The World & Beyond

The writings of a global transient.

Month: January 2015

Kidnapping, Inefficiency, & Significance

Most mornings I have coffee and an empanada at Pasteleria Noel.  I have been meaning to write a post complaining about some of the inefficiencies there but held off as I suspected something bad had happened to the owner who seems like a nice guy.

I noticed a Mercedes parked in front of the place at an odd hour and thought “that must be the owner’s car”. My first thought – as it always is when I see a fancy car in Panama was “why would you make yourself such a target?”  As I passed by later in the day I snapped the following picture:


Well now I was pretty certain that something bad happened and it was probably the owner.  There was nothing in the news for a few days but from today’s newspaper we learn that the owner of this Mercedes was kidnapped but has since been recovered.

Se sospecha de un grupo de venezolanos y colombianos que lo interceptaron el pasado jueves por el área de Bella Vista, en donde fue encontrado su vehículo. Durante este fin de semana la Policía hizo operativos para ubicar al resto de la banda.

I still am not sure if this is the owner of Pasteleria Noel but I suspect it is.  In any event, now that it is either A. Not him, or B.  It is him and he’s ok now, let me proceed to rant about the inefficiency of the place:

When you sit at the counter and eat and have a coffee you can’t actually pay at the counter.  You have to pay in the main checkout line.  The main checkout line is often crowded and is full of people buying a whole bunch of cakes and/or pastries for an event they are having that night.  I have long ago accepted that the 3rd world isn’t good at making lines move smoothly, but here is something easy that can be easily fixed:

While the desserts and cakes made every day differ, there are the “bakery staples” made fresh every day such as croissants, baguettes, and the like.

When you go to buy a croissant (as I do from time to time to eventually make a ham sandwich with it) it is not as simple as saying “un croissant por favor” and then paying for it.  Baked goods all very slightly in size and shape.  This is no big deal and the variance is always small.  At Pasteleria Noel, however, instead of just having a set price for a croissant they weigh every single one and charge accordingly.  This adds multiple extra steps to the process of buying a croissant.  Let’s compare the “normal” vs. Pasteleria Noel process for buying a croissant:


Me:  One croissant please

Bakery worker:  Here you go.

Cashier:   75 cents please

Me:  (pays) Thank you!

Cashier: Thank you!

Pasteleria Noel:

Me:  One croissant please

Bakery worker:  Do you care which one?

Me:  No

Bakery worker (weighs the croissant, writes the price on the bag)

Cashier:  How much?

Me: (Shows the bag)

Cashier: 72 cents! (or 71, 76, it varies)

Me:  (needs to count out 72 cents  I spend my changed here.  I couldn’t just have 75 cents locked and loaded and ready to put in her hand.)

Cashier:  Thank you

Now, if this sounds inefficient, it is even worse when dealing with some customers because they will waste time picking out the exact croissant or loaf of bread that they want.

Back to the kidnapping:  Driving a Mercedes around Silicon Valley isn’t likely to make you the target for a kidnapping or robbery.  In Panama City it is.  So why do people drive Mercedes in Panama City?

I reached out to my good friend Stephen Hilgart.  Steve is the most insightful person I know on human behavior.  Check out his website:  I had the fortune of sharing an apartment with Steve in Riga for 6 weeks or so in which time I learned more about human behavior and thus myself than in my prior 41 years combined.  Steve explains that it is all about significance:

Everyone wants to feel like they are a part of someone and they want to be loved and all but at the same time we all want to be different and unique and special.  The challenge in labeling it “significance” as I do is that not everyone uses that word to describe it.  They might use unique, special, or different.

My own advice is to search for significance outside of  material goods.  This is one of the reasons I write this blog even though nobody really reads it (yet!).

