X'mas again

Tis the time for X'mas celebrations again! Lunches, dinners, drinks, get togethers of all sorts...

Friends got together today for a X'mas luncheon starting with champagne at 11. It must have been a 5 or 6 hour lunch which ended up at one of our favourite watering holes thereafter. All seems to have been forgotten during this time abyss today -- by the time everyone crawled onto the comfort of their beds.

It's a culture of sorts to have long X'mas luncheons; and the Westerners have lived it up even though they're in Asia. Before we get into November, plannings and bookings would already have been underway for the early birds will get the best choices of restaurants and the best deals. It's a kind of reward for the year's hard work which everyone is deemed to have put in, especially in a tough year like this has been. I wonder what the bankers are doing in New York and how they're going about their traditional long and expensive luncheons.

My guess is that the bulk of their discussions would have been on how to pay themselves fat bonuses without raising the ire of taxpayers and government officials who are using taxpayers' money to bail their banks out of the mess created by their mismanagement. And I wonder how many of those taxpayers can afford to savour the Dom Perignons that this bankers down in their celebratory X'mas dos. In George Orwell's Animal Farm, there're words to the effect that all men are equals but some are more equal than others. Perhaps Orwell saw something which we are only beginning to realize.

Poor Thais

I have nothing but sympathy for the people of this supposedly peaceful, predominantly Buddhist kingdom

First they (the Bangkok elite) cannot tolerate a good Prime Minister (Thaksin) who cares for the poor so much so that they instigate the army and support a coup d'etat. OK he may have mixed business with politics, but that must surely be a case of the pot calling the kettle black for I can't imagine a Thai politician who's in politics with the sole purpose of serving his/her fellow countrymen. There's always a hidden agenda somewhere and this normally starts from a hunger for power and recognition, evolving into business propositions from people around them, and inevitably leading to some form of corruption, collusion or cronyism.

In the so called affluent Western world, this is not dissimilar to the work of lobbyists, and politicians laying the ground for campaign funds at the next election - its not called corruption or cronyism. Look at what happened to Bush and Cheney and their relationship with oil giants. Here in the East, it's called corruption and cronyism, plus nepotism in the words of the Indonesians.

"One man one vote" is just not good enough for the urban elite in Bangkok and surrounds. Farmers are deemed "children of a lesser God" and don't deserve to have the equal vote that the "intellect and elite" have

So why did the security apparatus and the army in Thailand let these PAD bandits and bullies run amok to the extent of isolating Bangkok from the outside world and inconveniencing tourists by closing their airport? Doesn't this smell of collaboration? Doesn't this suggest that some "high power" up there is tacitly supporting the bullies and bandits who wear yellow purportedly in support of the King. This high power is so powerful, for otherwise the PAD movement would not have rendered the army and police ineffective. How should the monarch feel when bandits and bullies further their crimes under the auspices of loyalty to the monarch?

They asked for Prime Minister Samak to resign when they occupied government house in Bangkok. Samak resigned but they didn't disperse from government house. Now they want replacement Prime Minister Somchai to resign and the government to step down. Who's going to govern if the government steps down? They, the PAD who's holding the country at ransom even though the government is a democratically elected one?

When I was in Bangkok during the Thaksin era, a lot of the established business people dislike Thaksin openly. The cushy contracts and relationships they had with the "old school" politicians suddenly disappeared in the face of billionaire Thaksin and his business empire. It's not unlike the Suharto kids in Indonesia - before the children grew up, business deals were spread out "quite equally" among Suharto loyalists under a "somewhat successful" patronage system; but when the children grew up and entered the business world, the best deals were snatched up by the Cendana family leaving the "bones" for the others.

How can Thais get out of this quagmire.

Maybe they need a strong Prime Minister like Thaksin to come back and resolve this once and for all - through negotiations and diplomacy. Thaksin must have learnt his mistakes by now - maybe he isolated the powerful elites so badly that they have but one aim and that is to put him out of power. The person who's so instrumental in reshaping the country and giving the rural folks a breathe of fresh air may have moved too fast for the urban folks to accept. I'm quite sure that a smart person like Thaksin will not make the same mistakes, IF given a second chance.

If only Indonesia has the same strong willed and committed leader in next year's elections. Rural Indonesians, perhaps even all Indonesians will be able to breathe the same fresh air Thaksin provided to the rural Thais - corrupt officials who pilfer from education and welfare funds for the poor excluded, of course.

Strange world in difficult times

This is indeed where are now. Failing banks; falling markets; felled regimes... Where is mankind headed, I wonder?

