Pattaya Mail turns 12

Vol. XIII No. 42
Friday October 21 - October 27, 2005

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HEADLINES [click on headline to view story]:

Money matters

Snap Shots

Modern Medicine

Learn to Live to Learn

Heart to Heart with Hillary

Psychological Perspectives

Money matters: Robert Shiller on the property bubble (part 2)

Graham Macdonald
MBMG International Ltd.

After skipping a week, we’re now back to covering the work of Yale economist Robert Shiller. To recap where we left off, Shiller has identified that property has become so overheated in so many areas of the U.S. that once a decline starts it could continue to spiral for two to three years, bridging the economic downturn and placing speculative buyers with scant equity but hefty debt into a real bind.

Lending has been effervescent of late with high multiples and low down payments - this inflates the bubble on the way up but creates disaster on the way back down. This is why Shiller sees the possibility of a real price decline of as much as 50% in American residential property values over the next decade. In fairness this isn’t as severe as our forecasts of outright unadjusted falls of up to 40% in the UK and Australian markets over the next 3-4 years. Shiller’s numbers are, on the other hand, adjusted for inflation - meaning that he only foresees a 20% to 25% cumulative decline in nominal prices (around -2% CAR over the decade).

However, equity withdrawals from real estate price increases have helped to grease the wheels of the global economy over the last few years so that would still be pretty devastating news for the world economy.

Whenever we publish a piece about US real estate we hear baying voices telling us that there has never been a major, sustained nationwide property price collapse - while we’re not sure whether there is really sufficient data to show whether there has or hasn’t, and while we’d argue that the current bubble doesn’t have too many precedents that didn’t end badly, there’s no doubt that localised problems of this intensity have been witnessed before. Barrons reminds us that “Los Angeles-area home prices fell over 40% in real terms between 1989 and 1997 before beginning a sharp ascent.” (Following a little way after a 60% jump over a 5 year period in the same area.)

Interestingly that bubble is ascribed mainly to job losses in California at that time. While any bubble can inflate until it bursts, Shiller believes that the current bubble is so over-inflated that external shocks aren’t necessary to prick it and that eventually prices could just crash under their own weight. This is true - but we reckon it’s going to be a close run thing whether the bubble becomes so large that happens, or whether the global recession cavalry comes riding over the hills first.

Three months ago, when Shiller released a heavily revised edition of Irrational Exuberance we picked up on the sections on the real-estate bubble and the consequent problems for residential property. One of these sections picks up on the residential property index that Shiller and Karl Case established in 1988, using “repeat sales” data. The best, although still imperfect way to measure property price movements is to value exactly the same asset in sale transactions that take place some time apart. This led to the formation of a company called Case Shiller Weiss that became part of Fiserv and publishes the CSW survey.

This data reveals some frightening insights about this bubble - “The rise in real prices since 1997 has already dwarfed the surge after World War II, when long-pent-up demand for homes overwhelmed supply for a time. And it only seems to be gathering velocity, with each year’s increase topping the previous one’s. Though in 1997 real U.S. home prices went up 2.1%, by 2000 the rate of increase had accelerated to 5.8%.”

Last year it was 11.2%, and Shiller believes it may have exceeded 15% in this year’s first quarter, against a backdrop of higher inflation, downwards pressure on personal incomes/GDP and increasing interest rates.

Shiller believes that the property bubble grew out of the same irrational exuberance that gave rise to the 90’s stock bubble - most of the housing bubbles around the globe occurred in countries that also had stock bubbles. Owners of London property that crashed in 1989 (almost exactly 24 months after the 1987 stock market crash) will be far from surprised to read that a recent study by the Bank of International Settlements showed that peak residential property prices in 13 industrialized countries studied tended to lag stock-market peaks by around two years.

