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Money matters: Early winter is here (Part
4)
Graham Macdonald
MBMG International Ltd.
Last week we looked at America’s inability to fund its
daily budget deficit in the future. Now let’s look more closely at
American debt. If you don’t have enough money to pay your bills and you
get around that by borrowing, then your creditors cutting you off is bad
enough news. That’s not the only bad news, however. Total US Debt
exceeds 340% of GDP. The US is ever more dependant on more debt in order
to sustain economic growth. The total debt owed by US Federal and State
Government and by US consumers now exceeds $37 trillion. That’s $150,000
of debt for every man, woman and child in the USA.
In addition to that, future fiscal liabilities exceed $50 trillion
according to Peter Peterson, Secretary of Commerce during the Nixon
administration and to Prof. Laurence Kotlikof, senior economist at the
President’s Council of Economic Advisors (CEA) during the first Reagan
administration in their respective books “Running on Empty” and “The
coming Generational Storm”.
This is starting to choke the economy, which supposedly expanded at an
annual rate of 3.5 percent during the first quarter. But (and it’s a big
BUT) US federal government borrowings expanded by 13.8 percent, US
household debt by 9.3 percent, US corporate debt by 7.5 percent, and US
state and local debt by 16.7 percent. All this shows that the US economy
- at all levels - borrows at a rate which is now expanding much faster
than the US economy.
This means that US national debt is more like an overdraft of US$150,000
AND an additional long term loan of around US$200,000 for every man,
woman and child (i.e. a debt of around $1.4 million per typical
household!). However, this is based on official commitments which, at
times, can be understated. For instance, the New York Times recently ran
a piece estimating the cost of the US military campaigns in Iraq and
Afghanistan at $1.372 trillion as opposed to the official estimates of
$258 million - although we actually think that the final figures will
fall somewhere between the two, it may not be unreasonable to double
that overdraft amount. These are huge numbers but wouldn’t necessarily
be a problem. If the US were generating more than that each year that
would reduce the debt over time. However, the overdraft equates to
almost 3 1/2 years of profits generated by everyone and everything in
the States and the long term commitments. Even without taking into
account interest it would take over 9 years to repay this debt assuming
that expenditure every year was zero and that all monies were used to
repay the debt.
In reality the process of adjustment will be drawn out and painful as
the US is forced to cut expenditure far enough below incomings to allow
itself to cover the interest burden and to repay some capital. Simply to
repay the interest and balance income and expenditure requires a
reduction of almost $1 trillion per year in American spending - in other
words an average US household would have to spend US$16,000 less than it
did last year just to stop the situation getting any worse.
This alone would be sufficient to cause the greatest recession that the
global economy has experienced since the 1930s. In 1929 equity prices
fell by 55% in one day alone. The only difference this time may be that
the maximum daily fall is restricted to 30% and in all probability is
unlikely to exceed 20% because of the restrictions now placed on
trading.
Not only is further access to additional credit a problem, but merely
servicing existing debt has now reached the stage where it is impossible
without:
1) An austerity regime of reducing consumption leading to a necessary
and probably protected recession. The US and the West actually need to
have a recession to get out of this mess!
2) A major currency devaluation (the US$ would be affected the most
severely) although Western currencies in general look vulnerable
compared to say the Yen.
Former ECB head Wim Duisenberg was quoted by Spanish Newspaper El Pais
as saying, “A dollar devaluation seems inevitable due to the tremendous
US Current Account deficit.” Similar views have been expressed by the
world’s 2 richest men, Bill Gates and Warren Buffett, Duisenberg’s
successor as European Central Bank president, Jean-Claude Trichet, and
German Chancellor Gerhard Schroeder.
Another factor will also cause downward pressure on the US$ and that in
turn will have an adverse effect on US and global equities as we shall
see next week.
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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]
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Snap Shots: It’s official: Film is dead! Digital takes over the throne
by Harry Flashman
 If you ever needed confirmation that film
was on the way out and digital is the way to go, not in the future, but
right now, the following item from the Associated Press says it all.
Nikon is to stop making most film cameras! That’s right, the cornerstone
of photojournalists the world over is to stop making their range of
equipment.
Peter Svensson, the AP Technology Writer last week wrote that the Nikon
Corp., which helped popularize the 35 mm camera five decades ago, will
stop making most of its film cameras to concentrate on digital models.
The Japanese company said it wanted to focus on “business categories
that continue to demonstrate the strongest growth” as film cameras sales
keep shrinking.
Nikon will discontinue seven film-camera models, leaving in production
only the current top-line model, the F6, and a low-end manual-focus
model, the FM10.
