Think For Yourself

Nowadays, a lot of people has forgot to think. They let the media, the government, the teachers, the companies, the lobbyists to do the thinking for them, and to shape the public opinion.

From very young, we are taught to accept as true, the teachings from our fathers, our teachers, our world leaders on every subject, from religion, sex, politics to economy, science and art. We are not encouraged to question or to challenge those teachings. In school, we are rewarded by our capability of memorizing instead of thinking.

It's very easy not to think. But the person who does not think for itself it's not free, it's a prisoner of others. Specially the media, they have the extremely powerful ability to distort, amplify, conceal, and deceive.

Speak your mind - no matter as crazy, as absurd, as provocative as it may be. Don't be afraid of expressing your opinion, even if unpopular or even if against conventional wisdom or established interests.

Inform yourself from various different sources with different perspectives.

Always keep an open mind, and above all, Think For Yourself!

To finish this post with a nice quote which sums it all up:

"The conventional view serves to protect us from the painful job of thinking" - John Kenneth Galbraith

The Greatest Inventions Of Mankind

In my opinion, the greatest inventions of mankind are, in order:

1. The Spoken Language
2. The Written Language
3. The Press (by Gutemberg)
4. The Internet

All the inventions above are about communication with oneself and with others; and with the preservation of knowledge.

It's communication that has allowed self-expression, thought, art, love to develop as well as the appearance of civilization. As human beings we are deep social beings with the need to interact with each other.

The preservation of knowledge allows us to benefit from all the experience, thoughts, discoveries and inventions that took place before us. To quote Isaac Newton “If I have seen further, it is by standing on the shoulders of giants.”

A Case Against Government Bailouts

I'm personally against government bailouts, be it an industry, a set of companies (such as banks) or an individual company. The arguments that government (amplified by the media) use is that these institutions are too big or too strategic to fail. However, we must note the following:

• If the company is in a non viable position, it got there due to bad management, inefficient usage of resource or failure to anticipate market condition changes - in sum, the market forces are saying that they don't want or need the company
• Resources (capital, workers, equipment, land, ...) are being tied up to an investment that is not sustainable, and therefore it drains resources from other profitable investments
• Competing companies, which are better managed, make a better usage of resources and correctly anticipate market condition changes can not prosper, because bad companies are kept alive artificially
  
• By rescuing a company in trouble, the government creates a moral hazard, which will a) encourage the rescued company to take bigger risks and b) create the obligation to save any other company or industry in the same situation
• If the situation and prospects of the company are sound, a private investor would certainly be found. There would be no need for government intervention in the first place!
• A non viable company, artificially sustained by government, does not create, but consumes wealth
  
• Finally... money can not be created out of nothing. Governments can only finance themselves by either a) borrowing and therefore creating debt, a liability imposed on future governments and generations; b) printing more money, which effectively reduces the wealth of everybody holding money and creating inflation; or c) increase taxes. In short, the government will make everybody poorer in order to bailout a few favorite constituents which do not deserve and are not worth to be saved (read the previous points)

What is the alternative them? Should the government just let the big institutions and companies fail? The answer is a big 'Yes'. Just look at the case of Lehman Brothers. It failed, the interesting assets got sold, the interesting workers were hired at a different companies, and the world moved on.

What about the 'domino effect', unemployment rise, lost taxes, consumption decrease? There needs indeed to exist a short term negative effect, so that that the market and economy can adjust, where the resources can be reallocated to more efficient usages, those that actually generate true wealth.

It's important to mention though, that the negative impacts are not the result of the recession, but of the bad decisions, actions and malinvestments carried out during the expansions.

Just look at the case study of Japan in the 90s. The Japanese economy peaked in 1989 and it has been in recession or stagflation since then, even though interest rates are zero, banks have been bailed out or even nationalized, and public spending surged to trillions of dollars.

If the government insists on bailing out bad companies and funding unnecessary public investments it will postpone temporarily the effects of the recession, but in the end it will only make the recession deeper and longer.

Carnival Means Venice

"I stood in Venice, on the Bridge of Sighs; A palace and a prison on each hand." - Lord Byron

TED - Ideas Worth Spreading, Free To The World

Have you heard about TED? TED stands for Technology, Entertainment and Design and it's a series of talks by some of the most intelligent, enthusiastic, successful, creative and passionate people in the planet. You can find among others, Bill Gates speaking of 'How to Change the World', Al Gore on 'Climate Crisis', Bono on 'The Fight Against Extreme Poverty', Richard Branson on 'Entrepreneurship', Jeff Bezos on 'Innovation', Benjamin Zander on 'Music and Passion'. Besides the great, controversial, provocative ideas that will stimulate your mind, you can find in TED a great source of inspiration. As a bonus, you also get free lessons on the art of speaking, presenting and selling your ideas. TED talks are free, and a true gift to mankind. Visit TED at www.ted.com.

