I voted!

No, not politics but Otto’s survey. Just go to IKN and look for the “WHICH WILL BE WORTH MORE AT END 2015?” poll on top of the page.

Before you vote, here’s my thoughts on each option:

1) AAPL: Not sure how much upside there is left after the past few years or what the margins are on mobile devices now that they are ubiquitous. Any monkey could have told you that but did you know that the proliferation of mobile devices gave birth to something called big data? Put simply: everything you do is recorded and analyzed. Your mood, location, places you’ve shopped at, relationships, etc. Feeling stressed out? Don’t be surprised to see a coupon for your local day spa on your smartphone. Walk into a bar? Expect an ad for a “get you home safely” taxi service on your trusty device. Ended a relationship on a social network? Book a comfort-sex trip to Kenya with any of our preferred travel partner sites. AAPL doesn’t really use “big data” in their business plan but their devices make it possible for others to do so. Did you know there are private, for-profit companies who will sell your current and recent location to anyone based on GPS data embedded in publicly available social-media posts? George Orwell was wrong about one thing only: the date was off by 30 years.

2) Bitcoin: I don’t understand it being used as a currency but you may be surprised to know that Bitcoin has serious implications for online security. Bitcoin is based on “mining” computer hashes, similar what is used in cryptography. As a result, cryptography that was considered secure only a few years ago is now trivial to break because Bitcoin miners have learned how to exponentially increase the speed of hashing (particularly by applying graphic processors or GPUs instead of CPUs). It used to be if a company like Target, Home Depot or JP Morgan got hacked, encrypted data on their servers such as passwords was relatively safe. Now this data is exposed and sold in no time. This combined with the existence of a shadowy industry where you can sell computer vulnerabilities to the highest bidder (ie. governments and businesses) means there is a tremendous incentive for hacking.

3) Gold: It’s shiny. For more wisdom, ask Otto because I don’t know.

Pro-Tip: Gringo dudes getting married in Peru

So you’re standing in front of a church half-full of people you barely know, waiting for your sweetie to walk down the aisle. Your sweetie doesn’t show up and you recognize only a few of your sweetie’s family members – most of the ones you know aren’t there. Then the priest enters and starts his Mass, which you barely understand due to your limited Spanish. People are kneeling and praying and you generally have no clue what’s going on except that everyone is mostly ignoring you and your sweetie isn’t there.


You see, the only things that generally run on time in Peru are the Catholic Church and an occasional airline flight. The priest probably has 3 or 4 weddings scheduled on that beautiful day and if he were to wait for the bride, the last wedding would be 3 hours late. Just sit tight and about 2/3 through the mass, the church now full instead of half-full, your sweetie will show up, the priest will stop what he’s doing and your sweetie will walk down the aisle. Then everything goes on but at least you now have your sweetie who can translate for you.


* * *

We were invited to a friend’s wedding last week at the “Sistene Chapel of South America”, a small church about an hour outside of Cuzco with ceilings painted in the style of the Sistene Chapel. I’m a bad picture-taker but it’s absolutely beautiful. If you’re visiting Cuzco, don’t miss it.

Church of  San Pedro de Andahuaylillas, Sistene Chapel of South America

Church of San Pedro de Andahuaylillas, known as the Sistene Chapel of South America


Had lentejas for lunch today. Remember when I fussed at Otto for cooking lentejas on his day off? Well, I’ve been meaning to say this for a while now: “I was wrong!”




I had eaten lentejas before and they were “OK no mas” but what I didn’t know is that lentejas done right, are great. We have a girl who cooks for us and she is an excellent cook, especially when it comes to any of the typical “comida criolla” of Peru.



Lentejas, comida criolla Peruana

2014 Peru Election storylines

Yesterday Peru went to the polls and elected a new crop of regional and municipal leaders. There are plenty of story lines out there if you’re into that kind of thing. Just look for #MadeleineOsterling or #CastanedaLossio, read about the influence of cocaine cash or the soap opera around Gregorio Santos. One of the more interesting story lines is how practically none of the elected local and regional candidates have any affiliation with the supposedly “national” parties in Lima, in other words, central government is extremely weak.

Rather than talk about politics on a grand scale, you know I prefer the personal side of things, so I’ll share a personal election story.

