Foreign Policy & Economic Affairs

A Mirthless World

2009-05-13T14:39:00.000-07:00

We all – quaint and unlucky humans – run like crazy people covering our faces with masks and our hands with gloves, rejecting handshakes because we don´t want to caught that nasty swine flu. That specter appeared in Mexico letting our more troubled fears come to life. We don´t want to fly anymore – at least not to Cancun – we don´t want to use public transportation or hang out at enclose spaces – at least for Biden.

As this influenza fret with deadly 24/7 appearances around the news media, governments around the globe deal with uncertain policies in order to prevent a wide spread of the disease. China – with a roughshod standing – persecuted Mexican citizens and stripped them of any rights to freely travel – they even had trouble getting back to Mexico.

The WHO rapt response to the crises was not enough to prevent the hysterical response from several governments that pursued resolutions that hoped to close all traveling from and to Mexico. The US president decided against such measure by saying that it is too late now; the virus already crossed the border so it will be unwise to do that.

As we travel around the globe we may take the influenza from Mexico to Hong Kong in a matter of hours, when we convey for viruses we also make it impossible for authorities to control the spread of a disease. We grill to travelers at airports victimizing the innocent as well. But there may not be much of a choice for authorities desperate looking at preventing a pandemic that could disrupt our daily lives.

Some ludicrous journalists underestimate the imminent threat that we face when a new virus surfaces and mutates. If we only had panicked at AIDS when it first appeared, we may not be losing that war right now.

The influenza is a powerful fiefdom that stopped normality and created – for the time being – a chaotic climate that shutdown Mexico for an entire week. Many countries like China wreak visitors with such panic that Mexicans look like terrorists carrying bombs. The over coverage of the news media is also threatening. We are seeing – gladly – that nothing major have happened, and this could pose a terrible precedent for a future outbreak of the flu. Next time we could be lulled and let the influenza spread and kills many more, and then the pessimistic will rise in “glory”.

This appears to be the case right now, lots of people jeer to what they call “excessive” coverage of the virus. If our current measures turn out to be a life saver – and no more throe appears upon us – then we will put down our guard and be much more vulnerable next time.

In any case we did not see derangement as you might have expected from such deadly monster. A complicate matter though, is that this virus pads around us all the time. Dead from regular flu stands in the thousands every year, this new virus has not caused that many dead but has the power to do so.

Flu medicine was also running out in every drug store around the world. Even when they are useless to prevent or control the new influenza, people crawl around begging for some pills. The appearance of flu peddles was just the new underworld business appearing in third world countries. One thing that came up was that people may have also wanted not to look sick, cause coughing or sneezing was the new ugly, and if you were “kind” of sick at the airport there was a good chance that you may spend several days in quarantine at the local hospital.

What dreg we have left after this whole freak episode is that we have no clue what wager will eventually appear in the future. Any disease that attack the young and healthy is much more likely to cause wide spread panic upon us. Comely people tend to be self assuring that with good health many well known illnesses won´t hit them. If they are part of a cultural virus target, then a spiral of chaos will rise.

We must be careful not to let this virus hit us with fury in the future. We know from past experiences that it comes in waves, and those usually appear months after the first group of people were affected. Even when we feel knackered with all the nasty media coverage of this issue, we have to be careful when our guard is down. Being miff is the one thing that will cause the worst case scenario to become life threatening.

One of the reasons that scientist judge as correct, is that the virus has not adapted to humans, therefore it is not lethal in the way that it could be after it hit us for the second time. Irate citizens must comply to a common denominator in the future, a world with lots of panic and virus that may or may not become a pandemic. We will see this type of schizophrenia disemboweling our daily lives to the point of becoming a grueling lackadaisical routine that will change our world.

The world as we know it is coming to an end.

Let´s shut down Latin America

2009-04-28T08:40:00.000-07:00

Let´s Shut Down Latin America

I am exhausted of feeling shame about our continent. Our land is great, our ladies gracious (exotic and charming to the point of creating a new level of pure beauty, above every other creature in the world), our spirit is strong and some people are even impulsive and bright – nevertheless – we are in the same path that has dragged us down for centuries.

It could be that we – a disgraced mix of races – are so determine to walk the path of self destruction that we are unable to think. Take our current drama stories that succumb in distorted views, we are victims of a mere delusion of socialist governments that create dreams that will never become reality. Just like the master of the universe created virtual wealth, Chavez and Co. create virtual prosperity.

That is why the first scar in our continent is Hugo Chavez. He has not just destroyed his country´s democracy; he has also created a despicable left wing thinking that poisons our continent. As he spews passé ideas the rest of the “no brain followers” replicate his same lame agenda in their own places.

Chavez may think he governs South America, parts of Central America and the Caribbean – even Castro is getting sick of this. Some of us think that he is just an unstable intolerant leader who is prompt to ignore de basics of democracy so he can be in power until the end of time. A self center egomaniac who tries to prove that he is the “man”, while bulling everyone who steps on his way.

Sounds familiar?

This is the type of leader that we like in our continent. A macho society that can´t tolerate weakness needs a macho leader that proves us that we are the “man”. When Pablo Ramos goes through life in his book “La ley de la Ferocidad” he does so by proving to everyone that he can – be successful. Falling in drug abuse and alcoholism he ends up being miserable at the same time that hi makes everyone miserable. The story told – in the beautiful Argentina – shows his tendency to be a womanizer and the irreplaceable corruption at all levels, presenting a society in decay that reflects how we treat and are treated when money matters more than life. The book is like a painting of Latin America, it intends to tell the story of Gabriel – the main character – but in doing that it also tells the story our a narcissist society that will not self endure, it will disappear.

Chavez pushed Cuba out of the dark bringing it to the spotlight as it took almost every country in the continent to a photo up magazine cover begging for Castro´s attention.

The left out?

The disgraced Rafael Correa of Ecuador.

Which bring us to this tiny country in the middle of Peru and Colombia. Correa is not only Chavez´s puppet, he is also his experiment. Since most other leaders are resolute to own their own agendas or at least get something back from Venezuela, Correa seems highly naïve to compel with Chavez´s will.

Correa may think he outsmart every other living creature in the world, which is sad because he may not be even above average. The sad story about him and Ecuador is that nothing this continent does, will take us out of this hell.

TIA may refer to a dangerous and inhumane place on earth. That continent may be the vivid image of human intolerance at a great scale. What we see in Latin America is at least a better version since we became a democracy. But the strong hopes of developing are nowhere to be seen – we may never get there.

The main reason is that we blame the US for all our problems, while the US thinks of us as their back yard. Unless we start blaming us for our own mistakes, we will never be able to overcome our simplicity.

Lugo – genteel and horny – may well have accomplished the first sex scandal this year. Not only he managed to pregnant several women, he may also be in legal trouble for doing it so to a minor. Way to go priests. At least he did nothing to children.

Morales and his coca leaf may last a month in peril of searching for a better suit constitution. This is the way our continent works, idiots become presidents, idiots keep them in power and then we complain that we have incompetent leaders.

The sad thing is that this so called leftist governments fawn to a dictatorship in Cuba. Instead of helping the Cuban people be free, they actually help the Castro´s infamous power. We – an oleaginous continent – have our evil doers depending on a incapable and lazy bunch of inhabitants that breathe in only to breathe out, they are prompted to believe that they only, are the righteous owners that should rule this continent forever.

So tangled is the core of our own mystery that the ail of millions of poor people becomes irrelevant when they cling to power. They all gather in these irrational meetings where we have become an obnoxious land of no ones. This gaga continent has become the pray of centuries of unpleasant existence. Our self deprecating art and harrowing movies are nothing more than the reflex of our lost ideas and low self stem.

We need laconic governments to provide more freedom. We need less constitution changes and much more individual liberties. Sadly we rather praise our own self destructive nature than acknowledge the wonders of individualism.

Latin America is a place where the party goes on and on. Gorgeous ladies destroy your will with a simple smile. A diversity of artists bring the world down to our rhythm – filling the lacunae in our daily lives.

But we still have no identity. This creates the perfect stage for chaotic governments that enable a masquerade to go on forever. When we became unhinged by the rhetorical questions our leaders asked, we let the precious fight of liberty go down the drain. Not only we have to fight ourselves in the search of new and innovative ways of governance, but in the process of doing so, we allowed the demons in our hearts to run rampant.

Latin American contribution to the world is less than impressive. While Asia is creating the new heavy weight champions while the US is slowly fading, we on the other hand run experimental democracies waiting for the perfect one to fit our needs.

Ortega, Correa, Chavez, Morales, Lugo, Castro, Fernández de Kirchner, all rule in third world countries with no real development to show for their socialist governments. Lula on the other hand is much more prepare and wiser than this other mediocre misbegotten leaders. He has the model that will be best to follow and he is not intimidated by anyone, so you can´t say that Brazil is a weak country just because he does not bully others.

If we are to learn anything from human history, is that we have to manage our own fate. If we let disastrous leaders run our economy we end up slaving our own future.

Although this may seem like the accurate way to go, geography matters more than before according to Robert D. Kaplan on his latest article published on Foreign Policy “The Revenge of Geography”. This could mean a lot of trouble to Latin America, which had a clear advantage over the US market for its proximity, now that Asia is growing as a super power we are in a clear path to be left behind. Asian poor nations plus Africa could provide China and other Asian nations with rough materials, in the mean time Latin America will still fight ideological ideas that go nowhere.
If geography will rule again, then opposing forms within the countries fighting the “threat” of globalization will rise – we face a new world order far away from us. Now it was fun thinking of the US as a superpower – that no matter what our leftist presidents said – was never going to invade anyone in our continent. Even more, most of our emigration was going to the north.

Now we have to emigrate all the way to Asia?

Sorry to say but that will really be a problem.

It will be better if this economic crisis turns out to be just like others in our recent history, and that the US may still hold huge power for decades to come.

The US may be immerse in the worst economic crisis in decades, but they sure know how to get out of it; and that is not at the hand of their government. They will do so trusting their own individual capabilities. It is time that we search our destiny doing the same.

In the mean time lest stop the experiments, bring back our dignity and get some decent leaders. If we lose our geographical advantage, then we will have nothing left to offer to the world and we will be the next Africa, where no good is created, and places like Darfur show us just how horrendous humans really are.

Too cool to be good?

2009-02-12T18:47:00.001-08:00

Don’t get me wrong, my friends, my associates and my business all come from the United States. The last thing that I want is for the US to stay on this downturn any longer. But things are looking bad right now. Not only Obama´s nominees are dropping out like amateurs in a poker game, but the rescue plan is just awful. I don’t know what will happen next and that may be the problem.

This is just terrible, thousands of people are losing their jobs and businesses are cutting on costs, all this brings the scenario to a bitter end. Judd Greg withdrew from being the secretary of the commerce talking about his disagreement with the Obama administration as a reason why. But take into account that is the second nominee to withdraw. This after a week in which the Obama team had seen three nominees left the table.

Obama seems to be lost in the middle of the worst crisis of our life time. When we need someone to assure us of a better future we watch the administration fighting to resolve problems. Not only on the nominee side but also on the rescue package. Geithner was part of the team that saved Wall Street from catastrophe leaving in the process billions in the pockets of those greedy CEOs.

The US economy won´t stop its free fall until trust is built again. This won´t happen until Obama can make the market trust him. Wall Street so far is not looking good, it has been going up and down but ending below the 8000 mark.

So what we need?

Someone willing to make tough decisions.

What will be of the future will be a matter on how fast things turn around in the rest of the world. So far the US looks like it is not going to make any progress any time soon. The core of the problem is far too complex for the current administration.

The economy is going down mainly because no one is hiring or investing in the future. Even tech companies are cutting costs. This means that unless people feel confident that this crisis is over there will be no turn around.

Obama may make things much better with the right team. Instead he is going for a consensus that seems to go nowhere. Suddenly Republicans are going into attack mode hitting the administration hard enough turning the public opinion against the rescue package. Democrats and Republicans agree on stimulus package of $789 billion dollars cutting billions of dollars to programs bringing the final toll to an insignificant number that will do nothing to bust the economy.

Most economist that I trust on listen to said that at least the US economy needs a trillion dollars to start a decent recovery plan. I believe the figure will be enough to bring back the lost trust in a weak system.

Take these points just to understand what I would do to improve in the short run our situation:

1- Don’t bail out banks, buy the toxic assets but wipe out stock holders, giving billions of dollars so big shot executives give themselves millions in bonuses is not only stupid, it should be illegal. Obama does not understand this.
2- Buy stock from troubled companies so they have an inflow of money, stock holders will benefit for the rising of price, but also the government that will own part of those companies.
3- Create a state fund for entrepreneurs in which states could allocate money into local banks to finance new projects, giving the new companies tax benefits encouraging people who lost their jobs into getting in a new business.
4- Let foreign people come to work, give working visas to investors, open your doors so the common man and woman that want to live in the US and want to take their money to the country. This will not big huge investments looking for quick returns, this will be people committed to make a living and to work in the US.
5- Let as many students as you can in, some of them will seek to stay bringing to the US a powerful amount of smart brains. When the economy starts picking up they will be the ones in great position to make a recovery last longer.
6- Encourage states to improve their school systems, give the necessary resources so they don’t have to cut on fundamental programs related to education.
7- Don’t go protectionist, keep your borders open to commerce, that will mean that you must improve your productivity and innovation.
8- Regulate, yes it sucks but rules must be clear so when banks go into reckless behavior they must pay for it.
9- Bring back the troops, although this is much more complicated than anyone could predict, the economic cost will easily pass the one for the economic program – yes Republicans don´t mind paying for war but complain about recovering the economy – saving billions of dollars. It will also easy the excruciating labor that those brave soldiers have carried for way too long.
10- Create a motor power based on green technology, as we are seeing the devastation in an extremely dry Australia we have to realize that the world is entering a face in which we not only have to worry about all the problems that we face right now, we have to add that mother nature just have had it with us. The world needs to find a balance between progress and conservation.
As in a strategic game there could be an infinite number of possible solutions that take us to the same bright end. This is a young administration that has faced tons of problems but that is still on time to make the right choices.

Obama is smart enough to change the course now and get things done as he truly believes they should be. I just hope that he moves quickly in the right direction, all of us depend on the well being of the US, some of us most than others. I believe that the world is not ready to have other super power, not yet.

Let me entertain you

2009-02-05T12:45:00.000-08:00

Take a look at the best performing companies in the US. Most of them are in the fast food business or in entertainment. This means that no matter how sordid the world seems, we will always cling to unreal thoughts that make us laugh and get us distracted for a while. We are sick of hearing how Madof embezzled for decades.

Sales of consoles and their video games were up in December even when everything else was falling. Movies are doing fine in this terrible economy, sports still get large crowds – although advertising is down – and concerts are scheduled as planned, meanwhile even tech industries face a tangled outlook.

This modern coliseum of entertainment is just part of well known effort to keep us from our ailing state of mine. Sports are a powerful force in shaping our lives, so do movies and lately real like video games – You Tube is the beginning of a new era of entertainment. But this also applies to politics, no wonder why Sarah Palin´s pregnant daughter got that much attention and the outstayed Blagojevich is a permanent gaga show.

I was watching the Australian open men´s final this last Sunday, and for a moment I completely forgot about the myriad of problems that we face, the millions of jobs lost, the negativity among many Republicans that just don´t seem to get it –naysayers to the stimulus plan – and finally my own despair.

Then I realize that we all need some distraction. It is good and it is not. As artists and big shot stars are destine to be in the spotlight – so we are distracted from our pity lives – politicians are also victims of the same parody. We are jealous of their success; we want them to fail – big.

Being frivolous about Britney Spear´s life is nothing to be ashamed of, her falling life enthused much more our TV sets than the raising price of oil. In the middle of this never ending economic crisis we tend to watch more sitcoms, funny movies, sport events, concerts, gossip about the stars, we hope that another politician gets caught with a prostitute – democrat – or that a gay man – republican – falls for a cop in the airport´s bathroom. Their subpar professional performance is part of their job.

From a strict business point of view being in entertainment is the right choice, recession prove? Even Tony Soprano heard complains that the mob was no longer recession proved – but good entertainment is. Unless we see Las Vegas in a harrowing free fall, there is nothing to worry about if you own a casino.

Fast food restaurants such as McDonalds are doing great, if you still want to feel like you can eat out – changing Zagat´s for Dennis may seem inappropriate – but when the economy is falling from a cliff, millions will do just that. One surprise was the poor performance of Starbucks, they are not just doing badly, they are also closing up hundreds of stores and plan to lay off thousands of employees.

Things are not just looking dim; they seem to be getting worst and with no exit in the near future. Obama only plays cool as he goes for a delicate consensus –laconic at least when we need certainty and punishment. If he only had the Bush determination to bully people around to make his top priorities work – it may have been Cheney bullying people around – we could be seeing a rapid increase in short term spending, plus reform in health care and social security. I wish that some oversight over Bush policies was also an Obama priority. He did made a statement on the sordid close to $20 billion in bonuses given by Wall Street last year. What we did not hear from him was the claim that these jackals should disgorge the money that was actually tax payer´s money. In any case these news are just part of the distraction, whether it is done on purpose we don´t know, but the final outcome is just as reveling. We are embedded by which poppy will the Obama family chose.

Needleless to say there is a sense of urgency in every word that is being expel from Obama, like Bush before him, everything has to be done at light speed, nothing short of a fully approved law will be allow when it comes to accountability. If you don´t do what I want, as fast as I want, then you will be to blame for this whole mess. He may chided lawmakers for their flimsy performance but without getting much reaction from them.

