Lyeux

Finances do not smile to Nvidia

Nvidia made public this week the assessment of the 2nd quarter of its financial year 2010 (it finished on July 26). And for the second consecutive time in as many quarters this year, finances are in the red for the firm with the chameleon. The sales turnover is in rise all the same compared to the first quarter of the financial year, of 17% with 776.5M$ against 664.2M$ in Q1, but one remains far from the 892.7M$ same period last year (- 13%). And especially, not of benefit once more for Nvidia, which posts losses with height of 105.3M$ for this quarter. The situation improves all the same compared to the previous quarters when they rose with 201.3M$. One of the primary reasons of this delicate period would be once more “famous” the business of the defective chips of the mark, which would have cost these last four months not less 119.1M$ in follow-up of the situation (replacement of defective chips etc…). For recall, the analysis and the correction of the problems in question had already cost close to 200M$ in July 2008. A note of hope all the same: Mr Nvidia, Jen-Hsun Huang, put on an increase in CA from 5 to 7% at Q3, and especially on a return for the benefits.

The saga of the summer

We summarize: we saw how between a 2002 and 2006 real estate bubble developed in the United States containing subprimes (mortgage credits) distributed to paid poorest tolow rates to the beginning, and explosives at the end of 2 years. The system functions if interest rates are weak (bond between rate of the EDF and rate of the mortgage deeds), which is the case until 2004 and if the prices of the real estate continue to go up, allowing the refinancing by positive richness effect. The appropriations subprimes are disseminated in the credits of the economic agents most various in the whole world via in particular securitization.

This bubble falls under a continuity of bubbles (Internet…) and is explained by “an abundant money and not expensive” but more deeply by the economic, banking and financial structures founded with the beginning of the year 1980 by the ultra liberals.

I will reiterate here the essence of my chronicle n°22 of March 2009 which will allow us a setting in historical prospect.

For well to include/understand financial crisis and economic current, it is necessary us to return behind and to include/understand that nothing arrives randomly, that it is not fate, that universalization financial and economic is precisely the fruit of political decisions aiming at déconstruire what had been built, the shortly of the crisis of 1929-1930 and obviously in the name of the reform and after modernity (already and always!).

I will be voluntarily synthetic in order to have initially an overall picture and then to arrive more quickly at “than to make now? ”.

Moreover, for deepened analyses, fine, intelligent and stimulative, I return you to the writings of F. Lordon but also to the brilliant analysis of the CA Michalet universalization to detail the various mechanisms of them. It left.

A whole structure was installation in the Eighties in the world and in France in particular thanks to the banking law of 1984, the European Single act of 1986: thank you Socialists, and thank you Jacques Delors!. The principal elements of this structure are:

- the deregulation of the markets of capital (financial sector and banking) which is the freedom of the movements of capital or, differently known as, lifting of the exchange control (i.e. the possibility outward journey and return of the capital), freedom in order to escape from controls from the States, the tax and the law (bleaching…) ;

- the banking desintermediation which gives access directly and easily the markets to be financed without being obliged to borrow near the bankers (collecting saving) by thus introducing competition;

- decompartmentalization of the markets of capital inside the countries as between them (i.e. the abolition of the borders between for example stockmarket and mortage market) which “puts an end to traditional division work between the deposit banks (commercial) and the investment banks (of investment)” – principle going back in France to 1860 – and that opens the spectrum of the placements and thus loans, possibilities increased thanks to new technologies which constantly make it possible to be connected on any money market of the world by involving a very great volatility of the capital;

- the opening of the capital of the companies, i.e. the abandonment of the cross participations which protected them from the stock exchange raids and the pressure of the courses;

- financial innovations or “financial proliferations” (F. Lordon) unbounded with for example the famous securitization which is the operation indicating the transformation of granted bank credits – and right from the start they are doubtful debts – in negotiable financial titles on the markets, and that develops what the specialists call the out-assessment of the banks what means that in fact any more the banks support the risk of the credit (cf subprimes);

- various incentives so that the manager defends as well as possible the interests of the shareholders (stock-options…).

The unit is nourished with the ideology of the autolevelling market and the belief in the virtue of the men!

