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Money matters: A House of Cards about to fall? Part 2
Graham Macdonald
MBMG International Ltd.
How stretched is the American Consumer? In one word - VERY!
This highlights a problem that was also the subject of another graph from Bank
Credit Analyst. Spending on essential items is rising rapidly in recent years,
as energy prices and housing costs are rising. This means there is less money
for discretionary items.
So, when it is all combined - slower wage growth, less discretionary money
available and a slowing housing market - it all points to the US not performing
as it has done. Also, the savings rate is already so low that there is not much
room for it to drop. It all sounds like there is the serious potential for a
consumer spending slowdown that could lead to an economic slowdown later this
year or early next year - at the latest.
This is further supported by the most recent results released by the U.S. Census
Bureau and the U.S. Bureau of Economic Analysis, at the U.S. Department of
Commerce, Washington, D.C.
Total July exports of $120 billion and imports of $188 billion resulted in a
goods and services deficit of $68 billion, $3.2 billion (around 5%) more than
the $64.8 billion in June, revised - another all time record trade deficit! (The
previous record was $66.6 billion set last October). The scope of the deficit
was even larger than expected - the Wall Street consensus had been for the
deficit to widen to $65.4 billion. As if this wasn’t bad enough, July exports
fell $1.3 billion whereas imports were $1.9 billion higher than the previous
month. The highest decreases in US exports were seen in capital goods ($1.3
billion) and in industrial supplies/materials ($0.6 billion). The biggest
increase in imports of goods were seen in industrial supplies/materials ($2.2
billion), capital goods ($0.8 billion), foods, feeds, and beverages ($0.2
billion), and consumer goods ($0.2 billion). Similarly the highest year on year
increases in imports were seen in industrial supplies/materials ($11.5 billion),
capital goods ($3.7 billion), consumer goods ($3.5 billion), automotive
vehicles/parts/engines ($1.2 billion); foods, feeds, and beverages ($0.6
billion); and other goods ($0.2 billion).
It’s interesting to look at the countries where the US still enjoys trade
surpluses (shown in billions of dollars) - Hong Kong $0.7; Australia $0.7;
Singapore $0.1; Egypt $0.1; Argentina $0.1.
The countries where Uncle Sam trades in the red include: China $19.6; Europe
$15.6; European Union $13.4; OPEC $10.9; Japan $7.6; Canada $5.9; Mexico $5.1;
Taiwan $1.4; Korea $1.3; Brazil $0.9.
Amazingly, there was little reaction by the markets to the record deficit even
though the worsening deficit will clearly cause a major slowdown in economic
growth in the third quarter - Mike Moran, chief U.S. economist at Daiwa
Securities America, has calculated that if the results for August and September
were to match July’s deficit, net exports would subtract 0.7 percentage points
from Q3 GDP growth! The reasoning is that the deficit was made worse by the
record oil price causing record high oil imports and that this now appears to be
easing (bizarre as today’s oversold price is higher than the July record high
average price paid and August future prices contangoed as the price per barrel
shot above $80!
For the first seven months of the year, the trade gap is $453 billion. This is a
faster pace than the same period last year, meaning that the record $716.7
billion annual deficit set last year could be broken. Exports fell for the first
time since February, while imports reached record levels. Not the rosiest
pictures for an economy desperately trying to ward off recession.
Both the big picture and microcosm point to the same story - the U.S. trade
deficit with China increased to $19.6 billion in July from $17.6 billion in the
same month last year, while at the same time the trade gap with China rose to
$121.3 billion in the first seven months of the year from $107.7 billion in the
same period last year, with U.S. exports to China setting a new record in July,
allowing China to report recently that its August trade surplus rose to a record
$18.8 billion, the fourth straight monthly record. The monthly trade deficits
with the European Union and the OPEC nations were also a new record!
As if all of the above is not enough proof to be worried, the International
Monetary Fund also waded in and has warned that a global slowdown is looking
more likely due to a slower US housing market and high oil prices. In a report
released in early September it states that, “There are risks to the global
economic outlook that have tilted to the downside.” It also said that the US
Dollar could well fall unless policies on savings levels and investment balances
were altered.
