Critique & Self reflection

Financial news are not always easy to understand but they hold crucial information that will help you understand economical development and many different facets of the globalizing world. In other words: Financial news are essential.

From week to week I enjoyed more and more reading financial news because the class had awoken my interest in comparing the different sources. I also got interested in many different stories in the financial world. Therefore it was getting more difficult for me to decide on the topic I am going to write about.

Before I thought news are always objective but this changed quickly after the first weeks. I learned that news differ enormous depending on the country and more important on political influence. I took the decision to write about a variety of topics because I wanted to get involved into different issues and learn from them. Therefore I was looking deeper inside the financial media, its sources and the provocative style/language of the source. Secondly I wanted to see if I can write a blog about a topic I have never analyzed before.

Writing the blog was at the beginning relatively challenging. Comparing the different sources from Germany, UK, USA and other countries broadened my horizon and I felt a strong development from week to week in terms of analytical skills. I learned how news are structured and how the different newspapers try to stick to ones principles. During the time of the UK Election 2010 the news were really interesting in terms of political statements and how the different newspapers deal with daily news and try to influence the reader.

One of the most important outcomes for me is that you should not believe any news without questioning it and researching about it.

Also interesting was the different political approach in the UK news in comparison to the German news, especially during the “Greek crisis” in the last weeks. There were huge differences between the news in the different countries. I tried always to present the most important facts and from week 3 onwards I tried to change my writing style into a more pleasant style. As I looked through my blogs today I saw the improvement of style, language and approach to the reader. At this stage I felt proud because I had achieved something that would help me in future.

I also want to point out that I really enjoyed the presentations of the blogs in front of the class. Presentation skills are nowadays very important and you cannot practice it enough. This activity enriched the class for me additionally. The class prepared me with analytical skills and gave me enough political information to analyze the different sources in the financial world. “Learning by doing” helped me feeling more and more comfortable in analyzing the different news critically.

Overall I had the chance to work on my analytical skills and the blog helped me developing basic skills further.

Helena, I want to thank you for the interesting time and wish you all the best for your future.

Cash for the big ones….

The European Union has trading advantages and the member countries are enjoying different incentives of the Union.

Billions of € are used for Subsidies each year. Objective is helping disadvantaged industries of niece markets develop or survive. However the question is if the money really reaches it original target.

The Sueddetusche Zeitung published a massive article last week about this topic. It is questioned if the “cash” goes to firms and sectors in need or is it just consumed by some privileged Multinational. I agree with the news in saying that it is a very difficult task in researching, controlling and supervision the usage of such cash.

The federal agency for agriculture and nutrition published numbers last week and the result was embarrassing:

• The creamery Nordmilch, a big Multinational, received 51.1 Million €

• SuedZucker received 42,9 Million €
• Pfeifer und Lange: 17.5 Million €

The website of the European Commission takes in a very objective point of view as I thought before. Who else should be more “objective” in this case?

According to The Guardian, the whole situation has to be structured and long term plans have to be made. A statement "We need to get away from food mountains and the race for the bottom and create a more sustainable future" shows the curiosity, but also the present dilemma. In this case The Guardian tries to indicate different present issues and wants to give the reader a feeling for different problems connected to the topic. I like the wording; it stimulated my imagination a lot.

Another article of The Guardian (Who's creaming off EU subsidies?), states about the export support of British dairy products. I really need to quote this:

“The biggest winner, Fayrefield Foods, was able to bank more than £22m over two years, 2004 to 2005. Philpot Dairy Products, the export arm of Dairy Crest, which owns well-known brands such as Country Life and Clover, also claimed a total of almost £22m. These levels of subsidy are enormous relative to the size of the companies: the £10m claimed by Fayrefield Foods in 2004 was worth almost 10 per cent of its turnover, for example, and dwarfed its profits, which were less than £1m. Nestle, whose export of skimmed-milk powder to developing countries has long been controversial, received more than £7m.