We got TVs that are running out of time, Obama has been pushing so analog TVs have more time before they go into history. We really don´t want millions of Americans thinking or reading the news instead of laughing at Rush Limbaugh or Bill O´Reily. We have to ban HBO before it runs too many Chris Rock´s performances. We want people to be entertained, we don´t want them to be entertained and think. That just won´t be right.

There is nothing wrong with any of this; we – the people – have to distract ourselves from this surreal world. Nowadays that we live more into private islands when we don´t seem to care much about social interaction – in the good all fashion manner – TV has been great at making us users of byproducts that keep us from thinking straight. Not that there is anything wrong with that.

What we have to worry about is the increase of distraction to epical levels – something that could unmoor our savage inner self – the sense that every event has to be bigger and better than the one before, that athletes have to run faster and farther than ever before, that TV shows have to be funnier and cleverer than anything before, that economic growth and recoveries have to be faster and greater, that production has to increase, that productivity has to be better, that barriers have to go down. Grandeur is our new god.

Obama was a good show – I am not saying that he is not smart enough to be president because he may be one of the smartest presidents ever – but he unhinges me with his rhetoric about change when he nominated Tom Daschle, Nancy Killefer and Timothy Geithner to the highest ranks when they had some tax problems.

In any case, the world was shocked about his performances, his speeches draw thousands of attendees and his inauguration set a new record – that makes my point. Obama is a celebrity, but every politician is one. The difference is that so far, he is trying to make things better. I hope that he is able to restart the US engine as fast as possible. I can´t take another oxymoron.

Now that Obama has become the first black president of the United States there is no other minority that will drive that much attention. He was the first and everything after this is not much news. Although another Sarah Palin could do the trick for a while – that is until something happens with Britney Spears – cause the genocide in Darfur is just boring. Maybe Craig could seduce another man, or Spitzer get another prostitute, because illegal wiretapping is not good news. We are not interested in important stuff; we do not like the boring news about famine or the human abuses in Cuba, not just from Fidel, but in Guantánamo.

Don´t blame the media, blame yourself, cause you didn´t even finish this article, or you did and thought it was really boring. Maybe next time I should put some “naughty” thoughts in here – that will make the news. In the mean time, the entertainment industry will win big, unless of course you are in the porn industry – and you need a bailout.

All the Eyes in the Right Place

2009-02-05T12:44:00.000-08:00

Today something incredible will happen, Obama will be sworn as the next President of the US. The immense magnetism that this is causing around the globe may be enough to bring one or two UFO to look down on earth and say, what is all the fuzz about?

Millions are going to Washington to admire an event as unique as the current world situation. Obama is the hope of a world in need of someone strong, with leadership, smart, curious, but most of all, with an aura of hope.

The heavy bag that Obama must hold on his shoulder is not the only problem that we face, we also need to find a lasting confidence in his economic team and his choice to be a foreign affair erudite must solve a myriad of devastating issues around the globe.

Hillary Clinton is tough and energetic and Emanuel seems like the Washington insider that will give Obama advice like a good lawyer – the one that takes your house, money, car, alimony… – well you get the point – giving him the leverage to negotiate in this tough economic times.
Obama may have recruited the best available team of experts, people proud of being eloquent and enchanted about reading an analyzing. No more friends in top places, no more ignorance running rampant on the highest jobs, no more corruption rewarded as if that was the right thing to do.

I will try to make a positive note despite the fact that Obama was never my choice, but democracy has given the world a unique opportunity to understand how things really work, and how simple they are.

We need to understand a basic premise, have Bush not been so tremendously wrong about so many things, and therefore people so desperate for change, would Obama have been elected?
This is an exquisite fact to analyze, cause as Chris Rock brilliantly put it, blacks need to achieve extraordinary things just to keep up with average white people. The same thing applies to most majorities and small countries. This may be bad for blacks, Latinos, Asians and other minority groups in the US who as a whole are more likely to achieve little. But the ones that actually achieve more than the average Joe, are prompt to be hail as remarkable examples.

Obama is that case, for what seems to be a fact, he is smart and capable of discerning the most complex matters into simple pieces that are read and reread until the final outcome that looks adequate. We look for the panoply that his image portrays on our actual misery, that sentiment reflects the need of a change in the course in which the US was heading under Bush. As Cheney vied and did not feel remorse of the spitting and destructing of the constitutions, many others see that as a closed chapter that hopefully will never be seen again.

What we must avoid is to think that just one man may bring panacea to the world, that the only presence is enough to turn things around and make this whole mess to be dissolved. If we are to bode about the outcome of this, we may as well be positive, things are down so much that it seems impossible to get any lower, but you never know.

In any case the status quo always needs slight adjustments and credible changes, right now we must wean from our current unsustainable situation, if we think of sacrifices that end in a happenstance, we may be understanding the first step of a sacrifice that needs to be done, and the sooner, the better.

Good luck to Obama on this tough journey, we all believe that a feasible future is hard to achieve, but is doable. On this epochal moment we need to cling into what we think will be best for the common good, the maudlin past that long ago offered homes and cars to hard working people is in shadows, the future is much more dim, but we haven´t seen abject poverty jet, we can still stand and create a new world.

The future scurries and we can´t hold it back. We must now stand behind the new elected leader and hope for the best, no stymie will hold back the opportunity that we must seize. In few months we will see a big difference, when Obama shows up on your TV and tells you that he and his team are doing all necessary to improve the economy, you will feel certain that is true, and work harder to make it. Bush lost that faith that people grasp to, Obama must encourage the people using his leverage to succeed in this tedious times.

Now is the best period to achieve so many things that need to be fix, let´s hope that the new leaders are at their best to take the risk and turn things around so the prosperity that was promised actually comes, this may be the time to claim that, “hard work is the only thing you need, in order to succeed.”

Let the Giant Fall

2008-11-17T16:50:00.000-08:00

It is easy to speak when you are not the one losing a job or finding that at an advance age – having worked at G.M. all your life – you may not be able to get a decent job. But tough times are here to shape a better future, and letting G.M. survive with a bail out won't be the right answer.

I always had my doubts over Rick Wagoner, I found distress knowing that he always enjoyed a wide support from every employee and car dealer of G.M., meaning that everyone is to blame for the mismanagement. Just after reading an article on the New York Times from David Brooks I came to realize that he is right. Saving the big three will send the wrong message to other companies that are in trouble. After all as David puts it "are the employees of Circuit City or the newspaper industry inferior to the employees of Chrysler?."

Maybe if Ford, G.M. and Chrysler file for chapter 11 they may never recover. But that may be the right signal to send to the companies, you either have a genius like Steve Jobs on your ranks, or you may find yourself begging for money after years of incompetent management. Obama is trying to save Detroit sinking the very own foundations of the American spirit of development.

Those millions of jobs related to this companies that may be lost will put even greater pressure on the already belated job market. No matter what the outcome is the government must assure people that it will take care of workers left out with no jobs, but it will also need to make sure that stock holders and the high management team are left with nothing.

It will be painful to see one of the big three falls into bankruptcy, it may never emerge from chapter 11, but companies like Google will grow stronger trusting their entrepreneur instincts rather than bad calls that could stalled them for years. A bail out on Detroit will only mean that CEOs like Wagoner could still find a high paid job while millions of really hard working smart guys are left unemployed.

If any of the big three survives this crisis it could emerge stronger, really embracing a new technology to transform those polluting machines that we drive today. It could also mean that no matter how iconic a company may be, it knows that it is on its own to forge a stable and prosperous future because Uncle Sam won't be there to save it.

This will also mean that if the government does protect workers, they will feel comfortable working at any company even when it is facing trouble times, they will feel that the state will back them, after wiping out all the big investors money. This will show Kirk Kerkorian to better know where he puts his millions, and stock holders to see a sweet deal when it appears.

We will see what happens if by this Friday nothing really shows that Democrats will have the votes to save the car companies. G.M. does not have enough cash to make it until Obama assumes the presidency next January. So maybe before 2008 ends being the worst year in recent memory, we will find that the big three may be the small two, or the lonely one.

One more joke Rick!

2008-11-13T18:15:00.001-08:00

I know, Rick can´t say that G.M. will face bankruptcy unless it gets that so needed money from the US government. Mr. Wagoner was self assuring on CNBC ´s interview with Phil LeBeau telling him that G.M. does not think about going bankrupt, the country can´t allow that to happen.

The US should not allow that to happen, that is true. When Lehman Brothers was left to the sharks the spiral of chaos unfolded much faster than anyone had anticipated. On the other hand I always thought that Mr. Wagoner was a lousy CEO. G.M. has been losing ground for several years now, it changed its big monster cars years after Toyota was enjoying a PR success called Prius.

I don´t know much about mechanics, but as a consumer I can feel the engine´s power and gas consumption, even when I do not understand the specifics. With this in mind Asian cars like Hyundai, Toyota or Honda give me the sense that they are more fuel efficient, have more power and are more comfortable. I would rather buy any of them than any of the G.M. brand.

Talks with Chrysler were fine now that we are facing recession. Talking about not getting a deal while your stock it’s at $4.36 is just stupid. If there is a lesson out of another lousy CEO like Jerry Yang is that you have to do what is best regardless of what your feelings are.
Mr. Yang rejected a $44.6 billion takeover by Microsoft back in February, instead he went to Google to cross a deal in advertising. Google backed off that deal facing possible inquiries of monopoly leaving Yahoo with a $12.2 a share as on Friday.
Microsoft´s proposal was for $31 per share, you know a bad move when you see it.

This could make G.M. a possible candidate for chapter 11, burning roughly $2.3 billion a month on Q3 it faces a huge liquidity problem as soon as January. Even with $15.2 billion in “available liquidity” it cannot risk to get to its minimum needs to get cash infusion. That is when Rick needs to run to Capitol Hill to beg for some money.

A bankrupt G.M. won´t be good for anyone being the same case as AIG. This confronts those two face phony Republicans that claim a free market wonder, just to bail out almost every big player in the American economy.

My concern does not lie on G.M.´s future, it goes to the fact that Rick Wagoner is just inept. If you hear him claim that G.M. needs around $11 to $14 billion minimum to operate and it has roughly $15.2 billion on cash liquidity, burning around $2.3 billion a month, then you now if has less than 2 more months until if goes below its minimum level.

Maybe it is time to show the exit door to Mr. Wagoner and teach an important lesson to stock holders, hey! fire the big boss before he brings down the company, do not reward him with millions of dollars on bonuses, do not give them a second chance.

To all those free market lovers, please accept the fact that free market does work but letting it be “free” could destroy the world economy as we know it. Rick Wagoner was defending that bail out of the auto industry saying that the domino effect that G.M. could cause if it goes out of business could prove devastating to the entire economy. If you are a free market pundit you may feel comfortable stating that AIG should be on chapter 11 with Lehman Brothers, Wachovia, IndyMac, Meryl Lynch, G.M., Ford, maybe Chrysler and Freddie and Fannie.

If that is the case then our current economic situation will be catastrophic, yes the world would have learn its lesson and we may waking up someday in the long future with a much stronger system, but for many years we could have suffered tremendous devastation in every corner of our economy.

When Mr. Wagoner says that in difficult times policymakers need to be ahead of the problems instead of reacting to the problems, it sound as if he never was told that the price of oil was jumping and people were looking for fuel efficient vehicles. He is talking about his own mistake for years, he is telling policymakers not to do what he did, making it sound as if he never crossed that path.

Do not react, that is a huge lesson. About 240000 jobs were lost this past month, maybe it is time for Rick Wagoner to be part of that statistic.

A New Era in Black and White

2008-11-05T17:16:00.000-08:00

Obama is the next US President, now what?

For most of the world – as we saw on the Economist electoral vote – Obama was the right choice to be America's President. Many see an amiable America after his is sworn to the office next year. But things are tough, and so will be his presidency.

The myriad problems that the world faces are only beginning to unfold, the current crisis is reaching to untold levels of complex derivatives that government officials are trying so hard to hide. We are at a benighted stage, the future looks dim and with the price of oil going down there are two new foreign policy aspect to take into account.

First of all Obama must deal with global warming. We saw some light when oil prices were trading above $150 per barrel, now they price is below $70 meaning that people could afford to drive big guzzling cars.

Second the financial crisis is creating a plethora of opportunities for a few really wealthy people to increase even more their income, leaving the vast majority with less money to cover their basic needs.

The world seems to have acknowledged that change is needed, even with nuance upon basic proposals the broad picture is objective to the blindest. But as we all know, whatever is cheap and brings more money, is what we will buy in the end. So with prices falling down and with no signs of recovering in the near future, oil is the king again.

Although this is good for consumers, for oil exporting countries it could prove to be devastating. If low prices are the trend then Obama may have an easier time in dealing with Russia, Venezuela and Iran. Those countries facing low prices and therefore lower income will need to cut back on costly social programs.

On the first front Obama will need to push to customize subsides on alternative energy, that is until companies have enough production to cut costs and be competitive. This or taxing oil – which won't happen any time soon. The great advances on fuel efficient cars could prove inadequate under low prices at the pump. Solar panels, wind farms, research on bio fuels, all compete directly with fossil fuels, and with oil being cheaper there is no space for any other source of clean energy.

We face a world in which pundits have a hard time adjusting to a cultural reality; capitalism won't fade even when banks fall into the government's hands. An ominous challenge is to regulate without strangulating entrepreneurs, without giving too much on subsides, without risking tax payer´s money. We sure miss high oil prices for a green future, we don't when it comes to geopolitics.

This brings us to the second problem, the financial crisis and the leaders that were the apotheosis of failure are still managing the possible solutions to hinder this recession. They failed at preventing this mess, and now they think they can get the world out of it. Shame on them.

Few harbingers were accurate when smelling the whole that was being dig underneath the housing bubble that busted. Among the future tellers that weren´t is Alan Greenspan. He is still surprise that the economy did not act according to what the theory stipulates. Maybe he is mistaking macroeconomic calculus with the theory of gravity.

Obama must deal with the most severe recession since War World II mixed with rough regimes and the threat of Al Qaeda. Printing money won't get the country out of debt, it will increase its dependence on foreign “aid” just when there is no foreign money. China holds over a trillion dollars on US debt, it cannot allow the dollar to fall so it needs to keep on buying government papers. China suffers when the Fed lowers interest rates, at present time it is 1% – lower than inflation. China loses money each time that this happens.

Those tawdry international investors who win when they speculate with the ups and downs of the market, are the ones that hurt poor countries around the world. They bet against the dollar, then against the euro, then against the peso, all of this in micro deals that create a sweeping vacuum machine that suck money out of every continent.The next US President must deal with these voracious investors as he tries to calm the market and the common people that are raving against the Wall Street´s greedy. Saving Wall Street means that Main Street will suffer, but the pain won't be as bad if the government chooses to let Wall Street fall. Punishing speculators will be impossible; the first step will be to push for more regulation and more power to international entities, something that Bush and his doctrine of isolation don't want.

More regulation will only minimize the problems, we will see if the dynamic of the US economy is enough to take it out of this crisis, and later if faith on the market could make honchos invest again.

The market teeters with no clear direction or signs of prompt recovery. The dollar strengths no because its economy is getting stronger, but because the others are doing much worse. Obama must prioritize the resurge of the US with unshakable leadership. Like Sarkosy in Europe the US must lead our continent to a sole and unify policy toward this global mess. Most of our governments will take scathing measures if they react as late as usual, this will only dampen the steady growth that Latin America has enjoyed in the last years.

Obama could not allow the lacunae in our financial world to become a plight chaos of epic proportions as it swallows every dream in which we have forged our society. He must act right now by getting the best and brightest into his ranks. He must not dodge at any difficulty, if he is to become a legend, he must put the country first, even before his party´s principles.

Que Viva América!

2008-11-05T17:14:00.000-08:00

draft-

You have to give it to the blue giant of the West. Yes they brought the financial crisis with those greedy bastards at Wall Street stealing billions of dollars, but they also gave us a huge lesson about how the future will look like.

Obama did not win the presidential election by getting 100% votes of black people, he won the election by getting, whites, blacks, Latinos, woman and Asians on his side. As you watched the crowd celebrating on Chicago you can see the diversity of the country.

Only in America could a black man with a Muslim background be elected president. Black people achieved through him the highest job on earth. It does not get any better than that, and it gives you a perspective of how the world will look like in the future.

Russia, Japan, China, India will never imagine to elect a minority leader as president, neither will a middle east country elect someone that is not Muslim, and sure enough Israel won´t have a catholic as Prime Minister.

But the US little by little is embracing its different emigrants into its main power. Now they have a black man as President and a woman as majority leader of the house. Nancy Pelosi is a tough leader who managed to succeed in a man´s only congress.

What is emerging and great about this is that Democrats being more tolerant have taken most of the seats available on the senate. They end up having a strong majority on every power seat in the country. The rest of the world may be thinking, what?

Yes the US made a lot of mistakes, mainly caused by a monochromatic party, but also by contempt to its minorities. Latinos felt abandoned by republicans, blacks no doubt about it since Katrina. A lot of changes are happening fast, the main one, America thinks green
Obama is not a black President he is a human President of the most diverse country in the world. You have to give it to America, they have done it again, they elected the most capable guy because he was most capable. As he will be sworn as the 44th President of the US next year many of the rest of the world will be thinking, is this true?