Last week Mamacita Linda was late coming home from her job. She’s been working in a town about an hour outside of Cusco. Upon leaving her job, Mamacita Linda and her coworkers couldn’t immediately get to their driver because 2 political candidates were having their “closing rally” and the streets were packed. Eventually a large group of moto-taxis with flags for one of the political candidates passed by. Mamacita Linda and her friends waived down one of the moto-taxis and asked if he’d give them a ride to the terminal where their driver was waiting. The moto-taxi said he couldn’t, that he was participating in the political rally.

Always the economist, Mamacita Linda asked: “Wouldn’t you rather make a few $ than to participate in this rally?”

To which the moto-taxi driver replied: “I have to participate in the rally. This candidate paid for each of us a tank of gas so we are supporting him.”

There you have it. People gave their lives for the right to vote. Nowadays in Peru, your vote is worth about 2 gallons of gas.

Double Espresso

If you don’t have everything you want in life, ask yourself, how many friends do you have at the grocery store? This isn’t my original idea and making a friend or two at the grocery store won’t make you rich and famous overnight but most anything we want to achieve in life starts with breaking the ice and obtaining the trust of a perfect stranger. Need a new job, looking for a relationship, trying to get your business plan funded? Chances are, it involves making friends or acquaintances with perfect strangers.

All this to say a couple of years ago we had a baby-sit during the summer whom I met through her older sister, a checkout girl at our local grocery store. They were from a rural town (Sicuani) and the older sister worked 60+ hour weeks (10am to nearly 11pm 6 days a week) for a salary of less than $300 / month, to make a little money for her family and save up for school. This is not unusual in Peru, workers feel like they have no better choice and very often maybe they don’t.

Tomorrow regional and municipal elections are held here in Peru. Frank Bajak wrote a good article about how Cocaine cash is polluting Peruvian politics. There practically aren’t any ideologies or party lines in Peruvian politics any more, it’s just a rush to get in and steal.

“Politics has lost all ethical sense. Now, it’s just about being a pickpocket”

I often wonder, what if the middle class would have the self-confidence to demand better, to stand up to their corrupt and incompetent leaders. By and large, it seems as if the working class and middle class suffers from a sort of misplaced desperation, instead of demanding better they’re just dying to “get in” with the local elected leaders and get a piece of the pie. As if they don’t believe they can do better without resorting to the established way of corruption and incompetence. I often think it’s about self-confidence, all the way back to the kids education: the so-called “good schools” here don’t encourage critical thinking or standing up for yourself but they are very strong about falling in line, discipline and rote memorization.

One day when Anna, our old babysit, was getting ready to go back to school in her town I was at the Plaza de Armas and decided to have a cup of coffee with her. A new Starbucks had just opened up. We went inside and I said to Anna, one day you’re going to walk in here with all of your friends, and they’re going to be all nervous-nellie, staring at their feet because they feel out of place here, fumbling around because they won’t know what they want. They’ll be looking up at all these gringos and city-slickers ordering Frappuccinos as if those people are really somebody.

And I told her: “Don’t you dare to act like that. Hold your head up and look everybody in the eyes. Walk straight up to the counter and order a double espresso.

She replied: “I don’t even know what that is.”

I said don’t worry about that, I’m sure you’ll like it. Then we walked up to the counter and ordered 2 double espressos. Anna was only 14 and I don’t know if she understood what I was trying to tell her. I told her to never look down because of where she was from. When in doubt, hold your head up straight and order a double espresso. Let people know you don’t take stuff from anybody.

* * *

Brianna Nayaraq

Just a pretty picture of my baby goose.

A bit more on corruption in Peru

Yesterday this article popped up on my Twitter feed. Other than the headline number of $3.5B in estimated annual corruption, the part about corruption in regional governments is eye-opening:

“…corruption in Peru’s regional governments have been in the spotlight with a number of regional presidents detained over accusations that they misused and profited from public funds … currently 22 of the 25 regional presidents are being investigated over allegations of corruption.”

Talk of corruption in Peru always reminds me of a conversation I had with a Peruvian friend of mine in the US, just before I left my job at GE to spend more time in Peru. My friend lives in the US but his father lives in Lima. Since we were both in aviation and my friend’s father was an officer in the Fuerza Aérea del Perú (FAP or Peruvian Air Force), my friend arranged for some introductions for me with aviation businesses in Lima.

