Euro and Portugal: The end of their Relationship?

Dear readers,

After reading a lot of article about this subject, I can tell you that the actual economic situation of the Portugal is not perfect.

Saturday, Luis Amado (Diplomat chief of Lisbon) had annunciate that government should take decisions to combated the financial crisis. He speaks about “Extreme situation”. If no decisions are taken, Portugal can say goodbye to the Euro…

Since the fragility of the Irish economy, investors pay a lot of attention in countries situations…

Investor’s confidence decreased a lot concerning the Portugal, and especially after the situation of the Irish economy.

These fears have pushed yields to the highest figures since the integration of Portugal to the Euro.

The minister explains:

"The country needs a broad coalition to enable it to cross the current situation. I think that government understand that the alternative to the current situation would ultimately leave the euro."

The actual government in Portugal decides to fix a deficit for the next year: 4,6% of the GDP.

We have to know that the deficit of this year and the last year was 7,3% and 9,3% of the GDP… It will be a real challenge for Portugal to succeed.

The budget is actually forecast by the parliament, the Portuguese government is not decides alone the budget of the country.

The actual policy is not really appreciated by Portuguese people… The majority of Portuguese really want to change the operation policy in Portugal.

Portugal seems known a real difficult period for the economy and the policy… It will be hard for us to combat these financial crisis consequences.

We also know that it is very complicated for European countries to maintain a good financial and economic level…

All countries are very different but they work with the same tax policy. It can be too much hard for some countries… as Portugal for example.

The decision to leave the Euro can be a help for Portugal because they maybe have to be more independent concerning taxes… Actually, the Euro can’t help Portuguese development, it causes problem on their policies and their economy.

Regards,

Pauline

Sources:

www.lefigaro.fr/international/
www.leblogfinance.com/
http://upload.wikimedia.org/wikipedia/commons/d/d7/2_euro_Portugal.png
http://touch2give.com/wp-content/uploads/2009/11/luis-amado-150x150.jpg

A royal way for Hermès and LVMH

Dear readers,

Many articles speak about the perfect growth of Hermès Group.  

In fact, their numbers increased a lot this year. The group already has a turnover of 590 millions Euros for the third semester (+30,5%) The family group had never been so confident about their luxury business: “ Probably the best year Hermès could works.”

In fact, the luxury area knows an important growth (+11%), it’s probably one of better area nowadays…

We have to know that Hermès is a family business, and they really want to maintain their family work. It’s really important for group members to keep their business image. 


Recently, LVMH had invests on their capital. This investment had caused a lot of discussions because Hermès analysed LVMH attentions. They justified themselves by saying that they pay attention about LVMH investment and they also want to keep their family image “ You can not prevent a family to reflect faced with an intrusion into its capital.”

In fact, Hermès group just wants to show that LVMH has only an investor role for the moment. They also pay attention on their actions because their growth is very important actually.

Hermès possess actually 73% of their own capital and LVMH had announced that they would invest in 14,2% of Hermès capital.

Side of LVMH, Bernard Arnault (LVMH president) wants to invest long term. He also wishes to maintain the image of Hermès. To conclude, their goals are quite the same but we can see a reluctant by Hermès, it’s quite hard to let a part of their capital to the biggest luxury group in the world!

In fact, LVMH knows an important growth too and I am interested about that. I have already written an article about LVMH and its new acquisition of the SMCP group. LVMH is the most important group in luxury area and Bernard Arnault research all intersting opportunities for the development of his group.

I think that strategies of these two groups are really good. On one side, Hermès group researched protection and growth, and on another side, LVMH wants to invest and also increase their presence in the luxury market.

It seems to be difficult to share business success history… but I think that it’s a real advantage for a company to maintain its history and its image.

Regards,

Pauline


Sources:


- http://www.leblogfinance.com/2010/10/lvmh-prise-de-participation-dans-hermes.html
- http://www.lesechos.fr/entreprises-secteurs/grande-consommation/actu/020920153475-hermes-en-route-pour-une-annee-historique.htm

About an interesting video...

