An SMS from Ernst: Short Messages Service (5)

Arabian spring is expensive for Dutch people (de Telegraaf; link in Dutch)

From an article in De Telegraaf the following snips (translated to English): 

The Arabian spring is expensive for the Dutch. The gasoline prices in The Netherlands are increasing quickly, due to the acrimony in the Arab states.

Paul van Selms, managing director of the United Consumer organization, fears that the gas prices might rise to €1.75 per liter ($9.07 per US Gallon - EL), when the oil price hits the $100 mark per barrel. This might happen shortly when the societal acrimony blows over to the other Arab countries (read: Unrest in the Middle-East? Offshore oil drilling might be an ace in the hole!). Today the prices of gasoline and diesel already rose by 1 cent to € 1.66 ($8.60 per gallon).

The gasoline and diesel prices in The Netherlands are (among) the highest in Europe. That has not so much to do with scarcity of oil, but everything with the tax hunger of the Dutch government. From the price of every gallon of gasoline 80% flows to the Dutch state in the form of Value Added Tax (VAT), excise tax and environmental taxes. In times of low oil prices the government raises taxes, not to reduce those when oil prices are (extremely) high.

Therefore pressure groups like the Bovag (organization for Automobile dealers and garage owners) are currently lobbying for flexible taxes, that can be lowered in times of high oil prices. Knowing the Dutch government and its addiction to tax euro’s this might fall on deaf ears.

Chemical company DSM profits from economic boost (De Volkskrant; link in Dutch)

De Volkskrant writes about DSM, the Dutch chemical company, specialized in tailormade chemicals, pharmaceuticals, special foodstuffs and high-performance materials and fabrics. Here are some snips:

Chemical company DSM profited from the improving economy in Q4 of last year. However, the company had to deal with unfavorable exchange rates and the still difficult market circumstances in the pharmaceutical industry.This announced the company on Wednesday, February 23. 

Net profit 4Q2010 was 149 million EUR, compared to -/- 60 million EUR 4Q2009. The EBIT result rose from 145 mln EUR up to 170 mln EUR. Turnover increased by 18% up to 2.08 bln EUR. Analysts estimated in general an EBIT of 178 mln EUR with a turnover of 2.04 bln EUR. 

“We were helped by an improving economic climate” according to CEO Feike Sijbesma of DSM. He spoke of very good results at the Nutrition division and a necessary improvement in the Pharma division. This part of the company was under heavy pressure as a result of little demand among the pharmaceutical companies, delayed approval procedures for new medicine and the withdrawal of a few large contracts.[…] 

DSM didn’t make a forecast for 2011, but said to expect another strong year.[…] Dividend was raised from € 1.20 up to € 1.35 and the company plans to further raise the dividend up to € 1.50.

DSM is one of the truly great multinational companies in The Netherlands. The company started as the exploitation company for the Dutch state mines (DSM = De Staats Mijnen) and evolved from a company in bulk chemicals into the current diversified chemical and biotechnical company. Its production ranges from state-of-the-art fabrics for bulletproof vests to special vitamins and foodstuffs.

Kadhafi’s billions? Those lie in Ridderkerk (The Netherlands).(De Volkskrant; link in Dutch)

The cynicism of western countries towards the Arab world becomes clear in the following article. It is IMO an absolute must-read. Here is the main content, translated to English:

Libyan leader Moammar al-Kadafhi stashed an important part of his billion dollar possessions safely behind a door in the Wolwever street in Ridderkerk (a sleepy town close to Rotterdam - EL). From this place 35 people lead a.o Libyan state oil company Tamoil. An at the same address a company is registered that is owner of Verenex Energy, the company that extracts oil and Liquid Natural Gas (LNG) in Libya, France and Canada. 

Kadafhi made a nice plate of spaghetti of his financial interests, which are estimated at 60 bln EUR (about $80 billion). Those are Bill Gates-like proportions. But all strands of spaghetti can be traced back to one company: the company, registered at Bloomberg’s as ”Great Socialist Peoples Libyan Arab Jamahiriya”. The management team is led by Kadhafi since 1969 and has one core activity: investments. 

