Si, desde la debacle de 2001-2002 que no se veia un escenario politico tan interesante ante elecciones parlamentarias. En breve, se estan armando tres frentes: el peronismo Kirchnerista, actualmente gobernando, el PROperonismo, una suerte de alianza entre el PRO de Macri y los peronistas no kirchneristas (auspiciados en las sombras por Duhalde) y la sociedad Seguidores de Carrio - UCR.
Mi opinion: creo que de las tres opciones hay solo dos capaces de gobernar y ellas son las dos que incluyen peronistas "potentes" en sus formulas (el kirchnerismo y el PROperonismo). La opcion Lilita suena linda, pero, creo, no deja de ser un rejuntado similar a la Alianza (que para mi en su momento fue una buena idea), que padecio de falta de poder con los riesgos que eso tiene con los peronistas en frente. Ademas, para aquellos que critican a los peronistas, la alianza que armo Carrio tiene algunos "elementos" bastantes irritables, ligados a hechos de corrupcion y arreglos impudicos.
Lo positivo es, dicho ya, que el escenario politico se arma con tres opciones diferentes y con similares oportunidades de triunfo, al menos por ahora. Eso significa que, si la cosa sale bien, el sistema politico comienza a reestructurarse y a funcionar nuevamente. Ya no habra solo una propuesta "ganadora" como sucede desde 2002.
Veremos...y en octubre sabremos...
Sunday, February 15, 2009
Thursday, February 12, 2009
The Economic Downturn
Yesterday afternoon I had an interesting but briefly conversation with two persons from one of the two main banks in Spain. Suddenly, and without "anestesya" (something I would have needed of right after coming from an exhausting "Quant" exam), they asked me the causes of the economic crisis.
As you may imagine, my brain was burning, and I started with what I think were the "causes": the story is that to stimulate the economy back in 2001 (or 2002?), Alan The Great and his "corte" at the FED decided to slash interest rates several times up to 1% in the US. The reduction of interest rates has a lag in its effects though but it enhance expectations on people to go and get a loan either to buy a house or to pay the credit card debt (which at the end, allow them to finance new acquisitions). The "stimulus" cut the vicious circle of pessimism making private consumption to react and, therefore, companies go buy new machines to satisfy customers' needs.
From what I see, the reduction in interest rates along with a precarious risk analysis of loan-takers created a bubble in consumption and real state investments that burst about eight months ago and that now we are "enjoying" so much! As mentioned earlier, the cut in interest rates has a lag period (usually around 9 months): as soon as the expansive effect starts it is difficult to stop and that is why it is so important to calibrate monetary policy. Well, when consumption increases too much guess who comes: inflation! (yeap, we argentines know about it...sadly!)
Once again, when the FED reacted to the increases in expected inflation it was too late: the world was consuming...and growing...but too much. Interest rates were increased with the goal of moderating growth and, hence, inflation. And when the adjustment in interest rates came into effect consumers, mainly in the US, find out difficult to afford their debts (mortgages, credit cards, etc) and have to reduce consumption in other stuff (a new car, a cinema ticket) to pay them. As a consequence, the economy starts to cool off, business are affected due to lower sales and have to fired employees, many of them that got a loan and suddenly lost their jobs...and left their houses to the bank.
Why the crisis spread out in the financial system? Well, nowadays the financial system is so developed and there are so many financial instruments to "play" with...Let's suppose that 1 million consumers with bad credit ratings got a mortgage loan with Bank 1. After that, Bank 1 takes 2/3 of those loans, divide them in four and sell them in the market. Banks 2, 3, 4,...,n do the same. Since financial markets are so integrated investment banks, that do not give mortgages, and other commercial banks from other countries buy those trenches expecting a good return. Then, the "domino" effect comes into the picture: as soon as mortgages owners stop paying their loans they affect not only Bank 1, who lent them the money, but also the "real" and new creditors. That is what is called "toxic assets". And that is one of the main initiators of the crisis.
