From the Stock Exchange with Envy


“Italian capitalism is at an extreme of unpresentability”, explains Bertinotti, “as the Telecom affair shows us.” The Confindustria has responded with talk of “anti-industrial livore”.
The Italian word “livore” is defined by Garzanti 2006 as “a feeling of bitter and deaf envy”. Bertinotti would be envious of Italian capitalism that is nourished by stock options, State concessions, the absence of regulations and the State’s fund for laid-off workers? Pull the other leg. In Italy there is no longer capitalism nor industry. No serious capitalist envies our Stock Exchange. The capitalists that use their own money and not someone else’s. Foreigners stay well away from the Milan Stock Exchange.
The figures for 2005 show that with any Government, foreign investments are always miserable.


The reason is the control of the economic terrain. Just as in some regions of the South, the multinationals don’t invest because of the presence of the mafia, in the Stock Exchange there’s no investment because of the presence of the “salotto buono”. The Takeover Game is controlled by 20 to 30 people. The rest is just telling jokes.
“According to the Federation of European Securities Exchange, foreign investors buy shares anywhere rather than in Italy. “ (Financial Times 28/3/2007).

The Italian Stock Exchange has the lowest percentage of foreign investments in the whole of Europe: 13%. Elsewhere, from Malta to Estonia, the average is 33%. In Italy, there’s the syndicate pact, the Chinese boxes, and the conflict of interests. A Vietnam.
The syndicate pact works like this: two or three shareholders make an agreement and remove all power from the majority. The Chinese boxes works like this: A ragamuffin with patched trousers owning a tiny amount commands everything. The conflict of interests works like this: the same people are shareholder, manager, supplier, member of the Board of Directors and supervising auditor in more than one company quoted on the Stock Exchange.
They are unsettling people because of their multiple personalities and multiple foreign current accounts. Everything OK, everything according to law, and Consob regulations.
Corporate Governance, the rules that should protect the shareholder and the company, where are they? Cardia enlighten us.
Meanwhile the Telecom shareholders meeting decided on stock options for the Board of Directors. The first and most important priority. And Tronchetti, absent from the shareholders meeting for health reasons, was present in the box at San Siro, healed by the spring sun.

Posted by Beppe Grillo at 01:57 PM in | Comments (9)
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Hi Mr. Chiametti,

You´re right on. Italy is unpredictable. For some (especially those with good connections, good lawyers and lots of money) it is often better than it should.

For the many "small fish" it can be good too, for as long as they go undetected.

Once under scrutiny, the "small fish" usually pay dearly. Even if they are law-abiding citizens who committed only minor irregularities. They will be punished very severely. (Even going through the pain and cost of fighting and winning in court is punishment enough!)

This is the reason I contributed my opinion--that most people are quite worried about investigations by the GdF.

But your point about the "shooting stars" of Italian finance--those who raised out of the borgata to acquire billionair status in no time... those cases are really puzzling. And what is most puzzling of all--is that they can go on for so long without anyone becoming suspicious...

Italians are catholic and believe in miracles. I guess they have reason to: if the Coppolas or the Ricuccis of Italy aren´t miracles, then what is!? ;D


Posted by: Dave Matthews | April 21, 2007 03:08 PM

Hello there Mr. Matthews
I didn’t say that Investigation by GDF is taken lightly by anyone, although I read everywhere (Especially from the Government) the number of unregistered workers is enormous, tax dodgers (Even completely unknown Individuals, GDF for 2005 approx. 1700 total fiscal dodgers).
The difference is that, not until it becomes blatantly clear that High Profile Businessman are circumventing the system, well then something is done about it.
Examples are plenty and easily listed:
Mr. Coppola, from nowhere to 130 Millions in capitals.
Mr. Ricucci, from Dentist to high finance in 3 years?
Mr. Berlusconi, 1992 on the brink of banckrupcy to billionaire (Although we know about this guy right?)
Mr. Colaninno, through Telecom he walked away with billions while Telecom 37.7 Bil in the red.
Mr. Geronzi, found guilty in several Bankruptcies is stil LOL!
While this are only the few, and known only because they were caught with the hand in the cookie jar.
Although I wouldn’t hold my breath that any of these Individuals will be sentenced or found guilty of anything, actually I would bet they will walk and continue their carrier with the blessing of the Italian Statistics.
Is a matter of facts Italy is at par with Nigeria for Financial and Political corruption (43th or 47th is I am not mistaking!).
Please correct me if I am wrong.
Good luck, Credibility is hard to build up although very easy to loose in a blink of a deal!