One day before leaving my job in the US my friend and I had a conversation about bureaucracy in Peru and my friend insisted if I needed anything, to call on his father, his father had a good network and knew how to navigate the bureaucracy. Then my friend thought about this and said if I ever really needed any help, if I had any problems with the bureaucracy, that an even better solution would be if I called on his grandmother because she knew exactly how to “play the system” and waive a dollar bill at the right place and the right time. My friend said the idea wasn’t to waive a lot of money, just a dollar bill at the right time. In fact, he was convinced his grandmother would be able to get more done than his father.

This struck a chord with me because my friend’s father was a high ranking, well-respected officer in the FAP. He answered directly to the Minister of Defense. How could it be that a person waiving a dollar bill in the face of a bureaucrat can get more accomplished than an officer 2 levels down from the President of the Republic?

Sadly, my friend might have been right.

Make the bed you lie in

I’m late to this but there was a poll a while back that showed 41% of Limeños would vote for a candidate they know robs public funds, as long as their candidate does “obras” (public works).

roba, pero hace obras

(Datum via Frequencia Latina)

This is in the context of the upcoming municipal and regional elections in Peru. I don’t follow Lima politics much but I believe the current mayor in Lima @SusanaVillaran has focused on organizational reforms (most visibly public transportation reform which is badly needed) and public opinion is that she doesn’t do enough brick-and-mortar public works.

It’s somewhat understandable that a person living in the poor “Pueblos Jovenes” cares about nothing more than getting running water and sewer but I’m sure the 41% also includes smartphone toting professionals and university students who should know better.

Corruption with impunity is endemic at all levels of leadership in Peru. Mamacita linda has been auditing local municipalities on behalf of the national “Controlaria” (a governmental audit agency) and their findings are horrible. At one small municipality, there was a payment of S/.15,000 (~US$4,500) for “expenses” to a close aide to the mayor. There are no receipts, no indication what the “expenses” were or how they were related to official business. Nothing. To put that in perspective, teachers probably make less than S/.2,000 per month in this town.

When the auditors finish their report, the national Controlaria will review the report and send it to the Fiscalia (Justice Department) where it will die. 6 months down the line a small blurb will be published in a legal register somewhere that the auditors’ report is invalid because the lead auditor only signed 126 instead of the full 128 pages as required by law nr 23456.45(b)(ii)(j) para 65.34.9 and there it ends.

* * *

Yesterday Ollanta Humala swore in a new Finance/Economy Minister here in Peru. You can view the details of the transition at IKN. Mamacita linda said something this morning about “not sure what will happen next” with the Peruvian economy and I opined that it wouldn’t make a bit of difference.

On her way to work Mamacita linda yelled out the door “I don’t know, some economists are kinda crazy sometimes!”

This is what your 4-star hotel in Cusco is built on top of

Have you heard about the latest archaeological “discoveries” at the Plaza de Armas in Cusco? Road work has been going on between Av. Sol and the Plaza de Armas, in the heart of historic downtown Cusco. As the old road was excavated, a number of historic Inca Walls have been “discovered” below the surface. Cusco has been abuzz about the new discoveries for the past few days, take a look:

Inca walls discovered in Cusco

Inca walls discovered during roadwork near the Plaza de Armas in Cusco

Inca walls below Plaza de Armas Cusco

Ongoing work/excavation between the Plaza de Armas and Av. Sol in Cusco

While it’s great these historic walls are being exposed, the word “discovery” seems to be a bit of a stretch being that 50-year old underground utility pipes appear to have been routed in and around these historic walls. “Discovery” in this case implies not something we recently found but “creating buzz to attract tourist $ that will help us clean up the archaeological treasures we covered up 50 years ago”. Or something like that.

It’s hard to tell from the pictures (taken over construction barriers) how much of the walls is original, quite a bit appears to be later work built on top of Inca ruins but some of the walls are clearly original Inca structures in very good condition. You can easily tell the difference because the original Inca walls are of exceptional quality, the form and fit of the rocks is nearly perfect, as are the angles and dimensions. Also, the Incas used no cement or filler of any kind between the rocks. In the pictures, the stairway and adjacent parts are clearly original Inca architecture. Later walls that were built by the Spanish Conquistadores or restored in later times aren’t of the same quality as the original Inca walls.