The good news.
We have a new US President who has to tackle the current crisis.
World commodity prices has fallen so inflationary pressures will not come from scarce commodities at least in the next 18 to 24 months.
All countries are coming together to get us out of this quagmire.
China is doing something to "jump shock" their economy.
we can all

The BAD BAD news
Recession, recession, recession
No signs that confidence is rebuilding in credit markets.
Putin and Russia has not said what it plans to do to get his country and the world back on track.
Europe is united yet divided still.
Pirates off Somalia are creating havoc to shipping, and hence stifling trade and raising costs/inflation.


Tell me more ....

Asia's young democracies

News out of Thailand and Malaysia are hoarding the headlines now; soon it will be Indonesia when they move into election fever in 2009. All these point to the fact that most countries in Asia are still going through a young and immature democracy.

Thailand has been notorious for their coups d'etat for as long as people can remember. Malaysia is slightly different in that the Barisan Nasional has been a stabilizing force in the country made up of diversified ethnic groups, until their General Elections in March 2008. From developments so far, the populace seem to be "fed up" with the pro-Malay/bumiputera policies which survived Malaysian politics up until now. The feeling on the ground, it seems, is that the pro-Malay policies are responsible for the culture of cronyism, nepotism and corruption in Malaysia which Indonesia - referred to as KKN in their own language - is trying to shed .

Malaysian politics is based on a patronage system not unlike the Indonesian system under the late President Suharto. Sort of an old boys' network not dissimilar to what's common in the UK, USA and Canada and other western countries. The difference in the affluent West is that they try and be as accountable as possible, save for the way the Bush administration appointed their security contractors in Iraq. In Malaysia, it's very different; for the government seem to award projects like they were "distributing the spoils", the way warlords or conquerors in history, east and west, used to do to reward their loyal subjects who helped them win territories.

Thailand is unique as the elite failed to deliver voter numbers to ensure that the party they support wins the election. Its probably arrogance which allowed Thaksin and his party to win over the greater numbers from the rural poor compared to elitists in the capital and major cities. The Indonesian politicians are better at this, knowing how to spread their campaign efforts over the areas where the numbers count. That's why I feel that the Thai elites who want to control Thailand are really arrogant.

Of all the democracies in Asia, Thailand is probably worst off. Malaysia a close second. The Philippines is too corrupt to count and Singapore's "managed democracy" probably doesn't fall into that league - and Singapore's leaders don't want to be in the same league of "western styled" democracies anyway. That leaves Indonesia, which is probably the closest to the western definition of "democracy" as we can get, not that it is the best form of governance for such a diversified country like Indonesia for now. But I'm sure that with a lot of hard work, the Indonesians will find the equilibrium on a democracy which works for their country, assuming there are enough politicians committed to the secular approach as the best way forward for their country in the next generation.

My take on the current financial crisis

What do you do when you find your retirement fund shrink to half what they were worth 10 months ago? How do you feel when seemingly low risk investments in top institutions and companies in the world fail you? Well, you are not alone.

Who would have predicted the fall of century-old establishments like Lehman and Bear Stearns?

NOBODY, really!

This is a good lesson to myself and all else seeking better returns for their investments. Whenever anyone asks me for investment advice, I always tell them to keep a portion of their wealth in cash and safe investments albeit low returns, such as fixed deposits in established commercial banks, while they put the rest in riskier investments such as equity-based mutual funds or stocks. This is yet to be tested as we haven't come to the bottom of this crisis, according to esteemed economists around the world.

So far, we've only seen investment banks and other niche financial institutions fail - not Bank of America, Citibank or HSBC - or not yet. Banks with a large deposit bases are somewhat sheltered from this turmoil, lest there be a run on the bank stemming from market rumours such as the one which befell Bank of East Asia in Hong Kong.

Governments are going all out to guarantee their nations' bank deposits - first the USA, then Europe, followed by Hong Kong, Singapore and others in Asia. I'm sure this "jumping on the bandwagon" syndrome is an inevitable defensive move especially coming from Hong Kong and Singapore. Imagine all the high net worth individuals pulling out their deposits from one country and parking them somewhere with governmental protection. That would have been catastrophic for their banking system.

Now, about riskier investments.

My approach has always been that of putting money I don't need for now, and money I can sit out and wait for returns in riskier higher return investments. We as individuals don't go by annual balance sheets and performance figures. We can afford to sit out investments over 3 or 5 years. If our investments return 50% in 5 years, we're still doing a healthy 10% per year average return (not compounded return) which isn't bad.

Some days ago, a friend of mine who has put money into equity-based funds panicked when the markets collapsed. He sold out, and ended up losing half the capital invested. Such panicky investors is a contributory factor to the collapse of stock markets around the world. He didn't need the money now. He wasn't forced by banks or brokers for he did not pledge the investment as collateral against any borrowing. There is really no conceivable reason for him to cash out when values are shedding on rumours rather than fundamentals. Such is the free market I suppose.

