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Money matters:
Graham Macdonald
MBMG International Ltd.
Nominated for the Lorenzo Natali Prize
The Real Estate Market is just not real, part 1
In the US, jobless claims went up before Xmas and Bloomberg
stated the “shadow inventory” of houses is also on the up. This is what people
call property that would be up for sale if the owners thought they could get a
decent price for it. Also, as the Wall Street Journal has reported, “A growing
number of people in Arizona, California, Florida and Nevada, where home prices
have plunged, are considering what it known as a ‘Strategic Default,’ walking
away from their mortgages not out of necessity but because they believe it is in
their best financial interests.”
There are millions of people in America who have property
which is worth over twenty percent less than what they are paying for the
mortgage. One of these was highlighted by the Journal: this poor chap has a
house worth USD230,000 and a mortgage of nearly USD330,000.
This idea of ‘Strategic Default’ is starting to grow. You
just wipe out your own debt. Okay, it does not look good if you want credit in
the future but at least you do not have the continuous worry of wondering if you
can meet the monthly payments. In the case above, the bloke has just improved
his balance sheet by USD100,000. The bank will then seize the house and put it
on the market hoping to recoup some if not all of its losses. Thus, the house
leaves the ‘shadow inventory’ and enters the real housing market and pushes the
prices down further.
The UK is not much better. Who would have thought it? It is
less than three years ago that HBOS was riding high as one of the top banks in
the world. Everything it touched turned to gold. It was only later we discovered
it was ‘fool’s gold’. HBOS was one of many banks to find itself overexposed to
the sudden drop in the property market.
In the world of commercial property, prices fell by more than
forty percent in the UK, the US and elsewhere. This would have been bad at the
best of times but most of these investments had been financed by debt. Thanks to
that wonderful phrase, Quantitative Easing (QE), the pain of this has not really
been felt yet. However, there are signs the morphine of QE is wearing off and
the worldwide banking system is about to suffer.
There is a real problem in that billion dollars worth of USD,
EUR and GBP in bonds which have been secured against commercial premises could
be worthless because of the fall in the value of property.
According to the Financial Times, “Over USD3,500 billion of
commercial property debt is outstanding in the US alone.” Approximately 25% of
this was securitized. Moody’s has advised that these will suffer from default as
there has been a drop in value of over forty percent from when they topped out.
It should also be noted that a lot of riskier investments have already gone
belly-up. Things will only get worse before they get better. The rating agency
has also advised that of the USD150 billion of commercial mortgage backed
securities which will mature over the next three years at least two thirds will
be have problems with refinancing. The US government has basically had to
guarantee these otherwise the market would just collapse.
Fitch believes this will also happen in Europe where the same
sort of mortgage backed securities account for GBP60 billion. The UK has been
honest about its problems but what about the rest of Europe? It has not and
there is a lot more to come out which will not do the real estate sector any
favours or the Euro either. Germany is meant to have twice as much exposure as
the UK which does not bode well.
As one Fitch analyst said, “It is questionable whether a
recovery will be in time and in sufficient magnitude to absorb the wave of
bullets falling from 2011 onwards.”
As time goes on there is more restructuring of original deals
as more and more defaults come to the surface. As mentioned above, forced sales
are already on the up. What happened in Dubai is a perfect example of this and
it cannot be the only time this will happen. The fear is this is only the tip of
the iceberg and there is a lot more to come. As reported in the Financial Times
last month, “Real estate debt for banks is the pig in the python and the
question is when it will be digested. It has looked like it will kill the
python.”
The outstanding property debt in America and Europe alone is
USD5,000 billion. Banks just do not have the cash to loan, despite what their
respective governments have done. HSBC reckons that well over eighty percent of
UK loans made over the last 60 months are now in breach of their original
lending agreements. However, the banks are now turning a blind eye to this. They
are actually rolling over loans as they near maturity. This is because they are
praying the capital values and Loan To Value (LTV) ratios will go up to a level
that can be refinanced.
