My World

HAPPILY EVER AFTER…………….

2012-02-09T20:44:00.000+08:00

It’s been like more than two years since I last blogged and as I mentioned, I’ve met a girl, decided to pursue her and thinking of settling down with her…… That was back then. Now, I’ve settled down with her and we’re expecting our first child. Anyway, a long time ago I thought I could go back to blogging right after settling down but as I happily learned that is not the case. Somehow in between family and work and books (and the occasional computer games and internet surfing), blogging don’t seemed to “squeeze in” and for a while, I did quit blogging until today when I opened my mail and found out that somebody read my old posts and actually liked it. It is quite encouraging that somebody actually liked what I wrote and it made me realized that I missed blogging. When I started out blogging, I intend to share my thoughts however absurd it maybe with the whole wide world. Overtime, blogging has become my refuge of sort from the solitude of life. I write not just to share but also to connect somehow. Anyway, that somehow is no longer the case right now. However, I do have a great many thing to share and amusingly, the things I originally set out to share when I first wrote my blog, most notably about history; I haven’t really shared about it. So without further ado, I’m back! Except that maybe I won’t be able to write as frequently as before but definitely, I will be writing something from time to time.

PENS

2010-12-16T18:59:00.002+08:00

Most people know that I’m an avid book collector but only a handful of them knew that I’m also a pen collector. Well, expensive pens that is. To date, I already owned 4 pens. I got the idea of collecting pens when I’m graduating from business school. Back then, I was thinking of how to “reward” myself for milestones and achievements that I’m going to rack up for the rest of my life. For most people, this would be a very easy task. I mean if you are working for somebody, reward would come in the form of increase pay, promotions, and added perks such as corner office. Or if you happen to own a business, probably a vacation trip, a new car, a new house. And this is my dilemma, I’m not working for another organization and therefore, I don’t receive higher pay, or even get promoted at all. As for the vacations, new auto, or house, well, I don’t need to achieve “something” to get those. I needed something “special” and “unique” as a reward. One day, I was watching this movie of Russell Crowe’s entitled, “A Beautiful Mind” and there is this scene that deeply impressed me, a group of brilliant men and women laying down their pens (all Parker pens) on the table in deference to their distinguished colleague that is being honored with a Nobel Prize. I was so enamored with the scene that I said to myself, “Why not pens?” and with that, I bought myself my very first pen, a metallic chrome body with gold clip Parker brand fountain pen to commemorate my graduation from MBA. The pen cost me nearly Php2,000 and I sort of a “regretted” buying the pen because although the pen wrote wonderfully smooth (I use the pens to write and sign checks). The ink easily dried up and it clogs. The latter entails wasting half a cartridge of the expensive ink just to remove the clog. Well, what can I say? First time blues. Since then, I decided not to buy anymore fountain pens. Anyway, my second pen is a gift from my sister, a Mont Blanc sign pen worth something like 14k Philippine currency. Apparently, my sister thinks that I have this expensive hobby of collecting pens (even if by then I only own one pen and my real intention is to just simply “reward” myself) and she wanted to “contribute” to my collection. And so on my 32nd birthday, she gave me that Mont Blanc sign pen. And this pen is by far, my favorite pen. Not only would I sign “important” documents and checks with “The Pen”, I also carry “The Pen” around as someone else would carry around say a Rolex watch except that most people would seem to notice the Rolex watch rather than “The Pen”. The only problem with “The Pen” is that not only the ink is expensive (cost somewhere around P395), it is also hard to buy because there is only one Mont Blanc store in Manila and you have to place an advance order for it and have to wait for “sometime” just to get your supply of ink. With that, I no longer use “The Pen” to sign just any “trivial” documents and checks save for the most important ones. My third pen is also a gift and is also a Mont Blanc pen. My aunt gave me that on my 34th birthday and it is a Mont Blanc ball point pen. Truth to tell, this “Ballpen” and I, doesn’t have much relationship history together. Partly, it is a ball point pen and partly because my 34th birthday isn’t exactly worth remembering. Now, my 4th pen, which I recently bought and gifted myself, a metallic chrome plated Cross sign pen with gold clip. I decided on buying the Cross pen after learning that President Obama used a Cross pen to sign the historic Health Care bill into law. Anyway, I have two reasons as to why I should “reward” myself with this pen. First of all, I closed a “big deal” this year. In the 3 months that this deal is running, it contributed something like 10% of my total annual sales for this year alone and if things went smoothly, it’s going to contribute 50% to my revenue for next year. That reason alone definitely “worth” a pen. My second reason and the most important one is that I also gifted my lady love with the same pen complete with her name engraved on it just like mine. And we both agreed to use those pens of ours to sign our marriage contract/license come May of 2011. Although the document isn’t as historic or even as controversial as the Obama Health Care bill but still the document still calls for a “worthy” pen(s) to sign on it.

P.S. I surely looking forward for my next “pen in the cap” to add to my collections. “ )

A Year Ago Today

2010-07-26T16:40:00.000+08:00

A year ago today, I met this incredible woman at a speed dating party. To be honest, it wasn't love at first sight (that happened later) for she was just one of the many that I'd met that day. However, for over the course of a year, I get to know her and I get to fall in love with her. What a year! Finally, I felt that I've found what I'm looking for. And today, exactly a year after, I'm celebrating my 36th birthday. Hopefully, this is the last time that I'm going to be celebrating it alone.

HAITUS

2010-03-22T20:21:00.001+08:00

This is what happened in the 6 - 7 months of my absence from blogging.......... Met a girl, fallen in love, went after her, courted her, she said yes and now, we're a couple.

HONG KONG – MACAU ADVENTURE

2009-09-23T22:43:00.000+08:00

Just came home last night from a 5 day vacation at Hong Kong, taking advantage of the holiday – extended weekend. At any rate, it was quite a nice vacation and the trip was kind of memorable to me. Hong Kong is not actually new to me. I’d been there like a dozen times before. In fact, I’d sojourned there for like a month sometime in the early 90s (that is because I had two aunts who lived there). Despite that, I never really “traveled” Hong Kong. I mean despite my numerous visits, I’d never go to places in and around Hong Kong save for a few shopping destinations that my aunts took me to and I soooooooooooooooooooooooooooooooooooooooooooooooo hate shopping!!! Anyway, when the extended weekend showed up in the calendar and my travel bug – bitten shobe of mine was itching to go “anywhere”, I decided to take advantage of it and travel as well. After all, I do need a vacation myself. However, when the choice of Hong Kong cropped up, the one question that perturbed me and my shobe was “where to go in Hong Kong?” I mean going to Hong Kong, there are only 5 reasons to visit that city aside from seeing old relatives and they are: Hong Kong Disneyland, Ocean Park, and Shopping, and more Shopping, and even more Shopping (and I sooooooooooooooooooooooooooooooooooooooooooooooooooooo hate shopping). Ocean Park, I’d been there like once or twice already. Disneyland, not my forte, I’m no longer a kid anyway and as for shopping, never mind. As such, it’s really quite a problem then but through diligent research using Wikitravel (about the favorite travel guide site of mine). I was able to come up quite an interesting and in fact, an adventuresome itinerary, which my shobe and I were able to roughly follow during the course of our trip. The trip, which I dubbed as an adventure can be categorized roughly into 6 activities. First, there is the Biblio – excursion, which is basically a bookstore tour as well as a visit to the Hong Kong Central Library (which is like my favorite place in Hong Kong). There is also the Culture Exploration, which is about visiting museums and places with cultural significance. The Sightseeing tour is about visiting some of the famous landmarks in Hong Kong and Macau. The Gastronomic Escapade is about satisfying that epicurean curiosity by trying out the food in restaurants around Hong Kong and Macau. Then, there is the Hiking Expedition, a trip to the wilderness in Lantau Island in Hong Kong. Lastly, a Hong Kong adventure wouldn’t be complete without a Shopping Quest (but that doesn’t mean that I anywhere “liked” shopping at all). Anyway, travelling to Hong Kong at this time of the year is SWELTERING HOT!!! Manila by contrast is a lot cooler. During our stay in Hong Kong and Macau, the temperature is like in the vicinity of 33 – 34 oC. And the only time it rained was like very late Monday afternoon for like 30 minutes or even less. To use a metaphor to describe the hot clime at Hong Kong, I would say that I’m not “melting” under the scorching heat of the Hong Kong summer rather I’m “evaporating” underneath its sun. It was that hot! It is not that I’m not used to the hot weather, having living in a country near the equator. Rather, it is because in Manila, I live in a bubble, an air conditioned bubble. I mean, I slept in an air conditioned room. I worked in an air conditioned office. If I had to go out, I drive in my Honda Accord, which is also air conditioned. I visit my clients in their air conditioned office. I dined in a restaurant and leisurely stroll in a mall, both of which are also air conditioned. If by any chance I had to stay out under the sun in Manila, it would be like 2 – 3 hours tops. As a tourist in Hong Kong on the other hand, I walked a lot (which is natural considering the fact that I’m sightseeing) and stayed under the sun for like almost the whole day, which is why I looked “drenched” and “dripping wet” after the day’s trip not by the rain of course but by my own sweat! It’s really that hot in Hong Kong! Despite the hot weather, what makes my latest Hong Kong trip standout from my previous trips to Hong Kong? Well, I had to say, memorable places, great food, and 2 new books that I bought in a Hong Kong bookstore (Commercial Press in Causeway Bay).

BOOK REVIEWS I

2009-07-31T18:39:00.002+08:00

Spoiler Alert: The following reviews may inadvertently reveal some details of the books. If you don’t want to be spoiled, refrain from reading this review.

The 22 Immutable Laws of Branding: How to Build a Product or Service into a World Class Brand by Al Ries and Laura Ries ISBN 0887309372 Rating: 3Stars/4

Truth to tell, there isn’t really 22 laws but just 2 laws. The first law is to maintain uniqueness, remain focus with your message by being consistent, and don’t muddle your message by trying to become “everything” to everyone. The second law is that a 100% domination of the market is impossible because not everybody has the same need and thus wouldn’t equally appeal to your brand message and purchase your product. If you get 50% + 1 market share, be happy and move on and create another brand. The remaining 20 laws are just rewording of the 2 basic laws. If you have too much time to kill, be my guess and read the book. It ain’t a boring read anyway just repetitive.

The Art of Kissing by William Kane ISBN0312117442 Rating: 3/4

Ever heard of a “butterfly kiss”? Or maybe “Lip – O – Suction”? If you haven’t, read the book. If you’re bored with French Kissing, read the book. However, take my word for it. Reading the book doesn’t make you a good kisser, practice do.

The Laws of Seduction by Robert Greene ISBN 0142001198 Rating: 3/4

This book is the author’s attempt to inject science into the art as well as an attempt to “procedurize” the “step by step process” of seduction. To do so, the book put forth a lot of examples based on real life personalities as well as fictional characters to prove its point. The latter (fictional characters especially from the Tales of Genji and Dangerous Liasons) are much more heavily favored over the former (real life people), which somewhat diminishes the convincing aspect of the arguments. Despite that short coming, I still find the points elucidated in the book to be rather practical and common sensical. Nothing extraordinary actually. As for the value of the book, well, let’s face it. The reason that we read the book in the first place is to master the art of seduction and as such, we wonder if the Laws of Seduction is anywhere applicable. Well, let’s put it this way. If we want to learn about physics, we turn to a physicist with a phD from a reputable school. We all know that Robert Greene is a “professor of seduction” but have we ever heard of Robert Greene, the seducer?

The Balanced Scorecard: Translating Strategy into Action by David P. Norton and Robert S. Kaplan ISBN 0875846513 Rating: 4/4

One of the biggest problem in management is that Business Strategy is always good on paper but not in the real world. This is because Business Strategy is made in the board room, isolated from the real world that is the front line and once this strategy is handed down from the top, frontline executives are at a lost on how to execute such a strategy. Balanced Scorecard as a framework links this Strategy – Performance gap. Norton and Kaplan’s other book, “Strategy Map” deals with the development of an “executable” strategy while this book provides the framework for monitoring and controlling of the “performance of strategy”. The book is not for everybody though. Definitely, this is not a book that a non – business or for that matter, even an occasional business reader could appreciate. This is a hard core business book that is most appropriate for those who understand the nuances of Strategy making, Implementation, and Performance management.

Bioethics and Moral Decision by Florentino Timbreza ISBN 9711181355 Rating: 4/4

This is a basic introduction to the moral philosophy on issues arising from the advancement of biomedical science such as Surrogate motherhood, genetic engineering, etc. The book is especially praiseworthy in the fact that it doesn’t subscribe to only one narrow religious ethico – moral philosophical point of view rather it proffered several ethico – moral philosophical point of views. A recommended reading for people who wanted to get a balanced understanding of the raging bioethical issues.

明代國家權力結構及運行機制作者方志遠ISBN 7030221877 Rating: 4/4
A Study into the Political Structure and System of the Ming Dynasty by Fang Zhi Yuan ISBN 7030221877

在諸多關於明代政治制度的史論中，往往看到“宦官干政”，“宦官亂政”的評論。傳統史書把“宦官干政” 視作恆古未之有的異象而加以彈伐。此書之論點與衆不同，它不僅把“宦官干政” 視作明代政治結構的一部分。而甚至把它視作不可或缺的一部分。此書認爲宦官是明朝皇帝的代表，而“宦官干政”更是至高無上皇權的延伸。我認爲此書的論點比較附和歷史實況。尤其是更附和歷代“内朝—外朝”政治權力斗爭規律。由此，我認爲此書對研究明朝政治歷史是非常重要的。
In most history books regarding the political system of Ming China, one would always find a negative criticism on the “political intervention” of the palace eunuch. In fact, traditional historiography would find political intervention of palace eunuch as an aberration, an indirect cause of the downfall of the Ming dynasty. This book however, posited a different point of view, one in which I wholeheartedly agree. The book subscribes to the theory that eunuch participation on the political decision is not only part and parcel of the Ming political system but also an indispensable one. The palace eunuchs as portrayed in the book are the representatives of the Ming emperors and their participation in the political process is clearly an extension of the absolute power of the Ming emperors in the matters of the state. I believe such point of view fits better with the historical reality especially since it conforms to the traditional “inner court – outer court” power struggle pattern of politics in Imperial Chinese. As such, I strongly recommend the book as a must read for anyone who is interested in the study of the political history of the Ming dynasty that is assuming you could read Simplified Chinese.

兩漢縣行政研究作者邹水傑ISBN 754385404X Rating: 3/4
A Study of the Xian (County) Administration during the Han Dynasty by Bao Sui Jie ISBN 754385404X

此書著重描敘兩漢縣行政運作的概況。此書最大的優點在於利用最新的考古發現來創造卓越的見解。再説，由於縣的行政機構是國家最基本的單位，因此它是最直接接觸到社會。也由於此，此書間接地描述著秦，兩漢，三國甚至到晉朝初期的社會演變與情況。我個人認爲讀此書對研究中國古代社會有特別的益處。
This book is all about an analysis of the xian or county administration during the Han dynasty period in Chinese history. The book utilizes the latest archaeological findings in developing brilliant insights into the mystery of xian administrative practice during that era. Also, because xian administration is the most basic level of government during the Chinese imperial era, it is the institution that had the most dealings with the societal forces at that time. As such, the book also indirectly touches on the societal development as well as the social reality during the Qin, Han, Three Kingdom, and early Jin dynasty period. Personally, I think this book is a big help for those serious academic study on the societal development in Ancient China. Again, assuming of course, you can read Simplified Chinese.

赫遜河畔談中國歷史作者黃仁宇ISBN 9571300462 Rating: 4/4
Conversation on Chinese History by the Hudson River, authored by Ray Huang ISBN 9571300462

首先我要說，黃仁宇是我最尊重，最喜愛的歷史學家。我總覺得他的大歷史觀是一個卓越的歷史解讀方法。他從上層政治勢力與下層社會力量的各自演變，發展以至後來的沖動，對抗再者往後的容和連接來解釋中國歷史的演變。這就是大歷史觀。在我的看法，黃老師寫這本書的最大目的就是要探討為什麽資本主義社會(Capitalist Society)不能在中國誕生或者落地生根。早在一千多年前，中國社會已經進入了前工業化時代(pre – industrial society)。然而，在條件俱備，臨門欠一踢的情況下，中國古代卻未能引發工業革命(Industrial Revolution)。也由於此，中國社會政治制度未能徹低的改造。此書從頭到尾，一直牽引讀者去縱橫一千年中國歷史至到元初。目的就是讓讀者親自了解中國滯留原因。黃老師把這本書寫到元世祖時代而只字不提元，明，清往後的歷史是因爲過了元世祖，中國已喪失了工業化的機遇條件至到二十世紀。他在寫這本書的最後結論是在研究理學。雖然他沒有直接指責理學為中國落後的原因。然而很明顯，他是持有這樣的結輪。
First of all, I like to say that Dr Ray Huang is one of my favorite historian. To me, his thesis on Macro – history is such a brilliant concept of historical analysis. Using the development and growth, the conflict, and the eventual merging and harmonization between upper echelon political forces and the lower strata societal forces, Dr Huang has masterfully recasts our understanding of Chinese history with his Macro – history analysis. In this seminal book of his, Dr Huang attempts to discover the underlying reason as to why Capitalism as socio – political system didn’t take root in China before the 20th century. According to his theory, a thousand years ago, China is on the verge of an Industrial Revolution (approximately 500 years before the West). It’s society has already exhibit properties of a pre – industrial society. Yet, the Industrial Revolution failed to ignite at that time despite the conducive environment at that period. As a result, Chinese socio – political system failed to transform leading to stagnation which eventually allows the West to overtake it in the 19th century. In this book, Dr Huang manages to take the reader on a roaming journey over a thousand years of Chinese history allowing readers to personally “understand” as to the reason behind China’s eventual stagnation. It’s a lucid read. The book ends in the era of Kublai Khan, the first Mongol Emperor of Yuan China. It didn’t tackle further the latter history of the Yuan, Ming, and Qing dynasties. The reason behind this treatment is that to him, after Kublai Khan, China has already lost its golden opportunity to industrialize. By then, it has lost all it’s pre – requisite advantage to jumpstart an Industrial Revolution. Furthermore, Dr Huang in his concluding chapter wrote about Neo – Confucianism. Although he didn’t directly pin the blame on China’s eventual stagnation to Neo – Confucianism, it is quite clear in his writing that he does harbor such conclusions. By the way, the book is written in Traditional Chinese. And though Dr Huang is fluent in English and has studied in an American University, there is to my knowledge no English version of the book available.