“Once stocks fell, real estate became the primary outlet for the speculative frenzy that the stock market had unleashed. Where else could plungers apply their newly acquired trading talents? The materialistic display of the big house also has become a salve to bruised egos of disappointed stock investors. These days, the only thing that comes close to real estate as a national obsession is poker.”

The above data and research was compiled from sources believed to be reliable. However, neither MBMG International Ltd nor its officers can accept any liability for any errors or omissions in the above article nor bear any responsibility for any losses achieved as a result of any actions taken or not taken as a consequence of reading the above article. For more information please contact Graham Macdonald on [email protected]

Snap Shots: Is secondhand a viable option?

by Harry Flashman

Two friends told me the other day that they were thinking of buying cameras, but although they were enthusiasts and wanted good SLR equipment, they did not wish to purchase expensive new cameras. What should they be looking at to buy?

There are plenty of good reasons for this interest in secondhand items. With digital SLR’s coming down in price and going up in quality, I too would not recommend large capital outlay for equipment that will be superceded and eventually worthless.

Just about all SLR’s these days have creative control over aperture and shutter speed, so in my book, the manual control over both these variables is totally necessary. Aperture priority and Shutter priority do make life easier at times, but you do need a fully metered manual mode as well. Note that – fully metered manual mode. Without this feature, you do not have complete control of the final image.

Take a “high key” photo for example. Unless you can over-ride the magic electronic eye, you will not get a high key shot, because you have to flood the film with light to get that ‘blown out’ result.

Likewise, to get those dark and moody images, you have to again over-ride so that you are relatively underexposing the film. Auto anything, or shutter or aperture priority will not do this for you. This is the creative control that you must do.

That creative control also allows you to shoot against the light, and balance your flash power against the ambient light to produce some wonderful images again. It does take some working out, but that is half the fun of creative photography. And if you don’t get it right first time, you can go back and try again, till you know exactly what you have to do. Film is the cheapest item in photography.

So what should you look for when evaluating a second hand camera? Like any second hand equipment, be that cars or cameras, you want to find ones that have not been abused in their lifetime. And with cameras the big problems are being dropped or getting wet. I generally recommend that you look at the swivels where the neck strap attaches to the camera body. If these are well worn, then this is a camera that has seen its fair share of film going through it. It has been used in its life, not carefully left in a cupboard, waiting for you to come along and give it a good home.

Open the back of the camera too and see if there are wear marks across the pressure plate which holds the film flat. Again this will indicate a camera that has been heavily used.

I also recommend that you open all battery compartments and look for corrosion in there. The fumes from degenerating batteries can render any camera an invalid, especially the sensitive electronic circuit boards.

A general look at the camera body will show if there are any knocks or flattened areas to indicate that it has been dropped onto something solid, like the floor. Whilst it may be fine, I would not buy a camera that has been dropped. It is too much of a risk.

Only after all the physical inspections should you consider looking at the functioning of the camera. Try the individual shutter speeds, and you will hear the differences in the sounds as the speed increases. Any ‘catching’ and this is not the camera for you.

You should also look through the lens while altering the aperture and you should see the opening close off as you go from fully open to almost fully closed.

If the camera is still looking hopeful, now is the time to run a roll of film through it. If the seller will not allow this, walk away from the deal. It will only take a few minutes to check and 40 minutes wait at the auto-processors. Set the camera on shutter priority and take shots of the same subject. Then set it on aperture priority and repeat the shots. Each photograph should have the same density, to show that the electronics are working correctly.

Lots of luck, and stick with ‘name’ brands!

Modern Medicine: The Passing Wind test for acute diarrhoea

by Dr. Iain Corness, Consultant

In my daily rounds of the hospital, there are always some expat patients who have ended up being hospitalized for food poisoning, and these patients are generally very amazed at how severe and debilitating this condition can be. Let me also assure you that the long stay expats in Thailand can also get this condition, just as well as the visitor who may not have met some of our more virulent pathogens.

