Family Money: Fair & Equitable

By Leslie Wright

Several readers have expressed concern over the recent collapse of Prudential’s talks to rescue the beleaguered insurer Equitable Life. The pension savings of more than 450,000 people are affected.

It all started when Equitable Life lost a legal wrangle over guaranteed annuities in the House of Lords last summer. Equitable’s actuaries had miscalculated the costs of guaranteeing these annuities, and had wanted to move the goalposts.

That miscalculation and the subsequent judgement against the firm landed them with an immediate ฃ1.5 billion bill, and put the firm in jeopardy.

After months of negotiations to sell Equitable, Prudential - Britain’s largest insurer - was the last potential bidder left at the table.

In a statement last month Prudential said, “After detailed consideration, the board of Prudential have concluded that it is not in the interests of either its shareholders or policyholders to proceed with this transaction. We just could not make the numbers stack up.”

Equitable’s president, John Sclater, said the only realistic option was to close its doors to new business, although he insisted that the firm was not bust.

Equitable’s managing director, Alan Nash, 52, finally realised that he could not go on running a fine old business like Equitable Life into the ground, and resigned.

It is small comfort to the hundreds of thousands of policyholders who now face the certainty of miserable returns on their investments that the man responsible will not be writing them any more of his self-satisfied letters. There have been calls for all the directors to resign, not just Mr Nash. In the wake of this pressure, most have now done so.

Miscalculation or mismanagement?

Equitable is the world’s oldest mutual insurance company - owned by its policy holders rather than shareholders - and it accounts for about a tenth of the British pensions market.

It manages some ฃ35bn on behalf of 650,000 savers, including 200,000 people with unit-linked pensions, which should not be affected.

Pensions already in payment will be protected, but with-profits policyholders who have yet to retire will receive substantially lower returns than forecast.

It is less than six months since Equitable’s president, John Sclater, was telling a restless AGM that Mr Nash was providing “strong and wise leadership”. It sounded nonsense then, and it seems grotesque now. Mr Nash misjudged the problem of the guaranteed annuity rates (‘GAR’) at every turn, and his actions finally produced the worst possible outcome for those whose assets he was paid to manage.

Nobody would claim that running a business of this size was easy, but the disaster was so predictable. From the moment that Mr Nash and his fellow directors decided that bonuses meant precisely what they chose them to mean, the business went into cloud cuckoo land where common sense counted for nothing.

Equitable’s guarantees are unequivocal: the commitment to paying the GAR on the full proceeds of the policy was plain. Only an actuary, such as Mr Nash, could have believed otherwise.

This misjudgement was compounded by a hopeless underestimate of the likely cost of having to pay the GAR. “Merely an irritant, with a likely worst cost of ฃ50m,” came the word from the wise actuary.

The cost of the GARs is now put at ฃ1.5bn - and given the accuracy of Mr Nash’s other predictions, even that is not a figure which commands much confidence.

GARs are highly sensitive to the progress of long-term interest rates, which is why Prudential decided that saving Equitable was just not worth the risk.

It is now clear that the business was not the well-managed, low-cost outfit of its public image. Even as disaster loomed, it was still spending hard on new business. Its last full-page ad in The Daily Telegraph was at the end of October.

The outlook for policyholders is not good. Equitable has already shrunk its exposure to shares and property and will be forced to shift even further into bonds. Its estimate that this will trim returns by between 0.5% and 1% a year looks far too optimistic.

In early December, for the first time, Mr Sclater finally condescended to apologise on behalf of the board. Unfortunately, he did not follow up by resigning, along with the rest of the board who have sleepwalked to disaster.

Equitable Life received more bad news when Standard & Poor’s, the rating agency, downgraded its ranking of the insurer’s financial strength from A+ to BBB.

The history

Equitable Life was formed in 1762, the same year as Baring’s Bank. The two city institutions now seem destined to share similar fates.

When Equitable ran into trouble it could not even find a buyer prepared to pay ฃ1 - the price Barings fetched after Nick Leeson’s dealings in Singapore forced a fire sale to ING, the Dutch bank.

Prudential decided that, even with Equitable’s funds under management of some £35 billion, it was not worth buying.