Why Managment Culture Matters: Thoughts on Petrobras, Devon, Chesapeake, and Kerr-McGee

The recent events at Petrobras have taken the investment community by storm, and there is much discussion about when the right time is to get in.  Bulls figure that given the reserves and the potential that the current price is cheap and will work out well in the long term despite the current scandals.  I am usually an “asset based” contrarian, but in this case I am not so sure.  Let me give you my perspective:

PetrobraI’ve worked at both Devon and Kerr-Mcgee and had many friends at Chesapeake.

To preface this post, I have never been a fan of “management guru” books and find them  to mostly be trash with little insight.  That being said, an excellent book could be written about the resurgence of Oklahoma City and the contrasting fortunes of Kerr-McGee, Devon, and the one-time high-flying Chesapeake Energy over the years and the differing management styles.  Perhaps I should write it.  However with the protagonist of this post now working for one of the antagonists the final chapter cannot yet be written.

If you don’t want to read a few thousand words and just want the punchline it is this:  Management and management culture matters, and Devon’s former CFO Jeff Agosta is the primary reason for Devon’s success whereas Kerr-McGee has disappeared and Chesapeake goes through recurring bouts to stay alive.  Interestingly enough, Jeff is no longer at Devon and now works for former Chesapeake founder Aubrey McClendon’s new company, American Energy Partners.  I will write more on that later on in this post.

The story for me begins in the mid to late 1990’s when I was working for my father’s money management firm.  Chesapeake was a high flying driller based on horizontal drilling in the Austin Chalk.

Wall Street was heavily promoting CHK and it was one of the biggest “momentum plays” on the street.  My father didn’t believe it.  Frankly, anyone with experience in the austin chalk knew that the decline curves were massive.  This time it was supposed to be different because of CHK’s horizontal drilling.  Horizontal drilling, however, wasn’t going to change the nature of the austin chalk as a play, it was just going to make the initial production bigger.  The problem however was that these were new wells and there wasn’t much history.

At the time getting well data was a pain.  We had to subscribe to a Petroleum Institute service for around 10,000 dollars per year that sent us CD’s with county well data from Louisiana which was months out of date.  Sure enough, the decline curves were massive.  We talked to wall street analysts, and of course they didn’t care.  CHK was everyone’s favorite.

A few years later CHK almost went out of business as sure enough the decline curves were massive.  That was the first time I heard the name Aubrey McClendon.

The next time was the summer of 2003.  I was sitting at my desk at the Zurich office of Kerr-McGee Luxembourg, (thank you IRS for creating such inefficiencies).  I had very little to do.  I was in Zurich for 2 months for a paid internship that was put together at the last minute because the employee whose job I was doing had a stroke and Kerr-McGee needed someone to take his place while he recovered.

Kerr-McgeeThe head of the office was an American hired in 1999 (a rare outside the ranks hire).  The rest of the staff was Swiss and/or German.  The European marketing team from the Chemicals unit (later spun off as Tronox) also shared these offices.  European Chemicals marketing was run by a Kerr-Mcgee old timer who was one of the few still around from the Karen Silkwood days.

The first sign that Kerr-McGee had issues was that I didn’t really have anything to do all day.  By and large I was done with my job by 10am.  In addition to my day job I was given a project to research the possibility of issuing euro-denominated bonds in Europe.  The project didn’t take long.  Other than that I had a lot of spare time.  Someone in IT at the main office in Oklahoma City seemed to have the sole job of tracking my web surfing and blocking every site that wasn’t work or finance related.

The Swiss like to take long lunches and usually have a few beers at lunch as well.  A directive had come down from HQ that nobody was allowed to drink at lunch but my boss told us to do what I wanted as long as he didn’t see it.  So, sometimes we would take 90 minute lunches by the seaside and have a couple of beers, but that still left the entire afternoon with little to do.  I had brought a lot of textbooks with me to Zurich to study finance and economics but I burned through those pretty quickly.

