Money matters:
Graham Macdonald
MBMG International Ltd.
Nominated for the Lorenzo Natali Prize
Recovery? Anyway, back in the real world… (Part 1)
If we believe what the governments of the western world are
telling us then we are over the worst of it and all will be peachy from now on.
Really? Well, let’s look at this in more detail. Property is a good pointer. If
you are to believe many in the real estate world then things can only get
better. Forget it. In the UK the price of houses could drop by up to thirty
percent within the next twelve months. Banks are still very dubious about
lending money and mortgage approvals are way down on what they were a couple of
years ago. And even for those that have managed to get a loan there is bad news
as lenders are in the process of increasing their rates. As John Wraith says,
“Any material rise in government funding costs will have a knock-on effect on
secured borrowing, putting significant pressure on households, this could have a
serious impact on any UK economic recovery.”
Things do not get better either when one has to take into account the fact that
a third of the mortgages taken out via ‘non-confirming’ mortgages, basically
equivalent to ‘sub-prime’, are now more than three months behind in repayments.
This will mean repossessions at a time when they are not needed as there is
already an excess of available property on the market. This news is not good.
Barclays had a dismal time with loan write offs in Q1 and Lloyds believes that
corporate bad loans could go up by as much as 50% in 2009. Last but not least,
the Royal Bank of Scotland announced that Q1 debts rose fourfold.
If certain analysts are to be believed there will be over ten percent
unemployment in the UK by 2010. It is almost this in America already. Assuming
their arguments to be correct then it is a fact that when unemployment goes up,
the price of houses goes down. If there are not as many people employed as there
were in the past then there is not as much disposable income around to make
mortgage payments.
Also, the fact that real (inflation adjusted) incomes are three percent in
negative territory, year on year, means that people will just not have any money
to spend on setting up a mortgage. Apart from the problems mentioned about
repossessions, this indicates there will not be so many new buyers.
Today’s chart shows how when unemployment rises then property prices fall.
Right, so that is property out of the window then. What else is there? Well, a
lot of the fund managers are a lot happier now than they were a few months ago.
Obviously, it is in their interest to see markets on the rise but the rubbish
they are coming out with these days is almost embarrassing. The Dow Jones is up
over 30% this year and this total is almost matched by the FTSE100. Everyone
seems to think we are well on the road to recovery and there are cheap
valuations out there to be had.
This is just not true. Some analysts use something called the Fed Model. This
gives an indication of the relative value between shares, stocks and bonds. At
the beginning of the year it was very bullish but now it is specifying that
equities are way over valued.
This can be checked by using a simple calculation. According to ING Research,
you use an index’s (Dow Jones, S&P, FTSE, etc.) earnings yield (earnings per
share divided by share price) and compare it with the yield (what you get as a
dividend) on ten year government bonds. The time to buy shares and stocks is
when the yield is a lot better than the yield on the bonds. At the moment, it is
not.
Credit Suisse has already stated, “The rise in bond yields has undermined the
valuation of equities.” Another company, Absolute Strategy Research supports
this, “We suspect that the biggest risk for equity investors is likely to come
from rising bond yields rather than rising PE multiples.”
For those that have made a good profit in 2009, it is time to take those gains
and bank them. Actually, talking of banks, if you have any shares in the
financial sector then get them out now - especially if they are in the UK. The
Treasury has already admitted it will not release any details of the tests on
British financial institutions as it “may lead to uncertainty in financial
markets... which could require further action by the authorities.” To a cynic
like me, this means that Alistair Darling and Gordon Brown do not want us to
know how much trouble the UK banking sector is really in.
Avoid anything to do with finance stocks. Just look what happened to people who
invested with the Bradford & Bingley. As one analyst told Bloomberg, the B&B
interest deferral “raises more questions about what might happen to hybrid and
other subordinated debt at other banks the government owns or might end up
owning.” Caveat emptor!
Even though there is meant to be more money available, information from the
Building Societies Association shows it was down 60% from the same time in Q2
2008. Given all of this and what was mentioned above, there is probably a lot
more trouble for the banking sector and you should not be a part of it.
To be continued…
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: by Harry Flashman
Viewpoint or point of view?
Any
photograph is, or should be, a representation of what the photographer
has seen, because photography really is all about the art of “seeing”.
Successful photographers are very often ones who have discovered a
“different” way of seeing the subjects they (and you and I) photograph.
One obvious example was the British photographer Bill Brand, famous for
photographing nudes by using a wide-angle lens on the camera. This gave
a very distorted figure, but one that became “arty” and produced fame
for Brand. Whether you find Brand’s viewpoint aesthetic does not matter
- the important fact to remember was that it was different.
Now, this does not mean that I suggest you race down to Jomtien Beach
with a fish eye lens on the camera and try and persuade people to remove
their outer garments! Far from it. You should stop for a while and
consider something unusual, compared to your “standard” way of taking
shots.