Dear readers,


I have seen an interesting video about American economic situation:

http://www.youtube.com/watch_popup?v=eb1n1X0Oqdw&pop_ads=0#t=11

The makers of this video are members of NIA (National Inflation Association)

NIA is a preventive association about inflation for American people; they want to help Americans to survive with the actual economic crisis. In order to give some explanation and advises to people, they give us concrete examples as the amount of the American debt, the gravity of the economic situation (impossibility to pay off the debt).

They give some advices to invest. For example, they explain that the gold and silver market continue to succeed. They encourage and help American people to cope with the actual economic crisis in USA.

Concerning the video, it shows a lot of social and economic problem that the United States has known.

Nevertheless, the main subject in this video is the actual inflation in USA. They firstly detailed all the reasons for the actual debt. Why all taxes increase a lot?

To answer this heavy question, the makers of this video speak about Medicare and Medicaid costs, Irak war cost. In fact, costs that the government forecast for these three projects became too important; they increase during the realization of these projects.

For example, they projected as cost for the Irak war between 50 and 60 billion dollars but it costs actually around 710 billion dollars.

One other problem in USA is the decrease of the industrialization. In fact, since around ten years, the competitiveness between China and the United States had led the bankruptcy of American industry. For example, concerning the textile area American industry progressively disappear.

The unemployment increase a lot too and the retirement pay decrease… NIA explained that if this situation doesn’t change American people would have serious problem with their life conditions. Because of this crisis and all bad decisions of the government, American people send their home, eat poorly and less, stop their air conditioning and do so on…

The future of the United States is in danger because of the actual education. In the video, NIA compares American education system with Chinese education system. They also compared the price of the education in these two counties. American people pay actually around 25000 dollars per year for school and Chinese people pay between 400 and 2200 per year. The Chinese culture made a better system education and young Chinese succeed more than young American…  

So we can see here that NIA criticize American culture and mentality. They also criticize investors and politician mentality: They name us Power junkies because they only think about profit.

The video compares also two currencies evolution: Dollar and Euro. In spite of the Greek crisis, Dollar currency will have problem before Euro.

In another part, NIA explains in this video the stability of growth in gold and silver area. They also said that the gold increase a lot actually.

After explaining the real bad situation of the United States, they showed that one area is continuing to increase in USA. Their goal here is to advise people about their money. They show that it can be a good idea to invest in gold or silver.

NIA compares the amount of the American debt and the amount of the gold that American reserve possesses. The amount of the debt is less important.

We see that NIA want to help people cope with the actual American crisis. NIA published this video because they want to educate American people about the crisis and the actual economic situation in USA.

Concerning investments in Gold, it can be a financial solution for American people but for a very short term…  Even though the gold market is stable, this market is growing very slowly. We have to know that if all Americans invest in gold, the gold price will increase a lot and it will stop a lot of people in their investment: It’s the theory of supply and demand.

Regards,

Pauline

Panic in Las Vegas!

Dear readers,

I have read a very interesting article about Las Vegas… Unfortunately, this money bubble cannot forever succeed in such an indebted country as the United States.

A new hotel “Cosmopolitain” decided to open its doors in December in Las Vegas. It will be a luxury hotel with 2500 bedrooms, spa, gym club, huge casino...  The Deutsh Bank has invested around 4,5 billion Dollars in this project.

All gave the impression of a perfect economy in the city...

Despite the thousands of tourists in front of slot machines, Las Vegas knows its worst economic period. American people knowing a bad economic crisis and limit their leisure budget. Since the beginning of this crisis, Las Vegas knows a decline in its client attendance.

People who work in Las Vegas confide about the actual situation: “It’s quite hard” said a man who works in a hotel.  The unemployment increase a lot, it represents today 14,4% whereas the unemployment average of the USA is 9,4%. Now, people in Las Vegas are satisfied with all types of jobs!

