jueves, mayo 29, 2008

Chrysler: Selling oil short

I've read many critics to Chrysler's (Dodge and Jeep) new refuel program. It actually fixes the price of fuel at $2.99 for three years, for up to a certain amount of gallons. Critics say that it's encouraging the use of fossil fuels... (but on the other hand other critics say that it only goes up to the equivalent of 12.000 miles a year, whilst the American average is 15.000, so I don't see much of an encourage... ). Thomas Friedman has even compare it to "offering discounted cigarettes to teenagers"! Quite sincerely I don't see the problem: I don't believe it's going to marginally change the consumption of fuel in relevant ways. What I do see is a good example of a financial instrument (short selling) turned into a marketing tool. Now the real danger is that short sells are dangerous, since the losses may be way beyond any estimations: what if the price of fuel goes up to $10, $15 or $20 per gallon? In theory there's no limit for it... not to mention that as far as I read the offer it doesn't exclude the potential taxes that may be created in the future. In the good scenario this is an original marketing tool, in the bad one this may cause heavy losses to the firms involved, unless they take cautionary options to hedge the risk.

domingo, mayo 18, 2008

On population (and Neruda)

So now it's Jeffrey Sachs who has joined those who claim for a reduction in birth rates... In fact, as reported by the New York Times, he argues in favour of a 2.1 ratio per family (and then he thanks his 3 kids).
I just have two words on that:
1) "Don't put the cart in front of the horse" (a free translation from Spanish). There's not one single country that has achieved development by restricting birth rates. It has always worked the other way around, so you don't need to worry: just help these growing countries to achieve development, then birth rates will take care of themselves.
2) Population is an endogenous variable... it's not that we are facing an "explosion" the planet can't sustain... Actually, we have reached this level of population because for the first time in human history we've been able to sustain it!: less wars, better medicine, more food. Now, I don't know if the world is able to sustain this level of population consuming at the same level that the US citizens do... but I know it can sustain the population to the level of consumption that allows them to live, and I dare saying, in much better conditions that most of their ancestors. The thing is that those conditions have bad press today, they are called poverty, and though it might be true that everybody would rather live in a better situation, I would not dare telling anybody that they would be more happy consuming more and having less children. I'd like to tell "developed countries" along with Neruda:
Ah you don't want to,
you're scared
of poverty, you don't want
to go to the market with worn-out shoes
and come back with the same old dress.

My love, we are not fond
as the rich would like us to be,
of misery. We
shall extract it like an evil tooth
that up to now has bitten the heart of man.

But I don't want
you to fear it.
If through my fault it comes to your dwelling,
if poverty drives away
your golden shoes,
let it not drive away your laughter which is my life's bread.
If you can't pay the rent
go off to work with a proud step,
and remember, my love, that I am watching you
and together we are the greatest wealth
that was ever gathered upon the earth.

Mas Informacion no es mas conocimiento

Paseando por youtube me encontre con Sweet Child'o Mine que hace mucho no escuchaba... grave error: la depresion me ataco cuando me tope con el siguiente comentario:
"the guitarist of guitar hero 3 has the apperance of the guitarist :)"
Definitivamente las nuevas generaciones tienen mas acceso a informacion, pero son mas ignorantes. Yo se que estoy viejo, pero cuando era chico y veia a heroes de las generaciones anteriores sabia quienes eran!!