It is doubly ironic that Equitable, which invented the term “actuary” to describe the professional mathematicians who advise life insurance companies, failed to foresee the risk that eventually destroyed it. Between 1957 and 1988 it sold pensions guaranteeing double-digit yields in retirement. The guarantees seemed unremarkable and unlikely to be exercised so no particular steps were taken to fund them.

Although Equitable was the first to calculate life expectancies on actuarial principles, it did not foresee that its policyholders would tend to live longer than their parents. Nor was it prepared for falling rates of inflation that meant the guarantees it had sold became increasingly out of kilter with what could be obtained in the market.

In short, the insurance company failed to obtain adequate insurance against the risk that it would have to honour the guarantees it had issued to 90,000 policyholders.

Worse still, as far as its 450,000 with-profits policyholders are concerned, it did not have any shareholders either. While these are often maligned as fat cats for taking a share in profits, they also come in handy for shouldering losses - just like the Names at Lloyds who have suffered so badly in the past decade as a result of unforeseen disasters.

The true cost of funding the guarantees Equitable issued is unquantifiable because it will rise if interest rates fall.

Firms throughout the financial services industry are less than sympathetic about Equitable’s fall. Its advertising made much of the fact that it dealt directly with investors and did not pay commission to intermediaries - but nor did it retain substantial reserves to fund contingencies.

The UK organiser of the policyholders’ action group said, ‘’Equitable liked to present itself as occupying the moral high ground because it had a very low cost base. But when it comes to long-term savings, financial strength is vital. It tried to make a virtue of distributing investment returns as they arose, rather than maintaining substantial reserves.

“This meant it had one of the lowest free-asset ratios - the extent to which its assets exceeded liabilities - of any life company. That was why I have said for years that Equitable was riskier than it looked.”

Another commentator said, “This is the culmination of sustained mismanagement. Given the demographics of the Equitable Life client bank and the quality of its brand before recent events, it is staggering how this has been handled.”

Some 238 years ago, Equitable’s Deed of Settlement stated, “Many advances and great benefits may arise and be secured to great numbers of persons willing to become contributors for Equitable assurances”.

Today’s regulators would insist on a warning that the rewards of mutuality also entail risk - as 450,000 sophisticated investors are now discovering the hard way.

Equitable Life is holding urgent talks with various US and European groups in a move to offload the choicest parts of its business and retain the goodwill of its rich and influential policyholders.

The race is on to find a buyer for its 200-strong sales and asset management operation, amid signs that some marketing executives are preparing to defect to other companies.

After Prudential - Equitable’s UK rival - pulled out of talks to buy the whole business, and the negative publicity that has followed, many of Equitable’s with-profits policyholders are very concerned at the future of the firm, and at best are faced with lower returns as the group is forced to switch its investment from equities to bonds.

The UK arm of Aegon, the Dutch insurance group that already owns Scottish Equitable, is interested in the mutual’s asset management business, which controls ฃ33bn of assets. This would double the company’s assets under management in the UK, taking it to ฃ67bn.

If, instead, Equitable chooses to contract out the managements of its assets, keeping overall control, it can expect to be deluged by offers from specialist fund managers who would not want “the baggage” involved in buying the whole business.

Schroders, Goldman Sachs and Aberdeen Asset Management are among the likely contenders for the contract to run all or part of the ฃ33bn portfolio. The most valuable part of the assets under management is the ฃ4bn in high-margin unit trusts. Barclays Global Investors and HSBC’s asset management operation are already sub-contracted to run ฃ500m of Equitable’s passively-managed index-tracking funds.

GE Capital, the financial services arm of the US conglomerate General Electric, wants Equitable’s computerised fund-administration system, which services 500,000 policyholders.

This side of the business has some valuable clients, including Marks and Spencer Financial Services and Merrill Lynch Investment Managers, whose ฃ2bn upmarket defined contribution business is serviced by Equitable’s back office systems.

Equitable’s sales force, comprising well trained and highly paid executives, is expected to shrink as people find jobs elsewhere. So unless it acts fast, Equitable could find it may not have much of a sales force left to sell.