Moreover, this state knows the real estate crisis… more and more people have to sell their home, does it remember you something? The economic crisis of 2007 has its first effect in this state just now! “We are speaking about Las Vegas as the new Detroit.”

Obviously, the end of the crisis will not happen soon in United States…

Entrepreneurs loose a lot of money because of their ambition. “We knew that this money bubble had some risks but we obviously continued to built”

American economists explain that the end of this crisis in Las Vegas will be very long… They also speak about a new economic policy for the state. Casino market will not being sufficient to help the end of crisis.

One more time, American investors have played with fire. They have a lot of ambitions but the actual economic situation doesn’t permit to do too much things.

In this case, American people are guilty because they don’t forecast all economic consequences.

When the American people will stop to be concern by the economic crisis? One thing is sure; it’s not for tomorrow…

Regards,

Pauline

Sources:

http://www.lefigaro.fr/international/2010/10/29/01003-20101029ARTFIG00612-las-vegas-entraine-tout-l-etat-dans-sa-chute.php

http://www.lvrealty.net/files/communities/cosmopolitan.jpg

http://fr.blackjack.org/blackjack/content/misc/blackjack-in-las-vegas.jpg

http://www.tripstolasvegas.info/images/Trips-To-Las-Vegas-las-vegas-casino-chips.jpg

A real bad situation for France...

Dear readers,

I come from France and I read more and more articles; which are speaking about the French situation: What a disaster!

France is out of gas, Paris receives terrorist threats and French students invade Streets…

The world can already worry about the French economic, Financial and social situation.

The wait is getting longer in French petrol stations and student’s reactions have consequences.

In fact, the French government attempts to create a new law concerning the retirement. Actually, the retirement age is 60 years old. Government wants the retirement to be higher (62 years old). This change can improve the French economy because these two years will allow the government to save for future retirement pay.

To stop this law, refiners want to limit the activity of France. They decide to block refinery access… and French people can take their car to go to work.

French students are disagree with this law too because they don’t want to pay 2 years more… Results: They burn garbage, they don’t go to school and they become dangerous (many accidents happened).

I let you imagine the French bad situation…a real drama!

Another surprise happened today! Government received terrorist threats from Osama Bin Laden.

This message explains in two points the reasons of a terrorist attack:

-                - Osama Bin Laden accused France to kill Muslim people in Afghanistan: “How could it be fair that you participate in the occupation of our countries and you support the American’s killing our children and women and still you want to live in peace and security.”

-                - Osama Bin Laden speaks too about the recent law about the interdiction of the wearing the face veil: “If you unjustly thought that it is your right to prevent free Muslim women wearing the face veil, is it not our right to expel your invading men and cut necks.”


You can see the message here : http://www.lefigaro.fr/international/2010/10/27/01003-20101027ARTFIG00565-ben-laden-lance-un-avertissement-a-la-france.php

In spite of the improvement of the situation concerning the gas, France worrying about the France future…

I don’t know what others country are thinking about the French situation but it is not giving a good image I think…

Regards,

Pauline

Sources:

- http://www.lefigaro.fr/international/2010/10/27/01003-20101027ARTFIG00565-ben-laden-lance-un-avertissement-a-la-france.php
- http://www.google.com/images?um=1&hl=fr&client=safari&rls=en&biw=1139&bih=527&tbs=isch%3A1&sa=1&q=raffinerie+bloquée&aq=f&aqi=&aql=&oq=&gs_rfai=
- http://www.tv5.org/cms/chaine-francophone/info/p-1910-France.htm?rub=3

BP manages its crisis

Dear readers,

I have read a very interesting article about the Bp oil spill in Gulf of Mexico.

It shows how BP tries to manage its ecologic incident because it takes big political and economical proportion.