Chatting to one lady who was wondering where and how she got her dose reminded me of one of my own episodes with this condition. I could have called this week’s dissertation, “The oyster and my porcelain friend.” The world is your oyster they say, but for me it was the reverse – the damned oyster took over my world.

What happened was that my wife brought home a bag of fresh oysters from the local market. It was no special champagne celebration, but merely a bargain spotted and capitalized upon. They were lovely, eaten with some garlic and a very small dob of chilli sauce. Without a drop of alcohol passing my lips either (true!), I retired to bed at 11 p.m. to suddenly wake at midnight with my mouth awash, tingling in my cheeks and the awful realization I was going to vomit. With an agility that would have made an Olympic Hop, Step and Jumper proud, I hurtled into the toilet and emptied my stomach in the porcelain bowl.

I returned to bed, to repeat the Olympic performance 20 minutes later, but by now it was bright yellow acrid bile. And again 20 minutes after that, and on and on and on, with more encores than Mick Jagger at a rock and roll concert.

By four in the morning, the Olympic athlete was dragging a battered belly from bed to toilet and return. It was time to forget about pride and my proud boast of being “always well”. I was put in the car and my wife drove me to the Bangkok-Pattaya Hospital.

It did not need a brain surgeon to work out that I had a case of acute food poisoning, and one of those oysters would have been the culprit. Diagnosis agreed upon, the principal treatment is fluid replacement. The intravenous drip was soon in place, and some anti-vomiting medication and anti-spasmodic drugs sent up my IV line to quell the uneasy stomach.

In a daze I was transferred to a room where the angels in white were waiting to tuck me in. There was also the usual bed in the room for relatives of the patient, a concept that is not universal all over the world, but one that I do strongly believe in. There is nothing more comforting than to know one’s partner is there, caring and watching over you. Anything to allay anxiety is good for the speedy recovery of any patient. Other countries should take note.

By the next morning, Mr. Oyster’s toxins had reached my lower bowel, and their departure from my gastro-intestinal tract was aided by rapid peristalsis. This is medical jargon for “the runs” and other euphemisms for diarrhoea (“diarrhea” if you come from the left hand side of the Atlantic).

There are a couple of schools of thought here. The one I adhere to does not include something to immediately stopper you up, like Imodium. The body (in this case the bowel) knows what is best and is rapidly excreting the problem. What is important now is electrolyte replacement therapy (the crystals you dissolve in water) to stop the body becoming unbalanced in its electrolytic make up.

And as I said at the start of this article – you know you’re better when you can pass wind! I’m better!

Learn to Live to Learn: Why not teaching?

with Andrew Watson

I am aware that one of the remits of this column is to identify areas of convergence and divergence between the world of education and the broader issues beyond its sometimes narrow, parched and parochial borders. Last week, a perfect opportunity presented itself,

David Moriarty, Managing Director of Fizz Finance

 to reach outside the world of schools. Into the depths of accountancy I was sucked, by a former Cambridge colleague who eschewed the pleasures of a potentially brilliant teaching career for the universe of numbers. In this sense at least, I suppose he chose one form of immeasurable infinity over another. David Moriarty is a qualified and outstanding teacher of Mathematics and an experienced manager, who walked away from educational administration to become a Chartered Accountant. He is now managing director of “Fizz Finance”, a company he formed to provide an outsourced finance service to small and medium companies. I was dying to ask, so I did.

AW: “Why did you leave education?”

DM: “I didn’t Andrew. I left schools, not education. You can never leave education. My professional experience and abilities allow me always to retain a ‘teacher’ role in some form. This is very important. At Cambridge I was able to learn with and from the best. Advice and enthusiasm about the pleasure of building a rapport with pupils and colleagues, while ensuring the development of academic standards throughout the classrooms, has remained with me and I aim to replicate that sense of reward and job satisfaction outside academia. But in schools, I’m afraid, I felt there were just too many ‘noddies’”.

AW: “What’s a ‘noddy’, David?”