Thus one attends in the passing of an entrepreneurial capitalism a financial capitalism/actionnarial, which F. Lordon calls pressure “basic capitalism wage”, i.e. with the passage of the creation of richness to the famous creation of value with the 15% of return on investment ROE (Return one equity), namely profitability financial required by the shareholders, which Michalet invites “the magic rate to satisfy the new Masters”. Known as still differently, it is the mode of the domination of finance on the economic one.

A promise of paradise on ground!

Now let us evoke the principal consequences of these measurements which, taken together, make system.

A pressure develops cascades about it on the whole of the companies, even on those which are not with dimensions. Because, if the CAC 40 they are only 40 large companies, by contagion – clients in subcontracting and delocalization – the constraint of the 15% (ROE) diffuses and imposes its law mortal on all, except with the profitueurs.

Also a competition develops with the social lowest bidder (wages, social protection) and tax (to soften the taxation of the high incomes, capital incomes thus). That results by a new distribution of the richnesses and especially in the collecting of a great part, increasingly larger, richness with the detriment of the public services, poor workers, middle-class, emergent countries, the poorest countries…

This research of the profit for the profit also contaminates the brains, including without our knowledge, and is diffused in new fields like the school, health, research…, by confusing effectiveness and profitability, quantitative and qualitative.

A note:: this creation of value is only fictitious since the trees never climb to the sky. But all the actors taken with this trap made pretence believe in it, and they seemed to them well to be right to believe in it since the tree climbed, climbed and even if there were many crises, but so remote (sic): 1994 Mexico – 1997 Thailand – 1997-98 Southeast Asia – 1998 Russia – 1999 Brazil – 2001 Turkey – 2001-2002 Argentina – 2001 Bubble Internet.

But attention not to be been mistaken in target. Kerviel and consorts are rotted or covetous only you and me (good perhaps a little nevertheless!). They made their job and made a point of preserving it, taken with the trap. They were to make as well if it is better only the neighbor.

Here not of morals nor of ethics, just a play of the structures, incentives. A structure which forms system.

My point of view on the policy debate of public finances 2010

France passes through the most serious financial crisis since 1945 with more or less of happiness if one compares our situation with that of our immediate neighbors.

We must continue the efforts which were made and prepare our country to be exceeded completely and durably this crisis. We should benefit from it to accelerate any initiative going towards the digital economy, towards the companies of high technologies, small or large which would bring a true medium-term appreciation and a vision as regards innovation.

But the economic crisis is not only the person in charge of the degraded situation of our public accounts. The successive governments made watch of much lightness as regards public expenditure; left like the line. Only centrists, when they were with the capacity had a true culture of financial stability.

The revenues from taxes will still know a strong fall this year, because of the general deceleration of the activity. The decision to give up the professional tax, even if this idea is good in the absolute, should be cold the time necessary to cover with more legibility in the evolution of our rooms for maneuver.

If one believes the Course of the Accounts of them, the situation of the accounts of the State would approach the 140 billion euros of deficit, that is to say more than 7% of the GDP for a total debt estimated at 1330 billion euros. It is true that with so vertiginous amounts, one is in right to wonder structural solutions whether could be found quickly to reverse this situation?

The social accounting posts as for them a deficit of 30 billion euros. It, even if is compared much with the national debt, they remain in more modest values and proportions.

Nicolas Sarkozy had the idea of this great loan about of which everyone speaks without knowing with how much it will amount and atwhich rate of remuneration it will be established. The idea of a great loan is all the more astonishing as the State borrows every day. And it is well one of the reasons which explains its strong deficit.

It thus acts more than one political operation that financial. If the State borrows in a media way this time, that it makes better use of it and that it uses this money to inject it into the innovative companies.

But it seems to me worrying that decision makings concerning the economy are played more and more on the media slope. Let us take the fall of the VAT on the restoration: here a decision electoralist which will not lead to any marked improvement of the profession, nor on a better remuneration of the many employees who depend on it. A smoking which does not regulate anything, but which costs us still a little more.

The only decision which would be innovating would be to attack the tax niches. At one moment when much claims more transparency and debates in the political decisions which are made and are for nonthe office plurality of the mandates.

It seems to me that there would be like an air of cousinage with this great reform, if it were to be undertaken seriously.