It is true, and more than that, this is the future, right now, right here. Que Viva América with all its flaws and all its achievements. Many black people were crying with joy when Obama was coming to the stage. The next leader could be a Latino, of maybe an Asian, a woman, or a regular white guy. It does not matter anymore, you truly have the chance of being something in America.

All those US haters may be left with little to cheer for, yes you hate the country but still have family there, or friends, or like a band, of the language, of their technology, sure you have doubts about the war on terror, but felt empty when the twin towers felt on that horrendous day.
It is not a matter of a new day for the US, it is something to embrace and think in the rest of countries. Unless you have the best of all cultures, of all people, you will be left as a third world country.

Every minority in the world is winning everything, from sports to elections. Take into account that we all are similar in the end. When it comes to color we prefer green, and not the kind of good green that could save the world, but the evil green that is making it disappear.
Anyways, I saw a nice picture of a pretty blond girl on top of her dad´s shoulders cheering for Obama just behind a young Latino guy. On another shot there was an Asian lady holding a camera just as a white commentator announced the latest results.

Congratulations to Obama and all that he carried on with this election. May he hold his word and have the courage to fight all the problems that the nation faces. McCain also made a special conceding speech saying that he feels that being an American is more important than any other thing. To all of us that face differences in our own countries this prove to be a life lesson, only if we unite as a nation to be better. We do not back our elected leaders, we wish them the worst, and that only mean, that we all get the worst.

A Former World View

2008-10-13T20:33:00.000-07:00

If Barak Obama is to win the US election and he becomes the next US President, then the country will turn once again as the best one by a lot of measures. That he is black caused at the beginning concern among many Democrat supporters, that he was unprepared was my main concern. I still believe that if Hillary was more honest and more committed to her ideas rather than to her popularity, she would have been a terrific US President. But that is not Hillary, despite being tough and smart she is also ambiguous when it comes to policies. She tried to mingle conservatives and liberals in the same box – that is not possible.

Obama is not my favorite candidate, I don´t like his speeches and I consider Bill Clinton to be a better political figure. Obama lacks commitment to his ideas, when I see him I just don´t feel that he truly believes in a better future, he can´t enthuse the audience – nevertheless this time is anyone but McCain. But one thing that is irrelevant to me is that he is black. And that is exactly what makes this election wonderful. It has come the time when state by state is allowing gay marriage, I do not support gay marriage, but that gay people marry is irrelevant to me. I do not support abortion, but I strongly believe that the choice should be held by woman, whom should have all the tools to make the right decision. So even when I am against abortion I feel that it should not be banned, woman must be allow to have that choice, it is only up to them – and in some cases to her partners – to opt or not for that. Many conservatives on the other hand love to slouch to woman with pesky remarks about how despiteful they find abortion´s choice of “ending a life”.

There are many other issues that I am against, but I rather oppose them intellectually than support legislation that threatens to cut liberties. I did not grow up hunting so the need to hold Weirauch HW90 and chase deer is not part of my life – Sarah Palin will be shock – but it doesn´t mean that I will go around with banners pledging to restrict gun use. To the relief of the NRA.

A world that is more tolerant could be just as threatening as a world that is too conservative. Changes somehow seem to fit perfect in US politics. That a woman and a black man fought fiercely for the nomination at the most popular party in the US was good now, not 4 years ago. That gay marriage is being allowed in certain states and not in all of them is a good process now, not 10 years ago. That smarmy Republicans seem lost with their all white candidates with no woman representation is great now, not 8 years ago. Progress in certain liberties and some equal rights could not be brought all at once, that will shock the nation, that is why conservatives are always welcome to balance things.

You don´t want to see millions of bemused guys at home babysitting kids – when nature put woman in charge because they are better suit to do a greater job than man. It is a process in which woman by slow paces are working and not staying at home, or doing it after they took care of their kids until they were old enough to be left with more freedom. It is all about adapting the entire society to the new world, without creating a wave of failures that could threaten the country.

Conservatives in this new world must be consistent to the needs of the nation; if they want to strive against liberals they must embrace true values in a silky manner. They claim that a small government is needed and they run huge deficits, they want lower taxes and they cut them for the wealthy, they claim peace and they use aggressive rhetoric to run for war. People should show their backs to this type of wonky conservatism, mainly to those unprepared intellectuals that use moral authority as a way to push for a last century agenda, when the world is fast changing into a sole entity.

The new world has a US full of emigrants coming from Asia to Latin American, with various languages, different literature, cultural backgrounds that converge in new forms, mix of races that make us all look different and somehow closer. The GOP is an all white organization in a globalize world, is an old party with medieval ideas that caused the perfect storm in just 8 years in which their top representative hold the White House.

We need someone that says no to abortion, that says yes to gun rights, that opposes gay marriage, that wants to use force instead of diplomacy, that wants a tougher control on immigration. But these ideas should not be free tickets to get a free pass on terrible other ones that have nothing to do with moral views. You can feel that these concepts are profoundly wrong; you may even think that to follow this will be to highlight what you think is hubris. In the end you must admit that if there are no contra balances to liberalism it might mangle our society to the extent that it will underscore values that many have cling on to for so long.

Tax cuts on the wealthy, lower financial control over government agencies, deregulation on the market – to later end up giving $700 billion in aid – spending cuts in social areas to run huge deficits, appointing look alike people instead of prepare ones. All of this should not be compromised by the fact that we need conservatives to oppose liberal views.

All of these battles should be on the moral ground, we cannot tolerate that these issues threaten the entire world economy. Now we finally agree what I said a long time ago, Greenspan was the worst Fed chairman in history. Two bubbles under his tenure are just as bad as two recessions under George W. Bush.

A world view painted in the streets of New York was brought to its knees when no one trusted the American President and thought this was an isolated case in which Europe and Asia will not be affected.

There is no such thing as an all mighty nation that can sustain itself without having the rest of the world helping in. We learned that while Europeans claimed their system was sound, later their “sound” banks started falling off the cliff. No one can assume that their views were right about anything just about a month ago.

Things did change and were unnoticed, things surrounded us for a long time but we loath discuss them, or at least the intellectual powerful felt blinded by current events and missed the big picture.

We will emerge much different after Obama is the new US President and the war in Iraq comes finally to an end. When CEOs are forced to quit with no much compensation, when Republicans cling to their values without being idiotic about economic policies. When jingoism is a forgotten issue. The world will always look to balance itself, it will go to a middle ground, just like people always gather in big numbers, like cities are the center of an area, like big countries the center of a region. We all tend to go the “down town”, and so the world will always be there.

The old world view has no black presidents in white countries, no high ranked woman in Middle East ones, no white CEOs in Asian companies and the highfalutin attitude of leftist governments in Latin America still shines in the horizon.

The new world center is much more liberal than the past one, and the US government will be more European than the last. The new world view has not more discussions about these issues – they are settled – the new world view will talk about real problems and not about this old social transformation. We tried to muddle archaic conservatism but it will resurge much cleaner and powerful – to incite huff in many people.

As we have entered this new century we fill that the old one looks distant – passé – we can stand on Sussex Drive in Ottawa and watch people from all over the world walking indifferent of their race. All you care about is respecting the new land in which you live, all that matters is how prepare you are, how hard working you have become. You live in an accent tongue new land that somehow is more beautiful and diverse that anything seen in the past. Sadly the hapless Republican Party still lives in a white culture that is eerie of what lies ahead; their old world view is gone, they need to embrace the new world or become the minority party of the future.

The Mystery of Unbroken Fears

2008-09-15T19:21:00.000-07:00

It is sicken and comical to watch a candidate blatantly lie in front of millions with untroubled manner. This has happened before and will occur forever, until that is when the world is over.

What is troublesome is that even when they are wicked creatures who deceive for personal gain, they are just like lawyers, torturous and necessary. Like a story that is passé the old complain about politicians should come to reality. None of the prolific speech tellers are willing to rule for the common good if it interferences with his personal achievements.

But there is no other way to make things work, society is a moving entity that follows unknown patters that are God´s guess how they work. In any case, the citizen of a country is left to believe that change is always the solution for the problems that the country is facing. We know this much, everyone always offer change, that is because we never think that our country is working as good as it should be.

You may not care about a singular voting process in the middle of the world, but there is a remarkable aspect in the human sick that is best to describe.

Ecuador will go to the polls in a couple of weeks to vote for a referendum asking if the new constitution – written under the regime of Rafael Correa – should be approved. The fact that there is a voting on the constitution is pretty important – even so – it is heinous to branch it as the best we ever had. Some trouble appeared when questions rose that the text that was voted on the assembly floor was different from the one that will appear on the Yes or No voting.

Correa´s allies on the assembly admitted that the actual text have some differences from the original one, but called those mistakes of “good faith”. They parrot responses given by the President over and over until they get transformed into a well design script. This is not unique of Ecuador, most politicians will read somebody else’s speech making you thinking that they know it by rote.

Most of the process ended up as a bunk, we are still struggling to understand if the pros of the new constitution are better than the cons. Overall it seems to me that this is the least concern that we should have in our heads.

Personally I don´t trust democracy, I do feel the need of it, but we all face the mistakes done by a majority that not always takes elections as serious as they are – or to be even clearer are too dumb to think. The problem of democracy is that just like free market it will always lead to the right thing, but only after we all pay a high price.

In this particular voting process the flaws are basically the same ones that we had before. The “wise” Rafael Correa – who by the way is an economist – poor soul, talks about change, about a better future that will start as soon as the new constitution gets a Yes from the majority of voters. What is troublesome is that most of that is just talk, the fact is that you see the same old habits, only that this time he screams that he is not part of the old “policies”. Sounds familiar? Looks like someone has the same tactics that Karl Rove used for the G.O.P.

The situation is sometimes disturbing as it seems that the government flogged the constitution and then threw it to the people – some of them who barely understand that the future of the country is at stake. My response to the nay voters is that they are wasting their time making false assessment about articles in the constitution. The main problem surrounding this whole process is the process itself.

You can proclaim change when people are in woe and, lo, nothing seems to happen for better. That is a cheap strategy but it will certainly work, even more when people in distress are clinging to a leader that they see as honest and hardworking.

The resemblance of today´s division in Ecuador looks like what happened years ago in Venezuela, it puts a wanton weight over the few that acknowledge the dangers of letting the starving claim a better future. And it is not that the poor do not have the right to claim change, the problem is that it is easier for politicians to trick them. To me this is the case today.

Millions of grievous citizens are feeling the heavy investing that the government has put into infrastructure; roads have been built, schools improved, health care given. So if you are as the majority of Ecuadorians – poor – then you will be an ingrate if you voted No.

My particular position is that in some cases projects seem like profligate investments. I understand that investment is needed in poor areas as much as big buildings need to rise in big cities. What the government must do is to find balance between these parts; if you want to execute leverage you need that first. The country as a whole does not have a path to follow; we lack that distinctive get together to go to the moon theme, that open our market so we can manufacture everything that the world needs, that unite the continent so we will be stronger.

What I always grumble about is that good words written on a paper are not relevant to change, the dim future exasperate the brightest and hardest working people, they usually don´t benefit from a herd of delinquents that plague our government. Change is a cultural matter that starts with basic and unpopular measures. This will affect not only the pockets of the rich, but some benefits that the poor get. Medicine and education could not be taken away from people, and food to children should be provided by the government if necessary. Any other wickedness by the government may as well damage our free future.

We are not committed to a better future with the rest of the country, we face the same problems that Thomas L. Friedman and Paul Krugman entitle to the Bush administration for making people go out shopping instead of asking them to face the war with all the sacrifice needed. Our path is not limpid – not to the common citizens at least – it may be blight to some of us, but crystal clear to the dark Machiavellian advisors that Correa has. He appears talking from one non sequitur to another, in the end I even doubt the evidence and hope on a glimpse of light that never appears on the horizon.

We are facing a deep transformation that may start just like every other one done in the past, with flaws, corruption charges, a youth full of stoicism, personal attacks that end up on the opposition taking umbrage on Correa´s regular tasteless remarks. We hear the wail of the hunger and a hand willing to give them help. That is a strength that populist have, it is not fundamentally wrong, what complicates it is the fact that it violates the foundations of democracy and free market. Price control and other measures are not welcome in the long run, they help create black markets and distort the real output that the economy can achieve.

I don´t believe in a transcended transformation that cannot address the most underlying problems in this tumultuous times. You should not spend as if the price of oil will be over $140 a barrel forever – Ecuadorian oil prices are much lower – cause as it happens today is falling below the $100 mark. We need a fundamental transformation that focuses on what we do best and what we will do best. We have had more than enough constitutions to play with, now comes one more. Correa may have the charisma to blatantly lie without being caught, we may be so desperate to let that happened with no accountability. We sure missed another shot at creating a unique opportunity for our children. Shame on everyone that let this happen, mainly on the passive voices that watch change without knowing that change is not synonymous of better; change is just different and there are out there a millions ways to be different and get it wrong.

You can read the next constitution as much as you want, if we as a society are not willing to enforce it as we haven´t done before, we may need to make a better one in the next ten years. We are scornful citizens prompt to depression as we pull away from each other, and there are no signs of détente between the President that has polarized Ecuador – just like Chavez successfully did in Venezuela – and a weak opposition that sure can´t make their case right. Think again, this is not about a Yes or No on the ballot, it is about starting that “better” future with the wrong foot.

An Outstandingly Talented Candidate… that should have run against McCain

2008-09-01T18:38:00.000-07:00

The more that I see Obama being outperformed by McCain, the more that I as struggle to understand why Democrats did not send Hillary to the final round on the presidential race.

Her marvelous speech on Tuesday night was even greater because of her grace, her positive attitude and the energized crowd that gave her a long standing ovation when she first walked in. Even Bill appeared tearful at times. As I watched Hillary performed in such unique way – to a crowd that maybe still hoped that things change before anything was official – it came to my head that Democrats may feel that they made a huge mistake sending Obama to face the tough Republicans on the main election.

Obama is nowhere near to take a huge lead over McCain, who at every point should be losing by a lot, considering that he is clueless about the economy, that he still wants to be in Iraq and the his monochromatic party has failed to embrace a multicultural country.

Obama has failed to bring that change rhetoric to a consistent action. While Hillary was tough and heroic Obama is timid and lacks that spirit to make a huge majority believe that despite his inexperience he will be a great leader.

McCain on the other hand is not the best choice for Americans. He wants to drill so more oil profits will go to his pals, but with no actual consequence to the price on the pumps. He is so jealous of Obama that even went to the extreme of placing him with Paris and Britney on the same add.

Knowing that America should not risk four more years with a Republican on the White House we can only hope that Obama wins an undeserved presidency.

Bill Clinton gave an outstanding speech on Wednesday after a four minutes or so ovation from an exited crowd. He did after Hillary a day before, what they should have so no one can tell that because of them the party lost on the general election.

Bill after all had one of the greatest eight years on the White House, opaque at times with the Monica scandal, but remembered with nostalgia after eight years of a Bush presidency that has bought more doubts than great memories.

The big night was on Thursday, although the big stadium presentation could mean a lot of problems for Obama, Democrats filled the stadium nevertheless. His speech was done to weight some confidence in the American audience. Compare to both Clinton´s speeches this particular one told me nothing new about a better future, but is generally acclaim as a great speech, where he said what was needed.

My bitter sweet feeling that Obama is the lesser of evil is more deep now that we have to tolerate a movie star for the next eight years. His character was not strong enough to beat Hillary in the primary, now it seems that he is not strong enough to beat McCain.

Now that Sarah Palin – an unknown governor from Alaska – is in the race as McCain´s choice for veep, Obama has to feel that leaving Hillary off the ticket was a dumb idea.

We may see that Joe Biden with all his experience overshadows Sarah on their debates, but woman that felt that Obama let them down may chose to support Sarah in the end. Remember that Hillary appealed to a lot of woman on the fact of just that, that woman are capable of getting to the White House, that is exactly what Palin is doing, trying to be a woman on the White House.

This can pose several problems for both campaigns, Obama risks losing the vote of thousand of Hillary supporters, most of the woman that could flunk to Sarah, also McCain can no longer attack Obama for his inexperience, as you know Sarah just got into the spotlight as she was nominated to be the Vice presidential choice two days ago.

But thinking that Palin could take most of Hillary´s votes just because of gender is not right either, what we are seeing needs to be analyze at more depth, you can take it anyway you want it, but Republicans placed a woman as Vice president candidate and that is a lot of accomplishment for a remarkable election, the US surprises the world every time that things looks bad.

If Hillary would have won the Democratic primary things will be different now. But things are the way they are and are far too complicated to understand why.

Obama does not seem like the great leader that the US needs in order to embrace the future. America was the hope and destiny of millions of entrepreneurs that saw it as the only place where they can achieve what no other place in the world could offer them. In a globalized world this is not longer the case.

Universities can bring and educate the brightest people in the world, give them the tools to be entrepreneurs, give them information, showing them a new culture. But only the government can chose to keep most of those bright students in the country. Allow them to have a job, maybe a working visa or to accept them as new citizens.

America needs a strong leader that knows that this is the future. That embraces green technologies and pushes for environmental friendly legislation. I have not heard either candidate committed neither to this nor to a hard future for this side of the planet.

We all saw the miracle of the Chinese growth, the ultra-modern airports, the slim stadium, the billions invested in infrastructure, their proud people and of all the gold medals during this past Olympics.

Obama does not seem like the right choice; Americans need someone like JFK to guide the country to the moon, someone like Reagan to achieve policy based on true beliefs. Clinton was a clear example of economic policy leaning to growth and equality.

