Last Saturday, while reading the last issue of The Economist at home, I found the following table with the evolution of government spending for some countries:
Government spending as % of GDP, source: The Economist
You can see that the trend is upwards for all countries.
In one of my favourite books, “Augustine’s Laws“, the author goes on extrapolating several trends in the defense and aerospace industry. I did the same with this table for the average of these countries and the particular case of Spain, for obvious reasons.
When will government spending reach 100% of GDP?
Extrapolating the trend, this would occur in Spain  the year 2124 (for the average of the countries in the table it would happen in 2171). What would that mean? By 2124 every euro spent in Spain would be spent by the government (local and central), not a dime spent by individuals. The end of private property.
Government Spending as % of GDP, extrapolation
That is not necessarily worrisome: we would be provided a home by the state, food to eat (the trend doesn’t say whether we would have to eat in public canteens or we would receive vouchers to get stuff from grocery shops), clothing, etc… We would become a kind of communist country in the end. Don’t worry, United States would join us some years later. I guess the last country in joining this pan communist block would be Switzerland, but its time would come, too. No Cold War this time.
In case you wanted to start-up a business, you’d better do it soon: I guess some years before the doomed 2124 it would be prohibited to launch such kind of initiatives. Good luck with your venture! I’ll just look forward to a pleasant and quiet 9-13 position in such an administration. đ
El pasado dĂa 15 leĂ varios tweets haciendo referencia a una entrevista que la periodista de TVE Ana Pastor habĂa hecho a Mahmud Ahmadineyad. AsĂ que la vi.
Debo ser muy raro, porque no he dejado de leer elogios a la periodista y a mĂ me parece que la entrevista, el papel que hizo como entrevistadora, es lamentable. Sin paliativos.
Francia e Italia. Fuente: el Stockholm International Peace Research Institute (SIPRI), autoridad internacional en la materia. En la siguiente herramienta, se puede hacer una bĂșsqueda de exportaciones de armas con destino Libia en los Ășltimos 20 años. Aparece un registro por valor de ~168M⏠de exportaciĂłn de misiles anti-tanque MILAN por parte de Francia, y otro por valor de ~80M⏠de exportaciĂłn de helicĂłpteros por parte de Italia.
Estados Unidos. Fuente: el Departamento de Defensa. En su informe anual de 2009 [PDF] muestra como Libia, que habĂa estado bajo embargo durante años, desde 2006 comenzĂł a recibir exportaciones comerciales de armas desde Estados Unidos, aunque por un valor muy bajo, menos de 1M$ en 2009.
âŠ
Si la gente vitorea la entrevista porque le ha plantado cara a Ahmadineyad, me parece bien, pero le podrĂa haber tirado un zapato o una estatuilla de Il Duomo a la cara, en vez de hacer una entrevista.
Si TVE querĂa incordiar y molestar a Ahmadineyad, podrĂa haber hecho muchas otras cosas, en vez de una entrevista.
Si querĂan presentar una imagen deplorable o ridĂcula de Ahmadineyad podrĂan haber hecho un documental, en vez de una entrevista.
Some weeks ago I read in the newspaper one of these mistakes that you may find so often with some journalists (apologies for journalist friends who may feel criticized). I checked some weeks later and it hasn’t been corrected, so I’ll let you know.
The article is about a plan to capture Bin Laden. It says that he is hidden in a region of 11.585 square meters up in the mountains… I checked the cables (6) mentioned in the article and in no one it says the size of the region. I havenât been there in Waziristan, but I know the figure is wrong. I say I know, not I suspect. Thatâs the problem with some journalists they just donât know nevertheless they write about it.
11.585sqm is the size of the garden of my parents’ neighbour. It is a square of 107 by 107 meters, a football field so to say. Do you believe that Bin Laden is succeeding in hiding himself in a football field from an army of thousands? Then he could have just titled it “Bin Laden hidden in a football field!”, a much more catchy headline to attract readers.
I am sure that in your respective fields of knowledge you have seen plenty of similar cases that make you doubt about everything you read in papers.