The company has 4 subsidiary’s, all registered at the Wolwever street and the annual report of 2009 stated a ‘token’ profit of 26 mln EUR with a turnover of 7.7 bln EUR:

-    Tamoil (part of Oilinvest BV from Ridderkerk)

-    Oilinvest BV

-    Venerex Energy

-    The Libyan Investment Authority (LIA)

Especially the LIA is considered Kadhafi’s toy with 50 bln EUR: it is an Special Investment Vehicle of the Libyan government. Of course more countries that have surplus money due to oil exploration, put it in a savings fund. But in the case of Libya it is not clear what happens with the billions of Euro’s and who is the owner of it.

For the time being Kadhafi can access his billions effortlessly. Two years ago he closed all his Swiss bank accounts to make the Swiss feel that they should not mess with him. His cash withdrawal was 4 bln EUR at the time. Kadhafi is used spreading his investments to remain under the American radar. A soccer club in Italy, a concrete factory in Austria, the publisher of the Financial Times, an Italian arms company and one of the largest Italian banks UniCredit have all Kadhafi as a prominent shareholder.[…] And those are only the known investments.

But much more oil money, estimated at 40 bln EUR, is waiting for Kadhafi in Libya. Resistance against the dictator makes it difficult for him to invest it. Would he be ousted, he should give up his Scrooge McDuck money warehouse. This incentive to oust him is saved by the great dictator himself.

What can I say. At these moments I’m not so proud to be Dutch, but Business is Business…

Dutch National Bank DNB chairman Nout Wellink is now “available for the job of “President of the ECB” (Volkskrant, link in Dutch)

Vanitas vanitatum, omnia vanitas

( Hebrew Bible: “Vanity of vanities. Everything is vanity”)

The only person in Europe that thinks that chairman of the Dutch national bank DNB Nout Wellink deserves a chance as next president of the European Central Bank (ECB) is of course: Nout Wellink.

At a gathering of students from the Economics faculty of the University of Amsterdam, Nout Wellink spoke carefully of his desire to follow up President Jean-Claude Trichet of the ECB.

“When I am asked, I would give it some serious thoughts”. In an interview with the Wall Street Journal Wellink states that the follows the developments around the succession of Trichet “with great interest”. Never before the president of the DNB was fishing so openly for the position of ECB President.[…]

Enough! Please ! Stop this babble and blah-blah of this incredibly conceited man. What IS enough to let him see that he is NOT the right man for the function. Maybe this evidence will help:

Icing on the cake, as far as the DNB bloopers concerned, was the bankruptcy of DSB Bank (Dirk Scheringa Beheer) in 2009.

DSB, a middle-large, privately owned bank in The Netherlands was founded by Dirk Scheringa, a former policeman. The bank started 35 years ago as a small bureau in credit facilities, Frisia Financing. It developed throughout the years into a full-service bank with:

-         a balance total of 7.8 billion EUR;

-         250,000 savers (value 3.1 billion EUR);

-         150,000 loans and mortgages to customers (7,1 billion EUR)

at the moment of its demise in 2009.

During its lifetime the bank had a reputation of loansharking, conditional sales and bleeding their customers dry with unnecessary insurances (paid in the form of a lump sum) and hidden costs. These hidden costs were so enormous that people in some cases ended with a total mortgage amount that was twice the value of their home. Commissions on insurance products were f.i. up to 80% of the lump sum that had to be paid.

At the moment that it became illegal to force people into buying unnecessary insurance products, the earnings model of the bank vanished into thin air. From that time the bank started to bleed money: all kinds of people filed charges against DSB Bank and contacted national television with their complaints. This scared away savers, as the bank became more and more of ill repute.

The final blow for DSB Bank came when a well-known whistleblower, Pieter Lakeman, instructed all savers of DSB to collect asap their savings, as the bank would be technically bankrupt. Like with every self fullfilling prophecy, this was exactly what happened to DSB Bank. Pieter Lakeman was the person who got the blame from government officials and the DNB, but the only thing he did in fact was showing that the emperor didn’t have any clothes.

All this time – from the time of establishment of DSB Bank in 1998 on the foundation of Frisia Financing, until its demise in 2009 - Nout Wellink did what he used to do: nothing, except for yapping afterwards that “his hands were tied and he couldn’t do anything, as banking rules prohibited this”.  And all these 11 years the writings were on the wall for those who wanted to see and listen.