It will also stop making most of its manual-focus lenses.
Most of the company’s autofocus lenses work with manual-focus bodies,
however. Also, German optical company Carl Zeiss AG is widely reported
to be planning a line of manual-focus lenses for Nikon bodies.
Nikon did not give firm dates for the discontinuation of its products,
but said Wednesday that sales will cease as supplies are depleted.
Major competitor Canon Inc. still makes five models of single-lens
reflex film cameras. At the lower end of the market, Eastman Kodak Co.
announced in 2004 that it would stop selling film cameras in the United
States and Europe.
Nikon ranks fifth in digital-camera shipments in the United States,
behind Kodak, Canon, Sony Corp. and Fuji Photo Film Co.
Nikon was a major force in establishing the dominance of the 35mm
single-lens reflex camera, the workhorse of professionals and
sophisticated amateurs until the arrival of digital cameras.
Its breakthrough model was the F, released in 1959. It set a standard
for ruggedness and reliability and became a must-have for
photojournalists.
Unusually, Nikon has maintained the same lens mount over the years,
meaning most lenses from 1959 will fit today’s digital models and vice
versa, albeit with functional restrictions.
However, debate still rages as to whether digital is better than film.
For example, Ken Rockwell, an American pro photographer seems to have
put his money on every horse in the race, saying in his website, “Since
the only legitimate professional application of 35mm film has been for
news, action and sports, 35mm film for professional use is becoming
obsolete as more and more people and organizations move to the Nikon D1
series digital cameras. For instance, the big newspaper here in San
Diego got rid of their darkrooms in 1999. Even printing presses have
forgone plates and now many take just digital inputs. Film is just a
pain to have to use for publication. The only high-end pro use of 35mm
today is for sports on posters and magazines, since larger format
cameras are not fast enough.”
He then goes on to say, “Film will remain king for landscapes and
anything that holds still and requires big prints. I even prefer its
color rendition for Internet use. It’s also the king for anything you
intend to want to print years from now. In 5 years anything shot on
today’s digital cameras will look awful compared to what was shot on
film today, by the standards of the future. Remember, digital already
has replaced 35mm film, but the economies of the market and scale will
not have it approach larger film format quality any decade soon, since
the demand is not there to justify development at any price you’ll want
to afford.”
In a nutshell, if you shoot using medium or large format transparency
film, keep doing it (for now). If you shoot using 35 mm print film,
forget it! Digital is much better, from about 6 megapixels and upwards.
Remember too, that the ultimate factor in print sharpness comes down to
the lens you use. A good quality prime lens from the camera body
manufacturer will give you good quality final prints, be that from film
or directly digital.
Finally, Nikon would not be discontinuing film cameras if digital were
inferior. And will I sell my Nikon FM2N? No, I shall wait for someone to
invent a digital back for it and in the meantime I will buy a Nikon D70.
Modern Medicine: Hear today and gone tomorrow
by Dr. Iain Corness, Consultant
I began to think about ears and hearing during Children’s
Day. In one of the large shopping centers they had dedicated the stage area
for children’s entertainment. The noise from the battery of boom boxes was
so loud that foreigners were walking through the shopping mall with their
fingers in their ears. Without the benefit of a sound pressure level machine
to get an accurate reading, I would estimate that the children were being
exposed to around 120-125 decibels (dB). The significance of this, is that
adult workers should not be exposed to more than 90 dB for an eight hour day
(legislated in many countries). Children should be exposed to much less.
I have always wondered why musical performances/entertainment in this
country need the volume control wound right up. Now I know. The audience has
been rendered deaf after a few Children’s Day experiences! This also goes a
long way towards explaining why the local populace does not hear phones
ringing, and why the girl in the next office has her mobile phone ring tone
set on maximum. I know she has an incoming call before she does!
However, the reason for deafness is not all the result of Children’s Day.
There are other reasons, including (dare I say it) getting older! The
effects of aging start around 20 years of age, and our hearing starts a
gradual decline. Higher frequencies are usually the first to go. This
age-related hearing loss is normal and is similar to the age-related effects
with vision.
The two main types of deafness are called Conductive deafness and Nerve
deafness. Deafness at birth is known as congenital deafness, while deafness
that occurs after birth is called adventitious deafness, and the most common
cause of adventitious deafness is noise, which accounts for over one quarter
of people affected by hearing loss (which gets us back to Children’s Day).
A brief look at the anatomy of the ear will help understanding the causes of
deafness. The ear is made up of three different parts, including the outer
ear which is the part you can see. Its shape helps to collect sound waves. A
tube, called the external ear canal, leads inward to the eardrum.
