I've moved the blog over to Wordpress.com. You can find new posts at brazilthoughts.wordpress.com.
See you there!
Tuesday, March 1, 2011
Tuesday, February 22, 2011
The Banking System is Still Broken
My good friend Ricardo Torres in his tradingcafe blog has again hit the nail on the head. We have done nothing to change bankers' compensation packages and everyone with experience with the system, from Ricardo to Dominique Strass-Kahn is again warning that the ridiculous bonuses paid to bankers because they earn fees for their banks not necessarily profits for their clients is a sick system based on simple and venal greed.
At the height of the financial crisis in 2009, we, society, talked a lot about changing the bonus system to force bankers to wait to receive their variable compensation until the deals they structure actually show a profit. If the compensation is supposed to be based on the success of investments that have components of risk, then make it so. You only get the bonus when the profits of the deals are realized.
As ever, talk is cheap and the rhetoric of two years ago has gone away, replaced by a new wave of outsized and unproved bonuses. Where are you SEC, US Congress, CVM, Banco Central, FSA and all the other supposed regulators of the financial system? Your lack of action is condemning us to more rounds of bubbles and recessions.
At the height of the financial crisis in 2009, we, society, talked a lot about changing the bonus system to force bankers to wait to receive their variable compensation until the deals they structure actually show a profit. If the compensation is supposed to be based on the success of investments that have components of risk, then make it so. You only get the bonus when the profits of the deals are realized.
As ever, talk is cheap and the rhetoric of two years ago has gone away, replaced by a new wave of outsized and unproved bonuses. Where are you SEC, US Congress, CVM, Banco Central, FSA and all the other supposed regulators of the financial system? Your lack of action is condemning us to more rounds of bubbles and recessions.
Sunday, February 20, 2011
Inflação em Brasil
Na terra de tudo bem, não é. Depois de 15 anos sem inflação séria, estamos começando uma nova onda do tipo de aumento de preços que vivemos nos anos 80 e 90. Os jornais de hoje estão cheios de materiais sobre esforços, válidos e fajutos de controlar preços. O que nos na blogasfera podemos fazer é sinalizar a alerta, o semáforo amarelo.
No seu blog, tradingcafe, meu colega Ricardo Torres está contando a historia do preço absurdo do pequeno bloco de chocolate, Diamante Negro, que chegou em equivalente de 2 libras britânicas. Uma reflexão verdadeira do nome dele. (E hoje ele fala dos carros)
Hoje, minha vez. Minha esposa me mandou hoje para farmácia para comprar uma nova garrafa de bloqueador solar que ela gosta. Ano passado, pagou R$34,95. Este ano, R$34,95. Tudo bem. Ano passado, container teve 200 ml. Este ano, 120 ml. Uma redução de 40%. Ou seja, uma inflação de preço de 40%. Que absurdo. Com o preço de transporte público, preço de Diamante Negro, estamos vivendo uma inflação estúpida, sim. Espero que nosso governo acorda para os perigos e pôr esta tendência sobre controle AGORA.
Também, siga este link e você verá uma charge ótima sobre o que o custo dos celulares está fazendo para nossas bolsas. Em Israel, fiquei chocado com quanto nós pagamos aqui em comparação a soma pífia das contas dos primos meus.
No seu blog, tradingcafe, meu colega Ricardo Torres está contando a historia do preço absurdo do pequeno bloco de chocolate, Diamante Negro, que chegou em equivalente de 2 libras britânicas. Uma reflexão verdadeira do nome dele. (E hoje ele fala dos carros)
Hoje, minha vez. Minha esposa me mandou hoje para farmácia para comprar uma nova garrafa de bloqueador solar que ela gosta. Ano passado, pagou R$34,95. Este ano, R$34,95. Tudo bem. Ano passado, container teve 200 ml. Este ano, 120 ml. Uma redução de 40%. Ou seja, uma inflação de preço de 40%. Que absurdo. Com o preço de transporte público, preço de Diamante Negro, estamos vivendo uma inflação estúpida, sim. Espero que nosso governo acorda para os perigos e pôr esta tendência sobre controle AGORA.
Também, siga este link e você verá uma charge ótima sobre o que o custo dos celulares está fazendo para nossas bolsas. Em Israel, fiquei chocado com quanto nós pagamos aqui em comparação a soma pífia das contas dos primos meus.
Freelancing Foreign Ministers
Just as we were leaving Israel last week, Avigdor Lieberman, the Foreign Minister, announced on television that two Iranian warships would be passing through the Suez Canal. Yet another pronouncement about all those countries that hate Israel and wish her ill. Ok, Iran does hate Israel. According to Ahmadinejad, Iran’s President, Israel should be wiped off the face of history.