Firs of all, BP stopped recently the oil leak with a very ingenious system:

BP’s engineers have built big screw tops in order to contain 98 tonne of hydrocarbon.  Thanks to this action, to oil leak should be stop very quickly but the result is not quit sure…

In spite of this ingenious invention, BP will have a lot of problem because they are accused of lacking vigilance about their oil platform.

Bp tries to defend us and give some response on their website:

“BP and the gulf of Mexico Alliance announce Implementation of BP’s $500Million independent Research Initiative.”

American government is afraid of the BP invention results because news leaks can arrive soon. All 600 animal species are not save today and coasts are very damaged… For the American government, it’s clear; BP should pay in order to repair all damages.

“BP will receive an invoice”

6 members of the House of Representatives have presented a text, which explains that this type of incident represents 75 million of dollars. Americans senators want to elevate this amount at 10 billion of dollars… 

The award will be terrible for BP! In fact, this type of disaster has a lot of consequences in the environment. I think it is totally normal that BP should do everything as possible in order to repair the situation. This disaster will have an important impact on environment but also on economy and policy! This disaster involved a lot of politics and economics decisions to find solutions for the country.

Regards,

Pauline

Sources:

www.usinenouvelle.com
hebdo.nouvelobs.com/
www.bp.com/home

LVMH and Dreyfus bet on the SMCP group

Dear readers,

Since 2005, in France, acquisitions increase a lot and I want to talk you about one of them.

This acquisition concerns the most important group in the fashion area LVMH and three very famous French fashion brands (SMCP group: Sandro Maje Claudie Pierlot)

These brands propose clothes for young women; it’s very chic and classic.

In fact, the LVMH group decides to extend one more time its activity.

Concerning this acquisition, two persons have become majority shareholders this Monday: Arnault family and Dreyfus family. 

They actually hold 51% shares of SMCP group, other shares are holding by brand founder members. This operation has been realized via L Capital hedge found (From Arnault family) and Floran hedge found (From Dreyfus family).

This acquisition is very important for SMCP group because it will permit its internationalisation. 

These three brands are working very well in France and it will surely work abroad in Asia, Europe and United States.

The group predicts to have a 180 million of Euros turnover in 2010.

Recently, L capital and Floran have buy Pepe Jeans and Hackett brands.

I think that acquisitions for brands can be a real help to develop products, brand image and internationalisation for example.

In this case, LVMH is a luxury group with interesting brands, so this acquisition gives a good image to the SMCP group. I am sure that this group will enjoy a good evolution.

 Regards,

Pauline


Source:

http://tempsreel.nouvelobs.com/index.html
www.maje-paris.fr
www.sandro-paris.com/
claudie-pierlot.placedestendances.com/ 

Kerviel Crisis

Dear reader,

I would like to speak about one French and Financial affair.

In January 2008, Jérôme Kerviel was accused of being the only responsible of Société Générale’s money losses.

Indeed, the Société Générale bank had lost 4,82 billion of Euros because of bad decisions about futures contracts with shares index.

Kerviel had made these bad decisions and became the responsible of the worst french financial history of our century.

Nevertheless, one question worried financial people: “Why this error became an accusation? Is it not the trader’s job to take risks on financial market?”

I agree with this questioning because a trader has to take risks in order to succeed but sometimes it failed. I think that handle a lot of money can be the consequence of losing control.

But the main problem in this affair is that Kerviel had certainly taken advantages of his professional situation.

In the meanwhile of his case, Jérôme Kerviel write his biography in order to try to explain his acts. He was working for a company as computer consultant.

Yesterday, the verdict has been pronounced. The ex trader sentenced to 3 years imprisonment and he has to refund 4,9 billion Euros.

 We can see here that the refunding is totally symbolic!

I think that the sentence is very hard for Jérôme Kerviel because he has to pay for all the mistakes of the financial world. The trader qualify his job as prostitute, it shows here his feelings about the affair.