Analysts also report that some of Equitable’s 35 fund managers are poised to leave the company, although Equitable recently said there have been “no new leavers”.

The future

How will Equitable Life’s holders be affected by last month’s announcement?

Equitable intends to reduce its investment in equities and increase holdings of bonds, such as government gilt-edged stock. Fixed-interest securities (bonds) are less volatile than shares, but historical evidence suggests that equities are likely to generate the highest total returns over the medium to long term.

Currently, Equitable’s life fund is about 60% invested in shares with less than 40% held in bonds.

Equitable plans gradually to reverse those proportions and claims this move is likely to reduce investment returns by “only” between 0.5%-1% per annum.

So someone who invested ฃ1,000 a year over 25 years in a with-profits pension, assuming annual growth of 7%, could formerly have expected a maturity value of ฃ67,676. Now, they can expect to get just ฃ58,156 - a reduction of 14% of the fund’s potential value.

Similarly, someone who invested ฃ1,000 a year in a with-profits endowment policy will see nearly a 14% reduction in the potential value of their fund. Before the recent revelations, they could have expected a maturity value after 25 years, assuming annual growth of 6%, of ฃ58,156. Now, however, they could expect to receive just ฃ50,113.

But some observers think that Equitable’s 1% projected reduction could itself be optimistic. They claim that the actual reduction in investment returns may be much greater.

Cut & run?

Some 450,000 Equitable Life policyholders are now left wondering if they will ever get their money back. Many have already decided to cut & run.

One Equitable policyholder recently told me he had phoned Equitable Life in UK to find out if he could cash in his pension. “And they told me I would lose 10 percent of the value of my fund if I took it out now,” he said.

In a desperate attempt to stem a run on its funds, Equitable Life is levying a 10% penalty against anyone who tries to cash in their policies now.

An Equitable Life spokesman said, “The financial adjustment for early surrender is necessary in order to protect policyholders staying in the fund.”

Another policyholder who recently sought my advice was hoping someone would rescue the company. “I am very disappointed that everyone has walked away,” he said. “My instincts tell me to cut my losses and get out now. The company has been so secretive that I suspect its liabilities must be much more than they seem.”

Yet another policyholder, who has ฃ250,000 in a with-profits personal pension plan with Equitable into which he has been contributing for 12 years is considering transferring his personal pension plan to another provider. “I will have to pay charges for transferring into any new fund as well, so I will really lose out,” he told me. “But I’d feel more comfortable going forward with a better-run company,” he added.

Whether those who hold on, in the hope that a buyer may be found who will turn the situation around, will fare better than those who swallow the painful penalties for getting out now and placing their hard-earned money with a better managed firm, only time will tell.

NOT By Mirin MacCarthy

Over the past two and a half years, the leading lights of Pattaya have been interviewed by Mirin MacCarthy, and their lives and souls laid bare for everyone to see. Some of those people approached the Pattaya Mail and asked that Mirin be put through the same procedure, so that they, in turn, could see what makes this woman “tick”. (Dennis, your wish has been granted.)

Mirin MacCarthy, of the red hair and impish sense of humour, was born in Brisbane, Australia, the elder daughter of an Irish-Australian accountant father and an English real estate agent mother.

Like most Irish descendants Down-under, her father was a staunch Catholic and she was sent to a series of “good” Catholic schools for girls. However, she admits she was more of a dreamer than a hard worker, but still gained a place at the Repatriation Hospital in Brisbane as a student nurse, graduating as a Nursing Sister.

Towards the end of her training she obviously began dreaming about men, ending up marrying a young school teacher and having two sons in quick succession, followed by a daughter three years later.

She travelled to Papua New Guinea with her husband in 1970. “I just loved the tropical nature of New Guinea. It was idyllic in those days - hot, tropical, with servants. We went fishing in clear water and the local people just loved the kids.” It was in New Guinea that Mirin’s artistic side came forward and she began painting and writing poetry.

However, the idyll was not to last, as the youthful marriage was strained, and she and her husband went their separate ways. Returning home to Brisbane, now with travel in her blood, she toured the UK and Europe with her mother before returning to the arduous life of a single supporting mother.