If I could do it all over again I would have spent the time learning German, although it was also when I first started to really study body language as I could not communicate verbally.  It is really the subject of another post but from my time in Panama, Switzerland, Italy, Albania, Poland, etc. I have become somewhat of an expert in reading body language.  Body language doesn’t lie.  People do.  I now like to sit in restaurants and watch body language.  It is fun to spot which woman doesn’t like her date and just wants to get out of there as quickly as possible even  vs. which guy is going to get lucky that night.  I’m also good now at knowing when I am being lied to – although I have had a few spectacular failures in that regard.

Back to Zurich: So I started spending my spare time looking for a permanent job.  Simply searching “energy companies in Oklahoma City” got by my IT censors and I quickly gathered up the names of all the big energies companies and their officers.  By googling around the domain names you can always come up with the structure of corporate email addresses (i.e. firstname.lastname or whatever) because some employee somewhere has always used his or her work address to post on a random message board.

So I sent out some emails to some Oklahoma City energy company executives.  The emails read as follows:

Hello, my name is Gordon Haave.  I am currently working for Kerr-McGee in Zurich in the corporate Treasury department.  Previously I have served as Vice-President of a $300 million money management firm and as the CFO of a $20 million residential construction firm.  I am returning to Oklahoma City in August and am looking for a full time job if you have any available.”

Short and simple appeals work with some people and not with others.  I got replies from both Jeff Agosta (then SVP of Finance and Treasurer of Devon) and Aubrey Mclendon (CEO of Chesapeake)  Aubrey was very nice as everyone always says he is.  We had a brief back and forth and after inquiring around the company he told me that there was nothing available but to stay in touch.

Jeff responded basically with a “yes we are looking for someone, come and see me when you get back to Oklahoma”.  That’s how I ended up working for Devon.

However, I was still working at Kerr-Mcgee.  Every day was frustrating as there was little to do, and everything I did have to do basically had zero value added.  Let me explain:

My primary job was ensuring the accurate cash forecast of Kerr-McGee’s North Sea oil and gas operations, and to ensure that cash balances were kept at a minimum so that they could be invested in time deposits.  In the morning I had to make sure time deposits were properly received that were due that day, and in the afternoon all cash had to be swept up into new time deposits.  These were often overnight or just 2-3 day investments.

The process was based off of the weekly cash forecast which was stored on the Kerr-McGee mainframe and accessed by everyone via Citrix.  The weekly forecast started on Monday at the operating units.  The operators would have to forecast DOWN TO THE PENNY every single expenditure or receipt they knew about.  At the end of the day Monday the information would go to one higher level up, where it would be compiled.  It would then move on to one level higher up on Wednesday to a treasury analyst for that unit.  On Thursday morning I had all of the information for every unit and would complete the overall spreadsheet which presumably someone reviewed on Friday.  It was a pain-staking process that took the time of at least 10 people over the course of the week to do.  And to what end?

Of course a Treasury department needs to be able to forecast cash, but down to the penny?  There were times where somewhere along the way the info would be recalled because someone let out an anticipated  $500 expenditure.  What good does knowing about the $500 expenditure matter?

Ideally if you have the exact cash balance down to the penny you can invest better.  For example, if you have $1 million dollars extra and you know you can invest it for and extra 4-5 days instead of just overnight you will earn more interest.  But how much?  Enough to have 10 people working on the thing?  Enough to harass operating units into worrying about that instead of worrying about their operations?  Of course not.

I once said something to my boss about it and his response was “you are lucky, when I first started here they were doing this by carbon paper, and only changed to spreadsheet because they couldn’t buy the carbon paper anymore”.

I was in a good position to learn many other things about the corporate culture.  As the young American guy there by myself the chemicals sales force guys would take me out at night on their expense accounts when they passed through town and they expressed how hampered they were by the corporate culture.

Also, at the time, Kerr-McGee was spending literally millions of dollars per year on outside consultants whose job it was to change the corporate culture.  One of these consultants spent a week or so in Zurich and I went out to eat and have a few drinks with him a few times.  I’ll spare you the details of the horror stories but his conclusion was pretty straight-forward:  “It’s utterly hopeless.”

