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Danielle Lacley: «It is difficult to save, invest or consume if you know you will be taxed»

Economist Daniel Lackley may have been better known for some years for his activity on social networks, his interventions in…

By admin , in news , at May 15, 2022

Economist Daniel Lackley may have been better known for some years for his activity on social networks, his interventions in the media, and his books, but perhaps his career is more unknown. After graduating in economics from the Autonomous University of Madrid in 1990, he began working at Repsol YPF. When Alfonso Cortina was president, he became responsible for investor relations after going through the areas of financing and exports. From Repsol he moved to Anagas, where he was also responsible for investor relations. And from there he moved to investment banking in the United Kingdom, where he has developed most of his career over the past fifteen years and accumulated a fair amount of stories and advice that he tells in his new book.

-How did the landing take place in the United Kingdom?

I had a very intense and interesting career in Spain related to energy. When I was in Enagas, he offered me the opportunity to work at an investment bank in London. He told me not to leave; Which was crazy, but I went, and I have no hesitation in saying that I got to experience my best work there. In the Citadel, where I was, I lived in one of the most aggressive environments out there, but the great thing about working with those guys is that you’re constantly learning. My best moments as a professional and the ones I’ve learned the most from have been the toughest moments.

-How was the comparison with Spain?

I had a time of deep disappointment with the Spanish financial sector before the crisis, but it passed. With the crisis, brilliant professionals present in the financial sector emerged in our country.

Often the average citizen does not trust the investments suggested by the bank.

I think citizens must differentiate between advising and selling. When you go to a bank, the bank is selling you, and that’s completely legitimate. Independent advice is something else. They are not incompatible, but citizens have to take advantage of both and inform themselves sufficiently in advance, as we do when we go to buy a car.

-Has the Spanish investor changed much?

-Too many. In the book I tell a friend used to tell me that the Spanish only invested in TLS (Telefonica, Ladrilo and Santander). It was easy to say that he only invested in traditional and insider securities. Now I have frequent meetings with clients who have great knowledge about securities from around the world.

– Is it a good time to invest?

-definitely. Keeping money in deposits is now like losing it. On the other hand, most investment funds in Spain have daily liquidity. Of all the funds I worked with for fifteen years, none of them were funds. It is essential to take advantage of the benefits of the Spanish market, which are unique, in order to find opportunities based on each one’s profile. There are people who are open to greater exposure to risk and those who have less.

Is this a good time to invest in the stock market?

-Sure. If I saw it a year ago, how come I can’t watch it now? I think corrective times like now are a good time to invest in longer term trends.

How do you view real estate?

In Spain it is assumed that real estate is revalued simultaneously, and this is not the case. You have to be selective. Spain still has a lot of real estate that is well below 2010-2011 levels, despite the fact that it has gained much appreciation in the areas of Madrid and Barcelona.

-Do you see bubble possibilities?

-I see the risk of a bubble, which doesn’t mean there is one. Many people started investing in the real estate market because rates were low, mortgages were cheap and regular, and prices were rising. Then he started calculating rent-buying, hoping for a 4% return, and recently someone told me he was happy with a 2% return. Well, we’re already starting to take risks. We are still far from the bubble level in Spain, but we are at risk of another bubble. Why? Because of this belief we feel that real estate never goes down. I always tell people that we think real estate is safe because we don’t see price fluctuations. If one looks at the various valuations of real estate in the neighborhood on the stock exchange, one will fall behind. I will never buy, as I will see a difference of 20-30-40%. I think you are being very cautious. I haven’t seen people pledging for 100% of the property’s value, but the risk exists.

– and how can that risk be reduced?

With information, transparency and financial education. Risk arises when there is an interest in maintaining an impossible valuation at all costs.

How do you view cryptocurrencies?