I believe the guy took the info from the Wikipedia. There it says 11.585 square kilometres (a region the size of Madrid region) and he just copied it wrongly… donât know what is worse: whether copying without understanding or copying without caring about mistakes, you name it.
Hoy al contrario que en el post sobre Ibercaja querĂa comentar algunos de los aspectos que me encantan del servicio de ING.
Comisiones: no hay. Por hacer transferencias, ingresos, por la tarjeta, etc. Nada. Los Ășnicos costes que hay son los de operar en bolsa.
A alguna gente le da miedo el no poder ir a una oficina a quejarse, a solucionar un problema. En primer lugar, decir que en determinados sitios sĂ hay oficinas de ING. En segundo lugar vendrĂa una pregunta Âżacaso en una oficina de un banco uno recibe un buen trato o te solucionan un problema de forma adecuada? Sin embargo, ejemplos de excelente servicio con ING he tenido varios.
Last year Luca and I went to Brazil during Easter holidays. Some days ago I was looking at some pictures and I remembered that I had wanted to write a post about one experience we lived then. I never wrote it then, so Iâll do it now.
The brochure already warned that some foreigners found it strange that people were asked to pay to attend a religious ceremony. If I remember well we paid about 100R$ between the two of us (~30âŹ), a perfectly payable amount.
For me the best thing of the evening was that with the mind thinking about attending the ceremony we ventured with the group into a part of the city that by ourselves we would have never dared to go. I sometimes make the comment that we donât dare to go to places just because the noisy media has given us that fearful sense. I guess that if we had checked the guide of Brazil we had, it most probably would have discouraged us to go into the neighbourhood we went.
The room where the ceremony was held could have been any wide room of a building. It wasnât any kind of special temple. We gathered about 40 people inside; split 50/50 between tourists and candomble practitioners (or performers). The head of the ceremony was an old woman.
Let me take the following passage from the Wikipedia to briefly describe how the ceremony goes:
âIn the public part of the ceremony, children-of-saint (mediunic priests) invoke and “incorporate” OrixĂĄs, falling into a trance-like state. After having fallen into trance, the priest-spirits perform dances symbolic of the OrixĂĄ’s attributes, while the babalorixĂĄ or father of saint (leading male priest) leads songs that celebrate the spirit’s deeds. The ceremony ends with a banquet.
I think it was all fake. I donât believe any of what it happened it was actually felt by performers. I risk that youâll get me wrong, you may think I am not tolerant with other cultures, etc. Not the case.
I just felt that ceremony was a business show much the like flamenco shows in Granada, with the difference that with the flamenco you donât feel cheated. You know from the beginning that you are attending a show.
The money wasn’t definitely a problem; I love to spend some cash for different experiences. E.g. sometimes we have just paid a guide to explain us a temple not caring about the accuracy of the explanation just about the curious stories he or she might tell, as the rest of the information we will have forgotten in months.
Believe it or not it took me time to make up my mind. Luca is way sharper than I am in those situations… I think she gave me a look of disapproval no later than the first 5 minutes had passed. During one pause, she explained me her view of it, and then, back in the room, during the following minutes of sudden trance-in/trance-out I was making my numbers in my head.
We were about 20 tourists. If each of us had paid about 50R$. The total income then was ~1,000R$. If the band (I avoid the word congregation here) performed a show every night, they would make ~30.000R$ a month. Letâs correct the figure supposing that not every day they may have a performance or that in not all performances they will be able to fill the room… say they make ~20.000R$ a month. As I said, there were about 20 performers, this would mean that each could receive ~1,000R$ (some of this would have to be deducted to pay the transportation of the tourist and the home-made drinks they offered).
The average salary in some parts of Brazil is in that order of magnitude, ~1,000R$. Then take into account that many of the performers were family, so it really makes sense for them, it’s a formidable way of making a living for the family. Probably if I had been born in that neighbourhood and I could have a supplement to my salary of 100% of my salary by faking a trance situation per night I would have been delighted to do so. And it is perfect as a business! Itâs just that it leaves you with a bad flavour. It feels like cheating. We wouldnât recommend it.