As you may imagine, my brain was burning, and I started with what I think were the "causes": the story is that to stimulate the economy back in 2001 (or 2002?), Alan The Great and his "corte" at the FED decided to slash interest rates several times up to 1% in the US. The reduction of interest rates has a lag in its effects though but it enhance expectations on people to go and get a loan either to buy a house or to pay the credit card debt (which at the end, allow them to finance new acquisitions). The "stimulus" cut the vicious circle of pessimism making private consumption to react and, therefore, companies go buy new machines to satisfy customers' needs.
From what I see, the reduction in interest rates along with a precarious risk analysis of loan-takers created a bubble in consumption and real state investments that burst about eight months ago and that now we are "enjoying" so much! As mentioned earlier, the cut in interest rates has a lag period (usually around 9 months): as soon as the expansive effect starts it is difficult to stop and that is why it is so important to calibrate monetary policy. Well, when consumption increases too much guess who comes: inflation! (yeap, we argentines know about it...sadly!)
Once again, when the FED reacted to the increases in expected inflation it was too late: the world was consuming...and growing...but too much. Interest rates were increased with the goal of moderating growth and, hence, inflation. And when the adjustment in interest rates came into effect consumers, mainly in the US, find out difficult to afford their debts (mortgages, credit cards, etc) and have to reduce consumption in other stuff (a new car, a cinema ticket) to pay them. As a consequence, the economy starts to cool off, business are affected due to lower sales and have to fired employees, many of them that got a loan and suddenly lost their jobs...and left their houses to the bank.
Why the crisis spread out in the financial system? Well, nowadays the financial system is so developed and there are so many financial instruments to "play" with...Let's suppose that 1 million consumers with bad credit ratings got a mortgage loan with Bank 1. After that, Bank 1 takes 2/3 of those loans, divide them in four and sell them in the market. Banks 2, 3, 4,...,n do the same. Since financial markets are so integrated investment banks, that do not give mortgages, and other commercial banks from other countries buy those trenches expecting a good return. Then, the "domino" effect comes into the picture: as soon as mortgages owners stop paying their loans they affect not only Bank 1, who lent them the money, but also the "real" and new creditors. That is what is called "toxic assets". And that is one of the main initiators of the crisis.
Saturday, February 7, 2009
Closed
This weekend is just for studying, studying and studying...nothing new though but the "big" difference is that finals are coming:
Monday: marketing case + mid-term assignment (analysis of a cosmetic brand)
Tuesday: Financial Accounting
Wednesday: Quantitative Analysis
Thursday: Managerial Economics (basic micro and macro)
Friday: Information Systems
Sure I will survive, no matter exams go well or bad, but am doing my best...
Finally, I have an extra activity on Wednesday afternoon that will take me three to four hours. Unfortunately, I can tell because of what we call "cabala" (no, it is not a date!). Hopefully in the future you will know...
Monday: marketing case + mid-term assignment (analysis of a cosmetic brand)
Tuesday: Financial Accounting
Wednesday: Quantitative Analysis
Thursday: Managerial Economics (basic micro and macro)
Friday: Information Systems
Sure I will survive, no matter exams go well or bad, but am doing my best...
Finally, I have an extra activity on Wednesday afternoon that will take me three to four hours. Unfortunately, I can tell because of what we call "cabala" (no, it is not a date!). Hopefully in the future you will know...
Tuesday, February 3, 2009
Casa del Libro
So far a bit different from Buenos Aires, the competition among booksellers is pretty concentrated in Madrid. In Buenos Aires, though the offer is becoming more concentrated, one can find some "independent" booksellers in Avenida Corrientes and in Avenida Santa Fe. However, I must recognize, I hardly go to those; I usually buy in libraries located in shopping malls that belong to large bookseller chains. And I think that is the trend...
