Tag Archives: Credit Agricole SA

A second view, what can we see?

Some might have wondered how last Friday’s blog was weird (at https://lawlordtobe.com/2017/11/10/two-streams-one-view/). That is not a bad thing; it is not with the reader. The writer (read: that would be me) watched too many data sources and too much information on several sides from several fronts, I merely illuminated one path, one journey ever streams of data. More important, even as the Story was published (read finalised) on Friday morning, we see that Reuters reported (at http://www.businessinsider.com/frances-macron-flies-to-saudi-arabia-to-discuss-lebanon-crisis/?r=AU&IR=T) the mention “French President Emmanuel Macron booked a last-minute flight to Riyadh as tensions between Saudi Arabia, Iran and Lebanon heat up“. I am not so sure how ‘last minute’ it was. You see, I already reported on “Credit Agricole SA is selling half its stake in Banque Saudi Fransi to billionaire Prince Alwaleed bin Talal at a discount“, you see, I reported on part of this and I mentioned the Forbes part which had given me “International banks are grappling with how to approach the Middle East’s biggest economy, which blocks foreign control of local lenders. Some are positioning themselves for what’s expected to be a free bonanza as the kingdom overhauls its economy and plans to list Saudi Arabian Oil Co. in what could be the largest-ever initial public offering” already. This free bonanza is part why some of the most eager people trying to become a wave of new billionaires are there. If they have the Gaul, the vastly above average intelligence and the backers, those three will allow for the next few years to make another 300-500 new billionaires. In that light the move of Credit Agricole to leave did not make sense to me. You see, they are greed driven like pretty much any other bank, walking away from a profit bonanza makes no sense at all. The fact that these parties are trying to unload what they have to Prince Alwaleed bin Talal makes little sense. That is until you realise that these people might have been in business with the 200 arrested individual. Yet in this we see that the entire issue goes further when we see that ‘Prince Alwaleed Bin Talal Arrested in Saudi Crackdown‘, so was the event set up for tactical reasons? Do you think that if he had seen his arrest he would have bothered with the sale as it is? The fact that his links with JP Morgan and their facilitation of the sale means that there is a lot more going on behind the screen. You see that share is well over £372 billion; do you think that the media is showing us all? There might be a crackdown, but is it a crackdown? Is it royal annexing of squandered goods or is its trial and a showdown where the other members of the Saudi Royal family are shown that disruption within the ranks are no longer tolerated. In all this what is next? You see, from the view we are given, the existence of these international banks are essential to creating a non-oil depending economy. A new economy set towards services, technology and pharmaceuticals. There is plenty of value in all this for Saudi Arabia to move forward, yet the track will be a lot longer if there is disruption in the ranks. France might have been hard on Hezbollah and as such they are a pleasing presence towards the Royal family of Saudi Arabia, but more important, Banque Saudi Fransi is merely one of several players with trillions in value available. In military terms France is a better beachhead for Saudi Arabia to enter the new fields of economic growth in several ways. The moment the growth in France is seen the other nations will jump like hungry rabbits to the fields of vegetables in a mere instant. France is leading the way because it is figuring out that the present course is not working.

Yet, is any solution so polarised?

No, it never is. Yet again the situation changed. Iran has not been seen in a good light and their nuclear options have been met with large waves of distrust. Not in light of Hassan Rouhani and the path he is on, but the realisation that there was a Mahmoud Ahmadinejad before him and that level of extremism is a danger to most of the world, and the clear danger and additional risk we see that when another Mahmoud Ahmadinejad comes after President Rouhani. It is not merely a risk, it is closer to an actual likelihood and whilst their nuclear knowledge grows, the danger becomes a lot larger. France and Saudi Arabia see that danger too and they are beyond concerned. They are not alone. At https://www.businessinsider.com.au/saudi-arabia-iran-tensions-2017-11 we see the tweet from Israel’s defence minister, Avigdor Lieberman:

  Lebanon=Hezbollah.
Hezbollah=Iran.
Iran=Lebanon.
Iran endangers the world.
Saad Hariri has proved that today. Period.
 

It is the view we have always seen and as such that truth is pretty much undeniable, so now the moment is primed to get this sorted and to get the changes made earlier, there is seemingly no downside to any of this, political Europe merely preferred to sit on their hands when it came to this terrorist organisation (Hezbollah that is). I believe that Saudi forces are considering that Iran will be more and more limited to create turmoil when there is no Hezbollah. As they can no longer facilitate through others, Iran must openly act and turn the world against them or fall in line with the Arabian Leagues and behave according to those voices. At that point Qatar must also adjust many of their policies, and the impact might not be predictable, there would be enough evidence out there to show that they need to adjust in many ways. I believe that this would end up with Saudi Arabia wielding the only voice of power, dissent in the Middle East would end to a much larger degree. As I personally see it, there would be clear benefits for the state of Israel as well. As the threat to Israel ends, it can focus on growth in a way they have not been able to do for decades. There will be clear impacts for the UK, Russia and the USA too. Their diplomatic games will likely fall on ears much less eager to please them. It will be about growth for the Middle East. I believe that this shift will continue into Europe and several Commonwealth nations as well. India might be a frontrunner to grow the generalised pharmaceutical markets. The US will have to water down their wine to a much larger extent and there are options for the US, but no longer at the vulture driven profit margins they used to have. A shift that will take several years and that is where those ‘free bonanza runners‘ currently in Riyadh could make their billion(s) over the next decade. It will be risky to some extent, but art present you run large risks and end up making nothing in Europe at present. So why stay there?

