Life As It Goes By

If you had bought and sold shares of AIG and Citigroup over the past year,you would not have expected their prices nowadays. Still a distance away from their prime (especially Citigroup), the 2 highly debated stocks have now shifted the bar from SELL to HOLD and now to BUY. Those who had ridden through the high and low deserve to earn a medal or some recognition, at the very least for the confidence they have shown in their choice. They gambled well, almost winning at the very last. Big winners, however, are those who have anticipated these early this year and were busying snapping up the shares.

So you see, this is a true game of fear and confidence. Forget about the fundamentals. Forget about the numbers on the balance sheet. Just remember guts. If you dare to bet against the majority, you stand a really big chance to win it all. And what does this make you? A more daring wagerer which is what the US government is trying to groom now. Here is how you should go about it. Set up a financial institution now (be patient with the gambling first). Obtain government funds to provide loans to those who need it. Be it consumers who need to pay their monthly installments or businesses which need some cash to tide over this crisis. Make some decent gains from the difference in interest. Use this gain to make investments such as buying AIG shares, foreclosures and smaller companies. Do it in a big way just like how you would gamble. When you run out of funds, request from the government and fill it back up again. Post the decent gains in your balance sheet and write-off whatever loss you have gambled away. Remember, just keep a huge turnover figure. Make sure the figure is really huge and grows at an amazing rate. The goal is to be so huge that the government can’t let you fail. Then, they will pool in more funds. Of course, they may take your CEOs away and limit your bonuses. Sit back and relax. The gambles you have made should pay in time to come and they should grow greater than what the government had put into your company. Then, you pocket the remaining (with nothing down in the first place, how’s that?).

No matter how well the politicians play the role of regulators, they still look like idiots when dealing with financial or economic matters. You can’t really blame them; it’s just not their cup of tea. They do share something in common: the guts to gamble big. Team Obama, banging on the success of their earlier policies, is pushing more reforms such as the health care and only to be seriously challenged by the Republicans this time. The fact about how the budget deficit will blow up into previously unreachable level provides enough brake power. From the economic point of view, the only government income are derived from taxes (maybe now from the investments they have made in “national” companies). In any form, taxes are unlikely to appeal to people. It’s like taking the freedom of a soul. However, there is not too much good in printing tons and tons of money without taking income of any form. Some of the states are already suffering from their poor budget management. Raising taxes might be the only way out for some of them. Let’s face it. The government is now sucked dry by the financial sector of the economy.

Again, it’s a question of fear and confidence. If you are confident, you would forsee that businesses would pick up and stock market would hit through the roof again. Then, the income and capital gain taxes would bring in the necessary income for the government. This is perhaps why the stock market has to be as where it is now. Hope is what everyone wants. But the truth is financial sector is not the whole of the economy. It’s just a part of it. Stock market, according to some, is a good indicator of the performance of the economy. A more accurate prediction were to consider the performance of housing sector as well as unemployment rate. Anyway, current performance shown in the stock market received much help from the ailing government. This is perhaps where the fear sets in. If the government had spent on its budget on the financial sector, where can they find the budget to spend on the other sectors? Cutting on expenses in other budgets would help much. What is gone is gone. The TARP funds were meant to avert the Great Depression. The remaining funds (God knows how much) have to be divided among the rest of the economy, as well as the “must-have” expenses such as defense (or war, in this case) and education. This leads to the most feared question, will the government go bankrupt? How do we define that? A few governments have bankrupted before (usually because they can’t repay the loans or government bonds issued) and there are always a limit set to where they feel they can’t go on anymore. What would be the limit in the case of the US government? Definitely, it has to be more than trillions of dollars. Otherwise, they would be bankrupt by now.

Oil and housing prices threaten to rise now that investors with profit on hand (from the stock market) are scavenging around for better, sound investments. The world is actually quite limited though. If it’s not the stock, bond or housing markets, it got to be the commodities. Everyone is so desperate that they would go for anything. Recently, the cheese in Parma like wine in France would be traded. It was told from the newscaster that it is for the benefits of the both sides. And what exactly are the 2 sides? The producers and traders. Yup, you get it right. It’s not you or me, the bloody consumers or tax payers who save the asses of these traders. So this is how they pay back to us: pushing the prices of commodities to the limit, making our lives tougher with high inflation.  What would the government do about this? Or what did they do in the last 2 years? Nothing. Nothing for us. So, please tell me, how can I feel confident at all?

Change is coming and it’s uncertain that who would really benefit from it. We are still learning to adapt to it now. Just like how we saw personnel being questioned by Senators publicly, even in front of the television. Tough questions were being thrown at the “defendants” (if I may call them that) and answers were given. At the end, no actions are required. It’s for the better understanding of the situation and hopefully we can all learn from these painful experiences. You want to know what do I think of this? Complete waste of time. I am not catching another of this anymore. Unless I am hooked again with the reality shows, it’s out of the question for sure. What did it mean when Mr Bernake said he hated the decision to save the “Too Big to Fail” companies and he had done so to prevent a systematic risk from occurring? If the only person who can make the decision felt it that way, what else can we do as commoners? Yes, we should think of ways to help those in finance sector. Without them, we can’t survive. I don’t see any traders paying for my meals or offering me jobs. Instead, I have to thank them for not taking these away from me. I think the Fed is the biggest systematic risk and my greatest fear. It doesn’t want to protect the consumers like us. Instead, it is working with the wealthy to enslave us. With this, I rest my case as this game is too much for me.

