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Money matters:
Graham Macdonald
MBMG International Ltd.
Nominated for the Lorenzo Natali Prize
Cooking the books
As regular readers of this column will know, one of my
favourite quotes is, “Lies, damn lies and statistics”.
I was reminded of this recently when the US government announced its latest
Gross Domestic Product (GDP) figures. These were better than people thought they
would be and so the markets went into overdrive amidst investors buying anything
and everything they could. This mania lasted all of 24 hours after more figures
came through which showed consumer spending was down by one half of one percent
and people buying houses were as common as Raith Rovers supporters after Gordon
Brown declared his support for them. Those who had just bought stock and shares
were now trying to sell.
Also, Forbes Magazine stated that “New home construction is 74% below the peak
it reached in January 2006, the drop is far more dramatic than the 46% decline
in 1981 and well ahead of the 60% fall between 1986 and 1991.”
What is even more disturbing is that there are now nearly 20 million homes in
America which are unoccupied and empty. And they want to build more? Twenty
million homes is a lot of property to sell. So, by the end of the particular
week in question the markets were actually down.
As Dan Denning, author of the best selling The Bull Hunter, says, “Don’t
believe the GDP hype, the big problems in the economy - too much debt, too much
leverage, too much government - are still there. They didn’t go anywhere
overnight. We’d suggest that getting sucked back into stocks now because of the
US GDP figure is a very bad idea. Of course, we could be wrong, maybe stocks
will go up another 20% from here. Or 30%. Or 50%. But it’s not likely. It’s more
likely that the recession is over, but that the Depression has just begun.
“It’s begun because what the US GDP numbers actually show is a private sector in
full retreat as its income shrinks, its assets fall in value and the cost of
servicing debt rises. Into that terrible breach the public sector has stepped,
armed with an arsenal of inefficient and stupid programs that give the illusion
of economic activity, but actually prevent the economy from liquidating excess
capacity and bad debt (the two conditions required for a real recovery).”
Couldn’t have put it better myself. If everything is as tickety-boo in the Land
of the Free as we are meant to believe then how come no-one is spending and
everyone is feeling as though they are suffering from a permanent hangover?
The real answer, to misquote Sir Winston Churchill, is that the way the GDP is
worked out is a deceit wrapped in a lie inside a fraud. How can something that
looks so good be so bad? Well, it is the way things are calculated - lies, damn
lies and statistics. For example, GDP does include government spending but, at
the same time, does not subtract the actual borrowing the government undertakes
to fuel its spending. It goes without saying that what the government spends is
not an accurate reflection of what happens in the private sector.
We have been taught that one of the best ways to judge how healthy an economy is
faring is to look at the GDP. This is usually expressed in either positive or
negative growth and allows the politicians to comment accordingly. However, the
brutal fact of the matter is that GDP is about as much use as a bag of spuds at
telling us how healthy a country’s economy really is. To show this, we need to
understand how the GDP can be worked out. There are three alternative methods:
1. Expenditure
2. Income
3. Value Added
Hypothetically, it should not make any difference which of the above is used as
they should all produce the same result. However, when theory is put into
practice this is hardly ever the case. For example, when governments spend money
like it is going out of fashion, as has been the case this year, then there is
considerably more growth when calculated the expenditure way. This is because of
the way it is worked out. The expenditure method, which is what most people use
to find out what the GDP is, works out how big an economy is by adding up the
expenditure and then taking away the imports. This is a simple way of looking at
it:
GDP = Government Spending + Gross Investment + Private Consumption + (Exports –
Imports)
Why is this wrong? Well, technically it is not. However, it does lead me back to
the end of the first sentence: “Lies, damn lies and statistics”. Let’s look at
an example. Most people who have even the most basic grasp of economics accept
that Australia did go into recession. However, the Aussie government would have
you believe otherwise. In fact, it wants you to think it all is hunky-dory in
the land of the wallaby.
Like a lot of countries all over the world, Australia pumped money into the
economy as if there was no tomorrow. Kevin Rudd, the Australian PM, would have
us believe this saved the country from suffering the worst. However, if the GDP
had been calculated by either the Income or Value-Added methods then Australia
would definitely have been in a recession. This was explained by the economist,
Dr. Rose of RMIT University in Victoria, “The income series... indicates a
pretty minimal year all round. Both the September and December 2008 quarters
showed an actual fall in the level of output, the very definition of a technical
recession. Over the year, the level of GDP has fallen 0.4 percent, by no means
as bad as elsewhere, but more in keeping with the general experience across the
economy.