The total cost of the dairy subsidy regime across the EU is more than €1bn. Dairy farmers receive some subsidies directly, but much of the money goes to processors and exporters - who are paid by EU taxpayers - to underpin prices”.

This article is wonderful and uses many different examples how the money of the EU is used for different purposes, in technical language this is also called “subsidies” (irony).

The Global Subsidies Initiative (GSI) states hard movements against fraud and abuse of subsidies from member countries of the EU. This shows to me that Corruption is also present in the EU. Clarity of Responsibility is still not given in many situations.

I think that subsidies should be there to stimulate a market in its introduction phase. Other long term subsides like seen in the photovoltaic will just an imbalance into the system. In comparison the “small wind turbine sector” is crawling around and heavily needs governmental support to kick off.

The different newspapers mention imbalanced situations and I think it can even be seen as “fraud” because the purpose of the original intention is not shifted by accident. The system is used by some individuals and there should be more control and action to prevent an abuse of such important mechanism.

The complex topic offers a lot of possibilities to get cash. In my opinion there are always so many options to sneak around or work on a personal advantage. I think that what counts for the EU right now is the “big picture”. The EU has to concentrate on the financial situation (e.g. Greece) and the structuring for the next decade and new member countries. As mentioned in several blogs before, the EU will get more and more competitors from around the world (e.g. China, Brazil...) but as more challenge there is the more possibilities exist also to set oneself apart.

Therefore helpful mechanisms of control should be used appropriate but the main focus should be on growth, financial balance and communication inside the EU.

Sources:

Sueddeutsche Zeitung:

http://www.sueddeutsche.de/wirtschaft/395/509525/text/

European Commission:

http://ec.europa.eu/agriculture/grants/index_en.htm

The Guardian (1):

http://www.guardian.co.uk/business/2010/apr/01/energy-industry-policy-tariffs-renewables

The Guardian (2):

http://www.guardian.co.uk/business/2006/may/21/europeanunion.food

The Global Subsidies Initiative (GSI)

http://www.globalsubsidies.org/en/subsidy-watch/news/european-commission-freezes-subsidies-romania-and-bulgaria-over-charges-corrup

http://www.update.dk/cfje/VidBase.nsf/ID/VB01594377

The “dark side” always brings new possibilities...

Solar Concerns are fighting for their green image. The renewable energy sector offers many new business opportunities that also bring financial investments and new incentives.

But how green is the green development?

Components like silver or lead or Cadmium-Telluride are not always only good for the environment. These elements bring a lot of toxic substances for the environment. Therefore the EU wants to implement new rules and regulations to manage renewable energies, its waste and its “dark sides”.

Der Spiegel – a German News Magazine- published an amazing article at the 25.04.2010. The article states that the industry can not only get easily divided by “good solar energy” and “bad nuclear energy production”. It is more complicated and contains much more trouble and of course there is always a “dark side”.

The solar modules contain toxic components that have a deep impact on the “green” reputation of energy generation. Now the EU is implementing new rules and regulations that prevent the usage of toxic substances. This will cause massive problems for the solar industry.

Expensive recycling or changing production?

The change of production and its “ingredients” would cost the industry millions of €uros and would take years also to get back to a proper and efficient production. Therefore the manufacturers are using another strategy: expensive recycling > change of production.

DeutscheSolar is such a company that got established by the development of the solar sector and is benefiting from the huge demand.

PresseText Deutschland a industry press agency- that states the development in a very objective and general way. It is interesting to read its fact but you have to be quiet “into” the topic to understand the technical language.

Other newspapers as the Financial Times or The Guardian are just approving the growth of the industry. I prefer the German press at this stage because there is much more information about possibilities and challenges in the new market.

The situation brings up new businesses of recycling and other options. For financial investors, this option has a lot of potential according to Spiegel. But still Solar-recycling has to face huge challenges before the niece market will be established.

Financial investments are heavily influenced by European rules and regulations that build the “umbrella” for the different countries in Europe.