The idea of this post is to discuss a new case for our Information Systems class. As the title refers, it is related to Casa del Libro. This bookseller chain competes against general stores such as El Corte Ingles (where you can buy food and clothes and bikes and books and...) and FNAC (mainly electronics). However, "nobleza obliga", Casa del Libro is owned by Grupo Planeta, the main editorial group in Spain and the seventh in the world; so that, it is not alone in this world.
The case refers to the launch of www.casadellbro.com in September 2001, just months before the "dot-com" crash and days before the 9/11 attacks. The goal behind the launching of the website was to increase Casa del Libro market share and become the leader in the Spanish book market. In 1999, the company had hired a consulting firm to develop the business plan and got an agreement with AOL, which was just launching its operations in the Spanish ISP market in 2001.
Casa del Libro had been selling books online since 1995 through an artisan website, and operations required a great deal of manual processing. The "big bosses" of Grupo Planeta decided to take the Internet wave, invest a lot of money in a state-of-the-art platform, go for an alliance with AOL and take over the online book market planet(a)!
However, in September 2001 they discovered that the UNIX platform could not be adapted due a mistake in the design phase, that AOL did not meet its target in the ISP market, that terrorist attacked the Twin Tower in NYC bringing the world to an economic recession, and, la "frutilla del postre", the "dot-com" bubble...burst!
THE DECISION
Grupo Planeta's management had to decide whether continue with the idea of launching the website and run it with the UNIX platform or switch to a cheaper Microsoft platform. The UNIX platform needed a re-design process but guaranteed high availability in case of high traffic and a large number of transactions; it implied also high maintenance costs (plus the expenses for the re-designing process). On the other hand, the Microsoft platform had lower maintenance and development costs but was not an state-of-the-art server nor as powerful as UNIX.
Considering the context, I would switch to the Microsoft platform. Though most analysts forecasted growth for business through online services, I think that at the time it was very difficult to predict how the e-economy would react to the "dot-com" crash in terms of reliability in business transactions, and, more important, when and how the "real" economy would react to the economic recession after the 9/11 attacks. In such a context, the best idea would be to retreat to a "wait and see" position. In any case, the evolution of online sales via the Microsoft platform would give an idea to managers about how to react and whether to switch back to the UNIX platform. In addition, it would be very difficult to raise the issue about investing lots of money in an Internet business while the holding company, characterized by its conservatism, was focused on reducing costs to face the crisis and the crash of the "dot-com" era had just occurred.
Let's see what our professor tell us tomorrow about this story...
The idea of this post is to discuss a new case for our Information Systems class. As the title refers, it is related to Casa del Libro. This bookseller chain competes against general stores such as El Corte Ingles (where you can buy food and clothes and bikes and books and...) and FNAC (mainly electronics). However, "nobleza obliga", Casa del Libro is owned by Grupo Planeta, the main editorial group in Spain and the seventh in the world; so that, it is not alone in this world.
The case refers to the launch of www.casadellbro.com in September 2001, just months before the "dot-com" crash and days before the 9/11 attacks. The goal behind the launching of the website was to increase Casa del Libro market share and become the leader in the Spanish book market. In 1999, the company had hired a consulting firm to develop the business plan and got an agreement with AOL, which was just launching its operations in the Spanish ISP market in 2001.
Casa del Libro had been selling books online since 1995 through an artisan website, and operations required a great deal of manual processing. The "big bosses" of Grupo Planeta decided to take the Internet wave, invest a lot of money in a state-of-the-art platform, go for an alliance with AOL and take over the online book market planet(a)!
However, in September 2001 they discovered that the UNIX platform could not be adapted due a mistake in the design phase, that AOL did not meet its target in the ISP market, that terrorist attacked the Twin Tower in NYC bringing the world to an economic recession, and, la "frutilla del postre", the "dot-com" bubble...burst!