“The third measure shows the changes in GDP according to the production-based
data. Here, too, (in the Value-Added) we have the ingredients for a technical
recession, with an actual reduction in the level of output in both December 2008
and March 2009. Across the year, GDP has fallen by 0.7 percent.
“While the stimulus package appears to have been able to distort one of the
three sets of national accounting measures we used, beneath it all the
Australian economy, in keeping with the rest of the developed world, has gone
through a recessionary phase from which it is only now beginning to emerge.”
Good argument, well presented. Put another way, the only way the Aussies could
say they had not gone into a recession was by using the Expenditure method and
this only worked because of the amount of cash the government put into the
economy itself. It may seem harsh to say the Australian politicians are actually
lying but the fact is quantitative easing cannot be sustained and to say the
economy is recovering when people are still in the brown stuff is very hard to
swallow.
To put it succinctly, there can be no recovery via financing debt on through
improvement in real production. So a better way to calculate things would be to
say NET government spending when doing the aforementioned equation, i.e.
government spending MINUS government borrowing equals NET government spending.
If this happened then the end figure would look a lot more realistic. No country
can spend its way out of recession or depression. Once people realize this then
we will be back in the real world.
The point is that if the free market does not want to buy something then why
should the government use what is already borrowed money to purchase it and then
show it as a net positive? The basics of it are real economic advances are done
when manufacturing is on the up, production increases and people start to make
true profit for themselves and the companies they own or work for without any
direct or indirect government stimulus. They are not made by, “Lies, damn lies
and statistics”.
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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: by Harry Flashman
Why “Auto” can sometimes trick you
 Automatic
cameras have become so good these days, there is a tendency to think
they are foolproof. You are guaranteed a great shot every time. Correct
exposure, sharp as a tack and looking professional. Unfortunately in the
real world, that does not necessarily happen, as this photographer found
out.
Dear Harry,
A question for you regarding my Sony Cyber-shot. I recently was a guest
at a beautiful wedding, the reception was quite well lit so I thought
rather than use a flash and have everybody look like ghosts I would turn
the flash off.
What I had not taken into consideration was that the shutter speed would
be slower without the flash. Most of the photos were blurred, either by
me shaking, or the people I was photographing moving during the shot.
At least I am assuming that was the cause of the bad shots, what is your
opinion Harry?
Thanking you, Sunny.
Your assumption is spot on, Sunny. The clever brain (or electronic
smarts) inside the camera knows that a certain Exposure Value (EV) is
required to produce correctly exposed shots. That EV has two variables,
but which are related directly to each other, and they are the size of
the aperture and shutter speed.
Now even though you felt the venue was well lit, and I do often tell
people to turn off the flash to stop the rabbit in the headlamps
appearance, that venue’s ambient lighting was not enough to get to the
EV required without some extreme values in aperture and shutter speed.
I will presume that you had the camera on full ‘auto’ and not on
Aperture Priority, but the result would have been around the same. The
electronic brain knows you can’t hand-hold at much slower than 1/30th
second so will try to use that shutter speed and open up the aperture to
whatever is needed to get the correct EV. That’s the theory.
However, when the camera runs out of aperture setting, then all that is
left for the camera brain to adjust is the shutter speed and its little
electronic brain gives it an even slower shutter speed, at which you
cannot hand-hold. Blurred shots are the result.
Now whilst all of the above is relevant, there were a couple of points
in time at the reception where you could have averted the disaster. When
you were composing the shot there would have been a winking indicator in
the viewfinder to tell you that the camera felt flash was needed. You
chose to ignore that, deciding that your brain was better that the
Cyber-shot brain. At times that can be so, but not this time!
Secondly being a digital, the Cyber-shot gives you the opportunity to
review all shots after you have taken them. All within a few seconds
too. You could have looked at the first shot on the three inch LCD and
would have seen that it was blurred and worked out then, what you worked
out later, that the shutter speed was too slow to hand-hold, despite the
image stabilization feature. Sometimes we can ask too much of our
equipment!
You could also have then gone into the menu and tried to up the ASA
rating in the camera, since it will go to 3200, albeit with some ‘noise’
and lack of sharpness as the trade-off. Even at only 800 ASA, you would
probably have got away with it, but it’s easy to be wise in retrospect.
