War reporting from the Starvation Front
Published:
November 4, 2012 at 1:34am
The Times, yesterday:
Government sells €140m of its bonds
Three separate issues of government stock for the value of €140 million were oversubscribed by almost double the amount.
The Treasury said yesterday that all applications by the public, amounting to almost €121 million, would be accepted. The rest will be allotted to financial institutions.
There were 5,256 applications with the value exceeding €252 million, confirming the popularity of government bonds as a medium to long-term investment.
The three bond issues were: at 4.8 per cent until 2028, 4.3 per cent until 2022 and 3.75 per cent until 2017.
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Amazing. If we continue to stay under the PN government our standard of living at this rate will double in a few years.
Hope the people will open their eyes and see this amazing prosperity.
Only if ignorance wasn’t bliss.
The rich will most certainly get richer, the poor………………..
… have every opportunity to educate themselves, work harder and get richer.
Nothing to see here, keep on moving.
I really hope that people will open their eyes and see the great difference between the two major parties
Heh. This story confirms what many think:
1. People are too tied up with the expenses of daily living and electricity bills. The last thing on their mind is buying government bonds.
2. Malta’s economy is doing so poorly that nobody would dream of investing in government bonds.
3. Oh well, at least they managed to scrounge some money from a couple of fools, because you know, if the people had faith in their government, the total number of applications would amount to TWICE the amount required.
Le, m’hawnx flus fl-idejn. Kulhadd jittewweb bil-guh qieghed.
Judging by the rush inside a clothes store yesterday in Sliema, people are either dreading an Arctic winter or fear that with Labour at the helm we will all end up wearing boilersuits. It was just madness; le, m’hawnx flus fl-idejn, tridx tmur.
We went to Marsaxlokk today for lunch, and the 30 or so restaurants on the waterfront were filled with patrons inside and outside, while other people were waiting for a table.
Ghidlu l-Joseph, nies mejtin bil-guh ghax probabbli ma sabux mejda vojta. U hallina. PL = Partit tal-Lanzit
Malta owes such a rapid growth in the creation of wealth solely to the Nationalist Party in government.
The politics of the Nationalist Party, more pronounced and well expressed in governments during the past 25 years, have been decisive in giving Malta the best direction. Tangible proof of all this is pecuniary one, abundantly visible in the creation of wealth.
Per capita income has shot up, we have full employment, the gross domestic product is performing well and sovereign borrowing is contained to acceptable levels. The composition of the productive sectors of the economy is healthy with good added value margins.
What’s more important is the economy is resilient and the labour force has given proof it can respond well to difficulties and under pressure.
Unfortunately the Labour party is not capable to match this performance. I claim that it’s proletariat origin and sentiment is impeding its direction from having a wider and inclusive vision for Malta. Which means that the purpose and strategies of that party are flawed.
How long have you lived in Cloud Cuckoo Land ?
Long enough to know the difference between a PN led government and an MLP/PL one.
All my life, which is quite a few years. Come on Reuben, the data is real and the evidence is for all to see and touch.
I am earning more than ever and can change job for the better whenever I want.
I can continue studying, both here in Malta and abroad (scholarships).
If that is cuckoo land, then I love it.
Daphne,
Your comment reflects one side of the issue – the public and the financial institutions are doing well.
But that the GOVERNMENT – is selling its BONDS – which, after all, remain a form of financial investment, is in itself a confirmation that the public trusts it with its money.
I overheard this conversation while standing in a queue at the bank yesterday:
First woman: Ircevejt il kont tad-dawl?
Second woman: Iva x’wahda din! Gieni euro 121.
First woman: Tieghi gieni euro 87. Ma nafx kif ser naghmel. Dax-xahar kelli vista lit-tabib li swietli euro 25 kif ukoll euro 10 gall-gass.
