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February 23, 2013

Global Risk Landscape 2013


The World Economic Forum created an intriguing set of 50 'global risks'. The global risk that respondents rated most likely to manifest over the next 10 years is severe income disparity, while the risk rated as having the highest impact if it were to manifest is major systemic financial failure. There are also two risks appearing in the top five of both impact and likelihood – chronic fiscal imbalances and water supply crisis.

The most 'worrying' risks are up and to the right (higher probability and high impact).

Chronic Fiscal Imbalances tops the chart along with Sever Income Disparity.





The Top 5 Global Risks by Impact have evolved notably over the past few years.




The Top 5 Global 'Most Likely' Risks have also evolved but Economic remains the most dominant.


February 21, 2013

Italian Elections increase doubts over long term reforms

Italians head to the polls on February 24-25 and never before the political scenario has been so chaotic and appalling.

We are witnessing new political movements like the 5 Stars movement climbing up to third place in a matter of months and never before we have seen Germany actively entering the Italian political debate to try and keep Berlusconi at bay.
 
All this is adding up to financial uncertainty on the future of Italy and at large of the Eurozone.

Pier Luigi Bersani, who heads the centre-left PD was considered the assumed new prime minister just a few short weeks ago, at least in the Chamber (the lower house of parliament).

It's all up in the air now as Silvio Berlusconi's PDL has staged a massive rally in the polls.

Berlusconi has been on a rampage lately blaming Germany and Chancellor Angela Merkel for the unemployment problems in Italy, promising to refund the hated IMU (property tax) and more exotically declaring that tax evasion is justified.

Beppe Grillo's Movimento 5 Stelle (Five Star Movement) which has been largely ignored in the Italian press has been wildly popular at rallies. Grillo has a chance to come in second place.

Mario Monti, who heads the centrist Con Monti per l’Italia (With Monti for Italy) coalition, is running a very distant 4th.

Poll Blackouts

Officially, pollsters cannot post poll results in a blackout period before the election. That blackout period started February 9. Below Reuters' 8th of February polls.



Those results are misleading because they do not include undecided voters, and the undecided vote is a very large 20-25 percent!

With such little difference between Berlusconi and Bersani, and with huge rallies for Beppe Grillo and Berlusconi, any outcome is possible.

Germany Warns Against Berlusconi

Of potentially more importance, Berlin Warns Italians against Berlusconi

Here are a few examples from the story.

German Finance Minister Wolfgang Schäuble reportedly said (but later denied) "Silvio Berlusconi may be an effective campaign strategist, but my advice to the Italians is not to make the same mistake again by re-electing him."

Polenz, a senior member of Chancellor Angela Merkel's Christian Democrats, said: "Italy needs political leaders who stand for the future. Berlusconi is certainly not one of them."

One Italian bank even went so far this week as to issue a report arguing that a Berlusconi election would almost certainly force the country to apply for emergency bailout aid from the EU. Mediobanca, Italy's largest investment bank, wrote that "a last-minute Berlusconi victory would scare the market sufficiently to put pressure on the spread."

"Silvio the Savior"

Spiegel reports Berlusconi's Faithful: 'Only Silvio Can Save Italy'
Adoration of Berlusconi in Italy remains widespread. In the parallel universe occupied by his followers, there is no room for doubt about Berlusconi and lines are clearly drawn. Silvio is good and the others are bad.

These fans gather at his speeches, like the Saturday rally in Palermo, where thousands crowded into the venerable Teatro Politeama. There were women in long fur coats and fine gentlemen in three-piece suits. Dock workers like Ferrante squeezed with them through the entrance, everyone pushing and shoving each other like adolescents at a rock concert. The hundreds who didn't make it in must stand outside.

Fully a quarter of Italians are prepared to vote for Berlusconi again. It is an astounding degree of homage paid to man who faces allegations of abuse of power and bribery; who faces the scandal surrounding the underage escort Karima el-Marough, alias Ruby Rubacuori; who has been blasted for blatantly misogynistic comments; and who broke many promises as prime minister. Instead, the opposition, left-leaning judges and even the Germans are blamed for all that is not right with Italy.
At best, Bersani will win the Chamber and lose the Senate. That would likely result in a hung parliament.

Anti-German sentiment in Italy is high already. The entrance of German politicians into the battle may fuel that sentiment in a major way.

It is conceivable "Silvio the Savior" pulls off a stunning upset win in both the Chamber and Senate, but a Senate victory would still require a coalition (no party will come close to a majority).

It may be difficult if not impossible for any party to form a Senate coalition if Monti's party does poorly as expected.

