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Money matters:
Graham Macdonald MBMG International Ltd.
What is a ‘Ponzi’ Scheme?
The term comes from Charles Ponzi who became known as one of
the biggest rip off merchants in America in the last century. He was known to be
a compulsive liar - when he was in prison, he sent his mother a letter saying he
was a ‘special assistant’ to a prison warden.
 Charles
Ponzi’s official mug shot.
The actual term means that if someone has invested in a particular
product/fund/scheme early on and wants to redeem money then they will be paid by
the money paid in by later investors, not any actual profits.
What Charles Ponzi did was promise 50% profit within 45 days or 100% in 90 days.
How was he able to do this? After he was released from jail he received a letter
from Spain. In this was an International Reply Coupon (IRC). The reason for the
IRC was to permit someone in one particular country to send it to someone else
in another country. This person could then use it to pay for the postage if they
wanted to reply. The IRC was priced at what the cost of the purchase was where
it was bought but could also be swapped for stamps to cover the cost of postage
where it was redeemed. If the values were different then there was the
possibility of making a profit.
In 1919, inflation hit Italy and brought down the cost of postage when compared
to the US dollar. This meant that IRCs could be purchased in Italy and then
changed for American stamps to get a higher value. What this entailed was:
- Send money overseas
- Get someone to buy the IRCs
- Send IRCs to America
- Redeem the IRCs for stamps of a higher cost
- Sell the stamps
Charles Ponzi was later to claim that the net profit to him after all costs and
exchange rates was well over four hundred percent. In a way, it was a type of
arbitrage - this is where one profits by purchasing an asset in a particular
market at a lower price and selling it straight away in another market at a
higher price.
Ponzi borrowed money, sent it to relatives in Italy telling them to buy postal
coupons there and send them back to him. However, that was when the problems
started. There were many administrative problems to overcome.
This did not deter Ponzi. He borrowed some money from American friends saying
they would double their money within three months if they gave him what he
needed. In retrospect, it is amazing to say so, but he did deliver on this
initial promise. Encouraged by this, he founded his own company which was called
the Securities Exchange Company. He used this to promote his now infamous
scheme.
The initial investors benefited as promised. More and more people wanted a cut
of the action. Ponzi hired people to sell the concept and paid them generous
commissions. In February 1920, Ponzi made USD5,000. One month later he made over
USD30,000. Two months later he pulled in USD420,000.
After depositing over USD3 million in the Hanover Trust Bank he had a
controlling interest in the bank itself. Within six months of setting up his
company he had made millions. Yet more and more investors poured in. People were
even taking out mortgages on their homes.
Money continued to flow in. What people did not realize was the whole thing was
already operating at a financial loss. However, providing new money kept coming
in then other investors could be paid out. It was starting to look as though it
was too good to be true. In fact, when one financial writer said it was, Ponzi
took him to court and won a large claim in damages which gave people new faith
in what he was doing. By late July 1920, Ponzi was making USD250,000 per DAY -
this is equivalent to over USD2.5 million in today’s money.
However, some people were still suspicious and both the Massachusetts’s
government and the Boston Post carried out separate investigations on Ponzi. The
latter hired Clarence Barron to examine Ponzi in more detail. He reported that
even though the returns were incredible, Ponzi was not actually investing in the
scheme himself. The killer came when Barron revealed that for all the
investments that were in the Securities Exchange Company to be covered there
would need to be 160 million reply coupons in circulation. In fact, there were
only 27,000.
There was a run on the company but Ponzi paid out USD2 million in three days to
allay fears and this worked - temporarily. The Boston Post then published an
article which showed Ponzi was in debt to the tune of millions. This was the
beginning of the end. In early August, the FBI raided the offices of the
Securities Exchange Company and closed it. Ponzi was arrested and it was proven
that he owed over USD3 million. In the end this bought down six banks and people
were lucky to get back 30 cents to one US dollar invested.
Ponzi was jailed after being found guilty of mail fraud. He was freed after
three and a half years only to face charges of larceny. He was found guilty and
sentenced to seven years. He appealed and was released on bail. Not being able
to help himself he went to Florida and set up a land purchase scam which
promised 200% profit in two months. Some of the land sold was actually under
water!