With her nursing qualifications, she joined the intensive care ward of the hospital, every day packing the kids off to school and then picking them up afterwards. She became interested in flying, and would take the kids along with her to the weekend flying school, where she graduated as a solo glider pilot, and then commenced powered flight training, but had to give it up as it was just too expensive for a supporting mother.

Not long after this, she met Dr. Iain Corness, who offered her the post as the Occupational Health Nurse in one of his clinics. Mirin adapted well to the new nursing discipline, while Dr. Iain fell for her charms and then adapted to living with a ready made family of three children, the pair eventually tying the knot in 1982.

Giving up gliding after a nasty crash, Mirin again turned to her artistic side and began to dabble in photography, eventually becoming a partner in a photographic studio in Brisbane and writing a photography column for the major daily newspaper. This brought more overseas trips in the form of photographic modelling assignments, where she worked both in front of and behind the camera.

With the children now older, and overseas travel well and truly in the blood, Mirin and her husband began annual vacations to Asia, including Thailand, and the seeds were sewn which would eventually bring her to Thailand permanently.

The Thai connection really began with her leaving nursing and opening and managing a Thai restaurant in Brisbane in 1989. “This was one job where you had to be on the ball all the time. I had all Thai staff and I had to overcome many problems, especially in the early stages. I’d been open one week when the cook walked out! Fortunately I had some wonderful Thai friends who found me another cook.”

In between times, she continued to paint and write articles for many glossy coffee table publications. But even this was not enough to keep her restless spirit down, and she took on more training, graduating in Swedish massage and then Hawaiian Lomi-Lomi and then finally becoming a Reiki healing Master.

Throughout this time, she also immersed herself in her hobby - pets, particularly birds, having an aviary with several tropical species, as well as an imported Thai Korat cat.

However, by 1995, and with both her parents passed on, Mirin was ready to take things a little easier and the restaurant was sold. Her husband also wanted to leave Australia, so they planned the big move.

It was three years ago when she arrived in Pattaya, complete with the much travelled Korat cat “to sit on the beach, read a book and get my fingernails done.” Unfortunately, she found there was a limit to the number of books you could read, and her fingernails were also limited to 10, so the fingers ended up being put to better use by resuming her career in writing.

Mirin has “almost” settled here, but still misses Australia and the excellent Australian wine. “I can’t drink beer and wine is so expensive here,” she says ruefully.

If asked to qualify success for her, she will say, “sitting on the beach with a good book” - but she has already done (and rejected) that, so she is still looking for the peace of mind that “success” should bring. She does feel that everyone should do something of consequence, and she is proud of having been the founder of PAWS, an animal help society here.

Mirin has a restless spirit offset by a desire to just sit and watch TV some days. She has another aviary for her birds and a loquacious African Grey Parrot that lives indoors. In the fridge she keeps tins of dog food for homeless dogs, as well as food for the Korat, and another stray cat rescued from a rubbish dump. And in between, she writes columns (like this one) for the Pattaya Mail.

A multi-faceted and multi-talented lady - some parts of which, Dennis and all the other Successfully Yours subjects, can now eagerly scrutinise!

by Mirin MacCarthy

by John D. Blyth

Introduction

London’s Metropolitan Railway was the first section of today’s great ‘Underground’ railway system to be built, work being fist put in hand between Paddington and Baler street, soon being extended past King’s Cross towards the city. Those who know it will realize that this was no deep-level ‘tube’ line, such as became familiar later on, but was only just below street level (some streets being dug up for the line to be built and replaced afterwards), and that quite a proportion was in the open air. Even so there was much misgiving as to the fact of emission of steam and smoke by the steam locomotives to be used - in fact, unlike emissions from petrol and diesel engines, that from a ‘steamer’ although not pleasant, is not dangerous. Concern reached such a pitch that the line’s Engineer, Sir John Fowler, ordered an experimental locomotive from Robert Stephenson & Co., of Newcastle, which, it was hoped, would not emit smoke or steam whilst in tunnels. It arrived in 1861, was tried on a few test runs, and was then put away out of sight. A total failure, of course, and it was left to the Great Western’s Sir Daniel Gooch to solve the problem. Steam can be condensed, but smoke and solid particles cannot, so there was only a partial solution, and when the first section opened to the public in 1863, it was ‘condensing’ Great Western locomotives that worked the trains, on the broad (7ft 1/4 inch) gauge, the new railway being laid to take both this and standard gauge vehicles - just as well, as it turned out, as a disagreement between the companies involved led to a short-notice withdrawal of all G.W.R. equipment. The Great Northern then turned to, and with some quick action was able to provide a service on the standard gauge.