Finance law in Algeria: Louh answers the owners

The Employment and Minister for Labour Tayeb Louh chose the SNVI to answer the interrogations which the complimentary finance law particularly within employers’ associations caused.

“I chose this symbolic system place in order to give the support of the government to the encouragement of the production and of the national investment” within the new framework of the economic policy, the minister declared, before answering criticisms which fuse of all shares on the complimentary finance law 2009.

Tayeb Louh will say initially that the economic measures contained in the LFC come to devote the production and the national investment, the fight against the counterfeit and devotes a development of the nation’s economy based on the investment and not on the importation. Employers, adds it, “must recognize that the invoice of the imports knew one fulgurating increase until reaching the 40 billion dollars in this first half of the year”. In front of such a situation, Louh will say, “the government could only make such decisions in favour of the nation’s economy”.

The minister will add that the policy of job creation and fight against unemployment cannot lead under conditions where our economy functions only by the importation, making the happiness of the exporting countries of these products. “One cannot continue in such a step with such a high volume of the imports”. These measurements were taken, has it says, also so that there is investment in our country. The minister will point out that the complimentary finance law founded measurements for the promotion of employment. It is about the extension of the exemption of imposition from 3 to 5 years as regards SME employing 5 people. Idem for direct foreign investment (IDE), the companies installed within this framework which will employ 100 workmen will see their times tax exemption to pass from 3 years to 5 years. As regards the guarantee association of the investments, the banks, has it says, cannot pretext the risk of insolvency for the creation projects of companies within the framework of the ANSEJ or the CNAC since the capital of this case was increased by 20 billion DA to 40 billion DA.

In the chapter of the national production of the drug, the Employment, Minister for Labour and Social security will announce that new measures will be taken in the few weeks to come with regard to the sector. Among most important measurements, the minister will evoke the widening of the list of refundable drugs. Other products (medicamentous) will be subjected to the price reference frame of the credits “not need for importation with the detriment of the investment”, it supported.

Retirement pension: increase of 5%

About the retirements, the minister will indicate that this year, the pensioners will see their retirement pension revalorized of 5%. The latter will perceive their pension with the last 4 months retroactive effect until next September.

Louh, which was delayed on the improvement of the conditions of the pensioners, will plead so that the pensioners are dealt with effectively. It indicates that its department will launch a study which consists in improving the pensions of reprocessed whose loads are considered to be important (children and parents in the need) by other supplements.

For the moment, that remains at the stage of the project but according to Louh, it is possible that this project takes form.

Louh seems, in addition, satisfied that the majority of the pensioners suffering from chronic diseases profit from the chart from the third-party payer.

About the contractualisation, the experiment launched in the wilaya of Annaba, has it says, gave satisfaction and it will be generalized with all the wilayas of the country.

Recovery package for the SNVI

The chairman of the SNVI Mokhtar Chahboub indicated, yesterday, that the recovery package of the company was accepted by the participation council of State (CPE). Before the end of the year, it has says, the company will be equipped with a working capital and funds of investment.

Moreover, this company, which employs more than 6.700 workers, will need 2.000 employees in mechanical engineering to recruit from here 2014. A 3Ecole Nationale Sup3erieure of technology will open its doors next October where 200 new graduates will continue studies in mechanics and management. This school will be created by the ministry for Higher education in partnership with the national Academy of arts and trades of Paris, indicated it responsible for human resources of the company, Nadia Taki.

The service of management of personal finances Mint.com raises 14 million dollars

Third round table for the service of management of personal finances Mint.com, which announces to have raised 14 million additional dollars at Founders Fund and investors already present at the capital, among which Benchmark Capital, Shasta Ventures, First Round Capital and Sherpalo.

Essential in times of crisis? Mint.com makes it possible to the private individuals to very precisely follow their expenditure through an interface connected with their various accounts. From the statements emitted by the banks, the service lavishes various analyses making it possible each one to have an precise idea of its budget, its expenses and its money re-entries.

Mint.com assert today 1,4 million users, primarily in the United States, and would indirectly manage a capital of more than 47 billion dollars credits. Volumes of data such as the firm plan to soon make studies on the behavior of the consumers.

