So much for Joseph 'pajjiz mejjet ghal steak' Muscat and his starving mittilkless
It’s going to be difficult for Joseph Muscat to tell us (yet again) that the poplu is maghkuz. Or that the poplu can’t afford to pay their water and electricity bills.
Or that the mittilkless have to eat pizza instead of steak when they head out on Saturday night.
Maybe they can’t do that because they’re investing in stocks, shares and bonds instead. When people feel financially threatened, they save instead of spend.
It doesn’t mean they don’t have any money because of ARMS or the rising price of laham tal-friza. It means that they have it but don’t want to spend it.
And now they’ve taken it and spent it all at once, or rather, invested it.
Ordinary people have rushed out and over three days have snapped up €100 million in Malta government stocks. They would have bought up much more than that had they been able to. The bond offer was heavily over-subscribed, though no over-subscription figure has been released.
This is the first time in living memory that thegovernment has closed a bond offer early because of over-subscription by the general public. Usually, small investors take up far fewer bonds than the total on offer, and then the financial institutions, like banks and investment funds, take up the rest.
Malta is in the remarkably blessed position where 95% of state debt is owned to the state’s own citizens. While other states are on the brink of bankruptcy and have to beg loans off the IMF, Malta just puts out a couple of notices and brings in €100 million from the electorate.
The curious thing is that many of the people who bought those bonds will be the sort who contradict themselves by then saying that they have no trust in the government and that they’re going to vote for Joseph Muscat.
They trust the government enough to lend it money, but they don’t trust it enough to vote for it again.
I haven’t the time or inclination to tot up the total value of bond offers and share issues/offers over the last two years or so, but perhaps somebody else might oblige. One thing’s for sure, it won’t be that Anglu Farrugia.
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According to the Chairman of the Malta Stock Exchange:
“Indeed, 2009 was a record year for new issues since the Exchange commenced operations in 1992. Twelve
Corporate Bonds and one equity were admitted to the
Exchange’s recognised lists, besides eleven new issues
of Government Stocks, totalling an issue value of over
€800 million. In addition there were sixty one issues of
Treasury Bills amounting to a nominal value of over
€1.6 billion.”
Chairman’s Message, MSE Annual Report, 2009
Sorry to distract from the subject of your post but you put that photo and i cannot avoid commenting. Is the image an MLP advert or your doing? If it is an MLP ad the person who did it should be sacked instantly. “nippremjaw il-bzulija” loosely translated would be “rewarding the hard-working”. The opposite of hard-working is lazy. To my knowledge a stereotypical lazy man has just that kind of thick stubble and looks scruffy and dazed. Whoever put that text on that photo did the opposition leader no favour.
[Daphne – Yes, it is a real MLP advert taken from the Labour Party website http://www.therealbudget.com. And no, that is not Joseph Muscat’s real stubble, nor his real dark-haired scalp. Those were created digitally.]
Can an economist, maybe Prof. Edward Scicluna, explain how Labour will reward the hard-working and at the same time introduce the living wage?
I’d hate to think what images ‘leader1’ to ‘leader12’ look like!
[Daphne – You can see them here: http://daphnecaruanagalizia.com/2010/11/02/how-could-they-have-got-it-so-wrong/ ]
Thanks. I’m not sure yet whether to laugh or cry.
Who in his right mind would digitally create stubble for this image?
[Daphne – Who in his right mind would portray a future prime minister like that?]
Dear Daphne, so you think the Government stocks were taken by ordinary Maltese people. How clever, go and tell it to the marines please.
[Daphne – Of course they were. I’ve worked on several bond offers and share issues/offers over the last 10 years, and yes, the bulk are taken up by ordinary people. It is really quite amazing. With some offers, those ordinary people actually queued up from the early hours of the morning to be first to get in when the offer period opened. I speak with certainty because I speak from experience.]
i hope you know what money laundering and a black market is Daphne….
A bit more stubble and he morphs into the likes of Osama.
Why do certain people deny the proof of the truth?
I am 37 years old and I remember that during my childhood most middle-class couples who were planning to get married led dreadful lives.
They would never go out, never bought any clothes, one car per couple that normally belonged to the man. “Qeghdin nibnu”, “ser nizzewgu” used to be heard very often.
It was enough to put you off getting married. As a child I came to associate getting married with misery and financial hardship, everything sacrificed and no fun ever. I was nauseated by the idea of getting married when I grew up. I used to find this kind of life disgusting.
Nowadays it’s completely different. There’s been a big change in life-styles and culture.
Women do not stop working when married. A loan is taken which helps you keep going, even though every month you have to deduct quite a sum from both salaries. But at least the quality of life of a married couple and their family has improved.
No one shares a car anymore. Children are involved in extra-curriculur activities and a never-ending list of positive things which show a better standard of life.
Yep you are right Daphne. But there are some things this boring reader can tell you. Malta has a debt equal to 70% approx of GDP. Even though most of this debt is owed to Maltese citizens and is euro-denominated (huge plusses), the 70% ratio remains worrying. One, it is rising each year. The govt is talking about reducing the debt below the EC treshold of 3% when we need to be talking about a small surplus to start redcing the overall debt. Two, the use of surplus cash in the economy to mop up govt bonds is diverting cash from productive investment in job generating enterprise. Yet all this can be argued away by (1) the need not to shock the economy into recession by too drastic austerity and (2) the succesful issue of many corporate bonds and equities means that alot of money was still diverted into productive investment after all. I’d go with that. What I do not go with is that much of the surplus cash which bought these bonds is unpaid taxes and that these govt bonds have NOT been mopped up by ‘ordinary Maltese’ as you put it – by many Maltese yes, but hardly the average man in the street. There is simply no relationship with the dismal or modest results of the vast majority of Maltese businesses with the exception of the banks and the ‘miracle’ of all these endless millions in cash in our economy hungry for a home. Some may call this the Maltese economic model. Tax evasion and government debt financed by unpaid taxes, creating a bubble more self-contained (and with the euro as its currency) than some may realise. But its got some huge disadvantages. A large swathe of the population – the army of tal-paga – more than half the population by my estimates cannot dream of buying these bonds and their earnings and savings are not sufficient to bolster their future meagre state provided and unfunded pensions. Their current real wages are being eroded each year. I believe that the Maltese economy will continue growing but a cost will be increased relative poverty for alot of people who were once the lower middle class. In your ivory tower, you just dont seem to be able to decipher this, and never stop beating a defiantly optimistic drum that all is hunk-dory, It isnt hon – not for ten of thousands of Maltese who dont read your blog, who skim through The Times and drive ten year old cars they can only hope to replace with second hand Japanese models. They dont care much about either your Gonzi or your Joseph, and their knowledge of economics runs the length of their grocery bill. Spare them a thought from time to time
Has anybody ever done an extensive study into the size and extent of the “black economy” in Malta ? I think it will make surprising reading of the huge amount of business done on a cash basis locally. How about Profs Edward Scicluna having an objective (!) go at it ?
http://www.timesofmalta.com/articles/view/20101116/local/enemalta-ceos-office-minister-clarifies-situation
This was my comment which must have got under the moderator’s radar:
Anthony Farrugia(20 minutes ago)
“It appears the green-eyed monster – oh! I mean envy – is alive and well among Opposition members; in Maltese we have a word which describes it all ” lanzit”; can somebody somewhere supply the English equivalent; I think Enemalta has more serious problems than dishwashers, folding beds and fire escapes which go up or is it down? This all smacks of 80s style mintoffian socialism !”
Opposition MPs discussing domestic appliances when Enemalta’s debt (not depth !) has reached Euro 527 million; how chicken brained can they be ?