So what was this practical lesson all about? Really, the message is to
remember that any automatic camera has limits. “Auto” does not equate
with “fool-proof”. The second message was to check your shots after you
have taken them. That is what the LCD/digital camera can give you over
the old film technology, where you waited for a couple of hours to see
if you had a usable shot.
Thank you Sunny, and please keep taking shots. Photography is a pastime
that does give you the opportunity to improve, and the more shots you
take, the greater the improvement.
Modern Medicine:
by Dr. Iain Corness, Consultant
Will 2010 be another year of abuse?
I think most of us, when pressed, will admit to abusing our
bodies. We punish our livers (New Year being a fine example), we also punish
our brains with alcohol and we punish our joints and cardiovascular systems
by being overweight. We also regularly make New Year resolutions to stop
doing all of the above, which generally lasts until the first of February!
However, after many years in the primary health care business, I realized
that most patients self-select into two very different groups. There are
those who worry about every symptom they ever get, and on the other side are
those who ignore their body’s telling them of things that are amiss.
It is between these two sides that the field of self-monitoring lies. With
some patients they will slavishly carry out examination and recording far
more than their disease process would require, but for others, they will
just not do these simple procedures, as they refuse to admit to sickness or
ill-health in any way.
It is important here to state that I am discussing long term monitoring of
chronic ailments, such as hypertension, diabetes or asthma. I am not asking
patients to become doctors and make their own diagnoses. Sometimes it is
hard enough for experienced doctors to do that!
This whole business of self monitoring is something that actually gets much
space in the medical literature, and the medical profession itself is also
quite divided over this issue. Here I will try to provide the ‘middle
ground’, which itself is not without certain problems.
Let’s take Blood Pressure problems first. In actual fact it is quite
difficult to get accurate blood pressure readings. Blood pressure is a
dynamic factor in the body. Step off the kerb and be narrowly missed by a
speeding motorcycle going the wrong way up a one way street and your blood
pressure will rise immediately. If it doesn’t, it probably means that he hit
you and you are already dead. There is also a well documented type of high
blood pressure reading called ‘White Coat Hypertension’, which is where the
BP goes up as the white coated doctor gets closer.
So what is your ‘real’ blood pressure reading? For me, one isolated raised
reading does not mean you have hypertension. All that the one reading means
is at that particular time, for any number of reasons, your BP was elevated.
It could be down again tomorrow. Only by taking serial readings will you
(and your doctor) really know.
Let us now imagine that a definitive diagnosis of hypertension has been
made. This is where self monitoring can be very good. You can return to your
doctor and give him serial readings, taken at home, and these will probably
be closer to the ‘real’ numbers than ones taken in the sterile and sometimes
frightening doctor’s office. Mind you, this does depend upon accurate home
measurement, using accurate equipment.
However, the physicians with the care of diabetic patients are not so
enamored of glucose self monitoring as the cardiologists are with BP
readings. There is little evidence that home blood glucose monitoring
improves outcomes in Type 2 diabetic patients. There may even be negative
effects associated with it, including increased distress and worry. Regular
hemoglobin A1c levels may be more appropriate than daily finger pricks.
Since the Hb A1c levels show the overall diabetic control over the previous
three months, it is actually a more consistent monitor, but that test is not
available as an easy home testing kit. It’s back to lining up to see your
diabetic specialist on a regular basis, I’m afraid.
And so to asthma. The respiratory physicians seem to be more in agreement
with home monitoring for this chronic condition. Serial lung function
testing with simple hand-held devices can show the asthma sufferer the
trends of decreasing or increasing respiratory function. At predetermined
levels, the patient can be instructed to initiate different therapies to
stop them going into a full-blown asthma attack. This is self monitoring
towards a preventive end. The main aim in asthma treatment.
The message is simple. If you have a long-term condition, don’t ignore it,
but monitor it! And report to your doctor regularly.
Heart to Heart with Hillary
Dear Hillary,
On weekends my family and I like to get away from the city and go to the beach.
This takes some organizing, but I used to think it was worthwhile just to get
away from the endless pressures of work. Now I find our day is spoiled by the
never ending interruptions from beach vendors all trying to sell bolts of
material, food, sunglasses, inflatable toys, model airplanes, massages or nail
polish. What can be done about them? Surely the person in charge of the area
(concessionaire?) could tell them to go, but it doesn’t seem to stop them. Have
you the answer to this problem?