Against the Gods: The Remarkable Story of Risk by Peter L. Bernstein Rating: 4/4

The book despite it’s “eye catching” title isn’t about religion or faith but rather is a book on the “history” of the development of risk management. It began with the telling of the invention of mathematics, then shifted to the discovery of probabilities and statistics, then to the conceptualization of the idea of risk, and finally to the modern development of risk management. The process by which Peter Bernstein tells the history of risk management is through the introductions of the key concepts in risk management (such as probability theory, normal distribution, variance etc) by way of meeting the personalities behind the “creation” of such concepts. In this sense, the book feels like an amalgam of biographies of “eccentric” but otherwise pretty interesting mathematicians. Though the book is about mathematics, surprisingly, the book seldom talks about numbers. Instead, the book delves almost exclusively on the theoretical concepts. In fact, the discussions on the theoretical concepts usually turned profoundly philosophical in nature. Because of that, I find the book not only interesting to read but enlightening as well.

Acknowledgement: I like to thank for my old pal, Jerry for proof reading my reviews in Chinese. Thanks, pare!

金縷衣 (The Gold Laced Suit)

2009-07-26T08:14:00.000+08:00

唐杜秋娘 (Tang Dynasty Du Qiu Niang)

勸君莫惜金縷衣，
勸君惜取少年時。
花開堪折至須折，
莫待無花空折枝。

Abandon thy pursuit
Of that Gold Laced Suit,
‘Stead cherish that fleeting youth
Of dreams and romance.
Pick, smell the roses
At its fullest blossom,
Lest it past and wither
Left holding a dried fig.

少年行 (A Young Man’s Quest)

2009-07-25T13:56:00.000+08:00

唐令狐楚 (Tang Dynasty, Ling Hu Chu)

弓背霞明劍照霜，
秋風出馬走咸陽。
未收天子河湟地，
不拟囘頭望故鄉。

Bow swung
On my back,
Sword hung
On my waist.
With shining armour,
And glittering banner.
I push my steed
With all speed
I rode out of Xian Yang
To the valley of He Huang.
Bent on reclaiming,
The lost land for my king.
Till that day come,
I shan’t even look back at my home.

劍客 (The Wandering Swordsman)

2009-07-24T09:37:00.000+08:00

唐賈島 (Tang Dynasty, Jia Dao)

十年磨一劍，
霜刃未曾試。
今日把似君，
誰為不平事。

Ten years I labored,
Long I waited
To unsheathe my sword.
Point me to the nearest strife, my friend,
That justice be served
With thy blade.
(Another translation)
Ten years I trained,
Raring to unsheathe my sword.
Tell me stranger, where is the nearest battle.
For which glory that my blade shall earn.

TUANGOU 團購

2009-07-21T22:20:00.000+08:00

Read an article on CNN’s website the other day regarding China’s newest consumer buying trend, Tuan Gou 團購 or the literal translation, team buying. The idea as I understood is that using internet as a tool, a group of Chinese netizens would band together to purchase in bulk a product that they commonly like to buy. Because of their “relatively large” number and thus, their huge combined purchasing power, these netizens was able to haggle or more appropriately, coax a better price and terms from sellers. These Tuan Gou netizens have no formal organizational structure and are driven to organize merely by impetus and as such, they would only elect a temporary leader (or more like a purchasing manager or a leading negotiator) to do the haggling for them using their numbers as a negotiating leverage. According to CNN, such purchasing/haggling tactic worked pretty well and had actually succeeded in generating huge savings for buyers (you can check CNN about it). Personally, I think the whole idea is brilliant. Simple yet brilliant. Furthermore, I personally believe that this whole scheme of thing could possibly be transformed into a profitable new business model. Since the inception of the internet, many businesses and entrepreneurs have squeeze their brain juice dry to come up with a “winning” formula for online business success but so far, only a handful did make it. Many tried but failed. The reason is because the business models they come up with only attracted “visitors” and “page views” but hardly translate that “number” into revenues and eventually into profit. The idea of Tuan Gou could be the key since “they” not only have the “numbers” but also the group members are actually buying instead of soaking up freebies offered over the net. Furthermore, in the early days of the internet, the prime movers of the World Wide Web are the content providers. They generate contents interesting enough to attract visitor traffic and from there, they make their sales pitch but with the advent of Napster, Apple online music store, blogging, and social networking, the internet underwent a radical makeover into a tool for P2P (peer to peer) interaction and Tuan Gou is a genuine PSP interaction. It is precisely because that Tuan Gou is a user generated interaction rather than a proprietary development of a commercial entity, Tuan Gou as a consumer trend is more spontaneous, more “credible” and may perhaps be a longer lasting trend than an occasional hype usually identified with the early internet driven consumer behavior. However, for Tuan Gou to work, a few key ingredients must be present. Foremost among the factors is that the products that are the target of these Tuan Gou participants must be sufficiently generic (though not entirely) to have a single price point and be also readily available with other sellers as to foster competition. If a certain product has multitude of available variants and each has their own price, there will be more choices and therefore, instead of one concentrated buyer – group, several smaller sized buyer – group each with fewer members and hence, lesser bargaining power would exists. In addition to that, less generic product would provide points of differentiation that each seller would strive to emphasize in order to justify charging a higher price and hence, negate the bargaining leverage of the Tuan Gou group. Secondly, a Tuan Gou group should be fairly large in order to create the necessary bargaining leverage. The size shouldn’t be just a dozen not unless the item in question is pricey such as an automobile (which would probably have few purchase in a day) but rather in the vicinity of 30 – 50 people in order to be effective. Otherwise, sellers would quickly dismiss the group since they could easily “replenish” the “lost sales”. More appropriately, the “number” should be large enough as to comprise a significant portion of a sellers’ transaction for the day. As an example, suppose a seller has an average of 1000 transaction per day, a Tuan Gou group of 12 (assuming each member constitute 1 transaction) would be miniscule and even in fact, would be negligible to the bottomline of the seller. Conversely, if a seller has an average transaction of say just 100 a day, a Tuan Gou group of 50 representing 50 possible transactions would be a tempting prize for the seller. A third factor for the success of the Tuan Gou is that the Team Leaders or more importantly, the entire Tuan Gou process should be credible. There should be no suspicion of one member or any member of the group making money off the Tuan Gou group by entering into a backroom deal with the seller. As much as possible, transparency should be maintained during the deal making process. Losing credibility in the process would mean a loss of solidarity among the Tuan Gou group eventually resulting into the disbandment without any deal being made. Lastly and most importantly, the deal or more accurately, the savings that could be generated should be substantial. Anything less than that would put into doubt about the usefulness of the whole Tuan Gou system. This is because the question that each member of the Tuan Gou group would frequently ask is that “can I get the same deal if not better on my own?” If the answer were to be a yes, then what is the point of joining up with a Tuan Gou. It is because the individual doesn’t have enough leverage to get the “best deal” from the seller that the idea of Tuan Gou even existed in the first place. For now, Tuan Gou is still uniquely a Chinese consumer concept albeit one probably growing in popularity as suggested by CNN but I believe that such a concept could well applied outside of China as well and who knows, Tuan Gou would probably become a consumer reality in a next few years instead of just merely a temporary fad.

BREAKING THE EAT – ALL – YOU – CAN BUFFET CODE

2009-07-13T20:58:00.000+08:00

The most frequently asked question whenever one is in an Eat – all – you – can buffet restaurant is that “how does the restaurant make money?” I mean given the huge selection of food available on the buffet table and the “unlimited” amount of food that a patron can consume, most diners would think that they’re getting “the better end of the deal” and that the restaurant would surely go for broke feeding every patron till their belly ache. Actually, the truth is there is no such thing as a free lunch (both figuratively and literally) and restaurant that offered such fare are actually making quite a profit. To understand how an Eat – all – you – can buffet restaurant are making money, it is important to fully grasp two important issues central to this concept. The first one is the costing of foods being served in restaurants and the second issue being the difference between “unlimited” and “eat – all – you – can”. In a regular ala carte restaurant, food (or entrée) are priced based on servings or serving size. To illustrate, whenever a patron orders ala carte, the food is served on a dish, which represents one unit or serving that is enough to satisfy certain number of people usually 2. In some restaurant, they offer varying serving sizes of the same entrée to satisfy varying number of patrons. So there is a regular size that is good for 1 – 2 persons and a larger size good for 3 – 4 persons and still larger serving size for more persons. Pricing of the dishes in these ala carte restaurants are based on servings or serving size. In an Eat – all – you – can buffet restaurant, there is no serving limitations nor there is serving sizes. Regardless of any type of restaurant, the method of costing food or entrées is the same; that is they are based on weight. Raw foods like meat, seafood and vegetable are purchased based on their weight. In a regular ala carte restaurant, an entrée’s serving size is determined by weight and costing is based on all inputs that go into preparing the entrée in it’s specific serving size including labor, cooking fuel, the raw food including ingredients. In an Eat – all – you – can buffet restaurant, since there is no serving size or serving limitations, the cook could prepare the entrée in “bulk” (in short, in a very large serving size) even though there is a practical limitation to the size of that “bulk” (such as the limiting size of the cooking utensils and the time needed to fully cooked such large size). At any rate, in an Eat – all – you – can buffet restaurant, each entrée at the buffet table has a certain cost based on weight (as in per kilo). In the Philippine setting, the cheapest entrée on the buffet table would be steamed rice. A kilo of local variety uncooked rice costs around Php20 – 30 per kilo while that of imported jasmine rice variety cost somewhere Php50 a kilo. Add labor and electricity plus water, a kilo of steamed jasmine rice could cost anywhere from Php65 – 75. Anyway, not all entrée is as cheap as steamed rice but some entrées would definitely cost more than others. Taking note of that in mind, it’s time to explore the second issue. Though an Eat – all – you – can buffet restaurant may seem to offer an “unlimited” food for the patron to consume, the reality is there is a limitation, a natural limitation, which in this case is the size of human appetite hence the term “Eat – all – you – can”. Now the question is how big is an “average” human appetite? 100 grams or food? 200? Half a kilo? Take note also that human appetite tends to “increase” when there is an abundance of food available or when the atmosphere is “conducive to binge eating” as in the case of Eat – all – you – can buffet. Despite that, assuming that a patron consumes ONLY the most expensive entrée on the buffet table to the exclusion of other entrées, we now have a “maximum cost per patron”. From this “maximum cost” add a certain mark up to cover overhead expenses, we now have our buffet price. The mark up in this case is our “minimum” expected profit. This is because in reality, patrons don’t just consume a single dish all throughout, they actually sample practically everything on the buffet table. As such, the profit can only get “fatter”. However, all of this computation is based on an assumption of an “average” human appetite albeit an increased version of it. What about those patrons who have above average appetites? Well, this is where statistical theory comes in, The Law of Large Numbers. What this theory suggests is that while there are patrons who have above average appetites, there are also patrons who have below average appetites and that in large numbers, the two just simply “even out”. Furthermore, at the end of the day, what really matters is how much profit does the restaurant make? And profits are not computed on an individual patron basis but by bulk. As an example, assuming that there are 1,000 patrons taking their meal at a certain Eat – all – you – can buffet restaurant and assuming also that the average appetite is half a kilo, that would theoretically require the kitchen to prepare around 500 kilos of food just to satisfy the appetites of the patrons but in actuality due to the “relatively good appetite” of some jolly old guests, the kitchen dishes out 550 kilos of food. Supposed that the average cost of the dishes is Php200/kilo and the restaurant charges Php300/person, the restaurant would still make a profit of Php300/person x 1,000 person – 550kilos x Php200/kilo = Php190,000 (exclusive of overhead costs). Although the restaurant made Php10,000 less than “normal” (the profit should be Php200,000 assuming average appetite) but still, it makes money. Having gotten a picture on how an Eat – all – you – can buffet restaurant makes money, it is thus easier to understand the various policies and practices that an Eat – all – you – can buffet restaurant implements. One such policy is No Sharing, which may sound absurd given the fact that the offer is supposedly “unlimited”. Well, the reason is because the pricing of the buffet is based on an individual’s appetite size, sharing with a NON – PAYING sit – in guests would render the “limiting” assumption invalid but sharing with another paying patron is actually favorable to them. The same reasoning applies also to the policy of no leftovers because it exceeded the assumed limits of the appetite size on which pricing is based. The use of shallow but heavy plates in an Eat – all – you – can buffet restaurant has its purpose to deceive the senses. With a shallow plate, a patron could easily “fill up” the plate thus tricking the patron into thinking that he/she has enough. The same goes with heavy plates. In short, what all this analysis on the business model of an Eat – all – you – can buffet restaurant suggests is that “The House Always Wins” regardless how much one eats (except of course if there are too few guests patronizing the establishment such that the restaurant cannot recoup the overhead expenses from the net margins). But then again, do we really need to “Beat the House” when dining in an Eat – all – you – can buffet restaurant? I remember a classmate and a friend of mine in business school who offered her thoughts on Eat – all – you – can buffets. To paraphrase, she said that we pay not to binge eat but rather we pay for the variety of dishes available, which is quite true. When we dine at a regular ala carte restaurant, because of the price, we can only order a limited number of entrées but in an Eat – all – you – can buffet restaurant, with the same “budget” or a little bit more, we actually have more choices to choose from in order to satisfy our craving and that is really the benefit of dining in an Eat – all – you – can buffet restaurant. However, if one is really mischievous enough as to “dare to BREAK the House”, there is actually a way…….. but not by eating more. The formal business classification of a restaurant is food service companies and as such, it is surprising to most people that restaurant doesn’t really “sells” food or dishes or entrées or meals but the services that goes into preparing and serving the food itself. And that services includes among others: buying of raw foods and their ingredients, preparation including chopping, slicing, dicing, marinating….., cooking and preparing the food/dish/entrée, setting up the place creating the conducive ambience of food enjoyment or simply for occasions, the serving of the food/dish/entrée, the cleaning of the table, washing of the utensils, maintaining a sanitary environment, the whole enchilada. It is the service that is basically why we would venture out to dine in a restaurant and willingly part our hard earned cash. We like to eat Chinese dishes or Italian food but we don’t know how to cook Chinese or Italian or perhaps, we’re a lousy cook or better yet, we’re too lazy to cook. The solution, we dine out at a Chinese or an Italian restaurant. We don’t have time to cook because we’re too busy so we dine out. We had a party but we are so overwhelmed with the preparation and so we make a reservation with a restaurant. The kitchen is stockpiled with dirty dishes that reaches to the ceiling and waiting to be cleaned, the solution………………… we dine out at a restaurant. It is by understanding the nature of the restaurant business that would provide us with a strategy “to beat the house” (which in this case is the Eat – all – you – can buffet restaurant). The strategy is actually simple. Rather than filling up the plate with food per trip to the buffet, get only a small portion of the food per plate but “get as many plates” by returning more often to the buffet table. In that way, you practically eat the same amount of food that your stomach can digest but the restaurant waiter has to remove more plates, the dish washer has clean more plates than the usual load, both of which would probably necessitate hiring more hands just to keep up the service quality. Furthermore, because more plates are needed to “circulate”, the restaurant has to make additional investments in buying more utensils. As a result, financial wise, the restaurant in an effort to maintain the service quality would have to absorb an increase in their overhead costs which consequently reduces their profitability while at the same time requiring them also to shell out more money just to satisfy the patrons’ whims. And that is how you make the “House (in this case, the Eat – all – you – can buffet restaurant) run for its money”. On a more serious note however, this concept of Eat – all – you – can or its equivalent is actually a very “clever” business model. By offering unlimited use, the sellers stoke the buyers’ greed and entice the latter to patronize the formers business. The sellers’ offer of unlimited use is actually a ruse because in reality there is a “natural limit” to the use of the service or product that the sellers offer and the sellers priced their offering based on the maximum limit, thus guaranteeing their “minimum” profitability. Pretty shrewd but not bad.