This could only be an interim measure, and Sir John Fowler turned to Beyer Peacock & Co., of Manchester, who designed and built to their series of excellent 4-4-0 tank engines with condensing gear, to an outline specification by Sir John.

The ‘Ghost’

The experimental locomotive remained a mystery for many years, and had information on it been deliberately confused and all traces covered up a better job could hardly have been done. It was referred to in an address to the Institute of Civil Engineer in 1885, but this was not made public, at least at the time. All this led to the engine being known all over ‘locomotive’ circles as ‘Fowlers Ghost’. Rumour had it that it ‘went on hot bricks’, and a picture, much reproduced, later turned out to be totally inaccurate. Ten years later still, it was advertised for sale, and was bought by none other than Isaac Boulton, who had it dismantled and brought to his famous ‘Siding’ at Ashton, arriving on seven trucks. An intended re-building, to include Boulton’s water tube boiler, was not completed before the company went out of business.

Trial runs with the ‘Ghost’

Little is known of the ‘Ghost’ on trial, but a disastrous foray down the Great Western line, about 7 1/2 miles or to the present-day Hanwell station is known; things went badly wrong and there was much difficulty in getting it home; another on its home territory, between King’s Cross and Edgware Road is on record, but seems to have been no better.

During the early building days a train of coal wagons conveyed William Gladstone, Prime Minister of the day, with colleagues, through the tunnels, and a photograph is known of this event, and the locomotive can be seen but no one has identified it; but there is also a contemporary picture of the ‘Ghost’ at Edgware Road station. Prints on the wall of the saloon bar in the ‘pub’ in Action Lane, London, gave me a chance to study both, and I am quite certain that the engine of Gladstone’s train is none other than ‘Fowler’s Ghost’! An offer to the landlord of the pub to purchase both was rudely rejected, yet he had no idea of their interest.

The ‘Ghost’ as it materialized

My only illustration this week is taken from Rosling Bennett’s ‘Chronicles of Boulton’s Siding’, and it is this book that revealed, with interest of the firm who had built the ‘Ghost’, just what the locomotive was like. In fact the original is two drawings, one a side view of the locomotive, the other in one general appearance, and something of the strange boiler.

It will be seen the ‘Ghost’ was a 2-4-0 tender engine (the four-wheeled tender is not shown); driving-wheels a surprising 5ft 6in - not ideal for a lot of stopping and starting, nor for the severe grades of the Met. Line; outside cylinders of modest size were fitted; the gauge was, of course that of the Great Western, 7ft 1/4 inch. Nothing very strange about any of this.

It is the boiler that raises the eyebrows a little! The very small firebox at the rear, the tiny portion of ‘tubed’ boiler over the leading wheels, and the huge combustion chamber between the two, which is where the firebricks were located. When running on open track these were supposed to be heated by the gases from the fire, any spare heat producing steam in the short boiler. When running tunnels, the dampers were to be tightly closed, no gases passing, so no emission of smoke! And in this situation the fire-bricks were to add their heat and assist in steam production.

With an ordinary boiler, something might have been made of this engine, but the use of fire-bricks was a bad error of judgment; and in those day days the fact that water, having the highest specific heat figure of any known substance would hold and retain heat better than would fire-bricks. A later proposal - for another ‘Ghost’ if you like, was designed by Stephenson’s, and the fire-brick presence was retained in an even bigger chamber. Happily this was not built, nor the design completed, so for this article we can ignore it.

The remains of the original ‘Ghost’ were bought for scrap by the Beyer Peacock Company, and so the ghost was finally laid to rest.