I don’t want to name names but I remarked to him once that a certain person in our division seemed to be the real brains of the operation, yet he was not the head of it and I was wondering why.  The answer: “Because X joined the company two weeks later than Y 20 years ago”.

So let’s review what I learned about Kerr-Mcgee:

A.  A massive number of employees doing useless jobs.

B.  A culture where seniority is all that matters.

C.  The corporate tail wagging the operating dog.

After Kerr-McGee it was on to Devon in Jeff Agosta’s unit.  I ran the “cash management” function which included the investment of excess assets as my primary job but I also performed as somewhat of an overflow worker for other corporate finance projects as needed.

devon_EnergyWhat was the corporate culture at Devon?  Well, it depends on what part of it you worked in.  In accounting it was just as bad as as Kerr-McGee.  There were massive, bloated staffs of people who did their job the way they did it and simply wanted it to stay that way and didn’t want anything to change.  That didn’t really matter too much except that corporate expenses were higher than they should be and landowners would be pissed off because they got their checks late.  More than a few times in social settings when telling someone I worked at Devon the response would be “why can’t you send your checks on time?”

Corporate finance, however was a lean and mean operating machine.  We had less people performing the finance and treasury functions than Kerr-McGee had working on the weekly cash forecast – and we did a good job of it too.  This was all under Jeff’s leadership and direction.

How did the cash forecast work?

When I started there was already a cash forecast spreadsheet which I later revamped.  Here is how it worked:

We pulled production estimates from an existing database.  We pulled gas and oil prices from Bloomberg and applied a discount to them for what Devon would actually receive for oil and gas sales.

We knew corporate overhead data and when payroll was due, and we knew interest and swap payments already.

As to the level of accuracy acheived it was pretty straightforward.  The conversation went something lie this:

Me:  Jeff, given interest rates and what we can do with extra cash in terms of investments (or lack thereof) and the manpower that we will have to expend in order to get a more detailed forecast it is cheaper to just leave an extra 100 million laying around than expend the effort to harass people so that we can do more detailed forecasts like Kerr-McGee does.  Plus, we don’t have to harass people who have other things they are working on.

Jeff:  Agreed.

And that was that.

A rational and efficient decision was made, without regard to “how things are always done” and taking into account that there is no need to be harassing operating units.

Not harassing the operating units was a theme that Jeff reinforced a few times.

I recall one even when a decision was made by an operating unit to bid on some blocks off of Brazil.  The email I got was basically “We have to have $40 million dollars in an account in Brazil in three days”.  The $40 million wasn’t a problem – remember we always had more than that just laying around.  The problem was opening the account.  This is was after 9/11 and the government was imposing all sorts of new Know Your Customer rules on the banks.

To open the account Bank of America wanted endless documentation that there was basically no way I could do within 3 days.  In the end I just said to our representative at B of A “look, this is Devon energy opening an account for a Devon subsidiary, we have 120+ accounts with you.  This account needs to be open tomorrow.  I will send you whatever documentation you want later, but this account has to be open tomorrow.  If you don’t know your customer well enough to open the account then we will have to find someone who does”.

He opened the account.

At some point during or after this event I said to Jeff “Hey, these guys (the operating unit) really have to give us more heads up next time”.  Jeff’s response was “It is fine for you to send them an email asking them to give you a better heads up when they can, but always remember they are the one’s who make the money.  We work for them, not the other way around”.

Meanwhile let’s get back to Chesapeake.  Aubrey McClendon the well liked and flamboyant founder had his own management approach.  I can’t speak too much to the internal culture as I was not a part of it, but Aubrey was generally highly regarded by his employees.  The problem was as follows:  He ran the company like it was his own as opposed to running it on behalf of the shareholders.