In its latest report, the IMF underlined what it saw as the biggest threats to
continuing global growth. It said that rising oil prices coupled with recent
figures showing that the sale of US new homes fell yet again have sparked fears
of a wider economic downturn.
“The recent market turbulence is a timely reminder for authorities to strengthen
macro-economic policies and persevere with needed structural reforms,” said the
IMF’s Global Financial Stability report. It went on to say, “The potential for a
disorderly unwinding of the global imbalance remains a concern.”
At the heart of many of the fears are trading imbalances, and the IMF’s report
came the day after China said it had posted a record of $18.8bn (£10bn) trade
surplus with the rest of the world in August. Just compare this with the US. One
explanation for this huge gap is the weakness of China’s currency, which makes
Chinese goods comparatively cheap, thereby boosting exports. In its report, the
IMF urged Asian nations to aim for greater exchange rate flexibility, and said
Europe and Japan should improve structural reform.
And yet some people out there are still more concerned about inflation! Anyway,
back in the real world…
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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: Photogenicity –
the magic ingredient
by Harry Flashman
One of the amazing features of photography is the magic
ingredient known as photogenicity. The dictionary even defines
it as “having an appearance that looks pleasing in photographs.”
And if you take that one step further, it means that the
appearance may not be as pleasing in real life. Hang onto that
definition!
Being able to get photographs that are good enough, and
appealing enough, to make the cover of Vogue is every
photographer’s dream, but it is not that easy. As they say in
the classics, you have to kiss a lot of toads before you find
your princess!
This really is a toad!
Now we live in a country which is renowned for having some of
the most beautiful women in the world (and beautiful lady-boys,
as discovered by more than one errant, alcohol soaked swain at
three in the morning). If that is the case, a trip down Beach
Road should give you enough images to get you straight into the
pages of Vogue, Cleo, Cosmo etc tomorrow. Oh, if it were only
that easy!
Some years ago, I was given the opportunity of a lifetime – to
shoot a glamour calendar for a client. Girls, girls and more
girls, and 12 months to shoot them in. What a dream assignment.
Wrong! What a headache!
You see, photogenicity is not something that every model has,
but a “comp card” is something every model does have. Now the
“comp” which is short for “composite card” is a selection of
photographs of the girl in question. You, the photographer, go
down to the model agency and they spread out this playing card
pack full of comp cards for you to peruse. After several minutes
you select three beauties that you would like to see further.
These are the lucky ones picked for the “cattle call”.
I should also point out that this selection process should not
be done by just the photographer alone. Take an assistant! Your
idea of what constitutes beauty and what the world at large (and
more importantly, the client) thinks is beauty may be poles
apart.
Now when the models arrive at the studio you get the first
inkling that all is not going to be that simple. This girl in
raggy jeans and a seat shirt does not look like any of the
chosen ones! But don’t forget, what you saw was the comp – a
carefully selected group of photographs showing nothing but the
best and most appealing pictures. What you do not know is that
it might have taken 14 rolls of film to get that girl without
her eyes shut, and since then she’s put on 5 kg and an assorted
face mask of pimples!
However, it is not all downhill from here. You go ahead with the
test shoot anyway. You must allow the model time to apply their
make-up, and if you thought your wife takes an age, you haven’t
experienced a model doing the business! I would shoot one roll
of film and then look at the proofs. If one shot in six looked
OK then you are on a winner. That’s right – only one in every
six and you’ve done well.
The other amazing factor I found out, after photographing
countless ladies, is that the ugly toad can sometimes really
turn into a princess on film, and the most gorgeous princess can
really turn into a toad! That is this magic ingredient called
photogenicity, which is not observed by the naked eye. It is
something that just sparkles through with those girls that have
“IT” – but how you tell is difficult. The only way I know is by
the test shoot.
So if you have just discovered the most beautiful lady in town
and you take her picture, do not be disappointed if the final
print does not do her justice. Remember I only expected one in
six – and that’s with great looking ladies who had all modeled
before, were signed up with a modeling agency, and were supposed
to know what to do.
But do not let me discourage you! Keep trying, there’s a lot
more toads out there than you could possibly imagine!