A Night At the Movies

Some creaking theatres in Thailand are still censoring movies. If you live in Pattaya, you probably won’t much notice it. We don’t have many cinemas here. But Bangkok is a different story. Going to see a Hollywood film there is quite an adventure. Unless the film one wants to see is purely action, violence and blood, or a horror film in which the special effects make you lose your dinner in your partner’s lap, the local sensors either clip out the offending scene or spread petroleum jelly over the naughty bits. I always wondered how they do that. I am guessing, but it appears they use cotton bud tips in an editing machine. Projected on the screen, one can still see the tiny fuzz lines through the haze. Frankly, I’m rather used to it. Vaseline applied to the face of film crates a Daliesque effect, equivalent to the dropping of a tab of LSD. Leave it to the Thais to always be slightly creative.

Viewing Hollywood’s “latest” in conservative societies can become a hobby unto itself. Since censorship in each country is as diversified as the cultures which allow it, observing the technique is really where it’s at, so to speak. Even if you can’t really follow the original story line, going to the movies in some countries can evolve into an addiction whereby one truly looks forward to just how the butchers will attack a multimillion dollar work of artistic and technical endeavour from another country.

Kissing scenes in Indonesia and Malaysia are clipped. Not the whole scene, mind you, just the part where all four lips are about to meet. India forbade kissing scenes until the mid 1970’s as well. I found it entirely charming that the country with the second largest population of humankind on the planet did not actually want the masses to know what kissing between a man and woman usually leads to. Indian folklore must have some equivalent of the American “stork brings the baby” myth.

In Singapore (in the movies which are not on a very long black-list) the films are cleverly dubbed to exclude dirty Anglo-Saxon curse words, and re-dubbed with slang which is less offensive to the “Sing-lish” ear. I once saw a movie starring John Travolta, where he was dubbed by the sensors and called a woman a “pig” instead of the original “slut”. Apparently in Singapore it is more socially acceptable to call a lady a porker. Occasionally in that island nation, entire footage is clipped out, and one is left with the feeling one nodded off for a nap without realising it. And if by chance the ending of the film is one where the bad guy gets away, and the crime paid off, the whole ending is just removed and THE END comes on the screen. It’s over, and that’s it. Crime does NOT pay in Singapore. So they will not show films which send improper messages to their saintly citizens, even if they have to “fudge” the story line.

Censorship aside, Thailand audiences are uncommonly patient and well behaved. On many an occasion I have watched movies, back to front, with the middle reels left out altogether. Most projectionists are not highly paid and usually spent this time at their jobs either blotto with drink or simply fast asleep. Fifteen minutes of silent sound track, or blank screen would send a lynch mob to the projection booth in a USA theatre, and no jury in the land would convict the perpetrators. Thais, on the other hand, seem not to notice. This interval gives them time to step outside and have a smoke, make a hand phone call, or apply make-up. After all, it’s just another night at the movies.

by Richard Bunch

From Simon Jackson, Bangkok: As a Windows user, I find using keyboard shortcuts much faster than performing the same task with the mouse. Although there are CTRL+C for copy, CTRL+X for cut and CTRL+V for paste to name but a few of the more common ones, I wonder if there is a way of increasing the number of keyboard shortcuts available.

Computer Doctor replies: I too find keyboard shortcuts quicker, once the brain has remembered what the shortcuts are! There are several programs on the market that will allow you to take control using customised keyboard shortcuts. A couple of these programs spring to mind, one is Hot Keyboard which can be downloaded from www.hot-keyboard.com - the other is Macro Express, also available by download from www.macros.com The former is the lighter of the two and one that I personally use. It is very easy to configure and you can have global shortcuts which are available no matter what application window happens to be active. There are also application specific shortcuts which are only available when a particular application or window is active. It allows you to control things like Dial up Networking, Volume, Application Launching, Text Entries, etc. The possibilities are vast. Macro Express, on the other hand, is rather more substantial and at 3MB rather larger than Hot Keyboard, which weighs in at 650KB. It offers several more features, as one would expect, including password protection to secure data.

