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Money matters:
Graham Macdonald
MBMG International Ltd.
Nominated for the Lorenzo Natali Prize
Financial weapons of mass destruction, part 1
On the 16th September 2008, the BBC reported, “Lehman
Brothers, the fourth-largest US investment bank, has filed for bankruptcy
protection, dealing a blow to the fragile global financial system. The news led
to sharp falls in share prices around the world, and officials took measures to
reassure markets. Lehman had incurred losses of billions of dollars in the US
mortgage market. Merrill Lynch, also stung by the credit crunch, has agreed to
be taken over by Bank of America, the latest twist in a dramatic turn of events
on Wall Street.”
It was another dark day on Wall Street, another day of
uncertainty, but while most people went about their day, thanking their personal
Gods that they did not bank with Lehman’s, little did they know that their “100%
capital protected structured product” agreed with their respective financial
advisor or another company was now worthless.
Structured products are sold under a variety of names by
banks, building societies and financial advisers. They are variously described
as ‘guaranteed equity’, ‘protected growth’ or ‘dynamic growth’ plans or given
more complex titles such as capital accumulator auto-call plan. Minimum
investments start from ฃ500. They normally run for fixed terms of three to ten
years.
“Structured” or “capital guaranteed” products inherently
possess an element of risk known as Counterparty Risk. Whilst the name of such
products suggest the investment is failsafe, counterparty risk can actually
render such an investment worthless should the counterparty default on their
guarantee. The counterparty is usually a bank, insurance company, financial
institution or such like. In order for the counterparty to agree to provide
capital guarantee’s for an investment, they invariably insist that the majority
of invested capital is deposited within their own zero coupon products or fixed
interest instruments. In extreme cases, counterparties may insist that up to 90%
of an investment is deposited in such instruments, leaving only 10% investable.
This remaining 10% is then very often leveraged up by the counterparty which
means that effectively 90% of your investment is reliant upon the solvency of
the counterparty, and the other 10% is used to secure leverage for additional
investment exposure.
The returns on the plans may be pre-determined or variable,
but are normally dependent on the performance of an index, such as the UK FTSE
100, which tracks the share prices of the largest listed companies. The big
attraction of such plans is that they promise investors the return of their
capital, even if the stock market goes down, although this promise can be
subject to certain very important provisos. In this example, the aforementioned
Lehman Brothers were the counterparty (guarantor) for a FTSE 100 index
“guaranteed” tracker, even if the FTSE 100 index grew at 20%, the investment
would be worthless once the Lehman brothers filed for insolvency in September
2008.
The investors’ money is treated in two ways: firstly, the
provider will use the major proportion of it to buy a zero coupon bond. The bond
is intended to return a fixed amount at a specified point in the future, and
that amount can be set to match the investors’ original investment, or a
proportion of it. This is the capital protection element of the product. The
proportion of capital invested into the zero coupon depends upon prevailing
interest rates and the term on the investment, it can also be dependent upon the
amount of leverage the counterparty is willing to issue on the remaining portion
of the investment. This leaves a residue from the total sum invested. So,
secondly, the product provider uses this residue to buy the other, income- or
growth-producing, component in the structure in the example previously
described, the residue would be invested into a FTSE 100 tracker index.
The example graph on this page is purely fictional, however,
it illustrates how an investors’ money is distributed within a structured
product.
To be continued….
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The above data and research was compiled from sources
believed to be reliable. However, neither MBMG International Ltd nor its
officers can accept any liability for any errors or omissions in the above
article nor bear any responsibility for any losses achieved as a result of any
actions taken or not taken as a consequence of reading the above article. For
more information please contact Graham Macdonald on [email protected]
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Snap Shots: by Harry Flashman
Bracketing for beginners
Bracketing is one of the best ways to ensure that you get as close to
perfectly exposed photographs as possible. It is an essential in pro
photography, and is easy to do for amateurs. But most weekend
photographers have never heard of it. Why?
If you read any good photographic book and you will
come across “bracketing”. With modern cameras being so good, almost
intuitive if you read the publicity blurb (hint: don’t read the blurb,
but do read the manual), then why should bracketing still be necessary?
First off, let’s define bracketing. This is taking
the same subject three times with three different settings. Basically,
more light than you imagine is needed, the correct amount of light, and
finally, less light than you imagine.
Now I do not really care how you get the “correct”
setting, whether you get it from the camera’s built-in light meter, or
from a hand held light meter, or even if you used the photojournalist’s
f 8 and be there, the important factor is just that you do have a
‘starting point’ to work from.