Although it is difficult to quantify this was apparent by the massive amount of money that Chesapeake through around the community in what appeared to me to be one big dose of self-promotion.  Chesapeake funding was all over Oklahoma City, and the news articles praising McClendon were legion as he achieved celebrity status.  Companies need to distribute money in their communities from time to time for their long run success, but Chesapeake’s giving far outstripped anything Devon or Kerr-McGee was doing.  I was constantly thinking to myself “I wonder how any of this benefits shareholders”?

Later events that are quantifiable proved me correct that indeed the company was being run in his own interested instead of the interest of the shareholders.

In short, McClendon has a sweetheart deal where, after shareholders paid to acquire land McClendon got an ownership stake of 2.5% of every well drilled.  He had to pay 2.5% of the drilling costs.  How did he come up with the 2.5%?  He borrowed against his interest in the wells.

Chesapeake_logoHere is the problem with that:

1.  McClendon was competing with Chesapeake for access to capital.

2. Let’s say the price of natural gas goes down and Chesapeake needed to curtail it’s drilling or shut-in some wells.  What decision should be made?  Well, if McClendon has massive personal interest payments to make on his personal debt, he suddenly has a conflict of interest with the company.

McClendon of course denied any conflict of interest, but it is ludicrous to believe that shareholders ever would have approved such a situation had they known about it.  The defense of course is that the board of directors (who represent the shareholders) knew, but this is the same board of directors that bailed McClendon out of his personal financial problems buy buying his private map collection from him and awarding him a massive bonus while Chesapeakes own fortunes were in decline.

In addition McClendon was using CHK employees to do personal work for him and also never disclosed that he had a hedge fund on the side which traded in the same energy markets that CHK did.

In short, he ran the company on behalf of himself, instead of on behalf of the shareholders.

To contrast this behavior to what I saw at Devon:  One time a senior manager operating out of Houston donated $10,000 to a charity without prior approval.  As Jeff relayed to me the manager was told “that is the shareholders money, either get it back or pay it back yourself”.

All of this leads to an interesting situation:

Aubrey McClendon is the last person in the world I would want to look after my interests as a shareholder.  Jeff Agosta is the first.

Now, Jeff works for Aubrey.

In January 2014 Jeff was fired as the CFO at Devon.  I don’t know the scoop and have not spoken to Jeff in 6 years, but as someone with more knowledge than I do tells me:

He fucked up on a forecast/reporting issue, plus he alienated virtually everyone who worked under him with his management style, it seems.

I have no idea myself, but that he might have alienated people under him would not be a surprise.  I for one liked working in his unit.  With Jeff would always knew where you stood.  If you did a good job you knew it, and if you did a bad job you knew it.  Not everyone is like me however.  Some people care more about the 5 minutes of pleasantries that need to occur when a conversation starts and need criticism of their idea in a roundabout manner.  Jeff was not that guy.

More importantly, I would bet that Jeff attempted to impose his efficiency viewpoint on the rest of the company and got a lot of pushback.

American Energy Partners is said to be getting ready for an IPO.  My advice:  figure out who is really calling the shots on the finances.  If it is McClendon then take a pass.  If it is Agosta then go all in.


So what does all this have to do with Petrobras?  In the end and after years and years of attempted reform Kerr-McGee called it quits.  The stock had basically gone nowhere for 20 years and eventually the chemicals unit was spun off and the Oil & Gas assets sold to Anadarko.  The archaic corporate culture just couldn’t be overcome.

In all companies the allocation of capital is incredibly important.  The difference between Energy companies and many other companies is that the economic consequences few key decisions will be apparent in short order.  Proctor and Gamble can make bad decisions and the result will just be a slow decline in overall market share over a long period of time – this is not the case with an energy company.

Petrobras can have all of the reserves in the world, but if management and the corporate culture are no good shareholders will never realize a profit from it.

“The superiority of everything Russian was the rock on which their mental world was built”

During lunch today I read an article in the June 20th 1949 edition of Life Magazine called Why They Confess.  The Remarkable Case of Hans
Fritzsche – who lived through the terror of a Russian prison – shows how the communists can break a man’s spirit without laying a hand on him.”

