Herve van Caloen

Value, long-term horizon, long only, contrarian
Herve van Caloen
Value, long-term horizon, long only, contrarian
Contributor since: 2012
Company: Belpointe Asset Management
The share economy is past tense?
Agree, but there is a lot of fat to cut. I hope they are serious this time.
You make a good point, Mr. Sleek. (Yes my name is van Caloen, an old Flemish name). However, pension expenses as a percent of GDP is still very high compared to Ireland's 4%. Ireland too experienced a contraction in their GDP. Let's assume that the Greek GDP shrank 25% and that it used to be "only" 10%, that is still unsustainable when in crisis - and more than Germany. It is just a complete misallocation of resources due to clientelism. I did not even go into anecdotes like certain professions entitled to pensions at the age of 50.
Thank you, Bruce. I think this time there will be real constraints. The money will be dispensed gradually and only if the Greeks meet some targets. But I could be overly optimistic!
Risketon, FX stands for foreign exchange.
I agree that the stock price overreacted, but I do wonder why Alcatel was so eager to sell itself. This merger looks like a defensive one as both NOK and Alcatel are seeing pressure on margins. Such a defensive merger does not bode well for the industry's overall margins.There could be more price pressure before things settle down.
The solution is not debt. The solution is not inflation. The solution is not currency wars. The solution is to stop trying to manage cycles. The more one manages cycles the more the system becomes vulnerable. Isn't defending this pile of debt "ideological tsunami"? I am only saying that telling us that we need inflation to grow is b.s. If you think my reasoning is wrong, show it but don't automatically go to this argument that if one disagrees with Keynesian ideology, one must be an ideologue.
NeedMoreCoffee, depressions and panics were the norm in the nineteenth century also. I don't dispute that, but I believe it is inheritant to capitalism. Trying to avoid corrections - the Great Moderation - is what makes the system fragile over time.
Thank you, Mitch.
226178, you are right. I do not pretend to explain everything. My point is specific. It is about the erroneous concept that one needs inflation to get the economy growing again. There a lot of factors that help the economy grow. Mild inflation is not one of them. Yet that is what we are being told.
Excellent. Thank you.
Indeed, I believe the CPI hugely understates real inflation, mostly because of an "estimated" cost of rental.
Quant, your argument justifies the armed rebellion of separatists in Corsica, the Basque country etc. If only these separatists had a big brother country, they too would be justified to kill for their independence? The fact that there is a minority in the east of Ukraine (not THE Ukraine, Ukraine is a country) does not justify Putin's dismissing of signed treaties.
Ok. But do read about Bismark's wars before 1870 and the events in Italy. Stalin's massive deportation of Ukrainians, including Tatars, may explain why Russians claim to be a majority in th PE east and in Crimea, no?
Quant, you know enough history to not state that if Putin were to invade the eastern Ukraine, he would be taking the first step in Hitler's footprint. South Ossetia? Abkhazia? Half of Moldova? Crimea? And, by the way, there are Russian soldiers and sophisticated Russian weapons going back and forth between Russia and Ukraine.
Now, before we get lost in endless discussions of history, let's try to look at the big picture. Nineteenth century Europe was plagued by endless nationalistic wars, which eventually resulted in the 2 world wars of the twentieth. Putin is reviving this spirit. Yes, a minority of Russians in Ukraine may still long for the Soviet empire, but the war started when Putin used his stooges to invade Crimea and then foment a "revolution" in the east.
Again, where is the defense of the Tatars? Chechnya? The list of frustrated minorities who were conquered is much longer than the list of Russian imperialists left behind in Ukraine, Latvia, Estonia, etc. At the end, Europe has to decide if it wants to solve its problems peacefully (The European Union's initial goal) or through wars (Putin's macho solution). The latter is quickly leading to a dangerous war. You write yourself that Hitler would have been judged as an annoyance if he had stopped after taking Vienna and Prague. Would it have been better to stop him earlier?
Quant, do you really think the Tatars are better off today in Crimea? Don't you think have a stronger case to claim Crimea which was Tatarstand before it was Russia? History is easy to manipulate and Putin is a master at it. To say that the Flemish should joins The Netherlands because they share a language is not understanding European history. The Dutch and the Flemish have been separated since Holland's independence from Spain. After centuries of separation, they no longer have much in common. Ditto for Ukraine, which despised the Moscovites a thousand years ago. Ukraine's history through the Commonwealth of Poland and Lithuania has made it a different people. The Russians in the East are mostly those who came with Potemkin in the late eighteenth century. They are the occupiers and will be a minority. Nobody suggests they should oppressed.