Modern Medicine: Are you a buffalo?
Or a carefree butterfly?
by Dr. Iain Corness, Consultant
I have said this many times, but despite all the advances in
modern technology, the death rate will always be the same – one per person!
So, are you going to die? Undoubtedly yes. Read the above sentence again.
The death rate will always be the same – one per person!
Unfortunately, being born is, after all, the very first step in the dying
process. Somebody writes your name on that mythological bullet, and one day
you are going to collect it. You cannot escape it. It’s the old death and
taxes routine. However, you can make it difficult for that bullet to find
you! You can dodge and weave for a while.
Now, I fully realize that there are those of different faiths who are happy
in their belief that there is an after-life, or reincarnation, or some other
way by which we can do it all again, and I am not at cross purposes with
that. I am merely talking about the ‘here and now’ – the next life can look
after itself, in my book!
In our respective lives, there will be those of us who seem to fly though it
all, the veritable ‘butterflies’ who flit from flower to flower, savoring,
tasting and, need I say it, enjoying. Eventually, they run out of puff and
quietly fold up their wings and pass on. On the other hand there are those
of us who stumble around like buffalos from one disaster to the next, one
illness to another and eventually succumb – the victim of some tragedy.
Does the first group have a charmed life and the second are only living on
borrowed time, or was it written in the stars? Being personally of the ilk
that does not believe in prophecy, until one of the fortune tellers round
the place predicts the winning lottery numbers for himself, I shall
disregard the ‘prophecy’ concept.
Let us look at the butterflies and the buffalos. As far as ‘borrowed time’
is concerned, both are in the same situation. Our lives are fleeting visits
to planet earth, and that’s all. Like going on holidays, you try to make the
most of your two weeks on the Costa Plenty, so also you should make the most
of your six months in Pattaya.
“Six months!” I hear you shout. “Is that all I’ve got?” In a way, yes.
You see, it is difficult to look ahead much further than that in the medical
sense. So much can happen. Six months is enough time for a fulminating
infection to carry you off, or to develop an aggressive cancer that will
destroy your liver and do the same.
So if we are looking at six months worth of future, how can we make it such
that it is not this next six months, but some six months way in the future?
The answer is a simple medical check-up. This will predict your future life
for you, much better than the Indian fortune teller with his turban and a
well thumbed set of Tarot cards. Advance notice of when the Bank of Life is
going to foreclose comes from your medical records, not the soothsayers on
Jomtien Beach.
But what is the difference between the butterflies and the buffaloes?
Nothing really. Both are on “borrowed” time. It is merely different
attitudes to life and living. You can complain about only having a handful
of rice, or be thankful that you’ve got something to eat, many do not. In
other words, a positive attitude. The butterflies have it right. They remain
carefree and enjoy life, no-matter how short. However, they are more likely
to have longer lives, as being positive strengthens the immune system,
protecting you.
However, pity the poor old buffalo. It carries the world on its shoulders to
its grave. And that is probably an early grave, because negative people
depress their immune systems. This can be scientifically demonstrated.
The choice is yours. Buffalo or butterfly. I know which I’d rather be!
 Heart to Heart with Hillary
Dear Hillary,
I thank you for publishing my letter (27th October), but I must say your
reply includes certain uncalled for criticisms. I am fully aware of the Thai
cultural and family traditions. However, my wife was fully aware of the
stipulations in the PreNup and was happy to sign them. Incidentally this
PreNup is drawn up with each paragraph written in Thai and then followed in
English. Since we started living together some 23 months ago, I have, each
month, given her an allowance so that she can send money home regularly.
Furthermore, she does not want to have much to do with her family and only
visits them once a year for three or four days. I had that stipulation
inserted in the PreNup as there have been many instances, as I am sure you
are aware, of one or two members of the family due to visit and five or six
turning up and becoming very difficult to get rid of. Selfish or not, no way
am I going to let myself in for this sort of thing.
I should also mention that about a year ago I made a Thai will leaving my
house, car and whatever money is in the Thai bank to my wife on my death.