FOOD CRITIQUE: YAKIMIX, CHINESE – JAPANESE – KOREAN MIX

2009-06-24T15:44:00.000+08:00

I finally visited to YAKIMIX last week after my brother strongly recommended it. YAKIMIX is an all you can eat buffet type of restaurant offering Japanese sushi and Korean barbeques with some Chinese dishes. It is located along Macapagal highway, right across HK Plaza and near the World Trade Center. Personally, I think the food there is great. It is not your regular fare eat – all – you – can restaurant where the food are so – so and are simply stomach fillers. This place is a cut above the rest though not in the same league as the hotel buffets. It is also a shade more expensive because of that. Anyway, to start, the look of the restaurant is quite modern though not dazzlingly fancy. It is not strip bare either. The place is rather spacious and also well – lighted. Overall, the place exudes a kind of soothing ambiance. In terms of amenities, the parking space is adequate and the sanitation facilities are ok. Now for the food, I started the lunch by making myself a salad at their salad bar. I find their greens quite fresh and crisp, which you don’t see often in other similar buffet restaurant except probably in hotels. The sushi bar is placed right after the salad bar and their offering though plenty are quite the standard fare. You can see something like 15 sushi types being offered. In terms of the freshness of the sashimi both the tuna and the salmon being offered, it is rather fresh though not exactly Tsugi level fresh but still it is better than the other buffet type restaurant wherein the sushi are kind of frozen and “smelly”. One probable reason as to why the sashimis are rather fresh here at YAKIMIX is because the sashimis are laid over a covered “pillow” of crushed ice instead of a simple plate, which somehow “preserved” the freshness of the sashimi and not freezing it outright. The sashimi slices are quite larger here at YAKIMIX compared to similar buffet restaurants. The same goes with the other sushis. Aside from the salads and sushi, there are also Korean appetizers such as Kimchi, though I really won’t even try to touch it with a pole, not because there is anything wrong with their Kimchi but rather I really don’t Kimchi at all but according to my siobe, their Kimchi is less than authentic, i.e., doesn’t taste that good as those from Korea (my siobe loves Kimchi). After the appetizers, you have two choices of soup, both of them are Japanese. Didn’t try them though but again my siobe says its ok. Next to the soups are the cooked dishes, which are predominantly Chinese though at that time, they also served Crispy Pata (the meat only without the bones), Ebi Tempura, Tonkatsu. In fact, they have plenty of offerings to choose, which is somewhere around a dozen more or less. My favorite among the dishes that they offered is the Salt and Pepper Spareribs, though it is not that spicy the way I wanted it but then again it is rather meaty. The Ebi Tempura they’re offering uses less batter and as such though the shrimp fillings aren’t exactly “humongous” (more like small), one can actually taste more of the shrimp than the flour and egg that wrapped it. As for the Tonkatsu, the breadings are thin and the Tonkatsu is quite meaty. Overall, I find the quality of their cooked food rather excellent. Next to the cooked food are the Korean barbeques, raw meats such as beef, pork, lambs (according to my brother but I never had one because they didn’t offer it that day), and raw cuttlefish or squid (thinly sliced). All these barbeques are offered in two varieties. One marinated with black pepper and the other marinated in garlic and bell pepper. Again, there are about a dozen offerings on the buffet table. The raw barbeques are cooked on a cone type frying pan located at the center of your dining table. The slices are quite thin and are thus easily cooked. The barbeques taste great but seemed “few” because of their thin slices. However, by the time I get to it, I was already more than half full so it doesn’t really matter. The sauces by the way that is available for the patron to use is similar to the shabu – shabu sauces, which includes among other, the Sate paste. After the belly busting, full course meal, the dessert came in next. The desserts being offered consists of fruits (3 or 4 kinds), sweets like custards and cakes (around 5 to 6), and the traditional ice cream. It is surprisingly that they didn’t cut back on their dessert offerings unlike some other buffet restaurants. Plus, the ice cream is not the usual “Big Scoop” ice cream. Instead, its Selecta ice cream. Not only that, they also offer popsicles alongside the “traditional” ice cream scoops. Overall, the food offering is quite plenty and I find their taste and quality to be excellent. To be more precise, on a scale of 1 – 10 with 10 the highest, I would place an 8.5 – 9.0 for their food offering. After the meal, came the bill. The price of YALIMIX’s buffet during lunch time on weekdays is P499 + service charge. The price is already inclusive of bottomless drinks. Prices other than the regular lunch is somewhere around P600+, drinks not included (+ P55 for the bottomless drinks). As I said, the price is a shade expensive considering the fact that the average shell – out while dining at a fancy ala – carte restaurant is around P400 including drinks. The other all – you – can – eat buffet restaurant charged around P350 for the food and roughly P400 with drinks during weekdays and on Sundays and holidays and dinner, the latter charged somewhere around P500 with drinks (definitely less than P600). Despite that, I think value – wise, YAKIMIX is a much better deal over the other buffet type restaurants. This is because you shell out a few extra bucks in return for a much excellent quality food fare.

QUESTIONING RATIONALITY

2009-06-18T18:26:00.000+08:00

I’ve been reading this book, “Against the Gods: The Remarkable Story of Risk” by Peter Bernstein for like 2 months now. The book despite it’s “eye catching” title isn’t about religion or faith but rather is a book on the “history” of the development of risk management. It began with the telling of the invention of mathematics, then shifted to the discovery of probabilities and statistics, then to the conceptualization of the idea of risk, and finally to the modern development of risk management. The process by which Peter Bernstein tells the history of risk management is through the introductions of the key concepts in risk management (such as probability theory, normal distribution, variance etc) by way of meeting the personalities behind the “creation” of such concepts. In this sense, the book feels like an amalgam of biographies of “eccentric” but otherwise pretty interesting mathematicians. Though the book is about mathematics, surprisingly, the book seldom talks about numbers. Instead, the book delves almost exclusively on the theoretical concepts. In fact, the discussions on the theoretical concepts usually turned profoundly philosophical (an example would be the Theory of the Average Man which Francis Galton, one of the mathematicians being mentioned in the book proposes to be the tantamount to the perfect human being, the Theory of the Average Man is ultimately borrowed from the mathematical concept of Regression to the Mean). One of the recurring philosophical “rumblings” that is mentioned in the book is the assumption of Rationality. All of the mathematical concepts and models being discussed in the book are premised on a “rational” decision maker; that an individual would accept the conclusion of a logical analysis in choosing the appropriate course of action in an uncertain situation. The mathematical concepts and models would provide the framework for such logical analysis however, mathematical models aren’t the sole framework for logical analysis; conceptual frameworks are as effective as well. In real life however, such is not the case. Human beings decide or more appropriately, react despite what the logical analysis dictates. A case in point would be the recent financial crisis. The whole idea of Credit Default Swap is the shifting of the burden of default risk to the entity that could and willingly absorb it in return for a commensurate (which is often times lucrative) premium. Yet, even the most “secure” of the creditors (the ones who buys the CDS) eventually got to absorb the losses arising from default which goes against the very grain of CDS (creditors who bought CDS for protection against default losses done so after careful logical analysis, see “The Global Financial Crisis of 2008, dated”). Or in another case after the collapse of global finance, creditors/investors became extremely risk averse that they dumped even the most creditworthy of securities despite what the numbers generated by their analysis are favorably suggesting. So what this say? Are we human beings irrational? Or that our “models” of rationality is irrational in the first place? And this is the gist of the latter chapters of Peter Bernstein’s book, which is irrational? Us human beings or the conceptual models that we create to tell us which is rational? On one hand, human beings are too emotional to be rational. Our emotions tend to “cloud” our objective assessment of the facts of the matter and which is why we make mistakes in the first place. On the other hand, mathematical and conceptual models of analysis and decision – making are overtly “simplistic”, relying on 1 or 2 variables that poorly approximate the complexity of the human behavior. It is also too “static” to adapt to the ever changing human mind. But then again, aren’t human emotions itself a rationale of human rationality? I mean human emotions are built – in, instinctive, reactive mechanism. We react immediately to a stimulus to “preserve” ourselves, to protect ourselves from the perceived harm even without a thorough analysis of the still vague and unfolding situation. We couldn’t simply say, “wait, I haven’t thoroughly analyzed the situation yet and therefore, couldn’t make a decision as what to do, give me more time to finish….” in the face of imminent danger, can we? Of course not! Our emotions, our instinct does the “rational thinking” for us in a split second in such scenarios. It is for this obvious reason that we could conclude that we human beings are very much “rational” and this in turn led us to concede that our current mathematical and conceptual frameworks for decision making are still far from perfect. Now, if human beings are truly rational, why then the idea of rationality exists? If everybody is human and therefore rational, rationality as a concept shouldn’t be around because the mere notion of the existence of rationality implies that it’s anti – thesis, irrationality also exists, which in this case is true. We often label certain individuals or group of individuals as irrational, illogical, crazy, and even insane. But what is rationality anyway? Or better, what is irrationality? Based on dictionary definition, rationality is the quality or state of being agreeable to reason. Irrationality therefore would mean that being disagree to reason. And reason according to dictionary definition is a basis or cause, as for some belief, action, fact, event, etc. So in this sense, the whole idea of rationality is one of conformity; a conformity to reason or logic and irrationality is non – conformity to reason or logic. But what is the basis for reason or logic? Mathematical frameworks? Conceptual frameworks such as those based on faith, belief, traditions, or logical analysis? As mentioned, frameworks both mathematical and conceptual ones are insufficient basis for rationality. Furthermore, who determines that a framework/model for rationality is generally applicable or for that matter, incontestably correct? An authoritative figure? A synod of authoritative figures? Or simply general consensus of acceptance? Is there even a democratic process to determine the general acceptance of such model/framework for rationality? What about those who reject the model/framework for rationality? Are they being “irrational”? Perhaps the more interesting question is, “is a ‘reason’ based on some framework/model applicable to all?” Perhaps in some cases. Or there are as many “reason” as there are people in this world? So, is there such a thing called “rationality”?

P.S. If you ask the same question then welcome to “deconstructionism”.

0.4%!

2009-06-02T21:17:00.000+08:00

0.4%! That’s the growth of the GDP for the 1st quarter of 2009 versus the same quarter last year as reported last Thursday. Seasonally adjusted, that translates to a figure of -2.26%. Wow! Nobody as in nobody got the Philippine GDP prediction right. Most of the economist (including those from the WorldBank and IMF) figured that the Philippines would grow somewhere between 1 – 3%, the government in fact was looking at more than 3% GDP rate (see “CRYSTAL BALLING 2009 – THE SLOWING PHILIPPINE ECONOMY – IS IT LUCKY?” dated December 16,2008) The fact that the GDP rate went below most economists expectation is beside the point. The real issue here is the fact that the GDP number figured closely to zero at 0.4%. Notation-ally speaking, a number close to zero means a stagnant economy however if inflation were to be considered, the economy is in reality contracting and because of that, we are in a RECESSION. Of course, some perennial optimists would argue that we aren’t there yet considering that recession is by definition, two consecutive quarters of negative growth and that the figure isn’t “exactly negative”. In short, if you were to listen to the die – hard optimists, the economy is just “teetering on the brinks” of recession and not yet in recession. Well, not to be a pessimist but we’re already over 2/3 of the 2nd quarter and by all indications, it’s no rosier than the 1st and in fact, it seemed to be pretty much worst. If you were around in the country during the second quarter, it seemed that after the Holy Week vacation, Filipinos suddenly became misers and withheld spending altogether. One of primary reasons is the early opening of school season (school opened on June 1 this year) and “normally”, people saved whatever they can to pay for the tuition fees and everything else needed to breeze through schooling. As such, spending on most “non – essentials” including holiday vacation trips are done way. Talk about the “resiliency” of the Philippines against the Global Financial Crisis. It seemed that we aren’t immune after all. Anyway, the debate as to whether or not we are in a recession is irrelevant at this point. What is more of a pressing concern is that “how long would this situation last?” “Theoretically” speaking, the Philippine economy shouldn’t perform this badly given the fact that 2010 is an election year and that incumbents would “move heaven and earth” to have government spend money on infrastructures in order to court the goodwill of the electorates in hopes that they would get reelected come 2010. But with a government constantly in short of money, a “fiscal stimulus” plan (to stimulate the election hopes of the incumbents and secondly, to steer the economy out of the doldrums) may actually fall short of “stimulating” the economy. It is not that the government didn’t pour money into the “system”. They actually did except that the magnitude isn’t “big” enough to cover the shortfall from “other sources of demand”, namely personal consumption expenditures or consumer spending, which grows only 0.8% in the 1st quarter and private investments of businesses, which actually contracted. In layman’s term, the Filipino consumer stopped spending except for necessities while businesses became cautious in their investments on building up inventory for eventual sale, on new ventures, and on new production capacities. Even so, there seemed to be a great chance that the government would still embark in a “spending spree” just to prop up both the economy and the politicians seeking reelection but whether or not that would make a dent on the economy remains to be seen. On the personal consumption front, consumer spending in the last few years is largely driven by the huge remittances from OFWs (Overseas Filipino Workers). Aside from that, the “call center boom” has also contributed to the improving purchasing power of the Filipinos. That all changed last year with the weakening of consumer spending, which is attributed to the sudden change of behavior of Filipino consumers from one of conspicuous spending to that of “saving for the rainy days”. And 2009 is no different. This is in spite of the apparent hefty growth in remittances in the 1st quarter of the year. The primary reason I think for the sudden behavioral change is the perception of consumers on the future well – being of the Philippine economy. A cursory look at the Philippine economy would reveal that the country is highly dependent on the American economy. The United States is our largest export market. It is also our largest call center market as well. America also hosts one of the largest OFWs communities and as such send a huge share of our dollar remittances that is propping the Philippine economy. With America in the red, job losses locally and in the US among OFWs are expected and plainly evident and this in turn contributed to the mentality that hard times are ahead of us and thus altered our spending habit. In my opinion, on the short term, the American economy would seem to start to turn the corner but a full recovery would take some time (see “The World Economy, 2010 - , dated May 6,2009). And because of that, it would take some more time after the full American economic recovery before the effects of the American turn around be felt in the country (in terms of exports, call center service demand, and demand for OFWs). There is a lag phase. On the business investment side of the economic demand, according to UP economists, Philippine businesses actually follow a boom – bust cycle of 6 years, which overtly coincides with the political – electoral cycle. The reasoning behind that is that with a change in regime, there follows a “restructuring” of the business “hierarchy” with some businesses being favored over the other while others are being “prosecuted”. Such restructuring opened up business opportunities, which embolden the favored businesses to invest more thus, jumpstarting the “investment boom” at the beginning of each new administration. As times goes by, with political reality settling in and political environment becoming more stable, the new administration’s policy directions would also get clearer, which encourages further investments even among the most skeptical. This “investment boom” would peak somewhere on the 3rd year of the administration continuing to the 4th or maybe even up to the 5th year. By then up to the 6th year, businesses would turn cautious, withholding investments, and adopting a wait and see attitude in order to avoid potential losses in the event of “policy reversals” of the next regime (hence, the oft complaint of businesses about the government’s lack of continuity, transparency, and sustainability of policies). After which, the whole cycle starts again. One way of viewing the current economic situation in the country is that on one hand, the economy is battered by the current Global Financial Crisis and on the other hand, it is also affected by the upcoming political uncertainty brought about by the coming election. Based on this diagnosis, the short term scenario of the economy looked terribly weak and in my opinion, the earliest that the economy would turnaround would be in early 2010 (due mainly to election spending) if not the 4th quarter of 2009 that is assuming the American economy would be on its way to recovery. A definite recovery in my view would begin in mid 2010 right after the election.

ON BEING REMEMBERED

2009-05-28T22:21:00.000+08:00

Watched Night of the Museum 2 last week, it was a nice movie. Really enjoyed it. However, there is this one particular phrase in the movie that struck me. It is the one uttered by the “animated wax replica” of General Custer near the end of the movie. To paraphrase what “General Custer” in the movie said, “I am remembered by that one failure that I made”. And that one failure he mentioned refers to his ill – fated “Battle of Little Bighorn” or more famously, “Custer’s Last Stand” (see Wikipedia for the details). The phrase struck me because it reminded me that history is not solely about the record of great deeds, of towering success, of stunning victory. In fact, more often than not, history records failure with more lucidity than success and General Custer doesn’t enjoy the singular distinction of being a great failure. There are many more failures like him that littered the pages of history. The reason for this is because history is the collective memory of a people, of a nation, of a race, of a civilization. It is not just about names , dates, and places of famous people, place or events. It is about past experiences engraved in the collective memory of a people. It is from this collective memory that we seek success by trying to emulate acts of great personalities and at the same time, avoid the costly mistakes of historical failures. There is however, something in common that successful great men in history and those men deemed as historical failures shared and that is they have ambitions and they have the audacity to realize such ambition. Many have ambitions but few possessed the audacity to achieve it and the few who dared to live up their dreams, some end up a success while others failed either due to an act of nature or to their own blunder but in spite of that, we “remembered” all of them equally. It is due to this reasoning that I came to the conclusion that “being audacious has its rewards; you either end up as a monumental success or an epic failure; either way, you’ll be remembered.” But of course, being remembered for as a success is way better than being remembered for as a failure.

