Democracy – a racket!

As a reader of Marc Faber’s Gloom Boom & Doom report todays headline of his latest letter stroke like thunder:

US Democracy began as a great Movement. It became a Business. Now it is just a Racket.

May I remove “US”? Would you agree? What is left of democracy is a political elite that lashes out like bullies on too much booze. They use “their system” as a racket. Rather precisely so. Whenever someone stands up and asks or says something uncomfortable, they call him “anti-democratic”.

I hear politicians talking about “exploding tax income”. WOW! They are proud of squeezing the last drop out of their society and getting away with it. Amounting nothing but debt on the shoulders of our kids who will be left with a mess – created by a racket.

Germany decided to provoke Russia even further by sending tanks to Lithuania. After starting an economic war (sanctions) against Russia, now we get more material? Well, once again I might say. Was anybody asked? I did not hear a parliament decided on it. Neither people.

But latter disturb democracies anyhow. Only. And get the racket if they do so too hard.

Political Entrepreneurial Creation

When I opened my company in China so many years ago (feels like a lifetime), the officers asked me to write how I felt I made an impact on China, its people. I had to think. And those thoughts made everything I made in the future better for me (and hopefully a very tiny bit for China, a country I loved and love more than any other).

I received no goodies, no cash in hand. In Germany, if you have the right consultants, they shower you in subsidies, in startup money and the like. In China they keep it simple: they exempt you of tax for a certain period.

Rationale behind: net equals gross equals 24/7. So you work as you never did before. Business grows, people are hired, turnover rises, stability kicks in after the fragile takeoff.

Risk for China: zero.

One concrete example who freedom works. Let things free and they grow. In Germany, regulation kicks in and kills most initiative in the very first second. When I registered a company again here, I thought someone tried a wild joke with me. I had to declare taxes monthly. That is 12 times a year. I felt a bit like a criminal under supervision. That basically is how Germany treats its small entrepreneurs. Tax police looks like FDA troops in Colombia. You make one single little mistake (so far, I hope I did not), and they shoot you out of your life.

I was never asked if I wanted to do good for Germany and how. Doesnt matter. I was told: every cent boy, each month, our share, payday. Did the robber knights in the middle ages collect monthly? I thought they collected only after harvests, so maximum twice a year. And if its true they only took 10% well anyone has their phone number? We might call them back?

My idea is simple: take the damned government back. It kills initiative, it destroys creativity. Any government program is initiated by consultants with close links to politicians who skim the cash and make a little show. Real founders get peanuts and have to prostitute themselves instead of simply being able to work ahead.

Copy China for once! Would help, I am sure.

Political Social Destruction

This is on a rainy sunday afternoon without real rain yet. Feels like Germany overall. You know it soon will be wet to the bones but it simply did not come yet.

When did all this start? 60ies, 70ies? When did peopel decide that money printing was a solution, that future generations did not matter, that fun and happiness was a human right for all and thus being pursued in the utmost ridiculous ways? When is the next time generations will clash? Last time, I read lately in an interesting work of a sociologist, was when a little Austrian decided not to be little anymore and crashed the whole country to pieces.

Lets face it: we have two markets: the old ones who have and the young ones who also have, but latter nothing but trouble. Trouble to make ends meet, trouble to pay their dues, trouble with a society in which parents are not automatically grand-parents any longer taking care of their kids offspring but manage timeslots from golf course or meditation class.

There was never a more selfish generation that todays elderly. There was a cool book out by a famous German journalist on the issue. There will be more to come.

Read, enjoy, experience. “Its my belly” became “its your kid” translates into “sorry, I have so many things to do take care of your little beggar yourself”. Whole generational concepts break. And you have an archetype of the whole movement: our leadership. Smilingly avoiding responsibility. Shooting from the hip, living in the day.

Sometimes I get the impression that our leader caters only her electors, the elderly pensioeers, big bank accounts, against everything, down with nuclear power plants (we made our money in heavy industry, now we want tranquility)! in with all refugees of this world to make us feel better (and no matter what, they will be integrated in the kindergardens she just closed down).

She makes the world look simple. Dont ask. Dont worry. She  has everything under control.