The Austrians Are Right, Keynes Was Wrong

I just finished reading the book "Economics for Real People" by Gene Callahan written in 2004. I feel like a veil has been removed from my eyes. Our schools, governments and media constantly brainwash us with Keynesian ideas which are just plain wrong. An alternative Economic Theory exists: the Austrian School, founded by Carl Menger (in the photo) in 1871. If you want to understand how the current crisis originated and where the economy is heading, you don't have to look no further - just read the book! Look also for "Peter Schiff" in You Tube to get a glimpse of the Austrian School ideas which go against currently established conventional wisdom. A few key points (from my review of the book in Amazon):

• Real economic growth can only be achieved through Production and Savings and not through Consumption and Debt
• The only real money is attached to a real collateral, such as gold as opposed to the current paper money that the central banks are happy to print out of air
• Central banks should not have the power to "print money" or fix interest rates
• Government intervention should be minimal - subsidies, protectionism, price fixing, regulation, public spending are to be avoided
• Free Markets with the Law of Supply and Demand will tend to maximize the value and wealth of both the individual and sociey

And The Oscar Goes To

Sunday, 22nd of February, the 81st Academy Awards will be held in Los Angeles. My favorite movies from last year were The Dark Knight, Australia and Slumdog Millionaire. Anyhow, here are my favorites for some of the most important categories:

• Best Motion Picture of the Year: Slumdog Millionare - very original, funny and moving and great direction
• Best Performance by an Actor in a Leading Role: please not Brad Pitt!
• Best Performance by an Actress in a Leading Role: Kate Winsley (first) and Anne Hathaway (second)
• Best Performance by an Actor in a Supporting Role: Heath Ledger (rest in peace) - the Joker was a stunning performance
• Best Performance by an Actress in a Supporting Role: no opinion here
  
• Best Achievement in Directing: Danny Boyle for Slumdog Millionaire, the director of Trainspotting
  

Funny T-Shirt

Parkinson Law

Parkinson is a personal hero of mine. He formulated the famous Parkinson Law in 1955 in The Economist magazine - the article can be found here. It essentially states that:

Work expands so as to fill the time available for its completion.

This apparently simple rule, can be generalized into: available resources will consumed up until their full capacity. Notice the importance of that! It means that the consumption of time, money (budgets), memory/CPU, employees, etc. will tend to match their availability, whether they are necessary or not!

It's important to notice that this conclusion was reached during the study of the British Colonial Office where the number of officers increased continuously even as the number and size of the Great Britain colonies declined. This is explained by two factors:

Factor I: An official wants to multiply subordinates, not rivals and
Factor II: Officials make work for each other

This can be observed in practice in big organizations and companies as well as in the public governments. The sheer size of an organization can hide and accommodate all sorts of inefficiency, waste and unnecessary spending. When the bad times hit, everybody looks surprised at the impact on the organization and at the amount of "fat" that has grown steadily over time and that suddenly has to be cut.

In my opinions, organizations (specially governmental ones) need to shuffle their middle-top management structure every one to two years because of the following:

• Time silently will creep in habits, complacency, policies, politics, personal interests and even some form of corruption
  
• Small kingdoms will arise where the king tries to expand his influence (usually through an increased budget or personnel) and also tacit agreements emerge among the different kingdoms as to have every kingdom not attacking another and to protect each other
• The organization becomes more bureaucratic, bigger (fatter), slower, resistant to change and to new ideas and becomes a consumer of more and more resources
  

Reviews: The World Is The Greatest Judge

The time and money available to any individual is very scarce. When you buy a book or movie ticket you're not only investing your money, you are also investing your *precious* time. The problem is, you can only know for sure whether the investment was worthy after the money and the time is spent forever. While preferences and tastes vary from individual to individual, one can get a good "quality indicator" by:
a) Researching some information about the author and about the book, music or movie.
b) Finding the customer ratings, and reading public reviews - usually the most important are the most positive and most negative
Personally, my favorite sources of this type of information are Amazon for books and music CDs, and IMDB for movies. While not 100% accurate, it greatly improves the probability that you make the right choices. I also feel some obligation to share my opinions with other potential consumers so that they can benefit from my experience. You can find my book reviews in this link.

Make A Difference

Most of us want somehow to change the world, to leave our mark and make it a better place. Why not make the whole difference to one needing child? For $22 USD a month, through Children International you can provide basic food, health and education to a child from an underdeveloped country. Since 2005, I'm sponsoring Teddy Mukuka (in the photo) from Lusaka, Zambia, who is now 9 years old. I get regular letters and pictures from him. It's a great feeling, so I greatly recommend it.

My Funny Valentine

Tomorrow is Valentine's Day. According Wikipedia the holiday is named after two early Christian martyrs and it was made popular in the middle ages, when courtly love flourished. Also according Wikipedia, the tradition goes that lovers take the day to express their love for each other by sending Valentine's cards, presenting flowers or confectionery.