To cut a long story short, Ponzi was jailed for this one, too. He then tried to
escape to Italy but was caught and returned to Massachusetts to serve out the
rest of his sentence. He was released in 1934 and was deported to Italy where
Mussolini gave him a job. However, he was so bad that he had to do a runner to
Brazil after having stolen money from the Italian treasury. He then died in
1949.
So, what does all of this tell us? Basically, if something sounds too good to be
true then it usually is. If banks are offering great deals then it is because
they need money to stay afloat. If fund managers propose unbelievable returns
then it is because no-one would invest with them under normal circumstances.
Remember, these times are about preservation of capital, not frittering it away
on get-rich-quick-schemes. It is possible to make money and beat the bank but
look at the small print first and do not expect brilliant returns, just good
single figure ones.
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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]@mbmg-international.com.comm.com.com
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Snap Shots: by Harry Flashman
12 months of digital photography - How does it stack up?
 After
more years than I care to remember using film stocks, I succumbed and
joined the digital evolution 12 months ago, purchasing my first ‘real’
digital, the Panasonic Lumix DMC-FZ 50.
After three months of ownership I was still very much in love with this
new camera. After 12 months, am I still ecstatic? The answer is yes and
no!
Let’s go through the silly things first, which are all fairly minor, but
do decrease some of the enjoyment in using the camera. Remember that
while an image is the end result, it is how easy and enjoyable in the
handling of the camera that also counts for the photographer.
First, silly item(s) - the covers over the battery, the AV digital slot
and the memory card. The battery compartment requires moving a lever,
the digital slot has a spring-loaded door (which I always forget to
shut) and the memory card has a sliding cover. The intuitive method
would have been to have all three operated the same way.
Another silly item - the thumb wheels to alter shutter speed and
aperture are on different sides of the camera. One wheel would have
done, click to the left for aperture, click to the right for shutter
speed (just the same way as electric mirrors on a car use the same
switch).
Other annoying features include the lack of any sub-35 mm setting on the
otherwise brilliant zoom lens with its range of 35 mm - 420 mm. Add-on
wide angle lenses which suit this camera are also not highly rated and
everyone I know with one has given up using the conversion as it
decreases sharpness.
Another somewhat disconcerting feature is when you are shooting any
scene with a bright light source in it. This leaves “light trails” down
the viewfinder, but these do not appear in the final picture. As I said,
disconcerting until you have experienced this a few times and have
started not to worry!
Finally, the on-camera pop-up flash is about as good as lighting a
match. Woeful! This leaves you with the option of having to find a Lumix
flash or one that is compatible. Lumix units in this country are unheard
of (the downside of buying something not readily available in Thailand),
but the Olympus range is compatible, but ridiculously expensive, more
than the amount I paid for the camera. What I finally did was to buy an
aftermarket flash (Jessops) and forget all about TTL capabilities. After
all, with the ‘instant’ playback available with digital cameras, I set
the flash to what I think it should be and then after the test shot and
review, change the settings from there. A bit more fiddly, but fun in
its own way.
And the up-side? Wonderful range in an equally wonderful Leica lens. As
mentioned before, 35-420 mm is an awesome range, and my results are pin
sharp all the way through. For years I have bleated on about never using
a zoom lens, and always use prime lenses. This lens shows how wrong I
have been.
Of course, I have to mention the ‘instant replay’ which characterizes
digital photography. The close-up control is easy to use so that you can
review the fine details in a shot to make sure it is really sharp. I
find that if it is still sharp at X 8, it will be a suitable print up to
10"x8", though obviously something sharp at X 16 is even better.
The Lumix has also made me lazy. Where before I spent much time looking
to see that I had the correct exposure setting and then worrying until
the negatives came back, with the FZ50, I use the automatic exposure
setting, plus the auto bracketing feature giving me plus and minus two
thirds of a stop either side from the chosen exposure setting. A quick
review and I know I have the shot with the correct exposure. No waiting,
it’s there!
The instruction book is comprehensive, though most of the “modes” I
select manually, being not that lazy - yet!