The volcanic action in Iceland brought up the topic of “how much power does the EU have over its member countries?” referring to the inefficient and slow decision taking from the responsible departments in Europe.

With this new business sector I just want to demonstrate the massive possibilities of growing and changing niece markets in a more globalized world. Financial investments are necessity to get new markets developed. The “conflict” between the member countries of the EU and its “EU umbrella” will give us a challenging time of finding the “right way” in doing things in Europe. Subsidies, tax regulations, import/export rules and quotas are all financial mechanisms that influence the development and the working together between states.

Solar recycling, the development of green energy supply and other fast developing industry sectors will always have a “dark side”. The objective of the governments should be to stimulate growth of such important and futuristic sectors but also to take care of an intelligent financial, economical and political development for the next decades.

Another point I want to mention is that we have to focus more and more on renewable energies and perhaps we have to change our thinking from only “making cash” to a more durable point of view that includes development of sustainable energy supply and development of investment possibilities at the same time.

The sun is shining, the wind is blowing…

We just have to set it up appropriately…

Sources:

Spiegel:

http://www.spiegel.de/wirtschaft/unternehmen/0,1518,688779,00.html

DeutscheSolar:

http://www.deutschesolar.de/Recycling.293.0.html

Pressetext:

http://www.pressetext.de/news/060613029/siliziummangel-solarbranche-forciert-recycling/

Financial Times:

http://www.ft.com/cms/s/2/48087984-321c-11df-b4e2-00144feabdc0.html

Does Brown has to pay the bill already?

If May 6 may produce a break from the “tired choices” is still not clear but becoming more and more reasonable. Elections are always bringing hype to the media and the whole population of a country but last week’s first TV debate brought up some clashes in the media in Germany and the UK.

According to the German Spiegel, Nick Clegg, the “newcomer” in the scene made a big step towards a turn in the UK politics. The German News Magazine is quiet amused about the TV debate and quietly smiles about the performance of the three “handsome guys”.

The Times wrote about that “British politics have reached American era” and about a “historical day” before the show in the TV was actually shown. Just five years after the legendary Kennedy-Nixon-duel in the USA the “Brown Night” was there…..

Further the German Spiegel describes the 90min debate as boring and without any matrix. I agree with the Spiegel because I just wanted to see something special from three “brilliant” politicians of one of the most important European countries. Clegg “made the race” against the two other fighting superstars and now we have the dilemma…

In comparison the Financial Times made a much more objective approach. In my point of view the FT is not taking any direction actually what makes me feel a bit worried. The interview shows an objective description of the debate (link: http://www.ft.com/indepth/general-election-2010). David Cameron and Clegg the heroes, Gordon Brown losing power, I don’t know where this should lead to…..!?

In contrast, the UK Telegraph is presenting a much more “pro Clegg” article that demonstrates Cleggs input and his positive approach towards change and setting up something the country has not seen before. (The last few leaders did not promise anything like this, right? Good statement so..) The Telegraph is further quoting David Cameron who warned that a vote for the Liberal Democrats risks allowing Gordon Brown to “limp on” in power. The paper shows a very biased approach. Pro Cameron and Con Brown! What a surprise…

The Sun shows a video where Clegg is with students and speaking to them in a very personal way. I like The Suns summary and it’s pointing out of Cameron and Cleggs position. The video and the short article point out the most important issues during last week. Cameron takes in again the role of the “superstar” and the video shows him as the “deliverer” or even as the “redeemer”.

Focus, another German News magazine clearly favors the new and fresh approach of Clegg. The refreshing Cameron turned away from the old and dusty parties and offers something new to the UK resident. “We can do…” “Change”.. Didn´t we hear this words before..... from our American friend....!?

Finally the Spiegel brings it to the point by saying “Gordon…is that the beginning of the end?”

Different articles from Germany and the UK showed me impressive comments about the election 2010 in the UK. The show masters are not that spontaneous and professionals as the American idols but they all came to their statement during the TV battle.