So in this tumultuous times – just at the begging of this new millennium – when the US needs a strong leader with a clear vision of the future, voters have delivered McCain and Obama. Both candidates lack the sense of how the future will unfold all the imbalances of the current situation.

It is a shame that Obama has to be the next president, but true democracy brings to power whoever gets the most votes. Hilary knows this and pressed on a remarkable speech for everyone around her to vote for a better future. I think she knows that Obama is not the right one to change things, but McCain should not be allowed to win.

“No way, no how, no McCain”, those were Hillary´s words on her Tuesday speech. This implies that McCain must not win, even if you have to elect Obama to impede that.
We hope for the best, but it has to be set, I don’t think that Barak Obama was the right choice.

The black light at the end of the tunnel

2008-07-30T21:23:00.000-07:00

Again and again we end up talking about energy independence and the blindness of our leaders. Now as the price of oil is coming down, mainly because America is driving less and being more conscious about how much energy the country uses, one thing that worries me is that the green revolution may head to an abrupt end.

Now that G.M. and Ford are closing some of the factories that produces big trucks, one thing that comes to my head is that the market will go on the opposite way. Why? They are too dumb to be right.

If the world economy slows and Brazil starts producing those hundreds of thousands of barrels of oil a day from off shore platforms, we may see the price of gasoline drop significantly in the US market, meaning that people will stop thinking about saving and will go to their Hummers again.
This may seems like a fairy tale but it is not. People will go after their personal interest rather than the collectives ones, that is why unless you tax gas – yes Friedman again – no entrepreneurs will be able to invest large amounts of money on alternative energy, Mr. Pickens will lose billions of dollars and Mr. Gates won´t be putting a cent in the company Pacific Ethanol.

If prices fall that fast all the green spirit will turn black, oil addiction will prevail and the Middle East will keep on building ridiculous islands just to show that they don’t know what to do with those extra trillions that they have.

The following picture is blinding the world of economists. We are too worry about inflation fears, Fanny and Freddy, City and Bear, Iraq and Israel, if Bernanke call it recession or a slow down, or if hurricanes will affect the Gulf of Mexico, that we don´t understand that all of them are correlated to two critical problems.

Where are the dollars heading?
To the countries that produce petroleum.

Which country is taking advantage of the current situation?
Those who produce petroleum, plus the ones creating green energy.

If you think you are smart enough – and since I won´t be writing for a while – let me propose this. I will place two scenarios for the future and you will tell how they are going to be, then we can actually believe if all those macroeconomic formulas work in the real word.

If you want to trust your instinct they you are welcome too, just try to put some words on what you think about it.

a- Oil prices will fall below $100 (inflation adjusted) before 2008 ends. The world economy will recover by the first quarter of 2009 and things will seem like 2002. That is low interest rates, more consumption, low energy prices, a housing market picking up, more exports from Asia, a bigger India and a strong Brazil. The main consequence… oil consumption will grow again and big cars will crowd our roads.
b- Oil prices will be at records high, touching $200 (inflation adjusted) the world economy will hung while green technologies and energy savings keep the US and Europe afloat. Both will embrace current wind farms and solar panels while China sinks into a black smoke air that is polluting its cities. The world economy will almost face recession but it will recover by the third quarter of 2009 when these technologies hit the market and be the engine of big companies.

Two tricks on this, first you have to guess if Obama will win over McCain, both candidate´s policies are opposite when it comes to energy. Second you have to embrace or reject the idea that China can grow without the US and Europe buying its “toys”. This is the difference between having a hungry Asian and a starving one.

Maybe you are really smart... who knows.

G.M. and the Bankrupt Nightmare

2008-07-07T09:31:00.000-07:00

Like any big company that holds a lousy CEO and some blind car dealers – in the US – the future looks dark and dangerous. Not long ago intellectuals where laughing at the proposal of giving rebates and paying for gas to the big SUV buyers, not long ago car dealers across the country sent their support to Wagoner, not long ago the Prius became the car to buy, while the Ford F-150 series and the Hummer where symbols of inefficient fuel burn monsters. The conundrum of the big three just began, people where taking about the Japanese cars being better.

Ford made the same mistakes as G.M. did when the prices of oil where climbing fast, Chrysler is out of the talk because it will soon disappear. The problem with Ford is that is not as great as G.M. nor as powerful, also it seems that it begrudge the cash on hand that G.M. has; which could be devastating taking into account that the credit market is tight, and no major institution is lending without collateral.

G.M. was the brand, the model to follow, and the American pride on how to do business, even now that its international operations are performing great in developing countries, the North American ones are burning money on a breaking point basis.

Japan parlays its ability to be flexible when producing new cars using that leverage to create more sales which translates into more money, while G.M. is selling the Hummer, Ford the Jaguar and Chrysler, well it was bought by Cerberus Capital Management.

G.M. is worth $5.6 billion, has about $20 billion on cash and it is burning $1 billion a month, so you have a company that has more cash on hand than stock value, that is losing money faster than any turn around could fix, that is stuck with big SUV unsold, and that is competing with the “low cost hungry of growth” Asians. My vitriolic criticism comes from the fact that this has gone far enough, none of the intellectual elite were taken aback by this crisis, but when they spoke against Wagoner they were trashed by a lousy and mediocre P.R.

With the gallon of gas over $4 and the price of oil over $140 a barrel you can say bye bye to the good all days where contamination through burning fossil fuels was cheap enough to drive wherever you want to with little money.

Really?

When I live in the U.S 8 years ago this was already a problem, the price of gas was going up and people were complaining about the cost of heating their houses and filling their tanks. It was not as bad as it is now, but I heard them complain.
So why Detroit kept producing those monsters?

The profit on SUVs is much higher for automakers and car dealers than small fuel efficient cars. What they didn´t get is that the profit for small fuel efficient cars is better than losing money over unsold SUVs.

But what can I say, I never liked Wagoner and now that the company has been torn apart I see the brand that I admired for so long, lost into indecision and hesitation of a lame duck leader that could not take the right path when the Japanese did.

G.M. sales in June felt by 18% according to the Economist, and while they rush to make fuel efficient vehicles, on the same article a car dealer explains that people still prefers fuel efficient Japanese cars over the American ones.

This means a lot of trouble, since we think that a Toyota is fuel efficient while a Chevy is not, people will have on their top of mind a Prius instead of a Cobalt.

Some rumors about the split up of the North American operation of G.M. – which loses money every month – and the international operation are getting bigger. But this won´t fix the main problem, how to make people buy their cars.

A company that lacks a genius on its ranks, with no serious change of direction for the future, is doom to be bought – like Chrysler – or sent to bankruptcy.

While most of us can´t stop thinking about the soon to come 3G iphone – and have seen Steve Job´s presentation a thousand times –many others are thinking about the new Corolla and how Google will help Yahoo on its fight against a Microsoft´s takeover.

G.M. is out of the picture when it comes to entrepreneur spirit, innovation, development and growth. That could reflect not only a change in a company structure, but how they ersatz towards the Japanese auto models to see if America can catch up.

For connoisseurs of G.M. failures the tricky point is this, fight to get a new direction on the company, or fight to see it fall into Tata´s hands in few more years. Either way the new leader will be Toyota, who saw an interesting opportunity selling fuel efficient cars, when the big three saw nothing but a waste of time and money.

We cannot be tickled by the current events, not when we always looked at G.M. as the number one, the undisputable leader that sold more than anyone else. This may not be right to say, but I feel that the same is happening to the US. For some reason people cling to the wrong leaders until things fall apart, instead of embracing change when things can improve.

We are not looking for cars to be beau ideal we want fuel efficient ones, we want comfort and a good engine, that uses less gas than our old pickup truck, Wagoner may know how to jargon to their believers, what he can´t do is convince the rest of us that he should stay one more day.
You may not agree that G.M will file for bankruptcy in the near future, but you may like to think about which car you are looking to buy next.

You may ask for a picture of my new to be bought Yaris, but only after you send me one of your new Prius. That is the way that Thomas Friedman drives.

Current news (draft)

2008-06-12T19:55:00.000-07:00

Note: I will post some comments on current news – even when articles haven´t been finished.

This will allow me to post what I think is relevant and to sort a brief analysis that may be helpful.American Politics: Hillary made a lot of mistakes on the primary campaign, the most notorious one was her political calculations at every stage, which in the end turned her into an opportunist. She is talented no doubt about it, she is tenacious, strong, decisive, but all those qualities are not good enough if you change your points of view for political gain. We saw a well position Hillary loosing ground in the middle of the fight, while a charismatic Obama was gaining the support of the superdelegates of the party. Hillary made a good ending, more balanced, more accurate, and with Bill kept aside from the stage, her image was improved by wide margins. Obama won the nomination and now faces a dirty Republican machine, which by the latest accounts will turn to see how many mistakes his wife makes during the campaign.

I run into a great article from Bob Herbert at the New York Times today –Savor the Moment – which takes on the matter that this is certainly a historic moment in US politics. The next step will be not to be amazed by an African-American or a woman running for president, the next step will be to see that as a normal thing. America still holds a change in keeping its place in the world as a super power. Things like this make the country a place where tolerance and equality sooner or later take a front stage.

I will like for Obama to be the next President, he won the primary and should get enough support from Hillary´s followers. Remember that candidates represent a movement, so you should cling to the movement not to the candidate. They have flaws and will let you down on some issues, but the big picture needs to be what you are looking for. But my support for Obama goes as the lesser of evil, which means that McCain - or any other Republican - will be the worst thing that could happen to America. Republicans need to find the right approach between pushing for a small government and letting private companies run without any accountability.

McCain will have a tough time detaching himself from Bush, from his policies and from the all “white” GOP. He still praises tax cuts, even when the economy is sinking under them; he still wants free market to run rampant, even when the housing bubble showed us how damaging it could be. We should not stop free market from working, but controlling and setting laws that protect the common good are necessary, so when the “free” market made adjustments, the economy won´t hit rock bottom as hard as it is happening today.

Global Economy: on a different approach to what economist think, let me set two important perspectives clear. The first one is that if the market works perfectly on its own, what is the need for us commenting about the future? The economy will always balance itself – that much we know – but sometimes that balancing will hit millions in severe ways, will rationalize food supplies, will raise the price of oil to records high, will destabilize entire regions, will threaten the well being of nature. Few examples on this:

1- Energy independence: The US did not acted quick enough to keep the price of oil above $4 a gallon to change from big monster SUV to smaller more fuel efficient cars. This has caused the three stooges to be nearly bankrupt closing plants all over the country in recent months. Rick Wagoner might as well be the worst CEO in recent memory. He took a life time opportunity of developing a fuel efficient car and turn it into a too slow too late policy, that is making Toyota take the lead as a “green” car maker. People were shocked the Friedman talked about taxing gas, now that gas is actually at $4 they still think that market should work on its own. LISTEN market will always do the right thing, but that could be costly, if we intervene we can mitigate the impact on our economy.

2- Petro-states: bravo, we fed Saudi Arabia, Venezuela, Iran, Iraq, Russia and many others, with hundreds of billions of dollars. They don’t care what you and I think, they have the money and the resources to makes us crumble. The US can´t even accuse Chavez of “helping” FARC, they can´t allow anyone to attack Iran, and sure Russia can arrest as many detractors as it wants to. Suddenly these states have become the wealthy ones, democracy has been threatened in this regions and the balance in the world has been lost.

3- Food supply is short, bringing down the cost of producing it will be impossible, transporting it is getting tough and with scarce supply on the world market, feeding the hungry on the adequate quantities seem to be impossible.

4- Green technologies: on a pure economic perspective, getting green technologies is not about saving the world, it is about being efficient and using resources as much as possible. If wind and sun light are free, then why not working so they can be use to our benefit. If water supply is scarce, then why not conserving it? On a over populated world with a unsustainable middle class, what we need is green technology that could provide fuel efficient cars, clean energy to our industries and houses, recycling on a world scale, conservation of natural resources and mass transit transportations. Selling millions of gassy cars a year is not any good for our ecosystem, but if you look at the traffic problem in major cities, you can see that is not good for the economy either.

5- Globalization: you can though numbers and prove that globalization has more pros than cons, but the main problem with this force is that we have no control over it. it could go either way, helping poor countries develop faster, helping rich countries expand their businesses, but in the end what is doing is creating the sense that frontiers won´t matter in the future. Why is this a problem? Because our weak international institutions are unable to police bad apples, so companies that hold industries in different countries won´t be accountable for their misbehaviors.

The second one is that the US has run imbalances that are creating chaos on the international markets. If the price of oil at $135 is a shocking number, would it be that high if it was priced on the Euro? Also interest rate this low on the US is weakening even more the already “worthless” dollar. A war that needs to be finance, job losses and unemployment running at 5.5% creates a sense that recession may be worst than previously thought. Unless the next US president assume a correct economic policy and let tax cuts expire, end a costly war, and put the budget on balance again, the US economy may hit a point of no return. The worst scenario will be when a country won´t want to sell you “goods” because your currency is trade so low, that you are not a desirable market. Don’t believe me? Latin America is exporting more and more to Europe rather than to the US, why? Because the euro is stronger bringing more purchasing power to exporting industries.

Economic future: the US will be on hold until the next November elections. McCain must be defeated so republican finally change their lame strategies. A monochromatic party that has caused so much damage to the country should already learn its lesson by losing all that it can lose. A nation that has neglected research, were social programs are unfunded, where health care is too costly, cannot focus on keeping its position as the number one country in the world. I believe that the US will recover after the third quarter of 2009, until then we will see some severe changes in public investing, tax cuts, health care and trade balances. Inflation will hit the American market in couple of months, while the price of food will keep climbing energy cost will take a toll on the travel industry, on the three stooges in Detroit, on purchasing behavior of millions of Americans.

Economists should stop considering all the variables possible that could take an economy down, it is bad enough that we get every fore cast wrong, we tell governments how to act and the economy is getting worst on a daily basis. We can take all the numbers available and correlate the impact of high fuel cost on the purchasing power of people, learning how much it will affect the service industry. So? Read Robert Driskill on a Foreign Policy article “Why Do Economists Make Such Dismal Arguments About Trade?”, to realize why so many people is detracting from our point of view.

Numbers about the future of the economy tell us nothing, more often when Bush talks about tax cuts working, even when we are on a recession, then you hear job losses and people like Michael T. Darda speculate how accurate the Labor Department could be.

The real numbers are on everyday people struggling to pay mortgages, trying to get their kids into college, facing extremely high prices at the gas pump. Sure they are to blame for being careless on their spending, but that is why we have governments, to make sure that we don´t worry about those things. If the GOP thinks that the big bad government is useless, and private companies with no oversight could do better, the Katrina, Iraq, food productions, energy conservation will be in great shape today.

A Food Crisis that Hard to Stop

2008-06-01T16:52:00.000-07:00

Draft
Part 1
An economic approach to the current food crisis is raspy to understand. You have to push through substantial reforms that may threaten millions of lives while letting the free market fix the high prices of food. Every decision being made and the consequences of them can push even further to the abyss poor nations -that struggle as they try to mitigate the famine that their citizens are facing. Our effete standing toward food aid is hurting places such as Sudan where hundreds of thousands will die if we don´t act soon.

It is imperative that alternatives should be consider with correlation of the effects that they have on the budget of hundreds of millions of people living with less than a dollar a day -read an article from the Economist "On the poverty line" to understand how the World Bank measures the purchasing power of people, they analyze the effects and numbers comparing various years using purchasing-power parity (PPP), so you have an idea that statistic could be misleading as they tend to draw a poverty line that is done according to a subjective perspective. Still we have to address this matter taking into account how to reach an agreement between farmers trying to profit from their production and billions getting the food needed to survive.

A big obstacle we face is that the world is moving too fast, our governments are incapable of building the necessary infrastructure that our current industries demands they shun to the responsibility of creating a XXI century world. More disturbing, private companies are also getting behind our needs and this has become a major conflict now that we need more food to be produced.

You have to wait to get a new Prius, your phone calls made through your cell phone get cut all the time, private insurance has gotten to a point where companies are struggling to pay for it, investment in new energy sources have not driven down the prices of those new alternatives so the mass can adopt them, recycling companies are too few for all the waste that humans produce, this just to name a few examples on critical industries that are failing to meet our needs. But the most critical one -the food industry- is the only that can crash a country in no time bringing the toll of deaths – caused not only by famine but from public unrest – to numbers that we have never seen before.

Food shortage has become a sordid problem that the world seems unprepared to handle – it has always been around – but the current scale makes it impossible to solve in the short term.

The factors that caused this food crisis to go out of control are various; some of them can be blame on economic mishandlings but many others are related to the rise of China and India, Global Warming and the high price of oil. Even when many politicians could cri de coeur matters will stay the course until arid soil could be turn into productive land.

On the economic perspective of the food crisis we have some serious analysis to make. Here is where we can blame our governments for poor investment on infrastructure and poor criteria when giving subsides to agriculture – such as CAP in Europe. Although we can trace how much this subsides had affected third world countries that couldn´t compete with low prices, the main reason to have them was the invaluable feeling that food should always be grown locally as much as possible, in case of a world food crisis you can always count that you won´t starve to dead. It is cinch to assume then that Europe won´t do anything to change its policy toward CAP in the near future.