In summary, a great camera for the price. Get one of you can find one!
Modern Medicine:
by Dr. Iain Corness, Consultant
Pole dancing - trendy and healthy!
I receive much medical information from overseas, and I
thought I should share the latest with you. The heading was “Pole Dancing -
Trendiest Way For Guys To Get Into Shape!” It continued with, “No longer an
activity limited to smoky basement clubs off the back streets of Soho
(London). In recent years pole dancing has shed its sleazy image and become
a rather popular way for women (and men it seems!) across the UK to keep
toned and fit.”
Now, so that there can be no misunderstanding, this does not mean that you
should go and dance with a Pole called Wienczyslaw from Warsaw, who may not
appreciate your fitness routines. This is the arena of the chrome pole
palaces of health, of which there are several in Pattaya.
This article was really edifying as finally I know why certain go-go bars on
Walking Street are so popular with the male population - the lads are there
to get fit. Silly me, thinking they were there to drink beer and ogle! It is
fitness training, not vision training.
The Brits are so enthusiastic about pole dancing, that training DVDs
(available from www.poleexercise.co.uk) can now be found alongside your
average aerobic workout and there are a number of classes that are offered
all over the country. (By the way, I am not making any of this up.)
Luckily the classes are not intended to be professional training but are
presented more as a fun way for women of all ages and sizes to get fit,
improve flexibility and posture, tone up, burn calories and boost
confidence. I would agree on that, as our local pole dancers definitely do
seem fit, flexible, toned up and full of confidence. It does work, it would
seem. However, it should be noted that the local chrome pole dancers also
have a certain dusky hue, which may herald some basic differences between
Pattaya’s pole dancers and those from Plymouth.
Again, according to my medical information from the UK, once you have
mastered the art of climbing up, twirling, spinning and swinging around the
pole you will find some of the most notable benefits of pole dancing are:
• In a one hour session you can burn as many as 250 calories, almost equal
to a good gym session.
• It builds and tones your upper body, strengthens your stomach muscles and
increases muscle definition in your bottom, arms and thighs.
• It makes your body release the endorphins which make you feel better and
more energetic, a definite plus on Walking Street.
The medical info paper continues by asserting that pole dancing is proving
so trendy that an increasing number of men are getting in on it! All this is
according to someone called AJ, who is apparently one of the UK’s leading
male pole dancing instructors and has been teaching for the past five years
at Covent Garden’s Pineapple Studios with his company PoleFX. “Over the past
12 months we have seen a huge rise and interest in pole dancing, not only
from a student level but also featuring in films such as The Wrestler with
Mickey Rourke and Marisa Tomei and Crank: High Voltage with Jason Statham
and Amy Smart,” said AJ.
In fact, so popular is pole dancing, that in October this year AJ will be
co-organizing Mr Pole Fitness 2009 in conjunction with Miss Pole Dance UK.
It definitely won’t be one to miss!
However, on a couple of research trips, I have found the local pole dancers
are not too pleased when their territory is invaded by pale skinned men or
women (who are only intent on getting fit, and could not be termed
exhibitionists in any way). Is there a new opening here, to bring back the
tourists, I wonder? I think I should invite AJ to come over here, where the
noble art of pole dancing originated and see if his pole fitness can out do
our local ladies!
And I suppose you used to think that medical information was all dry and
dusty, didn’t you? Mind you, there’s also some absolute codswallop (like
this one)!
 Heart to Heart with Hillary
Dear Hillary,
I have a neighbor with a voyeur wife, and I’m at my wits end to know what to do
about it. When I go into one of the upstairs guest bathrooms, balance a stool on
a chair and climb on top, peering through the top most slit in the venetian
blinds I can just see, with use of powerful binoculars, through a narrow crack
in my neighbor’s bathroom curtains this shameless hussy taking a shower and
flaunting her nude body for all the world to see. She is a serial offender as
this occurs every night, without fail. Not only is this obscene, but extremely
dangerous as the stool becomes very unstable when I start to tremble. Serious
injury is more than likely, bearing in mind should I fall I would only have the
use of one hand to try and save myself. My question is - if I topple from this
precarious perch and suffer grave injuries, can I claim compensation from this
disgusting exhibitionist?