THE GREAT BOOK BLOCKADE OF 2009: MY VIEW

2009-05-23T21:21:00.000+08:00

There is a huge uproar that is been going on for the last 3 weeks or so if one has been following Philippine based blogs. And recently, that “outrage” has even spread to mainstream media with several high profile columnists/journalists expressing their “indignation” on the matter. The heart of issue is about the taxation of imported books to the country which ultimately led to what Robin Hemley, an expatriate in the Philippines described as “The Great Book Blockade of 2009”. The whole brouhaha started when a book importer ordered a huge shipment of the popular Twilight novels of Stephanie Meyers (ostensibly to satisfy Filipino booklovers craving for vampire romance) and once that shipment arrived to the country, Customs led by a certain Rene Agulan refused to let the cargo out of the port not unless the book importer paid the “proper” custom duties on the shipment to which the importer initially refused citing the Florence Agreement. The Florence Agreement is an international treaty signed in 1952 by 98 countries around the world of which the Philippines is one of the signatories. The treaty’s objective is to promote international understanding by allowing the free circulation of educational, cultural, and scientific books. The means to promote such free circulation is through the removal of custom fees among the signatories of the treaty. It is because of that, no Philippine book importer had paid any custom duties for the last 57 years until that incident. The particular enterprising custom officer, Rene Agulan’s stated reason for his stance is that the Twilight novels were neither educational nor cultural and certainly it ain’t scientific at all hence, that particular importer had to pay custom duties somewhere between 1 – 5%. Because of the mounting storage costs of the withheld cargo, the particular book importer relented and paid the said duties. That act of “kowtowing” to the rapacious appetite of government for money (of which the government is perennially short of it due to ….) has set off a “bad” precedent. Every imported book shipment since then were levied a custom duties of 1 – 5%. This naturally raised a howl of protest from all the book importers, who refused to pay and sought out government explanation on the matter. What transpired was something of a tragic comedy. Sought for explanation, a wisecracked Department of Finance (the supervising government body of the Customs Bureau) undersecretary Espele Sales, who is also probably an expert grammar professor, cited a passage of the enabling law, R.A. 8047 to defend government’s action. According to her, the law provided for “the tax and duty-free importation of books or raw materials to be used in book publishing”. Because of a “missing” or “vanished” comma right after the word books, our creative undersecretary interpreted the passage as to mean only “books used as raw materials in book publishing” are exempt from paying taxes. Every other else is subject to tax. Geez! She must be a pretty darn good grammar expert! I mean for the past 57 years, nobody got the “interpretation” of the law right until she came along (incidentally, if you have to get a good lawyer, get Espele Sales because she could help you to walk free of bloody murder by simply reviewing the incriminating affidavits for grammatical error or typographical errors which thus void its usefulness as an incriminating evidence). Anyway, because of the tiff between the book importers and the Tax agency, it was alleged that for two months, no new books has entered the Philippines (and hence the term, “The Great Book Blockade of 2009). It is no wonder that I felt that there is a dearth of new titles in the shelves the past few months. Anyway, like all issues in this country, this particular issue has also 2 opposite sides/opinions. On one side, there are those who doubted the very existence of a “blockade”. They argued that books never “disappeared” from the shelves at all during the tiff, which is quite true, a dearth of new titles maybe but disappearance? So where is the blockade? Furthermore, these people argued that 1 – 5% tax is “minimal” and that the “ridiculous” book prices are more of the book sellers doing. On the other side, some people are indignant; indignant of the government’s insatiable demand for “blood”, sucking every penny out of people’s pocket just to line theirs. The more statesman – ly of them argued that the government’s action are in contravention of the government’s lofty goal of uplifting the people’s literacy. By restricting the free circulation of books, we defeat the policy of expanding knowledge and literacy. Furthermore, the action amounts to a censorship and is an assault to the people’s freedom. Also, the government’s unilateral action has reneged it’s commitment to the spirit of the Florence Agreement to which it is a signatory. As such, it sends a “wrong” signal to the world that the Philippines government is whimsical when it comes to policy adherence and applications. Well, that’s in a nutshell, what the whole Great Book Blockade of 2009 is all about. So what do I think about the whole enchilada? Well, personally, I’m against the imposition of the duties on imported books (even though I’m not really a fan of vampire fiction) and my reason isn’t those lofty ideals of freedom but something more “grounded”. You see Philippine books are pretty expensive! I should know because I’m a book lover, I like reading books and I also collect books (to date, my Anobii account listed 271 books and I not only buy books from the local stores but also during my foreign trips). A “really good (imported) book” in the Philippines, hard bound, excellent paper quality written by a noted author can command a price of upwards 2000 pesos. The paperback edition of such book with nice paper quality sells at around Php1500 to Php2000. A “good book” (one in which the author is not that popular) with a nice paper quality typically sells around Php1000 – 1500. Between Php800 – Php1000 are the “downsized” version of a typically good book or the so – called mass paperback copies. Below Php500 are books whose printed pages are of newsprint quality. By comparison, in China, a paperback edition book with nice paper quality costs around Php300 – 400 (converted already) tops. As a matter of fact, last December, during my vacation in China, I’ve bought 7 books for 341 RMB or roughly Php2500 total. Imagine 7 books for the price of 2 or maybe even 1 bought in the Philippines (the books I’ve bought in China are scholarly works on Chinese History). Now that is expensive. It is due to this high price of books that book buying and collecting is fast becoming an expensive “hobby” of the “well – to – do”. A “financially struggling” individual can’t “afford” to read and collect books even if he loves books. It is for this reason that an imposition of a few percentage points of custom duties on the cost of books would only make books more expensive and the matter worse. However, it won’t be that bad if we have a “functioning” public library system instead of a pathetic one that we have now. In other countries I’ve been to, the public library system was so well – managed and well – endowed that people actually flock to it and literally crammed it. An example would be the Hong Kong Central Library, right across Victoria Park in Hong Kong, one of my favorite places. The Hong Kong Central Library is huge, 8 floors tall like a shopping mall but instead of merchandise on its shelves, it’s all books. The place is so popular with the locals that every seat in the place is taken and one literally has to sit on the floor in corner with his back against the wall just to be able to enjoy his reading. You can’t find those here in the Philippines. Without an “effective” public library system and with books getting expensive, how do you expect Filipinos who want to read to be able to read? One Anobii member used to say that “a room without books is like a person without his soul”. Perhaps not everybody would agree with his view but I think everybody could agree with me when I say that “you are what you read or didn’t read”. So, ever wonder why our country is like this?

FILM REVIEW: STAR TREK (XI) 2009: BOLD REIMAGINING; RADICAL RETCONNING

2009-05-11T21:47:00.000+08:00

Spoiler Alert: This article contains some spoilers of the movie. If you wanted to be surprise, don’t read this article.

“Space……… the final frontier. These are the voyages of the starship, Enterprise. It’s continuing mission to explore strange new worlds, to seek out new life and new civilization, to boldly go where no man has gone before!” – Opening line of the Star Trek: The Next Generation series.

As a trekkie, I’ve been waiting to see this movie for a long time now. Correction, I’ve been dying to watch this movie for ages already ever since Paramount pictures began showing trailers and teasers of the movie sometime last year (or was it the year before?). And on the opening day (May 8), I finally get to relieved my frenzied anticipation and thankfully, the weather cooperated (it was raining heavily the day before; a storm was coming to town then). And thankfully, the movie didn’t disappoint and honestly, I was pleasantly surprised on how the movie is done. It is somewhat different from what I would expect because the movie contravened established Star Trek conventions or more appropriately, TRADITIONS. Despite that, it was a great movie and I like it. In my assessment, I would give it a 4 out of a rating of 5. The 2009 Star Trek film is the eleventh film in the Star Trek movie franchise and chronologically the first film or a prequel to the 10 films before it but probably, this film may not even be considered a prequel at all given it’s radical retconning (as in total revision of the story line to the extent that it stray away from the storyline’s continuity) but an “alternate” franchise altogether.
Plot
The movie is some sort of a biopic of Star Trek: The Original Series’ leading characters, most notably that of Captain James Tiberius Kirk and Captain Spock (although at the movie they haven’t earn their command stripes yet). It tells a little back story of their youth, their first mission on board the newly built Constitution class, USS Enterprise and how they eventually rise to their respective position at the ship and finally becoming the legend that we all knew. The main plot line of the movie revolves around the revenge of a future Romulan by the name of Nero against the future Spock in particular and Vulcan and the Federation in general. The plot started during the late 24th century when a giant star near Romulus, the homeworld of the Romulan Star Empire went supernova, which threatened to totally annihilate Romulus itself. The 24th century Spock (played by Leonard Nimoy, the “original” Spock) then working as Federation ambassador to Romulus frantically devised means to saved Romulus from certain destruction. He along with several Vulcan scientists were able to develop “red matter”, an unstable compound that when reacted with matter would induce the formation of a singularity, a “gravity well”, a.k.a. “black hole”. However, Spock’s effort went for naught as he wasn’t able to deliver the red matter on time to save Romulus from complete destruction. In spite of that, Spock still pressed on with his mission intent to stop the spread of the energy shockwave resulting from the collapse of the supernova and thus destroy other planets in the neighboring star system. As he was approaching his target, a marauder ship, an advance, heavily armed Romulan mining ship commanded by Nero, who happened to be on a mission outside of Romulus before its destruction and who had lost everything with the destruction of Romulus appeared. Hellbent on revenge, Nero pursued to destroy Spock but instead was “sucked” into the time – space fissure created by the black hole, as a result from the detonation of the red matter by Spock. The result was to “throwback” the marauder nearly 129 years (or was it 150 years?) into the past. The time – space fissure created an electrical storm phenomena in space during the early 23rd century that attracted the attention of the Federation vessel, USS Kelvin, whose first officer, Lt. George Kirk was the father of our hero, Capt. James Kirk. A battle ensued between the marauder and the USS Kelvin resulting into the self sacrifice of Lt. George Kirk by ramming the Kelvin into the marauder in order to save the lives of escaped survivors of the Kelvin. It so happened that one of the escaped survivors happened to be George’s wife who at that time is pregnant and in labor. And in a dramatic coincidence, she gave birth to our hero, the future Capt James Tiberius Kirk, while the baby’s father is in his last few seconds of his kamikaze run. For the next 25 years, our heroes (James Kirk and the younger version of Spock played by Zachary Quinto) grew up while the marauder and it’s captain, Nero planned their revenge. Nero eventually got hold of the future Spock and the red matter, both came into the fissure a few seconds after the marauder but only emerged after 25 years of the appearance of the marauder in the past. With the possession of the red matter, Nero finally set in motion his revenge, complete destroying Vulcan and is in the process of destroying Earth when he was eventually defeated by Kirk, the younger Spock and the crew of the USS Enterprise in a dramatic battle. The movie concluded with a meeting between the future Spock and the younger Spock and the beginning of the legendary 5 year voyage of the starship Enterprise as depicted in the Original Series.
Critique
Script
One of the obvious “loop hole” of the film’s script is the numerous “continuity error” that punctuated all throughout. There are about a dozen of them that a not – so – fanatical trekkie like me could find and expose. Such blatant “mutilation” of canonical rules would for a “traditionalists” trekkie, who uphold trekkie canons as bible truth, be considered as “blasphemous” if not an outright “sacrilege”. However, all of this are neatly “smoothen over” (and ultimately assuage the hard core trekkie’s indignation) by the most convenient of all the plot devices available to a science fiction film, that is TIME TRAVEL and it’s PARADOXES. Personally, I find the script is cleverly done. For one, by retconning the storyline, writers had the creative freedom to come up with an entertaining piece without being bogged down by numerous conflicting canonical conventions. There are many films (Star Wars the prequel trilogy) and TV series prequels (Star Trek: Enterprise series is one such case) that got mired in negative reviews simply because the writers are trying to be faithful to the establish canons. As such, in an effort to create a plausible back story to an established canons, some of the plots are deemed illogical while others are seen as somewhat “forced fitted” into the story line. I simply couldn’t imagine how the film would look like if the writers followed the established canons to the letter. Probably, it would not be as entertaining as this movie. However, some errors do occur in the script. Foremost among them is the part wherein the Romulan captain Nero stopped an attack once he discovered that the ship he is on the verge of destroying is actually the USS Enterprise. And he was able to do so by “reading” the markings USS Enterprise off the ship’s hull. Imagine an alien who could read English! For obvious reasons that Earth based movie goers couldn’t understand a word of the Romulan language, the conversation even among the alien Romulans are uttered in Federation Standard a.k.a. American English in trekkie universe (the classic explanation according to a trekkie lore as to why Romulans or for that matter any alien race “seemed to speak” Federation Standard is because they are fitted with a device called a Universal Translator) but to have a Romulan read Federation Standard?! Unless, Federation Standard is part of the core curriculum of school aged Romulan in the late 24th century, the writers must have seriously erred in the script and at critical juncture!
Directing and Special Effects
For science fiction movies like Star Trek, special effects played a very prominent role in the movie if not for much of it. Personally, I think JJ Abrams did a good job with the film direction. If you are familiar with the battle scenes of the previous Star Trek movies, the battle scenes in this movie are much more “clear cut”. The battle scenes of the last few movies in the franchise use CGI effects. It is very fast paced and quite short such that it literally “finishes” in just a blink of the eye. The relative shortness and fast pace of the battle action doesn’t leave a lasting imprint on the mind. The battle scenes in the current film however are more clear cut and “realistic”. The style of which reminiscences that of another sci – fi series, the new Battlestar Galactica (the 2008 version). Furthermore, the design of the Constitution class, USS Enterprise is more swanky, more sleek than the Original Series era starship, which is quite “geometric” in appearance. The internal design of the ship is also much different from the previous incarnations of the USS Enterprise starship in that the inside previous starships are literally more spacious with little “protrusions” of pipes and metals. The only thing that one can see inside the “old” Enterprises in their various incarnations is the desks containing the computers complete with view screens. In this latest version of the starship Enterprise, the internal layout is more cluttered with the engineering room looked more like a pipe maze. Overall, the feeling is that the ship’s internal layout resembled more of a submarine or an aircraft carrier layout than the “regular” starship layout of the trekkie universe.
Characters and Actors
One of the most impressive things about the latest Star Trek movie is the degree of imitation by the current crop of actors to the original cast members. In particular, Karl Urban’s portrayal of the irascible Dr Leonard McCoy was such an “exact” replica of the speech, the accent, the mannerism as well as the irascible character to the “real” McCoy portrayed by DeForest Kelley that one would think that Karl Urban is a younger clone of DeForest Kelley. Other actors too are equally “faithful” in their imitation at varying degree. Such “faithful” rendition of the original characters allows trekkies to easily accept these new actors in their roles because for the longest time possible, most trekkies didn’t even dare to imagine somebody else would be playing the parts of the original actors in the roles that the latter are typecast into. Accent apparently played a large role in the maintenance of this “imitation”. For example, Montgomery Scott, the Enterprise chief of engineering is played by James Doohan in the Original Series had a heavy Scottish accent and Simon Pegg, the current “Scotty” also exhibit such heavy Scottish accent (complete with the character’s condescending attitude). Pavel Chekov is another case. The character in the Original Series played by Walter Koenig has a distinct Russian accent and Anton Yelchin, a Russian with also a distinct Russian accent currently portrays the role of Chekov in the movie. The movie however is not a simple “imitation” exercise by the current actors of the original casts. They are also given some creative license to develop the characters. The most readily seen example is the portrayal of Kirk by Chris Pine and Spock by Zachary Quinto vis – a – vis to William Shatner’s portrayal of Captain Kirk and Leonard Nimoy as Spock in the Original Series. Shatner’s Kirk is decisive, arrogant, and bold. These are the same qualities that Chris Pine was able to elucidate in his rendition of Captain Kirk. However, Shatner’s Kirk is cool and calculating, more of a risk – taking explorer rather than a gung – ho, swashbuckling adventurer that Pines’ portrayal seemed to suggest. Furthermore, Pines’ Kirk seemed to be more like a James Dean type of rebellious bad boy than the more “gentlemanly” officer image of Shatner’s portrayal. Probably, the script called for such a portrayal since this version of Captain Kirk does have a stormy childhood. However, still, I would prefer a more “gentlemanly officer” type of Kirk even if it has some sprinkle of James Dean in it. Spock on the other hand as portrayed by Leonard Nimoy is an expressionless being trying hard to get in touch with his “human” side and for that, Nimoy’s Spock is the “model” Vulcan for which all subsequent Vulcan portrayals are based in the Star Trek universe. Zachary Quinto’s Spock conversely looked more like a human trying hard to be a Vulcan. Again, this maybe what the script calls for, to accentuate and ultimately explore the inner struggle of Spock between his “humanity” and his Vulcan lineage. Well, I just kind of that felt that it was quite odd for a “model” Vulcan to suffer identity crisis and trying hard to be a Vulcan. Anyway, despite that probable script’s attempt at ‘reinvention of the characters”, I felt Zachary Quinto’s take on Spock is done pretty well. I mean it is hard to portray a Vulcan especially their ubiquitous hand greeting signal. As for Chris Pines portrayal, I think he has to be more “mature” in his portrayal relying less on physical brawn. Other than that, I think he does well. There is another thing I’ve noticed in this current group of actors. They seemed to be more “cheery” when compared to the original casts. I mean Kirk is the quintessential leader and he almost always maintained that “coolness”, which William Kirk played to perfection. Nimoy’s Spock is ever expressionless and DeForest Kelley’s McCoy is the usual irascible self while George Takei’s Hikaru Sulu wears a long face that seemed to suggest a calculating and scheming personality. In short, the original casts’ portrayal seemed to be more “stoic”. Conversely, the current actors seemed to wear a smile constantly even if they’re serious and thus, they seemed more “cheery”.
Overall, as I said, the movie is a 4/5 in my book and it is one of the few movies that I deemed as worth watching the second time around, which I did last Sunday by the way (I’ll probably go for a third one soon).
P.S. To better understand the terminology of trekkie “speaks”, please refer to Memory Alpha, a Star Trek Wiki hosted by Wikipedia, http://memory-alpha.org

THE WORLD ECONOMY, 2010 –

2009-05-06T21:53:00.000+08:00

Note: This is just an opinion of mine and not based on some economic model, nor is it based on any factual data or figures. Furthermore, I’m no economist, just a regular businessman. I don’t have a degree in Economics either, just plain old fashion common sense.