I am also aware that most cameras these days do have
a good metering system, taking readings from various points in the
viewfinder and working out a good average, but you must remember that
all the camera can do is give you a ‘good average’. This does not mean
that it is the ‘best’ exposure.
There is much in the literature, too, about how good
digital cameras are in problematical light situations. Surely the
digital range is enough to get you out of trouble, under any situation?
Simple answer is, No. If you are looking for a really good final image,
you have to give the camera as close as you can to the ideal exposure
for that picture. There are limits in how far you can go away from the
ideal.
What I am preaching here is that you should always
try for excellence in your photographs. Do not think that if there is
not enough light, then you can fix it all with Photoshop or other fancy
computer technology. You can’t. It will end up as a trade-off between
detail, brightness and contrast. And nothing beats correct exposure in
the first place.
So we return to bracketing, one of the oldest methods
of getting a properly exposed print, and still significant in the
digital age. As stated above, you have to have a starting point, and
what you have to do is to decide just what is the main element in the
photograph you wish to take. Is it the person, or is it the countryside,
or is it the building, or water on a lotus leaf? Having decided on the
main element try and get a light meter reading from it. Even walk up
close so that the main element fills the viewing screen and get your
initial light meter reading exposure values. This is the starting point,
so set you camera to the values indicated. Such and such f stop
at so and so shutter speed. If you have metered correctly, then you will
get an image that is close to perfect. But only “close”. To get that
perfect exposure, now you bracket.
The easy way is to take two more shots, one set at
half a stop “under” exposed and the other at half a stop “over” exposed.
Now you can do this easiest by changing the f stop (aperture) by half a
stop, as most lenses have the half stop increments, while the camera has
full stops with the shutter speeds.
The three shots shown here were bracketed with the
half an f stop increments, as it is always very difficult to
estimate bright exposures. As you can see, the third one is probably
best, though the first one is also acceptable. The dark one is throw
away value only!
Nest time you are trying something just a little
tricky - remember to bracket the exposure!
Modern Medicine:
by Dr. Iain Corness, Consultant
Drug Addiction
Reading a book the other day, it mentioned that the principal
character was on “purple hearts”. I remembered the popular drug nickname,
but couldn’t remember its correct name, so I went to the purveyor of all
knowledge, Mr. Google.
Sure enough, one of the sites gave me “Drinamyl” (the
trade name) and my mind could stop enquiring; however, the information on
the site was more than just comprehensive, it was terrifying. Just go to
http://www.cocaine.org/argot.htm and you will see why. Just how many illicit
drugs is the world consuming these days? Forget the YaBa and Ice as used by
the ‘clubbing’ set locally, the list of the so-called recreational drugs is
beyond comprehension. That site alone has 24 pages of drugs and drug slang
terms, most of which I have never heard of. Perhaps I am knocking around
with the wrong crowd?
Back to the list: have you ever tried an Amp joint - a
marijuana cigarette laced with some form of narcotic? Did you know your
aunties? Aunt Hazel - heroin, Aunt Mary - marijuana and Aunt Nora - cocaine?
Then after all the slang terminology comes the list of
substances people out there are trying, forgetting the usual heroin,
cocaine, rohypnol, marijuana and LSD and mescaline, but there are drugs such
as PCP (phencyclidine), methcathinone, psilocybin/psilocin, MDMA, fentanyl,
gamma hydroxy butyrate and more. It prompts the question, what is wrong with
today’s society, that it has to retreat from the ‘normal’ world into the
drug culture?
As a practicing doctor, you become used to the endless
streams of drug addicts who try all kinds of inventive ways to get you to
prescribe their particular drug of addiction. There are the ones who appear
with multiple photocopies of reports from hospitals overseas stating that
the person is on the waiting list for some operation, but in the meantime
needs XXXX (which of course is just one of the addictive drugs the person is
taking). Then there is the patient who comes in and appears to be very open
about it all, “I am a drug addict, doctor, and I am under Dr. Somebody in
some Other-Town (a long way away). Dr Somebody gives me enough medication
for a week, but unfortunately I have to stay here for an extra two days. Can
you just let me have enough for two days, that’s all, as I’ll be back in
Other-Town on Monday to see him?” If you ring the telephone number given as
the doctor’s surgery, it either never answers, or it is a lone voice
claiming to be that doctor, but who very quickly gets tripped up when asked
some medical questions. Yes, drug addicts can be inventive.
