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Money matters:
John Sheehan
Global Markets Asia
The inevitable demise of
Western Democratic Capitalism? Part 5
Low Interest Rates-Blessing or
Curse?
Amongst all this chaos one major contributor to the 2008
crisis will continue to reign unchecked: low interest rates. With the exception
of a few short term spikes, we have just experienced a 30-year long period of
overall gradually reducing interest rates. This has served to continuously lower
the cost of credit and thereby boost productivity and drive up wealth. We may
wish to applaud ourselves for how well we have done economically in the past
generation, but the reality is that much of this has been achieved as a result
of money becoming cheaper to borrow.
Rock-bottom interest rates were a fundamental contributor to
the scale of the 2008 crash and mark the end of the interest rate road. 2008 was
not a once in decade downturn, it marks the end of an era. Now there is nowhere
else to go; interest rates are close to zero and cannot drop any further in
order to stimulate markets and kick-start recovery. It will be interesting to
see how the world copes without this advantage in the future.
Given the weak prevailing economic fundamentals, and not
wishing to appear unpopular once again, governments will be reluctant to
significantly increase the cost of money for the foreseeable future. Borrowing
will therefore remain cheap which will continue to encourage speculation - money
will chase money seeking to find any form of advantage, no matter how small.
John Sheehan, Global Markets Asia
Bubbles will therefore continue to run amok unabated for the
sake of keeping the multi-trillion investment industry in a job. So far we have
seen bubbles in dot.com, property, oil, equities in 2009, gold maybe, and then
what next? All speculative markets are at risk to unwarranted speculation and a
complete lack of logic as to why investors are piling in. Fundamentals are
irrelevant. Data is prevailing over common sense and judgment. Investment will
be governed by technology, mathematicians, probability theory and greatest
short-term speculative upside - the same casino mentality that previously
consumed the markets and fuelled the huge scale of the 2008 crash.
The politicians will of course encourage and applaud this
mirage in order to bask in the reflected glory. They will claim that speculative
rises are in fact a “certain sign of commercial recovery,” and vindication of
how competent they are and a direct result of their expert handling of their
economies!
They should enjoy their dream whilst they can as it is likely
to be the only good press that they will benefit from for a long time to come.
Their feebleness and lack of leadership is summarized by their acquiescence to
the financial sector.
As Gordon Brown unfortunately said in his Mansion House
speech of June 2002: “What you as the City of London have achieved for financial
services, we as a government now aspire to achieve for the whole economy!”
Government attitude to what is the biggest financial challenge of the modern era
is that the financial system led us into crisis and will lead us out! In other
words they are entrusting the future of the western democratic system entirely
into the hands of the culprits that were instrumental in making the mess.
The size of the 2008 crisis shocked the markets, politicians
and governments, and exposed “the emperor’s coat” of the 21st century - complex
new financial products and derivatives that only a handful of people at the
sharp end of the business truly understand. Even within the investment banks
that generated these products, few people outside the trading fraternity really
got it. Everyone else, including the CEOs of the now defunct investment banks
worked on the “emperors coat” principal. If the industry that created these
products struggled with understanding, what chance for the politicians and the
dull ranks of bureaucratic advisers and regulators that are supposed to keep
things in check?
The immense size of the unregulated financial sector that
integrates these new products has hardly changed since 2008, and very little
meaningful progress has been made in terms of proper regulation since crisis
hit. Derivatives, credit default swaps, interest rate swaps, money market funds,
repo market; add it all together and the total exceeds USD 1.1 Quadrillion!
Throw in the USD100 Billion or so balance sheets of the regulated banking sector
and the world is now at risk from exposure to the financial sector at a level
equivalent to 20 years global GDP, 85 years of the US economy and 250 years of
the Chinese economy!
If it is any consolation, the chances of this lot melting
down together is probably remote, but the scale of what has been unleashed upon
an unsuspecting world by the financial sector is staggering, and the world seems
oblivious to the risks it is allowing to build up in its midst!
So what happens next?
“Expect the unexpected” is probably the most accurate
prediction that can be made for 2010. Expect sovereign debt crises, reckless
protectionism, short-sighted fiscal decisions, strikes, sudden erratic surges or
dips in the capital markets, and a whole host of stuff that we haven’t even
thought of.
All of this will continue to pile on pressure onto an already
beleaguered capitalist model. For how much longer will the people tolerate this
situation until at least fundamental re-engineering is demanded, or the system
risks collapse? Were the dollar to lose its elite status as reserve currency for
the world, the US economy would face Armageddon. For now the USA can in theory
continue to print virtually infinite amounts of debt as long as the world
continues to buy its debt for next to nothing.