As I write this post, the "My Funny Valentine" song keeps playing in my head - I just love it! Try to listen to the versions by Matt Damon (yes - the actor), Sting or the J. J. Soul Band.

Well... time to bring out the Romeo inside.

"If I profane with my unworthiest hand
This holy shrine, the gentle fine is this -
My lips, two blushing pilgrims, ready stand
To smooth that rough touch with a tender kiss."

Software Architecture

There are a lot of different opinions and discussions of what exactly Software Architecture is. I personally like the definition from Bass, Clements and Katzman:

"The software architecture of a program or a computing system is the structure or structures of the system, which comprises software components, the externally visible properties of those components, and the relationships among them".

The definition of IEEE (IEEE 1471) is more comprehensive in the sense that it includes the explicit connection to both the context and the underlying principles:

“The fundamental organization of a system embodied in its components, their relationships to each other, and to the environment, and the principles guiding its design and evolution.”

What is then the goal of Software Architecture? In my opinion, first and foremost a Software Architecture is a solution which tries to maximize different (sometimes competing) objectives under a given set of constraints. As a result, the Software Architect needs to balance a large number of factors, such as economical, technical, political, social and aesthetic under technology, personnel, schedule and budget constraints.

Regarding the deliverable of Software Architecture, this is the “Architecture Description” (IEEE 1471), sometimes referred to as the “Architecture Blueprint”. The Architecture Description is a collection of views which present different perspectives of the same architecture blueprint. There is, however, no consensus about the set of views which must be included in an architecture description. The Zachman Framework, defines 36 views while the Rational Unified Process (RUP) defines 4+1 view models.

There are usually more than one possible valid software architectures solutions for a given problem. It’s important to stress the point that that an architecture can not be judged or evaluated unless the context of the problem on which it was developed is well understood. Based on that context, architecture alternatives can be assessed and compared against each other. Bass, Clemens and Katzman propose a methodology called Software Architecture Analysis Method or SAAM for short. Microsoft, in MSF v4 for CMMI Process Improvement, offers a similar methodology called Lightweight Architecture Alternative Assessment Method (LAAM). Essentially, each architecture alternative is evaluated and ranked according different project specific attributes, such as: performance, scalability, reliability, availability, usability and functionality under constraints such as technology, resources, cost and schedule; and against project business objectives, such as: return on investment, time, budget and risk. This provides a structure and systematic methodology which should be documented for future reference.

Oil Peak

Together with climate change, which most of us have heard about, the end of oil is the greatest challenge to Mankind, ever! It's quite surprising that media and governments do not inform the citizens of the world about an event which threatens the lifestyle of all people on Earth. Our economy, our society and our civilization relies on an endless supply of "cheap" energy. As the peak of oil approaches - and believe me that we will live to witness it - oil will get increasingly scarce and expensive up to a point that it will break the social and international balances (think "Gulf War 2.0"). While there have been many initiatives on alternative energy sources, such as Wind, Solar, Biomass and Hydrogen, there is still no economical, feasible alternative to oil. I strongly recommend that the reader becomes acquainted with what the Oil Peak is and what it means. The Peak Oil Wikipedia article is a good place to start. Those who want to learn more in depth, can read the book "Twilight In The Desert" by Matthew Simmons or for those who are portuguese and enjoy novels, they can read "O Sétimo Selo" by José Rodrigues dos Santos.
I would like to end this post on a high note, so a couple of positive points:

1. Oil Usage and Climate Change are closely related, so reducing Mankind dependency from Oil will greatly benefit the environment.
2. President Barack Obama has pledged 150 billion over the next 10 years in order to build a clean energy future.
3. All over the world, everybody is getting more aware and more sensible to environmental isssues, so the reduction of waste and the increase of energy efficiency is gaining momentum.

Wikinvest

Well, if you're interested in the stock market, be sure to check out Wikinvest. It's a great site to learn how the markets work and where they are headed. It's also a great place to share opinions about markets and companies.

Twitter

I just recently joined Twitter - so I'm finally a full Web 2.0 citizen :)

You can follow me @ http://twitter.com/JoaoCortez

The Daily Reckoning

I'm now following The Daily Reckoning which provides both a great read and food for thought. Most of politicians, central banks and media take the ideas from Keynes as written by God Himself. They are now trying to solve the problem using the same principles and methods that have created it in the first place. There's a less known economical theory - the Austrian School - which is more fundamentally sound and that accurately predicts the expansion and recession cycles caused by the Keynesian government and monetary policies.

The Daily Reckoning is very critical, but very, very refreshing and very stimulating. Give it a try!

Thought Of The Day

“Yesterday is not ours to recover, but tomorrow is ours to win or lose.” - Lyndon B. Johnson