I am just back from a business trip to Cairo, Egypt, and it has been a very interesting experience for me. It was my first time in this beautiful country of extremes, and I truly want to come back as soon as possible. This should be quite soon if the business I went there to help initiate fructifies in the way I expect. I found Egyptian people nice and full of sincere hospitality. At first I was shocked by the presence of armed police in just about every corner of Cairo, including inside my hotel, at which entrance there was a metal detector control that we had to cross every time we entered. Soon enough I got used to it, and in fact I always felt quite safe, even in crowded areas at night. Traffic is absolutely mad and nerve-wrecking, even worse than other crazy cities like Shanghai or Belgrade, or Madrid, but since my driver seemed confident in the middle of the battleground I forced myself to relax, buckle up, and simply hope for the best.
I am about to take 4 days off in the countryside with Alicia and Carlos (their mother is left behind for she has to study for exams), and I really look forward to it. Spring time in our small village in Segovia is truly beautiful, we are taking the bikes, the padel rackets and all the soccer balls Carlos wants with us, and we´ll have a great time.
I am also taking a book that I love to read to my kids, and that here I would like to recomend, it is called "Where the wild things are" . To be honest, most children books bore me to death, and I take reading them as something of an obligation but that I do not really enjoy too much, but this one, I really love to read it over and over again.
The copy I own was a gift from my dear American friend Miranda to my kids the first time she came over to visit us in Madrid. Thanks again Mi.
It is really difficult to star writing (or even to star thinking) when I have a side banner on my screen which says in huge pink letter over an also pink background "!El ChikiChiki en tu móvil! !Descarga sin límites! It is really tempting to just say to oneself, Why bother!!. But I will try.
Today in realmarkets I come across the following article by my admired Marting Wolf in which he summarizes what is happening lately in the world economy. One of explanations is really striking: the emerging economies (the poor) have been saving in order to lend to the develeped countries (the rich). We "the rich" have been buying our houses, and our SUV, and our trips to exotic places with the money of the peasants and the factory workers of China. In Mr. Wolf´s words:
"Emerging economies have also been huge exporters of capital. China’s current account surplus was 11.1 per cent of gross domestic product last year.[...]The excess savings have been largely absorbed by those high-income countries with liberalised financial systems adept at channelling credit to those people interested in borrowing on the needed scale: households."
Now the party is over, the music stopped and there are no chairs for all. Perhaps this time around we the rich will learn from the poor how to be more humble and more thrifty. We might learn that More is Less.
Today, thanks to S.McCoy, from El Confidencial, I have found out about REALCLEARMARKETS. I am exited and grateful to this great writer (whom I strongly recommend), because this is the type of website I have always wanted: a place where I can find a good selection of the best that is written by the best minds in business, finance and economics, and this is the best, on a Daily basis!
Most of us don´t have the time to look everywhere, everyday, and short out the best articles, and then find the time to read them: realclearmarkets, is doing that for us.
I have put a direct link in my blog, so that everyday I will start my day seeing the articles which I should find the time to read.
Additionally, yesterday I include the fantastic Dilbert widget, which I found about through the blog of my good friend Felix Peinado. Thanks Felix, I always learn from you!!
It is not so usual, at least in my experience, to hear inspiring words during a business lunch. This is why it was so nice when I heard about the "If" poem by R.Kipling. This poem is very well known, and can be found in many places in the internet, but I think this humble blog could be greatly improved by these inmortal words:
| IF you can keep your head when all about you Are losing theirs and blaming it on you, If you can trust yourself when all men doubt you, But make allowance for their doubting too; If you can wait and not be tired by waiting, Or being lied about, don't deal in lies, Or being hated, don't give way to hating, And yet don't look too good, nor talk too wise: If you can dream - and not make dreams your master; If you can make one heap of all your winnings If you can talk with crowds and keep your virtue, |
I have never visited Kosovo, but I was very near its border a few years ago, during a business trip to Belgrade and other parts of the Ex-Yugoslavia, not long after the Balkan war (the last) was over. I remember I saw a UN convoy, and this is as close as I have been to a war zone (I suppose my military service in Ceuta does not apply, even though I met there some truly terrifying characters), but it was certainly not a reassuring feeling.
While in Belgrade I saw many buildings destroyed by NATO bombs, and it was just like in the movies, but it was real, and real people had died there, and it made me feel very insecure. Of course the war was over, and I had nothing to be afraid of, but those images are still in my mind, and they came back after all the news about the declaration of independence by the Kosovo parliament yesterday. I am no expert on international relations or even history, but this is one of those moments when I feel that nothing good can come out of this.