Looking forwards, the defining moment may well be the day
that foreign buyers stop subsidizing the USA and demand a higher return on
investment in US Treasuries. The problem then is interest rates rising
significantly and the cost of servicing burgeoning national debt increasing
sharply beyond the capacity of its Treasury. Such an event could occur within
twelve months or ten years, but when it does a point of no-return will be
reached, and the world order will probably change dependant upon who is poised
and ready to take advantage.
As human beings we tend to remain trapped within the limits
of our own experience and perception of events that unfold around us in the
world. For example, because the USA has always been the top-dog superpower for
most of us in our lives, we cannot even remotely envisage a situation where this
is not the case.
History tells us otherwise though; that everything is
cyclical and eventually comes to an end. Change is an inescapable part of human
development, and even the strongest systems, empires or leaders cannot continue
reigning for ever. For those who consider a systemic collapse within the
capitalist model to be in the realms of fantasy, never forget that just two
years before the collapse of communism and the fall of the Berlin wall, such an
occurrence was deemed impossible and absolutely unthinkable!
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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
Auto and no flash for better results
 Flash
photography tends to worry some weekend photographers, so this week we
might try to de-mystify lighting.
Camera flashes come in all shapes and sizes. These
range from piddley little things in the camera body, which will light up
the end of your nose and not much else, through to pop-up flashes that
will get to the other side of a (small) room, through to the big
hammer-head flashes which bolt on to the camera and can light up the
other side of the moon during an eclipse. But do you really need all
this ‘firepower’?
Take a look at the photo with this week’s column. The
Halloween lantern was photographed at night, and if a flash had been
used, the whole atmosphere of this photograph would have been lost. With
flash you would have had a washed out pumpkin, and nothing inside.
Without the flash, the solitary candle burning inside became the source
of light, and the photo really shows up the carving and the fact that it
is a Halloween pumpkin. A small amount of light was reflected from the
photographer back into the exterior front of the pumpkin, and there you
have it - a ‘surreal’ shot of a Halloween pumpkin.
Now the orange color (which you can see on the net
version of Pattaya Mail, but unfortunately not in the grey and
white hard copy) is something that came with the candle light. What has
to be remembered, is that light comes in many different colors. There is
in fact a light scale, measured in degrees Kelvin, that shows why the
late afternoon shots are ‘warm’ and the other shots are ‘cold’. It also
explains why a household light bulb looks orange when photographed, and
why objects lit by neon tubes look green. This color shift can be seen
with digital cameras if you do not reset the white balance for the
prevailing light source.
Getting slightly technical, color temperature is a
term that is borrowed from physics. However, the photographic color
temperature is not exactly the same as the color temperature defined in
physics, as photographic color temperature is measured only on the
relative intensity of blue to red. However, we borrow the basic
measurement scale from physics and we measure the photographic color
temperature in degrees Kelvin (K).
Here is a table to show the differences in light
sources.
1000 K Candles; oil lamps
2000 K Low effect tungsten lamps
2500 K Household light bulbs
3000 K Studio lights, photo floods
4000 K Clear flashbulbs
5000 K Typical daylight; electronic flash
5500 K The sun at noon
6000 K Bright sunshine with clear sky
7000 K Slightly overcast sky
8000 K Hazy sky
9000 K Open shade on clear day
The next confusing aspect is that the photographic
film and the human eye do not see the colours with the same intensity.
The usual print film is ‘balanced’ to around 5,000 K, so light sources
lower in color temperature will look orange, even though it does not
look orange to the naked eye. There are other films available balanced
to tungsten light, so this time the light bulb will look white. You also
do not have to know the degrees Kelvin table by heart to get some
different photographs when you turn the flash off.
Try doing the following this weekend and let’s get
some spectacular low-light photographs. Firstly, inactivate the flash,
but turn on the automatic mode for your camera. In other words I am
going to make this very easy for you. No hard exposure calculations. If
you have a tripod, dust it off, but even if you haven’t, continue.
Go to your local markets at dusk and take some
photographs of what goes on there, using just the stall-holder’s naked
bulb for illumination. Be prepared to lean against a telephone pole to
stop camera shake. But give it a go.
Now try photographing some of the hotels at night.
Most are quite brightly lit and once again, you may end up very
surprised at what you get. Even try some portraits lit by candles only.
Use your imagination, and not the flash!
Modern Medicine:
by Dr. Iain Corness, Consultant
Are you getting depressed?