As for being able to read Thai, I have already explained that the PreNup is
in Thai and English (as written by the lawyer) and furthermore the ‘Marriage
Registration’ from the Banglamung Registration Office (Amphur) states in
para 3 ‘Both spouses had a contract before marriage as attached’. I would
appreciate a partial apology for your earlier uncalled for comments.
The Thoughtful Farang
Dear Thoughtful one,
You appear to have missed my point, my slighted Petal. When I wrote “Are you
sure that what you think was in the document actually is the way you
imagine?” I was suggesting that unless you personally can read and
understand Thai, what guarantee have you got that the English ‘translation’
and the Thai paragraphs actually are a true reflection of each other? You
are trusting a 5,000 baht lawyer, which is not something I would like to do.
I also do not read any indication of pre-nuptial demands made by your wife.
You have only reported what safeguards you insisted for yourself. Did she
have any? I still believe that your ‘thoughtfulness’ only goes as far as
your own self. You may have made a Thai will, which is all very fine and
noble, but if you are legally married, she collects the lot anyway. Finally,
I note that she is to receive your house. Do you own the land it stands on
to be able to do this? Or did you do a PreNup agreement with the Land Office
as well?
Dear Hillary,
I am beginning to think the lyrics in the old song “If You Wanna Be Happy
for the Rest of Your Life, Never Make a Pretty Woman Your Wife” are right on
the money. On one hand, I am the luckiest guy in the world to have such a
caring, intelligent, and incredibly gorgeous girlfriend. I mean she is a
complete knock-out - a perfect 10. But, on the other hand, that is causing
me many headaches living here in Pattaya. As you know, most men come here
with one thing on their mind. And, no matter where we go in this town, there
are always a slew of pot-bellied, follically-challenged middle-aged swine
completely and unabashedly leering and ogling at my girlfriend. Every bar is
the same story. Their lecherous eyes stare at her as if she were a piece of
meat on sale at the South Pattaya Market, and some go so far as to say lewd
comments or use their worst pick-up lines on her. The worst part is their
complete lack of respect and tact. They act as if I am not even there. I
would never think of staring at a woman the way they do to her, especially
if I see she has a boyfriend or husband. I think they feel that since there
are lots of bar-girls around town they can treat any woman like that here.
What do you suggest? Should I just do my best to ignore these neanderthals,
or should I punch their lights out, start learning Muay Thai and give them a
good kick in the ass, or what? Thanks a lot!
The Boxer
Dear Boxer,
You are a troubled little poppet, aren’t you. You certainly are hanging onto
some pent-up aggression. If it’s not punching their lights out, it’s a right
proper kicking in the ass. Hillary wonders why you are so insecure with this
relationship? I wonder if the problem isn’t the ogling your girlfriend gets,
it’s the fact that you are being ignored? Lighten up, puff out your chest
and be proud of this gorgeous girl – or you will lose her and end up with a
barker. Of course, then you won’t have to worry about the oglers. You might
also think about taking her somewhere that people are better mannered. They
do exist, you know. They hang around the better class bars, not the ones
with ladies outside saying, “Come in sexy man!”
A Female Perspective: Contortions
with Sharona Watson
It is almost a year now since I started writing this column and I have
enjoyed it very much. It has given me the opportunity to organise my
thoughts and feelings on many subjects and in many ways has opened my eyes
to things. I have been able to meet some very interesting people and talk
with them about subjects which I think matter - from a female’s perspective,
of course. Both men and women have contributed, although I always get the
impression that men are slightly less forthcoming. Whatever the subject and
with whomever the discussion has been, it is always an interesting dynamic.
Judging from the emails I get, at least most of you seem to agree. So thank
you for sending me your thoughts and reflections on the topics I write
about. I am always very happy to receive them, even the occasional
ridiculous ones from some men, who if the content of their messages is
anything to go by, are obviously irrational at best.
This year has also coincided with me arriving at the landmark age of forty
and I’m not sure whether it’s the milestone (or millstone?) or something to
do with investigating subjects in detail, but I find myself feeling anxious
quite a lot just now. I don’t like the feeling at all. Here I am, trying to
build some sense of permanency in my life and all I get is the opposite. I
never used to worry about it, you see. It’s probably having children that
does it. I’m trying to look three years, five years down the track and
imagine where I’ll be and I don’t honestly know. Perhaps none of us do? But
I would like to have some idea which can at least allow my soul to rest at
ease.