DM: (laughs uproariously) “I suppose by “noddy”, I mean those self-seeking, self-serving petit bureaucrats who seem to populate many kinds of organisations, particularly schools. I can’t be doing with them. They have such an inflated idea of their own value and position. I guess they’re like David Brent in “The Office”. Incalculably ridiculous people.”

AW: (dangerously) “Isn’t that what chartered accountants are meant to be?”

DM: (laughs more seriously) “I suppose so. Maybe. But this is the twenty first century, not the nineteenth. You need a broad skill set to succeed today, wide interests. Politics, music, sport. It’s not going to be enough to be average and I felt that in too much of my school experience there just wasn’t the managerial expertise to know how to achieve excellence.”

AW: “Are we talking George Bernard Shaw?” (“Those who can’t, teach”)

DM: “From my personal experience? Probably, yes. But, the responsibility and opportunity to share knowledge, as you and I have discussed at formal conferences and on more leisurely occasions at the Hawk’s Club, Cambridge, is a lifelong quest, extending beyond the classroom and the pupils. So I would say that now, especially as a chartered accountant, I continue to have that responsibility to educate others and share my knowledge.”

AW: “So how does education work in the world of accountancy?”

DM: “Good question. Well, what I do includes management accounting and financial control, budgeting, reporting, cash flow analysis, scenario analysis, etcetera. What Fizz provides is fundamentally a dynamic, forward looking service designed to provide companies with a stable platform from which to develop and expand. Unfortunately, many small and medium companies underestimate the importance of financial control. Therefore, it is often useful for directors of these companies to consider the following. First, every company attempts to make profit and profit must be converted into cash to ensure it remains solvent. Secondly, every decision made by a company will involve money, therefore a finance professional should be involved in every decision. Thirdly, management must, at all points in time, be aware of the financial position of their company. This requires timely and accurate information which enables informed decisions to be made. These are just a few considerations that often ‘bypass’ senior management in small and medium organisations, like schools. Fizz Finance provides robust budgeting, timely reporting and appropriate reforecasting of a company’s finances.”

AW: “Can you clarify the parallel with teaching?”

DM: “Sure. Fizz Finance provides company directors with an unrivalled service, imparting knowledge and ensuring an on-going education through experienced finance professionals with excellent credentials.”

AW: “This sound like business talk”.

DM: “Well of course it is! That’s the point! Look, you’re entrepreneurial. Tell me whether you, with your business interests, would find the services of Fizz Finance beneficial?”

AW: “I’m sure I would. Are you trying to sell me something?”

DM: (animated) “Of course not! I’m trying to explain how, even in ‘business’, education is still a major part of my life! I will always enjoy being a ‘teacher’ and never take lightly the opportunity to impart knowledge and perhaps increase the understanding of others. Whereas I seek to maximise profit in my own business, I am very aware of the stress caused by financial pressures in small and medium businesses. As such, we at Fizz Finance look to generate a better understanding of finance in senior management and to encourage a new mentality whereby the importance of finance is at the forefront of their minds. This does not mean for instance, that education in a school suffers. In fact quite the reverse. By creating efficient systems, where anomalies are not allowed to exist, far more cash becomes available for where it’s needed – the students! I’m afraid I’ve witnessed far too much siphoning off of cash for personal use by people in positions of responsibility not to have become a realist. After all, companies live and die by cash and any opportunity I have to see companies succeed and staff develop is as much reward as the fee income the work generates.”

AW: “Do you think we share the same philosophy?”

DM: “I think we remain very similar despite different careers on opposite sides of the world. We both encourage others to open their minds, consider their actions, to make informed decisions and to be accountable. The greatest reward is to see success, knowing that we have played a part in it but more importantly realising the increasing potential within our pupils and clients.”