Next time weâll go for the concert, no matter the price.
Let me close the âToastmasters blogging weekâ by informing you about a great Toastmasters event in Madrid next May 7th.
We will celebrate the Division Conference in Madrid (this is happening in Madrid only once about every 4 years). It will be open to all kind of participants. You donât need to be already a member to take part in it.
There will be some very interesting presentations but most important of all, there will be 3 speaking contests: public speaking contest in Spanish and English and evaluation contest. There it will be decided who are the champions for Spain & Portugal, who will compete in the next level. It will be a big show, where you’ll be able to meet many people, learn a lot and put an end to the day with a wonderful gala dinner. There is a wonderful team working to make it a great event.
Even though I am now based in Toulouse, Iâll go to Madrid that day to take part in that event as the contest chairman, in case you hesitate whether to join the event not knowing anyone (youâll at least know me!).
I realize that I have often talked about Toastmasters in this blog (last days included), shared the script of some of my speeches, etc… but I have not dedicated a post just to explain what Toastmasters is.
I found a video where Lance Miller explains in just 7 minutes the Toastmasters experience. Lance Miller is one member of Toastmasters who after working hard for years and trying several times won the World Championship of public speaking in 2005. I had the chance of attending a conference in Lisbon in 2009 where he gave a presentation; he is a great and a very motivating speaker. You can see it in the video.
If you want to know more about Toastmasters, no matter where you live in the world, most probably there is Toastmasters club nearby, check it out. Â If you are one of my acquaintances and happen to live in Madrid, please, note that there are 5 clubs in Madrid. Find them here.
Yesterday I posted the speech I gave at Rosemasters club last Saturday. As I mentioned there, on Saturday we celebrated the contests of the club.
This is a special occasion every year. Actually, there are two such special occasions in the year. In the spring we celebrate the speech contest and the evaluation contest, while in the fall we celebrate the humorous speech contest and the table topics contest (this last one is about improvisation).
Normally, in weekly meetings, members do not compete. The contrary, the atmosphere is relaxed and inviting you to speak in front of a friendly audience. As the mission of the clubs reads âThe mission of a Toastmasters club is to provide a mutually supportive and positive learning environment in which every individual member has the opportunity to develop oral communication and leadership skills, which in turn foster self-confidence and personal growth.â
Nevertheless, some of our members (~5% of them) like to take the opportunity to compete, to prove themselves how they can improve and enjoy facing new and bigger audiences with every upper step of the competition. The competition also puts you an extra point of stress that itâs very good to learn how to handle it.
I have taken part in such contests, and even though I havenât won, I can tell itâs a wonderful and unique experience. You really prepare and polish your speeches, paying attention to every detail. Then, the day of the contest is for you to enjoy it.
I remember when I competed in Lisbon in April 2009. It was a big auditorium, filled with about 100 people. They offered us to use a micro. I turned down the offer. I thought: âwhen am I going to have the chance to try if I can project my voice to the last corner of the room? And with such a friendly audienceâ. When the contest finished, I went to check with a woman sitting at the very back of the room whether she could hear me well. She could. That was my victory for that day.
I wanted to share with you in this post a speech I gave last Saturday at Rosemasters club contest. I was not contesting but a speech was needed for the evaluation contest, so I volunteered.
Why do I share this speech in particular? Not because it was especially good (nor especially bad), but because it has some insights that could help some of you in case you hadnât reflected on them or made the numbers yourself.
I titled the speech âSnowballâ but a more suitable title would have been âSnowball, or the beauty of compound interestâ. Please, note that the metaphor of the snowball itâs not mine, so no need to praise my originality here. I borrowed it from Alison Schroederâs biography of Warren Buffett âSnowballâ, which I reviewed in other post in this blog (I take the opportunity to recommend the book again).
Below you can watch the video uploaded in Youtube (from the second 0:42 some helping hand lifts the camera, please be patient during those first seconds). Below the video I share the script of the speech so you can actually see the formula and the charts I showed. Reflect on it; it may help you a lot a long way down the road.