Then there are the ones, usually female, who play on your
heart strings. “Doctor, I’ll be honest with you, I have been a drug addict,
but I am giving up next week. I’ll not be needing any more after that, but
if you could just give me a week’s supply, I’ll come back and see you next
week for you to guide me through the withdrawals, because I know I can trust
you.” (Yeah, Yeah!)
Like most doctors in the front line, you persevere with
these drug addicts for a while, but eventually you give up. I had a sign on
the wall of the waiting room which said, “Under no circumstances, will
Schedule 8 drugs be prescribed.” But they still tried.
In 40 years of medicine I have only seen one successful
ex-heroin addict. One. I have my own theory about this, and this is not the
result of research, but just a gut feeling after observing drug addicts and
their behavior for many years. I believe that after a period of time, the
drugs permanently affect the working of the brain, so “normal” or rational
decisions are not made, and in fact can no longer be made.
By the way, if you think the drug culture has some sort
of honor amongst thieves, it doesn’t. They even have their own slang terms
for those who rip each other off. A “Beat artist” is a person selling bogus
drugs and “Beat vials” are vials containing sham crack to cheat buyers.
Please keep your children away from drugs.
Heart to Heart with Hillary
Dear Hillary,
Thanks again for taking the time to reply to us, and I truly understand your
reply. Of course I meant the back of the head slapping in the proverbial sense.
Everyone comes here with the idea of a good time or life in mind. It was just an
idea I had while sitting here at the computer bored during a recent rain,
contemplating the problems of my two-week millionaire friends. You were right
about every aspect of your reply, and I now feel my offer was way out of bounds.
You do just wonderful on your own, and there are other places for me to offer
whatever advice I could provide. That is until I find something more worthwhile
to do with my time.
In previous posts I mentioned we are newly retired here, and
now that most of the business of that is done, it is time for me to find other
activities more suited to our lifestyle than worrying about the troubles of
farangs which is your job. It is time for us to get involved with more like
minded expats. We haven’t been in a bar in two weeks, not even those owned by my
friends. So while you are current on the changes in Pattaya I’d be speaking of
only history, a time that has passed never to return.
Of course I will continue to read your column, but I think
maybe the next time you hear from me it will because I’ll be the one needing the
advice. Hope that time never comes, but I know where to find you if I need you.
Have a great day, keep doing what you do.
Les and Lawan
Dear Les and Lawan,
How gracious of you, and I do hope you find something to fill in the days, now
that you are retired. The old advice is still the best - find a hobby, but make
sure the hobby isn’t 150 cm tall with long black hair. That hobby can be quite
dangerous. Golf is safer. Best of luck to you both.
Dear Hillary,
Our son is 21 and still lives with us in the condo. He hasn’t got a job, so
spends most of his time in front of the computer. The other day I wanted to use
it and found that when I checked on the history in the menu, he has been
regularly looking at porn sites. Every day! Is this dangerous? Should I, or his
father, speak to him about this? Or should we just ban him from using the
internet? I am very worried about this, but hope that you may have come across
this sort of problem before.
Marie
Dear Marie,
This ‘problem’ is far from new. I am sure your husband would have secretly read
his father’s collection of Playboy magazines, generally “hidden” under the bed,
and it wasn’t for the words either. The porn sites on the internet are really
just the same as the ‘naughty’ pictures used to be in the girlie magazines, for
the same reasons. Don’t even think that banning his internet time will work.
However, you do have a problem - and that is a 21 year old son with no job and
not enough to do with his time. Why is he not at college or university? Why is
he not employed? The voyeur aspect you are worried about is part of growing up.
Lazing around the house is not. I suggest you and your husband come to grips
with this and get something for the young man to do. And soon.
Dear Hillary,
I’ve been away for a couple of years and since I’ve come back I see it’s the
same old same old problem, but if these guys stopped to read your column they
would stop a lot of heartache. The girls are great fun, but for the sake of the
little man, don’t get serious. How many times do they need to be told, if it
seems they can’t read either? Just sign me off as “Amazed”.
Dear Amazed,
Like you, initially I was amazed, but no longer. The males who write to me,
remind me of the behavior of lemmings, where the whole pack rush over the cliff,
leading to total destruction. The unsuspecting male tourists come here in packs,
complete plane-loads it seems, and they descend on the bars, where the ladies of
the night are waiting like killer whales ready to eat baby seals. And do they
ever get eaten! And when the tourists get back to their home countries and send
off the money they promised to their faithful darlings, after a few months the
rush of hormones slows down and they wonder what they have done, and then start
to complain to me, and how do they get their money back after their mate tells
the sucker that his faithful girl did not go back to the village, but is still
working from the bar. Really you have to hand it to the bar girls. Every last
one of them turns in Oscar winning performances, so they deserve the financial
rewards they get, and the over-eager males deserve the financial drain that
comes from it. Do they read? No, they haven’t got the time!