[email protected]
Next week: “Good as Gold”

Heart to Heart with Hillary

Dear Hillary,
Every year you get inquiries about Thai girls sitting sidesaddle on motorcycle pillions without falling off. Your annual replies seem well-considered enough, but you never get to the bottom of the matter. I noticed the first time I set foot on a Thai street back in 1970 that Thai girl bottoms have a powerful attraction. It is quite strong enough to keep male eyes locked on them, and them locked on their pillion seats. As I have aged along with some of these girls, I have also noticed their attractiveness scarcely diminishes.
You are quite right that a girl can lose her lock if the motorcycle loses it, too. Despite the fact that my #1 fan Lek has a most attractive bottom, she does not trust the contraptions and sits a-straddle. But then she always does her own thing without much regard for convention (as do I, I wear sarongs and sit a-straddle - male bottoms have much less attraction.)
Paw Yigh Lee
Meuang Yote Nakorn

Dear Paw Yigh Lee,
So I take it that you are a “bottom” man, and one for many years it seems. Hillary is happy for you, and is quite willing to accept the fact that you prefer to wrap yours in a sarong before venturing outside on a motorcycle. Just don’t ask me to adjudicate. I agree that male bottoms tend to go flat with the years, or perhaps it is the attraction that goes flat! Thank you for letting us know that Thai ladies bottoms endure forever.
Dear Hillary,
Not that I’m complaining all that much, but Thai girls certainly seem to enjoy showing off their pins in mini-skirts. The leggy look with super-high heels and super short skirts certainly raises the interest of the lads in the office, and probably raises some other things as well. My problem is our office girl who’s skirts seem to be going higher every day, so much so that we have to pretend we’re playing Bingo “Eyes down and looking!” Since she reports to me, should I say anything to her, or will it be too embarrassing? I would really like to know, and to do the right thing here.

Dear Jack,
Too embarrassing for whom, my Petal? Sounds to me that the embarrassment is yours, rather than hers. If her dress standard does not fit in with the office protocol, then you must say something, but do it gently, and privately, not in front of the entire office. The other way around the dress code problem is to supply a company uniform, which has trousers, rather than skirts, and your problem (if it really was a problem) is fixed.
Dear Hillary,
I know you have written about lending money many times, but let me tell you the other side of the coin. You say we should never lend money to the girls in the bar, but after a great night, it is difficult to say no. OK, so we probably know deep down inside that it is not going to be repaid, but sometimes you just do it to be generous. Is there anything really wrong with this?
Fool and his money

Dear Fool and his money,
After reading your letter a couple of times, I think you are making excuses for yourself by saying that you just feel like being generous. You have just spent a night in a commercial transaction, and I think you are trying hard to make it seem less ‘pay for pleasure’ and more of a western relationship with the girl, which does not involve payment for services rendered. Commerce is commerce, no matter how you want to dress it up, my Petal. Lending money to a bargirl is giving it away. The chances of the ‘loan’ being repaid are very small. Where are they going to get the money to repay the loan to you? By taking the money as a ‘loan’ from someone else, my Petal. What you do with your money is up to you, but don’t try and make out that you are a knight in shining armour. The knight is paying for his night, no more, no less.
Dear Hillary,
I’m bored. Please don’t tell me to go and do charity work, as I’m not the kind of person who enjoys feeding little babies and the like. I was just so pleased when my children learned to feed themselves, why would I want to go back 20 years. This is supposed to be such a wonderful country, but there’s really nothing for expat women to do. There’s plenty for the local women, but since I can’t speak Thai, I cannot join in there either. So what do I do?
Bored Babs

Dear Bored Babs,
Just what did you do in your own country? Or were you bored there as well, Petal? As an adult, with grown up children, you must surely know what your interests are by now. Reading? Movies? Writing (complaining) letters? Cooking? Entertaining? Exploring? If you feel that not being able to speak Thai is the main handicap, then go and take lessons every day. Babs, there’s nothing that Hillary can tell you to do. You have to look at your own situation, work out your own likes and dislikes and concentrate on something from there. Stop feeling so sorry for yourself and do something positive. Today!

