Our Lessons from 2011

 

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

 

The May 1, 2010 cover of the Economist newspap...
Image via Wikipedia
  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!

    Graphic "When Greece falls" presente...
    Image via Wikipedia
  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
Image by Bill Strong via Flickr

All the best and good luck in 2012.

 

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...
Image by Alex Osterwalder via Flickr

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
Image by palestrina55 via Flickr

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…Is that what we really want?

wm-license-information-description-missing wm-...
Image via Wikipedia

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...
Image via Wikipedia

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.

Deutsch: Weltkarte mit Fokus auf Europa Englis...
Image via Wikipedia

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

Do we value everything and understand nothing?

On reflection, the ‘mechanism’ established to rescue or save the Euro is indicative of the fact that we still understand very little and can control and short-circuit systems to some extent, yet we think we value everything.

Inflation, and dare we state it openly, serious inflation of double-digit proportions must now surely be back on the cards?

We realise that we are not the only and first publication to come up with this analysis.

Bloomberg reported on 30 September 2011 that European Inflation had unexpectedly jumped to 3%, up from 2.5% in August.  Yet, this is still a long way off a double digit scenario, however, the factors mentioned in the Bloomberg report included, the Greek Default (possibility) and the ECB actions still possible in terms of containing European wide inflation.

Although most economists predict that inflation will start to wane next year, we believe that actions like the Greek Debt haircut and the increase in the EFSF’s bailout fund to €1tr sends signals to the market that the value of money is now seriously ‘delinked’ from operational reality.

We will not comment here in depth on monetary policy, as it is currently applied, however, we are beginning to get the impression that inflation as ‘the silent and stealth’ taxation it really is, is now firmly (yet behind closed committee room doors) on the agenda to help “manage” the size of the European Debt mountain.

It is worth keeping an eye on the real drivers of inflation and then there is some value in keeping an open mind.

theMarketSoul ©2011

Frameworks, frameworks, frameworks…

Today (26 October 2011) is an important watershed date (or not) for Europe.

Will our leaders and the politicians be able to agree an all encompassing Framework to rescue the Euro, or will we need to think about a more modular approach for the future?

We believe that it might be in the Euro’s short-term best interest to look for a more flexible, yet fragmented modular approach. However, the capital markets might not appreciate the continuous uncertainty and political wrangling whilst we keep on looking for a ‘best fit’ modular solution and what that might entail…

theMarketSoul (c)2011

Recapitalising Europe

Forget about recapitalising the French Banks, saving Greece, (or the Euro)….

Euro Dominoes

Continuing our conversation on Innovation

Yes, we admit it! The headline statement above is all about grabbing your attention.  We are not advocating any disorderly default crises.

What we believe is that the ‘agricultural’ economic base and the semi-integration of Europe, via market and monetary union, without going the full circle of political and fiscal union as well, has at this point failed.

Not that a major concerted (and concentrated) effort to ensure it does not fail will end in failure itself.  But has anyone really asked the question:  At what financial cost?

If an US Treasury Secretary, Timothy Greitner, has to take the unprecedented step of flying across the Atlantic to come and join a European Union Finance Ministers meeting, then something big must be on the cards!

Is he going to come and tell Germany and France in person to just let Greece go?

This reminds us of a stanza from Felix Dennis’ poem “How to Get Rich” about timing:

“Good timing? To win it
You gotta be in it.
Just never be late
To quit or cut bait.

This might just as well be the message for Europe:  How not to get Poor.  The key words are “Never be late to quit or cut bait”.

What we believe is happening behind the scenes is the planning for an orderly default mechanism and Euro ‘disbanding’.

The more Angela Merckel’s resolve hardens around saving the Euro, the less we believe Europeans themselves are warming to this concept.

 So what about Innovation then?

We started this article with the intention of continuing our conversation on Innovation.

So, what we mean by Recapitalising Europe actually is related to addressing the culture of decay that has enveloped Europeover the last few decades.  If Europe is referred to as the ‘Sick Man’, then there must be something behind that statement.

And we believe that it is the general lack of support for invigorating Europe that is a key driver.

What do you mean, we hear you ask?

In the quest to unite Europe, we have built a framework of a European parliament, a Council of Europe, a judicial system, etc.

With these institutions have come regulation, rules and edicts.  Sometimes messy, sometimes helpful.  But at this juncture, we are so overrun by nonsensical regulation that the will and spirit to be creative and innovative has drained away from the general citizenry.

This is a very, very sad state of affairs.  The young European citizens have lost their ‘psychological contract’ with the wider Europe and European integration goal.  High rates of youth unemployment across Europe is breeding a generation of disengaged European citizens and ultimately is an opportunity and efficiency waste in the medium term.

But how do we Recapitalise a spirit of Innovation in Europe?

This is a key question we are going to ask of our network and as part of our general ‘outreach series’ and report back on our progress towards establishing an Innovation Framework for Recapitalising Europe.

Please ‘tune-in’ again soon for a status and progress up date.

theMarketSoul ©2011