I cant see her concept. No plan behind it. She gives me the impression of thowing candies from a carnival car. And people give me the impression they are perfectly ok with it.

Like this, social fabric is torn, the formerly warm social overcoat of Germany is nothing but a thin blanket nowadays. The old generation ate up the cake, matter of fact, under guidance of Berlin.

Do the elderly really believe they will get away with that?

At the same time whilst – because of their selfishly induced spending spree of politicians they elected – kindergardens are closed, schools are closed and all kinds of services for young parents, young workers, young people are cut back.

A bit risky I would say.

I am constantly waiting for a group to say: “ok, we stop paying to social welfare” or “wait a minute. Did you really pay into your pension fund?”

In the end, reckless politicians will make politics for a social aggregate that promises to elect them. After election, they will get a positive feedback loop by election gifts. One wants to be re-elected. It must be hard to fall out of the “king of Germany” bed (limousines, drivers, security staff and all the insignia of power). Actually it almost never happens. As our parties decide, who is elected. Voters only decide which party is it.

But none of them thinks about the “real end”.

Germany surfs on 0,7% on 10 year bunds. In other words: free lunch. Let interest rates come back after their 5000 year low to say 2,1%, that means, let them triple and where do you think Germany will stand?

Wet to the bones.

More schools, more kindergardens … simply more closed.

How else would one call that but political destruction? Its not they dont see it. Its not they could not turn around. Problem is a turnaround takes more than several legislation periods. And thus, no politician is interested in it.

In final consequence that means in a democracy with 4 year election cycles it is impossible to achieve real change. That leaves two options open: the system is changed or change becomes systematic.

One thing is sure: times wont get boring anytime soon.

 

Words & Politicians

I have to share this insight by my friend Ping in Shanghai, with whom I have so many valuable discussions, endless phone conversations, patient analysis of matter that matters.

When I asked him what he thought of some press statements lately, concerning government issues, he contered with the question how on earth in the West people always looked on words. (I forgot, for one instant, that Confucius said never to measure a human being by its words, only by its deeds).

Ping claimed: “we look at simpler things. Did our lifes get better? Do we have better food? Safe income? If so, good politics.”

How better could it be described? We look behind the scenes so many times. We try to figure out what is good in the split between Russia and Europe, which strategies might work in matter no simple businessman can understand. In the end, I look around and see kindergardens closed, schools closed. In the rich Germany that has no more money.

Good politics?

Words – Deeds

Creative disruption

When the CTO of a Dax company once called me a “creative disruptor”, that was positive. Companies back then (10 years ago) looked for active disruptions of their own processes to make themselves less fragile for outside disruptions. Simple analogy of a boxer learning to take some hits.

Nowadays I get the impression of streamlined corporate “cultures”. No, I do not believe they “eat strategy”. Culture is a big word. Some corporations have limitations they call codes. Most of those codes are ridiculous, they are white-washed rubbish. Was Max Frisch still alive, Dürrenmatt or Nietzsche, they might have attacked them vigorously for being nothing but theatrical role play.

A company is made of its parts and those parts are human beings who determine all other non human parts of it. Hire disruptive spirits! Go for the politically incorrect people, the ones who have clear minds and are not so controlled by fear they are afraid to speak out.

I often wonder why those guys in black suits often have their sleeve cut tatoos. In businesstime they are “tamed”, in leisure time they are “wild”? I would not trust such a person a second. Either or. You are either or. You are not for 8 hours.

So go for the people who are. 24 hours, 7 days a week, until the day they die.

China Investments

I started, age 16, to do advertising for local shops. I had a 386 my father had bought me, a printer and a scanner and learned how to use Corel Draw and Photoshop. Must have been back in 1991 when I learned that advertised, branded goods and services created better returns than no names.

At age 21 I already was allowed to manage a really big brand, Persil, in China.

When I started investing, I realized again that brands usually returned more than companies that created un-branded goods and services. Thus, relating to China, I started searching for a China Brands Funds – and did not find one.

When I met a fund manager of Liechtenstein, Mr. Marc Cujai, I forwarded my idea to him and he consequently planned to open a funds with the leading brands of China.

Have a look: mcvm.li

EU hiring practices mistakes

Why is there now European Apple?

