Obama unveils plan for $ 50 billion for infrastructure

Spend or not spend, that is the question. Philosophical, and above all political. On Monday, Barack Obama has chosen the first option, announcing the day of Labor Day (Labor Day), a plan to allocate at least 50 billion dollars in road, air and rail.

The goal is obviously to create jobs while the unemployment rate has stagnated at 9.6%, desperately despite latest figures less bad than expected in private last week, and popular discontent rises. Problem for the President, within two months of the midterm elections, Republicans will do everything to thwart his plans and maximize their chances of winning the House of Representatives on November 2. Worse for Democrats, some pollsters are even considering a takeover of the Senate, one third of the seats are at stake

Republicans against a 2nd stimulus

The plan, spread over six years, includes the construction and renovation of roads (240,000 km) of railways (6,400 km) and 240 km of runways. Given the state of America’s infrastructure, it would not hurt.

Republicans immediately lambasted the plan. With their rise in the polls, they have every incentive to drag things. The Representative Eric Cantor, a rising party, denounced “a stimulus of more” after a first effort of 800 billion dollars in 2009. Repeating the classic conservative mantra, he calls out “immediately reduce spending” and “lower taxes” to “relieve the private sector and creating jobs.” John Boehner, who would become the boss of the House if the Republicans win, had recently called Obama “fired” his entire economic team, Treasury Secretary Tim Geithner at the top.

A Nobel economics calls for spending more

Obama does not allow himself to do. In poorly in the polls, he tried on Monday to refresh the memory of voters. “The Republicans think you are amnesic. They forget that it was they who got us into this situation, “he said in the stricken town of Milwaukee.

Others call finally outright to spend more. In the columns of The New York Times, the Nobel Economics Paul Krugman laments the reluctance of Obama during his first 18 months at the helm. “His recovery program was not ambitious enough and was stopped too early,” said he. And to compare the situation to that of massive spending salutary 1938. The only difference at the time, the 2nd World War had passed the pill.

Between debt crisis and lack of credit

The annual report of the Governor of the Bank of Italy is usually the more cautious economic public document, whose topics are selected and measured with almost the precision of sling used for weighing gold and gemstones. The attempt to bring it into many of the lowest common denominator has been designed to support the recent move of budget cuts is a bit ‘provincial and limited. Rather we should share the concern of the governor at the widespread corruption, lawlessness not only for tax and the failure to reorganize the public administration.
In our view, however, disagree Mario Draghi has some major weaknesses that would require more study. Immediately evident that he repeated several times that “central banks have provided liquidity to an extent unprecedented in both the case of Lehman Brothers in the most recent euro. “The exceptional expansion of liquidity measures have avoided a systemic crisis,” he recalled.

But this liquidity is going to cover, inter alia, “deficits and public debts have risen dramatically.” For the euro area, “the massive creation of debt, in a phase where it is due on the outstanding amount of bank bonds markets has suddenly increased the risk premium on a number of sovereign debtors,” said Draghi, highlighting this great and grave concerns that plagued all the heads of institutions of governance and control of the economy and finance.
The public debt of the euro countries, which will come to an end in 2010, to 540 billion euros, to which you are adding new debt for a total of almost 930 billion of new issues. In 2010 Italy will have to repay 250 billion for licenses. Then 192 in 2011 and 168 in 2012. Repay, as noted, means simply issue new securities to replace the old ones. The problem is finding buyers willing to buy at a fair interest rate and not punitive.
In addition to the growing problem of sovereign debt, emerging strong competition among banks to win European and American institutional buyers of bonds. According to some estimates, about 40% of the 2,000 billion dollars of large U.S. funds consists of 16 major titles of European banks. Draghi also said that with the onset of the Greek crisis, severe liquidity strains in the interbank market have returned and the operation is focused on the short term. ” Currently, U.S. investors for roughly $ 500 billion in short-term credit operations of European banks.