Regardless Berlusconi there seems to be no good outcome for Italy.

January 13, 2013

2013 Economic Freedom Report highlight Italy's troubles

The appalling state of Italian economy is no longer getting international headlines but the slide of the county toward third world standards is continuing unabated.
The new 2013 report on Economic Freedom has been published; a full report can be found here and again Italy's ranking is a disaster for a major economy.

On the overall score Italy is ranking 83rd which by itself is an appalling result for a major developed economy, positioning itself below Uganda and Sri Lanka.

But when it comes to Freedom from Corruption Italy manage to score an appalling score of 39 together with Ghana and Macedonia.


Below some extracts from the report delving into an analysis of Italy's shortcomings:

The foundations of economic freedom remain weak in the absence of an efficient judicial framework to provide effective and timely resolution of cases. Corruption, often involving government officials, is a growing concern, severely undercutting confidence and trust in the government.

As per the rule of law and corruption Italy is faring among the worst countries, below the motivation for such low ranking:

Property rights and contracts are secure, but court procedures are extremely slow. Many companies choose to settle out of court. The legal system is vulnerable to political interference. Widespread corruption has bred a culture of lawlessness and tax evasion and has weakened respect for the judiciary. Enforcement of intellectual property rights is below developed-country standards.
And when it comes to attracting investments:

Regulatory complexity causes delays and increases the cost of entrepreneurial activity. Completing licensing requirements takes over 200 days and costs more than the level of average annual income. Serious labor market rigidities constrain job growth, and the informal labor market accounts for a large proportion of employment. Stagflation engendered by the eurozone crisis presents monumental monetary policy challenges.

       
       
Read more about Italy Economy.
        See more from the 2013 Index.

   

OVERALL SCORE BY COUNTRY:


Hong Kong 89.3
Singapore 88
Australia 82.6
New Zealand 81.4
Switzerland 81
Canada 79.4
Chile 79
Mauritius 76.9
Denmark 76.1
United States 76
Ireland 75.7
Bahrain 75.5
Estonia 75.3
United Kingdom 74.8
Luxembourg 74.2
Finland 74
The Netherlands 73.5
Sweden 72.9
Germany 72.8
Taiwan 72.7
Georgia 72.2
Iceland 72.1
Lithuania 72.1
Austria 71.8
Japan 71.8
Macau 71.7
Qatar 71.3
United Arab Emirates 71.1
Czech Republic 70.9
Botswana 70.6
Norway 70.5
Jordan 70.4
Saint Lucia 70.4
South Korea 70.3
The Bahamas 70.1
Uruguay  69.7
Colombia 69.6
Armenia 69.4
Barbados 69.3
Belgium 69.2
Cyprus 69
Slovakia 68.7
Macedonia 68.2
Peru 68.2
Oman 68.1
Spain 68
Malta 67.5
Hungary  67.3
Costa Rica  67
Mexico 67
Israel 66.9
Jamaica  66.8
El Salvador  66.7
Saint Vincent and the Grenadines 66.7
Latvia 66.5
Malaysia  66.1
Poland 66
Albania 65.2
Romania 65.1
Bulgaria 65
France 64.1
Rwanda 64.1
Thailand  64.1
Dominica 63.9
Cape Verde 63.7
Kuwait 63.1
Portugal 63.1
Kazakhstan 63
Turkey 62.9
Montenegro 62.6
Panama  62.5
Trinidad and Tobago 62.3
Madagascar 62
South Africa 61.8
Mongolia 61.7
Slovenia 61.7
Croatia 61.3
Ghana 61.3
Paraguay  61.1
Uganda 61.1
Sri Lanka 60.7
Italy 60.6
Saudi Arabia 60.6
Namibia 60.3
Guatemala  60
Burkina Faso 59.9
Azerbaijan 59.7
Dominican Republic 59.7
Kyrgyz Republic  59.6
Morocco 59.6
Lebanon 59.5
The Gambia 58.8
Zambia 58.7
Serbia  58.6
Cambodia 58.5
Honduras  58.4
The Philippines 58.2
Tanzania 57.9
Gabon 57.8
Brazil 57.7
Benin 57.6
Belize 57.3
Bosnia and Herzegovina 57.3
Fiji 57.2
Swaziland 57.2
Samoa 57.1
Tunisia 57
Indonesia 56.9
Nicaragua  56.6
Vanuatu 56.6
Mali 56.4
Tonga 56
Kenya 55.9
Yemen 55.9
Moldova 55.5
Senegal 55.5
Greece 55.4
Malawi 55.3
India 55.2
Nigeria 55.1
Pakistan  55.1
Bhutan 55
Mozambique  55
Seychelles 54.9
Egypt 54.8
Côte d'Ivoire  54.1
Djibouti 53.9
Niger 53.9
Guyana 53.8
Papua New Guinea 53.6
Tajikistan 53.4
Bangladesh  52.6
Cameroon 52.3
Mauritania 52.3
Suriname 52
China 51.9
Guinea 51.2
Guinea-Bissau 51.1
Russia 51.1
Vietnam 51
Central African Republic 50.4
Nepal 50.4
Laos 50.1
Micronesia 50.1
Algeria 49.6
Ethiopia 49.4
Liberia 49.3
Burundi 49
Maldives 49
Togo 48.8
Sierra Leone 48.3
Haiti 48.1
Belarus 48
São Tomé and Príncipe  48
Bolivia 47.9
Lesotho 47.9
Comoros 47.5
Angola 47.3
Ecuador 46.9
Argentina 46.7
Ukraine 46.3
Uzbekistan 46
Kiribati 45.9
Chad 45.2
Solomon Islands 45
Timor-Leste 43.7
Republic of Congo  43.5
Iran 43.2
Turkmenistan 42.6
Equatorial Guinea 42.3
Democratic Republic of Congo 39.6
Burma 39.2
Eritrea 36.3
Venezuela  36.1
Zimbabwe 28.6
Cuba 28.5
North Korea 1.5