To be continued…
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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
Changing needs
 When
we all began with a Kodak Box Brownie camera, we were delighted with the
ability of this equipment to record scenes, and even people (as long as
you didn’t get too close). From there, most of us went to folding
cameras like the Voigtlander Bessa (am I bringing back memories now?)
and from there to an SLR like the Canon AE1 + Program.
For the keen amateurs there would be a number of SLRs
from various manufacturers, until you settled on one and built up a
system from there. I have one friend with the complete range of Pentax
lenses as well as a couple of camera bodies. I have another who has to
drag his Nikon cameras in something that looks like one of those wheeled
cases and weighs half a ton. He is a professional.
Very recently in an article about flash guns, I wrote
about a DVD I had been given, saying, “Being a Nikon produced video
lesson, there was a very strong message to use Nikon equipment, and I
will admit to using Nikon myself until I was seduced by the ease and
simplicity of the Panasonic Lumix.” That prompted an email from Don
Griffith who wrote, “Smiled when I read this Panasonic Lumix - but I
think you may be talking about a DSLR. I bought a little Panasonic Lumix
TZ7 myself -the only thing it has not got that is really important to me
is RAW. It has quickly become indispensable-and the picture quality is
generally excellent.
“Would recommend any serious photographer to buy a
super-compact, if they can afford it - beats lugging all the Nikon/Canon
gear around every time you step out of the door - and missing some
critical opportunities because you have decided to give your shoulder a
rest and have left it all at home. Never waste money on the official
case - it is an advert to get it stolen, as often it advertises what is
inside - buy a similar cheaper case at a bargain store about one eighth
of the cost - just as good - in some cases better, as rigid instead of
soft, offering some protection if dropped.
Put the saved money towards a spare battery instead.
Don Griffith”
Now I was remiss here, because I should have stated
my Panasonic camera more accurately. I bought the ‘bridge’ Panasonic
Lumix DMC FZ50 and not the TZ7. The FZ50 does have the RAW files
capability which Don Griffith is looking for. I also bought the camera
because I didn’t want to walk around lugging lenses any more either, and
the DMC FZ50 has a Leica zoom covering 35 mm to 420 mm and with optical
image stabilization, you can even hand-hold through the zoom.
Another photographer who agreed with my choice was
Alan Puzey who wrote in with his own experiences of the FZ50. And he was
another tired of lens lugging. He wrote, “I no longer wanted to carry
around a case of equipment with additional lenses, flashes, etc and so
SLRs were out. Of this sort of alternative the Lumix looked just what I
needed - and has proved to be so.
“I love the lens quality and the positioning of
controls around the camera. Very logical and easy to use. When I have to
revert to the ‘on-screen’ menus, they are pretty good. I didn’t at first
like the feel of holding this camera, but now I have got used to it,
it’s no problem at all and now feels ‘normal’.
“I only use the ISO 100 setting; the sensor is not
the best available and all speeds higher than this bring quality down.
ISO 800 and 1600 I wouldn’t touch with the proverbial barge pole!
“There are far more detailed reviews on the internet,
but these are my main feelings, and I hope they’re of use. A little in
return for your good columns.
Cheers, Alan Puzey”
And is there a downside? Yes there is. It would be
nice to have a wide angle capability, but so far the adapters are not
good by all reports and the built in camera flash is woeful. You can’t
have everything!
Modern Medicine:
by Dr. Iain Corness, Consultant
Do you positively want to live longer?
You can begin by humming, “If you wanna be happy for the rest
of your life, never make a pretty woman your wife,” as sung by Jimmy Soul in
1963. Was he correct? If you are happy, will you really live longer?
After much research, including clinical studies, the
researchers have the answers. Be happy and stay well. Be aggressive and get
heart attacks and cancer, and shorten your life correspondingly.
Now that does not mean that all happy folk live to be 100
and the misery bags turn in their credit cards at age 45? No, but there is
enough evidence to show that your personality type influences the kinds of
diseases you will get later in life, and some of these can be very
conclusive. And not just a ‘coronary conclusion’!