Because there are no European nerds in big companies anymore. And that is a simple story. Look at the “career” section of multinationals in Europe. What you will find is a click in database that requires you to measure yourself and document it, following a clear cut structure.

Those data then are analysed by an outsourced team.

What you get like this? Standadized rubbish. Conditioned people who fear not to fit in. Fitting in? How on earth do you want to innovate, to create by fitting it?

In the old days, say Daimler Benz, they invited their job applicants, first step of good marketing, they had wild sessions and discussions. One way one got wild guys. Henkel was even better. They had a fast track up to the big bosses, if someone crazy enough came by.

Thus, they innovated, created and conquered world markets.

Nowadays, as a cool friend of mine, a grandmaster of marketing, father of worldbrands always say its only “the same damned tablecloth over the same damend table with the same damned dishes” over and over again.

We need to hire differently. Companies have to stop using outsourced services to hire what shall become their DNA.

China perception

G20 says, no China worries. I say: when was the G20, the IMF or a similar institution right last time? Pre Lehman, one might have been better off doing the opposite they said.

But beyond bashing the big pools of brain, how come nobody critizises such a bold comment?

China is a country extremely short on land, extremely long people. Its pressure from pollution on health and economy are immense and growing day by day.

Now, there is a major conceptual change how the economy shall work. Under all this given headwinds.

Do we really believe there is no risk involved? Did 2007 condition us so well, Pawlow would envy Bernanke and Draghi, that we seriously believe after each rainy day there will be quickly bright sunshine?

I talked to a usually good broker recently. One who claimed he was China positive all year long. His reason “the PBOC has tons of firepower left”. Thinking the economy actually does not matter but the speed and amount of printing money and its subsequent distribution makes me shiver.

I remember the words of a big laoban in Wuhan, 2010. “One day”, he claimed, “China is to pay a bitter price for running on steroids”.

Is that day around the corner? It very well might be. Why? Well, the old markets falter. Or how a famed hedge funder once said: beware of a consumer strike. So the other pair of sneakers from Fujian might simply have lost attractivity. And price competitiveness anyhow, given the long rise of the yuan together with an explosion in labor and land cost in China.

Now the old ship of China sinking slowly and the new shiny one still at the docks, not floatable yet, people have to jump between them. My friend Ping lately stated he felt “China shoots the policy from the hip, I feel nothing is stable, well planned”. And “not well planned” is a desaster in China. A country that relies on strategic planning since millenia – you simply dont plan badly or not at all.

When the rescue efforts for the stock markets made the Chinese believe that Beijing was chaoticly trying something, trust in more than only the paper trading was lost.

Lots of people start wondering: were to many tigers and flies squatted? Is the other part of China, the one that Xi threatens to stamp out, fighting back?

With so many questions open, there wont be bold investments in China. There will be a careful checking of options. In a world right under Damocles, probably reasonable but not to the extent the G20 proposes. Waiting does not mean calm. It means China takes shelter and lets the Taiphoon fall on land – mei ban fa – no other way.

China Market

 

China – oh China!

what in the West is wishful thinking and what is precise analysis? Do we merely prolong a trend in seeing China as the workbench of the world and a perfect market for our western (luxury) brands?

I am not that sure.

Last time I spoke to my Chinese friends, they spoke of uncertainty in the face of a new political and economical doctrine. So far, the China ship went its course and well so (ignoring the fact it was on printed money as elsewhere in the world). Now, the government claims a “dream” ahead, more quality, more sustainability, a better world.

Papa Wu and Mama Zhou disagree. Since Maos Great Leap Forward each time they hear they have to change, the frown. Change is bad. Making money is good.

And so far, the slogans all sound nice. Innovate, blue skies, silk road and belts everywhere. But the key issue is: what does Wang and Zhang think of it? Do they understand, agree and – invest?

So far, not. So far, they do what all Chinese do in times of change, when first the new ruler has to prove that he has the heavenly mandate: they wait and see.

This waiting and seeing, combined with a slump in foreign markets, might become a reverse of the movement in 2008 when China put down billions on the table at work.

At least, borning wont be the attribute qualifying the times ahead.