Financial guidance and keeping the economy up is main objective during these stormy times. Brown is having his last chance of being brilliant otherwise the cards are going to be mixed again from Mai 6^th.

The economy, financial development, rules and regulations, taxes, quotas and other financial regulators and mechanisms are directly influenced by the political circumstances.

In my opinion the crisis showed the ability of Mr Brown and his fellows. Now it’s time for the British people to react and to respond to the last period. Therefore we will see if Brown needs to pay the bill already…… Society will make its choice…

Sources:

Der Spiegel:

Der unbekannte Dritte triumphiert

http://www.spiegel.de/politik/ausland/0,1518,689305,00.html

http://www.spiegel.de/politik/ausland/0,1518,689566,00.html

Financial Times:

Clegg rejects Tory election warning

http://www.ft.com/indepth/general-election-2010

The Telegraph

http://www.telegraph.co.uk/news/election-2010/7605935/General-Election-2010-Nick-Clegg-says-poll-points-to-end-of-tired-politics.html

Focus:

http://www.focus.de/politik/weitere-meldungen/grossbritannien-liberaldemokrat-clegg-gewinnt-fernsehduell-gegen-brown-und-cameron_aid_499214.html

The Sun:
http://www.thesun.co.uk/sol/homepage/news/election2010/2936415/Tory-leader-David-Cameron-reveals-plan-to-give-more-power-to-the-people.html

Information wants to be free

Information wants to be free -- Withdraw from China

Google, Facebook, YouTube are just examples of how the young generation is spending their time now a day’s. The invention of the World Wide Web has a phenomenal impact on nearly half of world population in the 21th century.

China with 1.3 billion inhabitants offers a broad application field. In the past weeks different newspapers always mention the conflict of Google and China. Information wants to be free. The internet as source of entertainment is limited in China. Foreign countries operating in China have been quick to see Chinas potential but are largely unable to grasp it. China has different values and strict regulations. Facebook, Twitter and YouTube are explicitly blogged, what you cannot imagine coming out of the western world.

The Economist is describing the situation analytical and is mentioning the fear of western firms that China just opens their own companies that supply the same service. Therefore the World Wide Web could be shaped from Chinese influence easily.

German Spiegel Magazine is quiet keen to present Goggles tactic and to provoke tension between Google and China. Spiegel writes that both sides are showing their power and trying to push the other side to the limit. How far can Google go? How does the Chinese government react?

Result: “Welcome to the new Google home Hong Kong”. Google moved its headquarters to Hong Kong what does not calm the situation at all. The move into the more “special economic zone” Hong Kong brings some advantages to Google. Google does not have to put any filter on its published information any more as the Chinese government asked Google to do. According to the Süddeutsche Zeitung this is not a “completely legal step”. I just like the competitive environment and that businesses as Google have to be creative and innovative to be always “one step ahead”. What made me laugh is the quote from Mike Hammer, one of the speakers of President Obama, where he states that he is kind of shocked that Google and China could not find an arrangement.

I could point out much more critical points like Google being scared of getting blocked and consequently looses the Chinese market. I want to focus more on the overall problematic from here:

Human rights are in the western world the solution to a balanced living together between individuals. China has still other values and will not change them as quick as the western world wants China to change. In my opinion much depends on people’s education and point of view towards development. A democracy is the modern form of a governmental structure in the western world but we needed many years to come to this stage. Google is representing the United States of America. Does the conglomerate fight for human rights? For equality and an “up-grade” of the individual person in China or does Google only want money and market share?

At this stage it is not visible how far both parties will go and how fixed they are to their own opinion.

But it is sure that the duel between the conglomerate Google and China is one of the most representative duels in a globalizing world in the 21th Century. It shows the differences in culture, believes and economic development.