Just this morning on my way to work I was listening to a podcast about WebEx, a comunities website, and, as I listened to it, I though that the news about Kosovo were from the XXth (or indeed XIXth) century, and the ideas about Comunities, was the XXth century. It seems as if many politicians (and obviously many of their voters) are still living in a world of National Pride, National heroes, National this and National that, a world explained in terms of boundaries, in terms of US againt THEM, Our language, Our history, everything that makes US better than Them. These stupid arguments, this constant demonising of the OTHER, is something we are sadly growing accostumed to in Spain. Nationalists are permanently on the offensive, yet portraying themselves as if they were innocent victims of some ruthless tyran.
On the other hand, we all know the world is going FLAT (Friedman), that more or less expontaneous Communities are being developed everyday, changing the way we SHARE our time on this Earth, changing the way we LEARN, the way we (some) FALL in LOVE,..... I´m not so naive to think that Internet has not borders, because there are still many for whom the Web is Off-limits, an unkown and dangerous place...., but it is certainly a much more open and free "place" that the world our politians seem to still have in their minds. Let´s hope that as we proceed into the XXIst we will eventually bury the old ghosts of the XIXth and XXth centuries.
I really like this ad. I find it a perfect definition of what a well-lived life is in my opinion: a journey of discovery, a voyage to learn, to uncover the beauty all around us. Human curiosity, even with its sometimes perverse side-effects, is one of our greatest assests as a species.
A few weeks ago I was fortunate enough to come across the Podcasts produced by the Finantial Times in which Martin Wolf reads his columns at the influencial newspaper. Of course, I would much rather read Martin Wolf, but given the scarcity of that most scarce resource, TIME, I can listen to him in my car on my way to work.
For what I´ve been reading and listening to lately, it seems to me that we might be headed for an economic Perfect Storm in this dear country of us. What do I mean by economic PS? I mean that everything that could go wrong is in fact going wrong, and that the only good thing about the bad news of today is that they are certainly not as bad as tomorrow´s bad news will be. Let see: after years of unprecedented increases in housing prices, a large proportion of the Spanish households are "married" to a mortgage for 20,30 or 40 years. A few things are be quite certain about this marriage. One: in many cases it will last longer than the real marriages who signed those mortgages. Two: the mortgage is often worth more than the house is helping to finance. Three: the housing bubble is bursting right before our eyes. Four: salaries have not increased above inflation (or house prices) during these years of bonanza, so it is difficult to see how could they increase now in times of rising unemployment and general economic slowdown. Five: if salaries are not likely to increase in the near future but morgage payments are increasing, how could consumption be maintained at present levels?
And on top of that the banks which all these years have joined the housing party by providing cheap credit are now cutting back on risks, and refuse to lend to those few who are still willing to buy a house. Just as spectations of rising prices and cheap money pushed people into houses they could not affort, now spectations of lower future prices and restrictive lending have brought the housing market to just about a complete halt.
So it seems as if the main economic engine of Spanish growth is just about running dangerously short on fuel.
Well, perhaps if the rest of the world is growing fast, they will buy more of our products and compensate the decline in domestic consumption....I would´t count on it, let´s see. The productivity of the Spanish economy has been declining fast, in part due to the very low productiviy of the jobs that were being created, and in part due to the sorry situation of our school and university system, and the lack of decent budgets for Research and Development of Spanish companies and of Spanish governments at all levels. So the world is not exactly waiting in long lines to buy our products....and turism, the traditional cow of the Spanish economy will suffer from competition in other countries with lower prices and better service.
Furthermore, the world is not expected to grow as fast in 2008, with real worries about the health of the US economy, the rising price of oil (reached 100USD this week), the geopolitical instability in places like Iraq, Pakistan, Nigeria, the rising threat of terrorism (Dakar rally has just been cancelled for fear of attacks!!), and on top of all that, the finantial crisis originated on the "suprime" mortgages. The finantial markets are dry out of money because banks refuse to lend money to each other because they do not trust the fundamentals of their business. The central banks are pouring money into the world finantial system but the lack of confidence among the institutions is making these attempts all but useless. There has already been a bank run (first time since XIX century in UK), when clients lost faith in the capacity of Northern Rock to guarantee their deposits...How many other banks, in the world, how many in Spain, could be subject to such disturbing lack of confidence?
And to add insult to injury, Spain will have a general election in 3 months, and it looks as if could get messy. If no clear majority can be achieved by either of the two main national parties, the key to the Moncloa could be in the hands of the regional (nationalist) parties. When the economy will be in need of a strong hand to make the difficult changes that the Spanish economy needs to get out the hole it has put itself into, we might have a goverment with its hands tied by very regional and particular interests.
I truly hope I´m wrong, but we could be set for a bumpy ride. Buckle up, friends!