However, this is research is really nothing new; it is
more of a reinforcement of previous knowledge. In the times of Hippocrates,
the healers were interested in the personality of the patient, because even
then they felt that this had a bearing on the disease process. This
conclusion was reached after observation of the patients. Observation was
the great trait of the great medical minds. We would not have developed many
‘cures’ if it were not for the physicians who noted the deviations from the
normal patterns in the first place.
The combination of mind and body and disease is the basis
for holistic healing, and even though Hippocrates and his healers did not
have all our pharmaceutical treatments wonderful tests and MRI’s, they did
treat the person, not just the disease.
So why do we fall ill in the first place? Is it a
personal weakness, is it just “lifestyle” or just plain bad luck? Since I am
not a great believer in “luck” be it good or bad, my leaning after many
decades of medicine is towards a type of personal “weakness”. After all, you
can take two people with the same lifestyle but one gets ill and the other
does not. Why? Simply, the sick person was more susceptible than the other -
in some way they had a pre-disposition or call it a “weakness”. Simplistic I
know, but it seems to fit.
So what factors seem to be involved in bringing about the
pre-disposition. Genetics are one, and do play an important part. If your
parents are diabetic then you will most likely have the problem too, but it
is not absolutely inescapable. The modern scientific studies with large
numbers of people have come up with interesting statistics. One famous
researcher, Eysenck, lumped us all into four main personality categories.
Type 1 have a strong tendency to suppress their emotions
and tend towards “hopelessness” and are unable to deal with personal stress.
Type 2 people, on the other hand, are also unable to deal
with personal stress, but react to life with anger and aggression.
Type 3 is less clear-cut with a mixture of all these
personality traits.
Type 4 covers the optimistic and relaxed who deal much
better with interpersonal stress.
Using these broad categories and looking at disease
profiles that each type gets, returned some amazing facts. Type 1 was the
cancer prone group, Type 2 got heart disease, Type 3 got both while Type 4
people were not prone to either cancer or heart disease. Can you see what’s
coming next?
Eysenck did not stop there. He went on to show that when
people modified their personality they also modified their disease profile.
When you think about it, this is staggering stuff! By attention to your
personality profile you can modify your disease profile!
The most significant personality trait was “anger”. Learn
to modify your anger response (and this can be done) and you become less “at
risk”. This is approaching Buddhist philosophy and “jai yen yen” - but you
can modify your personality. That last sentence can make you live ten years
longer, happier and disease free. Forget all the wonder cures, just look at
yourself first! Hippocrates did more than say oaths!
Heart to Heart with Hillary
My Darling Hillary,
My response re my hurtful depiction of your sweet self in my recent cartoon is
to tell you that you brought it all on yourself by rejecting my advances in so
many ways especially when I wrote under the alias of Nairod Remraf (yes it was
me) which culminated in your telling me “to pitch my tent on the Sukhumvit fast
lane.” Talk about a man scorned! Also recently you exposed my weakness in using
the apostrophe to demonstrate your animosity to thousands of readers. (I still
say my English master was right) causing me to strike back in the most hurtful
manner possible knowing that there’s nothing more important to a woman than her
looks and it worked! But Hillary, who finished up the most hurt? (Your turn to
gloat.) Because while cracked up with mirth at your expense (and this is the
truth) I stooped to open my fridge door for a celebration beer and something
cracked in my back which confined me to my bed for twenty hours and then a
further day and night in hospital until able to walk again. Both painful and
expensive and I haven’t laughed since. Re your bottle of bubbly compensation, I
might just when returning home to Warwickshire for a couple of months in the
spring, purchase the substance that has altered my mind, a bottle of the local
scrumpy cider which doesn’t travel well especially in the heat and will likely
cause you never to ask again! Oh, and my English master was also my Maths,
History, Geography and Sports master, was Turkish and drank scrumpy.