Hans_FritzscheHans Fritzsche was one of the few Nuremberg defendants found not guilty.  He was a popular radio personality during the war, and worked in the Propaganda Ministry.

He was arrested by the Russians and later turned over for the Nuremberg trials.  Before being turned over he spent his time in the infamous Lubyanka prison where he signed a false confession without having been beaten or his family threatened.

Some interesting quotes from the article:

 “The superiority of everything Russian was the rock on which their mental world was built”

“He could count on his fingers with one hand the soviet guards who ever overstepped their limits; and on the fingers of the other hand the Western guard in the Nuremberg jail who did not”

“He became a victim of the Lubyanka psychology, furiously trying to guess what kind of answer would satisfy the commissar.

……and  comment I am not sure what to make of but is interesting nonetheless:

“Western prisons are filled with people who feel innocent, Russian prisons with people who feel guilty”

After months of wearing Fritzche down he ultimately signed a false confession because:

“Hope is stronger than fear, therefore hope is more willing to make concessions”

and the Russians gave him hope at the end.Lubyanka Prison

In the end, the Russians got what they wanted, but it had no value as it was essentially false information and did not, therefore, lead to his conviction at Nuremberg as they had hoped.

This raises the question of what exactly we are/were doing in Guantanamo.

The takeaway from the Senate torture report released in December is best summed up by Kevin Drum:

” In plain English: The torture was far more brutal than we thought, and the CIA lied about that. It didn’t work, and they lied about that too. It produced so much bad Intel that it most likely impaired our national security, and of course they lied about that as well. They lied to Congress, they lied to the president, and they lied to the media. Despite this, they are still defending their actions.”

That torture produces bad intel has been well known for some time.

Napoleon said:

a.. The barbarous custom of having men beaten who are suspected of having important secrets to reveal must be abolished. It has always been recognized that this way of interrogating men, by putting them to torture, produces nothing worthwhile. The poor wretches say anything that comes into their mind and what they think the interrogator wishes to know.
a.. On the subject of torture, in a letter to Louis Alexandre Berthier (11 November 1798), published in Correspondance Napoleon edited by Henri Plon (1861), Vol. V, No. 3606, p. 128

We know from the Fritzsche case that even just being broken down leaves a man ” furiously trying to guess what kind of answer would satisfy the commissar. ”

If we know from the Frtizsche example that you can get said bad information or a conguantanamo torturefession from hope rather than fear, what have we been doing torturing people?

If you can break a man’s spirit without laying hands on him then why have we been laying hands on them?

What kind of people can sit around an orchestrate such acts knowing full well they won’t even work?

I’ll let the answer to these questions dangle out there for readers to contemplate.  I myself am not sure, but I bet this quote is a large part of the answer:

“The superiority of everything Russian was the rock on which their mental world was built”.

Just replace “Russian” with “American”.

The Real Benghazi!$#!?!!!!!!! Scandal

As the political season heats up and the Bush and Clinton tribes prepare to lock horns we all get to cringe at the resurgence of the Benghazi! meme.  Yes, I am as sick of it as most of you are.  However, there is a real issue that literally nobody talks about.

First, to get this out of the way, there is no scandal in what actually happened in Libya.  The State Department had people on the ground in an outpost in Benghazi (there may be a scandal in what he was doing there to begin with – but thats a different story).  There is always a trade-off between security vs. cost.  Someone, somewhere, made a judgement call that turned out wrong.  These security decisions are made around the world every week and if anything the State Department errs on the side of being too secure.  Around the world American embassies are walling themselves off from the countries they operate in with massive compounds well cut-off from the local society and culture.