What between the red shirts and the yellow shirts and the
blue shirts, it is a constant dilemma each morning as to what shirt you can
safely wear to work. Even green can be a problem as you might be confused
with being a ‘greenie’. Freedom of choice in the shirt selection has been
taken away from you. Should you get depressed about it?
Well, if you are a western male, even if this does
depress you, you will almost automatically repress the emotion. You were
taught to do this by your father. You probably even picked up your crying
toddler son after a tumble and said, “There, there. Big boys don’t cry.
You’re OK.” Correct?
We are all guilty of promoting this stereotype. The big
strong man who protects the weak and vulnerable woman. Countless movies all
follow this theme from “Gone with the Wind” through to “Mission Impossible
III”, so it must be true. Unfortunately for all those big strong
super-protective men out there, the stereotype is not necessarily true and
rigid following of it can be quite contrary to good mental health.
“Men tend to be action-oriented, so they mistrust
feelings and tend to regard emotions as a sign of weakness,” says Dr Michael
Dudley, a psychiatrist and chairman of Suicide Prevention Australia. “For
men, mental illness is seen as a moral failing, so they bury pain and don’t
talk to people about it. But depression is an illness, not a weakness.”
Depression is an illness that can strike at any time,
even to those normally associated with dogged masculine determination.
Famous amongst these was Sir Winston Churchill, who guided the UK through
the tribulations of WWII, and who called his depression “the black dog”.
What has to be understood is that just “feeling down” on
its own is not a symptom of mental illness. We all feel down from time to
time, generally when something has happened to precipitate it, even the
death of a family pet. “We all feel sad from time to time, but depression is
an ongoing sadness that lasts for two weeks or more, with a complete loss of
pleasure in things that were once enjoyed. Some men live with their
condition for months, or even years, and become acclimatized to their low
mood or negativity,” says Dr Highet, a psychologist. “But depression isn’t
merely a passing blue mood or something that someone can ‘snap out of’
without help. Depression dramatically alters an individual’s body, mood and
thoughts,” she says.
Since men have been raised not to have public displays of
depression, many adopt strategies to cover the problem, with the common ways
being to become workaholics, risk taking to produce ‘highs’, alcohol and
illegal drugs.
“Men often try to manage their own symptoms,” says Dr
Highet. “While this may provide temporary relief, it only compounds the
illness as they are not addressing the underlying condition. Getting help is
essential.”
The incidence in the community is frightening. In
Australia, which has a well developed reporting system, it is believed that
clinical depression is Australia’s fastest growing illness. The National
Survey of Mental Health and Wellbeing found that one in four women and one
in six men suffered from depression. In 20 years it is predicted that
depression will be second only to heart disease as Australia’s biggest
health problem.
The enormity of the problem has remained hidden, but
consider this: Depressed men are four times as likely as depressed women to
commit suicide. Of the over 2,000 suicides in Australia each year, 80
percent are male. There are more men committing suicide each year than dying
on the roads (in Australia), and almost 50 percent of suicides are males
aged 25 to 44.
While the causes of depression are multiple, and men try
to mask their problem, the sad part is that depression can be treated.
Modern pharmaceutical medication is not ‘mind altering’ but restores the
chemical balance in the brain to allow ‘normal’ thought processes to return.
However, it needs the men to admit that they might, just
might, have a problem!
Heart to Heart with Hillary
Dear Hillary,
Belated Happy Valentine’s Day. I hope you enjoy the ‘chocks’.
Your biggest fan,
Big D USA
Dear Big D,
Your belated Valentine’s Day wishes are accepted gladly. You are a man who
understands the way to a woman’s heart is through chocolate bars. And the Extra
Dark, too, and Lindt, the best Swiss chocolate as well. However, my darling
Petal, there’s no ‘k’ in chocolate, but I will always forgive you.
Dear Hillary,
As we know there is always someone who goes a little too far and spoils it for
the others. The ungrateful feringhee who has been abusing Thai kitchen
appliances and boasting about it in your column is clearly in need of a sharp
corrective. This person is also showing signs of interfering in certain matters
of which he can know very little.
I can assure him that electric shocks will be the least of
his troubles if he continues in this misguided fashion.
In addition, his improper behavior with regard to chopsticks
has been noted. I suggest he look at the map and understand exactly where he is.
Madam! I realize you are not responsible for the occasional
perverse correspondent. You are writing for a respectable paper and your
sincerity is obvious to all. Thoughtful persons who seek loving and mature
relationships could do worse than listen to you. For that reason, I am sure your
reference to ‘the black arts’ was not intended as serious advice. Those who
meddle with the unknown usually come to a sticky end.