The wind is changing and some U.S. funds are beginning to withdraw their funding from Europe. It is not only financial game of geopolitics, but employees are decisions by the situation in U.S. debt. An example is given by the recent request of the insurance giant American national interest, real estate, Fannie Mae, new emergency aid to 8.4 billion dollars. Fannie Mae, which was saved from bankruptcy in 2008 with public funds, the portfolio has 3 trillion in mortgages whose value is deteriorating. He recorded 11.5 billion loss in the first quarter 2010. Its total losses accumulated by the explosion of subprime is 145 billion. Almost half the GDP of Greece, for instance.
Albeit quietly, Draghi warned that “banks must be prepared to face even prolonged and recurrent periods of market anomalies.” After recent experiences, it would be irresponsible to leave the market the magic task of responding to this emergency. Therefore become extremely urgent agreements between states and governments of the G-20 to prepare a new governance and new rules on finance in the dragons has stood up as president of the Financial Stability Board.
Facing then, with regard to our country, the core of the relationship between the economic recovery and access to credit and solvency of small and medium enterprises, the governor reported that “credit companies was down 3.7% in December 2009 compared to September, because of year. ” Percentages, the main decrease was recorded for more industries than the North already a tight access to credit in the South. Signs of improvement have been swept away by the euro crisis.
As is clear from the report of the Bank of Italy, “the recession worsens the liquidity of bank loans and credit losses in 2009 of the five largest Italian banking groups accounted for almost 70% of operating profit.” Despite the recent financial aid package EU, the ECB estimates, optimistically, that European banks will face write-downs suffering credit equal to 187 billion between now and end 2011. During the same period the same banks will compete in European and EU countries because “it will thicken deadlines for significant amounts of bank bonds.
In this race of governments and banks to finance their securities, SMEs, the engine only with the resumption of productive work, could be closed taps credit. It would be naive to rely only on a newfound willingness of banks.

We believe the government’s emergency operational plan of Deposits and Loans Fund to create a special fund to finance long term projects and technologically advanced of Italian small and medium industry. SMEs are the only camel working. It can withstand long drought, but he died without water!

Economists can not predict

The ponytail that had made such a stir among the Swedes when they handed the Nobel Prize in 2002 no longer exists. There remain a few silver rings, a medallion of Adam Smith’s neck, the desire to understand the origins of the crisis and the passion to explain. Yesterday, Vernon Smith, who makes his students read Smith (Adam) and David Hume held a dialogue with the editors of Il Sole 24 Ore on issues related to the crisis of the state and the market (in the afternoon will be available the recording of the forum).
The American Nobel laureate, 83, always uses laboratory experiments to test the truth of economics. “We learned about the crisis day by day – debuted -. Economists, despite not having foreseen the tragedy of the situation, they did a good job because they have adapted to events: we have become experts in experiments. Without forgetting the lessons that come from history. Between 1922 and 1926, recorded an increase in costs to buy homes, to reach the minimum close to the outbreak of the Great Depression, the same situation just before the current crisis. But still to be deciphered in its complexity.
He could foresee the crisis? We were careless or was a new event so as not to be deciphered?
This crisis was not foreseeable, is part of the nature of bubbles, which are also unpredictable. People leave sucked into a kind of expectation continues that feeds itself on prices increasing: it was always like that in centuries past. The crisis is not sustainable will come to an end, although we do not know the times. We understand the rules in the stock market: the bubbles hurt investors and, therefore, banks and other stakeholders. You can not predict the bubble, but to protect those who participate in the market, you should limit the damage.
What will happen to the euro?
For some ‘time I thought that the decline of the dollar could not last and that there would be a reversal in the ratio dollar / euro, not because the U.S. economy was going well, but because I thought the Europeans had learned how not doing things the wrong way.

The industry beats the crisis

The Great Depression from which the world economy is struggling trying to get out has highlighted once again the primacy of industry and finance. If Italy and Germany have stood the pressure of the crisis better than other countries, this fact is largely due to strong manufacturing structure of the two economies, made of steel rather than paper (in the ephemeral sense of the word).
Just as steel now offers an example that is a summary of the ‘pride of doing “: the group of Cremona Arvedi scheme has led to a revolutionary system in the world of steel that was presented yesterday to the international community in the field. This is a production line for sheet metal coils (coils) that from the wreckage, without interruption, leading to the finished product: a “train” along 170 meters during which the raw material to 1,500 degrees, in continuous casting is transformed into rolls of steel strip which then takes away the industry, primarily automotive and household appliances. This unique facility, designed within the group and produced by Siemens Vai, protected by 460 patents, offers a series of revolutionary innovations: today is produced in one hour what previously was achieved in weeks, thanks to a line only replacing a process divided into two separate establishments, the resulting flexibility enables it to meet demand in real time, just in time addressing the need of client companies, enabling them to lighten up the store (very much felt need in times crisis and market volatility) for the first time has been obtained by hot rolling steel strip thickness of 0.8 mm, much demanded by the market (before they were made cold by further processing) . All this offers new market opportunities and competitive, with savings on energy costs and overall process estimated at 30%, and part of this result is “shot” to customers.
The plant cost 500 million, financed with equity and 300 200 with eight years of funding from a consortium of banks. “2007 and 2008 were very good years that have allowed us to make hay in the barn,” said group president, John Arvedi. “We realized early on that in 2009 and 2010 were critical years and we have focused on innovation and new markets.” The group (1.4 billion turnover and 132 billion EBITDA in 2008) succeeded last year, even before then to bring the system to the new facility, to expand especially in the Middle East (“Europe is a big mistake to leave that rich country orbitino only under the influence Asian). The results were significant: “We worked 100% of our ability, when all our competitors in the Western world have not exceeded 50%. The profitability was in line with the previous year. We have neither fired nor used layoffs, and the new line we hired 600 people and assume another 150. “
While complaining of volatility in commodity prices caused mainly by speculation (nickel, zinc and other metals exchange markets amount to 20 times the actual consumption of industry, a situation difficult to manage) Arvedi sees as positive the next years: “In the Western world consumption is 500 kilograms per capita in China half, one quarter in India. It means that the potential is still huge markets for billions of people. Steel is far from a mature product: indeed, a modern country is identified in steel consumption. “