A few weeks back, my eyes caught on an intriguing title of a magazine cover (either TIME, Newsweek, or Fortune, can’t remember). The catchy title goes like, “Cheap Oil Forever” or something to that effect. Anyway, I was so “stimulated” by the catchy front title that I proceeded to read that particular article on the magazine right on the spot at the bookstore. The central claim of the bold statement is based on a comparison of the oil price behavior made in the previous price cycle during the 1980s oil shock and the current price cycle. According to the article, both cycles though different in their peak prices exhibit similar behavior and from the comparative analysis, the author concluded that the current price cycle has already seen its peak and already went pass of it and the ensuing price trend would only see prices going down if not stabilizing. In short, oil prices is not likely to “skyrocket” in the short term foreseeable future much unlike the price fluctuation seen in the last two years or so. Wow! This is really a bold statement, indeed! Just last week (I think), the IEA, the rich western countries’ energy advisory group, projected a shortage of crude oil production capacity as early as 2011! With shortage as the logic goes, oil prices would revisit that unbelievable price tag of $147 a barrel in the next two years. That assertion though of IEA is hinge upon the complete economic recovery of the US and the OECD economies (the Organisation for Economic Cooperation and Development, the organization for advance economies mainly western countries) by 2011. Contradicting? Yes, absolutely! That the price of oil would buck the established historical trend is both “seemingly anomalous” and unnerving. However, the assertion of full economic recovery by 2011 though is not without basis. The news for the past month or so on the economic front is somewhat optimistic with American authorities claiming to see the “green shoots” of economic recovery based on encouraging economic data so far at hand. In addition to that, China’s economy is coping pretty well with the crisis and it’s export shows signs of improvements as of late. All this fueled market rallies around the globe, reacting in a way that suggests that the end (to the free fall of asset prices and to economic contraction) is already here and that we have already “bottomed out”. The most optimistic in fact, believed that there is nowhere to go from here but up. Pardon me for being a killjoy but I’m still unconvinced that this is the case especially the latter (that there is no way to go but up) though I don’t deny the fact that we had already turned the corner and “bottomed out” but recovery? I felt that assessment is too early to call (and I’m not alone in that assessment). Also last week, the former NEDA director, Cielito Habito, wrote in his column in the Philippine Daily Inquirer about the future economic prospect. Specifically, there is a debate whether economic growth pattern from 2010 onwards would be an “L” (sudden contraction of the economy as seen in 2008 followed by a prolonged recession or at least, an extended period of lethargic growth in the short term), a “V” (a sharp rebound; a momentary “dip” on the economic growth rate followed by an unusually strong recovery), or a “U” (a sudden contraction of the economy followed by a slow recovery). And this is the reason why the magazine article is such a “bold statement” because it presupposes that the global economy will experience a slow recovery or a “U” if not an extended recession, an “L” which goes against the recent raft of evidence of economic optimism. The recent market’s reaction on the other hand assumes a “V” shaped recovery if not at least a short “U” type of recovery. As I explicitly said, I don’t believe that a “V” shaped rebound is in the offing but a prolonged recession (the “L”) seemed to be contrary to what is happening around. Instead, I believe (as a growing number of analysts and economists do) that the world economy will experience a “U” shaped recovery if not an extended period of lethargic growth (or a modified “L”) in the short term. And I had my reasons for believing so. The current economic malady was borne out of the financial meltdown in the US brought about by the overextended debt burden of the typical American household. The debt situation was in turn derived from Americans assuming the mantle of being the “global consumer of the last resort” or being the “consumer of the world” for the last decade or so. This unflattering mantle came about during the last decade of the previous century with the internet boom. As we all know, the Americans have this 301k pension fund, which are heavily invested in securities and with the booming stock market, the value of their future “savings” correspondingly ballooned. Couple this “boom” with easing government restriction on the use of pension fund savings, the average American felt that they are “rich” even if their so – called wealth are in papers only. This “boom” wealth has drastically altered the American psyche and underpinned much of their consequent spending spree. You see, an average person would save a portion of their income as an insurance against future needs but with an extraordinary gain in their “creditable savings” due to the internet boom, most Americans believed that setting aside cash for future needs is no longer necessary and that future pensions and future income streams is as good a substitute to savings. As such, Americans began to spend and spend and spend even more. The internet bubble burst before the turn of the century didn’t give much of a dent on American propensity to spend because the government’s aggressive monetary policies and easing fiscal policies enabled the securities market to continue rolling on. As such, this created an illusion that “good times are here to stay” fueling even more spending spree. Eventually, a point came when this unrelenting spending spree gave rise to a voracious demand for resources that stretch global supply capacities to its limits and by the law of supply and demand, when supply dwindles and demand increases exponentially, exorbitant price increase inevitably follows. Inflation is the end result and we see the $147 a barrel crude oil in the market. As inflation began to bite into the income of the average individual by reducing their buying power, the inflation looks set to spiral out of control and governments worldwide began to drastically change course on their monetary policy from free – wheeling credit to one of restriction. This in turn took the wind out of financial markets resulting into a series of events that led to the current state of things. The current “Great Recession” differs from the previous recession episodes of the 90s and the early part of decade of the 21st century in that American savings are seriously affected. Previously, American savings are “protected” through government’s aggressive monetary policies but the financial meltdown has practically wiped out American savings. This could be gleaned from the news that people are coming out of their retirements to work for a living. And this is exactly my point as to why the current “Great Recession” would drag a bit longer or that recovery would be weak and slow. Americans can no longer spend. They don’t have money to spend. They need to rebuild their savings that they’ve lost. And as Americans were the “consumer of the last resort” or the “consumer of the world” with the American economy contributing a hefty share to the global economy, good times won’t be back for the rest of the world for quite some time. That however, wasn’t the “shocking” part of my “intuitive” assessment. I believed that the current crisis has “shocked” the Americans back to their senses (the common one). From a propensity to spend unleashed in the 90s to a propensity to save, Americans found out that there is no real substitute to savings than putting aside a portion of the hard earned cash in the bank and get this. No amount of government intervention would make people spend again, well, not at least the type of spending that we seen in the last few years. Remember, Economics is not a mathematical science but rather a social science that studies a person’s behavior in allocating resources or in layman’s term, how people spend their money. When people collectively became frugal because they felt they don’t have financial security to spend, no amount of government intervention would force people to spend. They would just save whatever money is thrown at their way. Not even disincentive to save such as zero interest rate on deposits or penalty on savings would force a change in behavior. People would just dug a hole in their backyard and bury their cash. With a much reduced spending resulting into a much reduced overall demand, economic growth would be stagnant, lethargic. The only time would economic growth return to “normalcy” is when spending goes back to “normal” and that can only happen if Americans manages to rebuild their savings or more specifically, when the Americans felt that they are financially secure enough to spend, which could take some time under a “favorable’ economic condition. Just exactly how long would this take? Well, if the 1997 Asian Financial Crisis is any gauge since the severity of the 1997 debacle is as catastrophic to Asian as the current crisis now hounding the Americans, it took some economies several years to recover. Of course, the stronger ones recover first while countries like the Philippine took practically a decade to get out of the rut. And the Asian economies were able to get out of the crisis because of “favorable” conditions. I mean the American economy then is on a bull run and China is equally bullish back then. As of now, there is no economy that is going to pull the world out of the rut. Many pundits are saying that China would save the world economy as its economic stimulus plan is deemed a success and that its domestic consumption is rising. China, however though the world’s third largest economy is far from being the “consumer of the world”. This is because their per capita income (the average income of their citizen) is below par. As such, present global economic recovery could take a much longer time. Speaking of China, the tremendous economic growth of this export juggernaut the past decade has partly contributed to the rising price of commodities of which crude oil count amongst it. What would happen to the crude oil prices if the US economy were to hobble along in a slow recovery while Asia, mainly China’s economy is bustling? Would the scenario of a $147 a barrel oil come back? Well, for one, China’s economy and to a certain extent, Asia’s economies are not as badly affected as that of the US and Europe in this current crisis, which could allow them to recover faster economically compared to the US and Europe and as such, Asian economies could provide some solid demand for commodities like crude oil in the near future and thus, provide support for prices. However, Asian economies and China in particular though big as they are, are merely a fraction of the size of the US economy. Therefore, it is inconceivable that they would be able to absorb the demand slack from the US and thus, tighten supplies and stoke debilitating price increases but nevertheless price increases attributable to China and Asia in general are to be expected. What is more worrisome is the current stimulus package being implemented by the US. The flooding of dollars in the world market serves as a volatile fuel ready to ignite a hyper – inflation in the coming years. This is because prior to the current crisis, the American dollar is trending lower vis – a – vis to the other major currencies around the world such as the Yen and the Euro. In layman’s term, the American dollar is devaluating in the global currency market before 2008. It is due to the crisis that the trend is reverse since the Dollar is the global currency of choice and American Treasuries are a safe haven for Dollar investments. However, as the crisis bottoms out, money would begin to flow out from the low yielding American treasuries and into other markets which offers better yield. Furthermore, recent pronunciations of American policy makers doesn’t really encourage holding onto the Dollar. I mean phrases like “Rebalancing the economies” sounded more like Americans should “sell more and buy less” (which translates to America should export more and import less). Less spending, lower overall demand also support US policy makers’ Dollar depreciation tact. On top of that, we have the flooding of Dollars in the international market. All this doesn’t really augur well with the value of the Dollar. As the value of the Dollar depreciates, prices would correspondingly increase since commodity prices selling in the international are produce locally (as in their respective countries) and as such are priced in local currencies (all production costs are valued in their respective local currency and not in US dollar) and with the fall of the Dollar and the corresponding increase in the value of their local currencies. It would require more dollars to buy the same amount of item even if the value of that item doesn’t change at all in terms of the local currencies. In short, prices would increase and in our case, the prices of crude oil would certainly “jump”. The only question is at what magnitude? This in turn depends on the strength of the underlying demand and the extent of the depreciation of the Dollar. That is a bad news for Dollar and other dollar – linked economies (countries whose currencies are closely peg to the dollar) as they not only have to grapple with slow growth but also with inflationary pressure (for non – dollar linked economies, the net effect could be zero if their currencies correspondingly appreciate against the dollar). This would turn provoke a policy response from the US FED in the form of raising interest rates in order to “mop up” excess dollar liquidity. The net effect would be further slowing of the economic growth and recovery as the economy is starved out of cash in circulation as people prefer to keep their money in banks and earn high interests. With that, we would end up with a classic case of stagflation, stagnant growth and high inflation (if the inflation didn’t subside fast enough), which is about the next worst economic state, next to Depression and /or the Great Recession (another way to “appreciate” what “stagflation” is, is to relate it to income; in stagflation, your income doesn’t improve at all but the cost of living would tremendously increase). Then again, it may not happen since demand may not be present to support stratospheric crude oil prices. But then again, who knows and that is why the “bold statement” magazine article pique my interest.
P.S. I don’t want to be right this time around. I prefer to be proven wrong. After all, I’m just partially correct with my last assessment on China, see “The Coming Collapse?” 9/26/07 (ok, I’m probably way off the mark, which is a good thing). “ )

TRANSPLANTING BUSINESSES

2009-04-22T20:28:00.000+08:00

There is this article written by Greg Macabenta that came out at today’s issue of the BusinessWorld (April 22, 2009, page 4/S1, “On transplanting a Business”). The article is about “transplanting” a successful “homegrown” (which in this case, the Philippines) business model to a foreign country, which in this article refers to the United States. Specifically, the authors warned about the mistaken notion that a proven business model could be replicated in another country and still be successful. This is because “foreign” consumers have a markedly different needs, wants, and taste compared to the “local” consumers, i.e., consumers from the home country that the business originated. As such, the author opined that most business going international usually took two routes. The first route is to play on the niche of a “natural consumer” group, specifically the immigrant group from same country as the business. The other route is to go mainstream, i.e., to sell to the general consumers of the host country not just to a specific group. Most “transplanted” businesses taking the first route would eventually take the second route in order to expand and break free from a limited market segment. Quite an interesting article actually since the author utilizes his own experience to write the article. I remember during my business school years when I’m taking up Global Marketing. The one and only commandment of Global Marketing is adaptation, i.e., a business’ product, brand, and marketing strategies must “adapt” to the local conditions of the host country. The notion that “one size fits all” is quite “blasphemous” (for wanting a better term) in Global Marketing because different people has different needs, wants and taste both individually and collectively as a national/racial/religious entity. However, there are some “high profile exceptions” to this “core truth” of Global Marketing as some brands seemed to defy this core logic. One such case is the Tokyo Disneyland theme park and to a lesser extent the Hong Kong Disneyland theme park. Disneyland is unabashly an American theme park and yet, it not only thrives in a thoroughly un – American environment. It is rather successful. Paradoxically, one other “foreign” Disneyland theme park is a colossal failure, that of Euro Disneyland in Paris, France and French culture is part of the greater Western culture of which the American culture also belong. Another exceptional case that defies the adaptation logic in Global Marketing is Coke. A Coke is a Coke and is still a Coke wherever you are around the globe, be it in China, in Europe, in the Philippines or in the US. McDonald’s would also fit the bill but it has since allowed “local” menu content (a form of adaptation) in countries like the Philippines where it is lagging in market share. Quite contradicting, indeed. On one hand, logic portends that adaptation must occur in order for a product or a business transplanted into a foreign soil to succeed while certain cases dramatically prove that it isn’t the case. And this is where messr Macabenta’s insightful article proved useful. While products and its marketing might not need to adapt in foreign lands, business strategies and certain aspects of the business operations do have to adapt. For one, a company’s business model or competitive edge may not be useful in a foreign land (and this is the limitation of Global Marketing since it only concerns marketing). For example, a company’s competitive edge in the local market may hinge on it’s taste, which in turn hinge on logistical support to ensure freshness as well as on adept sourcing capabilities and it’s knowledge of the local consumer’s taste. Granting that the taste is acceptable to the foreign consumers on the host countries, yet the logistical challenge to ensure product freshness as well as the sourcing of some ingredients which is not available in the host country might severely cripple the company’s ability to replicate it’s competitive edge in the host country and hence, necessitate changes in it’s business operations in order to sustain it’s “perceived” competitive strength (which the host country’s consumers may not appreciate at all especially if it involved added cost and therefore translate into higher prices) or all together create a new competitive strength based on “new realities”. Another example would be, if the company is hugely successful in it’s local market simply because it’s business model dictates that it had to deliver it’s products or services as fast as possible but in a foreign country, speed of delivery may not be the “deal clincher” especially if the mainstream competitors are delivering as fast as the company or that the consumers of the host country doesn’t particularly value speed of delivery and instead opt for something else like quality for instance, which thus turned the wildly successful business model simply a “local” phenomenon. Taking this as a cue, it would be safe to declare that there is no international company that haven’t “adapted” to the local conditions and still be successful. Coke for instance has a markedly different and yet successful distribution strategy in the Philippines compared to other countries like the US or in Hong Kong, or China but even so, Coke is still Coke nonetheless. In short, what messr Macabenta advocates about businesses going global is that it has to adapt to the local condition that it is “transplanting”. Moreover, I think this adaptation theory is not only applicable to businesses that is going global but may as well apply to businesses being put up in a foreign soil by immigrants using the business model develop from “home” (the country of origin). A case in point here is the delicacy shops in Chinatown (in Manila). Most of the delicacy stores in Chinatown are set – up immigrants and are highly focused on a very particular market segment, mainly fellow immigrants. These Chinese delis sell food stuffs from mushrooms (I knew of 3 or 4 kinds of “Chinese” mushrooms), Wooden Ear (木耳), Hopia, Tikoy, Scallops, Chinese candies (like White Rabbit), to the more “exotic” stuffs like Stuffed Pork Intestine Sausage and the likes. And just like what messr Macabenta observes, the market focus strategy on immigrants though hugely successful in the early stages of the business would eventually reach it’s limits in terms of number of clients. Furthermore, the clientele base, as observe by messr Macabenta would sooner or later diminish as second or even third generation immigrants whose taste are more in tune with the locals shun their products. As this develops, most of these “specialty” stores are forced to go “mainstream”, i.e., cater to the locals other than the particular immigrant groups. However, going mainstream has it’s difficulties and challenges. For example, in the Philippine Chinese deli’s case, selling mushrooms, wooden ear, and scallop to the Filipinos would be futile since Filipino cuisine don’t actually use those stuffs. Some of the more exotic delicacies like intestine sausage don’t exactly appeal to the Filipino palate at all. However, the Philippine Chinese deli’s are pretty much successful in going mainstream precisely because it was able to adapt to the locals. Tikoy for example has become popular because it has adapted (by coming up with small personal sizes) to the Filipino’s gift giving tradition during major holidays (which in this case is the Chinese New Year). Now, it becomes an SOP to give and receive Tikoys during the Chinese New Years whereas in China and elsewhere where Chinese are the majority, such practice of giving Tikoy is less seen. Hopia, as a Chinese delicacy has evolved into a Filipino delicacy simply by adapting its flavor to the Filipino taste. Instead of the original mungo only variant, it now has ube….. Changes can also be seen from the way businesses are conducted by the Chinese delis. They no longer boxed themselves in Chinatown. A few of them actually branched out ostensibly to cater to the growing demand of the mainstream markets. As a conclusion, for any businesses “transplanted” from the home country and into a foreign country, adaptation is a must, be it in the product offering or in the strategies used or in the business models being utilized. Relying on a proven successful formula made in the home market doesn’t guarantee survival in the new foreign market much less success.