Puritanical Pattaya Parishioner
Dear Puritanical Pattaya Parishioner (PPP),
You appear to be confusing your aspirations with your capabilities, my one-armed
Petal (or are you just missing one hand?). To begin with, taking the start of
your letter, you are mistaken, the lady next door is not a voyeur. You are the
voyeur. By the end of your letter, you have decided that she is an
exhibitionist, which is unfortunately incorrect as well. In fact, you are the
(literary) exhibitionist, telling the world, behind the safety of a nom de
plume, that you have a problem precariously perching in what one imagines is a
semi-nude pose, hanging on with your one good hand. Rather than advise you on
the legal situation regarding compensation, I would suggest that you beat the
problem (oops, sorry, meet the problem) head on and while wearing your raincoat
visit Walking Street in Pattaya any evening where I am sure you could find some
lovely ladies who will be happy to help you with your underlying needs.
Dear Hillary,
Don’t you get tired of all these men who write in complaining that they have
been ripped off, jilted, robbed and bankrupted by women half their size and half
their age. Is this some inbuilt male self-destroying mechanism, or are they all
just suckers for a pretty face? Or is it just all the beer that they drink?
Amazed
Dear Amazed,
And I believe that must be Ms. Amazed judging by the tone of your letter. Now,
have you lost someone to the brown maidens, I wonder? No, males generally do not
show self-destruction as one of their less redeeming features, well, not to my
knowledge at least. However, you are correct that some (not all, my Petal) of
them fall prey to the flattery found in the beer bars, and when viewing the
world through beer glasses, you can get a somewhat distorted idea of what is
real and what is clever salesmanship. So I’m sorry I cannot fully answer your
queries, but perhaps you can answer just why do these men succumb so readily? Is
there something missing in their previous relationships?
Dear Hillary,
I remain utterly flabbergasted that every week, or it seems that way, you will
get another letter from a broken hearted male who has lost another house and
several ounces of gold to another young Thai hussy. That is after the buffalo
has had its expensive injections to get it on its feet again. Does nobody warn
these people that this is the most likely outcome? Perhaps you should have a
notice inserted in the Pattaya Mail that Thai women are a wealth hazard! I
suggest the front page, to get their attention. Or are they blind already?
Browned Off
Dear Browned Off,
Are you Browned Off or “Burned Off”, Petal? It sounds that way to me. You do not
say where you came from, but all the western so-called developed countries have
their own financial hazards in the men and women stakes. Called divorce
settlements and alimony, these are resulting in many men walking the streets of
Pattaya rueing the fact that they have lost several houses, cars and been made
poor by the women in their own country. In America they are even drawing up
“pre-nuptial” agreements as a form of “damage control” to try and quantify and
contain the loss on splitting up. Since more than 50 percent of first marriages
end in divorce in the western world, that’s a lot of houses out there in the
matrimonial maelstrom. No wonder the sub-prime market collapsed under the weight
of all that lot. However, Hillary remains absolutely flabbergasted that people
such as you protest so loudly your amazement that this happens here, as if it
didn’t in your own countries. If you don’t believe me go your local Chicken
Pluckers Arms in the UK and take a straw poll of how many men have lost
everything but their shirts to some English women. You get off lightly over
here. Hillary does also take you to task, branding all Thai/Farang marriage
failure females as being hussies. Would you say the same about British women? Or
Americans?
Let’s go to the movies:
by Mark Gernpy
Now playing in
Pattaya
X-Men Origins:
Wolverine: US/ New Zealand/ Australia, Action/ Fantasy/ Sci-Fi/
Thriller – Marvel Enterprises, following hard upon the highly successful
reemergence of their comic book franchises in 2008 with Iron Man,
starring Robert Downey Jr., and then a month later The Incredible
Hulk, with Edward Norton, has topped them both with their latest,
Wolverine, starring Hugh Jackman. I think this is simply brilliant,
starting out with eight minutes of nigh perfect popular filmmaking, a
sequence that is thrilling, sensible, and, wonder of wonders, deeply
intriguing! It then veers into a quiet sequence building up a
love-interest, which might seem to be just padding, but no, get involved
with it, because the love relationship leads to some real emotional
payoffs down the line. A superb action film for anyone who likes the
genre, with thrilling performances by Hugh Jackman, Liev Schreiber, and
many others.