Posted by: Giacomo Chiametti | April 21, 2007 02:48 PM

I think investigations by the Guardia di Finanza are not taken lightly by anyone in Italy.

Least of all by the honest citizens.

Posted by: Dave Matthews | April 21, 2007 01:42 PM

Hello there,
I would like to remind every one, that although regulator, the CES the CONSOB etc. are made up of very smart guys and hopefully competent and morally outstanding people (Have some doubts on the last pronoun!) the problems comes down to Credibility!
Like the good old Mr. Greenspan used to be, and the say went “When the FED speaks every one listen”.
In the US, when the IRS sends a letter saying ‘We would like to discuss with you your 2xxx Tax returns” the Individuals automatically send the following reply “Please advise on what amount should I put on the check”.
This is just to emphasize the Credibility they have, whilst in Italy well, first they let 5-8 go by and by then you may be eligible for a moratorium or the other.
Folks the money makes the world go around and drive Entrepreneurial ship, the difference is that Financiers Industrialist and Politicians have the system by the uevos (Spanish for you know what).
So when they say “Jump” you should reply “How high should I jump”.
Italian should start thinking for themselves, they do not need this idiots, when they realize (Like few do now, look at who is who in Italy!) that nobody needs them, respect them, lesson to them and more importantly fear them, it’s all over like the Mafia, Cosa Nostra, Ndrangheta (Not sure how to spell it!).
Fear and Credibility , think about!

Posted by: Giacomo Chiametti | April 20, 2007 10:42 PM

The Stock Option mechanism is not wrong, and exists of course also in the US, actually, we learned this from the americans.
The problem is again a problem of control (as always is for Italy), against creative accounting and insider trading.

That is the problem, a problem of mafia, not a problem of wrong principles.


Posted by: Antonio Disarň | April 20, 2007 09:14 PM

Hello there, every one of You,
Although Italy is in a really dire situation, mostly of his own doing, actually from the same people in charged with supply the people with Opportunities.
3% of the people control 96% of the money invested in Economic activities.
Over 50% of the work force (With any degrees of approx. the estimate varies between 7.5-8.7 Millions), one way or the other make a living working for the government, therefore not productive, actually subtracting value to the system.
I wish I had the magic wand to obliterate the Idiotic Bunch competent only for their own well being.
I don’t have it, but what I have is faith in good people and in Italy there are many good one.
I am looking for the Joanna of Arc (Miss. Lewinsky is not available at this time)willing to give to the new Top cheese of the Democratic Party the infamous blow-job so that any Magistrate can impeach him and this idiotic government collapse on itself.
My best guess is, it took quite sometime to get where Italy is today, it will take even longer to get out of it, although as I sat before Italy is too close to Europe for an Argentinean style upraising to happen.
I would put my money on several organizations very well connected in southern Italy; they may have more expeditious way to stop this Darwinian Idiotic Evolution.
As for me, I do not vote any of these Individuals, not until any Italian Politicians will take responsibility of his/her action as far as I am concerned, they run for office only as a carrier and most definitely not with any positive input or ideas.
I would need to see an action plan put forward to the electorate, with specific actions to be legislated implemented and verified, and if not like any contract penalties will apply.

Posted by: Giacomo Chiametti | April 20, 2007 06:54 PM

Investments go where there are favorable conditions.

If Italians are not happy seeing money leave the country, they need to create the conditions to attract it.

Posted by: Dave Matthews | April 20, 2007 04:36 PM

In line with what stated earlier on this article is the outcome of the future European Football Cup. Polonia and Ukraina managed to win the ballot and be the future countries offering the event. This, in turn, will attract investments and will generate cash flows for both countries whereas Italy won't, of course, benefit from this as loser of the bid.

Though a European Cup may not be fully labelled as FDI, it does indeed gather capital investments and drive infrastructures and tertiary development.

This "defeat" does reflect the unattractiveness of Italy and the situation is likely to worsen as developing countris are entering future bids for massive investments. Put it simple, keeping the current situation "as is" will not help Italy climb up the investment ladder and enhance its image to foreign investers.

It's a slight decline. Moreover, as of Today, sings of improvement are really difficult to be spotted ahead.

May European standards save Italy.


Posted by: Luigi B | April 20, 2007 03:49 PM

Italian Capitalism has become the equivalent of an enemy invasion of the Country. The weapons are not fighter jets, bombers and tanks, but a well orchestrated financial swindle that is siphoning off the wealth of the Country to a few individuals and foreign destinations, reducing its people to penury as if a war had ravaged the nation.

Posted by: Enrico Rossi | April 20, 2007 03:07 PM

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