The idea that Hillary or her minions were somehow callous to the lives of Americans in Benghazi is ludicrous. Well, to be clear, Hillary (like the Bush tribe) most likely is callous to the lives of anyone else but that is not why the deaths in Benghazi happened.  Decisions were made about the level of security needed for the mission.  The decisions turned out to be wrong, but even if you assume Hillary is the worst person on earth she is at least evil enough to know that Americans killed on her watch is going to impact her public persona and would not have wanted it to happen.

Here is the real issue that nobody but myself is talking about:

After the attack the Clinton tribe went into cover-up mode.  It is common to say “it’s not the crime, it’s the cover-up” but covering-up a crime in human enough behavior that people don’t get too worked up about it by and large.

What matters hereBenghazi attack is the nature of the cover-up.  In order to protect themselves the State Department was not only looking to deflect blame, but was willing to impair a fundamental human freedom.

The response by the State Department in the aftermath of Benghazi was (and they knew this was false) to blame a video on youtube.  Shortly thereafter newspapers around the country were filled with op-eds by Hillary’s minions talking about why “free speech isn’t absolute”.

For example, a professor at the University of Pennsylvania called for the jailing of the film’s producer and claimed that “ is not the first to denigrate a religious figure, nor will it be the last. The Last Temptation of Christ was protested vigorously. The difference is that Bacile indirectly and inadvertently inflamed people half a world away, resulting in the deaths of U.S. Embassy”.

Fortunately the world quickly saw through the “it’s the fault of a youtube video” lie, but what would have happened if we all actually believed the lie?  If Congress or other legislative bodies would have attempted to restrict free speech on the basis of the lie would Hillary have spoken up and said “wait, guys, don’t do that, that’s not what really caused Benghazi”?  Of course not.  She would have gladly gone along with the charade in order to protect her reputation.

An attack on the First Amendment in order to cover-up an administrative screw-up is unprecedented and in my opinion is a crime larger than the Watergate cover-up.

That’s the real scandal, and yet it’s not what the Republicans are talking about every time they scream Benghazi!!$%$!!!!

When in Rome, Avoid the Americans

Since I travel a lot and have been to a lot of unusual places it is fairly routine that I get emails from people saying “my cousin, sister, son, etc is traveling to country X.  Do you have any advice?”.

My first piece of advice for traveling to any country is always as follows:

Find out the yahoo message board or subreddit on Reddit where Americans in that country congregate.  Write a post that says “I’m an American traveling to your country.  What is a good part of town to live in?  Are they any good cafe’s or bars where Americans hang out?”

You now have a list of places to avoid.

I don’t hate my country or countrymen, but the fact remains that Americans overseas are without a doubt the most obnoxious group of people you will every encounter on your travels.

The general behavior of American expats is as follows:

1.  Separate yourself from the local culture.

2. Do nothing to learn the language or customs.

3.  Hang out at all the same cafes or bars.

4.  Bitch and moan endlessly about why this country is not as good as America

5.  Condescendingly tell the locals why they should do things more like Americans do.

This is particularly true in Panama where Americans believe that Panama owes America an eternal debt for building the Canal.

I was prompted to write this blog post because of an exchange that happened yesterday on the Americans in Panama yahoo message board.  I am a subscriber to the board (although I have never posted) because sometimes there are some good posts about how to accomplish one or another task when dealing with the Panamanian government or where/how to buy something that is difficult to find.  90% of the posts are mostly people just complaining about how living in Panama is not as good as living in the U.S.  I typically don’t read them because when I do my blood pressure increases and i get the intense urge to respond “SO FUCKING GO HOME ALREADY” but so far I have managed to keep my cool.

Yesterday a Panamanian wrote a post titled “Rude Gringo” about a bad experience she had in a traffic jam with a Gringo trying to cut her off.  One single reply to this post perfectly encapsulates everything that is wrong with Gringos and their mentality.  The post is as follows:


1. Panama was a Province of Columbia
2., Theodor Roosevelt paid $10000 to Columbia upon request of Panamanian separatist in order to have a independent country. Without US payment no Independent state of Panama.
3., US engineering and medical know how help to eradicate: malaria, yellow and dengue favor in order to built the canal.
4., I fail to noticed that without the “ugly gringos” that would happen.
5., US liberated you and other Panamenos of the cruelty of Noriega
6., Pres. Carter stupidity to give you the Canal “gratis” even though it cost a lot of money for US people to build.