I don’t know what the plan is for this site going forward, now that it has been laid bare again I hope the site gets a full restoration. It’s sad to see such a piece of history strung full of sewer pipes. Of course any archaeologist, historian or architect worth his salt could tell you that the entire historic downtown area of Cusco must be sitting on top of similar Inca structures. When the Spanish Conquistadores first brought “their” God and King to the New World, they built churches on top of the existing Inca temples, to show the superiority of “their” God and King. Here in Cusco you can still see some original Inca structures but sadly most of the original Inca architecture in the historic downtown has been covered up with buildings from the Spanish Colonial era and beyond.

Progreso para todos – I’m part of it today!

If you know me, I can be a bit direct. I’m not proud of this but if you catch me at the wrong time you may get the non-sugercoated version of what’s on my mind. So it was the other night when I was taking the garbage out and a group of neighbors stopped me with “Sir we need to talk to you”. The “president” of our neighborhood was with them and I had just fussed at her a couple of days before because she lets her pitbull run loose, which is not OK. However turns out this wasn’t a dog issue.

The “president” of the neighborhood said they were making a list of the days where each neighbor would be supplying water and electricity to the construction crew of the “region” Cusco who are refurbishing parking areas and sidewalks in our neighborhood. The crews have been working for about a year, typical inefficient and slow Peruvian public works. I had mostly ignored the ongoing work because trying to improve anything would literally be like fighting city hall.

My not-sugercoated answer to the group of neighbors was something about the taxes I pay in this country and that if they wanted me to do the project they’d better pay me and get out of the way because I sure as cielos wasn’t going to support the cl********k that was the project in front of my house. Then the most startling thing happened: the neighbors explained to me that this is what they had agreed on with the leadership of the “region” Cusco, that if we wanted our 40-year old falling apart sidewalks to be fixed, that the people in the neighborhood would supply water and electricity to the workers. It had to be done like that because there are no other options, they said.

I always thought the utter incompetence of the Peruvian public works was “just the way it is” but it startled me to find out that educated people actually make high level decisions to make it be that way. It’s not the result of a bunch of guys being sent to a job without instructions or plans, it’s the result of a bunch of guys being sent to do a job with specific instructions how to screw it up. Educated, career bureaucrats who couldn’t milk a cow if you gave them a bucket, deciding how to do things they have no clue about whatsoever.

By that time I’d mellowed out a bit and I told the neighbors I really don’t care about the water or electricity that the workers may need, just knock my door and you can have anything you need. What startled me was the utter incompetence. Our sidewalks and parking lots need to be refurbished but the relevance of that project pales in comparison to what Peru really needs, there are people here who don’t have basic services. Forget about schools, health care in rural areas, traffic safety, etc. Those very necessary projects will never happen unless there is a wholesale change in how public works are accomplished.

Some neighbors argued this was the right way to do things. How else could the workers do their job, without electricity or water? That is the type of thing that bugs me about Peru. I don’t know if it is the long working hours for the middle class or the silly emphasis on education but there are many people who are quite clueless about life in general making decisions about things they are entirely not qualified for. My neighbors were amazed when I explained to them the correct way to do the project would have been to get in touch with the utility companies and set up temporary connections for water, power, 220V, 480V, whatever the needs of the project are. Give the workers real tools (they are doing this with hammers, chisels and 1 electric jackhammer), machinery, training, safety gear, etc.

Today the workers are back at it, they’ve duck-taped a water hose to a faucet in the back of our house (there aren’t any in the front patio) and “routed” their water hose through our living room out to the parking lot. I’m not kidding: there is a water hose duct-taped to a faucet as I’m writing this. And the project is managed/implemented by “region” Cusco, not even our local municipality or city of Cusco. These are supposed to be the “big guys”.

Rant over. Sorry for the venting.

parking lot work

Parking lot work in front of our house

water hose

Water hose to the works in front of the house

Washington Post on Peru’s crackdown against illegal mining

Not a bad article and pictures at the Washington Post. Here’s the article and a quick excerpt:

“After years of ignoring the frantic gold rush fouling the Amazon forests of southeastern Peru’s Madre de Dios region, the government has launched a no-mercy campaign to crush it.”

Otto has lamented the environmental damage done by illegal mining in Peru for years. It remains to be seen if Peru’s weak institutions and government will persevere in this crackdown.

One small thing you can do is not buy any gold or silver when you visit Peru. The jewelry stores here won’t be able to show procedence of gold, they’ll just lie or make something up. View my Twitter conversation with Otto about my dilemma in having to buy rings for a friend’s upcoming wedding.