There has been some recent criticism in Europe to the CAP approach. On a recent Economist article title "Let them eat cake" the French minister Michel Barnier was quoted saying that he does not “believe in industrial farms”, also implying that he is looking for a different approach on who gets subsides and how. The article goes on explaining that some American imports are ban due to "health" concerns – poultry washed in chlorine is a good example – this keeps the prices high, but the problem is that now that the rise of food prices has been constant, Europe is not taking serious steps to let the market set the prices, they are keeping subsides as if prices were low and they thwart any efforts to drive cut subsides.

The lack of efficient infrastructure investment in third world countries made agriculture a not desirable business to get into. When products were grown by rural agriculturist there were no roads to take them to bigger markets in cities, so a lot of the production was lost and the one that made to the markets was taken by intermediaries whom made the biggest profits. With no leverage to negotiate prices they barely survive and agriculture was not a business creating entrepreneurs, was something that was inherited and the only thing that this poor people could do.

This obviously discouraged many small growers that couldn´t afford to transport their products to nearby cities, it also left a lot of land unproductive. Not only this affected the prices to the final consumer, it made the development of new growing techniques impossible.

The crisis is worth to be seen from this angle – from the poor countries side – they are the ones that will suffer the most while this crisis last. Two factors are critical as they hit vulnerable people, one is that rich countries will always get access to food no matter how expensive it gets, they also give billions of dollars a year on subsides to its agriculturist. This means that producers from poor countries will want to export their products to these rich markets despite the local outcome of their decision. If prices are higher around the world they will get more money from exporting than from selling in their local markets – see the Argentina´s case. The second factor is climate change, agriculture has always been a risky business – as it counts on the good will of nature – but with droughts in Australia, “el niño” hitting many countries in South America, Africa facing drops on production due to little raining and several other countries watching their agriculture facing extreme weather conditions –the the risk is higher than ever.

One cruel example of how countries are using high food prices to their advantage is Thailand's proposal to make a "rice cartel" with Vietnam, Cambodia, Myanmar and Laos. They think about manipulating prices just like OPEC does – even when Mr. Samak denies this. The outcome could be devastating if they manage to keep price of rice at current levels, we can forget about affordable rice in the near future. Thailand exports around 10 million tons a year, three times as much as the United States, according to an article from Thomas Fuller, this means that they could become the Saudi Arabia of rice, and with countries like Brazil, Egypt, India and Vietnam talking about cutting their exports to ensure local supply we know that the "cartel" hold more power than we think.

This brings us to the food aid debacle. As prices keep skyrocketing food aid donors need to put more money to maintain the past levels steady. At the beginning of May Bush proposed to give $770 million on new US aid – according to Reuters – on the same article Robert Zoellick was quoted saying that two billion people could suffer severely from this food crisis. So Bush's proposal could actually be effective as it somehow slows famine in several countries. The problem is that if demand grows at current levels and supply stays stagnate, prices will be higher than expect by food aid donors, which means that more money will be necessary just to maintain people from dying, bringing to cero all the progress made to decrease malnutrition.

The rise of an undesirable middle class from India and China that will only exacerbates global contamination, food shortage – as they turn from rice to meat – and push prices of other goods to records high, is making the competition for food even worst. They have the money to get the food that they need, while many African countries that depend on international aid are seeing their daily meals running short of what is expected. Sure the approach of the WFP was stupid enough to give “free” food instead of investing in agriculture so these countries could produce their own, but local conditions made it very difficult in some areas to pass through corrupt governments and civil wars, like the genocide in Darfur.

On a New York Times article "Food Crisis Meets Chaos in Horn of Africa" Jeffrey Gettleman talks about Somalia and how Africa "was about the last place on earth that needed a food crisis." People there haven't eaten for weeks and the animals they had – due to a severe drought – were dying increasing the chaos there. Gettleman mention Jeffrey D. Sachs as saying that some countries in Africa face a perfect storm. He explains that food aid is also scarce because local violence in places like Darfur makes it really hard for aid to be delivered. Another problem Gettleman described is that Americans launched air strikes on Somalia accusing it of hiding Al Qaeda terrorists; this has caused a "wave of revenge threats against Western aid workers". This is added to the already terrible shape of international aid. Like in Myanmar when aid was not accepted, African regions could face famine not only because aid is short, but also because they don't want to receive it.

This is a storm that was formed while we enjoyed talking about global warming and thinking that climate change won´t hit us anytime soon. We know that prices are up because demand is higher than production, but what has caused all of this?

Low production is the first problem to face. If demand is big you would expect that high prices will encourage many more individuals to start producing and get their products in the market, therefore products will be available in more quantities and demand will balance with what is offered. Also demand will contract over non necessaries items, bringing the pressure on prices to lower levels making them go down significantly.

We encounter two big differences on the analysis of this food crisis. On one hand we know that demand will eventually go down on its own, although this will cause famine in many regions –Africa will face the worst of it – malnutrition in others and severe changes in ecological systems that will be turned into farm lands, as they become more attractive to investments. On the other hand we encounter that even if supply increases it will be slow on certain regions that are suffering from severe droughts such as Australia. A problem is that supply is also going to satisfy the need of biofuels that pay much more than a hungry Sudanese child.

So even when supply increases not all of it will go to feed people, some will go to feed animals –grains that go to cattle –and other to “feed” our cars. This will bring the balance as follows: food demand will raise bringing prices to the roof; food supply will catch up eventually when the world faces an economic downturn that finally stabilizes the unsustainable growth of China, India and south East Asian nations. But food prices won't go down as alternative biofuels take much of the production and turns it into ethanol.

The inevitable force that will make farmers need more land to grow food will be a heavy toll on protected areas. Brazil may cut even more trees when farm lands are a better deal than standing forests. Rivers that in some places are already polluted will take water from habitat areas to agricultural ones lowering the quality of life for millions.

As production increases so will the need to improve transportation, the need to control the kind of production that goes into the country, safety measures will be harder to implement, speculators will play with futures, but most important as the economic cycle ends, millions of kilometers of grown areas will be left abandoned when prices drop. This will create a devastating effect on the people that bet too late on food and will leave an irreparable damage to nature.

The excessive and threatening demand from China and India, that is excessive because it happens too fast, and threatening because the world can´t handle a middle class this big, is bringing the prices of every product on earth to records high. They sure have the right to ask why they can't enjoy what the West has had for decades? But they also are entitled to answer, are they willing to destroy the world for that right?

Both countries hold about 36% of the world population, both are deploying millions of its citizens around the world on business trips to get as much rough materials as possible. A growing middle class from this countries can put on the street millions of new cars a year – China bought 8.3 million last year alone , millions computers – China bought 2,5 million notebooks on the first half of 2007 , a millions of cell phones, one billion cell phones were sold on 2007 on the world, just to name a few. Even when producing these goods is done on sustainable basis the wastes produced by them contaminate on great scale our fragile nature. Sure clothes will be available to everyone.

Clothing them is one thing, when it comes to feed two giants things get rough. If you move from eating rice and vegetables to meet, you are creating demand for inefficient food sources, such as cattle, in the United States on factor farming production cattle that is fed of corn is called corn-fed of grain-fed, this means that they don´t have a diet composed of forage but they have a diet that involves corn. How about giving to cattle the corn needed to stop famine in places in Africa and Asia – I am being ironic by the way.

According to a Foreign Policy article title "The List: The World's Most Dangerous Food Crisis", some countries will be hit mercilessly by short food supply. North Korea for example will face "the worst food crisis the world has ever seen", the price of rice it’s up 186% since April 2007. About half of the population in Pakistan suffer from food insecurity, and "the average food prices have risen 35% since last year". Indonesia is on the list, Ethiopia where 45 percent of its population is undernourished has no problems with food supply, but its population simply can't afford high food prices, so according to Josette Sheeran "food is on the shelves" but people lack the money to purchase them. Yemen is the last country on the list, and the article mentions that "the World Bank has warned, Yemen’s food crisis could wipe out all the gains made in poverty reduction between 1998 and 2005."

But we have much more to discuss: the price of food correlated to fuel surge, the rise in price due to the use of corn for biofuels, how CAP is not the answer to solve this food crisis, the millions of dollars that the fertilizer sector is making this days, how much food is needed to stop millions from facing famine.

Most important are the answers on how to solve this problem, they are basic to endure a long term reaction that applies economic development to a sustainable growth of developing world countries. Gordon Brown, Robert Zoellick, Jeffrey Sachs, Josette Sheeran and others will be quoted proposing measures that may reduce the threat of global famine that could appear on a scale that we have never seen before, I will also state some conclusions on the direction that I think is needed, and some on the direction where I think we are heading. On the second part of this article we will see the plethora of opportunities that we have as society to solve what could be, a long lasting crisis.

No longer for a Clinton

2008-05-06T19:44:00.000-07:00

As soon as my exporting is over, I will place the long awaited article about the food crisis.

But for now I wanted to talk about Hillary Clinton. First of all I supported her since the beginning, is not just that I don’t like Obama, it is that Clinton seem tough enough to take America back on track. But with the tax break proposal – following McCain on it – I must say that she will be the wrong person for the job.
How stupid is to propose easing a tax that will create little relieve to people while taking billions out of the government. No matter how you want to finance it, the problem with the US is that it is consuming too much gas, sending billions of dollars to countries like Saudi Arabia and Venezuela.

And opposing Nafta, that is the end of my support, at first I just thought she was trying to be nice and get votes from states that had lost hundreds of thousands of jobs, but now that her economic proposals are simple wrong, I must say that she is in to take the country on the wrong direction.

As she drags the election to a bitter end, Obama seems like the lesser of evil, while he deserves to win against an “I don’t know much of economy” type of candidate, the country need a tough hand like Clinton´s. Sad enough she made all the wrong choices and I must say, she will do on her first term what is needed so she win a second one.

It is a tough choice to make, but looking at what all the candidates are doing, and how the economy is barely hanging, Obama has turned to be my choice for President.
Please read an excellent article on Foreign Policy – the last issue – title “When China met Africa”, and picture how that racing power is embracing investments around the world, while the US is being bought by Europeans and big banks are getting money from Abu Dhabi. The excess money in the world is enough to purchase big chunks on American iconic companies. But Clinton is pushing for tax breaks on the summer and is opposing Nafta.

Maybe her selfish and egocentric behavior was more powerful that her toughness and decisive character, too bad that she didn’t see the big picture, she could had been a great President. We will see what Obama can do for the country.

Iraq and Global Warming

2008-04-27T08:55:00.000-07:00

(Part 2)

-draft-
Iraq is not entirely responsible for the incoming debacle in the US economy, but the resources that is using could had helped in making the recession less painful. Another problem with the $5000 a minute that is using -read part 1 of this article- is that it is financed with debt, and the billions needed to cover that debt are bringing the value of the dollar to its lowest levels in recent memory.

Part of the difficulty is that instead of raising taxes to finance the war, Bush proposed tax cuts during his first term. This put more pressure on the already weak dollar and it distorted the perception of a conflict that to most of the American citizens should end right now.

The US government policy is this, let the future generation pay for this conflict -since they will have to assume the current debt- we don't have to worry where that money will come from, we will be out of the office soon. This particular thought is what makes this war illegitimate, Bush was reluctant since the beginning to make the war against Iraq a matter of national commitment. He knew that if he taxed people in order to finance the invasion of Iraq, the support would have fallen right after the military operations started. The intellectual elite -not just the liberal media- supported the war based on insufficient prove, while millions went to the streets to oppose a war that they knew was phony. With taxes on regular citizens more people would have criticized or at least read more about a war that they would have to pay. This could have threatened the "war on terror" that was being developed by the Bush administration.

You can see how important are the financial priorities and its consequences over any policy that a government wants to take. Popular unrest starts mainly when our pockets are affected; international negotiations are more effective after the global community acts blocking a country on financial terms. The U.R.S.S fell because it didn't have enough resources to keep up its socialist model; China is destroying every natural resource that it has -no matter what the outcome- in order to keep growing and with that making its people happy. Iraq before the invasion, was a country devastated by the oil for food program, it couldn't even armed itself to the levels before the first Gulf War. The examples are various at showing just how important are to any organization and individual the money factor.

Sudan -as I have explained before- will skip any international condemnation as long as it continues to provide oil to China, whom will not be pressured to act against its economic priorities as long as it provides cheap merchandise to the West. No single policy is made without the consideration of the financial impact that it will have over the ruling industries.

Many conspiracy theories base a lot of their analysis taking the economic benefits that certain people will get from doing something evil and hidden. Take for example the claims made against Silverstain -right after the Twin Towers felt on the infamous terrorist attacks of 9/11- suggesting that he was well aware of the attacks, and didn't act properly because his insurance will cover the billions of loses inflicted by the falling of the buildings. It was also claimed that the United States wanted to keep the price of oil low when it invaded Iraq, and wanted to give billions of dollars in reconstruction contracts to big US companies. The outcome was much more different, the beneficiaries were third world countries that hold their debts in dollars, big US contractors, big oil companies, but the really big winners, speculators.

Now that the US economy has fallen into recession, the priorities have changed for a majority of Americans. Iraq is no longer their main concern -keep in mind that they are not paying for it- it is their job stability and the future of the economy. According to The Economist about 92.000 jobs were lost this past March, bringing the unemployment rate to 5.1%. Global Warming could also be forgotten if in order to enact laws that protect the environment people will have to expend more money on heating, gas, or taxes.

This is why economic policies are a delicate subject that it is not easy to address. For that matter a lot of priorities are not developed with money that is available, they are rather done by creating debt that is intangible for the citizens. This being the case is what reshapes many of the current actions taken by the Fed and the US government. The first one is "bailing out" big investment banks that took reckless decisions putting billions on sub-prime mortgages that were a sure loss. The second is giving tax rebates to US citizens that -on a minor rate- also took a high risk in buying houses beyond their means.

Where this leaves the Iraq war?

The war in Iraq has three major impacts on the US economy:

1- It brought the price of oil to records high and there is nothing that the world can do to stop that. Venezuela is using the money needed to invest in oil fields to help Chavez hold into the presidency "forever". Iraq most of the time is extracting oil at levels before the invasion, Iran is consumed on political conflicts that distract the government from its job, Russia is nationalizing its oil fields kicking out foreign companies that have the technology to improve oil exploration, Sudan is sum in genocide that from time to time threatens their oil fields, Saudi Arabia does not provide an exact account about how much they can really produce, this means that we don't know if their reserves are in good condition or not.

2- The billions allocated to the war far exceed what was needed to finance an universal health care, the baby boomers social security retire benefits, food stamps -now that the US has fallen into recession-, college loans to millions of eligible students maybe even scholarships, the badly needed update of the US infrastructure, the finance of tech research, bio research, also it could have funded the energy independence that the country badly needs. Since none of those things were important to the administration, nor to the republican ideals, they were left into the darkness, cutting some of the most important programs for the elderly and the poor. Such things as the V chip were left without enough funding, amen of the opposition of powerful groups.

3- The billions of dollars needed to fund the war placed too much money in circulation, meaning that the availability of dollars in international markets will soon make it vulnerable to speculation and holders will sooner or later get better deals getting rid of the green buck. This created an overflow of reserves of dollars in Asian countries, that suffer billions in loses each time that the exchange rate is making the dollar less attractive. The impact of the war is felt through indirect prisms among various stages of the world economy. Several oil producers are now the new "rich", some others just turned more authoritarian. The majority of the world was affected by the outcome of the war. Even with high oil prices -and the possibility that this could help fight global warming by turning into profitable goods some alternatives energy resources- not major policies were taken in order to curve our damaging pollution behavior. Instead the food crisis that the world may face is the worst outcome of the "grow corps to produce an alternative to oil."

By increasing the price of oil in the world market, the war in Iraq exposed a profound crisis of the uncontrollable appetite of two fast growing powers, China and India. Both need to increase their GDP as fast as possible so they can create the wealth needed to maintain their people happy. Both lack the oil to make their industries grow as fast as they want to, both are the most populated countries in the world and they need vast sums of food impossible to produce in their lands. India with its $2500 Tata car could destroy the world as we know; China with a financial crisis could drag the US economy to a point of no return.

My principal concern is that after the Iraq invasion the United States lost its moral ground to police some authoritarian countries. China is able to use its leverage against the Tibetan independence movement with no serious objection from the United States. Also the economic ties that come with globalization had shift the political power away from governments to big corporations. So even if the United States and India want to help the Tibetans against the brutal oppression of China, Private Corporation could be more effective at making that opposition be superficial, leaving the economic priorities intact.

On that same matter the war in Iraq looks more of a business movement than a security priority. Take what happened with the private military contractors that shoot dead several Iraqis with no accountability toward their actions. Bush on a press conference transmitted on CNN was asked by a female student of South Asian studies at Johns Hopkins University – “… the uniform code of military justice does not apply to this contractors in Iraq?”, his answer was “I am going to ask him, go ahead” referring to his secretary of defense at the time – Donald Rumsfeld- later laughing and saying “help”. At the end he didn´t answer the question so the student that was left without an explanation on how a private military contractor is able to provide service to the United States with no accountability of its actions, not in the US nor in Iraq.

Billions of dollars are reported missing or overcharged to the US government, billions more are stolen from oil fields, all of this while the indebtedness grows at an unsustainable rate. The war in Iraq was good as a wakeup call to the unsustainable energy consumption, but unless we take the right steps to "detach" our economies from oil producing countries, there is no way the world could survive a "real" energy crisis.