Even though , I am not Panamena, however, I have manner, graces and very high level of education which enables me to tolerate even your “ugliness”. Moreover, without my money and other “ugly gringos” money being invested in your country, some of progress what you are experiencing would not occur, just because you are Panameno.

In other words:  You owe us.

This person also just had to write about her “manner, graces, and very high level of education”.  That is:  We are better than you.

The sad thing is that the poster doesn’t even realize just how rude and condescending she was being – but that is the very nature of Americans overseas.  They really have no idea.

Assuming for a second that her post is accurate (I have some quibbles about it), she is missing the larger point about dignity.  Without dignity, a man has nothing.  You can take away a man’s land and his riches, but when you take away his dignity he has nothing left and he will hate you and want to kill you.

An entire world war was fought over dignity.  After the Archduke Franz Ferdinand received a well deserved bullet to the chest the Austro-Hungarian Empire made a list of 10 demands upon the Kingdom of Serbia.  These demands were written precisely so that Serbia had no choice but to reject them and therefore provide Austria-Hungary a Casus Belli for war.  Serbia, desperate to avoid war for a change actually accepted 9 of these ridiculous demands.  The only demand rejected was giving Austrian police the right to operate in Serbia.  This is an indignity no sovereign people can endure.  War was chosen over indignity.

The Serbs, a people fighting for everything, ultimately suffered total military and civilian losses of 1,1 million people, including 60% of the entire male population of Serbia.

If you treat people with a lack of dignity and tell them that they owe you for everything good in their life they are going to hate you, whether there is any truth to the matter or not.

You have no idea how many times I have heard expats in Panama explain how we are the only reason this country isn’t a total shithole and that we deserve to be treated better.  Whether or not it is true or not doesn’t matter.  This attitude isn’t going to win you any friends.  And, of course, the person saying it most likely had no role whatsoever in anything good happening in Panama and still isn’t adding anything positive to the society.

In any event, hanging around with expat Americans gets old pretty quickly which is why I don’t live near them nor hang out in the places that they frequent.

Americans overseas also mistakenly believe that segregating themselves off makes them safe.  In reality it makes them a target.

When I lived in Kenya I lived on Ralph Bunch road.  It is a nice quiet street near the Presidential compound, the Ministry of Defense, and the Russian Embassy which amusingly is on a hill above the Ministry of Defense looking down on to it.  Pretty much every American in Kenya however lived on the other side of town in Westlands.  Why?  That’s just what you do as an American.  If you ask an American where to live they will all say “Westlands”.

Whereas I never had any security issues where I lived people were constantly  getting robbed or carjacked in Westlands.  Of course they were.  If you were a criminal and you were looking for a target where would you go?  To Westlands.  Plus, traffic in Westlands was terrible and everything was more expensive as well.

westgate mall

When the Westgate mall attack occurred in Nairobi I was surprised that there were no Americans killed as Westgate Mall is where Americans all hung out and did their shopping.

A few years prior when there were attacks in Uganda one of the targets was a  restaurant frequented by Americans.

 “Uganda Police Force Inspector General Kale Kayihura stated, “The information we have indicates the people who have attacked the Ethiopian Village were probably targeting expatriates.”

Here in Panama, I won’t live anywhere near Clayton where the Americans will tell you to live. I also don’t go to Allbrook mall nor drink 5 dollar beers where the Americans hang out.  I live in a low-key building where I am the only American and it’s walking distance not only to my own restaurant but also to restaurants and bars where I am likely to be the only Gringo there.  It is a much better way of living.

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