Our Lessons from 2011

 

We decided to summarise our learning from 2011 into two brief thoughts:

 

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  1. The pains and strains of the economic sovereign debt melt-down in 2011, should stand us in good stead to deal with even more debt and sovereign strain in 2012, as More and Bigger Europe continue to miss the point; this being that more bureaucracy and more government and regulation will not get the INNOVATION engine started again to Recapitalise Europe!

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  2. Translational differences will matter.  The CLOUD is a huge business and business model transformation opportunity.  IT ‘Geekery’ and language could scupper this potential opportunity and we need to develop more ‘CLOUD TRANSLATION’ services so that a broader community and eco-system can get involved in an aspect of “INNOVATION ignition” in 2012.
Clouds over Tahoe HDR #1
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All the best and good luck in 2012.

 

theMarketSoul ©2011

Core Values

As we wind down 2011 we have entered the ‘reflective season’, where due to the structure of the Gregorian calendar and the very long(est) night of the year (in the Northern Hemisphere), we naturally enter a more introspective mood.

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Therefore, as we become more contemplative during this time, let’s reflect on our Core Values, both personal and organisational, and identify the gaps or misalignment between these two key areas of our daily existence.

Then start listing or rather prioritise these gaps and only focus on the one of two of the most feasibly achievable misaligned Core Values and develop a plan or incorporate it into your New Year’s resolutions.

If the gap requires coaching or input from people or personal development providers, do something as soon as possible to diarise or follow-up.

Keeping a diary supports personal development
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Look at utilising some common reminder tools we have available; pen and paper, notes or your mobile device, calendar reminders, or even new Cloud services and Apps, etc. in order to assist your “Oh Yes!” reminder moments later, should now not be the right or appropriate time or place to do something about the Core Value alignment activities you need to take.

SLA's Core Values
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…Turning 2012 into Positive Opportunity

theMarketSoul ©2011

More and Confused Europe? – Part 3 – It is Uncertain…

Continuing the conversation and analysis on the ‘fall-out’ of the British Veto being exercised at the most recent EU Leaders (crisis) summit, it is interesting to observe two specific angles to this:

Innovation

Our article on ‘Recapitalising Europe’ kicked off the discussion around Innovation. It appears that the leaders of Europe (a summary of Angela Merckel defending the Brittish position – see this link) have cottoned on to Innovation as a driver of value, because as the Today programme on Radio 4 reported on Wednesday 14 December 2011; the Czech president stated today, as the details of the agreement slowly start to trickle out, the agreement 26 ‘insider’ European countries signed up to early on Friday morning (minus Brittain), is ‘nothing but a blank sheet of paper’.

An Innovation Competence Process Coming From K...
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Fantastic we say, this is exactly where innovation can begin; not building crooked structures on the existing legacy of half baked institutional solutions, however, starting with fresh new ideas. Something European leaders will find an unfamiliar exercise.

Fear, Uncertainty and Doubt (a great big FUDge).

It is amazing to observe some of the conversations by pundits, stakeholders and other interested parties on the supposed damage this veto has done to Britains standing in Europe. And our brief analysis on this is that the commentators are mostly all adding to the FUDge factor of sowing fear, uncertainty and doubt in the minds of the general public, in order to NOT address the fundamental issues, but rather play the old politically and ideologically motivated games of CONFUSING the argument.

Caveat (beware) the public, the answers are more complex and interwoven than the fuzzy analysis and explanations offered to us at the moment…

Calm water
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Finally

It is worth remembering that the crisis or rather series of crises over the Euro is not over yet.  The work has merely begun to try to save the common currency.  The fall out and potential consequences is discussed in an article by Bruce Crumley in “As the Crisis Refuses to Calm, Scenarios of Euro Collapse Appear”

Read more: http://globalspin.blogs.time.com/2011/12/13/as-the-crisis-refuses-to-calm-scenarios-of-euro-collapse-appear/#ixzz1gaJfc1QN

theMarketSoul ©2011

More and Bigger Europe –Part 2 – It is MORE…

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We pick up from the introductory article by expanding on the issue of MORE Europe, which we did not cover in enough depth.

More Europe

It is without a shadow of doubt that belonging to an enlarged common market has huge beneficial advantages to all its participants.

However, the question of the Cost / Benefit analysis dynamics is never really explored in more detail. Perhaps it is easier to focus on just one or the other of the two interlinked dynamics, but for it to be a balanced appraisal; we need to focus on the interactions of both COST and BENEFITS.

And when the leaders of Europe cannot tell anymore what the difference is between a COST and a BENEFIT of being in a single currency Eurozone, then what chance do the rest of us have? Is our COST the misplaced belief that leaders will make decisions in our best interest that will BENEFIT us in the long run?

But if the COST is the lesson of Moral Hazard, why have they not learnt yet that working towards an orderly default is better than raiding the futures of millions of current and future taxpayers in Europe. The COST of an uncompetitive and stagnating Europe (which has been brewing and developing for a few decades now), is that we have lost the ‘child like’ curiosity of inventing and innovating our why towards sustainable economic development and growth.