The Commission studies measures to streamline the procedures

Unclear procedures and unnecessarily complicated: this is the opinion of many researchers on the process for obtaining European funding for their projects. Admitting it is the same as the European Commission, which proposed new rules to simplify the application and management of funds.
The plan – contained in a communication dated April 29 last year – provides a first block of news about the launch of computer systems more efficient, streamlining administrative procedures, more consistent application of rules and the timely publication of calls for proposals.
According to a second block of changes then do not have to specify every item of expenditure and accounting will become more similar to that used in the Member States provided for the simplification of existing financial rules while maintaining a more effective control, to example extending the use of ‘methods for calculating average costs, by which avoids having to account in the projects with “painstaking” every single expenditure item, even minor ones.
These measures are not immediately operational: the Commission undertakes to submit a proposal for revision of financial regulation to be considered but the European Parliament and Council. The effect is not expected before 2011, as reported by staff of the European Research Commissioner Máire Geoghegan-Quinn.
Finally, there is a third tranche of changes addressed in future research framework programs, primarily the eighth program under which the regulation is passed by Parliament and Council in 2013. Among the possibilities under a given orientation ‘payments by results, “according to the recipients, instead of notifying the individual items of expenditure, would receive lump sums for certain tasks in science and should show that they carried out effectively and efficiently. The same logic underlying the action of the European Research Council (ERC), which gives grants of up to 2 million euros to individual researchers.
“This is a lump sum amount – said Alberto Mantovani, Istituto Clinico Humanitas scientific director and member of the ERC – there are strict reporting requirements and assessed on the basis of scientific results.”
The Commission, meanwhile, has initiated the process for the interim evaluation of the Seventh Framework Programme: a group of independent experts, chaired by Rolf Annenberg, Director General of the Swedish Council Formas will submit a report in the autumn.
And on a time horizon longer period begins to outline the new ten-year economic strategy of the European Union, stressing the importance of research to exit the dark tunnel of recession and the target of a long-term growth. One purpose is to be able to bring research spending to 3% of European GDP to attract leading researchers and innovative companies.

Italian companies, wanted accountants

A survey by Robert Half – specialist recruitment company – the world of work has highlighted the extreme lack of administrative staff: an Italian in five is completely lacking this professional.
For 41% of Italian firms (27% in Europe) the cause is the difficulty in finding skilled personnel.
20% have planned recruitment Administration and Accounting within the next six months, to cope with the increase in turnover for the business.
The crisis makes it even more important than careful analysis of the accounts of the company to reduce costs, recover cash, collect receivables and expedite the legal practices.
Among the reasons why Italian companies plan to strengthen the administrative structure are: increase in business (48%), increased administrative (27%), upgrading of information systems (18%), corporate mergers and acquisitions ( 3%) increase in regulatory requirements (0%), other reasons (3%).
Among the qualifications required will be more than an administrative employee (25%), accounting (22%), staff with operational roles (-13%), internal auditors (8%) and expert in compliance (7%).
The Observatory on employment in administration and finance has also involved Italian leaders, who complained of too low a level of preparedness among the candidates and then a gap between demand and supply of labor.

Analysis of business , using Excel

Compiled by companies at year-end, the budget represents the static form in the financial position and financial performance, to meet the information needs of legal, tax and management. Modifications to the rules of the Civil Code (Articles 2423 to 2424), involving the preparation of financial statements – consisting of balance sheet, income statement and notes – with the transposition of Directive EEC IV, have improved the quality but did not alter conception “static” document itself.
More information (not only administrative and accounting) can then be obtained with the reclassification of balance sheet and income statement, and through the calculation of indices (relationships between items in the SP and CE reclassified), we can calculate with Excel.
It is a common practice for Italian SMEs, imported by the Anglo-Saxon countries and deemed useful tool to analyze the company and identify potential weaknesses.
Among other things, with the introduction since 2004 of new rules on the procedure for evaluating the creditworthiness of banks (Basel 2) the information system based on financial statements, has acquired additional strategic value in strengthening the corporate image based on the ability to count towards their customers, suppliers or potential business partners and investors.