How right am I?

I could be wrong but there is enough evidence out that that I am more likely than not correct. Business Insider, Forbes and the Financial Times have shown these paths over the last 6 months more than once. There is one premise that needs to be pointed out. The direction that this path opens is based on two elements. The first being how the drill-down on corruption in Saudi Arabia is playing out and their true intent on shifting their economy away from their petrochemical side. The more correct those paths are, the more reliable the outcome is that I predict. The corruption crackdown remains a factor as this has never happened before to this degree. I applaud it but I also realise that as this becomes a success a new Saudi Arabia will rise up in the global markets, one that is not in internal strife and one that is breaking out all borders to grow their economic footprint. It is not the status quo the current powers in charge have ever considered and it will make a lot of ‘old’ billionaires very nervous.

This might not be a bad thing either!

 

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Two streams, one view

As I see the news pass by, events shown on separate media, I notice myself wondering if my life had any meaning at all. I was young and I went to the Middle East in 1982, I would return in 83 and 84 only to learn that there was change. Terrorists like Hezbollah and Hamas were only small and Hamas rose as I would see in 1984, yet I thought that change would be inevitable. I saw Hezbollah as nothing more than pesky small minded terrorists, a tool to be used by Iran and Syria. Yet even as Lebanon was trying to move forward, there were signs in media and some places that the US needed Syria too much, in their case dealing with Saddam Hussein and as such many of us thinking we would fight for peace, we only fought for the borderlines that the US decided needed to be in place. It must have been the late 80’s, I was not longer in the Middle East and not all clued in towards the events of the day there. You see DARPA had not rolled out the internet at that point; ARPANET was not available for the audience at large. So today I see that the more things change, the more they stay the same. Now we see another push against Hezbollah. You see Saudi Arabia has had enough of those terrorists and is pushing back hard, it is also willing to push against Iran. I see two issues. One is that this issue will be bloody and even as we hope for the victory of Saudi Arabia there, there are more than just a few markers showing us that the three largest players (US, Russia and UK) are not completely in agreement whether the Middle East should have one clear dominant party. The issues in Iran, Egypt, Saudi Arabia, Libya and Kuwait that have been going on for half a century should show that. If that had not been the case Hezbollah and Hamas would have been little more than an inconvenience and they would have been dealt with a long time ago. So even as I see certain steps being taken I need to wonder if Saudi Arabia is pushing for a resolution, what will the larger picture show as it shifts. As that unfolds where will the US and Russia stand? What actions, or inactions will they use to leave the Status Quo in the middle east in a place called ‘as is’? The evidence for the longest time has shown that they pronounce whatever allies they have, but in the end, they only care for their needs and options. Now, this is not wrong or immoral, it is merely the way any nation plays its game. It is not a new game, it goes back even before Nicola Machiavelli thought it was a god idea to write down certain options for politicians to be.

As per Friday morning, we see: ““Due to the circumstances in the Lebanese Republic, the kingdom asks its citizens who are visiting or residing there to leave immediately,” a Foreign Ministry source quoted by the news agency said, adding that Saudis were advised not to travel to Lebanon from any country“, so even as we can merely speculate on what comes next, the onus is now pushed on Iran and what it is going to do with its terrorist ally Hezbollah. There is one opposing side which was shown by Reuters (at http://www.reuters.com/article/us-yemen-security-saudi-insight/deep-in-yemen-war-saudi-fight-against-iran-falters-idUSKBN1D91UR). With: “The dysfunction is a reminder to Saudi Crown Prince Mohammed bin Salman that his campaign to counter arch-enemy Iran in the Middle East, including threats against Tehran’s ally Hezbollah, may be hard to implement” we acknowledge that Iran has resources and skills and they are driven, both sides clearly are. In my mind, is the additional theatre (read: change of scenery) a workable factor? It does put larger pressures on Iran to get the logistics and goods underway, which will be their weakness to some extent. It is equally an issue how Russia will react. They might not openly act in this placement, yet the clear support to Hezbollah and as the times of Israel states: “the truth is that since Russia began its open military activities in Syria, Hezbollah fighters are also learning Russian methods of war, becoming familiar with advanced Russian weaponry, coming to understand the latest Russian technologies, and in some cases, actually fighting alongside Russian special forces“, we might comprehend the skills and training of the Spetsnaz Malcheks, or the ‘Войска специального назначения’ as they call themselves. In one part Avi Issacharoff omitted or decided not to implement one view in his story. In the end when the Spads are not holding their hands, Hezbollah remains what they were trained enthusiastic terrorists, they are only an army in the smallest sense of the total concept, this also means that as logistics falters, as support dwindles the armed Saudi forces will be more than a match and should gain the upper hand. Now, this can only play out if there is a stalemate between Russia and USA, because if the USA backs down and Hezbollah gets open on the ground Russian support, it becomes an entirely different slice of cake and all bets are off at that point. Only the Russians could push Hezbollah in way that the Iranians could never do. You see, if Iran enters the theatre the game changes as they become a clear and present danger to the state of Israel, their vocal insinuations made that so, so as Iran is trying to get a foothold whilst Israel has a few ways to counter them, we will see a more underground event of escalations where Iran is unable to counter a war they never have faced. You see their words (Iran that is) might look good on the news and on PowerPoint presentations, yet in the true data parks there is no setting, because in the end, this generation of Iranians have never faced anyone like Israel before and their faith in their own internal governmental presentations will make them even less prepared. So at that point it is merely a scuffle between Hezbollah and Saudi armed forces and in that equation there is no option of even a remote stalemate for Hezbollah. Is that the goal? I believe that Russia saw Hezbollah as a tool for what they needed, the US has always been hostile and Europe requires high earnings, so the ECB is very much not in favour of any outspoken hostilities against anything that can downgrade their earnings, so they are seemingly steering away from these events as much as they can, yet I will admit that is just me speculating on European events in this case. Even as London is more and more outspoken anti-Hezbollah. Amsterdam and Stockholm are not taking that path. In my mind it is the liberal multicultural flag that they embrace, in that atmosphere a group like Hezbollah can easily hide under this ‘veil’ whilst hating multicultural events as much as possible.