THE DECISION
Grupo Planeta's management had to decide whether continue with the idea of launching the website and run it with the UNIX platform or switch to a cheaper Microsoft platform. The UNIX platform needed a re-design process but guaranteed high availability in case of high traffic and a large number of transactions; it implied also high maintenance costs (plus the expenses for the re-designing process). On the other hand, the Microsoft platform had lower maintenance and development costs but was not an state-of-the-art server nor as powerful as UNIX.
Considering the context, I would switch to the Microsoft platform. Though most analysts forecasted growth for business through online services, I think that at the time it was very difficult to predict how the e-economy would react to the "dot-com" crash in terms of reliability in business transactions, and, more important, when and how the "real" economy would react to the economic recession after the 9/11 attacks. In such a context, the best idea would be to retreat to a "wait and see" position. In any case, the evolution of online sales via the Microsoft platform would give an idea to managers about how to react and whether to switch back to the UNIX platform. In addition, it would be very difficult to raise the issue about investing lots of money in an Internet business while the holding company, characterized by its conservatism, was focused on reducing costs to face the crisis and the crash of the "dot-com" era had just occurred.
Let's see what our professor tell us tomorrow about this story...
Sunday, January 25, 2009
Tesco Case
We were given a new case to analyze: yes, it is the Tesco Case!
As many of you may know, Tesco is an english "super" super market where nowadays you can buy from milk to movies, not to mention the opportunity to get a loan when you consider how to pay all the stuff your wife just bought! (Carrefour, I am waiting for your offer!).
The brief assignment required by our professor consists of defining what we think of the competitive IT advantage generated by Tesco.
From what I read, I think Tesco has based its IT-generated competitive advantage by being the first one to take advantage of the possibilities that technology creates for the business. The company has been highly innovative since the beginning of its story and took the right direction by acquiring advances in technology to increase its knowledge of customers habits and preferences. Investments in technology and, from there, marketing were hugh but they clearly payed off.
However, Tesco not only focused its efforts on strengthening its supermarkets sales through the famous Club Card but also clearly diversify its business to different services such as finance, insurance, traveling, and mobile phones! Tesco provides a large array of online uses for customers apart from shopping online such as trading shares, compare its prices with those of competitors, and more...and everything is easy to find in its website.
Another issue Tesco took advantage of was its location. Tesco has mainly focused its commercial activities in the UK, though in the middle 90s it started to expand internationally (mainly to Eastern Europe countries and Asia). That concentration allowed it to focus its efforts on increasing market share in the UK market. Tesco was able to use technology to research its market and customer successfully. And the customers help: it would be very different to get all the customer information and online interaction with them in a different market, one less used to deal with through the internet. In addition, the responsible use of data by Tesco allowed the company to continue innovating and get acceptance of new online "products" by its clients.
As many of you may know, Tesco is an english "super" super market where nowadays you can buy from milk to movies, not to mention the opportunity to get a loan when you consider how to pay all the stuff your wife just bought! (Carrefour, I am waiting for your offer!).
The brief assignment required by our professor consists of defining what we think of the competitive IT advantage generated by Tesco.
From what I read, I think Tesco has based its IT-generated competitive advantage by being the first one to take advantage of the possibilities that technology creates for the business. The company has been highly innovative since the beginning of its story and took the right direction by acquiring advances in technology to increase its knowledge of customers habits and preferences. Investments in technology and, from there, marketing were hugh but they clearly payed off.
However, Tesco not only focused its efforts on strengthening its supermarkets sales through the famous Club Card but also clearly diversify its business to different services such as finance, insurance, traveling, and mobile phones! Tesco provides a large array of online uses for customers apart from shopping online such as trading shares, compare its prices with those of competitors, and more...and everything is easy to find in its website.
Another issue Tesco took advantage of was its location. Tesco has mainly focused its commercial activities in the UK, though in the middle 90s it started to expand internationally (mainly to Eastern Europe countries and Asia). That concentration allowed it to focus its efforts on increasing market share in the UK market. Tesco was able to use technology to research its market and customer successfully. And the customers help: it would be very different to get all the customer information and online interaction with them in a different market, one less used to deal with through the internet. In addition, the responsible use of data by Tesco allowed the company to continue innovating and get acceptance of new online "products" by its clients.
