Witch-hunts

I have to recognize that I'm partially surprised that this term is not showing more frequently on the press right now to talk about what is happening against Wall Street and other highly paid workers. Wikipedia says that McCarthyism is the "politically motivated practice of making accusations of disloyalty, subversion or treason without proper regard for evidence". Isn't that what is happening now?

Let's take AIG example, for example. After all the problems that came with the credit swaps mess, AIG asked their best employees to stay to work harder to save the company. These people, not responsible at all for previous mistakes, are working 14 or more hours a day to generate revenue that: 1) will save the company, 2) therefore, will help the taxpayers to get their money back quickly.

Furthermore, these people have lost already more of their lifetime savings that were locked into AIG stocks, so they have been extremely penalized without any fault on their side.

Now, elected officials have started this witch-hunt to crucifize them for getting fairly paid. They want to apply 90% taxes on their bonuses. Is this madness?

If we don't give incentives to the good people to stay and work hard, who will turn around the situation? Who will take the economy out of the current situation?

You could read this "Resignation letter from an AIG employee" to get a more detailed picture of the situation.

Fun enough, or sad enough, the government has realized that there is no way of getting out of this mess without Wall Street, so the new program is begging for private investments to take the economy out of the hole. At the end, as usual, only capitalism and free markets will be able to get us out of the well.

Did You Know?

I know, I know, I already posted this video two years ago but ... this is an updated version with much better visual effects :- ) and some new information.

Let me highlight just two pieces that I find particularly insightful:

1) We live in exponential times
2) By the time a tech student has graduated, half what he learned is already outdated

Lo que se nos viene encima

A pesar de las negativas a aceptar la gravísima situación económica de España de nuestro querido ZP, presidente por accidente. Y no, gravísima, no es una hipérbole literaria que uso sin mesura. La situación está fuera de control y tristemente el lenguaje no alcanza para encontrar descriptivos adecuados.

Hagamos una pequeña reflexión inicial, simple, llana y veamos a dónde nos lleva:

1) El sector bancario/financiero representa un mayor porcentaje del PIB español que en US o UK.

2) El sector bancario español (y europeo) no está obligado a declarar cada trimestre las pérdidas en valor de sus inversions, como si lo está el americano

3) El sector bancario español ha sustentado su crecimiento en productos hipotecarios y en el crecimiento en latinoámerica

Si a estos datos unimos que el hecho de que más del 50% de los toxic assets están en manos de entidades europeas (que no están obligadas a decontarlos trimestralmente según pierden valor). Y que las entidades americanas ya han descontado más de un $1 trillion en perdidas. No hace falta hacer una matemática muy complicada para saber que en 2009 las entidades financieras del viejo mundo van a empezar a sufrir las consecuencias.

Da igual que no declaren las pérdidas, la subida de la morosidad y la falta de liquidez que origina el bloqueo de los mercados de capital las ha llevado a una situación donde pronto no podrán hacer frente a ... nada.

Pero esto no es todo, hay que añadir que el mercado español está plagado de hipotecas basura (pensabais que la idea la habían tenido solo en US?) con lo cual la gravedad de la situación se complica todavía más.

Lo más indignante del tema es que ahí nadie puede usar el argumento de que no sabían lo que se les venía encima. Diversas instituciones internacionales llevan más de un año avisando de que la situación es gravísima y mientras tanto nuestro querido ZP sostiene que todo estará bien a final de 2009.

Yo no sé que será peor: "creer que es simplemente inútil y no sabe lo que se nos viene encima?", o "pensar que simplemente no le importa porque siempre podrá culpar a la derecha, el capitalismo, lo que se le pase por la cabeza...."

Left & Right

Aturuxando made two interesting comments on my previous post and I would love to build up on the second one now. He brought to my attention a comment from Paul Krugman (sorry, I don't have the original so this must do it):

"...Éste es uno de esos momentos en los que toda una filosofía ha sido desacreditada. Los que defendían que la avaricia era buena y que los mercados debían autoregularse sufren ahora la catástrofe. Son los mismos que decían que si se subían los impuestos a los ricos pasarían cosas terribles. Pues Clinton subió los impuestos a las rentas más altas y la economía funcionó muy bien durante ocho años, mientras que Bush los bajó y mira lo que ha pasado. Creo que ese cambio se va a imponer."

I'm sure Mr. Krugman is very smart man, but this is probably one the most stupid arguments I've read in the last weeks. Let's see, using his rationale, we could also infer that having sex with White House's interns helps the economy. I mean, Clinton had sex with Monica and nobody knows anything Bush sex life, so that must be it ... the President's lack of sex has caused the crisis.

Bush & Clinton policies on taxes were different. We could discuss which one is better, but there is no single element that links the current crisis with current or past tax policies.