This again has speculative sides, but it is based on solid data and events. You might think that it does not matter, but it does. As more and more nations in their liberal mindset hold off on an actual war on terror, being it for economic or philosophical reasons. Not being part of it is equally a problem down the track. So as we move back towards Lebanon and Hezbollah, we need to realise that not only will this become ugly to a larger degree, there is every chance that unless certain actions are taken the issues seen in Aleppo will be seen in Aleppo too, there is just no way to tell to what extent. In this we can look at Survival Analyses (or listen to the song ‘as time goes by’), where the point in time and the prolongation of all this is the setting on just how much Beirut will look like Aleppo in the end, time is the only factor required here and the people in Europe know this. So as we see the news prepare on how there should be talks and there should be armistices, they all better remember that it was their need for status quo that is pushing the consideration for a terrorist organisation.

Who in Europe would have ever thought that support of a terrorist organisation would be the cool thing to do on September 12th 2001? So consider that and now wonder why Europe is, for now, again sitting on their hands or even contemplating siding to the larger extent with Hexbollah? Yet there is also good news because with the actions by JP Morgan to push into large chunks of the Middle East and more notably the push towards the Kingdom Holding Company. You might think it is not related, but it is. It gives the view that JP Morgan is a facilitator for setting maximised profits and these profits are not to go towards France. There has been a thought that the US is not commitment, but as there is profit in war, the clear fallout of any war is opportunity. It seems to me that the US wants to get as much profit out of that as possible, so as the dominoes are pushed into place, we see a situation where the media proclaims JP Morgan to be a mere financial advisor. I believe that to be incorrect. Even as Reuters reported “JPMorgan is in early talks with Saudi Arabian companies about overseas listings“, that might be true, but JP Morgan has been pushing itself and its ‘friends’ into powerful places where lucrative revenues are not set in millions, but in billions. I cannot answer whether Credit Agricole did the right or wrong thing, they are pretty clever all by themselves. I think that the Saudi issues in play now are pushing for polarising fields of options and opportunity on a global scale. In this case my view will be proven over the next 2 years as we follow the money. They question is where the source will be set and who gets to fill their bucket list from that well. when the options are returned in billions there will be plenty of players, although in this instance I believe that the outside opportunities (non-Saudi based companies) are offered to the friends of JP Morgan and them only, which is again a speculation. Whether I am right or wrong will be initially shown in the next 20 weeks.

There are however facts available to see that there is a direction in place. Reuters show on part (at http://www.reuters.com/article/us-jpmorgan-saudi/jpmorgan-sees-more-saudi-firms-looking-at-overseas-listings-after-aramco-idUSKBN1D7107), some might think that “He said listings in New York, London, Hong Kong or Singapore might help increase the liquidity of these companies and make them attractive for international investors, he said” is the part that gives the goods, yet it is the part not seen and more interestingly not implied that gives power to it all. The implied part is seen with “Commenting on the anti-corruption drive, Pinto said: “If it is done in the right way and for the right reasons it is good to do for the future of the kingdom.”” It is however only the first part. The news given with ‘Saudi Arabia detains 201 princes, businessmen in $100 billion corruption probe’ (at http://www.abc.net.au/news/2017-11-10/saudi-anti-corruption-probe-finds-$100-billion-embezzled/9136608). This was not a sudden part, this had been in play for some time. It was not merely the fact that at present 201 people are now in custody. Even as we see mention of Iran and the Lebanon pressures, we see that there is a larger play. His Royal Highness King Salman bin Abdulaziz Al Saud and Crown Prince Mohammad Bin Salman Al Saud have been on a path to get the nation reformed and moved away from oil dependency. In this the pool of plenty does not last too long when 100 billion get lost one handshake at a time as more and more people are connected to unlimited resources and wealth. As the press seems to be focussing on the crown prince and the ‘wild ride’ he created, there is a larger issue that is not too much in focus. No matter what the sceptics state, There is a clarity that Saudi Arabia is seriously considering that the age of oil is dwindling, as this happens they need to be able to push into other directions and they do have the wealth to create vested interests in pharmaceuticals, consumer goods, consultancy services and educational advantages. Forbes has had its share of articles on the matter, and whilst some look at ‘Saudi Arabia Looks To The Private Sector To Meet Growing Healthcare Demands’ it seems to me that 5G facilitation has much larger and more profitable sides as other providers are considering what to do, Saudi Arabia has the option to facilitate to the largest 4 cities and exceed in opportunity what Sweden has for its entire nation. When there is such a population (9.5 million) in 4 cities, there is an option to grow and grow fast. Now we know that there is a lively market already, but the idea that other services could be added grows the Saudi options to add markets and manufacturing opportunities through investment. I all this JP Morgan is potentially the spider in the centre of the web, growing in value and wealth from all sides at the same time. There is no way to state why Crédit Agricole walked away from those opportunities, but I feel certain that they did not walk away, the merely moved to a place around the corner. Even as the Financial Times (at https://www.ft.com/content/0e629bab-494c-34d0-8fe0-f71c8b089118) show mixed results, yet I believe that this French bank is moving into different fields, acquiring other banks and setting new goals. I have no way to tell on the why of it but I feel that moving away was only one as the clever people in this bank have agreed on a strategy that allows to grow faster and on larger fields. How?