Thank you, Quant. I just answered why I used the Hitler reference on top of the point you make.
Quant, the comparaison with Hitler is about the Sudetenland. Hitler too pretended to intervene to help his "countrymen". It has been an excuse time and again in European history
I am not sure I understand your argument,caret311.
So, we should have embraced German propaganda on the basis that Hitler was demonized by the press? Facts are facts.
Thank you, Quant.
My point about European countries is that there is not one that is really homogenous, maybe with the exception of Poland after the powers redefined its borders after WWII - even though Germans would dispute that.
I did not say that they need to be forcibly assimilated, but that they are Ukrainians which does not mean they cannot speak Russian. I believe the reported language "imposition" was greatly exaggerated by Russian propaganda. Anyway, it did not happen.
As far as the history of the Southern Slavic people is concerned, there always was a difference between the Kievian Rus (at the time the more developed) and the Duchy of Moscou where the barbarians lived. I am not an expert, but I understand that they were different groups of Slaves, as were the Poles and the Serbs. Should Putin not recreate a great Slavic empire under that argument?
As far as Putin is concerned, yes he is the villain. He is trying to go back to eighteenth century European politics where borders were defined by the strongest armies. He did invade Crimea and the same masked militias started trouble in eastern Ukraine. Without the sophisticated weapons and the Russian soldiers, Poroshenko would have ended this war months ago.
OK, Neil. But where does the money come from that the Fed pays the Treasury ($97 billion last fiscal year)?
Quant, there are a lot of countries with minorities. The Catalonians in Spain. The Basques in France. The Walloons in Belgium. What about the Scots in the UK? It is my understanding that the majority of the Russian speaking people in the Ukraine came with Potemkin when Catherine The Great decided to colonize the region. They have had more time to become Ukrainians than the the large number of Russians Stalin moved to Estonia. Since the percentage of "Russians" in Estonia is larger than the percentage of ethnic Russians in Ukraine, Putin would be justified to invade Estonia as well according to your logic.
Netblue, I believe interest rates have been dropping ever since Volker killed inflation, indeed 30 years+ ago. To say that the market provided the financing for the treasury omits to say that the Fed's purchases represented 71% of the market in 2012 and 63% or so in 2013. When the Fed is such a big participant it is a bit misleading to say that prices are set by "the market". I will concede that interest rates are down from the end of the last QE. But isn't it a bit early to judge the long term effects? Also, the removal of debt you mention is another way of saying that the government's debt was paid with thin air, isn't it?
The condescending attitude remark was directed to Mr. de los Angeles. Sorry if it appeared to be addressed to anybody else. Netbluesky, thank you for your response.
JasonC, the total bank reserves as of Jan 8 was $2.6 trillion, so the Fed spends much more than its reserves.
Thank you, netbluesky (I love your name!). There rests my case. The Fed monetizes the government's debt. They buy the debt, returns the interest payments and the principal to the Treasury. Why have we waited so long to do this? Were our forefathers that stupid? :)
Thank you for your condescending attitude. It helps the debate, which of course does not exist since you know it all. Let's see how this QE experiment unravels.
Asbytec,
This does not explain how the Fed's balance sheet more than quadrupled.
I really don't know, but Putin has shown that he has the power and the will to do it. The point is that there is nothing standing between him and such action. He controls everything.
How did the Fed's balance sheet ballooned if they only swapped assets they must have had before swapping? The Fed has an amazing ability to quadruple the value of their assets by swapping!
TotalIncome2, I am sure there are decent companies in Russia. The risk is political. In a dictatorship property rights do not exist. Profitable companies will be targeted.
Mr. de los Angeles, here is an article from the New York Times:
In 2013, the government issued a net $759 billion in Treasury securities to the public. That was the lowest figure in six years, as the budget deficit declined because of a healthier economy, which increased tax receipts, and to government austerity that cut spending.
The Fed bought a net $543 billion of Treasuries during 2013. That was not a record amount — in 2011 it had purchased $656 billion — but it enabled the Fed to finance 71 percent of the net Treasury borrowing during the year. That was the highest proportion since the government resumed running deficits in 2002. The 2011 purchases amounted to 61 percent of the money the government borrowed that year.
I believe even The New York Times understands that the Fed has been financing the debt,
To a layman, this is the same difference. The purchase of Treasuries may be indirectly from the Treasury, but you write yourself about the massive increase of money in your response to Mr. Roche. And then, at the end of the year the Fed pays the Treasury ($97 billion last year I believe) with the revenues of those treasuries. If one makes abstraction of the technical language, isn't that just a swap of printed money for treasuries?