Taxes & rich people

I really liked this except that I found today. I'm a supporter of President Obama, but there is a strong point behind this argument. Gov't spending is never the answer.

Lisa Schiffren:

Who Are the "Working Affluent"?... who earn the $250,000 per year or more that makes them "rich," and subject to new high rates of taxation? And why is a president who needs them to keep on producing at the prodigious rates both society and the economy require, treating them as if they -- not the slackers, the entitled, and the net tax consumers -- were the problem?... Corner readers.... The doctors, lawyers, engineers, executives, serious small-business owners, top salespeople, and other professionals and entrepreneurs who make this country run work considerably harder than pretty much anyone else (including... all politicians).... They pushed through grueling hours and unpleasant "up or out" policies in their twenties and thirties at top law firms, banks, hospitals, and businesses to earn salaries in the solid six figures (or low seven) today....

So, what happens when the heart surgeons, dentists, litigators, and people who employ 10 or 20 other people in their mid-size businesses decide that they don't want to pay for the excessive, pointless spending that the president finds so compelling? Instapundit [Glenn Reynolds] speculates on people "going John Galt." I think golf -- a time-intensive sport that the hard-working have eschewed for the past decade or two because it took too long -- will make a comeback...

Amazon Kindle

All you that have been following me on Twitter know that I've got a Amazon Kindle 2 one week ago. It's time for getting my thoughts out there. I don't need to say that I'm a strong believer on electronic books. I don't think there is any future for traditional books anymore. Who wants to carry around heavy, no-environmental-friendly, paper-based books?

I've got rid of my Sony eBook 3 months ago. Mostly, because I was waiting to get my hands around a Kindle 2 at some point this year - I didn't think it was going to be so early though. The Kindle 2 solves two of the my top three complains with the Sony:

1) It has wireless access, so I can buy books on the go (e.g., compulsive buy on the airport before getting into the plane). At the same time, the wireless access ensures that every morning I'm getting the WSJ on my device without me doing anything - other newspapers are available (e.g., New York Times)

2) It has a small keyboard that let you take notes. You can also clip articles that you like or highlight portions of a book, article and bookmark it. That's great as a substitute of the side note the I loved making on traditional books. It's not perfect, but it does the job.

I'm still missing a color screen, but that's not big deal for most of the books. For magazines is important, but for now, I can keep reading magazines on my computer. That's ok with me.

I don't need to say how impress I am with the device. It's responsive, works great, is light, ... However, it doesn't matter how good it was, because today it has became better. Amazon has launched the Amazon Kindle app for the iPhone. That means that all the books that I'm buying are available to be read also on my iPhone.

For me that's a big plus. Now, my library is available for me 24x7 on multiple devices. I have to say that this is the factor that helped the most in order to eliminate something that all of us, early adopters of ebooks, are facing: the fear of obsolescence.

I'm talking about the fact of investing $$$$ into buying books that after 5 years no platform supports anymore. I lost 10 books when I sold my Sony eBook, but I'm confident that the Kindle is a keeper. They are taking the right steps. Let's hope it doesn't take them 7 years to drop DRM, as took iTunes.

Anyway, in short, this is a great device, not perfect, but as good as it can get now.

Politics in Spain

This past weekend, Galicia and el Pais Vasco have held elections for their local parliaments. For several reasons, I wasn't able to submit my vote in time. Usually, I would be rather disappointed for having missed the single most important moment of influencing my government, but not this time.

It is not that I've stopped feeling part of Galicia, even from the distance; it is not that I don't care. Simply, it does not matter. It is that simple.

It seems that there is going to be a change in the government after all, and still who cares? Spain is getting into the deepest recession than anyone alive has seen, and little difference is going to make who is enjoying the power in some of the local governments.

What mechanisms can the president of Galicia put in place to unlock the capital markets? to restart the lending? to create jobs? ... If you think that there is anything they can do, think again.

It seems that I have the pessimistic hat right now. Maybe I'm wrong, maybe there is something that can be done. Sadly, I don't know what. Any ideas?

Formation of the Earth

Seed magazine has prepared this video where 4,600 millions years of Earth history had been accelerated to 60 seconds. It's amazing to see how quickly life has evolved in relative terms.

Membrillo, queso y .... menta

It's been long overdue, but I've finally found the time to talk about something that my good friend Tal put together back during our last thanksgiving. In order to honor all the spaniards attending, he had this idea of creating something based on quince (membrillo) and spanish cheese.

1) Cut the quince & cheese in small cubes

2) Smash almonds on a bowl

3) Dip the quince in the almonds so it gets completely cover

4) Use a toothpick to get together: cheese + mint leave + quince covered with almond

You can see the end product on the picture of the right. Believe me, it's fantastic. The combination of all the flavors is great. Like a party in your mouth :-)