You see, it makes no difference whether you have an SLR with multiple
lens choices, or just a humble point and shooter with a fixed lens, we
eventually get into a “habit” while taking photographs. Habits include
the lens you stick on the front of the camera. I will wager that you
have a favorite lens that stays on the camera body, and the others are
only used when you cannot get the subject in the frame and have to use
an alternative. And habits certainly do die hard, even if it is just
always taking shots in the horizontal (landscape) format. Got you!
Haven’t I?
What I am suggesting this weekend is to devote one afternoon to some new
or different ways of doing things. Many times it is impossible to
predict what the final result may be. You may have discovered a radical
new approach, a highly individualistic way of presentation. The end
result may not be to everyone’s taste (like my idea about Bill Brand’s
work), but you will never know till you try. And what is one afternoon
worth compared to the fun (and fame and fortune, perhaps) that this
weekend could produce for you.
To get you going, here are a few ideas you might like to explore. The
first I will call the child’s eye view. Our viewpoint is generally
around 1.7 meters from the ground. That’s where our eye level is and
that is the viewpoint we use in 99 percent of our pictures. Now imagine
you are a three year old child. Your viewpoint on life is very much
closer to the ground. You spend more time looking up at the world. It
would certainly be worth re-viewing some items from this very low
viewpoint. OK, I know you will end up looking up people’s noses - but it
just might work. You won’t know till you try.
The opposite end of the spectrum is the “Bird’s eye” view. This takes
some more thought and planning - and sometimes a step ladder as well,
but again you will get different shots. Ever noticed how many rock bands
have photographs taken from above, with the members of the group looking
up at the camera? It is because you end up getting a very powerful shot
- and a different, memorable shot. Try standing on walls, on top of
cars, or the aforementioned step ladder. Just don’t fall off! It is
actually quite easy to become unbalanced looking through the viewfinder
when up high.
For those who do have choices of lenses, or do have zoom facility in the
point and shooter, you can try using the two extremes that you have,
even though you may think that the lens choice is unsuitable for what
you are photographing. After all, remember Bill Brand! It is even
worthwhile taking the same subject matter with both of the two opposite
extremes - wide angle and telephoto.
Even going back to the ‘landscape’ (horizontal) and ‘portrait (vertical)
views, try taking a traditional landscape shot in the vertical format.
It will make you see how much sky there is, and how much you want to
contrast that with land. Likewise, a horizontal portrait is different.
Try another viewpoint this weekend and you might be amazed.
Modern Medicine:
by Dr. Iain Corness, Consultant
A lump of 4x2 and terrible tantrums
I’ll bet when you read the title you thought, “What
politically incorrect thing is he going to say now?” OK, I admit that being
politically correct has never been high on my list of priorities. As far as
I am concerned, PC means Personal Computer. I have also found that hugging
trees does not do too much for me, other than leaving green bark stains on
one’s shirt.
In response to the general thought that there is more “cancer” (for example,
but you can add in many other conditions) these days, I read a very
interesting article the other day in which the author suggested that there
may not be increased incidence of some diseases, but just better diagnosis.
I would have to agree.
Clinical medicine has always been an interesting field of endeavor, and I
well remember one of my more enlightened tutors at medical school saying
that the practice of Medicine was 90 percent mumbo-jumbo and 10 percent
science. That is not quite the experience of today. My estimation is now 60
percent mumbo-jumbo and 40 percent science.
But back to better diagnosis. With all the new technology that is available
today, such as MRI and color Doppler ultrasound, it means that diagnosis can
be made earlier and with more confidence than before. In many instances,
diagnosis of internal conditions can be done without resorting to surgery.
This is all good news, but life is never a 100 percent certainty I am
afraid, despite the fact that ‘death’ is.
There is also a tendency to act too quickly in some cases. Take prostate
cancer, for example. With the PSA test we can show whether the level falls
within the normal range, or otherwise. If higher than normal, does this mean
that your number is almost up? Fortunately, no. The sheer numerical value
does not immediately equate to terminal cancer.
With prostate cancer, more men die with prostate cancer - not from prostate
cancer. In other words, most prostate cancers are slow growing, so a ‘watch
and wait’ approach is quite justified. If the PSA creeps up very slowly,
then continue the watchful appraisal. If however, it shoots up, then it is
time to start action.
A recent study in the US, over some years, has shown that operations for
low-grade, low-risk cancers of the prostate do not provide any worthwhile
benefits for the older age group. But before you tell your surgeon to put
away his scalpels, please note that I am talking about “low-grade, low-risk
cancers of the prostate”. There’s a big difference, and you should discuss
this with your urologist.
Oh yes, the reference to the lump of wood - the politically correct method
of parenting in the developed world is to reason with your three year old
who is lying screaming on the floor at Tesco’s kicking his legs in the air
because you denied him a chocolate. The PC method would go as follows,
“Mummy can’t buy you one just now, darling, because it will give you dental
caries and you will have to have painful and expensive treatment later.”