The start-up, launched in 2007, said not to be with course of liquidities. This new lifting of funds should thus enable him to recruit new engineers and to accelerate his development. In spite of this new participation, which carries the investments granted some 31 million dollars, Mint.com abstains from communicating its valorization. Below, Mint.com presented by its CEO, Aaron Patzer (in English).

United Kingdom: the Minister for Finance ready to legislate on the no-claims bonus

The British Minister for Finances, Alistair Darling, declared Sunday ready to legislate on the juicy no-claims bonus which seem to make their return in City, financial heart of London.

Estimating that the granting of no-claims bonus based on short-term results had had “catastrophic consequences”, the Chancellor of the Exchequer declared that, “if it is necessary to amend the law and to tighten the things, we can do it”.

“It is clear that certain problems to which we must face today were caused by the fact that traders were encouraged to take risks that neither they nor their owners entirely included/understood”, added Mr. Darling during an interview to Sunday Times.

“The population at a rate of worrying because the taxpayer had to support several of these banks, and even the whole of the banking system, in fact. People want to thus have the certainty that we will not revive the same situation”, it continued.

This declaration intervenes at the time when the financial institutions of City seem to join again with the no-claims bonus guaranteed over several years and without bond with their long-term performances, a practice denounced in London and in the world like having worsened the financial crisis.

Sunday Telegraph affirms thus that Barclays, one of the rare banks in the United Kingdom to have rejected any public recapitalisation, offered up to 30 million books (35 million euros) of no-claims bonus to five traders high-speed motorboats which she would like to discharge of American JP Morgan.

Financial Services Authority (FSA, British gendarme of the markets) has Wednesday enacted eight rules to which the large banks of the United Kingdom will have to subject themselves from here to January 1.

The FSA in particular will impose that the major part of the no-claims bonus (at least two thirds of their amount) is versed over three years, and that they are related to the individual performances of the employees, but also of their teams and their group.

But the Authority did not go until putting a ceiling to the amount of the no-claims bonus, estimating this problem was spring of the policy and law.

Ulla Schmidt rejects criticism at financing of the pig flu inoculation

Federal health minister Ulla Schmidt (SPD) rejects the criticism of some Federal states at the financing of the pig flu inoculation. Schmidt appeals rather to the countries to pull with federation and cashes with the fight of the illness on a strand said a spokeswoman of the Federal Department of Health on Friday in Berlin. The protection of the population has absolute priority. Schmidt warns of it that the discussion is placed over the financing into the foreground, also is responsible the countries for the disaster control. The spokeswoman announced consultation with the Prime Ministers over this question.

Criticism to it came from the countries. Of Bavaria ministers of health Markus Söder (CSU) said in the pool of broadcasting corporations, there had „a completely clear regulation to be that the cashes and the federation take together this responsibility for the cost financing “. The North-Rhine/Westphalian minister of health Karl Josef Laumann said in „Financial Times Germany “: „If Mrs. Schmidt that differently sees and for it tax proceeds to make available wants, then she must do that from Federal Funds. “

Schmidt had agreed on Thursday with the cashes on an allocation of the inoculation costs, so that the cashes know the inoculation without contribution increases and auxiliary contributions financiers. The regulation plans that the cashes take over the costs of the inoculation of half of the population, the remainder carries then the state. Over the national participation she, if there were a high recourse to of the inoculation, said then would have the Federal Government and also the countries their „responsibility to take over “.

The protocol of financing of the LGV is signed

The protocol of financing of the project of the line at high speed was signed on July 29, one year exactly after the signature of the protocol d’ intention. A decisive stage in advanced project.

This signature took place on July 29 with the ministry of the Ecology, of the Energy, of Sustainable development and the Sea, in the presence of Jean-Louis Borloo. Gerard Lahellec, vice-president in load of transport to the Brittany Area and Patrick Delpech, president of the commission human solidarities and territorial to the Area Country of the Loire represented their respective communities.

The signature of this protocol by all the partners (Brittany Areas and Pays of the Loire, State, Rail network of France) mark thus a new stage in l’ advance of the project of line at high speed. The  objective of this signature is indeed to precisely fix the levels of contribution of the various partners and the methods of payment of their financial oarticipation. That being made, consultation of the companies for l’ attribution of the partnership contract and the starting of work, at the end of 2010 will be able to start.