Impressive video:

http://www.podcastingnews.com/2009/09/07/if-facebook-was-a-country-it-would-be-the-worlds-4th-largest/

The Economist

20th – 26th March 2010

Spiegel Magazin

http://www.spiegel.de/netzwelt/netzpolitik/0,1518,685123,00.html

Daily Mail

Süddeutsche Zeitung, 26^th March 2010

The Guardian

Google is another country

http://www.guardian.co.uk/commentisfree/2010/jan/29/google-davos-rusbridger

Financial Times

http://www.ft.com/cms/s/786a16d6-365a-11df-8151-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F786a16d6-365a-11df-8151-00144feabdc0.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fuk

How will Europe play its hand?

To compete against the US and China and other super powers, Europe has to fight as a UNION. The Greek crisis heated up the situation additionally in the last weeks. Europe has massive problems in the euro zone currently what does not help any economic recovery at all.

The Financial Times from last week uses a nice metaphor by putting the different countries on playing cards as the reader could choose his cards. Critique about the countries growth forecast of the four biggest countries in the euro zone (Germany, France, Italy and Spain) is all over. According to the Commission the forecasts are too optimistic. The Financial Times describes the movements in the euro zone always quiet objective and tries to concentrate on real facts. But are not public debts wiping out the benefits of roughly 20 years of fiscal prudence in the EU? Is the Greek problematic not just a symbol for still ongoing trouble between the members of the EU?

In comparison the German Süddeutsche Zeitung is critical about the approach of the Euro zone countries. The newspaper describes the situation as crucial and stressed. A serious scenario, stimulated from the “Greek issue”, is presented and the future of Europe as an economic base and currency area is questioned. Do Germany and other EU countries have to help? When do they have to help? How much? All these questions are not easy to answer. There are no rules and regulations for such scenarios but leaders, countries and commissions are confronted and have to take decisions.

I think all member countries still focus too much on their own aims. The “way of thinking” and the appearance to global competitors are still very individual. Did you ever see Nicolas Sarkozy speaking about great BMW and Mercedes from Germany? Did you ever see Angela Merkel standing behind Gordon Browns and facing the Americans? Yes, but not by far as Europe should appear. Europe has the “ingredients” to create a sensational competitor, a place to be and to live and therefore an outstanding business location.

If the EU wants to “play its hand” and play any important role between the “big players” as US, China or India, Europe has to play the game and try to appear as a Union. Nevertheless cultural background and traditions can be kept. I think that it is not easy to keep the balance between the two poles and all the interests but now with the Greek problematic Europe faces just an example that will show the connection, reliability and trust between the European countries.

In my opinion steadily raising public debts and the whole system of governmental deb is not the correct behavior in the 21.Century. Countries like Italy or France do not leave any safety margin in case economic development does not turn out that “brilliant” as projected.

Countries, governments and people have to take responsibility and have to start creating a future of more harmony and global relation. Also the question of “what comes after the globalization?” is something to think about during taking important decisions.

Europe,….. this is just the beginning…..

- Financial Times Thursday March 18 2010

Brussels warns forecasts too optimistic

http://www.ft.com/cms/s/a1bcd9c4-322c-11df-b4e2-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fa1bcd9c4-322c-11df-b4e2-00144feabdc0.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3DBrussels%2Bwarns%26ftsearchType%3Dtype_news

- The Economist March 20^th – 26^th 2010

- Süddeutsche Zeitung Monday March 22 2010

Warten auf die Katharsis

Does Ben make the world go round?

Can Ben save the world?

For some people Ben Bernanke is a mysterious person, for some he is the marionette of Obama, for some he is one of the smartest person in the world but nearly everyone think that Ben has some of the power “to make the world go round”.

Ben Bernanke is the current Chairman of the United States Federal Reserve, “He just happens to be the most powerful nerd on the planet” (Time Magazine 2009).
The Fed controls the money supply and is an independent government agency that conducts monetary policy, which means it sets short-term interest rates. Ben is therefore influencing inflation, unemployment, the strength of the dollar and therefore the strength of your wallet.

According to Spiegel, Ben´s nightmare is the presence of global economic crisis. But worse would be that he is in charge and taking the wrong decisions. Spiegel and Focus, two German newsmagazines were determining Bens work last week in a kind of humorous but also scary way. The main focus was on the power that is given to one person in the 21th Century. Also if Ben looks like being the “right one” but is it right to give so much power to “King Ben”?