At the end, I think that Kerviel is not innocent but he can’t be the only responsible in this financial history.

The foreign press juges that the sentence is too excessive.

Trader can be the best as the worst and the sentence is quit hard.  

Is Kerviel still a victim in this affair? I suppose, no body can have the correct answer.

Regards,

Pauline

Source:

http://www.lesechos.fr/investisseurs/actualites-boursieres/020839136828.htm
http://www.lefigaro.fr/actualite-france/2010/06/08/01016-20100608ARTFIG00768-de-l-affaire-kerviel-au-proces-de-la-societe-generale.php
http://www.lavoixdunord.fr/stories/image460x00/mediastore/VDN/France_Monde/A2010/M10/_101004-kerviel-afp.jpg
http://www.lepoint.fr/images/2010/10/05/174345-92933-jpg_72208.jpg 

Obama: Against Business?

Dear readers,

I have read in The Economist an article concerning Obama’s business thinking.

The journalist explains here that Obama doesn’t react as he should do in terms of business.

For example, the president of United States doesn’t communicate with any chief executive in order to improve the situation and find solutions together. Obama is view in this article as an ignorant president about business. The journalist explains that his attitude can be dangerous for a lot of investments in business and that it can be a serious problem for United States economy.

The Economist compares, in this article, Obama and Bill Clinton in their business strategy. The journalist describes Obama as an “anti-business figure” because he couldn’t comfortably talk the talk in business in spite of Bill Clinton who was active in the business area when he was president of United States.

Nevertheless, the journalist admits that Obama had done important things for his country as health care (new health care system) and Wall Street (restructuration plan).

I have seen on a live debate (Is Barack Obama good for business?) that 60% of people voting say “yes”.

I think that this article is a little bit too strict with Obama because he did a lot of things for a country, which was in a bad economic situation. For example, as we seen, when GM went bankrupt the government had found solutions. We also know that the president is not alone to manage the economic area of United States, a lot of people help him as Timothy Geithner (economy minister).

I think that the main problem here is that American investors believe Obama is against business. The article explains that three quarters of American investors think this. This situation can reduce the American business activity because investors don’t completely believe in their country business competences.

To conclude, it is time for Americans to create sustainable growth and restore American competitiveness in global markets.

Regards,

Pauline


Sources:
- http://www.economist.com/
-  http://kudlowsmoneypolitics.blogspot.com/2010/07/business-knows-more-than-obama.html

Apple negotiates the creation of one numeric kiosk with American editors

Another Apple innovation! I have read in the French economic newspaper “les Echos” that Apple proposes now to their consumers a new service in relation with the I-Pad.

According to Bloomberg, a digital kiosk will be on service in two months. It will facilitate the application access for the I-Pad.

It will propose to consumers reading a magazine or newspaper online. It will be similar to the application Ibook but to use it you have to pay a subscription each month.

We can see here that Apple really wants to dominate its consumer and what he can do with his Apple product.

Apple always succeeds with all its innovations because the brand provides security and simplicity.

As we know, the new target group for all electronic products is elder people (aged 60-80). This target group wants to use computers or products like the ipad but they are mainly looking for simple things to use. Apple recognized the demand, and I am sure they will succeed with this new service.

But nothing is done yet…

Actually, there is a main problem, Apple wants 30% of the profit (as with videogames and music applications) but editors disagree with that.

Now we have to be careful and see if this new digital kiosk will be available in two months…  

Regards,

Pauline


Sources:

- www.apple.com
- www.lesechos.fr

Welcome to my blog!

Hello everyone,

Nowadays, it exists a lot of communications media and people interprets it as they want. An information can evoluate according news paper.
Thank's to this blog, I will present you some events that I juge interesting and I will give my opinion about them. It name is "The business diary" because all datas in this blog will concern recent business and financial events.


I hope you will enjoy it!

Pauline Lagarde