The middle ear is separated from the outer ear by the eardrum. The middle
ear contains three tiny bones called the malleus (hammer bone), the incus
(anvil bone) and the stapes (stirrup bone). These bones amplify the movement
of the eardrum produced by sound waves making the drum move in and out. The
Eustachian tube connects the middle ear to the back of the throat and helps
to equalize air pressure.
The inner ear is where the sound waves are picked up by a tiny spiral-shaped
organ called the cochlear. Hairs on the cochlear sense the vibrations and
pass the message as electrical impulses to the brain via the cochlear nerve.
Now, Conductive deafness is caused by the failure of the three tiny bones
inside the middle ear to pass along sound waves to the inner ear. Another
common cause of conductive deafness is the failure of the eardrum to vibrate
in response to sound waves. A build-up of fluid in the ear canal, for
example, can dampen the movement of the eardrum. In many cases, treatment is
available for conductive deafness and normal hearing will return.
Nerve deafness is caused by disease, trauma or some other disruptive event
targeting the cochlear nerve. The rest of the ear, including the tiny bones
and eardrum may be working, but the electrical impulses cannot reach the
brain. Most cases of nerve deafness do not respond to treatment.
Remember that Deafness can range from mild to profound and has
multifactorial causes including injury, disease and genetic defects, and
excess noise accounts for over one quarter of people affected by hearing
loss.
 Heart to Heart with Hillary
Dear Hillary
Many times I read in your newspaper or other papers as well that they named
Pattaya as “Fun City” and then I wont ask you “Fun City” for whom? Do you
think an eight year old girl or a ten year old boy who must do sex with a
old men (Farang or Thai or whatsoever) do you think it is fun for them? No,
please dont use the word “Fun City” but maybe you can use: “Hollywood City”
because in Hollywood everthing (sic) can happen - bad or good. As far as I
know Hollywood in America is an area in Los Angeles in California but the
real Hollywood City must be Pattaya. Sorry thats my opinion.
David
Dear David,
You are pointing the accusatory finger at the wrong person! I have not used
that phrase for over four years (I just checked, Petal), but I will grant
you that many others have used it. While I agree totally with you that
pedophilia is abhorrent, to try and tar all of Pattaya with that brush is
equally incorrect. Pedophilia is a world disgrace and is found all over the
world including Europe, the Americas, Asia, and Africa. Just because it can
be found in Paris would not be sufficient reason to stop calling Paris the
City of Romance. To denigrate Hollywood the same way is also being
economical with logic. Sure, as you say there is good and bad in Hollywood,
just as there is good and bad in Amsterdam, Berlin, New York, London,
Calcutta, Sydney, Bangkok, Tokyo and even Pattaya. However, I am glad you
felt you could write to me to express your opinion. Please also think about
how eight and ten year olds can end up being in the sex trade. They do not
choose it, but their parents or guardians have allowed it to happen. All
societies must shoulder blame and responsibility, not just Pattaya City.
Dear Hillary,
Dear Grateful Pete,
What a treasure you are! Not just the card, but some Cadbury’s Roses
chocolates and a bottle of Orlando Trilogy champers (alright then, “methode
champenoise” for all the French wine pedants), and the koala bear key ring
as well (and I know it’s not a koala ‘bear’ but a marsupial, so the Aussie
pedants can put their poison pens away as well). I am so sorry I was away
when you called into the office, but rest assured, the parcels were kept for
me by the staff (they are under pain of death by blunt knitting needle if
they ever open my infrequent goodies) and I am enjoying one of the
chocolates as I sit here at the keyboard. It is people like you that keep my
spirits alive too. I get so many letters from people who feel that life has
done them down in some way, so it is so refreshing to see someone who
appreciates a little fun in life, and remembers a promise (as opposed to
that Mistersingha wretch). Pete, I hope you have a great year down under,
and maybe next year I’ll buy you a cup of coffee (if the editor comes good
with that raise he promised me)!
Dear Hillary,
I am from the UK in a long term relationship with my Thai girlfriend, and it
has been good up till recently. One of her cousins from the Isan village
dropped in, and is still here. That was seven weeks ago. We only have a two
bed condo, so it was a squeeze. Now there’s another one lobbed in, and the
GF says it’s OK because they all sleep together in one room on the one bed
anyway. This is what happens in the village, but this isn’t the village.
This is my condo! I am not happy about this. Other than chucking their stuff
off the balcony, what do you suggest?