But, what was Lieberman’s purpose in calling yet another press conference? To scare the heck out of Israelis, sure. To urge the Egyptians to bar passage or to exert some other form of diplomatic pressure, obviously not. Lieberman’s word does not count for much in Arab capitals. Beyond the populist cry against Israel’s enemies, Lieberman’s purpose was domestic politics. He wants to show that he and his party, Israel Beitenu (Israel Our Home), are the real strong voices against these terrible provocations by Iran, to prepare himself for another run at the Prime Minister’s office at the next election.
Who is Lieberman speaking for? The Foreign Minister of a country is her external spokesman. The government itself, in the person of the Prime Minister, should be supporting the Foreign Minister’s pronouncements. In the week since Lieberman’s press conference, Benjamin Netanyahu has kept a discreet silence.
So, an urgent question. Is Lieberman freelancing or speaking for the Israeli government? The danger if he is freelancing and has not cleared them with the Prime Minister or the Defense Minister is that his remarks become policy de facto. They are looked upon by the world as representing the position of the government.
From his previous ill-considered and undiplomatic pronouncements and from his open disagreements with Prime Minister Netanyahu over key appointments (e.g., UN Ambassador), it’s clear that Lieberman is not thinking about the Israeli government and policy coordination among ministries when he pops off.
The implications can be grave. Can the Iranians treat his remarks as a provocation and use it to trigger a military attack? No one has much confidence that the current Iranian government has patience or sophistication. In fact, the Iranians capitalized on Lieberman’s press conference to assert that yes, they were sending ships to Syria through Suez and the Israelis could lump it. In Europe, Latin America and around the world, Lieberman earned another own goal for Israel in terms of public relations.
Can Israel afford to continue to leave its foreign policy and its image abroad in the hands of an unsophisticated populist like Lieberman? Netanyahu needs the Israeli Beitenu votes in the Knesset, but at what cost to the country as a whole?
One last contrast with other countries. This last week, Hilary Clinton was acting the ascerbic school marm with Arab governments over their repression of protest rallies. While this did not make many friends in the region, it did have the clear and overt support of President Obama, showing that although US foreign policy is nowhere nearly as coordinated as they would like to believe, at least the Secretary of State acts in concert with her boss, and not as a somewhat out of control freelancer.
But, what was Lieberman’s purpose in calling yet another press conference? To scare the heck out of Israelis, sure. To urge the Egyptians to bar passage or to exert some other form of diplomatic pressure, obviously not. Lieberman’s word does not count for much in Arab capitals. Beyond the populist cry against Israel’s enemies, Lieberman’s purpose was domestic politics. He wants to show that he and his party, Israel Beitenu (Israel Our Home), are the real strong voices against these terrible provocations by Iran, to prepare himself for another run at the Prime Minister’s office at the next election.
Who is Lieberman speaking for? The Foreign Minister of a country is her external spokesman. The government itself, in the person of the Prime Minister, should be supporting the Foreign Minister’s pronouncements. In the week since Lieberman’s press conference, Benjamin Netanyahu has kept a discreet silence.
So, an urgent question. Is Lieberman freelancing or speaking for the Israeli government? The danger if he is freelancing and has not cleared them with the Prime Minister or the Defense Minister is that his remarks become policy de facto. They are looked upon by the world as representing the position of the government.
From his previous ill-considered and undiplomatic pronouncements and from his open disagreements with Prime Minister Netanyahu over key appointments (e.g., UN Ambassador), it’s clear that Lieberman is not thinking about the Israeli government and policy coordination among ministries when he pops off.
The implications can be grave. Can the Iranians treat his remarks as a provocation and use it to trigger a military attack? No one has much confidence that the current Iranian government has patience or sophistication. In fact, the Iranians capitalized on Lieberman’s press conference to assert that yes, they were sending ships to Syria through Suez and the Israelis could lump it. In Europe, Latin America and around the world, Lieberman earned another own goal for Israel in terms of public relations.
Can Israel afford to continue to leave its foreign policy and its image abroad in the hands of an unsophisticated populist like Lieberman? Netanyahu needs the Israeli Beitenu votes in the Knesset, but at what cost to the country as a whole?
One last contrast with other countries. This last week, Hilary Clinton was acting the ascerbic school marm with Arab governments over their repression of protest rallies. While this did not make many friends in the region, it did have the clear and overt support of President Obama, showing that although US foreign policy is nowhere nearly as coordinated as they would like to believe, at least the Secretary of State acts in concert with her boss, and not as a somewhat out of control freelancer.
Subscribe to:
Posts (Atom)