Let’s go to the movies:
by Mark Gernpy
Now playing in Pattaya
Devil: US, Horror/ Thriller
– A group of people trapped in an elevator realize that the devil is
among them. Produced by M. Night Shyamalan, which the directors and crew
are desperately trying to live down, being that his name, post-Airbender,
is as welcome as the devil himself. Mixed or average reviews.
Wall Street 2: Money Never Sleeps: US, Drama –
Oliver Stone directs this follow-up to the acclaimed 1987 film – 23
years later. There are some really good turns by a number of people:
Michael Douglas, Eli Wallach, Frank Langella, Josh Brolin. Some of their
scenes are well done with a lot of intensity in the execution. But
without much point or purpose, for me. Oliver Stone seems to visit
many of the events of the financial crisis without explaining what’s
really going on. I think if you were very familiar with the events, you
could bring your already-formed feelings to bear on the scenes you
witness, but without being so primed, it really makes no sense. Everyone
is very intense and angry and confrontational about something, but about
what is not explained. They might give the excuse that the issues and
the manipulations are way too complicated to explain to the populace in
a popular movie, but I don’t think that’s true. Hard work, and requires
thought, but very possible. The comics do it all the time, and Jay Leno
and the others do it every night. Think of Jon Stewart, or Bill Maher.
I find the movie profoundly unsatisfactory; too many
things don’t make sense, that seem to sound an alarm, but without any
clarity about what the alarm is about. Still, it shows a lot of skill in
filming scenes where much of great moment seems to be happening. Mixed
or average reviews.
Detective Dee: China/ Hong Kong, Action/ Crime/
Thriller – When the mysterious deaths of a series of loyal subjects
threaten to delay the 690 A.D. inauguration of Empress Wu Zetian, she
summons the infamous Detective Dee back from an exile into which she
cast him eight years earlier. Starring Andy Lau and Tony Leung,
and based on a Chinese folk hero.
The Extraordinary Adventures of Adele Blanc-Sec / Les
aventures extraordinaires d’Adele Blanc-Sec: France, Action/
Adventure/ Fantasy/ Mystery – An adventure written and directed by Luc
Besson set in the early part of the 20th century, and focused on a
popular novelist and her dealings with would-be suitors, the cops,
monsters, and other distractions. Adapted from a comic adventure series
written and illustrated by French comics’ artist Jacques Tardi, the film
is set in the carefree world before World War I, where Adele Blanc-Sec,
an intrepid young reporter, will go to great lengths to achieve her
goals, even sailing to Egypt to tackle mummies of all shapes.
Thai-dubbed only at Big C.
Saturday Killer: Thai, Action/ Comedy – The film
revolves around a troublesome gunman who kills for money to cure his
impotence, and a mysterious girl he has a crush on but whose heart he
can never seem to win. This is the middle film in a trilogy of crime
films, Friday Killer, Saturday Killer, and Sunday Killer,
all with well-known Thai comics paired up with leading ladies.
Saturday Killer is being released first because Friday Killer
was deemed too downbeat to start off with.
Legend of the Fist: The Return of Chen Zhen: Hong
Kong, Action/ Drama – This Hong Kong martial arts film stars Donnie Yen
as a local resistance fighter in the 1920s during the Second
Sino-Japanese War in Japanese-occupied Shanghai. Taken for dead after a
bloody skirmish, and after an absence of seven years, he returns in
disguise to uncover a plot linking the triads and the Japanese. It’s a
continuation of the 1995 television series Fist of Fury, with
Donnie Yen reprising his role as Chen Zhen, a role made famous by Bruce
Lee in the 1972 film Fist of Fury. Shown in a Thai-dubbed version
only,
Eternity / Chua Fah Din Sa Lai: Thai, Drama/
Romance – A class act in many ways, and always-solid Thai filmmaking.
It’s one of the most interesting Thai movies to come along in some time,
for a number of reasons. Based on a revered and classic Thai novel of
1943, the film depicts a forbidden love story in which adulterous lovers
are physically chained together for all eternity. Starring Ananda
Everingham.
Kuan Muen Ho / Hello Stranger: Thai, Comedy/
Romance – Riding the local wave of fascination in all things Korean (but
especially the boy-band, pop-star craze), comes another rom-com about
Thais in that country of wonder that seems to breed only cute muppets.
