Monday, July 18, 2011

So, it's reported Spanish savings bank Bankia has had to slash the price for its market debut to 3.75 euros a share to get its initial public offering taken up. This followed already deep discounting and must say something about the state of Spanish banking. See IBEX Salad (on the right) for possible reasons. I have no bloody idea. But I have read that Bankia's new price is 15% below the bottom end of its original 4.41-5.05 euros per share range. Which doesn't sound at all good.

A week or so I go, I wondered what would be the result of the clash of the EU bureaucratic zeitgeist and the nationalist zeitgeist of various parts of the EU. More correctly, various parts of EU member states. I still don't know, of course, but along comes an article in this month's Prospect magazine which tells us that “A nationalist reaction has been gathering in Europe for at least two decades – a predictable reaction to the process of integration. But it has been much aggravated by the failure of the EU to anticipate the problem and to begin to deal with its root cause.” The article ends with the view that how things are developing is “not a recipe for a vigorous self-governing Europe, but for bureaucratic governance. If the sovereign debt and banking crisis leads to fiscal centralisation, a major step towards that outcome will have been taken. The 'back door' will have led to centralised power under a mere veneer of federalism. For my part, if Europe is ever to approach a federal outcome - and I think that will require generations – I would prefer to enter through the front door.” Amen to that. All the article here.

I may from time to time have a go at Spanish society – Why not? I live here – but there are moments when I wish the whole world could take the same sensible and pragmatic view that one often meets here. The latest example was on Saturday night when I went to Pontevedra station to ask whether my visitor could board the night train there, rather than at the next station down the line, as per his ticket. The lady at the counter thought there'd be no problem but said I'd need to talk to the interventor (who turned out to be the chief inspector of tickets) when he arrived 'in a few minutes'. When he did, he was equally accommodating and waved my guest to his compartment. Mind you, we had by then luckily asked someone else what time he'd be showing up and had been told not for another hour. So much for 'a few minutes'. Time is a different concept here.

Talking about Spanish society, and reverting to normal mode . . . I regularly say my impression is that efficiency is not a totem here. The latest example to come my way is a letter from the company which administers the community in which I live. This contained the Minutes of the meeting I attended a couple of weeks ago. The first thing I noted is that only one side of the paper is used, so there are four pages instead of two. More relevantly, though, the company uses 175mm x 120mm sized envelopes, meaning that the four A4 pages have to be folded twice, into quarter size. The last time this happened – when we got the documents for said meeting – the number of pages was over ten. This meant that someone had to extensively sellotape each of the thirty-seven envelopes so they wouldn't burst. Does no one realise how wasteful and stupid this is? And does no one have the initiative (or nouse) to order larger envelopes? Does it happen because “We've always used this size envelope”. Which turns out to be something between the standard C5 and C6 size, BTW.

Sorry but this reminds me of something I've been meaning to write . . . Possibly the most worthless phrase you'll ever hear in Spain is “Leave us your phone number and we'll call you when it's in/ready/fixed.” Maybe a 1% chance.

The property market: Things get worse by the say. Some alleged expert says that “Only vendors who drop their asking price 40-50% below the competition in their area have a hope of selling.” And “As a result, 80% of private vendors are asking prices that are out of the market. Especially along the coasts, where the glut is at its worst.” All very logical, when there are hundreds/thousands of properties to chose from and the prices are expected to fall further. As I keep saying, a great time to drive a hard bargain. Except with my house in the hills. Which is unique and a real bargain already.

There seems to be a resignation a day over in the UK. A Spanish friend once told me no one ever resigns in Spain, whoever they are and whatever the scandal. I wonder if this is a widespread - even universal – view here. The one big non-resigner I can recall is the Agricultural Minister who was implicated in a massive flax scandal about twelve years ago and who was kicked upstairs into a senior EU job in Brussels.

As for Murdoch himself, here's a wonderful article from Charlie Brooker in The Guardian.

As for Europe . . . AEP has made what he calls “a modest proposal for break-up of the eurozone” and asks the question “Will any EU leader grasp the nettle?” His own – surely correct – answer is that “Unfortunately, most of Europe's governing elite is ideologically compromised by the Project and will attempt to defend an unreformed EMU with scorched earth policies. We can only hope that the less compromised judges of Germany's Verfassungsgericht bring matters to a swift head in September.” More here. Meanwhile, here's how bad the situation looked to some over the weekend.

Finally . . . Is there a more sick-inducing ad on British TV that that of APP? They claim they'd like to be the leader of the “pulp and paper industry” and that they aspire to do this “in a responsible and sustainable way.” Presumably because their focus groups say these are the buzz words that must be used, regardless of the reality. And that the ad must be a delivered to camera by an honest-looking woman with Indonesian features in a (presumably) Indonesian accent while she's if not exactly hugging a tree at least holding one, against the background of a forest. No wonder Private Eye had a go at them this month.

Finally, finally . . . If you want more on Europe, here's Irwin Stelzer's rather sceptical(skeptical?) view of things:- “The euro-zone debt crisis is over. Most of the banks are sound, and there will be a summit meeting on Thursday to solve any remaining problems.  . . Believe that and you should bid madly for the Spanish bonds that will come to market on Thursday. . . . In the end, in Italy as in the rest of the euro zone, much will depend on the ability of these economies to grow more rapidly than they have in the past. . . Unfortunately, the outlook is rather bleak. It is difficult to imagine that Thursday's meeting will do more than put a Band-Aid on the hemorrhage now afflicting the euro zone. . . One way or another preservation of the eurozone will require massive transfers of money from north - read primarily Germany - to south, a process already in motion. Generations of German politicians have promised their voters that would never happen. That leaves three choices: 1. lurching from crisis to crisis, the meat on which the eurocracy's Caesars feed; 2. allowing defaults; or 3. waving a not-so-fond goodbye to the zone's Club Med.” Vamos a ver.

PS. "English writer George Monbiot stated that "Asia Pulp and Paper (APP) could make a fair claim to being one of the most destructive companies on the planet.""

2 comments:

moscow said...

Colin,
Hypochrsy comes in different patterns. There is the down-right cynical version. There is the cheeky po-faced version of it. And there is the somewhat naive strand. I like to think yours is the last. But now we have it from you that there are different kinds of corruption. There is the bad for the economy (Spain) and the good for the economy type (UK). Amazing. I have always known Britain is not much better than Spain on these matters (whatever version of it). But hypochrisy definitely reigns supreme over there. Journalists bribing policemen? An unscrupulous maganate running the country? The whistleblower found dead? No, this is not Mexico.......Only in Britain, Colin.

Colin said...

Moscow,

How about giving us examples of your three types of hypocrisy? I am, of course, particularly interested in my type of 'naive' hypocrisy.

On a small point of detail, I was not defending either type of corruption, just pointing up the distinction that had been noted by others.

I will be talking about NHS corruption tonight, having already drafted the paragraph.

While you're on, why not answer my last request and give us your prognosis for the EU and the eurozone? You must have one, unless you live only in the past and the present. Why are you so reticent to tell us what you are betting on, when your understanding of these things is so superior to ours? Or at least mine.

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