Last week, I saw the last moments of 2 ladies who had seen 8 decades of the world in their own parts. One of them, I have only known for about a year or two while the other, since my birth. It’s definitely not the first funeral of a relative that I have to “go” through (my mum passed away about 9 years ago). Due to my family’s religion, I had to “perform” my last respects to my elder, one of which was to stay up whole night to watch over the coffin. I don’t mind all that actually. I had done more tedious ones before. It gave me a time off, to reflect my life so far.

Sad to say, it kinda looks like a family gathering which could be quite stressful at times. Seeing how well your peers do can sometimes put you under great pressure. There are so many things to ask for in life:marriage, child/children, career and health. When you are at certain level of these things, those who have been there, done that would be the next level of things. It seems like they expect me to catch up with them in no time. Anyway, it’s a good opportunity to keep check with what I do have and what I don’t.

It also acts as a motivator as well. It reminds me what I still have to fight for in life. Goals are clearer now. I know I am behind for some of these stuff but luckily I am ahead in some others. I begin to think life is pretty much like the computer games I played to kill time (or those online games in Facebook which my wife uses to compete with her friends). In some games I got to make the high scores and in some others I was beaten up badly. Of course, I enjoyed those that I can play well with and dreaded those that I can’t. But in life, sometimes, you don’t have the choice to play only the games you do well in. You are forced to play the losing games as well. Those who win all deserve to be there. For others like me, we try to keep afloat by winning more than we lose. Finally, there remain those who don’t take the games seriously. They just take the thrills of the game play and ignore the results. In the end, they would the bite of the results but they would keep better,detailed memories (all-time winners tend to forget their victories fast).

I can’t judge if the grandmas of mine and my wife’s had played theirs well. Results are however great. They had 4 generations in the family tree. I doubt I can achieve this myself. Probably I can live up to see my grandchildren but not their children.

They did not go alone. Typhoon Morakot, earthquakes in India and Japan and the virulent H1N1 flu had taken many others along. We might have misread the warning of the eclipse that had occurred not long ago. Old wisdom spoke of incoming catastrophes upon the sights of eclipse.

And now, I would like to pay my very last respects to them.

I had in mind this topic since I was on an overseas assignment in Japan. I began to think about the country. I am well aware of her past misdeeds but I am also awed by her achievements to date. No, no, no, it’s not about the crazy stuff her people creates but rather the longstanding culture they have.

I visited a World Heritage site in Kyoto. It’s called the Byōdō-in, a Buddhist temple built in 998 with its main building, the Phoenix Hall completed in 1053. On top of the Phoenix Hall, there are 2 phoenix hammered by some metals (sorry, I can’t remember whether it’s bronze). I believe the original ones are already kept in the museum next door. Other impressive structures are the wood sculptures that are still in good condition after all these centuries.

It reminded me of the fact that Japan was not conquered by intruders in her entire history. Yes, there were 2 atomic bombs dropped and lots of other bombings. But no one really came and ruled the whole country as she did to the others. This could be the reason why all these historical sites have been kept intact.

Then, it led me to think about the other stuff such as rice, soya sauce, steel, and so on. These “technologies” or know-how derived from making these produces should be well-kept as well. In Japan, it’s not hard to find family businesses that had been run by more than 4 generations. Regardless of their scale, the knowledge passed and improved over time must be at an admirable level. No wonder Japanese products are always closely linked with high quality.

I came across a sewage cover that was meticulously forged or probably moulded. It’s a bit hard to accept for me because from where I come from, no one care about how the sewage cover looks like. I can’t help having the feeling that the Japanese are specific, “detailed” people. The way they bound the tree branches, so that the trees could grow into the shape the Japanese want. It’s not my first trip to Japan but I still feel strongly about this.

More thoughts rushed into my minds. If they are so detailed, what are their expectations for things that they use? Do some shopping around and you will see the all kinds of products that serve almost the same function. Take for example, laundry bags come in all sizes and of different materials. Though they are all used for washing, they work differently for each specific purpose. You wash your socks in certain bags and you put your cotton shirts in others. In other words, their needs do not translate directly to mine.

Their needs seem to be more complex. The denomination of their needs are definitely many times smaller than mine. My one simple need can match with their multiple needs. But my need is a basic one. There is no other alternative or flexibility. It is not specific enough. Their needs may just be my want. This is where the problem lies.

The issue between want and need as economists have put it. There are more wants than needs for each individual. This is why there are necessities and luxury goods; elastic and inelastic demands. However, if one’s needs are actually wants of the other, how would the deal be laid out on the table? This means there is another dimension in the parameter, need. The degree of need is different for each person. A quick way would be to group people by countries and then sort them, using the level of disposable income. I beg to differ. If you have noticed, this is the first time I mention level of disposable income in this article.

I have been talking about the perception of need all this while. And this perception can be shaped by the culture and the longstanding technologies or know-how in the making of this need. If you cook the same potato differently, the value of the potato changes. Those who like it this way will naturally value it more and likewise for the vice versa.

I am not saying that the background culture or technologies determine the degree of need. I am just pointing out these could be main contributing factors. There could be others. Usefulness is one. I might have a different cultural background and used to a different level of technological application but I would still have the same need for such useful tools. Another would be the purchase occasion. Or the environment.

Fret not. This simply means that to create a need, you should keep on trying. It’s not that you have not found the need for others. It’s just that the degrees of need in them have not reached the same level as yours. Or you have not found the common pool of people with the same level. Remember, we are all different and similar in some way or the other. (Hope this can be a handy tip for those working hard to keep their business afloat during these bad times)