Psychological Perspectives:  Natural disasters require explanation

by Michael Catalanello, Ph.D.

Have you noticed? Have you have heard the latest buzz? Natural disasters like tsunamis, hurricanes, tornados, volcanoes, droughts, wildfires, floods, landslides, and mudslides, seem to be on the increase. Is it a sign of the apocalypse, or a judgment sent by God?

Just weeks after Hurricanes Katrina and Rita ripped through U.S. Gulf Coast states leaving much of New Orleans submerged and uninhabitable, a massive earthquake shattered lives in Pakistan, India, and Kashmir. The death toll stands at more than 40,000 and climbing.

It was only 8 months ago that a magnitude 9 earthquake in the Indian Ocean off of the western coast of Sumatra set off several tsunamis, devastating parts of southern Thailand and other countries in the region. Over 276,000 perished.

Other natural disasters have occurred with surprising frequency recently, in countries around the world. September saw Typhoon Talim strike Taiwan and China. At least 53 were reported dead. A magnitude 7 earthquake also hit northern Peru last month, killing at least four.

This month Typhoon Damrey rolled through China, the Philippines, and Vietnam, killing at least 31. Landslides in Guatemala claimed at least 613 lives last week. Hurricane Stan struck in Mexico and South America, killing at least 65 people. El Salvador’s Ilamatepec volcano also erupted this month.

What is going on? Why is our planet in such violent turmoil?

Some view these events collectively as an omen of religious or spiritual significance, a sign of warning that the end of time is near. Others have suggested that these disasters are sent by God to punish sinfulness, and avenge human wrongdoing. Of Hurricane Katrina, Michael Marcavage, the director of Repent America, reportedly said that “this act of God destroyed a wicked city.” The Old Testament of the Bible provides a number of such stories of catastrophic events brought about by God to punish or teach a stubborn or errant people.

My own bias leads me to look for naturalistic explanations of natural disasters provided by scientists. We understand much about the forces that underlie such events. Occasionally, as with Hurricane Katrina, scientists are able to predict in advance, with a fair degree of accuracy, the time and place that they will strike. Likewise, earthquake fault lines and past seismic events provide clues to the probable locations of future earthquakes and volcanic eruptions. Unfortunately, the timing of earthquakes proves much more difficult to predict at present.

It does seem as if we have had more than our share of natural disasters recently, but are such events really increasing in frequency? Although U.S. Geological Survey (USGS) ranked 2004 as the deadliest year for earthquakes in recent history, it was not the most fatal in recorded history. Records show that on January 23, 1556, a powerful earthquake killed an estimated 830,000 people in Shansi, China. With humans populating virtually every inhabitable nook and cranny on the planet, and with increasing population densities, it stands to reason that fatalities from natural disasters would increase in modern times.

Clearly, we live on an active planet. The features of the Earth provide clear evidence of a violent past. Scientists describe energy-driven processes from within the Earth’s hot interior. Other powerful forces that have affected conditions on Earth include the Sun, gravity, and collisions with comets and asteroids. These processes have been around since long before humans occupied the planet.

Perhaps it is our nature to require causes and explanations for natural events, particularly disasters that have such far-reaching consequences on human lives. In times past, it seems understandable that pre-scientific societies would imagine mysterious forces or supernatural causes to be responsible for natural disasters. As we develop greater insight into the forces of nature, however, such beliefs may seem unnecessary and out of place. Perhaps the persistence of supernatural explanations demonstrates the need for scientists and educators to better disseminate our understanding of the natural forces underlying this violent and often unpredictable world in which we live.

Dr. Catalanello is a licensed psychologist in his home State of Louisiana, USA, and a member of the Faculty of Liberal Arts at Asian University, Chonburi. You may address questions and comments to him at [email protected], or post on his weblog at

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