SUNRISE/SUNSET

2009-04-14T22:52:00.000+08:00

I’m not exactly a “beach” person though I am not necessarily averse to it either. My ambivalence towards the beach has more to do with the fact that I can’t swim. As such, the most I could do when I’m at the beach is to “soak” myself in the water, which is not exactly the most enjoyable of all the activities vis – a – vis to the boisterous partying in the water surrounding me. However, the good news is that there is more to the beach than just simply swimming. In most cases, the location of the beach has some of the most beautiful natural sceneries that one can feast his/her eyes on and I happened to be an avid nature lover especially of the sunrise and sunsets over the sea. Such is the case during my recent vacation trip to Virgin Resort at Laiya, San Juan, Batangas. Virgin Resort, one of the several resorts that dot the area, is situated right in the middle of “Laiya Cove” located at the eastern most coast line of Batangas that opens to the South China Sea. Anyway, during on my first day at the said beach, I was as usual “engrossed’ at my favorite “activity” at the beach, i.e., soaking. Probably it is the clear blue sky, or the crystal clear waters, or the strong splashing waves, or maybe it was all of it that enticed me to get out of the waters and lie down on my back on the shores and stare straight at the sky above while the cool water splashes and washes over me. It is then that I noticed that how beautiful was the sky that afternoon at the beach. Not much cloud, no skyscraper or tower to clutter the view, not much glare from the sun either. All one can see is wide, expansive, blue just plain, bright, cheerful blue. Funny, how can somebody like me could miss something so plain, so simple, so obvious, yet so beautiful. I ended up staring at the clear blue skies for an hour or so. As I was staring, it came to me that behind that beautiful, “unpierceable” blue “curtain” is the eternal darkness of empty space. Although, it is an obvious fact but still staring at the sky, I find it hard to fathom that there is actually “something” beyond the skies. I remembered in my reading of Mongol history that Genghis Khan before his campaigns would remove his belt and slung it over his shoulder and climb up the mountains alone to pay his respect to Tangri or Tengri, the Eternal Blue Heavens. He would spend a day and a night at that. What does he sees when he stares at the Tengri? Does he wonder as well? Although between Genghis Khan and me, we’re 800 years apart and he was in Mongolia and I’m in Laiya but still wasn’t it fascinating to wonder, to stare? That evening, around dinner time (7pm maybe), as I was waiting in the open bungalow for my dinner to be served, I noticed something over the horizon. A huge yellow ball, the size of a peso coin if you are able to reach it with your hand and get it, came out from under the sea and hung over the dark skies. The moon in it’s fullness shone so brightly that it dimmed the twinkling stars around it, smothering them in it’s brightness. It was like a giant lamp or more like a humongous flashlight that illuminates only a slice of the sea, leaving the rest in total darkness. The sea under the moonlight looked so calm and tranquil that it actually betrays the actual rippled turbulence. The whole scenery is like something that plucked out from a painting or any drawing of the moonlit sky over a body of water. It looked so “artsy” except that it is real and is directly in front of me that night. I can’t help but be reminded of Beethoven’s Moonlight Sonata (one of my favorite actually). Ludwig van Beethoven wrote Moonlight Sonata sometime in 1801 (over 200 years remove from my time). Moonlight Sonata, is a piano solo whose music is soft, literally quiet, and serene. The first time I strain my ears to hear the music, I felt I was strolling beside a lake and staring at the moon and enamored by the beauty of the moment must like I was then that evening except that there is no music in my ears (and I forgot to bring the radio or the CD containing the said piece neither was the song in my sister’s ipod) and I wasn’t strolling beside the shore. It made me wonder however. What Beethoven sees in such a beautiful moonlit night to inspire him to write such an immortal piece that captures the moment? Am I seeing what he is seeing? Or more accurately, was I seeing what Beethoven wanted me to see as depicted in my piano sonata? The following morning, for unknown reason (probably felt refreshed and invigorated by the events the day before), I woke up early, around 530. And as I opened the door of the cottage that we’re staying for the night, I discovered that it was already morning and everything is quite “illuminated” but the sun hasn’t fully come out yet. I thought that this is probably my lucky day and that I get to see the sunrise that morning. And so I set out to the shore, bringing along a chair and planted it near the water out in the open beach where I could clearly see the sun slowly rising up from the east behind the mountains. And turning my head to my right, I saw the moon now pale white setting over the mountains running away, fleeing maybe from the chasing sun. “The moon and sun shall never meet, one would eternally chase after the other but they will never meet” as the some forgotten old poem would say (or something to that effect). But of course, the sun and the moon do meet….. during eclipses. Between the chasing sun and the fleeing moon on that beautiful morning lies the “serene” sea in the middle. It’s rhythmic waves gently crashing onto the shores while further away, the crystal green waters reveals the bed on which that water rests. On it’s surface, schools of dancing fish, jumping out of the waters cheering, beckoning the sun to come out and play with them. What a sight to behold! Too bad, I could only see what’s in front of me and because of that, I had to constantly turn my head, paying only intermittent attention to the sun, to the moon, to the dancing fishes, to the serene sea. I wish I could “see” the whole thing in just a glance but I can’t. As the sun slowly rises, it resembles a lot like the New Year Ball at Time Square in New York but instead of descending from its pole, the sun is rising up from its invisible pole. Its brightness seemed quite subdued until it reaches it’s “peak” (of the imaginary pole, figuratively speaking). Right then, the sun blasts its full brightness in all direction, covering everything with a golden glow and blinding anyone who dares attempt as to even peek at its silhouette. Even as I was “blinded” by brightness, I felt a sense of renewal, a sense of energy, a sense of hope, a sense of life. I could only imagine that millennia ago when the first man came out its cave, he must have felt the same thing as I am feeling that morning, a sense of new beginning after a night of total darkness. It is probably due this feeling that our ancestors worship the sun, the light, the day and imbibe the sunrise with the meaning of renewal. It is only then that I came to realize a fundamental truth, which is “we are the reason”. We are the reason that what we came to know to be beautiful is beautiful. The sun, the moon, the sea, and even the fish don’t know what beauty is. Heck, they don’t even care that they are part of a choreograph performance that defines beauty. We define beauty. We are the reason that beauty exists, that the sun, the moon, the sea, the world and everything around us exist. In fact, we are the reason that reason exists, that meaning has their meaning. We are the reason. And it also us, that “ruin” beauty, that erase beauty when we no longer enjoy them, when we “busied” ourselves with whatever we’re doing, when we no longer get up to see the sunrise and instead opt to sleep through the day, when we no longer stayed up to gazed at the fullness beauty of the moon and instead glued ourselves to the nightlife. We are the reason.

THE PILGRIMAGE II

2009-03-09T21:33:00.000+08:00

To better understand this article, please refer to my previous article, “The Pilgrimage” dated May 19,2006.

This article is a continuation of my narrative of my vacation last December.

“Veni, Vidi, Vici” (I came, I saw, I conquer) – Julius Caesar

I’ve finally made it. I’ve finally reached the top of the Great Wall after more than two years. It was a great feeling to finally have reached the top of the Wall except that the feeling I had is somewhat “different” from what I’ve expected after completing such a “momentous achievement”. The feeling that I was expecting if I had completed the climb is one wherein the confetti dropped from the sky, everybody is clapping their hands while standing, cheerleaders dancing and hooraying (figuratively speaking although it would be nice to actually see cheerleaders dancing). The feeling should be like winning the NBA championship all by yourself ala Michael Jordan. However, the feeling was nothing like that. Not even close. Don’t get me wrong, I felt great on reaching the top but not “too great”. Maybe it’s the freezing weather that seemed to ruin almost everything nice. Maybe, it is the fact that we started the climb mid – way at the Badaling section of the Great Wall (八達嶺長城, located high up in the Badaling mountain) as opposed to Ju Yong Guan section of the Great Wall (居庸關長城), which starts from the level plain way, way down below. As such the climb at the Badaling section of the Great Wall is less arduous and hence, less challenging and therefore, less inspiring. In addition to that, I don’t get to see Mao’s famous words etched in stone, “不到長城非好漢” (if you haven’t been to the Great Wall, You’re not a man), which happens to further dampen the almost listless atmosphere. Or maybe it’s because I don’t have a little girl by the name Megan with me during my recent climb. Although my sister and the youngsters are good companies during the climb, I nevertheless missed Megan……. A lot. Anyway, it was the 28th of December, 2008, a Sunday and also the third day of our trip. We got up early, had our breakfast at the hotel. I was particularly “giddy” that morning since I was really looking forward to the climb at the Great Wall and fulfill my vow to come back and finish the climb. At the lobby, I received a gift from the Lionel, our tour guide; a manuscript of his half finish short story. So far, that morning seemed to be going quite well and I took it as a promising sign that things would be splendid that day but as the day progressed, things didn’t really live up to my expectation. The first thing that somewhat “ruined” my supposed splendid Sunday was a trip to the same old jade factory that I’d gone during my first trip to the Great Wall some two and half years ago. Like the first, it was supposed to be a “brief” detour but actually took like a good solid two hours. What a dampener. After that supposedly “brief detour” turned into a two hour shopping bonanza, we headed to the Great Wall. I was fully expecting to revisit the site of the Great Wall at Ju Yong Guan section (居庸關長城) where I made my first climb but instead, we went to the Badaling section. There was nothing wrong with visiting the Great Wall at Badaling per se except that at Badaling Great Wall, the climb is less arduous because the slope is less steep and walkway of the Wall is comparatively wider than that at Ju Yong Guan plus the climb to the topmost battlement of the Wall is relatively short. Furthermore, as mentioned, Mao’s stone inscribed “inspirational” challenge was nowhere to be seen at Badaling, which is to me a real bummer. Since, the Badaling section of the Great Wall is situated on top of the Badaling mountain range as compared to the Ju Yong Guan section Great Wall, which is way down below the narrow plain, we took the cable car up to the Badaling section. Now, the cable car ride might look every bit “dangerous” because you’re travelling high up the rocky mountain slope and hanging in the mid air without an engine or a parachute except for two cables isn’t really what we call a “fun” ride. Nevertheless, the ride is rather smooth with no surprises at all. This is because the cable cars are built on the southern slope of the Badaling Mountain and the mountain served as the barrier to the scouring wind from the north and thus spares the riders from the “thrill” of the ride. Once we arrived at the mid – section of the Badaling Great Wall, I, without delay began my quest to “conquer” the top of the Great Wall. The temperature that day was like the last two days at -8OC. At that temperature, the weather could be appropriately described as Freezing. I had to wear a thermal shirt and 2 sweaters and a winter coat on top of it just to keep me warm. But that doesn’t help with my bottoms, my foot, my hands, and my ears never mind the face. Even with thick gloves, heavy pants over a thermal pant, two socks, and a scarf wrapped around my mouth, the “cold” still got into me. The cold got a lot worst at where we are starting, which is at the mid – section of the Badaling Great Wall. Thankfully though, my sister and I bought some heating pouches, which are actually a pouch filled with pyro – chemical giving off heat once you rub the pouch. In this way, I got to keep myself from turning to an icicle but that further put a dampener on my already ebbing enthusiasm about the climb. Nevertheless, I persevere and started the relatively “short” climb (around an hour or less) to the top of the Great Wall. Got quite a work out there (and in the process generated enough body heat to keep me warm but not sweating) but nothing dexterous even for my “lazy limbs” (only got to stop for rest once or twice during the climb). At any rate, I find the climb rather uneventful and as such, by the time I’d reached the top, I felt rather drab yet the same time victorious, for I finally reached the top. Even so, I felt that victory isn’t sweet at all but a bit hollow. It is then I realized I missed little Megan. Somehow I get to realized that there are more important things than reaching the top or more aptly, there are things that make the climb to the top much more worthwhile. Funny, how I didn’t realize it beforehand or have forgotten it. Anyway, regardless how I felt that moment, I cannot but be awed by the sheer magnificence of the scenery atop the Great Wall. The Badaling section of the Great Wall is reputedly one of the most picturesque scenic spot of the Great Wall next only to the Simatai Great Wall (司馬台長城, which in my knowledge have just been repaired and opened to the public pretty recently around February of 2009?). And from my vantage point, one could truly appreciate the reason why the Chinese called the Great Wall as Wan Li Chang Cheng (萬里長城) literally, the Ten Thousand Mile Long Wall. The Wall seemed to have extended towards the ends of the earth as far as the eyes could see. Even in winter, the beauty is still ubiquitous. The scenery is both breathtaking and at the same time, eerily perilous. I mean lest we not forget that the Great Wall is first and foremost a military installation built by the emperors to keep out the marauding barbarians of the north from invading the farmlands to the south of the Great Wall. Soldiers of the ages past who had manned the Wall against the hordes must have drank the scenery of the Great Wall all day and all night. They probably like us must have been awed by the grandeur of the place but unlike us, tourists, these ancient warriors almost constantly felt the dread, the danger of an approaching storm over from the north. At the top of the Great Wall where I was, the place is crowded with tourists, boisterous and noisy but back then, the place is populated with only but a handful of soldiers and they are isolated from the rest of the world. The dreadful yet picturesque silence must have been deafening then. One could only imagine such whilst at the top of the Wall and in the middle of the jousting crowd eager to get their picture taken. Well, I’m a tourist, not a soldier, a historian maybe but definitely not a soldier and so I do what every tourist do, take my picture. But before I made my way down the Wall, I did what I did the last time I was here. First, I looked out in the open on side of the Wall, put both of my hands in my mouth and shouted, “I AM THE KING OF THE WORLD!” (well, that felt great indeed) The second thing that I’d done was to etch my name on the Wall and preserved it for all eternity except that I forget to bring a marker or a knife (now I know what I forgot to pack in my suitcase). And so, I had to look for “something” to use to “write” on the Wall. I got to borrow a pen from one of the youngsters and I lightly “wrote” on the white borders in between the bricks, _ _ _ 到此一遊 (for those who are visiting the Badaling Great Wall and wanted to see the “historical mark” for themselves, looked up at the left side of the Wall at the top, upper portion of that wall). As I was “writing” my mark, one of the youngsters “questioned” me as to why I’m “vandalizing”. Well, my reply then was graffiti as I was doing then provided a very important historical value. You see in all archaeological excavation sites, a lot of the artifacts, which are basically everyday things being used at that time are long gone. They are destroyed, stolen, or degraded. Graffiti on the other hand are left intact and provided valuable clues to an archaeologist about the social environment of the times. Besides, everybody is doing it (putting their names on the Wall) and they are aplenty. As they say, “When in Rome, Do as the Romans Do”, si fueris Romae, Romano vivito more, si fueris alibi, vivito sicut ibi (if you are in Rome, live in the Roman way; if you are elsewhere, live as they do there). However, I wasn’t quite satisfied with the markings I’d made. For one, it is quite light. Hardly visible. As such, I decided to make a second marking. This time I used the softdrink can pull up pin as an etching tool and finally “carve” the same words on the Wall (same section as the first except that it is at the lower portion about on the third brick from the floor). Having done that, I take one good look at the scenery and began my way back. Someday, I’ll be back for a third climb and by then, I know what it would take to “reach the top” and I’ll be prepared for it.