—–
Script:
“How many of you used to play with snow when you were a child?
Do you remember what the process you followed to build snowballs was? You started by making a small ball with your hands, like this. Then, you left it on the ground and let it roll over itself, so it was gaining more snowflakes and thus getting a bit bigger with every roll… for you it was a small effort, and after some time of rolling and rolling over, you easily could end up with big snowball like this.
It shows what is the future value (FV) of an investment’s present value (PV) that gains a fixed interest rate (i) for n periods.
To put it simple, it means that the interest that we earn over the investment in the first year, will enter the calculation in the second year. In a very similar way that small snowflakes are making the snowball bigger.
The importance of compound interest for our future.
Who is the younger member of the audience today? I will ask you one question, let me see if I get the answer I want.
Are you saving and investing with your retirement in mind? Do you have pension plan or fund?
An extremely important factor in this discussion is that time in the formula appears in the exponent. This means the longer the time period, the better. Or put it in another way, the sooner we start investing or saving, the better.
I made two quick calculations to show you. Imagine a 25 year old person who just started working. If he or she is able to save 250 euros per month, that is 3,000 euros per year, and puts it in a conservative fund which earns 3% a year… by the time he is 65 he will have around 230.000âŹ. His yearly contribution would have been 123.000âŹ. So another 110.000⏠will have come from the interest. He will practically have doubled his money.
On the other hand, take a 50 year old person who never saved any money beforehand. He will have to save it in only the last 15 years of his working life. To make the comparison, I supposed that he contributed the same 123.000⏠in those 15 years, for this he has to save 8.200 per year or 680⏠per month… when he is 65 he will have 150.000âŹ, having earned about 30.000⏠from the interests, 4 times less!
Effect of a 3% compound interest over 40 years.
If the young person would invest in more volatile asset, for example the stock market, which historically earns about 8% every year, the new figures would be these ones.
840.000 â earning 720.000 from interests
222.000 â earning 100.000 from interests / 7 times less.
Effect of a 8% compound interest over 40 years.
Finally, with this discussion I wanted to explain little bit the compound interest, how it is making your savings grow, and even though at the beginning the growth seems very slow this is because the growth with time is exponential and we human beings are not very patient, thus it is important to start early saving small amounts, as snowflakes… in the end you will have a big snowball.
Start saving and see you at the retirement age.â
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Final comment: as you may have noticed there several passages when what I say differs from the script. I didnât learn it by heart. During my first speeches in Toastmasters I tried to do so. Now I am departing from that approach. However, I do write the speech to give it a clear structure, to polish some parts, spot words I may have difficulty in pronouncing (so I can replace them for others) and count the amount of words so I am sure it fits in 5 to 7 minutes (often 7â30â… never more or fellow Toastmasters will start clapping).
Some days ago I tweeted about the swings of Mr. Market lately. The consideration of the stock market as Mr. Market is a metaphor that we owe it to Benjamin Graham.
Since a picture is worth a thousand words, I wanted to share a snapshot of the swings of our âJ&Lâ ( đ ) portfolio in the past few weeks. One could read the picture as âyou have lost 114$ in the past weeksâ. That same person on January 28th would have said âyouâve lost 2,000$ in the last 10 daysâ.
"Resist the human bias to act", Charlie T. Munger
In fact we have not lost a nickel in these weeks, since we havenât sold any stock. I love a quote from Charlie T. Munger, Berkshire Hathaway vice chairman, which goes: âResist the natural human bias to actâ.
You actually donât need to buy or sell stock when the market is in the mood. It is as easy as not doing it. You may buy only when you see a margin of safety and sell only when the stock has reached what you considered it to be at its intrinsic value.
You can see that in these 5 weeks we could have lost up to 2,000$ twice; we didnât. The only tools we counted with: patience and not âlistening to Mr. Marketâ.
Precisely today, it is published the letter of Warren Buffett to Berkshire shareholders. Whether you are planning to invest in stocks or only want to have a fun read, take a look at it.
The Blog by Javier 