Rather than embrace the opportunity to learn from the younger cultural of the Eastern European and Baltic States integration onto Europe, we are in danger of smothering their youthful exuberance with a bureaucratic Welfare State super-state, with a healthy dose of Welfare and Debt dependency for decades to come.

Countries using the Euro de jure Countries and...
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No-one is saying that the transition will be painless, but it seems that most leaders in Europe have forgotten to keep an eye on both the COST and BENEFIT dynamics. Except for the brave decision made by David Cameron on Friday morning.

English: David Cameron's picture on the 10 Dow...
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Veto the madness and risk what some call isolation, but we here at theMarketSoul call the grasp for our economic sanity.

We can still be part of a common market and then there is still a Common Wealth to leverage, should both the EU and the USA decide to marginalise Britain on the international stage, as some commentators are fearing.

Maybe a true third balancing force and alliance will help us move out of the doldrums of the CRISES of 2008 – 2011 (and quite possibly beyond).

theMarketSoul ©2011

More and Bigger Europe…Is that what we really want?

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Yes, it will be more bureaucracy and bigger financial problems down the line…

We pick up our analysis this week in the dusky glint of the aftermath of the (latest) EU Leader summit to put together a rescue package for the Euro.

More bureaucracy?

The inspiration for this comes for the ‘people pulling the wagon versus the people in the wagon’ analogy utilised by Dan Mitchell of International Liberty.

In an article we wrote earlier this year we very clearly called for INNOVATION as an engine of growth in Europe, yet all the politicians and bureaucrats can deliver are bigger EU institutions, hence, more and more people piling into the wagon!  Aren’t some of us getting not just tired of pulling the wagon, but frustrated and exhausted too.   Are these not some of the ingredients necessary to breed and incubate extremism?

Deutsch: Europäischer Rechnungshof English: Eu...
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Bigger financial problems?

In another of our earlier articles we mentioned the dangers of Moral Hazard.  By not addressing the fundamental problems of big bureaucracy (we are in danger of starting a circular argument here), debt accumulation, regulatory stifling, the ‘EFFICIENCY’ drive will permanently drive INNOVATION (and hence future growth) out of Europe.  Let’s face it, if it was not for the expansion of the EU towards the vigour of the Eastern and Baltic states, there would be no growth and opportunity and Europe would not be an attractive place to do business.

Europe’s maturity (and risk averse cultural norms) are now so engrained and an anchor and drag on innovation that attracting Foreign Direct Investment (FDI) (and purchasers of sovereign debt) will come more and more of a challenge in future.

The brave thing to do, in our opinion, was to stand up for a fragmented Europe, as David Cameron was prepared to do, because to be lead blindly down the alley, just to be beaten and bruised by the rest of Europe, would not only be folly, but a disaster for Britain.

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Only time will tell, but the Eurozone and sovereign debt crisis has dominated the headlines for long enough, and will continue to do so for some time to come…

theMarketSoul ©2011

…and here is some good news…

 

Adding further value to our conversation on The Market eQuation we introduce the concept of the:

RISKed RETURN on MARKET (RdROM) today on 11.11.11.

RISKed RETURN on MARKET adds a counter balance to the Efficient Market Hypothesis and Rational Market Theory, Black Scholes and CAPM, amongst others.

More detail to follow in due course…

theMarketSoul ©2011

The Big Design: Moral Hazard, and the EU

Irrespective of how the twists and turns of the Greek political system plays out over the next few days and weeks, we believe that the Big EU (Eurozone more specifically) players and their leaders only have themselves to blame for Greece‘s seemingly petulant behaviour.

If at the fundamental level we cannot understand that ANY form of bail-out will always support and lead to Moral Hazard, then we have learnt nothing from the past and the more recent debt and financial crisis of the 2008.

Previously we mentioned the ‘Credit Quake’ with lots of after tremors (attributed to Dennis Cox of Risk Reward), will last for a number of years and this is exactly what we have playing out as daily deadlines in front of our eyes at the moment.

However, to return to the point at hand:  The age of economic dilemma of Moral Hazard has reared its monstrous head again and is in danger of ‘nabbing us in the butt’ (yet again), because the leaders of the EU (more specifically the Eurozone 17) do not want to understand that all their actions in supporting Greece is only leading to a more dangerous form of Moral Hazard and flies in the face of the Austrian School‘s ideas of ‘Creative Destruction‘.

Without effective mechanisms in place to deal with European regions at different cycles of development (not even to mention the basic lack of sound  fiscal management), is to ask for problems (on a continuous basis).

Until a sound framework of either full fiscal and monetary union with appropriate checks and balances are rolled out in Europe, with a single capital market instrument (Gilt / Bond or EuroBond) and mechanisms for dealing with localised ‘failures’ of the market to clear itself effectively (never mind efficiently); we will continue to wretch and lurch about with market confidence eroded and leaders running around like headless chickens trying and implementing inappropriate tools for the job a sound framework is supposed to deal with.

It is not more regulation we want.  It is simply BETTER regulation.  It is that simple.

theMarketSoul ©2011