The United States is not leading Western nations to develop technology that can supply the energy needed with the less pollution possible. It is not acknowledging either their internal problems with letting the private sector run everything in the economy. Even military contractors are free to fail big orders -pending a Supreme Court decision the pharmaceutical companies could not be held responsible for dead related to their products. Big companies manipulate how the world runs, big banks manipulate how economies behave, big investors speculate at the expense of the billions of poor inhabitants of the planet.

What three trillion dollars -read Stiglitz latest book, The Three Trillion Dollar War: The True Cost of the Iraq Conflict - could have done to the global economy will always be a guess. More than that, those trillions made the most powerful nation invade a country with no viable considerations of the outcome. Money has been the only factor behind human behavior since our beginning. The fun thing about it is that money has an intangible value, and we run our lives and the world base on the perception that it worth something. If you like to have a wide picture of what trillions could do read a January 2007 article on the New York Times from David Leonhardt where he puts in perspective what can be done with that kind of money, although the he talks of just 1.2 trillion dollars.

The ultimate thought is ought to be that no matter what we think is the correct policy, no matter what is the right thing to do, no matter how bad something can damage our future, we will make our decisions considering how much money will be out there for us. Iraq and Global Warming are a clear example of fail policies that did not take into consideration the monetary value that drive our sentiments. Unless we measure in our future policies what an irrational number is 3 trillion dollars for wars, and trillions for not take actions against Global Warming, we may never understand the whole damage that we are doing to our future.

Be true to yourself; put a price to your heart.

Iraq and Global Warming

2008-03-30T11:17:00.000-07:00

(Part 1)

It is a fact that the only thing that moves humanity is money; power and other accessories come with it. Therefore, money is the final answer to every conspiracy theory out there -about anything.

This pops up the most important question that the world faces right now. How do we stop Global Warming from destroying our planet? It also helps to answer a key question about George´s impulse to invade Iraq despite the lack of evidence against Saddam Hussein. Why did he do it?

Two hypotheses will be analyzed as I try to explain how money is the only determinant behind failed policies and also unprovoked wars.

First hypothesis: The only factor that will function in the race against Global Warming is taxes on everything that emits pollution.

Second hypothesis: The only reason why the United States attacked Iraq was money.

Just in case that you don’t find any connection between this two hypotheses learn this. The Iraq war is running at $5000 a second, according to Nicholas D. Kristof of the New York Times, but it is finance with debt, not with taxes as it should had been. If you tax people they will complain and the support for the war would had fallen years ago. So it is universal that if you want to change people’s behavior -as a government- you have to do it by affecting everybody´s income. That is why if you are talking on real terms about Global Warming, you need to tax polluters. This is a caveat that we need to address seriously, otherwise we will continue to hear Al Gore from years to come.

First of all we need to assume that there is Global Warming and that this is caused by man, we will leave other theories out because even if there is no Global Warming, and even if it is not caused by men, we need to acknowledge that our present level of contamination is bad enough on itself.

Let’s put Global Warming on a single person perspective. On your work place you see a lot of waste by most of your co-workers. They print too many things on new paper, they don´t recycle, they don’t turn their computers off after work, lights are usually on even when they are not needed, heating systems, cooling systems, and any other artifact that keeps the temperature as you want, are unnecessary set to high standards.

And that is just with things that are part of your working experience –feel free to add any other wasteful act or to demostrate that attitude. But if we go forward to a more expanded network of activities we see that our companies in general, are enclave in part of some serious natural damaging businesses.

Look at you production lines (not good examples of thrift) and try to come up with every item that pollutes in great scale some part of your environment. If you are into developing software, do you care if your computes will be recycled after you are done with them? If you export flowers, do you care if the boxes and paper that cover them will be recycled by the florists? If you work at a newspaper, do you care what happened to the millions of papers that you print every year? The examples could be infinite.

This is going forward in your business, what about going backward. Do you know where the paper that you use at the office comes from? What about the light that is provided to your company, or the new laptop that you bought? Is is part of your concerns to focus on where those new wooden desk come from? Were those trees planted specifically for industrial purposes? Or were those trees cut from a natural reserve forest?

A troubling study found out that Global Warming has a exponential effect –I will not get too much into technical details that you can easily research- on how it acts over delicate ecosystems. The study “quote needed” found that when trees are under extreme conditions of heat they stop emitting oxygen. This pose an uncontainable problem, if trees are located in extremely warm places in the world, they won't help in absorbing carbon dioxide but instead they will contribute to the already excessive pollution. Scared already? If they don’t convert carbon dioxide into oxygen the heat on the planet accelerates even further.

A separate study on the Arctic – by NASA- found that “emissions of black soot alter the way sunlight reflects off snow”. Therefore, energy that the sun emits to that particular place is absorbed, warming up the zone even more. So when the ice cap melts, the consequences are disastrous. There is no way to stop the sun from reaching those places, there is no way in the first place to keep that ice cap from melting. And you know what comes after this. The ice melts, it warms up the ocean, the sea level increases, the currents are altered and the extreme weather developments after this, run rampant tearing down the planet. It makes you begrudge the past or at least our present when you think about this perspective; billions of people that live in low areas will be affected by flooding, coastal areas will be swallowed by the ocean, and let’s not even talk about the increase of hurricanes, droughts, heaving rain, extreme weather conditions (torrid areas absorbing thousands of kilometers). What will happen to our offspring?

There are important questions to ask. Is it too late to stop the earth from overheating? What if we control the emission of green house gases, would that help? or could that only decelerates the inevitable? What if what we need to do is not just stop the current warming of the planet, what if we need to cool it down?

As far as we can see if our ice age is over and the uncontainable warming of the earth is not just a product of our human irresponsible behavior, any action that we take right now won’t stop the planet from getting hotter, it will probably just delay that. This doesn't mean that we should act as if the inevitable death is a blank check on our acts. As Robin Williams said when he played the role of Patch Adams in the movie with the same name. "Our job is improving the quality of life, not just delaying death”.

The main actions, thought comes to the inevitable. If we are to maintain our standard of living, we need to take serious improvements in our wanton behavior. If you have to pay too much for a specific service you have two options. The fist one is keeping your present consumption as if nothing has changed, the second one will be to lower your consumption.

But this will only work if we believe that man is driving the temperature to records high.

Let’s assume that this is the case, the green house gases that are thrown into the atmosphere are the only cause of global warming. So in order to stop global warming we need to stop emitting those green house gases. Industries don't have any reason to do that if there is no serious consequence on their actions, common citizens are unwilling to change their behavior for a good cause. That is why taxes come as the only predictable solution in the table -any other proposal is sophomoric.

Changing from fossil fuels to biofuels is not right either, on a Newsweek article Michael Grunwald talks about the enormous threat that this poses on the Amazon where deforestation is destroying the entire ecosystem. We are not only losing trees, as the Amazon is deforested carbon is free into the atmosphere, this has made Brazil “fourth in the world in carbon emissions”, according to the same article. The Amazon is being killed because as we embrace biofuels, they turn into a lucrative business that expands at a fast rate. Since there is no other place where you can grow crops to produce biofuel, the agriculture expansion has no other way to go but into the Amazon, which lost in the second half of 2007 a chunk the size of Rhode Island.

A way to change this is by enacting laws that punish people who are destroying the environment, it is also important to drive the international community to assume the responsibility of paying countries like Brazil so they can protect the Amazon. To do this you need political will, but this will is tie to electability, so members of the United States Congress –in general- won’t take their chance if this is not supported by the constituencies. This is why the whirlwind war in Iraq could be the best foreign policy decision that George has taken, even when the consequences are different from the original ones.

The fact is that when the war helped out to an unprecedented increase of the price of oil tied up to the devaluation of the dollar, people started taking serious steps in order to reduce oil consumption. This being the case, much of the next important inventions will be driven by energy promoted investigations, hybrid cars, cities run by renewable energy, thousands of solar panels, millions of wind turbines, etc. Which may end up provoking a radical change into our lives. Who gets this right will be the power of this century, too bad for China as it struggles with Tibetan monks while their water supplies are disappearing completely -and they don't even shudder-.

Such improvements won’t have enough resources unless governments keep the price of oil at the current level. What can be done is, as Thomas L. Friedman said before, tax oil consumption. This will mean that no matter what happens in the coming future, people will always pay high oil prices. So any other energy source will substitute petroleum without having to be competitive on regular basis. On the other hand this is also a much needed energy independence policy. Global markets won’t panic if the fact that middle east is at war, or if Chavez claims that the empire won’t get his oil, or if Russia threatens to cut gas supplies to Europe, or if Africa sums into a continental genocide.

Taxing just oil is not enough though. What needs to be done is to complement the global fight on high temperatures by reducing emissions in every direction possible. This means that companies should be more energy efficient, take for example what Texas Instruments did when it built its new eco-friendly plant (RFAB).

The transformation of our black world to a green world may take decades to complete, however, this may include side effects too. If you think that ethanol is the next big thing, there are thousands of considerations that you need to take. If the final product uses less energy than it produces, if the products where it comes from (corn for example) is threatening the food supply for millions -take what Jean Ziegler said to reporters in New York, “that converting crops such as maize, wheat and sugar into fuels was driving up the prices of food, land and water”, according to the UN News Center. If you go for nuclear energy, what about the threat of nuclear waste, where will you storage those? Solar power could be the answer, only if you have enough materials to make it true. Wind power will face the same consequences. The best solution could be to adapt them to every specific situation in each region, or to combine the best of them.

This development will only be expanded to the masses if the price is competitive. With the surge of India and China, followed by many other third world countries the balance between what is produced of oil and coal and what is consumed is negative. In the years to come what the price will do is to go up even more, destroying the economies that depend too much on it and also empowering undemocratic regimes all over the world.

To give you an idea of the scenario is the current China-Darfur situation. China gets oil from Sudan where it has heavily invested, which means that Sudan is protected by a superpower that will look to the other side when it agrees to its interests. Sudan will maintain its power as long as it holds large amounts of petroleum. The same will apply to Venezuela, Saudi Arabia, Iran, Iraq, Kuwait, etc. All this petro-states will not have the wiliness to invest in alternative sources of energy as long as the price of oil is high. So the principal source for global warming will be there at the current level.

This is an important point to take into account when you try to understand how natural resources will be handled in the future. If it is settled that the current level of pollution will threaten the world, we need to reduce the amount of pollution, simple isn't it? But since the scenario will look like what was described above, the reduction can’t be a reality. Here is why:

Even if the United States, Europe and Japan lower their green house emissions, the rise of every other nation in the world and the incremental amount of resources and energy that they consume will overcome the reduction of emissions from this powers. Places like China will continue to rely on oil and coal to supply its much needed energy. Sudan and Nigeria will have the same autocrat governments repressing its own citizens with no serious punishment from the international community. What this means to the environment is that while much of the world will be transforming their current predator behavior, some other part of it will engage in just that.

What taxes could do on this case is to keep the price of oil high enough to make new developments available for the masses. So, my hope is that the United States and Europe set high standards to their industries, tax polluters and encourage entrepreneur spirit, therefore, at some point in the future the rest of the world will have cheap alternative sources and can detach itself from oil and coal.

This may not be enough, as I said before the chances that stopping our current levels of pollution won't horten the Armageddon. The earth is already feeling extreme heat and cold weather on diverse parts of it, simultaneously. A startling drought in the Amazon could destroy millions of trees turning green areas into desserts and vaporizing 20 percent of the global supply of oxygen. The discovery of alternative energy sources that replace entire lands of crops will starve millions of poor people. Our only hope? That our scientists are wrong and we still have time to change the future of the planet.

On the second part of this article I will analyze how the war in Iraq allocated billions of dollars that could had been used to improve the life of Americans in incalculable ways, in the hands of few corrupt companies that wasted the unique opportunity of creating a dream society -with élan- in the Middle East. I will also put in perspective the connection of Global Warming, Iraq and our priorities as society. How foreign policy is developed and how we are securing our natural resources.

I hope that for now Global Warming deniers at least take the plethora of opportunities in reducing pollution, even if they don’t believe in the end of the world, as we know it.

2008-03-23T14:13:00.000-07:00

(Part ")

Well, all seems just fine... right?

Between the first part of this article and this second one, the United States has fallen "officially" into recession. This brings terrible thoughts to my head; are our leaders that stupid? And if so, why are they our leaders?

The housing bubble ended being the most dangerous economic threat that the world has faced in the past half century. As I pointed before, I was with the pessimist souls that were at Davos this last February. The rest –the optimist- look not just foolish, they look ignorant.

Alan Greenspan still denies any blame for this uncontrollable mess. George talks as he does not know how deep this crisis is and the rest of the world watches helpless as the dollar falls to its lowest level ever.

This translates into a disgrace line of bad policies that are leading to the worst nightmare that a country could face -that is when no one wants to trade with you.

I thought at a certain point that the United States -lead by Bernanke- could skip this mess with the right monetary policy. It turns out that Bernanke was just another piece in the long list of incompetent managers. His improvising has lead to record prices of the futures of oil, gold and other “save” goods.

The Fed is driving the United States to the worst case scenario, one that could destroy the entire economy. Let’s see which two policies are turning the United States economy into a shred of worthless green papers that are losing the only thing that they hold, value.

The first irresponsible policy is this; lowering the interest rates without accounting the inflation factor, and not only that, lowering interest rates bringing the value of the dollar against other currencies to an all time low.

The second irresponsible policy is this; sending billions of dollars into the economy, on one hand by lending that money at a low interest to the banks, on the other by giving back billions in government checks to the American people as tax credits. This is setting the fiscal deficit further into red ink, while overheating certain segments of the economy while the rest is falling down.

Of these two disastrous policies the first one is the worst. Bernanke could lead to the end of the American prosperity by taking out the only thing that sustains the American economy, trust. How is this done?

When the Fed lower the interest rates that it charges to banks -so money is injected into the economy- what the Fed is doing is? a- pushing the “worth” of the green buck down, b- making more money available, c- making people spend that money, d- all of the above.

Those measures are done so the influx of billions of dollar in the economy helps increase the acquisition power and therefore moving the economy out of recession. The possible side effects are bad though, first you get cheap money that no one wants to keep, you rather spend that money than saving it. Since interest rates are lower people don’t have any incentives to keep their long term savings. But since the economy is weak, after the effect of sending everybody on a shopping haunt, certain parts of it will get overheated. Some business will find themselves into the weird unbalance of selling things in exchange of less money. This is what leads to inflation.

Once inflation is on the market it could tear the economy apart. The industries that are big enough to send their merchandise overseas will do that, because the exchange rate will benefit their profits, bringing further dearth of goods in the market. But the worst problem is the devastating toll on the value of the dollar.

Once the dollar loses its value the world will run in a stampede to sell them as fast as they can. Why having a currency that is not easily exchangeable when I can have some hard money as the euro in my hands? Why buying treasury bonds when I can buy gold or silver? Why exporting to the United States when I can sell to Europe where my products will be sold at a better price?

What we are seeing right now is the worst case scenario ever. The dollar is not longer wanted in the world, not even in America, and when a currency loses its value in such rapid way, the only solution is changing the currency.

Now let’s put our hands up for Greenspan and Bernanke. Good job boys!

When I first looked at this problem I thought of a simple solution. Letting the market fix itself, but as time runs out, if it has not done so already, I had a change of heart. My first impressions were, looking at the past and assuming that another bubble will be created, that as long as people believe in the economy some will think of a way of creating wealth out of nothing. And that other bubble could fix, at least on a temporary basis, the problems that the economy faces.

I have to admit that I cannot think of the magical bubble that will come and save the economy. Thanks to George´s lame duck policies, all that will be left is going to be memories of a better past. What lies in the future are dark days, not only because when most people get $300 they will spend them at Wal-Mart buying groceries or paying old debts, but because until that happens many major employers will be sending dozens of thousands out of work.

Think about the chain reaction that is happening right now. If people don’t buy things, businesses don’t sell things, they don’t hire people but instead they fire them, people out of work don’t pay taxes, the government collects less taxes, spend less money and finally, fire more people. In the end what you have is an economy filled with unemployment, lack of investment and a worthless currency.

But problems don’t end here, there is a credit card problem that is waiting to exploit and as sometimes happens, it will give the last blow to the economy. Credit cards lend too much money to people that could not afford to pay it back, and as it happened to Bear Stearns –who was sold for $2 a share to JP Morgan- individual debtors could end up giving their belongings to banks who will take them for almost nothing.

So credit card lending won’t be the next bubble to be created. However, it could be the last one to burst, then again we face a tough question. What bubble could save the economy? Oil?

What could happen in the near future is that the dollar will slip further against the euro, foreign investors will rather hold stock in European markets and will rather detach their financial ties with the United States. The final result may drive China to stop looking at the United States as a destiny market leaving the US government with no buyer for the billions that it need to fill the hole in their fiscal debt sheet.

Even when I tried to find an exit to this huge problem, no easy way is in the horizon. The only bubble that could be created is in the stock market (not likely) and on the credit card lending (too late).

What will actually bring the United States back on track will be the opportunity that countries like Saudi Arabia, Japan, China, India and others, see in the falling US market, they could go on a shopping day looking for plethora of opportunities in the poor housing, stock and private markets.

No other bubble will save the economy, no easy way out is on the near future; sure the exchange rate could soon stabilize the trade imbalance between the United States and its partners, bringing other economies into recession. This 2008 will be a nasty year for everybody, particularly for the optimist leaders such as George. As America´s leaders live in denial about the health of the economy, smart pessimist are betting on high risk businesses that will lead them to make billions once the crisis is over. They will create the next bubble –that I don’t know yet what would be- but I am looking closely to how the economy handles low interest, an overflow of “cheap” money and the write offs of hundreds of billions related to the housing market.