Mister Three then says, “Of course, Mummy, I had forgotten to look at the
future possibilities. I am sorry and I won’t ask again!” Having been a
parent and still being one, I can assure you that three year olds do not
reason (even if they have developed that far). Three year olds are similar
in responses to Pavlov’s dogs. The simple ‘cause and effect’ concept applies
here. “Stop that right now, and if you don’t get up, Mummy will smack.” That
has a far greater chance of working than entreaties to consider dental
caries. Fortunately, my son Evan turned four the other day. Instead of three
year old tantrums, he has adopted four year old tantrums.
However, I do not encourage brutality, that is why any nails should be
removed before application of the wood to the nether regions. Just who
dreamed up this politically correct nonsense anyway? It is interesting that
the social experiment of ‘no smacking’ in New Zealand, which was then
enacted as ‘law’ has not worked. The parents have rejected it. I wonder why?
Heart to Heart with Hillary
Dear Hillary,
I have been with my Thai partner now for one and a half years and we are both
very happy. I read your column every week and over the last few weeks I have
noticed how many people write about not meeting “nice girls”. My lady has six
friends who are interested in meeting any kind gentlemen. They are all working
ladies (not bar girls) and their ages are from 30 to 48 years of age. If anybody
is interested please get in touch with “Helping Hand” and I will send the
information to them. Thank you for your help.
Helping Hand
Dear Helping Hand,
Thank you for your letter, and I do believe you and your partner’s friends are
sincere in your wish to help/meet kind gentlemen, and be a helping hand.
However, this column is not a dating agency - for many reasons. I cannot vouch
for the men who may answer your letter - are they all really “kind gentlemen” -
as I cannot vet them, I cannot give that guarantee. Are all the ladies, as you
would suggest by your letter, not people out to make some money from
unsuspecting farangs? Again I cannot vouch for your partner’s friends either. So
I hope you can see that it would be wrong of me to become the intermediary or
‘match-maker’. What your letter does do, is to show that there are many nice
girls out there, and I would suggest that perhaps you and your partner and her
friends should attend some farang functions, like the expat’s clubs, or the
chambers of commerce, and meet the kind of gentlemen they are looking for at
those type of events.
Dear Hillary,
I’m a happy little bunny rabbit with my bunny partner beside me. She’s from a
bar, but she’s a happy little bunny rabbit as she’s got a partner to provide all
the lettuce she needs. So what’s wrong with that?
Bugs
Dear Bugs,
Absolutely nothing wrong with that, but be wary if the lettuce crop isn’t a good
one this year. Happy little bunny rabbits tend to follow the lettuce trail. The
special Greenback lettuce, that is.
Dear Hillary,
If the Thai women are as grasping as it would seem reading the letters on your
page, how come they are still in the business? Surely if they were all that bad,
word would have gotten out by now. I get the impression that they’ve been given
a bad name and it has stuck. Sure there has to be a few rotten apples, but am I
correct that the bad ones are a small percentage only?
Puzzled
Dear Puzzled,
It is not correct of me to comment on the bar girls as a group, but there is
certainly a good percentage of them out for what they can get. Certainly these
are the ones whose men ‘friends’ end up writing to me. Provided the male
holidaymaker understands the ground rules, everyone is a winner. But it is the
men who mistake financial arrangements for romance who fall for the “I lub you
too mut, dahling.” There are enough books out there, and there are enough
internet sites out there about this side of a Thai holiday, and the
heart-rending advice from yours truly as well. Nobody should be puzzled, Petal.
Not even you.
Dear Hillary,
My uncle came to Thailand last month for a visit. I was excited, as I had not
seen him or my aunt for some years. Imagine how I felt when my uncle arrived
without my aunt, but he had a girl from Bangkok in tow. He said my aunt did not
feel like traveling at her age (they are both in their eighties) but he didn’t
want to disappoint me by not coming. He didn’t say anything about the strumpet
he was with, and they were in the same room in the hotel (I only have a very
small studio so they couldn’t stay with me). Honestly, Hillary, should I tell my
aunt or should I tell my uncle he is not welcome here again? I am so confused.
Please help.
Confused of Chonburi
Dear Confused,
I am certainly glad you’re not my niece! You seem to be so delightfully
judgmental, manipulative and interfering. Be thankful that there is life in the
old dog yet and he came to visit you. Think of it this way, if you played your
cards right and keep your mouth firmly shut and were exceptionally hospitable to
both your uncle and his companion, your uncle might even remember you in his
will. And for that matter, how do you know that your aunt wasn’t glad to see the
back of the randy old boy for a while because he snores? Or, heaven forbid in
your so morally upright family, that your Aunt may have wanted the opportunity
to have it off with the milkman or meet up with a long lost lover. Personal
morality is just that - personal, i.e., relating solely to the individual. I
suggest you learn to live and let live, practicing mai pen lai and jai yen yen
and stop judging people. One day, someone might be just as nastily judgmental
about you. I hope they write to me too!
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