Still going strong.
Sing Lek Lek / First Love: Thai, Comedy/ Romance –
A young and ordinary high school girl has a big crush on a heartthrob
senior at school, played by for-real heartthrob Mario Maurer. To make
him see that she exists in his world, the girl tries to become a star at
school. At Pattaya Beach and Major, if still here.
Resident Evil: Afterlife: UK/ Germany/ US, Horror/
Sci-Fi/ Thriller – The series continues. This time, in a world ravaged
by a virus infection turning its victims into the Undead (read:
zombies), Alice (Milla Jovovich), continues on her journey to find
survivors and lead them to safety. Rated R in the US for sequences of
strong violence and language. Generally unfavorable reviews, but the
last Resident Evil did a whopping business in Thailand, and this
one is doing the same. Shown in both 3D and 2D versions at Pattaya Beach
(real 3D); in 2D elsewhere, and Thai-dubbed only at Big C.
The 3D version is authentic 3D, using the same cameras
James Cameron created for Avatar. His systems and cameras remain
at the cutting edge of 3D technology. Why they would want to use this
marvelous technology for a zombie flic is another question entirely, but
I want to help clear up the confusion as to what kind of 3D is actually
being used under the generic and often misleading label of “3D.” This is
genuine 3D.
The Snow White / Tai Tang Glom: Thai, Horror/
Thriller – Two students stealthily dissect the dead body of a pregnant
woman just to get the dead infant in her belly to do black magic. But
the magic doesn’t work, and they’re hunted by the ghost of the dead
woman. Rated 18+ in Thailand.
Scheduled for Oct 7
Red Eagle / Insee Daeng:
Thai, Action/ Thriller – Ananda Everingham puts on a red mask and gets
into action in this re-launch of an action franchise from the 1950s and
’60s that starred the legendary leading man Mitr Chaibancha. A highly
anticipated, wildly hyped movie.
Legend of the Guardians: The Owls of Ga’Hoole (3D):
US, Animation/ Fantasy – A new animated feature that has gotten
wide-ranging interest for its cutting-edge animation, and use of 3D.
It’s about a young barn owl who is kidnapped by the owls of St. Aggie’s,
ostensibly an orphanage, but where owlets are brainwashed into becoming
soldiers. Our hero escapes to the island of Ga’Hoole, to help its noble
owls fight the army being created by the wicked rulers of St. Aggie’s.
Staying happy in Paradise - the Counseling Cornerr
Richard L. Fellner
The maze of job titles
Most of the people looking for advice, having
personal problems or problems in their relationships inevitably have to
ask themselves: who is the right person to address my issues? 100 years
ago it was usually a priest or a medical doctor. Today, however, thanks
to the great progress in specialization and research, it makes sense to
contact the most competent partner.
Psychiatrists and neurologists: they are trained
medical doctors specializing in the diagnosis and predominantly
pharmacological (drug) treatment of severe mental disorders such as
personality disorders and psychosis (such as schizophrenia, etc.) and
neurological disorders (disorders of the nervous system).
Psychologists: are the experts on mental
processes and structures. It’s clinical psychologists who usually
specialize in diagnosis, counseling and training. Offering
psychotherapy, however, requires additional qualifications in most
countries.
Coaches, counselors, advisers: these titles are
not protected, so a proliferation of vendors, mostly without any skills,
or professionally based training exists. “Before use”, therefore, an
opinion about the seriousness of the provider should be formed.
Psychotherapy: for their profession, the
therapeutic treatment of mental disorders and psychological burden, they
have to undergo several years of intense training. Psychotherapeutic
applications include couples therapy and sex therapy. Psychotherapies
usually involve sessions of about 50 minutes every 1-2 weeks.
For minor issues only recently beginning, counseling
is usually sufficient. If these issues have lasted longer or occur again
and again, it is recommended to visit a qualified psychotherapist and to
follow through with the therapy for several months to achieve long-term
improvement. With severe mental illness, consult a psychiatrist in order
to get a correct diagnosis and medication support as complementary
treatment - it is worldwide standard today to get supportive and
stimulating psychotherapeutic treatment for psychiatric disorders as
well. This approach, however, seems to only slowly gain footing in
Thailand.
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Live the happy life you planned!
Richard L. Fellner is head of the Counseling Center Pattaya
in Soi Kopai and offers consultations in English and German
languages after making an appointment at 0854 370 470. |
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