Jozef Ackermann, the Chief Executive Officer of Deutsche Bank said last Friday that the Latin American region is better placed than ever to face the current ecinomic turmoil.
"Strong economic fundaments, booming commodity prices, improved confidence and robust domestic demand improved the region's resilience tothe current uncertain global developments. 2008 will be an especially interesting year as we witness the extent of this resilience and the degree to which the region can continue to realize its potential".
How would such a paragraph on Belgium read?
"A very uncertain political context, negative trade balance, and a foreign debt of 287 billion EU, the third hightest foreign debt/GDP rate in Europe, after Italy and Greece, makes Belgian extremely vulnerable in the current economical crisis. In the current hausse of commodities, resource-low Belgium is extremely vulnerable. Add to that a inflation which will double in 2008 compared to 2007 (close to 4% coming from 1,7% in 2007) and a growth which will be in the most optimistic scenarios 1,9%. Surprisingly enough, the 2008 federal budget takes into account a creation of 46.600 new jobs in 2008. This is surprisingly high in the current economical context."
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Mar 9 2008
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Mar 8 2008
Jonah Lehrer never replied on my comments on his somewhat retarted article on carbon emissions and the Amazon. Too bad, it seems that we all forgot that part in Al Gore's movie where he pulls out a chart which shows that the US is responsible for more than 70% of the carbon emissions. Africa (the continent) only accounts for 8% and Latin America (the continent) only 11%. Again, until the moment the US doesn't get (1) its pace of carbon emission growth lower than that in Latin America and (2) in a second phase gets its nominal carbon emission per capita below the carbon emission per capita in Brazil, there's no valid argument why any North American should even talk about subsidies to use to Amazon to offset the carbon abuse in the US.
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Mar 7 2008
I've been a loyal fan of Sidestep and Kayak over the last years. However, I've neverbeen truly satisfied with either of them. True, Sidestep will learn you that the cheapest flight you can find from Brussels to Rio de Janeiro is a TAP flight at 1.040 US$ which brings you from Brussels to Rio in 14 hours. Iberia offers you the deal for 1.055 US$ with 30 minutes more per leg of your trip.
But on transatlantic flights I need much more information than just the flights and the actual hours:
1. Leg room. Flying a Boeing 747 is a pain, flying an Airbus 340-300 or 340-600 is a breeze when it comes to seating comfort.
2. Security wait time: Heathrow: never again. Miami: never ever again. Frankfurt and Lisbon: comme si comme ca. Munchen and Zurich: heaven.
3. Aircraft age. Nothing worse than flying the old American cigar boxes. Quality of planes of American carriers like Delta and American is horrifying.
4. On Time performance.
5. Connection times.
6. Number of stops.
7. Flight duration.
8. Lost luggage track.
9. Hostorical airplane passenger loads. Extremely important for me. Air France and British Airways to Rio are always full.
10. Aircraft type.
11...
Imagine how glad I was when I learned that Insidetrip.com went in bèta. The site puts the consumer in control of their travel experience through an innovative search by "TripQuality" ratings.
I tried the service for two routes that I know very well, because I've flewn every possible carrier catering the route: Brussels to Johannesburg and Brussels to Rio de Janeiro.
1. Brussels to Rio de Janeiro:
The winner was the TAP flight with Tripquality score of 76%.
The analysis is right, probably the score fell below 80% because of the Lisbon airport. However, British Airways, Air France, TAM, Iberia all scored substantially lower. I can tell you why.
2. Brussels to Johannesburg:
This is an interesting one. Most people that i know fly South African over Heathrow or Frankfurt, or take Lufthansa over Frankfurt.
The last years I've developed a keen preference to fly Lufthansa over Munich or even better, fly Swissair over Zurich. Lufthansa flies an airbus from Munich and so does Swissair. And Munich and Zurich are one of the most convenient airports in Europe. Moreover, the trip with the Airbus 340-300 from Swissair is excellent; their fleet is maximum 5 years old.
The strange thing on this route is though that I could never find a Swisair on the return leg from Johannesburg back to Europe. This always happens to be a Lufthansa flight to Munich (Swissair and Lufthansa have codeshare). If it were not for that, this Swissair flight would score without doubt +90%.
Try it out for yourself.
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Mar 7 2008
The deal between Gafisa and Odebrecht is paying of: the profits of Gafisa's rose 89% last year and jumped to 143,8 million R$.
The underlaying dynamics:
1. Brazil's unemployment rate fell in December to the lowestsince 2002, spurring borrowing.
2. Contrary to the US and the US, the mortgage rates in Brazil were very low. In Belgium mortgages account to more than 113% of the GDP. In Brazil this is currently only 1% ! Gafisa expects mortgages to swell as much as 12% of Brazil's groos domestic product in five to seven years.
Gafisa is Brazil's second largest real estate company.