Beach Boy
Dear Beach Boy,
I think everyone agrees with you. These vendors who interrupt the enjoyment of
just being on the beach are a nuisance. Not only that, but if you have been to
the beach enough times you will have seen a sudden exodus as they flee from the
pursuing boys in brown. But please understand that the ‘crime’ is not selling on
the beach, it is selling on the beach without the license! Yes, I have the
answer to all this, but it does mean you have to travel a little further. If you
follow the coastline you will find deserted beaches with pristine sand and no
sales people. Mind you, there’s no-one to bring you an ice cream either! The
choice is yours.
Dear Hillary,
I am 17 years old and have come over here for a holiday with my Dad from Canada.
The girls in Thailand are just so more beautiful than the ones at home. Dad lets
me come with him to the bars and says it’s OK. Do you think there would be any
jobs in the bars for someone like me? I have been to bars before and worked in
McDonalds after school. I’m big, so I look older too and have met a girl here
and I would like her to be my steady. Is this going to be easy, or should I
forget about it?
Big Moose
Dear Big Moose,
You don’t say what part of you is supposed to be “big” but it certainly isn’t
the brain, is it, Petal? I could start by asking what is a 17 year old from
Canada is doing hanging around our bars, when the minimum age is supposed to be
20, but then perhaps you showed the man on the door your “big” bits and he
thought you were older. Or perhaps your Dad thinks it is funny to get you into
these places. There are good reasons that the minimum age is 20, and not 17. You
have absolutely zero chance of working here in a bar, even if you were 47 and
all of your bits had grown even bigger. Forget the girl, forget the bars and go
home to Mummy in Canada, that’s a good boy. You’ve wasted enough of my time
already.
Dear Hillary,
I love coming to Thailand, it is really such an exciting place to visit. There
are only a couple of downsides for me. Bartering and tipping. Can you give us
some pointers on how to do it, and how much to leave as a tip? If the
establishment charges a “service fee”, should you tip as well? What do you do as
someone living there, for example? I believe that the wages are not high for
some of the people in bars and restaurants and they need the tips, but I do not
want to throw money away either? What’s your tip about tipping?
Tippy Toe
Dear Tippy Toe,
Half the fun of coming here on holiday is the bartering side of buying, my
Petal. Don’t get too hung up about it. They will give you a starting price and
you should generally come back with about 40 percent of that. The shopkeeper
will then come down a little, you go up a little and so on. Keep smiling, it is
a game remember! If you find you are haggling over 20 baht, convert that to your
home currency and see if it is worth the hassle of continuing. Don’t leave
something you want for the sake of 50 cents!
Tipping? There are two situations here - service charge or no service charge. If
the establishment adds on 10 percent (the usual amount), then as far as Hillary
is concerned - that’s the tip. There are some places that no doubt pocket the
service charge, but that’s not anything of your doing, nor can you change it.
That is something between the employees and the owners to work out. However, if
you feel that the waiter or service provider has gone well beyond that which
could be expected, then you should reward with a little extra something for that
person, irrespective. You know the sort of things I like - a little fawning,
groveling and lots of compliments. In an establishment that has no standard add
on service charge, then it really is up to you. Small change left over or up to
10 percent is quite acceptable. The Thai people are grateful for anything you
leave them. It all adds up by the end of the day.
Let’s go to the movies:
by Mark Gernpy
Cirque du Freak
has been rescheduled for January 28.
Now playing
in Pattaya
Bodyguards and Assassins: China, Action/ Drama/ History – Dr.
Sun Yat-sen, the “father of modern China,” came to the British colony of
Hong Kong at the beginning of the 20th Century for just one morning to
meet a dozen revolutionaries from all over China to plan a major
insurgence to overthrow the Qing imperial dynasty and form the first
republic in China. Waiting for him was an army of assassins deployed
from the imperial palace. He needed an hour with the fellow
revolutionaries, and that hour was critical because it would lay a
foundation for a successful revolution. In order to provide him with
the best possible chance of success, the local revolutionaries set up a
decoy with a double going all over town, including visiting his aged
mother.