Good luck to the US consumers… while they shop at Wal-Mart.

Davos, the Housing Bubble and Our Inane Leaders

2008-02-27T15:24:00.000-08:00

(PART 1)

The economic forecast for what is left of this decade looks dim. When the political and business "crème de la crème" of the world gathered this past February at Davos (at the World Economic Forum Annual Meeting), they couldn't agree on what will happen with the world economy this year. They have the knowledge, the money and the instruments to be the ones who can address issues like the financial crisis and the housing market debacle better than anyone else. Even so, they didn't accord on a united front that delineate where we are heading; when the meeting at Davos was over two blocks appeared in torrent opposition, some optimistic and others pessimistic (like that helps). Anything in between is not worth listening to.

On a February "Foreign Policy" article about Davos, Moisés Naím mentioned George Soros and US economist Nouriel Roubini as part of a ultrapessimists group, saying that they “argued that we had entered the most important economic crisis in the last 60 years.”

They may be right when they talk about a nebulous future, and lets be honest, they way things are developing it doesn´t take a genius to understand the magnitude of the catastrophic prospective.

One of this ultrapessimists, George Soros, said at Davos: "The current crisis is not only the bust that follows the housing boom, it's basically the end of a 60-year period of continuing credit expansion based on the dollar as the reserve currency.” If this comment turns out to be true then a long term crisis may be waiting to unfold and the world seems unprepared to handle it properly.

On another negative side at Davos, Nouriel Roubini said: "It's not about a soft landing or a hard landing but rather how hard a landing it will be.” This may sound as terrible news not just for the financial system but also for governments; over $169 billion dollars on a “stimulus package” in the United States were approved to, in some extent, prevent the economy from weakening.

While on the other side of the Atlantic, as The Economist reported on its last Thursday weekly resume, “Britain moved to nationalize Northern Rock” meaning that the efforts to sell it were dropped, also meaning that taking over this mortgage lender “is the best of a bad range of options…” …”if the state is to recover a reasonable chunk of the £25 billion ($49 billion) in loans and £30 billion in guarantees it has extended to the bank.”

In one way or the other, giving tax rebates as “stimulus packages” or saving bad lenders from drowning the financial system, governments are feeling the pressure of keeping some confidence on the market. While in the end, tax payers will be the ones who end up paying for this disastrous under-regulated mess.

All this problems have a father and a mother. One is call the “housing bubble” and the other the “weak dollar”. Both problems started when the United States was trying to avoid a deep recession back in 2001, both are the result of some terrible economic policies that I will describe later.

But for now lets ask this question. Who really knows what will happen?

So far the United States had not declared a recession, Ben Bernanke said before the Committee on the Budget, US House of Representatives, Washington DC, 17 January 2008, “Recently, incoming information has suggested that the baseline outlook for real activity in 2008 has worsened and that the downside risks to growth have become more pronounced." That understates the actual dimension of the incoming crisis.

On the same soft words, “hide what you can about the real shape of the economy -line" -- President Bush on his State of Union Address declared that, "We must have an economy that grows fast enough to employ every man and woman who seeks a job. After recession, terrorist attacks, corporate scandals and stock market declines, our economy is recovering -- yet it's not growing fast enough, or strongly enough. With unemployment rising, our nation needs more small businesses to open, more companies to invest and expand, more employers to put up the sign that says, "Help Wanted."". But hold on for a second, this was not in 2008 this was back in January 2003, it looks like America didn´t take the right measures to maintain a healthy economy on the long run.

We heard after five years George´s 2008 State of Union Address, “In the long run, Americans can be confident about our economic growth. But in the short run, we can all see that that growth is slowing.” This could put George in one awkward position, giving him the sad record of having two recessions while he was President, but it also could threaten the party that supports those “terrible economic policies” that I mentioned before.

The Economic Policy Institute released a statement back in 2003 called "Economists' Statement Opposing the Bush Tax Cuts” which stated: “Passing these tax cuts will worsen the long-term budget outlook, adding to the nation’s projected chronic deficits. This fiscal deterioration will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research. Moreover, the proposed tax cuts will generate further inequalities in after-tax income." They were right, after five years we are back into recession, one that could be worst than the last one.

On George´s 2008 statement he also implies that tax cuts were never the answer. This sad acceptance, that is always meant to be misleading, shows us that a economic slowdown could not be treated as lightly as it was, and that after a bubble burst, in this case the technological bubble, another could be created in no time by taking wrong economic policies, that just as the tax cuts, drove the economy to a more severe damage.

But tax cuts were only possible after a highly respected Fed chairman (Alan Greenspan) “endorsed” them before Congress. On a CNNMoney January 2001 article about Greenspan´s testimony before Congress, “… Greenspan played down the idea that tax cuts would provide an immediate boost to the economy, saying that tax reduction is appropriate as a long-term economic measure now because of estimates of a larger-than-expected federal surplus.” With that comment Bush got what he wanted, a boost from the most respected economist at the time, implying that it is fine to implement tax cuts.

On a review of Greenspan latest book, the New York Times on a September 2007 article says the following, “Though he does not admit he made a mistake, he shows remorse about how Republicans jumped on his endorsement of the 2001 tax cuts to push through unconditional tax cuts without any safeguards against surprises. He recounts how Mr. Rubin and Senator Kent Conrad, a North Dakota Democrat, begged him to hold off on an endorsement because of how it would be perceived.”

But that was only one of the two mistakes made at the time, The Fed also under his leadership lower interest rates, back in 2001, to 1% in order to help the economy recover from the catastrophic technology bubble.

You can see the pattern here, bubbles are created during certain conditions in which the market push prices up for a prolong time, when its too late for the government to do something, it burst.

This is the connection between the inaction of the government that implemented fatal policies and private corporations that abuse a weak uncontrolled system. First tax cuts, those helped create the feeling that more money would go to the regular American, while it actually went to the richest, second was low interest rates, which created the feeling that money was worth almost nothing and that you could end up with big amounts of debt that won't affect your cash flow. That trigger two important private abuses, one was ultra sophisticated lending structures, which made people who couldn't afford a credit to get one, the other was pushing people to use their houses as collateral, creating the sense of wealth as the prices went up.

That created the housing bubble, that led to the current financial crisis. After this last bubble (the housing one) extrude problems around the subprime mortgage market, the lending market, the insurance companies and later on every financial institution, the results show that the stock market could be the latest to feel the wrath of a prolonged decline of prices, implying that it could bring down the world's economy before this 2008 summer ends.

But after this recession is over; which other bubble would be created? How the world economy will end up? Who will be the big winners and the losers? Which disastrous results will come from Bernanke's "rate cut policies"?

I will go into those matters on the second part of this article.

Would We See the End of The American Empire in Our Life Time?

2008-02-17T16:13:00.000-08:00

Few foreign policy experts dare to claim who will be the world´s next super power. Many of them broach to the fact that the United States is a falling “empire”, some critics mention George's last trip to the Middle East as prove that America has lost its path. We all saw when George was abase by Saudi Arabia -- who enjoys the ability to control its petroleum supply -- when he couldn’t negotiate a clear deal to bring the price of oil down. It seems that the United States has lost power and presence in the world, it can no longer dictate what could or not be done and with two wars, that seem a hubristic disaster, many allies had turned away from it.

Some foreign policy experts say that the world's hegemony is over and that a new world order will be driven by three powers: China, governing Asia some parts of Africa and will execute some influence in Latin America; Europe, who will expand its political model to all its continent reaching all the way to Russia; the last one will be America, hanging alone in the west, obviously without much influence over its so call “backyard”.

This new world order lies on the assumption that no new economic model will rise in the near future and that things will proceed as schedule and planned so far. As we economist like to say -ceteris paribus.

What they don't realize is that our current economic model has fundamental flaws that are not sustainable in the long run.

I don´t really get the creation of wealth, for example, based on the abstract reality of the stock market and more recently on the evenly ironic increase of the housing market.Wealth is composed almost entirely of “papers” (stock) that are “tradable” for money, which is “tradable” for “goods”. If the stock price goes up, your wealth increases, if it goes down the opposite happens. So you see how absurd is the idea of a individual being the richest man in the world and someone being the poorest. If I was to have millions of GOOG stock when the y first went public, right now I may be wealthy, without having anything to back it up (cause the price could fall to 0).

This is our current economic model, a big monopoly game where the bank (Fed) never runs out of money and where you can create value out of nothing. This is why Central Banks (almost all of them) can print as much money as they want to and companies can be worth more than the GDP of small country.

The diatribe between China and America is worth explaining so you get an idea of how their relationship works. The main concern of the "West" toward China is no other than economic; China gets billions of dollars for their surplus with America, which upsets the trade balance, and also China's excessive production and local growth is bringing the price of rough materials considerably up world wide.

That is why we should focus only on the economic factors that put tension in the China-America trade policies.The appetite for foreign goods in the Unites States was uncontrollable about a year ago, but now that the source of wealth for many families is falling (the housing market burst) that appetite is declining fast. The Chinese fear that souring prices will affect their exports, while Americans -already in a recession- have second thoughts about buying too much. This bring us to a serious problem; which other country could absorb the excessive Chinese production?

Look at the current situation of the Chinese-American export-import phenomenon. China will be "C", America "A" and the exportable “goods” will be reduce to: manufactured products "B” and service "D". "C" produces a lot of "B" that exports to "A", but "A" does not have the money to pay for all the "B" that "C" want to sell. So "A" needs to borrow money in order to buy those "B". "C" thinks that it is a good idea to lend money to "A" so "A" can buy "C"`s "B". "A" prints a lot of papers (Treasury securities) that are payable to "C" --with interest--, those papers end up in "C"`s bank account. In exchange for the papers "C" gives billions of dollars to "A". "A" takes those billions of dollars and purchase a lot of "B" from "C". "A" sells some "D" to "C", but that is not enough to make the equation "B"-"D"=0, or something close to that. That reflects the trade imbalance that "A" has with "C”.In the end what "C" does is: produces "B", sells those "B" to "A" and lends dollars to "A" so "A" can keep on buying, and the only one who benefits from this plethora of production is "A". Why "C" does all of this? It seem like a really stupid idea to me.

What was described above is how China and the United Stated do business. The first one allocates most of its production in foreign countries, while those foreign countries allocate billions in investments. The second one borrows billions of dollars and purchases a whole range of products around the world, but without producing much to export.

Lately though, few countries, some of those OPEC members, had supported the claim by Mahmoud Ahmadinejad that the dollar is a "worthless piece of paper"- and that they should start pledging the price of oil to a credible hard currency. This means that the core of our current economic system is falling apart, if there is no trust in the exchangeability of the dollar, then there is no incentive to trade products with certain countries, in this case, the United States.

No trust- no "goods" sold to you.

If the world never loses its confidence on the dollar being "tradable", the United States could keep on borrowing money with no collateral. On the other hand, if the world loses its confidence on the dollar being “tradable”, the dollar will fall even further and it could end in a point where countries or individual companies will have no incentive for selling anything to the United States.

This brings us to the fact that America will officially fall into recession and possibly out of its unique position as the solely super power, one that lost its path after Bush was sworn President back in January 2001. (That is a bold statement, but nonetheless somehow true).

So which theory will be correct, another great superpower of three powers?

Both theories asume the following; that in neither case the United States would be the superpower that it is today. We all know that empires don't last forever, what we can't predict is when they are going to fall.

So the important question will be; would we see the end of the American empire in our life time?.

But to analyze an answer you have to know several factors that will determine how the future will unfold. Those are part of a complex level of paths taken by individuals, companies and governments that made it possible for some countries to be in the "first world" or in the "developed world" category.

For this current article I will keep any other factors that are not economic out of the equation; otherwise we would have to talk about the impact of global warming, elderly population in Japan, Russia and some parts of Europe, the scarcity of natural resources, shortage of water supplies, the likelihood of wars in some regions, the impact of brutal deforestation, the outcome of plagues, the health problems of an over polluted environments and China's crowded population.

Which is the critical resource that a country needs in order to become a superpower?

Its not oil or any other natural resource, its not the geographical space where a country is situated, its not the technology developed, its who made all this materials and inventions work. Yes the human capital. This brings us to the key element that will transform regions and countries in this century, this is the answer to which country will become the next superpower.

The United States had had a great influx of foreign people during its existence, in the last century millions flew from Europe and Asia to America in searching of a better life, on the past two decades millions of latinos had also gone for the same reason. This had kept the United States as a multiracial nation that was able to adapt its image and make it appealing to the world. We all know someone that lives in the US, the world follows what happens in the US, everyone around the world has some connection to the US, this is why the country has been able to stand as a great power.

Students all over the world fought on the last century for a place in an American University. The best minds were going to America to study, research, explore, forge an entrepreneur spirit and, maybe live there. This means that the "best minds" from the world left their countries and went to the West. The United States benefited from the billions of dollars saved in education that other countries paid (mainly for undergraduate studies) for their best students to left to the US.

This created a pool over six billion workers willing to travel from all over the world to America, this creates a bond from many cultures with America, this gave to America what no other country had, the immigration of millions of smart brains to its land, at $0 cost.

So the next super power(s) will be the one that takes the advantage of a globalize world and open its borders to as many foreign as it can handle.

Why there is not a passionate palaver from our world leaders about this?

You may want to look at the same phenomenon in your country (“immigration”) the most dynamic cities are the ones that have received lots of immigrants. The only countries that will succeed in the future will follow the same pattern. That is why people around the world once admire America and urn to go and live there, even when their own countries could have given them the same opportunities.

After 9/11 everything changed, obviously George W. Bush had to take some hard measures in order to protect the country and also to ensure that no more terrorist attacks could happened. However, the outcome (that was unintended) rested competiveness in the United States.
Millions of international students, after their visas were declined by the United States or the paper work was harder to comply, decided to go to Europe, Asia, Australia even Canada. That brain power that was filling the seats at prestige American Universities, were taking planes to other places other the United States.

After years of this same policy ("with-us-or-against-us" -George W- Bush), America was seen as a misanthrope creature that couldn't control its urge to invade countries, without plausible caused. Not WMD or chemical weapons, not enough troops or planning; the world had a feeling that any excuse was more important that the sake of human kind. North Korea and Iran, which were more aggressive than Saddam Hussein in Iraq, were not invaded, while the genocide in Sudan expanded to uncontrollable proportions without any intervention, even in America's soil things were going badly. The world watched as Katrina destroyed the beloved and unique New Orleans. The empire was trying to understand what was going on, what did it missed?

All this problems brought the United States to an awkward position, when the Bush administration had to decide just how much money and resources to put in the wars and how much in their own country.

With billons of dollars expended on two simultaneous wars the impact on the economy is enormous, but also the distraction that it creates from the future policies that must be adopted.
Japan was always reluctant to take immigrants and now faces a serious population problem, with some projections pointing that the decline will start as soon as next year. That translates into more people being out of work or too old to be a 100% productive and few young people trying to keep up the entire economy.

Europe faces the same challenging problem that Japan does. It is estimated by AP that Europe´s population in 2050 will be about 658 million down 70 million from the currently 728 million. China will have it worst, by 2043, as an article from Xinhua News Agency May 10, 2004 say, the population will start to decline, but also the sex disproportion of new born will accelerate.

From data projected with information provided by the United States Census Bureau and U.S. Department of Commerce, we see a trend of population growth in the United States until 2100. That gives the United States a wide advantage from other countries, in the best scenario which included immigration to America, the population will be over 552 million by 2050.

So my theory is that we wont see in our life time the fall of the America empire, nor the incredible rice of any other. China and Europe face some serious challenges in the near future, cause mainly by their loath to a rational immigration policy approach.

Its hara-kiri for a country not to address the challenging future with all the current resources available, only the strongest will survive and if politicians are too dumb to realize the need to bring the best brains to their countries, then we should elect sport coaches, they do realize that, in fact their teams are great, when they get the best players from countries all over the world.

The Imbecile Continent

2008-02-04T19:43:00.001-08:00

(draft)
No one cares what happens or what doesn´t happened in Latin America. People talk about politics with the same ignorance as any other habitant of the democratic world.
Politicians manipulate the poor with élan causing entire masses to gather around for causes that should be left in someone´s closets.

I could say that I don’t like Hugo Chavez, Rafael Correa, Evo Morales and Alvaro Uribe. But I never took the time to learn their policies, to understand the countries that they govern and the perspectives that they had outlined for their citizens.

I, as an Ecuadorian, dislike complete Rafael Correa, I happen think that the President of my country should behave as a respectable public dignitary that would not be engaged in public displays of kinder garden games with the despicable mayor of Guayaquil Jaime Nebot Saadi.
But I haven’t investigated his proposals, I haven’t read about his ideas of a “new Ecuador”, I haven’t follow his comments on the future direction that our country should take and of course I had not learned anything about his political advisers.

So I am the least qualify critic of his presidency, nonetheless I oppose firmly anything that he tries to do, because his approach to the general public is full of contempt and his annoying personality erases any sympathy that I could draw toward our head of state.
This usually happens when we belong to a different line of thinking that our leaders. What Latin America lacks is that the opponents of political movements, that seem in the general picture to be doing nothing to take us out of poverty, gather in an New York like “intellectual faculty” where the weight of our thinking could generate some questioning toward our politicians.
This of course doesn’t happen, the intellectual elite is nothing but a group of so call opponents that frustrated with their economic condition fight in low end newspapers with words and ideas worth of high school headlines.