Disclaimer: my wife is related to Odebrecht. -
Mar 1 2008
After the denial on recession, the newest trend is denail of stagflation. Everyone will try to convince you that the (still increasing) inflation is due to disappear in the second half of 2008. The main two drivers behind the current inflation are supposedly the (1) rising energy prices and (2) the rising food prices.
When it comes to oil prices,you'll here the following claims "Unless you think oil is going to 150 US$ a barrel by the end of the year, energy inflation will be much lower."
As to the rising food prices, the solution also seems simple: "If you want lower food prices, just tell your Senator to take away ethanol subsidies and stop using corn to make ethanol, when we can buy ethanol made from sugarcane in Brazil miuch cheaper than we can make here".
On the ethanol level, I agree. What the US is doing is absurd. The dreams of the US of an energy-independent America is not more than a dream. The US currently has 60 ethanol plants under conrtsuction to add up to the already 140 plants in existence. Last year the US produced 6,6 billion gallons of ethanol from corn. This figure will rise to 8 billion in 2008. The US government spends 3 billion US$ a year subsidizing the ethanol production from corn. And we all know that US ethanol production from corn is a dead duck compared to the Brazilian ethanol proudtcion from sugar cane. Especially if you add the biomass ethanol production in the sugarcane-waste process.
The figures are there: according to the IMF, the US production of ethanol consumes 0,82 gallons of fossil fuels to create a gallon of ethanol. According to David Pimentel of Cornel, it even takes 29% more fossiel fuel to create a gallon of corn ethanol; a net energy loss !
Yet, the US will not turn it back to the ethanol business. And Brazil certainly won't, their yields on ethanol are contrary to the US impressive.
I expect food prices to go up by 4% next year. But you have to make the right picks to profit form the wave, forget lifestocks.
The real reason why we have inflation in Belgium is not only the increasing food and energy prices. I just received my Telenet (Internet & fixed phone bill); which mentions that my bill will go up 2,5% in April, due to 'higher cost of living'. Bullshit of course; the operationg costs of Telenet are decreasing. The real reason is that Telent need to obtain an organic growth of 5% in 2008, which it clearly cannot reach through selling more. So they decide to create inflation.
Just to say that the truth on inflation and growth is more complex than journalists wants us to believe it is. -
Feb 28 2008
Yesterday over dinner with a close friend we were talking about my fear of an unseen food crisis adding up to the current economical crisis. I've written before on my fears of the impact of a Global Food Crisis on Europe an specifically Belgium. My friend yesterday doesn't believe the storm can be that bad. He believes our governments in Europe can help with price controls.
Price controls are not a solution, they only lead to reduced supplies. There were price controls in the days of the Roman Empire and in ancient Egypt or Babylon. Price controls under the Roman Emperor Diocletian led to a decline in the supply of goods. The same thing happened under President Nixon's price controls in the 70s and the same is happening today in Venezuela. This lesson from Venezuela is an essential one for us.
It's one of the biggestopportunities for entrepeneurs these days: buy farmland in Brazil and start running a farm with a vision. More on that during our investors trip in May. -
Feb 28 2008
Brazil's real strengthened for an eighth straight day yesterday, alomst reaching a nine-year high, as a tumbling U.S. dollar and surging commodity prices boosted demand for the currency. The real has jumped up 4,8% since February 15, making it the biggest gainer against US dollar among the world's 16 most actively traded currencies during the period. The currency has strengthened 28 percent in the past 12 months, also the biggest gain among the major currencies against the dollar.
Brazil's real interest rate, calculated by subtracting annual inflation of 4.56 percent from the 11.25 percent Selic benchmark lending rate, is 6.79 percent.
Crude oil also rose above $102 a barrel today, the highest dollar level ever, as the weakening dollar led investors to buy commodities as a hedge against inflation. Brazil exports the crude oil it pumps from what are the deepest waters in the world, with recent discoveries in fields as deep as 6 kilometers. Commodity sales helped Brazilian exports rise to a record $160.6 billion in 2007. Brazil will export as much as $180 billion this year, according to Trade Ministry estimates. -
Feb 23 2008
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Feb 23 2008
Not, of course. I'm pulling you a leg here. Belgium will never have enough money to pay its external debt.
The news is on Brazil. The central bank just announced Brazil became a net external creditor by 4 billion US$. An unprecedent fact in the economic history of the country. -
Feb 22 2008
340ml: 4 men from Maputo, Moçambique, making music in Johannesburg, South Africa. Their initial album, Moving, released in 2004, was a gem. But 3 years later, their second album, sorry for the delay, promises to be the true revelation. The album should be available by early March.
There is something appealing about the Mozambican attitude of these guys and their music. It's for sure one of the next countries I'll be visiting; especially now that I master Portuguese.
Below: video's from "Midnight" and "Shotgun" from the previous album.
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