I suggest that the ‘frightened expatriate’ gets back into the
same closet where he keeps his old toasters. Either that or leave town, Chiang
Mai can do without his sort.
(Dr) Fu Manchu
Dear Dr Fu Manchu,
Your very kind comments regarding myself and my unworthy scribbling are noted,
and my chest is swelling with pride (nothing else this side of cosmetic surgery
has worked so far…). And please, do not be bashful by putting your title in
parenthesis (or even more simply in brackets, for some of my readers). Sax
Rohmer investigated your CV, and you deserve your title.
However, getting back to the Terrible Tale of the Tortured
Thai Toasters (attributed to Sax Rohmer, but unpublished as of this date), it
was after a visit to the newspaper office from Sir Denis Nayland Smith and Dr.
Petrie that they suggested the reference to the ‘black arts’. Probably they were
afraid to refer to this as the ‘yellow peril’, as this might have produced even
further machinations that only you have the power to produce.
As regards toasters and ‘sticky ends’, I have personal
experience of this, after attempting to make toasted cheese sandwiches, or even
Welsh Rarebit, by lying the toaster on its side and gently inserting the slices
using a spatula (rest assured I would never use a chopstick).
No, Dr. Fu Manchu, we do indeed live in troubled times,
and we at this respectable paper do appreciate all your efforts at keeping
Thailand’s toasters chopstick free. Christopher Lee was right when he said, “The
world shall hear from Fu Manchu again.” I am honored that you made that contact
through my Hillary column.
Dear Hillary,
I was told many years ago that you shouldn’t let your wife’s family come to stay
with you, even just for a few days, as it always ends up for weeks or months. I
thought I was lucky because it never happened to me. Relatives might stay one or
two nights, but that was it. Recently things have changed a lot now with her
brother and her cousin and her mother all staying in the house with us. They all
stay in the one room which I think is a bit unhealthy, and they’ve been here for
three months and there’s no sign of them leaving. They are quiet and do help
around the house and garden, but this wasn’t what I really expected. I asked my
wife about it but she just says it’s OK and they’ll be going soon after the
brother and cousin have got jobs and mother is just having a holiday. Well I
wish I could have three month holidays. What’s the next move, Hillary? Enough’s
enough, surely. I have a close family in the UK, but they wouldn’t come and stay
for ever.
Horace the House Husband
Dear Horace the House Husband,
You are now starting to see a little of what Thai society is all about, my
Petal. Family reigns supreme, and it is usual for them all to sleep in the same
room. It’s not unhealthy. It is Thai. When you got married, you joined a Thai
family, much more than your wife joining your UK family. After all, you married
a Thai lady and chose to live in Thailand. You would have to expect that Thai
culture will be dominant. You can try voicing your reluctance to have them
there, but be prepared for difficulties. This is your wife’s immediate family.
You can always try to find them jobs - in a far away city. Lots of luck!
Let’s go to the movies:
by Mark Gernpy
Now playing in Pattaya
Shutter Island: US, Drama/
Mystery/ Thriller – If this did indeed arrive this week, I urge you to
see it – but I have to warn you that a great number of people seem to
dislike it immensely. I’m just fond of it. I think the discrepancy lies
in expectations. If you go to see another great gritty Martin Scorsese
film in the tradition of The Departed, you will not like it at
all. Here he’s just having fun with an old film tradition – scary
goings-on in a lonely island hospital for the criminally insane, with
crazy people all around and frightening things happening in the middle
of lightning storms. Within this framework, Scorsese is taking great joy
in playing with his audience’s expectations, leading us all on a merry
chase full of deceptions. With Leonardo DiCaprio, Ben Kingsley, and Max
von Sydow. Generally favorable reviews.
The Princess and the Frog: US, Animation/ Family/
Fantasy/ Musical/ Romance – A fairy tale set in Jazz Age-era New Orleans
and centered on a young girl named Tiana and her fateful kiss with a
frog prince who desperately wants to be human again. I think Walt Disney
has much to atone for in its presentation of blacks over the years,
right from the very beginning in the silent era, and this film pretty
much does the trick. After a few squeamish moments at the start, the old
Disney magic takes over, and you’re treated to classic 2D animation in
the venerable Disney style. A brilliant animated film in the tradition
of the great Disney fairy-tale films. Generally favorable reviews. This
opened last December in most of the rest of the world.