A meticulously-crafted historical
movie with careful attention to detail. The first 80 minutes set up the
story and establish the characters; the last hour is all gut-spilling
action, featuring an all-star Chinese cast including Donnie Yen, Leon
Lai, and Nicholas Tse. Shown here only in a Thai-dubbed version with no
English subtitles.
Mulan: US/ China, Adventure/
Drama/ Romance – Based on the Chinese folk heroine Hua Mulan. When her
country is threatened by invaders, a young girl defends her father by
sneaking away from home and dressing up as a man to join an all-male
army where she eventually assumes a historically critical role in
defending her nation in a time of war.
Kru Bann-Nok / To Sir With Love:
Thai, Comedy/ Drama – The life of a volunteer teacher determined to
teach children in the backcountry.
Se-Sing Confirm: Thai,
Action/ Comedy – An unusual foursome teams up to probe into a children’s
kidnapping gang with plans to break the gang and save their kidnapped
friends. Really, it seems to me from the previews to be an outlandishly
violent film.
Bang-Ern Rak Mai Sin Sood / As
It Happens: Thai, Drama/ Romance – A romantic comedy about a young
man and woman who keep running into each other in various far-off places
around the world. In Thai only at Pattaya Beach.
Avatar: US, Action/
Adventure/ Sci-Fi/ Thriller – From director James Cameron, a major
achievement in storytelling, and a technological breakthrough. It’s
about a band of humans pitted in battle against a distant planet’s
indigenous population, and weaves many myths into the story’s fabric.
This is a film of universal appeal that just about everyone who ever
goes to the movies will want to see. In Pattaya, Major Cineplex and
Pattaya Beach have a 2D version, which is in English and Na’vi dialog,
with English and Thai subtitles as needed. Big C has a Thai-dubbed 2D
version, no English subtitles. The only Cineplex to show it in 3D is
Pattaya Beach, and unaccountably the 3D version does not have English
subtitles for the Na’vi language, only Thai, while the 2D version has
English subtitles in a special font and style. Not to have them is a
big mistake. Best choice is to see it in IMAX in Bangkok; the bigger
the screen, the better.
Reviews: Universal acclaim. Highly recommended; not to be missed.
Sherlock Holmes: US/ UK/
Australia, Action/ Crime/ Thriller – A new take on the Holmes canon. I’d
say, once you get over the shock of seeing Sherlock played as an action
figure, it isn’t all that bad. A bit of the old Holmes shows through.
Robert Downey Jr. plays Holmes and Jude Law his stalwart partner
Watson. There are a lot of chases through London, the dirt and squalor
of which is beautifully recreated, and a lot of fighting, and just a bit
of ratiocination. All in all, an enjoyable action flick. Purists
however will not be amused. Mixed or average reviews.
The Storm Warriors: Hong
Kong, Action/ Fantasy – A martial arts film by the twins Oxide Pang Chun
and Danny Pang. Shot entirely in three studios in Bangkok, and really
a special effects movie. Such as an army of flying creatures that
reminded me of the flying monkeys in The Wizard of Oz; they’re defeated
by being first changed into what looks like obsidian, and then smashed
into slivers. Very effective. As is the terrific makeup. So, yes, the
style is truly great; the substance questionable. Presented in a
Thai-dubbed version only, with no English subtitles. But I loved the
visuals, and the fantasy
The Treasure Hunter / Ci Ling:
Taiwan, Romance/ Sci-Fi – A story about time-traveling lovers who end up
in Genghis Khan’s Mongolia to search for an ancient treasure, with
Korean pop-star-turned-actor Jay Chou. Fairly devastating reviews.
Thai dubbed only, with no English subtitles.
32 Tan-Wah: Thai, Comedy/
Romance – Tops at the Thai box-office, even trouncing Avatar!
It’s yet another Thai “rom/com,” this one taking place on the 32nd of
December. A young man with amnesia has forgotten which of his three
girlfriends he truly loves.
Did You Hear About the Morgans?:
US, Comedy/ Drama/ Romance – Hugh Grant and Sarah Jessica Parker play an
estranged New York couple whisked into the witness protection program
and sent to Wyoming. Nothing much happens. Generally unfavorable
reviews.
Yam Yasothon 2 / Hello Yasothorn
2: Thai, Comedy – Thai down-country comedy with popular comedian Mum
Jokmok and the usual TV comedians, engaged in rustic humor. In Isan
dialect, with Central Thai and English subtitles. At Major Cineplex
only.
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