BLACKING OUT – CRACKING THE LOTTO: A FEASIBILITY STUDY

2009-03-05T21:30:00.000+08:00

A few days ago, a friend and a fellow blogger of mine wrote in her blog, www.jazchan.blogspot.com (which incidentally is a nice blog to follow), a commentary/opinion piece regarding the lotto craze phenomenon. Specifically, she was in the opinion that gambling is really bad for people and that there is no substitute to hard work as a means to get rich. I made a comment though on her blog stating my disagreement to her view since I’m an occasional bettor myself of the number game. For the record, I whole heartedly agreed with her that gambling is bad but occasionally, I see it as an opportunity worth exploiting. But before I proceed any further, it is appropriate to understand the background of this whole episode. Last February 22, the jackpot prize 6/49 Super Lotto of the Philippine Charity Sweepstakes Office (PCSO) has reached a historic high of P347,836,903.20, a staggering sum indeed. It was won by 2 individuals betting on the combination of 06-34-20-26-12-33. As such, the prize money was split between the two individuals who won. Anyway, going to my reply to my friend’s blog. I opined that as an occasional bettor, I only bet when the prize money reached a certain amount. Below which, I don’t even give a damn. Furthermore, I only bet on a single 6 number combination and at most on 3 combinations and nothing more. And at P20 per bet, my bets cost me around P20 – 60 per game until of course my reason for betting no longer exists (which usually meant that somebody else won the pot). The reason for my small bets is rather simple. It only takes one 6 number combination to win the pot and regardless of how many number combinations you bet on, only one would win it. Betting on several number combination sets (and therefore in the process bankrupting your meager finances, which to me is the true definition of gambling) would only increases your odds of winning the lottery but doesn’t necessarily guarantee success. Henceforth, it is illogical to me to bet on more than one combination set unless of course I’m going to “black out” the game. It is the latter thought (of blacking out the game) that got me thinking the past few days and the reason why I’m writing this piece. I’m not here to debate upon moral – ethical issues of the lottery game rather I’m exploring the possibility of “blacking out” the game. For those who are clueless about what “blacking out” is. Blacking out is betting on ALL POSSIBLE number combinations in a lottery game and in a 6/49 lotto game, there are 13,983,816 possible combinations according to Wikipedia (for an in dept analysis of the calculation, go to Wikipedia and search “Lottery Mathematics”). Blacking out might seemed to be a far – fetched crazy idea but some financial whiz in the US did such an audacious scheme years before (I saw that on TV, forgot which show that is). For such idea to remotely succeed, you need a huge pile of money to black out on all possible combinations and that the prize money should be in such amount that it would be large enough to cover the “investments” made and of course provide ample “return on investments”. In short, the prize money should be equally humongous. And I believe in the last 6/49 Philippine lotto game on February 22, that singular condition has been met. At P20 per bet, betting on all 14 million combinations would require an investment of less than P280 million. Subtract that from the prize money of almost P350 million, one can gain a profit of P70 million or a return of 25% over a period of at least 24 hours! (The 6/49 lotto game is held every Tuesday, Thursday, and Sunday, the shortest time lapse between games is Tuesday – Thursday draws with only 24 hours separating between the two draws). However, such calculation is at best, a fool’s math. The reality is much more complex than at first glance. For starters, how do you suppose to get 2.3 million betting cards (a betting card can hold 6 bets or 6 combinations and with 14 millions combinations, one needs 2.3 million cards), filled up 14 million combinations, and placed the bets (think the impracticality of placing all 14 million bets on one betting station, you’ll likely burn up the computer terminal before your 10,000th combination and as well as carrying all P280 million in your pocket, you’ll most likely be robbed before you even made the bet) all by YOURSELF in 24 HOURS! The logistic challenge is herculean if not nightmarish. You need help, lots of help. You have to hire staffs, create an organizational structure to oversee such operations of staffs and all of this entails costs, which might turn your “investment” foray into lotto a lot like gambling on credit derivatives swaps from Lehman Brothers i.e., you’ll end up with nothing, a pile of debt, and another pile of worthless pieces of papers. And this where my MBA education comes in handy, figuring out how to OUTWIT the system. For our hypothetical feasibility study, assuming the prize money reaches P350 million and that we have 24 hours to make the black out bets. The first logistical challenge we would find is to gather 2.3 million cards for betting (more just in case you commit mistakes in filling up). Of course, you can’t expect to gather all of these in one betting station and granting you can, you need several trucks to transport those cards to your headquarters. The best solution to the challenge is to sent out hundreds if not thousands of people to equally hundreds or thousands of betting stations across the country (this is on the assumption that the PCSO is against blacking out operations and henceforth would do everything to disrupt its success including delivering cards in bulk and accepting bets on all combinations as well). Take note, you have 24 hours to make all the bets and betting is only done on the day of the draw till 9pm. With 2.3 million cards to gather and assuming 1000 cards are to be gathered per betting station, we need 2,300 personnel to gather those cards from 2,300 betting stations. Now, this is no easy feat. It means we have to FIND OUT where those 2,300 stations are located. It would be great if we could find all 2,300 stations within a certain vicinity like Metro Manila but what if we couldn’t and that the stations are more spread out as in like the entire 7,107 islands. Furthermore, the betting stations would also serves as the place where we could place the bets after filling up the cards. Also, it would be prudent to have some “contingent plan” on alternate betting station locations just in case thing goes wrong. (One possible scenario is that you can’t get no more than 500 cards per stations, which means that you have to go to 4,600 stations instead) As such, it is therefore obvious that we have to map out the betting stations and this entails some planning and a logistic planning team working on it way before the actual betting date. After gathering the cards and transporting them to the headquarters, the next step is to fill up the cards. Now, this is the crucial phase of the operation. Due to the sheer size of the task involved, the number of people involved is understandably sizable as well. This makes supervision and quality control daunting. I mean the plan is to black out ALL POSSIBLE COMBINATIONS. As such, we can’t risk missing out just one combination and bet twice or more on a single combination because of lousy work of those filling the cards (and it later turns out that the missed bet is the jackpot combination). To rule out such possibility, we need to have computers to print out all the possible combinations instead on relying the individual brain power of the staffs and distribute them to those staffs. Next, we have to hire quality staffs. Filling out cards from a cue card might be a brainless task but then again, we want to avoid “stupid” mistakes for the stake is really high. Assuming that a person can fill out 4 cards with 6 combinations in each card in an hour for a total of 24 combinations or roughly less than three minutes per combination, a person working in an 8 hour shift could fill out 192 combinations granting that that person doesn’t eat or rest or even go to the bathroom. Simple math would tell us that we need 73,000 people (excluding other staffs like those working on the computer, gatherers of the betting cards and bettors plus other administrative staffs) in a single shift to fill out all the combinations (or if you’re working on two shifts, around 36,500 people per shift, and 24,333 people per shift working on three shifts). Of course, it is impossible to hire 73,000 people in a single day and expect them to start immediately and finish in time for tomorrow’s bet. Hiring should be done way, way before the actual commencement of the operation. Probably months ago. Activation and mobilization on the other hand could be done on that day but that entails we have to have some transportation to be able to gather and assemble that many people. In conjunction to that, another challenge is in finding a place to hold all those staffs, all 73,000 of them. Size is not only the problem in looking for a place to house all of those the staff, location is also a huge factor to consider. If the betting stations are located within a certain geographic vicinity like Metro Manila, then the location of the Headquarter/Worksite should be at or near the center of all these scattered betting stations. Now, if the betting stations are more widely dispersed, we may have to consider having more than one worksite and the leases of all these worksites would significantly add up to the initial investments. Furthermore, one simply cannot lease those places “right on the spot”. Leases must be made way before hand even if it is going to be used for at the least 24 hours. In addition to staffs, we have also to hire managers and supervisors to execute “the project”. Again, this can’t be done on that day. Instead, this should be done way ahead. In addition to that, managers and supervisors must be at least be briefed of what to do much less trained on what to do so as to become effective on what they’re going to do. We cannot simply let them lose inside the worksite and assume that they could deliver the “numbers” to you without them having a clue on what to do, can we? The last step after filling out the betting cards is to actually place the bets. The 2,300 betting stations where we got all those cards from would be the same stations in which we are going to place our bets. Each betting stations would be receiving 6,000 bets (1,000 cards) and each of the gatherers/bettors we are sending out would carry at least P120,000 (a comparatively modest sum) to make the required bets. And each gatherer/bettor has around 12 hours or less (9 or 10 am till 9pm) to finish placing all the bets before the draw. Afterwards, sit back and wait for the money to pour in (since we’re blacking out, winning is assured “theoretically” if no “stupid” mistakes occurred). Simple as that. Now the overall cost of such a venture can be “estimated”. Hiring 73,000 staffs to fill in the “numbers”, assuming you’re being “generous” and pay them P500 each would amount to P36,500,000. Add that to worksite leases, transportation costs, electricity bills, salaries of “other” staffs, miscellaneous expenses, and the salaries of all those managers and supervisors (which you most likely have to hire way before the actual event) including their “balato” or bonuses (you have to pay off some cash rewards to the people that contribute the most to your success), we are looking at a total bill of somewhere in the area of P50 million. Add that to your lotto “investments” of P280 million, we need around P330 million as initial seed money just to black out the game. Subtract that to the prize money of P350 million, our profit would only amount to P20 million pesos or about 6% ROI. Now, 6% ROI earned over a period of 24 hours may sound like a measly sum but that is significantly better compared to investing the same amount in any fixed income instrument such as time deposits or bonds that earn the same interest over the course of A YEAR! However, by blacking out the game, some positive development would occur that would increase our “profit”. First of all, by blacking out all the number combinations, we would also win the secondary prizes. Getting 5 out of 6 number right would earn us P56,000. A four number hit would earn us P500, and a three number hit would allow us to place a return bet. Now, disregarding the last prize, the secondary prizes amounts to 43 possibilities x P56,000/combination – possibility = P2,408,000 plus (43x43) possibilities (for getting 4 out of 6 numbers correct) x P500/possible combinations = P924,000. This would give us an additional income of P3,332,500, which would pad our net income to about P23 million. A much larger positive effect as a result of the blacking out the game would be in the substantial jump in the prize money itself. You see the jackpot prize is proportional to the amount of bet. The more bet, the higher the prize. However, not all bet money goes to the pot, a portion of the bets goes to charity funds and frankly, I have no idea how the PCSO appropriate the bet money. However, based on their website, www.pcso.gov.ph, the PCSO is by law required to contribute 25% of their gross earnings to various beneficiaries. That figure doesn’t include operational expenses as well as other required minor charity contributions. Assuming then that that is the case, it would be a “safe” bet to assume that 50% of the bet money would go the pot, which in this case would boost the prize to P350 million + P280 million/2 or P490 million. In which case, the net income that could be earned from winning the pot by blacking out the game would be P490 million – P330 million or P160 million, which means that our initial investment of P330 million would earn us a hefty return of 48.5% in 24 hours! Take that Wall Street! At this point after reading 4 pages of what I’ve written so far, you’ll probably be dreaming about vacationing in Cancun, on board of your own luxury yacht, sipping the priciest champagne, and eating the most expensive caviar you could lay your hands on but what a minute! Like in every investment, there is a downside risk! Foremost that comes to mind is the waiting game. You need to make plans and the initial preparation way ahead before the “actual” day, that is if it ever happened again. That entails, cash outlays for a what – if scenario that might not happen at all, which therefore makes all your expenditures irrecoverable sunk cost at least in the near term. Another risk issue is the tax issue. The Lottery was never advertised as being tax free. That means, the jackpot prize is taxable and the tax take could be significant as to alter our profitability calculation. A 35% tax take (assuming the highest income tax rate we had) would translate to P171.5 million less from our winnings, which would actually wipe out our gains and leave us in the negative. Well, the tax rate maybe significantly lower than the one we assume but at what rate? I really don’t know. Ask the tax experts. Collorary to that is the legal issue. Do we need to come up with a legal corporate entity to handle such a complex yet short lived operation such as this? If so, there are tax and legal issues here that may bankrupt us instead of enriching us. The third risk issue and by far, the gravest is the possibility that there is more than one winner to the game. And this is a distinct possibility because of the size of the pot, which attracts a large number of “opportunistic” and “occasional” bettors like me. In history of the lottery in the Philippines, there are several instances wherein there are multiple winners usually 2 but rarely 3. According to the PCSO rules, the winners have to share the pot. If there is another “lucky” winner to our hypothetical scenario, then the theoretical P490 million pot would be split into two P245 million prizes. This would result into an instant lost of P85 million. Now, in an unlucky event that there are 3 winners to our hypothetical draw, we stand to lose P166.67 million! Risky indeed! A fourth risk issue to address is related to the payout scheme. Most of us believed that the jackpot prize is paid out to the winner in one lump sum cash less whatever taxes that had to pay for. However, I knew that in some states in the US where the lottery is played, the payout is divided into several equal size tranches and remitted to the winner annually over a period of say 10 years more or less. This thus became a sort of annuity. In short, you payout your investments in cash and receive your return in staggered basis over a long period of time, which if you discount it to the present period as in today using the Net Present Value (NPV) computation, might translate into a definite loss. That of course is the case in some states in the US, what about the case in the Philippines? Well, it is obvious that I don’t know because I haven’t won the jackpot prize yet for myself. Actually, there is a way or specifically two ways to circumvent all these risks in order to win the Jackpot prize (make that 3). The first is to scrimp all the “expenses” on staffs and infrastructure and instead do it by yourself. You can start right now if you want and assuming that you can fill up 192 cards in an 8 hour – workday. You can finally place your bet after 73,000 days (working just exactly 8 hours a day) or 200 years granting of course, you’re still alive and kicking. In fact, you could concurrently start a savings fund for your “financing” needs come 200 years later granting of course, that there is no financial crisis that could happen in the next 200 years that could wipe out your savings and that the cost of bet doesn’t change at all in the next 200 years let alone the obsolesce of the number game itself. The second way to circumvent the risks and win the coveted prize is to bet P20 on a single combination like what I’m doing and hope that lady luck would smile on us. The third and final way to circumvent the risks and win the jackpot is simply follow what my friend and fellow blogger recommend. Don’t gamble, save every penny you have and work your butt off to riches! So after all this brouhaha, I came to my conclusion to this feasibility study of mine and that is WHERE AM I GOING TO GET THE P330 MILLION IN SEED MONEY?
P.S. Anybody care to loan me the seed money? We could split the profit. “ )

PHENOMENAL WOMAN

2009-03-02T16:52:00.001+08:00

by Maya Angelou

Pretty women wonder where my secret lies
I'm not cute or built to suit a fashion model's size
But when I start to tell them
They think I'm telling lies.
I say,
It's in the reach of my arms
The span of my hips,
The stride of my step,
The curl of my lips.
I'm a woman
Phenomenally.
Phenomenal woman,
That's me.
I walk into a room
Just as cool as you please,
And to a man,
The fellows stand or
Fall down on their knees.
Then they swarm around me,
A hive of honey bees.
I say,
It's the fire in my eyes
And the flash of my teeth,
The swing of my waist,
And the joy in my feet.
I'm a woman
Phenomenally.
Phenomenal woman,
That's me.
Men themselves have wondered
What they see in me.
They try so much
But they can't touch
My inner mystery.
When I try to show them,
They say they still can't see.
I say
It's in the arch of my back,
The sun of my smile,
The ride of my breasts,
The grace of my style.
I'm a woman
Phenomenally.
Phenomenal woman,
That's me.
Now you understand
Just why my head's not bowed.
I don't shout or jump about
Or have to talk real loud.
When you see me passing
It ought to make you proud.
I say,
It's in the click of my heels,
The bend of my hair,
The palm of my hand,
The need of my care,
'Cause I'm a woman
Phenomenally.
Phenomenal woman,
That's me.

P.S. Read this poem in this morning’s newspaper. It’s nice. Thought I share.

THEY HAVE A NAME FOR THAT……..

2009-02-16T20:53:00.000+08:00

It’s been quite some time that I’ve read the front page of the Inquirer. In actuality, I was avoiding it. This is because I don’t want to sour my mood further by reading the latest political scandals early in the morning. I mean reading the business news nowadays is depressing enough. One doesn’t need to keep torturing oneself by keeping abreast with the latest political drama. However, how should I say? Fate intervened? That one day sometime last week that I read the front page of the Inquirer. And lo! I didn’t get depressed by what was plastered at the front page. Instead, I got furious! The news that made it to the front page that “fateful” day was about the Senate investigation on the banned World Bank contractors and how things turned literally upside down. For starters, sometime in November 2007, the World Bank sent a confidential report of collusions and corrupt practices of 7 government contractors to the Philippine government, specifically the Finance Department. The report was made after a very thorough investigation. The gist of the report is the “suggestion” of the involvement of the First Gentlemen in the anomalous transactions of these contractors. However, the report was strictly confidential and contains only leads and not much substance plus a clause that it couldn’t be used in prosecution proceedings within the country in question. It is quite understandable as to the reason why the report was prepared in such way. For one, the World Bank being a supra national entity is and should be politically neutral and second, they shouldn’t interfere in the local governance at all. Because of the “lack of capability” of the Finance Department, the report was eventually referred to the Ombudsman and sadly like all other cases of grand corruptions and high crimes, it was left to gather dust and largely forgotten for more than a year. Then, sometime in early part of this year, the contents of the report got leaked and the Senate began an impromptu investigation of the alleged corruption. And to make a long story short, the investigation drags on and on like the usual zarzuela we all got use to. But that is not what incensed me. What infuriates me is that Senate committee in charge of the public inquiry has suddenly turned the tables on the accuser, the World Bank! Specifically, some “distinguish” senators are venting their “irrepressible” ire on the World Bank and calling it names. In fact, in one scene of this sad and pathetic “comedy”, a distinguish senator with terrible temper even wanted to kick the World Bank out of the country! Now let me get this straight about the entire issue here. Here we are perennially short of money due to a simple reason that we spend more than we could earn, which could be trace further to the fact that we tend to pay excessively more than it should be and these excessive pays, instead of benefiting a great number of people tends to end up in the pockets of a select and favored few. Because of the sorry predicament we are in, we are forced to seek help from a few creditors to finance our needs. And then along came a generous creditor, the World Bank who not only extended loans to our beleaguered nation despite our poor credentials but also given us a favorable treatment in terms of concessional rates and longer repayment terms. And unlike other financial institutions who are only after the profits that could be derived from such a loan without regards as to how efficiently that such money could be spent, the World Bank even offered to help us improve the efficiency of our spending by telling us the names of “corrupt” businesses and contractors such that the wealth derived from the investment of the loan money might be spread evenly and maximizing the benefits to the greater number of recipients instead of ending up in the hands of a few. And instead of showing our gratitude for such concern, our honorable and distinguish senators has the gall to be ANGRY at the World Bank! What the f*ck is this? Ok, maybe I’m not being clear here and for the benefit of those who couldn’t understand a word of English, let me phrase this in Filipino. Tayo’y lubos na naghihirap at kulang ang ating salapi para sa ikauunlad ng kabuyahan natin. Dahil dito, humingi tayo ng tulong. At sa awa ng Diyos, meyron naman tumulong sa atin. Hindi lang yan, bukod sa pangungutang, pinagbigyan din tayo sa pamamagitan ng maluwag na konsesyon. Higit pa diyan, tinulungan pa naman tayo na iwasto ang katiwalian sa paggagastos ng ating salapi upang sa ganoon ay marami makinabang sa salaping ito. Ngunit, sa halip na tayo’y matuwa, magpasalamat, at magtanaw ng utang na loob, tayo’y nagagalit pa! Now what kind of a person would do that? You know they have a name for such a person in Filipino and it’s called G*GO! I rest my case.
P.S. the whole brouhaha is not actually bad for it gave me an idea who NOT to vote for in the upcoming election some 15 months away.

My lady's presence makes the roses red

2009-02-14T16:59:00.000+08:00

by Henry Constable

My lady's presence makes the roses red,

Because to see her lips they blush for shame.

The lily's leaves, for envy, pale became,

And her white hands in them this envy bred.

The marigold the leaves abroad doth spread,

Because the sun's and her power is the same.

The violet of purple colour came.

Dyed in the blood she made my heart to shed.

In brief: all flowers from her their virtue take;

From her sweet breath their sweet smells do proceed;

The living heat which her eyebeams doth make

Warmeth the ground and quickeneth the seed.

The rain, wherewith she watereth the flowers,F

alls from mine eyes, which she dissolves in showers.