Second woman: Ommi kemm gholiet il-hajja! Dal-gvern ma jaghtix kaz minn xiex ghaddejjin. Jien ghalhekk ser nivvota lil Muscat did-darba. Almenu jrahhsilna l-kontijiet tad-dawl.
First woman: Nispera li hekk jaghmel ghax tiftakar x’kien ghamlilna Sant bil-VAT. Iweghdu kollox biex jirbhuha. Imma ma jistghax jaghmel il-mirakli.
Second woman: Irahhashom zgur. Tant ilu jghid li ser jaghmel hekk.
First woman: Ma nafx jien. Imma ma nistghux nibqghu sejrin hekk. Jien miniex ser nivvota biex jitghallmu. Ma nafda lil hadd minnhom.
Second woman: Wasalt jien, Lina. Nispera ma ndumx ghax irrid mmur nixtri libsa u par zarbun ghat-tieg tal-kugina.
First woman: Mela ahjar tghaggel, Mer. Ciao.
Tinsiex li dan kollu dejn li rridu nhallsuh ahna (int ukoll) uliedna ulied ulied ulied ulied ulied uliedna….
Typical Mintoffian ideology.
No my friend. That’s the truth.
Peter F. Fenech – correct. That’s the truth about Mintoffian ideology.
What’s the use of having millions in the Central Bank and having to make do with obsolete Strowger telephone exchanges, no water in our taps, electricity outages, bulk buying, subsidising dinosaurs such as Drydocks and bankrupt foundry (ask Alfred Sant – he should know a thing or two about this as he was CEO). U halluna.
No Peter, it isn’t. Government debt is not necessarily repayable the way you are thinking. Governments all over the world use funding through these instruments as it is an efficient way of making good use of one’s resources and as long as the amount makes sense when it is compared to how much the country produces.
The problem arises when a country’s GDP is regressing or the economic prospects present risks which can lead to this. This is precisely why Malta cannot afford to have uncertain economic policies which may tilt its performance and ruin its prospects.
If you hadnt noticed, your children will be paying themselves back with interest, my friend. At least, thank the Good Lord that they dont have to contend with some bank in some country.
Maltese are lending to themselves.
I would be more worried about the worth of these bonds. They are worth it as long as the PN remains in power.
Give Joe Pwerili Muscat two to three years, and the bonds will be worthless, because their worth depends on government performance. Muscat will be seeking a bailout from the EU. And that’s when our bond market will fail in Malta.
You can sell back your bonds back to the central bank in a few years time for a profit (tax free).That’s what I have been doing these last 20 years, and for a tidy little profit too.Safe investment that so far , has never ever let me down
Ghaliex qed tirraguna hekk? Ghal kollox trid hallas, habib – xejn ma jigi b’xejn.
Ihallsu uliedna bhalma ahna hallasna ghal pensjonanti ta’ illum. Mhux hekk timxi id-dinja?
Starvation front my right foot. Picture this.
Saturday night (yesterday) 9.00 pm. Driving up all the way from Qawra to Bugibba and back three times and not one parking space available, not even in the side streets, not even in the underground car park near the Dolmen Hotel.
At 10.00pm I gave up and went back home.
Kitchen economy tal-leader – u halluna. Imbaghad m’ghandiex biex inhallsu l-kont tad-dawl u l-ilma.
Same at Paceville and Baystreet, time 8:30pm, not one car space available, including car parks. Long lines for cinemas, bars and restaurants.
Dan mhux dejn izda apportunita ta’ investiment lil poplu Malti.
Il-qlieh igawdieh il-poplu u jerga jinvestieh ghand il-gvern.
Investiment minn Malta ghal Malta.
This only shows that the typical Maltese Joe knows absolutely nothing about investment. Coupon of 3.75% p.a with a YTM of approx. 2.8% p.a. (less the 15% withholding tax) … so you are left with a return of 2.5% p.a.
That’s not all. See who packs the numerous band clubs and other clubs where tombola is played every morning. I bet you that the majority are social assistance recipients.