Thursday, January 22, 2009
The Upcoming "Free-economics" Era
After my unsuccessful prediction regarding whether Meneame.net is a profitable business (answer: it is not), our Information System professor asked us to write about an article written by Chris Anderson. The article and references about the author are here.
In very basic terms, the article reflects the power of internet and how it is changing the way different industries are starting to communicate with customers. The term "free" reflects the tendency that many internet companies are following: give free things to people and earn very good money.
The best example of the "free" era is this. To provide you with just some figures: Google revenues were up 20.92 billion US dollars and the company value as of January 22, 2009 is 80.92 billion US dollars. Now, how much do you pay to use Google? I am sure you will say nothing (0); otherwise someone is stealing from you and it is not Google (and not me either).
Who is paying Google then? Following what the article says, there are three parties interacting: customers like you and me that go around different websites, the medium (Google) and, finally, advertisers. The first two agents participate in a free market whereas advertisers pay the bill. Something similar to what occurs in the media industry where you pay nothing to listen to the radio or watch TV (till cable providers show up) but advertisers do.
According to Andersen, what is going on in this internet era is what economists call "cross-subsidies": you give away something for free knowing that you will get something in return...for a profit, of course. The best example, also cited in the article, is Gillette: they almost give razors for free knowing that you will later need to pay for blades and shaving cream.
Andersen claims that the Friedman proposition of "there is no such thing as a free lunch" is vanishing. Andersen, we have to talk...do not discredit such an economist in front of other economist (with lower knowdledge though). There is always someone who have to pay the bill and, at the end, it is either advertisers or customers who pay it.
In very basic terms, the article reflects the power of internet and how it is changing the way different industries are starting to communicate with customers. The term "free" reflects the tendency that many internet companies are following: give free things to people and earn very good money.
The best example of the "free" era is this. To provide you with just some figures: Google revenues were up 20.92 billion US dollars and the company value as of January 22, 2009 is 80.92 billion US dollars. Now, how much do you pay to use Google? I am sure you will say nothing (0); otherwise someone is stealing from you and it is not Google (and not me either).
Who is paying Google then? Following what the article says, there are three parties interacting: customers like you and me that go around different websites, the medium (Google) and, finally, advertisers. The first two agents participate in a free market whereas advertisers pay the bill. Something similar to what occurs in the media industry where you pay nothing to listen to the radio or watch TV (till cable providers show up) but advertisers do.
According to Andersen, what is going on in this internet era is what economists call "cross-subsidies": you give away something for free knowing that you will get something in return...for a profit, of course. The best example, also cited in the article, is Gillette: they almost give razors for free knowing that you will later need to pay for blades and shaving cream.
Andersen claims that the Friedman proposition of "there is no such thing as a free lunch" is vanishing. Andersen, we have to talk...do not discredit such an economist in front of other economist (with lower knowdledge though). There is always someone who have to pay the bill and, at the end, it is either advertisers or customers who pay it.
Sunday, January 18, 2009
Meneame.net
Our Information System professor has asked us to analyze the case of meneame.net; this website, according to the info given by our professor, is a social network where users send different kind of news that they consider interesting. Those news are voted by other users and news that get more votes are posted in the front page.
If you check the site you are able to see how news show up and then the comments and votes. The website seems to be very famous in Spain and, since its launch in December 2005, the number of monthly visitors has follow an increasing trend with more than 20 millions visits in June.
Our professor has asked us to think whether meneame.net could turn out to be an economically sounding project. I strongly think that with number of visits per month mentioned, the site should be a profitable business. Imagine you want to promote your business in internet, what kind of site would you look for to post your ad? Obviously, the one with the most visits as possible.