The problem is, to be brutally honest; I’m not even sure where I’ll be five
months or five weeks from now. We seem to live in a constant state of
impermanence and whenever you try and do something about it, the opposite
occurs. But you don’t want to let it get to you, because then things become
tense and it starts affecting everything that you do. You can get angry
easily. You can end up hurting people close to you because of the stress and
instead of life being a pleasure, it becomes a pressure. Sometimes, I feel
like I have a massive knot inside me all tangled up and it hurts. I feel
like I have been twisted or bent violently and unnaturally into a different
shape or form: contortions.
I wonder sometimes whether there’s anything I can do to alleviate this
suffering but it’s difficult. Somehow or other I always seem to be relying
on somebody else. That’s the worst of it. I mean, who can you trust
nowadays? I don’t want to sound paranoid (although my husband says I’ve got
every reason to be) but it seems that just when you’re about to see the blue
sky again after a storm, something or someone appears to cast a cloud over
you. Then life can seem like a constant struggle; an uphill battle. What can
you do? Sometimes, I think to myself, “This isn’t what I expected life to be
like”.
Even with all the good things that happen, there are some things I need
before I can feel happy. Security is one of them; whether it’s to do with
the job, with finances or with personal security. “Well at least you’ve got
you’re health!” tease my friends, even though, especially when my back
hurts, I’m not even sure I’ve got that. So perhaps I should just get used to
it all; this feeling of not knowing whether tomorrow will ever come? (You
could argue that it never does.) But how can you get used to struggle? You
have to have some vision of a future without it, surely?
One thing I have a big problem with is individuals who know that many people
have insecurities like mine and play on them. That’s a really terrible thing
to do. Andy’s lucky. He rolls with the punches a bit more and talks about
the shape and pattern of life and reading the signs. Actually, to be fair,
he is always able to see another person’s point of view; he seems to know
and understand what they are feeling and thinking. It’s a bit freaky
sometimes. But I get annoyed, in fact very angry sometimes, because on more
than one occasion, because he understands another person’s position and they
either can’t or don’t want to see his, he just lets them get away with
theirs, even though it’s him that’s going to suffer as a result. And because
he is ready to suffer to accommodate another person’s point of view, however
skewed it might be, that means I suffer as well! Well hold on! I don’t
remember signing up to this agreement? I can’t understand it! (I’m getting
furious just thinking about it.) He’s far more willing to stick up for
someone else than he is for himself? How does that work?
So what’s the answer? Well, I believe that it’s true that you have to keep
trying to do your best to make your situation better. I also believe that
human beings can get used to anything. But some conditions have permanent
effects. For instance, lots of Holocaust survivors (not that there are that
many) hoard food in their cupboards and I’m wondering what kind of lasting
damage is being done to me by all this. I really do have bad back pain
sometimes and it makes sense to me that maybe all physical pain is related
in some way to mental stress. Sometimes I think it’s time to ‘move on’.
We’re a bit nomadic as a family, we always have been. But then I look out
over the sea from the house I designed and built and think, “I can’t
seriously ever consider leaving all of this, can I?”
Next week: Is that funny?
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Learn to Live to Learn: A Principal of principle I
by Andrew Watson
There is a sense of gravitas about the Regents school, Pattaya. It’s a place
of discernment, industry and artistry, without a hint of sophistry. Ten
years of almost undiluted success have put the school in leading position
locally and an increasingly resonant one regionally and globally. It has
been a pretty meteoric rise, charted by the charismatic Dr. Virachai, who
has put his heart and soul into the school.
 Mike
Walton; “The best thing about the school is the students”.
One of the quite well documented problems in international schools around
the world has been the high turn over of Head teachers. Regents have had
their fair share since their birth but they seem to have embarked upon a new
era of maturity and stability with the appointment of Mike Walton. In just
over a year of impressive achievement since he arrived, the school has
become a genuinely ‘moving’ organization, where policies, structures and
procedures enable, rather than disable the system. There is a strong sense
of direction and accountability emanating from a man who is reassuringly
frank. Physically (I’m not sure why) I was expecting someone of great
stature, with a big, booming voice. Thus I was pleasantly surprised to find
that the man charged with charting a course towards a culture of continued
growth and achievement is relatively diminutive.