We will learn this over the next 20 weeks. Yet no matter what is done and how the banks react is not a given, the direct dangers on how things escalate in Lebanon and with Iran seems to be crucial in all of this and I reckon that we will see the shifts quite soon. These shifts will not be through armed conflict, but will rely on the pressures and stresses that exist at present. In this Europe seems to take a ‘diplomatic’ stance (at http://www.ecfr.eu/article/commentary_destabilising_lebanon_will_only_strengthen_hezbollah_7235), yet with “Europeans should veer the other way, taking measures that aim to preserve Lebanon’s stability and governance structures, and to prevent wider conflagration. Iran is clearly a key source of regional instability, and Hezbollah has become increasingly assertive in Lebanon” it seems to advocate a path of inaction, 3 decades of inaction have shown that there is no solution on that path, a stream of casualties, of non-actions and broken promises. Saudi Arabia (and the USA) both had enough, and as Iran seems to be an annoying thorn in the side of Saudi Arabia, they have seemingly decided to take Hezbollah out of the equation. This will be interesting, because the moment Hamas and Iran realise that the gig is finally up, I wonder how must tearful pleads of ‘negotiations’ will be shown on nearly every soft hearted news channel on the planet. Perhaps a recollection of March 2016 is needed. With: “Hamas on Sunday sent a delegation to Egypt in an effort to beseech Egyptian security officials to stop destroying its tunnels out of Gaza. These terror tunnels, employed by the terrorist group for nearly a decade, are used to store weapons, smuggle supplies, and infiltrate enemy territory – Israel – as well as carry out surprise attacks in which people are killed and soldiers abducted.” (source: Breaking Israel News). It reads like “please let us be terrorists a little longer, we need the tunnels to do naughty things”. There is every chance that this falls on deaf ears, because as Israel is optionally no longer pressured in possible two front wars, they can fully focus on Hamas whilst Saudi Arabia will only have to deal with Iran after that. It will truly change the Balance of Power in the Middle East with Saudi Arabia as the only true power in that region, all because to a larger extent, Europe decided to remain in a self-imposed state of inaction. After three decades they still haven’t learned that inaction against terrorists will never ever lead to any solution.

Yes, there are a few elements of speculation from my side, but it is based on gathered facts and it I do not believe it is less likely on the balance of probabilities, it is merely one optional setting in a larger game that has been played for much too long.

 

 

 

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French Grape juice and a shipyard

There are issues stirring in the land of grapes and cheese. In France things are becoming slightly restless. Now, I have had my doubts about Emmanuel Macron for several reasons, but not on this. The Express (at http://www.express.co.uk/news/world/834196/France-Emmanuel-Macron-en-march-crisis-polls-fall-French-president) gives us “Several members of French ruling party En Marche! have accused President Emmanuel Macron and party directors of going against the root values of the movement by trying to change the internal guidelines regulating the candidates’ selection process“, which gives my initial response ‘And?‘, you see, being in a new party, being in front and shouting the loudest does not automatically grant the rights to wield a multibillion wallet for defence or healthcare. In the end, the selected party needs to place the right people in the right places, those with knowledge and the ability to push a nation forward. This would have been the one nightmare for Nigel Farage if he had won the elections the last time around. No matter how we feel about UKIP, it is not really seeded with senior cabinet quality fuel. The same can be stated for En Marche! That view is well phrased in “French politics expert Ariane Bogane from Northumbria University told France 24 that the party had justified its decision to change key elements of the movement, such as internal election, by saying that it was in order to avoid “personal ambition,” “rivalry” and “in-fighting”“. So what is going on, is it merely the infighting, or the disillusion of those who did work hard and expected to become part of the French government? Those bragging on the post they are considered for and having to go home realising that the carefully phrased ‘we are considering‘, becomes, ‘we were forced to find the person with the ability much more suiting the expertise required‘? Politics is all about finding the pushing forward party, within the party it will almost never be about to compromise.