Love, Dorian
 Dear Love, Dorian,
What a twisted young man you are, though obviously your English teacher has to
shoulder some of the responsibility, including your excessive use of the
exclamation mark and brackets, and I’ll ignore the split infinitives for now.
You hide behind a pseudonym (better word than “alias” in this situation, my
Petal), and who would have guessed that Dorian Farmer was in reality Nairod
Remraf? Certainly not sweet Yrallih from the Ayattap Liam, who has never spent a
summer in Warwickshire drinking scrumpy. As you yourself, for both of you,
admit, your mind has been altered by that substance. You will also see that I
have published your “cartoon” if I may bestow upon it a greatness that it does
not deserve, despite the fact that I have been depicted as a fat nude, with a
towel and the shower still on. Dorian, I, and most sane people, turn the shower
off before grabbing for the towel. Sorry to hear about your health problems.
Nothing trivial I hope. Finally don’t exert yourself trying to get scrumpy
through customs. I have seen what it has done to you.
Dear Miss Hillary,
My friend Dr Iain has told me of your distress that Cadbury
chocolate is to be taken over by the plastic cheese giant Kraft - its hard, I
know, and I do hear rumors that Moet & Chandon will soon by taken over by
Coca-cola. So get used to it - cheese slices and Coke will have to be your
comfort foods.
But keep up your good work, it must be reassuring that you
will always have a job as there is no end to male stupidity and Pattaya is its
world-wide HQ.
Dr Michael
Dear Dr Michael,
How nice to hear from someone cultured like you, my Petal,
though please remember that any friend of Dr Iain’s is not necessarily a friend
of mine. Whilst I applaud your attempts at being a wine connoisseur, do you have
to single out the cheapies for me? The ‘better’ labels will never be taken over
by the pop fizz bizz, I can assure you, even if chocolates have been besmirched
- but please note that the Belgian chocolates remain unsullied. Hint, hint,
nudge, nudge.
As you have so correctly diagnosed, male stupidity is
endemic, or even epidemic, but fortunately not pandemic, so that is probably why
the World Health boffins haven’t descended upon Pattaya with brooms at the ready
to vaccinate the drinkers in every beer bar. Or perhaps they have already?
Disguised as ladies of the night, they entice the passing males with calls of
“Hello, sexy man. Sit down please.” Once seated they distract the male with
several glasses of brown liquids, remove the wallet with surgical skill, and
then send the unsuspecting male to recover in intensive care rooms, generally
upstairs.
Thank you for saving me from the plastic cheese, I have made
it my business to avoid the wrapped slices - you never know if the plastic
wrapping is still on them - they taste just the same.
Let’s go to the movies:
by Mark Gernpy
Shutter Island, scheduled
for last Thursday, turned out to be a no-show throughout Thailand.
That’s a disappointment! I was looking forward to this horror fantasy
directed by Martin Scorsese with Leonardo DiCaprio, Ben Kingsley, and
Max von Sydow. It’s now on some lists for April 15.
Now playing in Pattaya
Up in the Air:
George
Clooney flies around the US firing people that their bosses are too
timid to do themselves. An Oscar best picture nominee, and Clooney is
also up for best actor. And, two supporting actresses: Vera Farmiga and
Anna Kendrick. Film also up for adapted screenplay, and director (Jason
Reitman).
Invictus:
US, Biography/ Drama/ History/ Sport – Starring Morgan Freeman and Matt
Damon, directed by Clint Eastwood. Delivered with typically stately
precision from director Clint Eastwood, Invictus may not be
rousing enough for some viewers, but I thought the character studies by
both Matt Damon and Morgan Freeman to be fascinating, and played with
the utmost conviction. Best actor nomination for Morgan Freeman’s
portrayal of South Africa’s Nelson Mandela. Generally favorable reviews.
The Book of Eli:
US, Action/ Adventure/ Drama/ Thriller/ Western – Some think It’s
uneven, and many viewers will find that its reach exceeds its grasp, but
The Book of Eli finds the Hughes brothers injecting some fresh
stylish fun into the kind of post-apocalyptic wasteland filmgoers have
seen more than enough of lately. Starring Denzel Washington. Rated R
in the US for some brutal violence and language. Mixed or average
reviews.