When the housing market crisis of the U.S. turned into the worst global financial crisis since many years, Ben blasted trillions of new dollars into the economy to rescue falling private companies, he ratcheted down interest rates to zero and gave money to borrowers who had never dreamed of receiving Fed cash.

The US Time Magazine is describing the situation very exorbitant what makes the situation funny and the reader smile but behind the whole scenario is pure seriousness what the reader never should forget. Probably the whole situation about the Fed and its global influence is so unreal and inconceivable so that you can only joke about it.

Focus is presenting facts about the Fed and its development under Ben Bernanke but not even close to the overwhelming and smart way as the US Time Magazine does it.

In comparison to Focus, Spiegel focuses strongly on future development and possible change of the influence and power of the Fed. Conspicuous but also coherent is that Ben directly tries to protect the power of the Fed. I think there is much more going on behind the setting what we cannot see from outside. How close is Ben to President Obama? What deals are made there?

“It is with considerable gratitude and not a little humility that I begin a second term as Chairman of the Board of Governors. I thank President Obama for the confidence he has shown in me by renominating me and the members of the Senate for confirming my nomination” (Speech, Chairman Ben S. Bernanke, Feb. 03.2010). The New York Times is writing critically about the second nomination what I think is correct because the reader should be stimulated to think about what is going on when such important steps are taken without any vote or democratic activity.

In my point of view Ben is one of the most important player guiding the world's most important economy. He definitely helped ensure that 2009 was a period of weak recovery rather than catastrophic depression. What scares me is that one institution, one man; one Ben has so much power to shape the path of the U.S. prosperity and even the direction of politics. What happens if this power is in the wrong hands? Did we not learn in the past years of history that too much power hold by one person can lead to the ruin….

I think Ben is one of the personalities that can manage this job, but what if he wants too much? Saving the world is not always easy and the future will bring up quite interesting challenges. Yen contra Dollar. Enthusiasts are switching out of dollar and into alternative low-yielding currencies such as yen. The dollar is therefore becoming less and less popular. This is only one issue Ben has to keep an eye on during his next four years at the Fed.

Ben has to learn that he cannot be friends with the whole world. Perhaps the dream of “saving the world” all the time is lovely but also keeps huge possibilities of failure. It's now up to our dysfunctional political system to let him do his job — and to fix the financial system so that he never has to save the world again.

Ben, good luck!

Sources used:

-Financial Times, Friday March 12, 2010

Increasing interest sparks movement

-The Time Magazine

Viewed: 14.03.2010

Available URL: http://www.time.com/time/specials/packages/article/0,28804,1946375_1947251_1947520-6,00.html#ixzz0iEkQtwpc

-Focus

Viewed: 12.03.2010

Available URL: http://www.focus.de/finanzen/news/konjunktur-bernanke-sieht-moderate-erholung_aid_483883.html

-Fed

Viewed 12.03.2010

Available URL: http://www.federalreserve.gov/newsevents/speech/bernanke20100203a.htm

-Spiegel

Viewed 10.03.2010

Available URL: http://www.spiegel.de/wirtschaft/soziales/0,1518,683512,00.html

-The New York Times

Viewed 14.03.2010

Available URL: http://topics.nytimes.com/top/reference/timestopics/people/b/ben_s_bernanke/index.html

-Business Week

Viewed: 14.03.2010

Available URL: http://bx.businessweek.com/ben-bernanke/view?url=http%3A%2F%2Fc.moreover.com%2Fclick%2Fhere.pl%3Fr2621123950%26f%3D9791

-Financial Times

Viewed 12.03.2010

Available URL:http://www.ft.com/cms/s/cefbcbc4-2184-11df-830e-00144feab49a,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fcefbcbc4-2184-11df-830e-00144feab49a.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3DBernanke%26ftsearchType%3Dtype_news