι οι περίοδοι αδιάλειπτου δημοκρατικού πολιτεύματος και ειρήνης, μέχρι και το 1974, ήταν περιορισμένες. Γιατί, λοιπόν, μας κάνει εντύπωση η σημερινή ανάκαμψη των άκρων (εθνικιστικών ή κομμουνιστικών – το προτιμώ από δεξιών ή αριστερών, για να λέμε και τα πράγματα με τ’ όνομά τους). Αυτοί ήμασταν και αυτοί παραμένουμε. Το κέντρο, σχεδόν πάντα, ήταν μειοψηφία.
Η εξαίρεση της περιόδου της μεταπολίτευσης, η περίφημη εθνική συμφιλίωση, απλά επιβεβαιώνει τον κανόνα. Αλλά και τότε ακόμα τα άκρα δεν εξέλειψαν, απλά διαχύθηκαν μέσα στις μεγαλύτερες κομματικές ενώσεις.
Σήμερα, ελλείψει διαλυτών, επανασυσσωρεύονται όπως η συσσώρευση του μάγματος στον υπόγειο θάλαμο κάτω από το ηφαίστειο της Σαντορίνης και η τάση αυτή, αργά ή γρήγορα, θα οδηγήσει στην εκτόνωση. Τώρα όσοι αντιλαμβάνονται την αναλογία με την Σαντορίνη, έχει καλώς.

Tuesday 4 September 2012

The real fear for the impending decision by the German Constitutional Court

Author: Kiron Sarkar, posted @ The Big Picture (http://www.ritholtz.com/blog/)
Edited by GL

The real fear is German Constitutional Court (GCC), while allowing the German President to sign off on the ESM, (thereby making it effective), may impose some restrictive conditions too. It should be noted that, in the past, the GCC has imposed conditions, which has set a precedent for all to see. The main reason for this concern is as follows. The ESM, which will have a max capital of E500bn at best, has insufficient firepower to undertake its task. Its resources must be increased. The EZ countries will not/can’t, in a number of cases, contribute more. As a result, the ESM must leverage itself, either through obtaining a banking license and then borrowing cheaply from the ECB (as is the case with the European Investment bank, which, by the way lends directly to governments), or through the issue of bonds which is purchased by the market, though possibly by the ECB as well. The German’s have steadfastly opposed this idea, though it is “clear” (to the author) that Merkel, privately, will not oppose such a measure. To date, her opposition has been for domestic public consumption, rather than otherwise. The judges at the GCC will surely know that and may, for example, force Germany to seek prior approval from the Bundestag, God forbid the consent of the Bundesbank or limit Germany’s exposure in some way, unless approved by the Bundestag/Bundebank/the people, etc. If this or something similar is the decision by the GCC, uncertainty will prevail. Medium to longer term bond yields of the peripheral EZ countries will rise (soar?) and unless resolved, these countries will be forced, yet again, to borrow at the short end (given ECB support), which clearly is untenable.

http://www.ritholtz.com/blog/2012/09/september-is-looking-particularly-uncertain/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%253A+TheBigPicture+%2528The+Big+Picture%2529