Yet the title gives another image. With ‘‘Oligarchy is coming!’ Macron faces nightmare political CLASHES as he PLUMMETS in polls‘ we are confronted with two part. As the express hid in the dictionary trying to tell us that a small group of people is in control in France is not new. Those who keep their eyes open are aware of that, for example, Natixis is surpassing a trillion euro value before the end of 2018, and its 15 members of the board have a large say for well over 20% of France, which is one hell of an impact. I am not referring that they have something to say, like for example Mark Carney as Governor of the British bank, no these 15 can lay down the law in unspoken ways. Actually, one of them had a (large) setback as the Wall Street Journal reported in 2014 with “Henri Proglio’s contract as chief executive of Electricité de France SA, sidelining a powerful businessman who has been close to the country’s center-right political camp“, yet there are several indications that this was merely a resignation on political grounds as some equally powerful players got to feel the heat of more than the mere risk of the Hinkley Point C nuclear project (yet, we will remain silent on those accusers, won’t we Credit Agricole SA?); in all this, the players have a point as the costs at one point was expected to surpass over 10% and on £18 billion it starts to add up fast. This is merely part one, in part two we need to look at the plummeting and so on. Yet overall, why becomes the question. I think it is more than that the current president is a mere former banker. In this the Independent (at http://www.independent.co.uk/news/world/europe/emmanuel-macron-popularity-rating-plummets-french-president-worst-in-20-years-july-ifop-budget-cuts-a7856986.html) gives us “Results come after the 39-year-old former banker unveiled key budget cuts in public spending and military finances – a move which has been heavily criticised“, which might be a valid reason for some to nag, yet what they forgot is that the previous administrations left France with a minus €2.1 trillion on the French governmental credit card and their economy is nowhere near the English one. In addition, France has a mere 64 million people, do that equation as debt per person bites in equality. The money is gone! The UK has been in this mode for well over half a decade and the French better wizen up fast, because the people now complaining had not as much as a hard time because harsh changes were required as early as 2010, nothing in that regard was seriously done. Another quote is “Mr Macron ended up overruling his own prime minister by vowing to go ahead with tax cuts in 2018, and plans to cut housing benefits were received unfavourably“, which everyone sneers at (the decision that is), yet perhaps you remember the French actor Gérard Depardieu who moved to Russia of all places because of outlandish taxation. When we consider some of the French numbers, we see the quote “less than 50% of inhabitants in France pay any income tax at all; only around 14% pay at the rate of 30%, and less than 1% pay at the rate of 45%” (source French Property). Under those conditions, we might expect that plenty have to complain about housing benefits, it might well be those not paying income tax at all. So when we see housing benefits, whilst the French are down well over 2 trillion, we have to consider how valid the polls are, perhaps better stated how fair they are one Emmanuel Macron. We all knew that the promises made by Emmanuel Macron would be hard to keep, yet not impossible. As a banker he knows that if the tax hike works and the hike become thousands of jobs, he has a start, the one thing about the French is that they are proud, yet those who are part of this Oligarchy tend to invest nationally as that is where their power and influence are.

For this we make a small sidestep to the dictionary. You see there are difference (which is also odd)

In the Cambridge dictionary we see “A type of government by powerful people in a small group is called oligarchy“, Merriam-Webster gives us “A small group exercises control especially for corrupt and selfish purposes in a type of government” and Oxford states “Oligarchy is a type of government controlled by a small group of people” so as we see the En Marche group cry in a Merriam-Webster style, whilst the reality is that the reality is merely the Oxford/Cambridge application of the issue. None of them invoke a social governing and even as the En Marche people are now moving towards Fascism accusations (none have been formally made at present), we need to realise that none of it matter if the French economy does not make a decent step forward. The social structures have drained the French nation too much. France has seen strike after strike; the French labour unions are a debilitating power, a fact even acknowledged by many French citizens. Now, I have never been against labour unions, yet they have to realise that their time as they perceive themselves to be is over, if the French have to default even once, their existence stops, the money flow stops and that will change the game forever in France. There are other parts and there is an issue whether a blame game applies. We have heard for some time on labour reforms, and even as we see the validity due to massive French debts, in this Bloomberg offers (at https://www.bloomberg.com/news/articles/2017-07-24/macron-s-uphill-battle-against-france-s-labor-law-quicktake-q-a) questions and answers that I now can avoid. We know that there are issues, yet it comes from a civil law system, with the French labour code set in over 3000 pages, as such reform now becomes essential. We see reports like “French unions say making it easier to fire people won’t create jobs, and that unemployment results from the tight budget policies forced by EU-imposed austerity“, this is not an invalid response (read: consideration), yet in equal measure we see that there is little space for short term jobs and as such, backpackers all over Europe get to take some of the economic cream from the top of the revenue, something that might be valid work for the French, yet some of them are not going near any short term jobs in hear of long term consequences. The Bloomberg quote “His three immediate predecessors all viewed France’s labour laws as too restrictive. In 2003 and 2005, Jacques Chirac managed to loosen the 35-hour cap on the working week, making it easier and cheaper for companies to add extra hours. In 2008, Nicolas Sarkozy cut taxes on overtime work and made it simpler for individual workers to negotiate their own departures. And Francois Hollande’s reforms of 2013 and 2016 made it easier to justify layoffs due to a downturn in business” is the clearest one, you see three administrations have seen the folly of the labour restrictions. Whether the unions are in fear of the power they wield, and the fear of how they become obsolete, that is how I see it, four administrations realise that companies with 49 have growth limits, pushing themselves into foreign ground through partnerships when it becomes an option, slicing the French economy at least twice in a negative way.

The second issue is less on the things he does and more about how it is done. The New Statesman is referring to ‘the Macron Con‘, the Evening standard is all about ‘shedding the banker image‘ and some have even less nice things to say, yet some is of his own volition, with ‘My thoughts are ‘too complex’ for journalists, says Emmanuel Macron‘ the Telegraph paraphrases “An Elysée official told Le Monde newspaper that the 39-year-old centrist leader’s “complex thought process lends itself badly to the game of question-and-answer with journalists” that is held every year on the July 14 national holiday“, it is not a good way to make friends in that area of people who still at times laughingly refer to themselves as ‘journalists‘. It now becomes the question how they will see and report on the STX France nationalisation. In this there is validity to at least some degree. There is no guarantee that the Italians will keep it as is, there is no guarantee that there will not be a ‘transfer’ of grounds towards very different applicable destinations. When we consider USA Today as a source with: “STX France is the only shipyard in France big enough to build big warships. It’s also a significant employer in France“, if so, can anyone explain to me how handing it to the Italians was a clever move to begin with? If the EU will builds its force on EU ground, than France would fare a lot better keeping the one place where they could be build French property, that is merely good business. In addition, as it is still doing jobs, which are unlikely to be completed before the end of 2018, how is changing hands of the shipyard a good idea?

