At Google Zeitgeist I hear Lord Mandelson say two things about the quality of government that make sense. One is that the better a government in a country the more tolerant people are of globalization. The second one is that the more demanding consumers of a country are the better they are at choosing politicians.
Still listening to the UK Secretary of State for Business I get a sense that top politicians are as much witnesses of this global crisis as top people in business. The only “real” actor in these times is the crisis itself. Everyone else watches the data and tries to cope.

Santander from Spain is one of the most valuable banks in the world by market cap. Indeed if it were a US bank it would be the third most valuable bank in America. That is truly remarkable for a Spanish bank. But today I read a piece of news that intrigued me. That in order to get rid of real estate that it got as a result of bad loans it sells apartments at a discounts to its employees and relatives of its employees. Personally I think that having a loan portfolio that is exposed to your own employees is not a great idea. Neither is the concept of favoring your employees over your customers or anyone else for that matter. If I were a shareholder of Santander I would just want Santander to sell its real estate at the best available price in the marketplace.

I don´t get it. I am in NYC having dinner with my eldest daughter, Alexa, a freshman at Columbia University. She is telling me about her “History of the Middle East” class and, in passing, she says that there are 300 students in her class. 300 students? Alexa´s tuition is $25K per year and she takes 10 classes. Therefore each class is $2500, so here there are 300 kids each paying $2500 or the crazy amount of $750K for a class that has 28 sessions of an hour and 15 minutes. The professor who teaches that class can´t possibly be making more than $50K just for teaching that class as he must do a lot else, and professor salaries, I estimate, cannot be much more than $200K per year. So the gross profit on that class is $700K. Now how can an institution that can make $700K on one course lose so much money and constantly be asking all of us ex-alumni to contribute to it? I haven´t studied the university income statement in detail but it sounds to me that these large courses must be cash cows. Of course Columbia has tons of expenses, administrators, teaching assistants, grants and so on, but still it seems to have an amazing top line and a terrible bottom line.

It is interesting to see that the Spanish Flu epidemic of 1918 which killed from 3% to 5% of the population of Berlin, Paris, New York started slowly in the Spring and Summer and then went wild in the Fall killing most of its victims then. Flu spreads by proximity and physical contact. In the Fall schools start, people go indoors, and the chances of contact greatly increase. But what´s different now is not the medicine itself that has advanced very little against viruses but that we have the Internet. If the current Flu epidemic killed over say 300 people in Spain I would probably tell people at Fon to work at home over the Internet. I would not ask people to risk their lives to work at Fon. I would not send my children to school either and would ask them to study over the Internet. I would establish a plan to limit contact with the outside world, would stop traveling and would wait. I see Skype type products usage exploding if the Pandemic happens. I just hope it goes away though. News from Mexico were encouraging this weekend.

The majority of deaths came in the Fall

graph via www.investorconundrum.com.

Yesterday BT, who is a fixed and mobile operator who owns its fixed network and resells GSM/3G services made an announcement that explains why it makes sense for BT, SFR, Zon and many other operators to team up with Fon. As the review that I quote says:

£15.65pm is all it now takes to secure an 8Mbit home connection plus a 7.2Mbit HSDPA capable dongle with 1GB monthly data allowance. BT claims the combo provides savings of more than £125 per year compared to current alternatives from the likes of Vodafone and Orange and from my calculations (let me know if you find out differently) that seems about right.

Now how is it that BT can offer such an amazing deal in which for only around $20 per month it can offer both ADSL and HSDPA? The answer is thanks to the amazing WiFi network that it built together with Fon that is known as BT Fon. HSDPA is good but it has two drawbacks, it is slower than WiFi and it comes with throughput limitations. So BT has developed a great technology whereby its USB dongles look for WiFi first and then HSDPA. And because together with us now BT has hundreds of thousands of WiFi points chances are that WiFi will be mostly available except situations in which the customer is in a car or somewhere away from densely populated areas. BT has made this a part of its margin calculations and it can therefore offers that are so much cheaper than Vodafone and Orange.

I found Benjamin Button, the film, obnoxiously boring. But I loved the short story by F Scott Fitzgerald that the movie is (not) based on. I read it today on my new Kindle, a device that is making me read again. Thank you Jeff Bezos. I used to read a lot but since the ’90s the combination of active parenting and the Internet slowed my book reading to a crawl. Yet today, I was taking Friday afternoon off in Menorca, and had the new Kindle at hand. Being a fan of free content I went to ManyBooks.net and found The Curious Life of Benjamin Button, the story as one of the most downloaded books. I went on to download the story because even though I had been terribly disappointed by the movie, I could not believe that the author of The Great Gatsby, had written a character that was as dull as the one portrayed by Brad Pitt. And I was right. The Curious Case of Benjamin Button which I encourage you to download here is funny, original, and if it had been expanded into a well scripted movie it would have had all the elements of excitement that the soporific movie directed by David Fincher does not have. What surprised me the most is how is it that a movie that has nothing, and I mean nothing to do with the story plot, can still be said to be that story turned into a film. Think of the many books you read turned into movies and after you read the story you will see how fundamental the differences in the plot between the two are. In any case I am sorry if you are one of the many who loved the movie. I guess we just don´t need to agree.