From John Washburn, Jomtien: I have just installed Windows ME and am really very pleased with both it and myself. However, since I did this my monitor, which is a Philips, has started flickering, which is annoying. Do you think this is just coincidence and my monitor has developed a fault or have I missed something in the ME installation?

Computer Doctor replies: It would have been helpful if you had indicated which video card you were running. However, there are a couple of things you should check. Firstly, right click on My Computer, then Properties, then select the Device Manager tab. Expand the Display Adapters tree and check that the correct card is showing. If not then you will need to supply the correct driver, either from a manufacturers CD or by downloading from the manufacturers website, the latter is the preferred method as this will ensure you have the latest driver. Although ME is supposed to be able to use Windows 98 drivers I have experienced several instances where this was not the case and a true ME driver was required. Once you have the driver, highlight the device, right click on it, select Properties, then the Driver tab and finally click the Update Driver button. Follow the directions, browsing for the path to the driver. Once the correct driver is installed then it may be that you need to increase the refresh rate. You can check this by right clicking on the Desktop, selecting properties then the settings tab and Advanced button, click the Adapter tab and increase the refresh rate as far as you can. Normally systems will accept at least 85 Hz.

by Apichart Panyadee

The most striking of adaptations in polar sea animals is to the cold. In the chill of the Arctic and Antarctic, as in the chill of the deep abyss, the sperm whale is warmed by what whalers call “the blanket”, which is eight inches of blubber. The blue whale, the beluga and the walrus all have this protective layer of fat which serves as insulation. Most vulnerable to loss of body heat is the young animal before it gains enough body weight. The richness of the mother’s milk is another adaptation to the severe climate. Harp seal milk, for example, is 45 percent fat, and high in protein, which speeds the rate of their growth. Seals also have hair which grows in bundles. The thick undergrowth of fur traps body heat. For these polar animals, keeping warm is less of a problem than cooling off. On land, a fur seal waves its flippers to fan himself. A harp seal relaxes the arterioles in its fat and skin, which then fill with blood and release heat.

Ecosystems of the Poles

Of the two Poles, the Antarctic is the more “other worldly”. Sources of the Arctic Ocean, both for its waters and its species, lie largely in the Atlantic, with a smaller contribution flowing north from the Pacific through the Bering Strait. The Antarctica makes its own world. It is a world defined by currents. Nearest the Antarctica mainland, easterly winds set one surface current flowing west. Farther out from land, the westerlies set another current, flowing east. This outer westward current is called the Antarctic Circumpolar Current. It is the largest current on earth and the only one to circle the globe completely unobstructed by land mass. It provides a thermal barrier to creatures from warmer latitudes.

The westwind drift ecosystem is the more productive one. It is based both on phytoplankton in the water, on algae growing on the ice, and a living river of krill. Antarctic krill is a species of shrimp. It lives more like a fish than a crustacean, schooling like a sardine and spawning several times a season. Krill is the keystone species in the Antarctic food web. It is the staff of life for the penguin, petrel, crabeater, leopard seal, and the Antarctic whales.

Antarctica’s distant past

When Antarctica was a piece of Africa, Australia, South America, and India, and for some time after drifting away with Australia, it was home to diverse species of flora and fauna. With its steady drift south, and with the formation of the Antarctic Convergence, species began to die out. The chilling of Antarctica was a complex phenomenon. As the continent migrated deeper into southern winter, winds blowing down from the growing polar ice cap cooled the surrounding currents in the ocean, which in turn blocked the warming currents. This formed a barrier for species of warmer climes. For life already on land, most of it died off and the continent froze over. Seabirds, however, prospered.

Lower forms of life in the seas were able to cheat the cold by their simplicity. Sea spiders and sea lice have a cavity of body fluid as salty as the sea itself. Fish biology however, is more complicated and the secret of their success in frigid waters is chemical. Some produce a kind of anti-freeze.

by Marion

by Lesley Warner

by Jan Olav Aamlid - President - House of the Golden Coin
http://www.thaicoins.com

A rose by any other name: Freelancer Bar (past the big arboreal landmark on Walking Street) was recently given a name change and is now F.L.B. Bar. Needless to say, there has been plenty of speculation among regular punters about the meaning of the new acronym, most of it unprintable in such an august publication as this. I have a couple of ideas: the Feeling Lucky Babe Bar, for the Clint Eastwood types, or the Frantically Looking for a Beer Bar, for... most of the male population of Pattaya.