The critique of some brilliant writers is left into the edge of our commonly ignorance, as people with high educational levels feel ashamed of showing intellectual curiosity at any kind, the leaders that acknowledge this, create a masquerade to entertain the masses with great results.
While Chavez insults the “American Empire” Citgo sell gasoline in the empire´s gas stations. While Correa is courting the Chinese, Ecuadorian upper middle class people plan their next trip to Miami. All of this with the disparity of rich and poor that plagues our continent.
The problem is not that there are serious disparities between rich oligarchs and poor workers, the sad story is that no one wants this to change. Our youth is so high on “drugs” that the entrepreneur spirit is part of clubs and parties, trips and alcohol, that there are no serious thinking about developing our countries into a new globalize world.

This means that we will be stock with the same lame ass presidents for decades to come, with the same corrupt public officials, with the same group of faulty politicians, but wait, this happens all over the world.

But they have accountability which means that the common citizen could change matters if he or she wants to pursue a bad official. Also they can lobby to make laws more favorable to their business and also vote from a big range of candidates that at least hold their principles close to the policies.

This means that the next decades will be much of the same, a bad situation that has pushed us back into this third world statutes.

Who is to blame?

Not the poor people that have to worry about food on their table, they were left with no education, so we cant blame them for our failures.
The ones that deserve the blame are with no doubt the owners of big companies, the “intellectuals” that write op-ed with no consequence at all. This are the people that have the means and education to push for a change that drastically guide us toward a better future. The story is different though, they have the political connections to surge with no effort whatsoever. So we are left with a rich segment that lives in a “dream world” while the masses watch football games with bear so they forget about their daily problems.

The imbeciles in this continent blame the emigrants for not staying here, they blame the government for not doing its job, they blame everyone but themselves. What they don’t realize is that the most brilliant and hardworking people are leaving the Imbecile Continent, so we can let them govern themselves, as they please.

Cheers my two face friends!

The Easy Choice

2008-02-03T15:52:00.000-08:00

You may vote for a candidate because of his or her electability, because you like him or her, because you like her or his policies, because you want to. Anyways there are million different reason why. In this 2008 elections you have to wonder on the Democratic side, who is the best?

With policies pretty much alike you can pick either of them and expect the same outcome, although you want tough with negotiation power, with and iron fist if the country feels threaten and with the ability to push for diplomacy in international affairs (we don't want another Iraq). You want the perfect candidate that would be the perfect president. Maybe were are dreaming on a fairy tale.Its not enough that the political practice can, as in Hollywood, shape the public exposure of certain candidates to appear more likable, they also can change past events in order to best serve their interest. This bring us to the purpose of electing a good official. Whether Clinton can beat Obama is not the question, she sure will win in the Super Tuesday, her margins are much better than Obamba --who wasted too much time in the small states that voted earlier, were with his charisma he won them over but forgetting that the big ones are the ones that matter.

The Gulliani strategy was not that bad, sadly he is too fake and too 9/11 to project the whole attributes of a perfect candidate. It may be that after the war in Iraq, which distracted America from the rightfully war against the authors of 9/11, a lot of people saw that violence may not be the whole answer to international problems. I figure that if you are a terrorist and you try to commit an evil attack against innocent civilians you must be brain washed and incredible retarded, but also part of an international organization that is dedicated to hire people just like that.

Even when the economy is what drive people's sentiment right now, there are other major problems that need to be acknowledge. Terrorist plots must be prevented at any cost, there is no other way to do that than the hard way. The international declined of the United States has to be a priority of the next president, don't forget the threat of a nuclear Iran and North Korea.

The most trouble subject is the falling dollar and this could be the one that destroy the country. So the easy choice will be someone that is not a Republican, after Bush and the incredible support among his peer in Congress, Republicans need to learn a hard lesson, that is to stop the inept policies that somehow are part of a old philosophy of a XX century autocrats. Emigration is the core of any country that wants to be in the lead of this century, energy independence will bring billions of dollars back to the United States and will rest power to OPEC countries.

Getting out of Iraq ASAP will be the wise thing to do -- you invade a country, destroy its army, build one from scratch, let the government run as it wants to, spend a trillion dollars, put the international community against you, put your own people against that war and not happy with it you commit your army for an indeterminate number of years. What?

And people vote Republican? I mean its is great that there is a conservative movement, that religion is part of peoples lives, that certain policies are fought by both sides and a consensus is made. But that has to be the end of it, you as voters, should push the Republican party to focus on those issues that you like, instead of using those issues to pursue others that the whole country truly dislikes.

So vote for a Democrat until the Republican understand that you can't be in Iraq forever, the phrase "we step down when they can step up" its like saying to your kids, we will support you until you can do it by yourself, and your kid is not 5 years old but 25 years old.

The sad thing about this is that Democrats could fall in the same voracious path of power, they could start policies out of touch with this millennium, or pull out of Iraq so fast that the country is left in chaos, or not be hard on terrorism. This is the outcome of one of the most complicated presidencies in resent world history.

Neither Bin Laden was captured nor Iraq is save and with a year left for George to be out of the office, the economy is falling apart, the dollar is crumbling, the American people think the country is in the wrong direction, American Universities are not getting all the brain power that they used to, the price of oil is giving to petro-countries the money to sustain the unsustainable in normal conditions, Global Warming is threatening the world as we know it and most important, we don't have a leading country that could enforce peace, change or guide us toward a sustainable future.

Shame on you who lack the intelligence to govern the most powerful nation in the world; whatever you do affects more than 6 billion people, and the future of human kind.

Vote for a Democrat, or to be more specific for Hillary Clinton when she wins the primary.

A New Sight

2008-01-31T20:48:00.001-08:00

This is a short essay to express what was left before and never done at all.
There are certain circumstances that can drive your life toward a new beginning, they may be unexpected by nonetheless defining.
Sometimes you think that you wasted your life, not in a real way, but you see yourself in certain positions that make you think, have I done enough?
I felt exactly like that in recent weeks thinking that it may be too late for me to achieve what others already had. We don’t realize that this kind thinking is what makes as losers, its never too late unless you never start.
So I push myself to the limit, I decided to prepare myself for a GMAT test in one week, in the end the result mix, I got 450 which is barely above average, but in the process I learn two important lessons that where somehow late.
The first one is the most important in mi life so far, I can do whatever I want to, I just need to commit myself to it. Have you notice that people that want something usually achieve that?
And I don’t mean being successful in their lives, take little things like; if you want to go to a club on the weekend and some of your friends push to a club where he or she feels it’s the best, you end up going there. Same thing when you chose a restaurant, a movie, etc.
At work if someone really needs the salary and is on commission, I bet that he or she will work harder than someone that does not need it as much. Here all the stories about couples that marry and were poor at the beginning but with hard work achieve a lot today?
So in essence I notice that I was lazy because I wanted to, I didn’t push myself to the limit, I was letting my body and mind to die in the tumultuous thoughts of failure.
I barely slept at night, I studied as hard as I could for a week, after work I had long hours of mathematical problems and tedious reading. On top of that the primaries in the United States were so exited that I had to follow them up too.
My days started at 6am, some exercise then a shower and strait to work. After work I went home and until 1 am in the morning all I did was taking online GMAT courses. I learn everything from scratch. I got a decent score looking at the preparation that I had, but most important, I did what I had to do, I drove my body and mind to the limit, and I did not collapse. Now its almost midnight and I am still writing; it was worth it.
Did you get the lesson?
Most of the people in the world are average, their lack of interest in anything is what makes them less competitive, no less intelligent. What I realize is that my appetite for knowledge have to go somewhere, it need to be canalize into something that experts the merit of the words, so I open this blog.
The first step is to see how hard you can be with yourself, so then you know how far you can get in a determinate time. I am proud of what I did, now I know where my limits are, so I can set a future, its not too late.
The second lesson is that you need to know how smart you are. I read as much as I can about things that interest me. Gladly I love geopolitics, economics, American politics, and international affairs. I had some projects that I will describe later when they are done (so no one still my ideas) that I am taking as a serious matter. So they are not just good ideas, but realities.
I did not get the score that I wanted, I could not go to the University that I wanted, but the most important thing is that I knew what happened. My score reflected not my stupidity but my ignorance. I knew I could have done better, much better. So I decided to prepare myself to another test, this time with months and not days, so I could prove that I am smart.
So knowing how smart you are its key. At first I was driven down, I felt melancholic and my future didn’t look so bright. Then I thought how thing eventually ended. I took studies seriously, I never did that before, I have a 4.0 GPA but because I have an extraordinary memory and I love to read, otherwise, I was an average student. I ended up with one of the highest scores of my promotion.
Anyways, I committed myself to a purpose and I worked really hard for it. The outcome was not what I wanted, not at all. Now what I am doing is pushing myself in the same way expecting long term results of a better preparation.
I write for a blog now, that concentrates in economics, some American politics and foreign affairs, so I cant afford to place things that are not accurate, I do have to research about some subjects and of course significantly improve my writing. Another thing that I got from my preparation for GMAT was the use of complicated words that better describe what is in my head.
I am placing this so you know if someone that is truly committed to a cause can achieve it. if as Chirs Rock said once “a B student happens to be the president…” the rest of us can do much better.
Now what are you capable of doing, try your best and even if you fail as I did, try harder and dream bigger. I did not get into the University of Ottawa, but I will get into Columbia, in the end it was always my dream. So by 2009 I will be there and you will se the prove that all that you need is that moment where you see with clarity your future. So when they ask you where you see yourself in the next five or ten years, now that its up to you to envision your life and drive it there.

PS: its a draft.

A Lost Country

2008-01-29T20:34:00.000-08:00

Its hard to tell if I am wrong or the rest of the world is. But for me the future must have a different taste that makes it unique, at least for the ones that can enjoy it.

Sure this sound selfish, but with climate change, the lack of security, the fall of the United States and the rice of a undemocratic China, things look pretty ugly in the future.

I always admire that no matter how bad things can get in the United States, justice has a way to find the right punishment for the criminals and the liberty to express what you think is respected.

But with America falling into a deep recession it letting China, who does not by any mean let freedom expands, take the lead internationally. Europe on the other hand its so scare of offending anyone that deludes its ability and power to it can please them all.
That where a small country has the opportunity to rise. Not in the conventional terms, but in modern ones. Let me explain what I am thinking.

I always hated the short minded people that surround me, people that think are clever because their job is done well, that they think are smart because the y know a little about something, or because they like “good books” and “cult” movies.

My edge is this; someone who would understands the future and what may come with it, creating the perfect paradise where the rich and powerful could enjoy their vacations, or their lives without any of the current worries of the international world. And of course, beneficing the people of that country in which everyone would like to live.

It does take a complicated approach and some moral objections to it, but the main idea is for this small country to create the perfect environment in which it could succeed in the future and also setting the basis for a influx of international capital that will keep it save from harm.

This country shall not take an army for granted, nor it will try to expand military, or fight its neighbors, it must be a place where safety will be part of its foundations. It must be the place where everyone in the world wants to be.

Such a model will be something like what Abu Dhabi wants for the future of its country. If the United Arab Emirates its pushing toward the future by expending millions of dollars in developing new sources of energy, why cannot some other country, in this case this small country, take it a step forward.

Here is a brief idea of what the world would look like in the near future (part of another column):
The scarcity of water will drive millions of people to the following problems: first- they will find that they current way of living will be alter significantly while their quality of life spins down. Second- they will see how food and other water use intensive activities fall apart as the scarcity if this vital liquid evaporates in the air. Fish and other scarce resources will drive the world into a freak control of my water territories fight. This just after the price of oil picks to new highs. On top of things the extreme pollution of the environment will transform entire metropolis into dead zones where you can barely live. War will multiple in places like Africa where at the current rate, genocide will get another meaning. As this was not enough, big corporations will put their money and industries where cheap labor is available and poor requirements are enforced.
This brings me to a so call “green paradise” where the above wont happen or it will be minimize as much as possible.

Let me talk about the details in the near future, for now I will explain to you the main idea and then in subsequent columns I will go into how it works.

What I dream of is a place that would run on renewable energy, that wont depend on oil, that wont have any big polluting industries, that have enough water reserves, if global warming melts the ice, then this country needs access to the sea and must have desalination plants. It need vast natural recourses and of course it needs to be in a save part of the world.

This country will be a new Swiss model, much more incline toward the future, much lest dependable on secret foreign capital, and much more enjoyable.

They key is to develop a nation that thinks about becoming the capital of the world, with all the developing, ideas, resources, money, human capital, natural resources, green energy, conservation and freedom being part of its central nerve.

Big industries like Microsoft will place their headquarters in this place, companies like Texas Instruments will bring their energy conservation factories, big world players like Saudi Arabia will take their luxurious hotels to this country´s beaches. International financial institutions like Citygroup will make this the new financial capital. This will be a place where you can trade your stock over twenty over hours a day continuously, where you can price oil and gold, where you can expect to do a public offering and rise millions of dollars for your company. You wont make any toys in this country, and agriculture will be only a matter of national strategy. No industries that pollute will be allow, logging, oil exploration, river contamination, air pollution, water poisoning, overfishing won be a problem in this place.

Google will develop its new cut edge operating system here, companies like Shell will test their new green technology. Nokia, Motorola and other will recycle and reuse the old cellular phones as the same time as they develop the latest model way ahead of the Japanese.

Keep dreaming in this; where Amazon could place its headquarters in this country while it manages their entire operations all over the world. A new United Nations may be built, international conferences on energy conservation, on palling the consequences of global warming will be held. GlaxoSmithKline may have the newest laboratory where they test cures for Cancer and AIDS.

This country does exist, but has none of this industries, nor the human willing to transform itself into this “green paradise”. As I said before, I will go into details so you see that this may be possible, sure maybe Abu Dhabi gets there first, but they idea is worth exposing.

I apologize for any mistakes that have not been corrected, I posted this way too late, I promise I will go over this and rectify if necessary.

Did Bernanke Fail?

2008-01-27T20:04:00.000-08:00

Did Bernanke not see all the signs out there that told us that the market bubble that was created was ready to burst?

Did he not see that the complex mortgage market was giving people the chance to get excessive loans that in normal conditions they couldn’t afford to pay?

Did Bernanke not see that the ballooning deficit was a destructive threat to the long term health of the American economy?

The Chairman of the Fed failed to see all this problems, or maybe he saw them but did not addressed them properly. In either way he is the one to blame for the upcoming recession.

Confidence is the key to any high profile job, when if you make a statement you reassure the market and the general public that you are in charge, that you know what to do, that you are a leader. But if your statement does not give confidence, then your are not suited for the job.

How the ballooning deficit gets any better with a 150 billion dollars more in debt?

When tax cuts were implemented Bush told us that they would had helped the economy to get stronger, they would had helped to get more jobs, they would had put billions in people´s hands. But now that we see that neither of those things happened, and more so, that were are falling into a recession. What is the idea of making those tax cut permanent? Does Greenspan knows about this?

Lets say that Bernanke is not the one to blame for this crisis, in a hypothetical case lets say that he was never in favor of letting the market fix itself, he never agreed with Greenspan on keeping interest rate low, which brought us to this problem. Then to whom should we turn our frustration against?

Lets talk about the big picture, as any good economist would know, you must seek a long term benefit over the short term one. With the upcoming elections and with the economy in bad shape any lack of effort by the Fed could lead to a disaster outcome against the Republican party, since Bernanke was Bush´s choice for replacing Greenspan.

This means that the Fed could act as if wanted or supported any measure that keeps the economy from falling apart until the elections are over, risking a long term commitment to do the right thing.

Lowering interest rates now that the dollar is on a stunning decline is reckless, this means that people will seek to change their holdings in dollars to a more secure currency such a the euro, furthering lowering the exchange rate between the dollar and any major currency in the world.

So what if instead of lowering the interest rates by 0,75 percentage points, Bernanke would of reassured the market that a further decline of the dollar, the huge deficit and the looming inflation were a bigger risk than the current recession.

In that way we would have known that he is truly committed to a long term recovery of the economy. But since he didn’t we know what Bernanke´s truly motives are: keeping the economy alive by any means possible, not taking into account what terrible damage it posses to the long term health of America.

With interest rates down and tax cuts, or rebates, or any other mean of placing money into people´s hands, Congress, Bush and Bernanke are doing the only thing that they could have done to damage America and therefore the world, subsequently we will have this short term measures that disperse the hopes of getting out of the economic slowdown.

People lost their confidence in the green buck; when people don’t want to sell things to you, you are in big trouble, when people don’t want to do business with you, you are also in big trouble. So now you have one of the worst measures in recent history, as if the government couldn’t do any more wrong, having a weak dollar is reviving the notion that America has lost its place as the undisputable leader in the world.

But it is easy to criticize Bernanke when we all pretty much know what the outcome of the current situation will be. So I should take also the risk of being right or wrong on how the economy and the world will be in the following months, so in any case I will be proud of making the correct judgment as any competent economist will do, or I will fall into my own words being wrong.

But for now I will keep it short. I will say that the economy will fall into a recession, the dollar will fall even further, more and more foreign countries or foreign investors will jump in and buy more and more American holdings. The unemployment rate will grow, the housing market will get worst, the 150 billion wont do any good to the economy, and neither Congress, Bush or Bernanke could save the debacle before 2008 ends.

Its all about being negative, but in my next column I will talk about the steps that could be taken in order to improve the long term performance of the economy and the only way in which America could regain its position as the undisputable world leader.