The Wolfman:
UK/ US, Horror/ Thriller – An excellent spare, dark, and brooding Gothic
version of the famous tale, told with great style and much blood. For
those who like Gothic straight-up horror and blood, this is a welcome
new and classic $85 million remake of the 1941 Lon Chaney movie.
Starring Benicio Del Toro and Anthony Hopkins. Rated R in the US for
bloody horror violence and gore. Big C has only a Thai-dubbed version;
in English elsewhere. Mixed or average reviews.
Percy Jackson &
the Olympians: The Lightning Thief::
Canada/ US, Fantasy/ Comedy – The Mount Olympus gods are not happy:
Zeus’ lightning bolt has been stolen, and high school student Percy
Jackson is the prime suspect in this sprawling and entertaining teen
adventure. As Percy finds himself caught between angry and battling
gods, he and his two close friends embark on an adventure to catch the
true lightning thief, and return the lightning to Zeus. Logan Lerman as
Percy is an excellent new teenaged hero like Harry Potter, but for me a
lot more interesting and with a lot more charisma; a sequel is already
announced for next year. There’s one short additional scene during the
closing credits. Big C has only a Thai-dubbed version; in English
elsewhere. Mixed or average reviews.
Avatar::
US, Action/ Adventure/ Sci-Fi/ Thriller – Nine Oscar nominations,
including best picture and best director. Now the highest grossing film
in the world ever, bypassing the director’s own Titanic. It’s a
very good film and a truly major technological breakthrough. It’s
exciting and beautiful, and has received near-universal rave reviews
from critics and fans.
In Pattaya, Major
Cineplex has a 2D version, which is in English and Na’vi dialogue (the
completely new language created by linguists for the natives of the
planet Pandora), with English and Thai subtitles as needed. Pattaya
Beach no longer has a 2D version; the 3D version remains, in English and
Na’vi languages. Unaccountably the 3D version does not have English
subtitles for the Na’vi language, only Thai. Big C has a Thai-dubbed 2D
version, no English subtitles.
Reviews
style="font-family: Arial,sans-serif">Confucius / Kong
Zi:
China, Biography/ Drama – Set in 6th Century BC, this is the life story
of the Chinese thinker and philosopher, from his days as a court
official through battles and political intrigues, to his old age as a
disillusioned sage. China has here adopted the Hollywood way of pumping
up the romantic and action-related angles of the man, even casting an
action hero (Chow Yun-Fat) as the man himself, and portraying him as
romantically attracted to a concubine. In Pattaya as in most places in
Thailand it’s in a Thai-dubbed version without English subtitles.
From Paris with
Love:
France, Action/ Crime/ Thriller – An intelligence operative working in
the office of the US Ambassador in France (Jonathan Rhys Meyers) takes
on more than he bargained for when he partners with a wisecracking,
fast-shooting, high-ranking US agent (a bald John Travolta) who’s been
sent to Paris to stop a terrorist attack. Stylish, fast-moving,
exciting, with a wild performance by Travolta. Rated R in the US for
strong bloody violence throughout, drug content, pervasive language, and
brief sexuality. Mixed or average reviews. Not at Big C.
Tai Hong / Die a
Violent Death:
Thai, Horror/ Thriller – This omnibus film consists of four short
shocking stories of death and horror, exploiting four real news stories,
including one tasteless recounting of last year’s deadly blaze at
Bangkok’s Santika pub, which is truly shocking – but shock at the
incredible insensitivity that can be shown again by Thai filmmakers
toward traumatic Thai events. Not at Major Cineplex.
My Valentine:
Thai, Comedy/ Romance – A girl who hates Valentine’s Day meets three
young men, each determined to make her his Valentine. The usual Thai
rom-com, with a mixture of cute young Thais and older TV comedians.
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