However, size and scale, as I was taught long ago, are not synonymous and as
I was greeted warmly and peered into his deep blue eyes, I immediately
beheld something which I suppose is a pre-requisite for a person in his
position: great passion. When he launched into a most eloquent discourse on
his philosophy of education, he became animated with enthusiasm; “My
philosophy of education is very much one of making it happen for all the
kids. It’s not about ensuring that the top end achieves at the expense of
anyone else. It’s about everybody achieving; that’s very important to me and
that’s reflected in my background and the sort of schools I’ve come from.
It’s great to trumpet your best results - they’re your headline figures and
they’re fantastic - but the way to measure the quality of the school is to
have good baseline assessment, to track progress. It gives you the data to
do your best in educating every child whether they are at the high end or
the lower end of the academic spectrum. That’s very important to me,” he
reiterated.
Mike’s background is in the British State system, the school of hard knocks,
perhaps. But he appears to have adapted seamlessly to Thailand, no doubt in
part as a result of being married to a Thai; Fon. It has been moving into
the culture of an international school that has represented a steeper
learning curve. It’s been hard work and Mike admits that he hasn’t quite
“got the balance right” yet between work and family. He and Fon have three
young children; girl, boy, girl; six, five and three.
It becomes immediately apparent to me that Mike is a very humble man; no
doubt as a result of his experiences and his education. His humility enables
him to see things objectively and he’s clearly delighted by what he is able
to observe on a daily basis. “I see incredible quality going on. I see
incredible growth in the kids. I see incredible results obtained by the
teachers in all aspects of learning. I sit back and I think, ‘I’m just so
lucky to be taking some of the credit for this; it wasn’t me who did it, it
was the staff!’ I do feel incredibly lucky to be associated with the
fantastic work that the staff is doing!”
Regents was already established as a ‘good to great school’ before Mike
arrived, so how does he envisage further progress being made? Is it a case
of constantly setting the school new challenges through a process of
critical reflection? “I do consider myself very privileged to be Head of the
Regents school and it is undoubtedly an amazing opportunity. Yes, it’s about
target setting - where can you get to - but it’s also about accountability;
being accountable for the results that you achieve with children.
Accountable to every parent. For example, say your kid got a ‘C’ grade in
Maths - is that a good result? Have you got your money’s worth out of a
school? Was it a great result for which you should be patting us on the back
or was it a poor result? This is where tracking comes in.”
There is no doubting Mike’s rigour; he’s as methodical and meticulous a
manager as I’ve ever come across. Finger on the pulse. However, it seems
clear from talking with him that there’s something about education which for
Mike runs much, much deeper than the surface water of results. It’s an
elusive concept, but one which is very much gaining value as a global
educational currency; ‘holistic’ education; the nurturing of the ‘whole’
child.
“Is he less interested in statistical results than the education...” of the
‘whole person?’ “Most definitely,” he responds with reassuring immediacy. So
how do you measure that? Mike laughs and says, “I’d be a rich man if I could
give you a quick answer to that.” Then his earnest honesty comes to the fore
once more. “Measuring results is fairly straightforward, but I wouldn’t be
at the Regents school if it wasn’t a school that had a holistic approach to
education; a school that sees the personal development of every child as
equally important as our academic success.”
I sense we are getting close to the ‘Round Square’ the global association of
schools founded on the educational vision of Kurt Hahn. At their heart there
lie six IDEALS; Internationalism, Democracy, Environment, Adventure,
Leadership and Service. Through nurturing these ideals in students, Hahn
shared his vision of a better world. If you’re talking about measuring
education of the ‘whole child’ then IDEALS should be evident everywhere you
go in the school. They are symbols of a value rich society. Are they
consciously encouraged at Regents? “The round square philosophy is very,
very real in this school.” Indeed it is.
Next week: A Principal of principle II
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