With Carlsberg Draught at 50 baht, most other drinks between 50 and 75 baht, light snacks at 50 baht plus and a live band every night of the week, the place is well worth wandering into for a quiet libation.

Maybe mine hosts Pete and Anne should consider offering a prize (a choice between a set of Encyclopedia Britannica and a dozen Tequila Sunrises) for the most inventive (and printable) meaning of the new acronym.

A piece of Bangkok in Pattaya: The Dollhouse, an ogling den in the newly revamped and increasingly popular Clinton Plaza section of Bangkok, is set to open a ‘franchise’ (for want of a better term) operation here in Pattaya in the next couple of weeks. The location is an already existing spot on Walking Street that has always struggled to find a niche. It’s being said that some of the dancing maidens due to strut their stuff in the new venue will be alternating between the Big Chilli and Fun Town, kind of like a dancing shuttle. Let’s hope the big smoke lasses don’t bring their overblown Bangkok pricing structure with them.

A bar, a bar, my kingdom for a bar: With apologies to the Bard, ever since the closure of the Samsara playhouse and noshery on Beach Road to make way for a giant pizza joint, the former innkeeper has been running around Walking Street like the ill-fated King Richard III. However, he has been looking for a bar rather than a horse, although it appears he has more chance of finding the latter on Walking Street than the former.

Despite having pocketfuls of shekels to throw around, he can’t seem to find anyone desperate enough to flog their current asset off to him at the price he’s prepared to pay. Visits to places like F.L.B. Bar, T.W. One and Sharky’s have so far proved fruitless. The search for a new dancing palace is becoming increasingly like a quest for the Holy Grail. We are the men who say, ‘nee’.

In the Boozers: For those of you with a nautical bent (or for those who are just simply bent) the Jack Tar Bar in Soi 6 is well worth a visit. They open from about 10 a.m. and serve good food all day at reasonable prices as well as flogging Carlsberg Draught at 45 baht and having a daily cocktail special at only 55 baht. They’ve got one of the best looking signs in town, although it tends to confuse a lot of people who think the place is called the Jacko Tar Bar. You’ll have to see the sign for yourself to get my meaning and there’s no truth in the rumour that the face on the sign is a portrait of Kiwi Bruce taken about 100 years ago. I happen to know that colour pictures had not been invented then.

My e-mail address is: [email protected]

Shetland Sheepdog

Good Points: affectionate, hardy, intelligent, loves children and other animals

Take Heed: best to tie back the topknot with a bow, or your pet could develop eye trouble

The Shih Tzu is a happy and attractive little house pet which adores human company and hates to be neglected. It is extremely intelligent, arrogant, and loves the long, daily grooming sessions. You will need to make time for this job if you decide to buy this delightful breed. However, since this dog is so lovely to view when he is clean and brushed, you may find the grooming as enjoyable as your little pet does.

Size: Weight 4.5-8.2 kg. Height at the withers not more than 26.5 cm.

Exercise: Short, regular walks, and off the lead runs. This breed is happy in an apartment or house with a small garden, but does enjoy a daily walk and a good run.

Grooming: Daily brushing with a pure bristle brush. Do not neglect this task or combing out tangles will be painful. Keep the topknot from getting into the eyes and take care that the ears are free from matted hair. If your dog does develop tangles, use a commercial creme rinse after shampooing and comb through the tangles gently as to avoid breaking the hair.

Health and Care: The Shih Tzu is a hardy breed and does not usually have health problems if well cared for.

Origin and History: The Lhasa Apso was highly prized by the Dali Lama of Tibet who would habitually give prized specimens to emperors of China. It is very likely that the Chinese crossed the Apso with the Pekinese to develop the Shih Tzu. As with the Imperial Pekinese, export of the Shih Tzu was forbidden, and it was not until the death of the Empress Tzu-his in 1908 that these little shaggy dogs were smuggled out of China into Europe

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