The problem is that the idea has arisen that they can only go up. I’ve been saying for years that they are startup Why currency? do they work exactly like a biotech company or a start up technology. In fact, the relationship with the North American technology sector is very high. You should be aware of volatility and risk. Some cryptocurrencies will survive and be an alternative to fiat currencies, but the vast majority will disappear. If you decide to invest in them, you must be very knowledgeable, aware of their volatility and accept the risk that one day they may drop by 50%.

-Looking at a more general level, how does it affect savings given that the country where you live has as much debt and deficit as ours?

The perception that the state is irresponsible in its public accounts prompts citizens to make more cautious consumption decisions. The news we get about our country and our economy often makes you look within yourself and into the past, and think it’s too easy to invest in your grandparents or your parents. , which is completely wrong. You also think that what is happening in Spain is happening all over the world, and that is not true either. You have to look outside and into the future, and just see that there are opportunities everywhere.

Maybe, but who is considering investing with rising inflation and declining disposable income?

There is a tendency to think that if you already have a wealth then you don’t need to invest. When I worked in the oil sector in the United Kingdom, there were people who had a lower salary than the Spanish and put their savings to work. The thought here is that, if you don’t have a large amount of money left, why are you going to invest. Why not invest 100, 300 or 500 euros per month?

“Then come tax.

-Sure. One of the reasons people make more cautious consumption and investment decisions is their belief that they will be taxed. Then the government gets angry because consumption does not increase. what did you expect? We are hearing the minister on duty saying that they are going to throttle our taxes. Obviously your consumption decisions are going to be a lot more withdrawn; Even more so when they tell you that they will not raise taxes on the working class; only the rich. People are not stupid.

-If at least later European funds would have saved us…

European funds, by design, are not going to work. They can’t work. They won’t do it, even if I distribute them with all I can. The way they’re structured, they go to companies that don’t need them; Those who already had access to credit. They do not go to small and medium sized companies. They address what politicians think should be important, and this is where the root of their own failure arises, which is already being seen. The impact on GDP and employment is negligible. Some PERTEs (Strategic Projects for Economic Reform and Transformation) are lost in a bureaucratic sea. If 60% of funds go into current spending without real economic returns, there may be no impact on potential growth. If you add to this that the government has thought of nothing more than adding bureaucratic layers to the already extremely complex and bureaucratic process, then nothing.

-How do you view inflation and the performance of the European Central Bank?

An increase in interest rates would include the increase in inflation that could come from an increase in credit, but it does not account for the vast majority of emerging prices, and in particular core inflation (which does not include energy and unprocessed foods). ) is not so. Raising interest rates is a necessary but not sufficient condition. You have to take money out of the system, and the only way to do it, when it’s rampant, is to reduce public spending. What causes inflation in the Eurozone to be practically twice as high as inflation in Switzerland? They have similar risks to supply chains, risks to Russia and raw materials. If the amount of money is the same, there may be one, two or three price increases for the war, but not all at once. Prices can rise simultaneously only when the quantity of money in the market is much greater than the demand. So what is happening is that the purchasing power of money is decreasing. Therefore, raising rates is a necessary condition, but not a sufficient condition: it must be supplemented with withdrawal of money which is not among the objectives of the ECB, as it will continue to buy what has already been issued.

-Would you consider a change in the law in favor of savings justified?

What we have to do in Spain is to stop punishing savings. A society does not grow beyond expenditure and debt; It does so through savings and prudent investments. People, government and their ministers think that savings is something that accumulates there and it is not financing the real economy which it does by financing companies, development, investments etc. Savings are the financing basis of the real economy; There is no spending, much less public debt to finance current spending, which is now done. Citizens see that they are punished for deposits, savings, that if they get little return from savings, they are punished… If they are able to deposit after paying their taxes, their Savings are made for the children, they are also punished. It is the constant theft of the fruits of conscience. it is amazing.

Danielle Lacley: «It is difficult to save, invest or consume if you know you will be taxed»

2022-05-15 02:36:18