Hence, with the power of Google sense, meneame.net has to be a profitable. The main issue for executives from the company is to define what kind of ads they allow since they get paid every time an ad is "click". As a consequence, they have to determine what type of people gets into the site, for how long, from where, what ages. The larger the data they come up with, the better to sharpen the target market for ads in the website.
It is possible to research news by topic, to check out users and comments as a great quantity of statistics; however, I think that the website could have more order and become more use-friendly. The website is very focused and dynamic and I consider that an advantage; otherwise, people tend to lose attention and may become less interested reducing their visits.
Well, I may post some other thoughts on the issue tomorrow. It is getting late and tomorrow we have classes!! and a loooong day waiting for us...
If you check the site you are able to see how news show up and then the comments and votes. The website seems to be very famous in Spain and, since its launch in December 2005, the number of monthly visitors has follow an increasing trend with more than 20 millions visits in June.
Our professor has asked us to think whether meneame.net could turn out to be an economically sounding project. I strongly think that with number of visits per month mentioned, the site should be a profitable business. Imagine you want to promote your business in internet, what kind of site would you look for to post your ad? Obviously, the one with the most visits as possible.
Hence, with the power of Google sense, meneame.net has to be a profitable. The main issue for executives from the company is to define what kind of ads they allow since they get paid every time an ad is "click". As a consequence, they have to determine what type of people gets into the site, for how long, from where, what ages. The larger the data they come up with, the better to sharpen the target market for ads in the website.
It is possible to research news by topic, to check out users and comments as a great quantity of statistics; however, I think that the website could have more order and become more use-friendly. The website is very focused and dynamic and I consider that an advantage; otherwise, people tend to lose attention and may become less interested reducing their visits.
Well, I may post some other thoughts on the issue tomorrow. It is getting late and tomorrow we have classes!! and a loooong day waiting for us...
Assignments
Yes, I can blame them. I am not posting as usually as I should due to the increase quantity of assignments we have had since the re-starting of classes. This coming week: entrepreneurship presentation (which counts as 10 assignments given the workload!) + organizational behavior final case (50% of the final grade) + possible quizz (I got the gossip, can't reveal the source nor the class). Not to mention the daily readings!
I just hope that in coming weeks I can post something interesting such as the Playboy - Facebook news (did you check it? I mean both Playboy and your Facebook, and, of course, the post).
I just hope that in coming weeks I can post something interesting such as the Playboy - Facebook news (did you check it? I mean both Playboy and your Facebook, and, of course, the post).
Sunday, January 11, 2009
Back!
After some weeks, yes, I am back (for good or for bad, whatever!).
I was absent for more than 10 days because too many things were happening around. First of all, I was on vacation!! Not that classes started just now but there were no classes till January 7 and, in the meantime, my wife left to Argentina (which does not mean she left me - yet), my parents came to visit and I had a quantitative exam that took almost all my energies last week.
I am very happy that my parents are here after more than three months without seeing each other. I am eating so well...and traveling!! yes, we went to Lisbon for three days and this last Saturday we visited Salamanca. I really enjoyed both trips and sharing time with my parents.
I do not think we will keep traveling since I have to much to do in relation to school, to get a summer internship...and to posting, of course!
I apologize for the absence and will try to be much more blog active in the weeks to come!
I was absent for more than 10 days because too many things were happening around. First of all, I was on vacation!! Not that classes started just now but there were no classes till January 7 and, in the meantime, my wife left to Argentina (which does not mean she left me - yet), my parents came to visit and I had a quantitative exam that took almost all my energies last week.
I am very happy that my parents are here after more than three months without seeing each other. I am eating so well...and traveling!! yes, we went to Lisbon for three days and this last Saturday we visited Salamanca. I really enjoyed both trips and sharing time with my parents.
I do not think we will keep traveling since I have to much to do in relation to school, to get a summer internship...and to posting, of course!
I apologize for the absence and will try to be much more blog active in the weeks to come!
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