Overcrowded
Dear Overcrowded,
You don’t say just how long is this relationship, Petal. Some of the lads
seem to think that anything over three weeks is ‘long term’. What you have
to remember is that this is Thailand, and your girlfriend obviously comes
from Isaan (I like the long ‘a’ pronunciation). This is what happens in the
villages. Everyone is related some way or other, and they are all known as
‘cousins’. You have entered into a Thai style relationship, living in
Thailand. You may consider it ‘your’ condo, but it is not the last outpost
of the British Empire, old chap. It is a condo that you paid for, but it is
still in Thailand. You can try throwing the belongings off the balcony, but
that will not make for a happy home (or condo). You should discuss this with
your long term lady, as sometimes the ‘good’ parts of living in Thailand
have to be offset by some different customs, and that is where you are. Best
of luck.
Psychological Perspectives: The psychology of worry
by Michael Catalanello,
Ph.D.
“There is only one way to happiness and
that is to cease worrying about things which are beyond the power of our
will.”
Epictetus
When it comes to worrying, my wife and I have a mutual understanding:
She is to do all the worrying, and I am to let her. If you were to ask
her why she worries so much, she would say it’s because she has to do
the worrying for two people.
Worry is a common human response to challenge and uncertainty. The word
“worry” is not a technical or well-defined psychological term, but it is
probably related to the emotional state known as anxiety. Not all worry
is considered undesirable and to be avoided, however. A distinction can
be made between a healthy concern, leading to preparation for a
challenging event, and less healthy nervousness or anxiety which serves
no useful function. The distinction rests upon whether or not the
emotion is helpful in achieving some desired outcome.
It is well established that nervousness or anxiety can, under certain
circumstances, enhance a performance of a task. Research in sports
psychology, for example, suggests that there is an optimal level of
physiological arousal or anxiety, which leads to improvement in players’
performances. Too much or too little arousal can interfere with
performance. Skilled coaches know how to manipulate athletes’ levels of
arousal in such a way as to optimize their performance.
Likewise, many performers, such as actors and musicians admit to
experiencing nervousness or anxiety, sometimes called “stage fright”
before a public performance. Effective performers are able to use this
experience to their advantage, creating an edge to their performance.
Others may feel overwhelmed by nervousness and anxiety, so much so, that
they avoid performing. Many people, for example, experience a
debilitating fear of public speaking, and refuse to speak before a
group.
Worry can sometimes present as a passive mental activity which is
unpleasant and unproductive. This type of worry is characterized by the
phrase, “spinning your wheels.” Worrying is sometimes performed as
habit, a ritual to ward off undesirable events. Some people experience
repetitive, unwanted, and intrusive thoughts called obsessions. These
are often disturbing, and can interfere with normal functioning.
According to cognitive behavior theory advanced by psychologists like
Albert Ellis, emotions like anxiety are intimately associated with our
thoughts or self-statements, the conversation which goes on inside our
heads. Rational thoughts are associated with healthy, adaptive emotions
and effective behavior. Irrational thoughts are associated with
disturbing, emotions and ineffective behavior.
Faced with the challenge of having to give a public speech, for example,
I can disturb myself by thinking, “I must do well. I must not make a
mistake or say something stupid. If I do, the audience will not approve
of me. If the audience does not approve of me, it proves I am stupid and
worthless.”
Thinking in this way would likely have the effect of increasing my
anxiety level to a point at which I am unable to perform at my best,
consequently increasing the probability of a screw-up during my speech.
If, on the other hand, I think more rationally, my self-talk might go
something like this: “I hope to do well; however, being human, it is not
out of the question that I could make a mistake, even say something
stupid. It is even possible the audience will not approve of me. But if
I don’t perform well, as I prefer, it’s still all right. Likewise, I
would prefer to receive the audience’s approval, but if I don’t get it,
that’s OK. My worth is not affected. Through the experience, I can,
nevertheless, improve my speaking skills and perhaps perform better in
the future.”
Thinking in this way would likely have a calming effect, reducing my
anxiety, and in the process, decreasing my chance of making a serious
blunder. In the likely event I do make a mistake, or perform below my
standard, I can recover quickly and generally offer a better performance
than I would in a heightened state of anxiety.
The good news, I suppose, is that we have a great deal of control over
our thoughts. Even though much of our thinking is done rather
automatically, with practice we can learn to recognize irrational,
unhealthy thinking that is associated with disturbed emotions. By
disputing and changing that type of thinking, we can change disturbed,
unhelpful emotions to more appropriate ones that are more compatible
with effective behavior.
But don’t tell this to my wife. We have this mutual understanding…
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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
http://asianupsych.blogspot.com
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A Female Perspective: Going Shopping
with Sharona Watson
If you thought last week’s column on
driving was controversial, then maybe it’s nothing compared to this week’s.