There is no doubt that the STX war is not over and I am not even going to speculate how this will turn out at present, you see being pre-emptive is one thing, the danger is that some shareholders will offer what they have in different ways to get the most out of their shares and greed can make a shareholder creative in getting the coin they expected. Yet, Trikkles (at http://trikkles.com/2017/07/28/french-government-to-nationalize-stx-france-economy.html), gives us “President Macron jettisoned his pro-business agenda and threatened to nationalise France’s leading shipyard to prevent its takeover by Fincantieri“, is that true? Keeping STX French might be very pro-business indeed. If it becomes Fincantieri property, there would be consequences. The Higher echelons could end up being replaced by Italians, so that is a chunk of funds not remaining in France, in addition, with procurement scandals first in Taipei in 2000 and now in India 2016, there are other considerations to make, so there are issues beyond the ship that is to be build. The interesting part is that in the entire emission control solution, I would have thought that they would focus on bringing jobs to the US, not ending up with a French place and getting loads of Americans and Italians to Normandy, let’s face it, it is no longer 1944.

In all this Emmanuel Macron seems to be getting a rough time. As the newspapers focussed on the largest drop, it seems that they are all in denial that both the UK and France are merely two players who have an astronomical deficit to deal with. In all this the Financial Times gives us another view (at https://www.ft.com/content/c826f982-7383-11e7-93ff-99f383b09ff9), as they state “Macron’s pro-EU stand is tested by Italy on the waterfront“, some will call it ‘betrayal’, yet who voice that and for what reasons? Here we also see the quote from Pier Carlo Padoan as he accused Mr Macron of abandoning his professed “pro-Europeanism and liberal values” by his decision to take STX France. So is it non-liberal or an essential step not to endanger the Normandy economy in the longer run? As we realise that STX is one of the few places in Europe where building an aircraft carrier is possible, as well as the fact that the largest cruise ship in history is getting build here, why leave it to the Italians? In this, the quote “Fincantieri had pledged to keep jobs and orders in France for five years” reads like a hollow joke, it merely not mentions that after 2022 syphoning the French economy towards Italy would be a given and with the French economy being a mere 1%, that syphoning could potentially kill the French options. So when I see the additional hollow quote “and Italian ministers rightly point out that Mr Macron’s demand to renegotiate suggests a lack of trust“, would that be a lack of trust, or a lack of Italian consideration when the clock strikes August 1st 2022?

In this there is one part that the complaining French seem to fail to grasp, if STX is only the first of a few reallocations to foreign owners, how deep in unemployment could France get? I have in the past never professed to be any kind of consideration to bankers like Emmanuel Macron, yet in equality I have been for the most always been on the side of giving all a fair chance, it seems that the French are not giving that to Emmanuel Macron, which as French citizens is their right (freedom of speech and so on). I merely hope that these people are looking further forward than the issues due next week, because in the long run France will need to adjust to a larger degree, the question becomes how and that is the issue that the previous 3 administrations have fought over for the longest time of their administration.

 

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The finality of French freedom

Even as the world is looking at the Dutch elections, we see initially that the biggest fear in the Netherlands is gone. Geert Wilders is still number 2, yet the VVD (People’s Party for Freedom and Democracy) did not lose as many seats as initially expected. This is good for the current Prime Minister, yet not as good for Geert Wilders as other parties had vowed not to work with him, no matter how many seats they got. Well, the initial numbers are out and now we see that the Netherlands will have some tough times. To get the next Cabinet to work they will need 4 parties, which becomes a small issue. The easiest alliance would be involving the CU (Christian Union), yet any medical ethical issue would cause concern on a few levels (the usual suspects like the pill, abortion, prolife issues). The second option is with the Green Left party (GroenLinks), which is predominantly youth driven, here the VVD will have some issues and there seems to be a level of unwillingness to work together. Now, the first option gives only one seat in majority, the second option gives a little more space to breath, but neither is a great match, both are decent matches. The Dutch labour party has been decimated. It went from 38 seats to 9 seats (Source: Volkskrant). They will need a serious amount of time to lick their wounds. No matter how this all fares. If Geert Wilders can keep his cool, he would keep a few options down the track. Here it is anyone’s guess what will happen next. I predicted that there would be no going around the PVV, yet I was proven wrong. Green Left grew a lot stronger and the VVD kept a few more seats than most predicted, so there is that too. Yet, with this situation, Nexit has basically become a non-issue, it is off the board for the Netherlands, so as that certainty becomes a reality we see that Mario Draghi wasted not even a second to give the French people his demands and ultimatum. In  the Express (at http://www.express.co.uk/finance/city/777170/Euro-irrevocable-ECB-draghi-Le-Pen-Frexit-vote-warning), we see the headline “‘The Euro is IRREVOCABLE’ Euro Bank chief fires warning at Le Pen over Frexit vote promise“, so if we would be a lot less diplomatic than we ought to be, we would state ‘Mr Looney Tunes has decided to be a slamming tactical in his claims‘. The two published facts given are “The ECB chief insisted the Front National leader was not a threat to the euro’s future, which he said was a measure of solidarity among members. His comments come after Ms Le Pen’s promise to call a vote over France’s membership of the monetary union if she wins the election in May“, You see, with smaller members pushing pressure Draghi had no chance at all, now, he has a few more options by trying to persuade the system players with “a measure of solidarity among members“, which I can counter with ‘perhaps spending the trillion you did not have was perhaps not the best idea?’ In that we can agree, we can disagree, but we all know that no matter the direction, it was a pretty dangerous step to take. It is the next two parts that are the cause of issues: “Market worries over the presidential race have increased as polls charted the rising popularity of the right-wing candidate, with France’s borrowing costs jumping, while the euro suffers sell-offs. In an apparent shot at the right-wing candidate, Mr Draghi today dismissed fears of the breakdown of the currency as ‘unrealistic’“.