Mr. Eddy Privitera, how much did you invest in these stocks?
According to Joseph Muscat, the oversubscription is evidence that the people of Malta have confidence in the imminent Labour government.
When Muscat spoke of kitchen economics, did he mean home economics? Is he planning on issuing a rival cook book to “Taste”?
Starvation Front News part 2:
Lunchtime yesterday (Saturday) in Gozo – all Xlendi restaurants full to capacity.
Gozo teeming with activity. Hordes of tourists and Maltese alike enjoying good food and good weather (as it should be).
Saturday morning: all Victoria cafès teeming with activity. Pjazza San Gorg was magnificent. There was an air of contentment. People were enjoying themselves over Maltese traditional breakfast fare.
What’s the point? We are having it so good and we are oblivious that, at the drop of a pencil (on the ballot sheet) we can lose it all.
“Lunchtime yesterday (Saturday) in Gozo – all Xlendi restaurants full to capacity.
Gozo teeming with activity. Hordes of tourists and Maltese alike enjoying good food and good weather (as it should be).”
This was hardly your typical weekend, what with the mid-term holidays and all.
So, what can we infer from this?
People with cash in a bank earning 2.25% prefer 4.8% and are willing to take a risk financing their government’s perpetual shortfall in revenue.
Now with inflation running at somewhere between 4 and 6 percent, these luminaries of Malta’s investment world are actually losing money (after withholding tax on that 4.8 we are back at 4% return).
Visionaries indeed.
A fool and his money…
In June 1998 the Sant government was forced to sell a vast amount of stock at 7.8%.
The interest rate was very high for the simple reason that it was feared that the uptake at a lower rate would not be sufficient.
The government had overspent obscenely and was in a state of panic. Lino Spiteri was wise enough to jump ship earlier on.
By then the country’s fiscal system was a complete shambles and trust in the administration’s financial policies had vanished.
Those who purchased that Stock did very well at the Maltese taxpayers’ expense.
Min iħawwad fil-borma jkun jaf x’fiha.
“Dal-gvern qeridna” – “M’ghandnix biex inhallsu l-kont tad-dawl u ilma” –
But then they have enough money to buy all these bonds, go out often to eat at a restaurant, go to the hairdresser weekly, make frequent visits to the nail technician and to the beautician, enjoy frequent holidays abroad, go for weekend breaks in hotels here in Malta and in Gozo, buy fashionable clothes (tad-ditta, of course), and so on.
Imma l-gvern qeridhom, imsieken ta. Ghandhom bzonn bidla ghax mhux kuntenti li qed joghmu fil-gid.
By buying government bonds, aren’t the subscribers effectively buying back the national debt they already ‘own’? If something happens to one domino, the entire system crumbles. At least I always thought that foreign investment was a better sign of a healthy economy.
yep….quite right…and there is plenty of that.
Besides, bonds oversubscription indicates a strong confidence in Malta government performance in economic terms.
Spain all over again. I’ve been warning against this, but then I’m no Doktor Ekonomista, so who’s listening?
It is true that there is money. But there are no real investment opportunities. Where is the private sector and its innovative ideas? (I’m not talking about the umpteenth futile block of pseudo-chic flats taking the place of some beautiful townhouse.)
Ah, no venture capitalists. Except in real estate.
Young Weber, you have put your finger on THE problem. And no PN genius is ever going to realise this, because they’re stuck in 1945 Sicilian economics.
It’s like EU membership never happened. It’s no wonder they’re going to lose this election.
Bull’s eye.
As Alfred Mifsud had it recently, “il-poplu Malti bil-ghaqal u huwa l-Gvern tieghu li huwa imqareb”. Sounds childish…unless you really think about it, which is when one classifies it as intelligent analysis.
No comments by Eddy Privitera? What happened Eddy, cat got your tongue?
Or perhaps you all thought that these bods would remain on the shelf so that Joseph Muscat could gloat and say that people don’t have money to spare in buying investment.