When it comes down to shopping, it is difficult to think of a subject which
sums up the differences between men and women more clearly.
In my experience, when you mention the word “shopping” to a man, the words
have a remarkable effect on his mood and face. It is as if he has, to
paraphrase J.K.Rowling, “swallowed a lemon”. The day could have started
really nicely for him. He might have got up really early, made coffee for
his wife, partner or girlfriend, shown gallantry and smiled in a lovely,
generous way. But mention “shopping” and his world begins to fall apart. He
panics, starts sweating uncontrollably and he reacts instinctively with
words like, “But, dear, we don’t need anything,” which he mutters as if
trying to think of a better excuse about why any shopping trip is
unnecessary. In short, he is looking for a way to get out of it.
 Men and Women’s Shopping Habits: Different Approaches!
In fact, sometimes he doesn’t even have to be involved with the trip. I say,
“I am going to town” and he says, “what for?” with a look on his face as if
he thinks that I’m going on some massive shopping spree that will result in
us being left without any money in our bank account at all. And I’m only
going to get a pint of milk! It is as if he doesn’t trust me with money and
I must say, I don’t like the feeling that gives me. Especially as when he
spends money, it seems to be without any care and concern at all. It’s like
there’s one rule for him and one for me. So obviously, I’m not going to
stand for that.
I tell you something else, this fear of shopping isn’t just because of
money. When we lived in Jerusalem, because I am obviously fluent in the
language, I was in charge of the money situation. So naturally, our position
was always healthy and well managed. I knew exactly how much money we had,
how much money we were going to have and what we could afford to spend,
when, where and how. Did it stop Andy panicking at the sound of the words,
“Let’s go shopping?” Not at all! You know what it is? It’s to do with power,
not being in control. I’m sure of it. And I don’t even think he can stop it.
It’s like a genetic thing or a male hormone thing, like driving the car.
“I’m the man, so I should be in charge of the money!”
So to the trip. As we approach the place where shopping happens, I get
excited, the children get excited and Andy gets tense. I mean, I love
shopping, really, even window shopping. I can spend hours looking at the
great range of all kinds of things that are on sale. But Andy has what he
calls, “low tolerance” for shopping malls and after about five minutes
complains of being “claustrophobic” and wants to get out. Actually, it’s a
real pain in the neck and it’s when arguments start. We should know better,
really. As they say, it’s like men are from Mars, women are from Venus.
Shopping to men is like a problem and they just want to solve it. Women just
want to talk about it. Men, like the hunters they are, have just got to
bring home a trophy.
One of my friends tells me that when she and her husband go shopping, for
the first twenty minutes or so, they look at things together. Then from
nowhere, a newspaper appears and for the rest of the time, he follows her
around, whilst reading it. Once it went on like that for four hours, until
she turned to her husband and said, “I could stay here all day”. Looking up
with a look of despair, he replied, “You have been here all day!”
You know, there are advantages. In the end, I wear Andy down until he says
things like, “Look, just get whatever you want”. At this point I could say,
“Well, thanks very much, my Lord, but I was going to get anything I wanted
anyway.” But I don’t.
Then there’s the question of initiative. When I give Andy a list to go
shopping (I used to make a deal with him that if he wants to play football,
he had to go supermarket shopping on the way home) it’s just a ‘minimum’
list. I mean, there are obviously things we need that won’t be on the list.
So he comes back very pleased with himself because he has got everything on
the list. But he forgets to use his brain and get the things which aren’t on
the list. Now, a woman can understand that sentence. I doubt whether many
men can.
The are only three places I have seen Andy happy about shopping. Once was in
New York City one Christmas time, where the atmosphere was so brilliant that
you couldn’t help but get caught up in it all. The second was in a shop
called “Mustapha” in the Indian quarter of Singapore, which is an incredible
experience for even the most hardened hater of shopping, endless floors of
everything you could imagine, like Aladdin’s cave. Third, Andy is at home in
any street market in the world. Haggling for him is like a hobby. In fact,
just like in “life of Brian” he hardly ever wants the object, he just wants
the “thrill of the chase” as he calls it. Of course, I’m better at getting
the deal, he just loves the chat. He once spent a week haggling over ten
bags in the Sinai desert. Every morning and evening he’d pass the same
little Bedouin store and pop in. In the end we were having dinner with the
shopkeeper and we’re still in touch with him.
Funnily enough, Andy’s in New York City now. I hope he finds time to go
shopping there – and bring something back for us!
Next week: What is work?
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