January 12, 2013

Blackrock Castle




Blackrock Castle, formerly Mahon Castle, is a 16th century castle located about 2km from the heart of Cork city, Ireland on the banks of the River Lee.
In the late 16th century, the citizens of Cork appealed to Queen Elizabeth I to construct a fort at Blackrock to "repel pirates and other invaders". In or around 1600, a round tower was constructed to safeguard against pirates "carrying away" vessels entering the harbour.
Blackrock Castle houses Ireland's first fully interactive astronomy center developed by the award-winning multimedia company Martello Media. The exhibition is now open to the public and is themed "The Search for Extreme Life in the Universe".







January 10, 2013

Global Manufacturing Ranking

The leaders of global manufacturing are changing rapidly, China, India and Russia are rising and Germany, Japan, UK, and Canada are sliding. The following chart simplifies the evolution of global manufacturing economies over the last four decades.

December 30, 2012

Sassi di Matera

The Sassi di Matera (meaning "stones of Matera") are ancient cave dwellings in the Italian city of Matera, Basilicata. Situated in the old town, they are composed of the Sasso Caveoso and the later Sasso Barisano.
Matera has gained international fame for its "Sassi". The Sassi originate from a prehistoric (troglodyte) settlement, and are thought to be the second oldest city in the world.

The Sassi are houses dug into the rock itself locally called "tufo". Many of these "houses" are caves, and the streets in some parts of the Sassi are located on the rooftops of other houses. The ancient town grew in height on one slope of the ravine created by a river that is now a small stream. The ravine is known locally as "La Gravina".

In the 1950s, the government of Italy forcefully relocated most of the population of the Sassi to areas of the developing modern city. Riddled with malaria the unsanitary conditions were considered a shame for Italy. However, people continued to live in the Sassi, and according to the English Fodor's guide:
Matera is the only place in the world where people can boast to be still living in the same houses of their ancestors of 9,000 years ago.
Until the late 1980s this was considered an area of poverty, since these houses were, and in most areas still are, mostly unlivable. Current local administration, however, has become more tourism-oriented, and has promoted the re-generation of the Sassi with the aid of the European Union, the government, UNESCO, and Hollywood: one of the benefits of the ancient city, is that there is a great similarity in the look of the Sassi with that of ancient sites in and around Jerusalem. This has caught the eye of film directors and movie studios.
Principally due to this reason the Sassi were the set of many films, as for example "The Gospel According to St. Matthew" (Pasolini, 1964), "King David" (Bruce Beresford, 1985), "The Passion of the Christ" (Mel Gibson, 2004) and "The Nativity Story" (Hardwicke, 2006).

























Ernesto Sirolli: Want to help someone? Shut up and listen!

In this funny and impassioned talk, he proposes that the first step is to listen to the people you're trying to help, and tap into their own entrepreneurial spirit. His advice on what works will help any entrepreneur.


December 25, 2012

Spanish Crisis Video

For those wondering what is happening in Spain worth checking this good documentary on the Spanish Crisis and its construction bubble crash: