Why people are worried, part 1

“The structures are here to stay but you have to run it like a prudent risk-taking venture, not like it’s casino night and you’re on a bender.” - CreditSights
Economists always talk of mean regression, the old maxim says that what goes up must come down but there is no doubt that business cycles today repeat the pattern of business cycles of the past. We can see this most clearly in terms of the credit bubble that is suddenly on everyone’s lips. The amazing availability of easy to obtain credit seems to be drying up. This boom has helped many people buy property for the first time and financed many business and corporate opportunities. However, those people who were deemed to be credit risks continued to be given money and now we are seeing why they were so regarded. It is now harder for them to get credit and this is filtering all the way down the chain. Investment houses and individuals all over the world are showing losses. This is further compounded by the fact that financial institutions now have debts that these investors will no longer purchase. Funds and shares are now going up and down with no real reason and even the biggest players in the market place like Blackstone and Bear Stearns are suffering.
Many people associate this with what has happened with the last few years. This is wrong. In fact it goes back to several things. These are: the failing of the savings and loan industry in the 1980s, the Asian financial crisis of the 1990s and the post-dot.com fall in the markets in the early 2000s. Most important of all is how governments around the world reacted to these problems.
For instance, in the US the Federal Reserve Bank reduced rates to the lowest level in twenty-five years so as to try and avoid further decreases in the markets. Even as he was enacting his famous ‘put’ Alan Greenspan recognised that short term credit could cause problems in the future. However, he did not know how badly it could turn out. The Fed was not the only government bank to do this. Others all round the world followed suit.
The fears that he expressed at the time now seem to be coming to fruition. The incredibly low interest rates of recent years along with amassed savings from many different fields meant that the price of property was being pushed up by availability of money. This preponderance of ready cash also allowed leveraged buyouts of corporate businesses throughout the world. The spiral had begun, investors in many guises threw all sorts of money at private equity companies and ultimately, although they might not have realized it at the time, new investment instruments such as derivatives and artificial debt instruments to make up the poor returns they were getting through the more traditional means. At such low interest rates extensive leverage was an easy option to try and access better returns.
The way this was done differed from how it was done in the past by the fact that these investments were a sort of financial instrument that moved the risk of default from the lender to the investor. What we don’t know is how it will all end up. This is what is creating the nervousness in the markets. As Alan Greenspan says, “These adverse periods are very painful, but they’re inevitable if we choose to maintain a system in which people are free to take risks, a necessary condition for maximum sustainable economic growth.”
Following the sub prime fiasco, what people are trying to make happen now is take the potential risks away from the leveraged financial institutions and persuade those who are better positioned to take them instead.
Economic growth, especially when America is taken out of the equation, is good, and even in the States, unemployment is still low. Thus far, the financial system has coped well with the most recent problems. However, the credit problems that people originally believed to be only relevant to one or two sub prime mortgage lenders are now starting to move to countries all over the world and many of the main lenders are being affected. The recent shenanigans at the Northern Rock Bank in the UK and Countrywide and others in the USA emphasise this.
The irony of all this is that this could have been caused by a system that was created to distribute and ease risk. What has happened though is that it has now become very easy for investors to purchase complex securities they did not completely comprehend. However, now that worldwide communication is so easy, efficient and cheap, markets can now be affected by the push of a button. So, if sentiment dictates a certain mood then it does not take much for the rest of the world to be affected. If the problems cannot be limited then all of this could cause a run on the markets and damage any potential economic growth.
At the beginning of this decade we were hit with the double whammy of the dot.com crash and 9/11. This forced us into a recession which meant the Fed cut interest rates in the hope of reviving the economy. However, two years later new jobs were still scarce and investment was not exactly at an all time high. On top of this, the rate of inflation was edging towards one percent. Given this situation, the Fed looked at how Japan had coped with deflation (i.e., where an economy suffers from declining prices, which in turn makes it more difficult to repay debts and means the central bank finds it extremely hard to try and stimulate growth).
Four years ago Alan Greenspan, who was at the time head of the Federal Reserve, said, “Even though we perceive the risks [of deflation] as minor, the potential consequences are very substantial and could be quite negative.” A short while later the Fed reduced the target for the vitally important federal-funds interest rate, a benchmark for all short-term rates, to one percent. This rate did not move for a year. The mindset behind this was that it would increase consumer confidence which would mean more housing being bought and people spending more in the High Street. This would result in improved exports and more corporate investment.
At the time Mr. Greenspan thought that this may cause problems but told his associates that it was an acceptable risk if it could ward off the threat of deflation. He later said, “Central banks cannot avoid taking risks. Such trade-offs are an integral part of policy. We were always confronted with choices.”
To be continued…

The above data and research was compiled from sources believed to be reliable. However, neither MBMG International Ltd nor its officers can accept any liability for any errors or omissions in the above article nor bear any responsibility for any losses achieved as a result of any actions taken or not taken as a consequence of reading the above article. For more information please contact Graham Macdonald on [email protected]@mbmg-international.com.com

Snap Shots: by Harry Flashman

Nikon Coolpix S51 - Is this the ultimate compact?

I had the opportunity over Xmas-New Year to play with the latest (released end of 2007) Nikon point and shoot compact. What first took my attention was the fact that it was not much bigger than the family Canon Ixus, but was in fact slimmer, and had a claimed 8.1 megapixel capacity. Turning it over, the LCD took up almost all of the back and the main menu was partly pictorial. If one has to have a menu, which as many readers know I consider anathema, then pictograms do make it simple.
The owner of the camera was an American lady, who almost floored me when she said she chose the Nikon Coolpix S51 because it did not have a tele-style lens poking out the front! Having become used to mini-zooms in compacts, this observation interested me, but when I saw the size of the handbag in which the Nikon was being carried, I could appreciate her reasoning. With the tele extended, it would have been a hassle, and many people do not turn off their cameras, relying on the auto-turn off feature to do it for them. Interestingly, Nikon got around the extended lens by keeping the lens at a ‘right angle’ inside the camera body, and it is a three times zoom, with an additional four times digital zoom ability (but with corresponding fall off in image quality).
Returning to the megapixel range, I believe that 8.1 is still really over-kill, as if you want to take photographs to blow up to the size of a barn door, use an SLR and be done with it. It is ‘horses for courses’ every time.
The latest technology to be incorporated in digital cameras is Vibration Reduction, and this appears to work very well with the Coolpix, meaning that even at the longest lens setting the shutter speed does not have to be super fast, even though the shutter speed range capability is between 1 second and 1/2000th second, plus an additional four second shutter when taking fireworks in the ‘Scene’ mode. Other options in this mode include Portrait, Landscape, Sports, Night portrait, Party/indoor, Beach/snow, Sunset, Dusk/dawn, Night landscape, Close up, Panorama assist, Museum, Copy and Back light. More than enough to cover most circumstances.
The LCD on the rear of the camera is a three inch one, and there was no getting away from the fact that this was a boon in composing the photographs. Camera manufacturers are beginning to understand that the user will always use the LCD in preference over a viewfinder, even though it uses more battery power. Ease of use is a fact of life for the average weekend photographer.
The in-camera flash appeared to work well, though will obviously have limitations because of its size, but includes Auto, Auto with red-eye reduction, Off and Fill-flash. Again, enough ‘creative control’ for the afore-mentioned weekend photographer, who might just have read the manual and understand that this camera can do a little more than simple point and shoot.
Another feature of the Coolpix (and present in other point and shoots) was the video recording capability which worked well, even in low light. However, if you are looking for the best in video, buy a dedicated video camera - anything else is a compromise.
The dimensions are approximately 92.5 x 59 x 21 mm, which is really ultra-slim, and at only 125 gm, is not so heavy as to tear the pocket off your shirt. These dimensions really do make this a camera to take everywhere.
Finally, the following is a quote from a user in the USA, “If you want something with a lot of manual controls that takes RAW images and gives you full control over the creative process, look elsewhere. If you want a credit card sized point-n-shoot that you can keep in your pocket / purse at all times that will deliver good point and shoot quality photos, you’ll enjoy this camera.” I fully agree. It is not trying to be an SLR that fits in your pocket. It is a very simple to use point and shoot for everyday family shots.

Modern Medicine: by Dr. Iain Corness, Consultant

What to do about the New Year resolutions

By about now, you will be hoping your partner does not remember the New Year resolutions you rashly promised to follow. Correct? You are still smoking and have actually put on a kilo or two after the Xmas/New Year blow-out. So much for those two resolutions!
Stopping smoking and losing weight are the two commonest resolutions, and unfortunately, the hardest to carry out. However, the following may help you, and hopefully make you successful (so you don’t have to make the same resolutions next year)!
Let’s tackle smoking first. First off, smoking is stupid. You stand a much greater risk of getting any cancer (not just lung cancer), as well as all the respiratory diseases, so that you wheeze your way to the here-after. Not much fun at all, and I don’t care if your great uncle Albert smoked 60 a day and lived to be 103. The statistics will show that smokers do not do well and do die early, sometimes quite horribly. That’s the real facts.
There are many ways touted to help you stop smoking. These range from acupuncture, patches, gum, spells and seaweed. But there is only one sure-fire guaranteed method. It’s called ‘cold turkey’ and it requires just you and a bucket-load of resolve. Whilst some of the other methods do work, after 12 months the majority of the people who try these methods will have relapsed and are smokers again. Read the figures if you don’t believe me, the people who go cold turkey have the greatest chance of still being non-smokers at 12 months.
Having gone cold turkey myself 27 years ago, I can assure you that the first two weeks are not easy. You feel like licking ashtrays, you are so much crying out for nicotine. Do not fool yourself, it is an addiction, not a habit. However, after two weeks you can watch other people smoking and not get down on your knees to beg! But don’t even have one, to see if you have really become a non-smoker. If you give your body just a hint of nicotine, you will be off puffing 40 a day all over again.
Remember that the key to success is to commit yourself to being a non-smoker and stop, then and there. Not “next week,” “after my birthday,” or any other excuse. Commit and stop now! And the really good news is that after two years, your lungs will be pink and healthy again.
Now to the other New Year resolution. Losing a few kilograms. Again this is going to require some commitment from you, but it is not as difficult as stopping smoking. Obesity is produced by a habit, not an addiction.
The vicious circle goes as follows - you begin to eat too much, so your stomach expands to meet the input. However, if you do not ‘fill’ your stomach, you will feel hungry, so you continue to eat more to feel full. By this stage you are eating far more than you need in calories so you put on more weight. You try and diet but you feel hungry (and angry) all the time, so you give up and then give yourself the same New Year’s resolution again next year!
Here’s how to get over this problem. Rather than change the items in your diet, keep eating everything you eat at present - but only eat 75 percent of the quantity you usually have. This way you have cut your calorie intake by 25 percent and never had to count a calorie!
Weigh yourself on day 1 and do not step on the scales again till after three weeks. You will find you have lost weight - guaranteed. If you haven’t lost weight write to me and I will write back and tell you that you ate more than 75 percent.
Now control the weight loss at half a kg a week, so that you don’t end up with meters of flabby skin on your arms, etc. By the way, if you stop all alcohol for the three weeks you will really see the kilograms come off.
Enjoy the fruits of your resolutions!

Learn to Live to Learn: with Andrew Watson

A dynasty of care

For this week’s column, I had planned to write about the greatest party of the century, a tale of rip-roaring, rollicking ribaldry from “die Mauer” - the Berlin wall - as it came tumbling down in 1989. But as I rise from slumber this morning, parties could not be further from my mind, so I’ll leave the party for now, if that’s alright.
The passing of HRH Princess Galyani Vadhana is a sombre moment indeed. It is a time of great sorrow, suffused with a feeling of great loss. In time, the curtains of grief will part to allow us to look back on a life of leadership and giving and give thanks for her great gifts, but now, all I feel is emptiness. She was a part of the great dynasty of care which is the Royal Family, where dedication to the people is lifelong and duties are performed with dignity, composure and compassion. For those of us from the West, where the juggernaut of modernity has overrun many of the rituals and traditions of ancient culture, how refreshing it is to be in a place where reverence and respect for all that the Royal Family has given the country, is palpable.
I have been fortunate enough in my time in Thailand to be in the same room as a number of members of the Royal Family and their presence is monumental and stately. For instance, at the Oxford and Cambridge dinner a couple of years ago, HRH the Crown Prince held the audience captive as he moved through the assembled. The evening was marvellously ceremonial. Then again, who amongst us, whether in Sattahip or Bangkok, has not come across an unexpected jam, where traffic, with brilliant military efficiency, has been arrested to enable the smooth passage of a Princess? I can imagine in other countries the populous expressing their general dissatisfaction with any kind of delay, whereas here I am part of a happy party of people straining to get a glimpse of a member of one of the great royal families.
Twenty five years ago, I was walking along one of the grimmer streets of London, the Walworth Road in Camberwell, towards the equally grey and unimpressive Elephant and Castle, from whence the not unusual wail of sirens could be heard. In a matter of seconds, flashing blue lights came into view, but the contrast between the manner of the approach of this convoy and the normal slalom of police vans could hardly have been greater. Cars parted like waves before an entourage the centre piece of which was a Rolls Royce adorned with the Royal Ensign. She wasn’t moving particularly fast, perhaps about forty miles an hour, slow enough for me to see very clearly who was seated on those plush cushions. It helped that her face was pointed in my direction; I, like everybody else that otherwise grey day, was rooted to the spot. It was Her Majesty the Queen and beside her was her husband, the Duke of Edinburgh. “Now that’s the way to travel,” I thought to myself. Even in that fleeting moment, I saw that Her Majesty was smiling. She exuded kindness. I felt, perhaps like many that day that my life had been enriched by seeing her.
Later, I conjectured as to what on earth she was doing anywhere near the pit that is the Walworth Road. She certainly wasn’t going to the Labour Party Headquarters (they used to be in a rather pretty, if petite Georgian house towards the Elephant end, one of the few buildings that escaped the Second World War bombing) because she had already past that. It turned out she was going to Kings College Hospital, the place of my birth, at the other end of the Walworth Road, in deepest Camberwell, in order to open a new wing.
Then it struck me. It’s not the business of Her Majesty to keep certain “less desirable” parts of town off her itinerary. In fact, quite the reverse. Who can forget the heroic efforts of Queen Elizabeth the Queen Mother, who along with King George VI, eschewed the sanctuary of safe refuge to visit the beleaguered during the blitz? Allegedly, Hitler regarded her as “the most dangerous woman in Europe”, which kind of says it all. There’s nothing like people behaving royally to undermine the effluent efforts of a despot and when that person is a Queen or King, well the despot had better look out.
In the West, it seems that people are only too quick to chide but I am convinced of this; there is no family in the United Kingdom who feels as deeply about their country as the Royal Family. They are surely a family which has the thoughts of the well being of the population uppermost in their minds. They are a unifying source of inspiration, whose steadfast strength of character is the ballast through which we might steady our social, moral or indeed political orientation. Like any family, they experience internal division, tragedy and strife, but they are not immune from outrageous fortune and it demeans our intelligence to think that they are. It is not whether or not they fall, but how they rise from adversity, which is the true example of royal blood.
And so it is with our adopted Royal Family in Thailand. Under royal patronage, the range of projects that have been initiated and implemented across the country, all aimed at building sustainable and better futures for the Thai people, is truly phenomenal. But these projects are not temporary, ephemeral, transient “photo opportunities”. They are permanent reminders of how leaders lead, with sense and sensitivity, understanding and intelligence.
HRH Princess Galyani Vadhana was heavily involved in social welfare, education, sports and Thai arts. She created a foundation to fund the studies of gifted young musicians and was president of various organisations, including the Cardiac Children’s Foundation and the Autistic Foundation of Thailand. In the great tradition of a great Royal Family, she was a “giver” and we will mourn her loss for 100 days and beyond. Her memory and work will live on.
Next week: Back to Basics

Doc English, the Language Doctor: Using Dialogue to make great English Speakers - part 2

This week we continue to look at ways to develop Speaking Skills. Try words that will help your child sound as polite as they possibly can in English by teaching them the P’s and Q’s (‘Please’ and ‘Thank you’) in the following exchange:
T. Can I have a _________ please?
S. Yes.
T. Thanks.
Teach your child the vocabulary they will need to help themselves learn English:
‘Sorry, can you repeat that?’
‘How do you say ‘_____’ in English?’
‘How can I spell ____?’
‘How can I say’ _____?’
Think about the exchanges you will need to have every day with your child and then write them down in a notebook to form dialogues, using standard English grammar and vocabulary. You might want your exchanges to sound more natural and so include a little slang and idioms. Try to make sure you speak a little clearer than usual top make the dialogue a little easier to understand. Use normal dialogue in normal situations, standard stuff that you will need in situations such as ‘Going shopping’, ‘At the beach’, ‘Making friends’, etc.

T. Hello. S. Hello. T. Can I have a cup/plate/spoon please? S. Yes, here you are. T. Thanks. T. Can I have one/two/three more? S. Yes. T. Thanks

T. Hi. S. Hi. S. Where is the salt/pepper/sauce? T. It’s over there. T. It’s under/over/inside the cupboard. S. Thanks

T. Hello S. Hello T. Where have you been today? S. I’ve been to the beach / shops / work. T. What did you see? S. I saw the sea / some clothes / lots of boring paperwork! T. Did you enjoy it? S. Yes, kind of!

T. Hello S. Hello T. Can you see the red/blue/green car? S. Yes T. What is it doing? S. Can you see the white/black car? S. Yes T. Which car do you like? S. The Red one. T. Me too / why?

Finally, don’t be tempted to interrupt a Dialogue half way through by translating everything into Thai. Dialogue should be a little challenging and translating everything takes away the challenge for the learner. Try to explain what you mean in different ways or use a whiteboard and picture clues.
If your child is young and really shy, you can play a puppet game and carry out the dialogue as part of a role play exercise. In my experience adults can also be shy about speaking in English. They feel awkward and don’t want to make fools of themselves. If this is the case, swap roles. Whenever they speak English, speak Thai back to them. If your Thai is as bad as mine, your partner will have a good laugh, feel more confident in their own abilities and more relaxed.
Encourage all efforts to speak English and don’t criticize, simply model, try again another day if the dialogue didn’t work out. Become aware of the differences between the Thai language and our own. Often there is a logical reason why your child might be having a particular problem speaking certain words or phrases and you need to understand a little about Thai language in order to know how to correct it. Thai words don’t generally include a hard end consonant sound or a ‘th’ (which is why the end sound often gets left off words like ‘bike’ and ‘with’. Thais will often insert a vowel between two consonant sounds (such as ‘sa-wim’ (swim) and ‘pa-lay’ (play). There is often confusion between ‘r’ and ‘l’ and there are the more obvious differences in grammar, particularly in use of tense. I’m not aware of all the differences between the Thai Language and English, suffice to say that many are simply the result of the learner putting the foreign English word into their own logical language system (called ‘language interference’).
In the box are four dialogues for you to try at home with beginners. You can vary the response / questions and build on these, or make your own if they seem too easy. Remember to switch roles periodically. Encourage your child to ‘think outside the box’ and include new words.
I hope these dialogues work, if not you can make up your own. Try using a book you have read or a film you have watched and recreate some of the dialogue. Sometimes I encourage a silly dialogue or make deliberate errors to check that the student is listening properly, or to encourage them to think outside the box. Try it! It can make the dialogue more fun! You can build in more interesting dialogue this way and the students love correcting the teacher.
T. Ok kids, Who can tell me the date?
S. 3rd of October
T. 3rd Octopus? Oh dear! Where is the Octopus?
S. No October, you silly! (louder)
T. Octopus? No, I couldn’t eat a whole one. Don’t like the taste. Yukky.
S. October, no, not octopus! (shouting)
At this point the kids take pity on a poor, deaf old man and one of them writes the date on the board.
Sadly, that’s all we have time for this week. Remember, you can send your questions or suggestions to me via email at [email protected]. Happy talking.

Let’s go to the movies: by Mark Gernpy

Now playing in Pattaya
Lust, Caution: Hong Kong Drama/Romance – See main review on this page
Hitman 47: US Action/Thriller – Agent 47 (Timothy Olyphant) has been educated to be a professional assassin for hire. 47 is both the last two digits of the barcode tattooed on his neck, and his only name. The hunter becomes the hunted when 47 gets caught up in a political takeover. Both Interpol and the Russian military chase the Hitman across Eastern Europe as he tries to find out who set him up and why.
This film is based on a video game, and its roots show. The result, according to reviews, is simply one violent encounter after another, an incoherent plot, and inane dialogue. Rated R in the US for strong bloody violence, language, and some sexuality/nudity. Generally negative reviews.
Mum Deaw: Thai Drama/Family – Mum, played by Thai superstar Mum Jokmok, leaves his easy going, relaxed life in the quiet village of Yasothorn to head for Bangkok where on his first day he meets a young boy who says, “Hi, I’m Deaw, and I’m your future son.” Apparently, in the universe postulated in this film, if Mum does not make love to Deaw’s future mother very soon, Deaw will be born as a puppy to the dog next door. I’m sure all this will be clearly explained in the movie.
Aliens vs. Predator: Requiem: US Action/Horror/Sci-Fi – Just what you would expect it to be, a comic book brought to life, loudly. I found it an exciting, confusing, and mindless blood bath and gore fest, with an excess of bodily fluids – blood from the humans and lord knows what translucent slime from the non-humans. Rated NC17 in Thailand, R in the US for violence, gore, and language. Generally negative reviews.
National Treasure: Book of Secrets: US Action/Adventure – The movie is absolutely preposterous and utterly implausible, but I thought it a lot of fun – but then I like very much Nicholas Cage’s persona and sense of humor. If you liked the first film, I think you will enjoy this one, also. Helen Mirren was a pure delight! Mixed or average reviews.
I Am Legend: US Action/Drama – Will Smith as a brilliant scientist responsible for releasing a virus that apparently cured cancer but then went on to kill billions of people as well, and proved unstoppable and incurable.
I think the first two-thirds is fascinating and a fine movie, with a superb Will Smith, surprising in the depth and the range of his acting; then it degenerates into a typical zombie flick. But, after all, that was the story they had. See it, for Will Smith and for the technological marvels of a dead and overgrown New York City, with lions hunting deer on Fifth Avenue! Generally favorable reviews.
His Dark Materials: The Golden Compass: US/UK Adventure/Fantasy - I recently saw this again, and again was quite captivated by it, even more than before. The film is a grand, rich fantasy, beautifully done, remarkably detailed. Strangely, it has gotten only mixed or average reviews. But see it anyway - it’s very enjoyable, and eye-popping!
Konbai The Movie: Thai Romance/Comedy – Usual low-class Thai comedy with the usual stars, mostly from television.
Yen Pe Le Semakute (Three Cripples): Thai Low Comedy/Action – Just an ordinary very low-class Thai comedy with well-known television and movie stars.

Aliens and Predators face off again in Twentieth Century-Fox’s Aliens v Predator: Requiem, now showing in Pattaya cinemas.
 (Photo Twentieth Century-Fox Film Corporation)