Milk: US,
Biography/ Drama/ Romance – Cheers for Major Cineplex, which continues
its showing of this mesmerizing film about the assassination of Harvey
Milk, the first openly gay elected official in the United States, with
Sean Penn, winner of the acting Oscar. An Oscar also went to Dustin
Lance Black for the script, as the best original screenplay. It was
also nominated for Oscar best picture and best director – eight
nominations total. Directed by Gus Van Sant (My Own Private Idaho,
Good Will Hunting). Rated R in the US for language, some sexual
content, and brief violence. Reviews: Universal acclaim.
The Haunting in
Connecticut: US, Horror/ Thriller – A classic haunted-house film,
and really well-done of its type. It’s technically proficient, well
acted, with an alarming score, creepy photography, and a great house.
The Thai audience I was in frequently gasped and screamed in delight at
the many scares. Besides which, the family is very believable, and an
interesting assortment of people. They move into a new home where awful
things happened in the past. Based on true events, sort of. Here’s a
tip if you ever move into a haunted house: it’s not a good idea to play
Hide-and-Seek there. Generally negative reviews.
Khan Kluay 2:
Thai, Animation/ Adventure – The legendary elephant is back in action in
this superb sequel to the animated movie Khan Kluay. Brilliant,
beautiful animation that looks 3D though really only 2D, with an
engrossing story, set in the time of Ayuthaya, when Khan Kluay is
appointed King Naresuan’s royal elephant. I especially admired the
animators’ skill in the opening sequences, as the camera swoops through
forests and jungles, and the beautiful final images while Khan Kluay was
“dead” awaiting his children to return him to life. It’s much more
assured than the first Khan Kluay, and the animation skills are now
really quite advanced. There are some truly scary parts in the film
involving death and destruction. But what can you do? In a bitter and
vicious battle between two warring tribes vowing death to the
vanquished, it’s difficult to make things look pretty.
Race to Witch
Mountain: US, Adventure/ Fantasy/ Sci-Fi – A perfectly acceptable
and innocuous action/ adventure film for children (mostly) with all the
standard chills and thrills, chase-movie suspense, and wisecracking
humor – and a few slam-bang action setpieces. Mixed or average reviews.
Sassy Players / Taew
Nak Te Teen Rabert: Thai, Comedy/ Drama – A gay teen soccer comedy.
Knowing:
Australia/ US, Drama/ Mystery – Just a lot of gloomy fun, and
well-done. A teacher deciphers a message in a time capsule that has
been dug up at his son’s elementary school; in it are some chilling
predictions – some have already occurred, others are about to. Mixed or
average reviews.
Mor 3 Pee 4:
Thai, Romance/ Comedy – A nice little advertisement for MSN: Four
teenagers make friends and chat online on MSN. Thee and Nut are
brothers living in Bangkok, June and Jane are sisters who live in
Phuket. Do the two pairs finally meet? Well it’s called a “romance”
after all!
Saranae Howpeng:
Thai, Comedy – Movie version of “Saranae Show” – a popular Thai comedy
TV show that has been on the air for 11 years. Stars many well-known
Thai comedians.
Crank: High Voltage:
US, Action – The indestructible Jason Statham again plays a hitman,
this time chasing a Chinese gangster who hijacked his heart and
substituted a mechanical one that needs to be jolted regularly to stay
pumping. Rated R in the US for frenetic strong bloody violence
throughout, crude and graphic sexual content, nudity, and pervasive
language.
Fast & Furious 4:
US, Action – Vin Diesel and Paul Walker re-team for the ultimate chapter
of this film franchise built on speed and cars. It’s almost entirely
about car races and car crashes, and it’s a profoundly silly movie.
During the non-action parts, Vin Diesel intimidates people. He’s very
good at it. He does it by furrowing his permanently furrowed brow even
further. Very impressive! Mixed or average reviews.
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