My sister called me the other day and asked how I was doing, as she knew I like to sort higher returns in riskier investments. I told her YES my portfolio did shrink by about half from the beginining of the year. YES there is a paper loss. But I also told her that I did follow Warren Buffett's advice earlier on in the year to hoard cash and wait for opportunities. I'm still pretty liquid and can embark on "buy" opportunities should I see signs of the markets bottoming out.

Having been through the Asian financial crisis in the late 90s, this doesn't surprise me anymore although its severity and speed did catch me off guard a little. The crests and troughs seem to happen every 10 years - 1987 black Monday, 1997 Asian crisis and now sub-prime.

My advice to friends and family is to wait this out, if their investments are in blue chips or blue chip funds. I waited out the Asian crisis and the investments paid off - at least on paper, as of end 2008 - but I didn't cash out in time before this crisis hit. Lesson for me then is to cash out when we hit the next high - be it in 3, 5 or 8 years' time - and restructure my portfolio so I won't be caught out in a situation where I'm depending on those investments to accord me the same lifestyle I'm leading now during retirement.

I hope this will help any panicky investor thinking of biting the bullet and cutting losses, for this is not the end of trading in the free market. As long as markets are trading, what goes down must come up, and vice versa.

Sub primes - Covering up with political backing

Look at the stock markets now. And look at what the American government tried to do.

When China covered up on the SARS and melamine scares, every one (almost) felt that China shouldn't have done that. But when the Americans covered up on the impact of their sub prime problems on the economic health of the world, the comments were a lot more muted.

I guess the difference is that in SARS and the melamine cases, there were actual human deaths directly relating to those incidents, whereas in the current sub prime fiasco, there aren't any DIRECT deaths, although the indirects harm that it has done to the modern world is beyond the imagination of any one of us.


There's Bernanke, Paulson and all the wise people with unquestionable credentials in a regulatory capacity who chose to remain silent about the impact of the sub prime crisis until a year after it first surfaced. Considering that these people have intimate knowledge of their financial systems, they should have had more notice than the rest of us prior to the problem surfacing in the public domain. So did they try to "cover up" thinking that it can be contained? Are they not as guilty as the Chinese officials who tried to cover up on SARS and melamine contamination in milk out of China?

We can't help Asians feeling like the Western media is stringing them up to roast at every opportunity for whatever cover-ups the governments of Asia do, the Western media seem to feed on it like a pack of vultures. But when there's a foul up in the Western world, not dissimilar to those in Asia, somehow, someone will be able to "guide" them into looking at things in a different perspective.

Is this less harmful and/or less severe than China's covering up of the SARS crisis? Or the melamine contamination issue still running hot in all the presses? Did the Americans elect a President who cannot appoint competent officials to look after their economy? What about all those checks and balances in Congress and the Senate? Didn't any of those learned men and women smell something fishy when the first sub prime defaults started to surface? How could the officials have taken JUST one weekend -- an American weekend when every American is supposed to be spending time with their families -- to sort out Bear Stearns? Even the best of brains would have had to do some preparatory work! Did they have an inkling as to what's happened and what's required? Surely they must have been prepared.

IS this a case of the pot calling the kettle black when it comes to disclosure for the interests of the rest of the world? Perhaps.

But we will never know, will we?

About Visions and Missions

Friend of mine just called and complained about some problems with her staff. She tried to instill some discipline and ground rules for her operations but met with resistance from some employees. Simple stuff that they were trained to do became chores she has to get involved in, as CEO of the company.

My answer: they (the staff) don't share your same vision and mission; and she's better off getting rid of those bad apples than to risk infecting the rest of her employees who need the job more and who are prepared to adapt to her ground rules.

I'm sure this happens to all companies, large or small. I also told my friend that it's the survival of the organisation and the security of all her employees which should take precedence over one or two rotten apples.

Every organisation must function and survive as a team. Just like football and any other sport. The minute we have a prima donna, the minute we have the weakest link who can't move at the same speed as the others, and who doesn't have the same conviction as the others, the organisation cannot survive, let alone advance in this highly competitive globalised world.

This friend of mine is a nice person, always kind, always mindful of her employees to the extent that she cannot bear to put someone out of a job. But I emphasized that it's the survival of the organisation, the interests of the shareholders, and the feeding of the majority of her staff and their families which are of paramount importance.

I'm glad she felt a lot better after hearing what I had to say. And I hope she will be able to put principles into practise and have the conviction to see changes through.