Is that so? If that actually was the case, he would not have needed to reinforce it, didn’t he?

So the two parts are ‘with France’s borrowing costs jumping, while the euro suffers sell-offs‘ and ‘the breakdown of the currency as “unrealistic”‘, no, it is only unrealistic as only Brexit is coming and until now, we have seen levels of misrepresentation and downright corporate ‘blackmail’ to anyone not singing the false tune Mario Draghi is giving us. Last week there was some economic recovery, but the sharp sell-off that had been visible is still a factor, that whilst the Dutch Nexit was never a true reality, we all knew that. France is another matter, the French has not seen decent economic days, for at least two administrations, which is why France is a big deal, that whilst they represent one of four anchors keeping the Euro in place. With the British anchor removed, the stress on the three is intense, the Euro cannot continue with the remaining two anchors that is the desperate game Draghi is facing now. Weakness and non-decisions from 2012 onwards have caused this mess, and of course he is not done yet. As we see in Reuters, last Monday he stated “If non-high-tech companies adopt more innovative technology, that would provide a boost for European productivity“, speaking as the European Central Bank President last Monday, it that so? With what funds? Innovations requires money, such steps have a cost. To get into deeper debt without the true prospect of revenue and incomes is too dangerous a game to play for too many companies. Many who think in such short-sighted ways will not survive the next fiscal year. In all this, it all hangs on how the elections are going in France. Mario Draghi might be voicing ‘a measure of solidarity among members‘ but the people behind the French member have been in a bad place for too long. In this there is even more pressure growing from Italy. Bloomberg gives us ‘production declines after rising for three straight months‘ as well as ‘Unemployment unexpectedly rose to 11.9% in fourth quarter‘, more important, the production loss is the biggest one in 5 years and pretty much nullifies the last two months of growth. That whilst we see a growth in unemployment. It is in this light that France should consider its options. That is, in equal light should reflect on whom they need to support in an election that will have a massive impact on the course that France will take into the future seas of turmoil. Steering towards the new elected President. What is equally disturbing is that the French political lines are changing, to a much larger degree than ever before, for reasons that are actually slightly unsettling.

The question becomes why?

You see, French Senator Jean-Baptiste Lemoyne is now endorsing Emmanuel Macron, we knew that François Fillon is pretty much on his way out and François Hollande never had a chance; so is this an act to enforce any party that is not Front National? Consider that question, it is now no longer for some to support the net best candidate and the best winner. No, there are now signs that certain power players will unite in backing whomever is most likely to stop Marine Le Pen. Certain plays have become this dangerous, not for what she is, who she is and what she stands for. No, certain members seem to fear and not embrace economic change. The Status Quo is everything. In equal measure, Macron has won the endorsements of those abandoning Benoit Hamon. Some press have even resorted to headlines like: ‘Hamon plans radical departure from EU ‘blabla’, some parties are now extremely worried, especially as the Status Quo groups could lose their Billion Euro gravy train. This is almost a unique situation where we witness the change of approach towards the need of individual economic momentum, which now trumps the electing the need for the good of France (I am not stating or implying which politician represents that).

My evidence?

There are several pieces in the more respectable news carriers. In this case a first is the Financial Times (at https://www.ft.com/content/cbf9a59c-04a1-11e7-aa5b-6bb07f5c8e12), who gives us: “Fifteen years on, however, the anti-far right “republican front” to stop the FN appears to be crumbling“, which is only an indication. The chart that they present in that article gives a very nice indication of the splitting of votes. The strong push from Fillon and Hamon towards Macron is almost unheard of. The abstention group is however still large enough to make an impact, yet the shift from 24.5% to 60.5% is also a little more than amazing. Such landslide victories are so rare, that seeing it twice in a row is no longer a mere coincidence. In this Mario Draghi could actually end up being the contributor to the success of Marine Le Pen. As he proclaims the quotes I used earlier, the large group that currently represents the younger voter that currently seems to be set in Emmanuel Macron camp at present, could realise between now and voting day that the words of Mario Draghi are hollow at best and that his ‘proclamation’ will be replaced hours after the election by apologies and words of hardship whilst claims of better economic times cannot be fortified or made into any level of reality on any way shape or form.