Clash of the Titans: UK/ US, Action/ Adventure/
Fantasy – The mortal son of the god Zeus embarks on a perilous
journey to stop the underworld and its minions from spreading their evil
to Earth as well as the heavens. Starring Sam Worthington as Perseus,
Liam Neeson as Zeus, and Ralph Fiennes as Hades. A remake of a 1981 Ray
Harryhausen adventure starring Laurence Olivier, and likely to be the
first chapter in a trilogy based on Greek mythology. Mixed or average
reviews. Shown in both a 3D and a 2D version at Pattaya Beach, 2D at
Major and Big C, which also has a Thai-dubbed version.
How to Train Your Dragon: US, Animation – I think
this is a really terrific family film. Set in the mythical world of
burly Vikings and wild dragons, the animated action comedy tells the
story of Hiccup, a Viking teenager who doesn’t exactly fit in with his
tribe’s longstanding tradition of heroic dragon slayers. Hiccup’s world
is turned upside down when he encounters a dragon that challenges him
and his fellow Vikings to see the world from an entirely different point
of view. Generally favorable reviews. Shown in 3D and English at Pattaya
Beach; 2D and Thai-dubbed at Big C.
Bang Rajan 2: Thai, Action/ War – The sequel to
Bang Rajan, it continues the patriotic legend of a tiny farming
village that fought Burmese invaders despite insurmountable odds and
successfully held off a foreign invasion until the capital at Ayutthaya
could put up a proper defense. Ferociously violent and bloody, with even
more buffaloes and mustaches than the original.
Saranae Sib Lor: Thai, Adventure/ Comedy – With
Mario Maurer of Love of Siam fame, playing a young man whose
father suspects he’s gay.
Remember Me: US, Drama/ Romance — Explores the act
of mourning as a theme, and how death sometimes reminds us that every
minute of life should be savored. Overall, a gently bittersweet and
affecting portrait. Starring Twilight’s Robert Pattinson, along
with Emilie de Ravin and Pierce Brosnan. Mixed or average reviews. At
Pattaya Beach only.
Valentine’s Day: US, Comedy/ Romance – Critics
have been unkind to this story of Intertwining couples and singles in
Los Angeles as they break-up and make-up from the pressures and
expectations of Valentine’s Day. It’s a huge hit in the US. Generally
unfavorable reviews. At Major only.
Nak Prok / Shadow of the Naga: Thai, Action/ Drama
— About a trio of thieves who bury their loot in a Buddhist
temple, then dress as monks in order to retrieve the stolen loot. Its
strong depictions of the thieves robed as Buddhist monks have kept it
out of Thai theaters until now, when the new rating system allows more
controversial scenes and images, if properly rated. 18+ in Thailand.
Alice in Wonderland (3D): US, Adventure/ Family/
Fantasy – Not your usual Alice, because it’s a new story, a riff on the
original, with Alice all grown up as a late teens girl about to be
proposed to. Escaping for a moment from the ditz proposing to her, she
returns to Wonderland to find the strange land now in the hands of a
cruel despot who is making life miserable for everybody. With director
Tim Burton, plus this particular Alice (Misa Wasikowska), plus Johnny
Depp in another of his way-out-there tragicomic performances – it adds
up to an unforgettable, one-of-a-kind movie experience. Mixed or average
reviews. Shown in 2D this week, and only at Pattaya Beach. I’ve
seen the 2D version as well, and to me the colors are considerably
brighter than in the 3D version, and overall it’s just as enjoyable.
Green Zone: France/ US/ Spain/ UK, Action/ Drama/
Thriller/ War – Courageous director Paul Greengrass takes on the whole
Bush Administration (and the Blair administration too I guess) as he
reminds us all, very forcefully, that there never were “Weapons of Mass
Destruction” in Iraq and the governments knew it, and the whole fiction
was created as an excuse to go to war. Starring Matt Damon as a US Army
officer who hunts for the elusive WMD and finds only an elaborate
cover-up. Rated R in the US for violence and language, 18+ in Thailand.
Generally favorable reviews.
Solomon Kane: France/ Czech Republic/ UK, Action/
Adventure/ Fantasy – Solomon Kane is a fictional character created by
the pulp-era writer Robert E. Howard. A 17th century Puritan and a
somber-looking man, Solomon Kane wanders the world with no apparent goal
other than to vanquish evil in all its form, and James Purefoy brings
great brooding style and charisma to the role. 18+ in Thailand.
Generally favorable reviews.
The Little Comedian / Ban Chan: Thai, Family/
Comedy – A family comedy troupe harbors a black sheep – a son who
isn’t funny and is constantly upstaged by his filthy-mouthed younger
sister. Comedian Jaturong Mokjok plays the father of the clan.
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