In that light, is it not weird that an investment banker who has never been elected to political office, is at present not a projected frontrunner, is forecasted to carry an optional 60% for round two? That isn’t just unheard of, it is a statistical anomaly and in the political field, such landslide levels are a no-no to say the least, especially twice in a row. Someone is buttering the electoral sandwiches in new unheard ways. Now, France or not, we can agree that extreme vote options like Marine Le Pen tends to sway a decent amount of people to go towards ‘anyone but this one‘, yet the numbers at which this is happening at is just too weird. In this we see that both Bloomberg and Citigroup are playing their own little game, especially as the collapse of the Euro would be devastating to those involved. At https://www.bloomberg.com/news/articles/2017-03-15/le-pen-win-would-wipe-out-25-from-french-bank-shares-citi-says, we see ‘Le Pen Win Would Wipe Out 25% From French Bank Shares, Citi Says‘, which is really intense and I wonder what evidence they can present, especially after these players got it so massively wrong after the Brexit vote. So the first quote “A victory for Marine Le Pen in France’s presidential elections would cripple the country’s banking stocks, says Citigroup Inc” is one that cannot be countered easily, yet when we see the graphics on that page, we also get: “The analysts predict declines of 30 percent and 34 percent for Credit Agricole SA and Natixis SA, respectively“, there it is, everyone’s favourite French government banker (Natixis) would lose 34% value, which would send anyone reeling, but in this case as the information as I presented them in my blog articles over the last two years, this drop would be impacting long term plans and Natixis does have a decent amount of fingers in all sorts of government pies. And the quote “Even though Le Pen’s policy plans threaten to shake up the country’s banking system, financial institutions including Credit Agricole, Societe Generale and Axa SA have avoided contact with her team“, which is also really weird, would you not try to talk to a candidate and even if they are all in the mindset that her approach is wrong, the veritable truth is actually in a direction on a path that is 180 degrees from shown. A dialogue trying to understand her path and showing the evidence to other directions and perhaps even alternative ways for both to get what they want.

Yet as we have seen, certain players are in the Segregation, Isolation and Assassination mode. Which is me stating that some shady solutions which are usually limited to HVT’s are now optionally tactics in which the larger corporations will engage to keep their status quo, this is nothing new, but it has never been this outspokenly clear before, there is that much at stake for them. Even if it is merely political assassination, Fillon is already crying those words and the setting towards the investment banker Emmanuel Macron is now clearly visible. I reckon that in this regard, the switch by French Senator Jean-Baptiste Lemoyne came slightly too soon, too soon as an increasing amount of voters are now wondering why the change, because such a shift would not have been needed until after the first round. As I personally see it, French Senator Jean-Baptiste Lemoyne used himself to create a momentum towards Emmanuel Macron, an act that will only create more momentum over time. This I see as the second piece of evidence that this time, the elections are about something a little more unsettling. I wonder if the French people see it in the same light.

In the Bloomberg article we see the included wrong vision too. As you see “losing the May 7 runoff against more business-friendly leaders such as Francois Fillon and Emmanuel Macron” gives us the ‘implied‘ fairness of two candidates, yet at present, two days after this, we see that Fillon got gutted, not surviving on his present 19.5% setting (3rd place), he gets to be the chance for Macron to solidify the pole position.

Citi is currently doing to France what several UK players did to anyone supporting Brexit, the question becomes: ‘Will the French voter realise this in time?

More important for Marine Le Pen will be whether this would realign those who are now predicted to go the Macron way. Time will tell and when we start seeing accusations in 2018, 2019 on how big business is influencing French votes, you better realise now that the warning signs have been all over the place and the non-intervention seems to be relying on the press and a select group of financial power players. By the way, it does not stop there, it goes on in several direction. Now, I do not feel inclined to prove them all wrong, it would make this merely a ‘he said-she said’ debate, what you should consider is the final part that Bloomberg gives us, “the analysts predict” is in the middle. You see, predictions require models, they require data and a few more little titbits that make up for the forecasting models. This model has to deal with two elements it cannot correct for as it has never happened before. First is the fact that President Hollande is currently the least favourite French president in modern history, and soon to be the only one term President in French modern history, so one of the data outliers is based on a premise that had never happened before, the second part is the ‘forecast’ that an politician, never elected in public office before becomes the person growing to over 60% in one round, as I see it, another prediction that is not a given. Are you getting the image? Whatever forecast we are introduced to will be a lot less accurate as several elements in play have never seen the light of day ever before. As such, there are serious questions in play on any prediction given in this election, no matter in which direction it goes.

I personally believe that Marine Le Pen is not the given loser (with 60% opposition), there are a few elements in play, but in equal measure I do not believe that Emmanuel Macron will be the given winner to the degree forecasted either. In the end, we will leave it to the French People to decide who will go to the Élysée Palace, not the banks, not the lenders and not any collection of ‘storage and media clowns’. All these proclaimers are for the most, all on the gravy train of globalisation (the Macron side), a term that has been filling the French with disgust for the longest time and the last 10 years have not been kind on any positive feeling of globalisation. Still, in the end the French will need to remain a little pragmatic, which does not mean surrendering to Globalisation, yet in equal measure there is uncertainty on how France will deal with Frexit, unlike the UK, they are directly tied to Belgium, Germany, Switzerland, Italy and Spain, so there are a few more practical considerations for France. I believe it can be done, but it is up to the French to select the referendum to leave the EEC and the Euro. We can forecast all we like, but if there is one thing the Dutch election have taught us, is that these matters are not black and white and that the outcome is currently getting bounced on the waves of identity and economy, two elements that never worked well together.

 

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