BEIJING NIGHT LIFE

2009-01-20T09:30:00.000+08:00

To be quite honest, I never like going out to bars at night. Although as an insomniac I usually sleep late, I rarely stayed out late at night. I prefer to stay up at night reading books than go bar hopping. Not that I totally dislike staying out late and go bar hopping rather that I am a boring “couch potato” who felt much more comfortable staying home. As such, I “normally” don’t have a night life either during my foreign trips even when during my backpacking trips to Hong Kong, Taiwan, and Singapore. Well, aside from the fact that I don’t have a habit of staying out late at night, almost all of the guided tour trips I had in the past are packed with “old” people, who shun the night life. At the other end of the spectrum like the backpacking trips, I simply don’t have anyone to accompany me to “chill out” at nights. However, this last trip of mine is different in the sense that there are more “hippie youngsters” in the bunch. All in all, there are about 7 of us “youngsters” including me and my sister (and I happen to be the “big brother” literally). Anyway, it was the second day of your trip to Beijing when one of the “youngsters” propose to literally “chill out” in the freezing night (-8OC) right after the day tour ended. He proposes to go to Hou Hai (後海, literally “the back sea”), a lakeside bar – entertainment complex close to the place we are staying at the Grand Mercure Hotel (the former Beijing Marco Polo Hotel) at Xi Dan avenue (西單街). Anyway, I really don’t have much to say about the night life scene in Beijing because of my “limited experience”. However, according to the Wikipedia, “Hou Hai is a famous night life spot because it is the home to several popular restaurant, bars, and cafes. The area is especially popular with foreign tourists visiting Beijing as well as the expatriate community and younger locals”. In spite of what is being said in Wikipedia, I honestly don’t see the so – called “popularity” of the place, i.e., I didn’t see any foreigners either expatriate or tourists (as if I could tell the difference) except for us (me, my sister and my 5 “little brother and sister”) although I do see a lot of the younger locals patronizing the place. Well, it could be that we end up at the “wrong side of the lake”, i.e., the “boring” side of the lake and therefore I wasn’t able to witness the “popularity” of the place. It is that or the weather is simply too horribly cold for any “functioning” night life to exist. At any rate, before we set out to Hou Hai, I had my younger “brothers and sisters” get my phone number as well as Lionel’s, our tour guide (by that time, he already had retired to his home) and the emergency police number in Beijing, 110 just in case everything went terribly wrong and of course, the hotels, address and phone number. I had to do this because I had this feeling that one of the major reason that the parents of these youngsters allowed them to go out in the first place is because they are with me, “the big brother”. Even so, I wasn’t the “leader” of the pack since I was hands down the most boring of the bunch. Somebody else fill that shoe. I was just simply a “chaperon” of sort. Aside from handing out contact numbers to everyone involved, I also brief them about some “rules” of engagement like never leaving somebody behind and going together as a group. Having done that, we all took the cab to Hou Hai. Speaking of cabs, Chinese taxi drivers are a notorious bunch. My very limited experience in dealing with them is simply unpleasant. Chinese taxi drivers are known to overcharge their customers and unless “reminded” upon (or insisted upon depending on the intransigence of the driver), they would seldom flag down the meter. It is probably due to this notoriety of Chinese taxis that the government has required them to install a receipt issuing meter complete with the taxi’s general information so that the riding public can use the receipt as proof when filling a complaint against a taxi driver (so asking for a receipt is a must when taking a cab in Beijing). Also, Chinese regulation allows taxi cab to carry only a maximum of 4 people. Since, there are 7 of us in the group. We are “force” to take 2 separate cabs to Hou Hai. The flag down rate for Beijing taxis is at a minimum of 10 or 11 RMB with additional surcharges after midnight (verification needed). It was around 930 pm I supposed when we got to Hou Hai and boy! The weather is simply freezing cold! My 4 layer of clothing barely kept me warm! The lake at Hou Hai is actually frozen rock solid due to the “mild” cold weather (that is according to Beijing residents, a harsh cold weather would see temperatures at around -20 degrees Celsius) so much so that we saw a lot activities literally over the frozen lake such as skating and “ice football”. My first impression about Hou Hai and probably Beijing’s night life in general is that the night life is not an “exclusive right” of the mid 20s to 30 something yuppies. At the “entrance” of the Hou Hai area, I saw a lot of “old” people, generally those above 50 years old doing some dance lessons with a dance ribbon. Kids are also around the area playing and they don’t look like from the neighborhood (just a hunch). Surrounding the lake on all sides except the front are bars and cafes, and the most prominent establishment (and the one right in front at the entrance) is the ubiquitous Starbucks. Most of the establishment seemed “small”, the biggest I think is just about 100 sq meters in lot area. Some establishments are two floors but most are single story. The streets in Hou Hai (at least in the place that we “landed”) are filled with hawkers and side walk vendors peddling everything from souvenirs to laser point pen. Included in this crowd are the employees of the different bars trying to lure or entice passersby to visit their bars. They are generally young, well – groomed, pretty (the ladies of course), and quite fashionable themselves. To me, they don’t seem to be bar employees at all but rather sales people/models. And oh by the way, these are people are quite pesky and insistent! They would follow you all the way trying to convince you to go their bars to the point that you felt that they are quite harassing already. Most of the bars are empty with only a handful being jam packed. I don’t know as to why is that the case but it could be that we are at the “boring side of the lake” or that we are early for the “formal” start of the night life (it was around 930pm then) or it was because the economy is bad and people are just avoiding spending altogether or it was because the weather is too cold for any functioning night life to exist. At any rate, we straddled through about half of the perimeter of the lake in search for a “nice” spot before we all decided to return to the front and picked the most “popular” bar nearest to the entrance of the lake. It so happened that the bar we chose has a Filipino band singing English songs. The bar was cozy but not “posh”. It looks so – so rather than “groovy” (that is if I understood the term, groovy at all). The drinks are well I don’t know expensive? I mean the cheapest drinks, which included bottled water, shakes, and juices (which me and my sister and the youngest in our group ordered) and beer cost 50 RMB or roughly, Php350 or US $7. Aside from me, my sister and the youngest in the group (I don’t drink. I’m no teetotaler but I definitely don’t drink. I only drink when very, very close friend of mine ask me to, otherwise nobody can get me to drink), the other youngsters ordered beer, Tsingtao beer, one of China’s popular beer brand. The bar also carries the more expensive wines like Jack Daniels and the likes, tequila. The price tag I think is around 1500 RMB (?, verification needed) upwards (Php10500 or US $250). We sat at the table directly in front of the rather “small” stage. At first, the Filipino band (they are 3 of them in the band, 2 lovely young ladies and a middle age guy in his late 30s perhaps) didn’t realized who we are but after overhearing us speak in Filipino, I could see their face grinned and they acknowledge us at the stage in Filipino (apparently, they so missed the Philippines that it’s a welcome sight for sore eyes to “see” us there). About this Filipino band, I was surprised to learn (and actually hear them) that they can speak phrases of fairly accurate Chinese Putonghua (普通話, the official Chinese language). They speak in “Chinese” whenever they are asked by the staff to acknowledge or “special mention” some bar guests (and who said Chinese is difficult to learn). This band is fairly popular I guess among the patrons of the bar because Chinese or more specifically, Beijing Chinese dig American music and this Filipino band sang quite well. One of the youngsters actually caught a few patrons “attempting” to sing along with the band. During the break in the performance, we got to chat with the band members and I was surprised to learn that there are many Filipinos who are working in Beijing and many like them worked as band musicians in Beijing bars and I thought Shanghai has the most number of Filipino bands “rocking” the town. Anyway, about the patrons of the bar, I observed that most of the patrons are in their 20s and 30s. They are mostly white collar workers who probably came by to unwind after a stressful day at work (it is only but logical to see such a demographic crowd in a place like this given the price tag of the liquors). Most of the patrons came by in small groups of somewhere between 2 – 5 people. Surprisingly, a number of the patrons actually came to the bar alone! Too many lonely people in Beijing perhaps? The crowd is quiet, not boisterous, although some of the younger patrons do get a bit noisy when drunk but generally, the atmosphere is pretty quiet save of course for the song that band is singing. It is as if everybody in the bar is paying close attention to the music except for “me and my group” (apparently, we’re the noisiest in the bar). Most people in the bar are in my point of view, don’t really care about who is sitting beside you, i.e., they’re not that nosy and they simply don’t care. I mean I saw a couple probably in their late 20s engage in a steamy “make out” session right inside the bar beside the window and totally oblivious of the crowd around them. I mean the couple has been going on with their steamy session like for an hour of our duration of stay in the bar. In fact, they’re still at it by the time we left. Yet, nobody seemed to feel “scandalized” or even remotely felt “uncomfortable” with it. Public display of affection isn’t a common “thing” in Asian countries like the Philippines. The same thing goes with China. I mean I never seen couples in China “kissing” in public before. However, inside the bar, things seemed to be less “inhibited”. Probably, it’s the alcohol or maybe, bars are the principal place for a make out session in China, well, at least in Beijing. It is just a guess though. We left after an hour or so of fun, light conversations, and good music. My impression of the bar scene in Beijing though this is no expert opinion since I’m no expert at all when it comes to bar hopping is that the place is small and cozy, the music is good, the place is generally quiet, the crowd usually just mind their own business, and the beverages are expensive. Not of much of a party atmosphere, I would dare say (as if I knew what a party atmosphere remotely looked like).

21ST CENTURY PEKING OPERA: A NEW OR RENEWED ART FORM?

2009-01-14T22:25:00.000+08:00

On the evening of the first day of my stay in Beijing, Lionel took us all (the entire tour group) to watch a “Kung Fu” show at the Red Theater right after a rather “tasteless” dinner (that is according to the opinion of one of the tour members which most likely reflect the sentiment of virtually everybody else). My first thought about the “Kung Fu” show was that of a Chinese martial arts exhibition but it turned out to be completely different. The so – called “Kung Fu” show was in actuality a “westernized” version of the “old” Peking opera (京劇). The use of the word Kung Fu (功夫) was just a marketing ploy to pique the interest of foreign tourists since most of us are just simply agog over Chinese martial arts. Anyway, Peking opera (or the modern word, Beijing opera) is actually an old Chinese opera theater invented some 400 years ago during the Ming dynasty (明朝). Before the advent of films and the television, the Peking opera was the single most popular entertainment medium for both the masses and the nobility including the imperial family. Its popularity still continues during the republican period (民國時代, ca 1911 – 1947) right before the Japanese invasion in 1939. At any rate, with the introduction of the movies and television, such “ancient” art form began to decline as people prefer much “colorful” entertainment media. It would have gone the way of the dinosaurs if weren’t for the recent “reinvention” of the medium. “Old” Peking operas is a play utilizing popular Chinese stories and legends such the “Monkey King or the Stories of the Travel to the West (西遊記)”, the “Romance of the Three Kingdom (三國演義)”, and others. Within the play, there is high pitch singing (similar to European operas), witty conversations (highly poetic in their sentence construction in some instance just like their European counterpart), drama (again similar to their Shakespearean cousins), and plenty of fighting scenes a.k.a. the “Kung Fu” part of the show (which our European counterpart lacks). Actually, the Kung Fu aspect of the Peking operas aren’t really Chinese martial arts fighting (ok, the Kung Fu fighting as the song goes) at all. Instead, it looks more like a choreographed “dance” or “acrobatic stunts” with actions (arm actions and legworks) that we all associate and identify as Chinese martial arts moves. In short, it is a dance that masquerade as true Kung Fu. The Kung Fu show that we saw that night was a true blue Peking opera in every aspect of it except that it comes with huge twists and major renovations that makes one rethink that whether or not that this show is an upgraded, “modernized” version of the Old Peking opera or simply an entirely new art form, one that is a successor to Peking opera’s illustrious past. The show we saw that night was titled, “The Legend of Ching I”. The story is about a boy who was send by his poverty stricken mother to the Shao Lin Temple(?) to become a monk and escape from poverty. The boy was very afraid and refuses to leave his mother’s side not until he became enthralled by the fighting prowess of monks displaying their Kung Fu. At which point, ching I resolved to become one of them. He became a monk and labored hard to become the best Kung Fu fighter. As time went on, Ching I grew up and became more enamored to Kung Fu to such an extent he became such an excellent practitioner of Kung Fu at a very young age. However, his very success waylaid him from the path of true enlightenment. He became arrogant and corrupt and drawn to temptation to such an extent his way in life. As such, the abbey of the temple refuses to give Ching I the permission to partake the “test” in order to become a true Kung Fu master. The “test” was actually physical combat with the best Kung Fu fighters of the temple. Disappointed, Ching I actually thought of giving up his quest until he discovered the true meaning of enlightenment (as in the Buddhist sense of enlightenment). He regain his composure and was soon allowed to take the “test”, which he manages to pass albeit all the hardship and challenge. After that, Ching I became a true master not only of martial arts but also of the spirit. He eventually succeeded the old abbey in latter’s role and had a young disciple himself. He uses his life story as a lesson for his young apprentice on matters of humility, patience, perseverance, and enlightenment. The story sounds familiar, right? Strangely, that’s the feeling I got after watching the play. The story seemed to resemble a lot like a popular Hollywood movie, Star Wars or to be more exact, the story strongly resembles much like the story of Anakin Skywalker a.k.a. Darth Vader. One could say that the Legend of Ching I is actually a 16th century Chinese version of the story of Anakin Skywalker. The only difference is that our hero, Ching I returned to the path of enlightenment while Anakin Skywalker was seduced by the Dark Side of the force and metamorphosize into Darth Vader. And this is actually one of the interesting innovations and twists that I am talking about, a “western” style plot. Another major change in this “deviant” art form is the language used. All throughout the more or less 2 hour play, the language used during conversations and narrations are in English! Not only that, it is in FLAWLESS English! The Chinese language are used sparingly and only during the singing part of the play. The use of English is actually not a surprise since this is again due to marketing reasons. I mean this play is meant for foreigners/tourists who couldn’t understand a word of Chinese (quite ironic because the majority of those in the theater that evening are either Hong Kong Chinese or Filipino Chinese; only a handful are actually westerners). What is surprising here is intention behind the use of the English language during the play. It meant that the producers of the show are planning to go “international” and become an international Chinese opera, not just merely your everyday, neighborhood Peking opera. As a matter of fact, according to the show introduction, the play had already stage outside of China on some occasions. Another “renovated” feature of this opera compared to the “old” Peking opera is in the use of the props. The “old” Peking opera doesn’t use much props if not any at all except for the costumes and the background (which is just a painted picture of the story’s setting). This modern incarnation however uses plenty of props as well as a clever manipulation of stage light to the extent one has a feeling that this is more of an extravagant Broadway musical rather than a “staid” Peking opera. Furthermore, there are some scenes in the play that display ballet dances and acrobatic moves reminiscences of the acrobat show that I’ve watched also in Beijing during my first trip some 1 ½ years back (see the blog article “Old” Beijing dated May 11,2006). So there it is. We have an art form that combines elements of the “old” Peking opera, European ballet, American Broadway musical, western plot devices and lots of Kung Fu. Despite that, make no mistake about the nature of this play. This is a Chinese play hands down because the theme and the philosophy behind the play are unequivocally Chinese. Themes like the Sino – Buddhist idea of futility of worldly life, and the meaningless of existence permeates throughout the play. Overall, I say the play is quite entertaining and good. I don’t know about how others specifically the westerners perceived the story however judging by the show’s longetivity, which according to the introduction is already on its 2600 + runs already since late 2006. I say the show must be quite popular among foreigners/tourists. Although, it could be argued that tourists are generally “forced” to watch the show because it is a “standard” part of the tour itineraries, I would dare say otherwise, that it’s popularity are genuine. My reasoning behind my observation has lot to do with recent “trends” in another entertainment medium, that of Hollywood movies. The recent trend among Hollywood movies, if one is perceptive enough is the “seeming” proliferation of Chinese elements in recent popular Hollywood movies. If you carefully look at Hollywood movies nowadays, you would notice the appearance of “Chinese” faces in the casts, the connection of events and things related to China as if the general sub – conscience are abound of it, and lastly, the subtle addition of Kung Fu in any fight scene. Now if such “trends” in movies are popular with western moviegoers, I don’t see any reason as to why a “westernize” Peking opera such as this one who is quite attune to western preferences and taste wouldn’t be popular at all. After everything that is said about this play, something kept nagging me until now. Have I witness an emergence of a new art form? Or I just merely witness an aberration of what looks like a new art form but which in fact is just a mangled westernized modernized 21st century upgrade of an old art form? Whatever it is, I had a sense that “this” art form would blossom further in the future.

AN HONORED GIFT

2009-01-10T22:10:00.000+08:00

The morning after the shopping expedition at Wangfujing (王府井) in Beijing wherein I bought 7 books, I received a surprise gift from of all people, Lionel Wang, our Beijing tour guide. Well, it started the night before when Lionel saw the books I’ve bought and was impressed that I could actually read Chinese and is also a book lover as well as a history enthusiast. And at the following day, he presented to me as gift, the manuscript of his written work, part one of his historical fiction/romance short story. You see, Lionel is not your typical tour guide. He is actually an amateur writer. Ok, he is a writer wannabe. He probably liked fiction, the historical romantic type with settings in China (judging from the topic of his choice). And he writes during his free time, which in itself is a tough act considering that he is married and he has a day job. Writing is no easy stuff. Anyone who likes to write can attest to that. Inspiration to write can’t be turned on as pleased like that of turning the tap water faucet on. There are many a times when one would be staring blank at the screen and can’t figure out what to write much less how to. This is further aggravated when you’re tired from working your ass off the whole day taking a bunch of giddy and demanding tourists around Beijing and coming home having to fulfill familial responsibilities. Anyway, a bit about Lionel. He is probably in his early 40s. He is a Manchu (滿族), the ethnic group that constitutes the ruling elites during the Qing dynasty (清朝), China’s last imperial dynasty. His ancestors belong to the blue banner (正藍旗), one of the Eight Banners (八旗), a socio – politico – military organization of the Manchu during the Qing era. Since his surname is Wang (王, the Fookien – Chinese pronunciation is Ong) and he is a Manchu, I surmised that he is probably of royal decent since Wang is a Han Chinese (漢族, the ethnic majority) surname and not an ethnic Manchu surname and in many cases in the past, the imperial descendants of former dynasties usually adopted the surname Wang as an emphasis that they are of royal lineage. It is either that or that his ancestor maybe actually a Han Chinese surnamed Wang and that they are “incorporated” into the Manchu Banner system during its early phase of conquest of China sometime in the 17th century. At any rate, it is safe to say that his forebears are of aristocratic descent. Lionel is actually quite fluent in English and he could actually speak a few words in Filipino, which is very rare. He would always belt out the words, “Dito Tayo” whenever he wants the tour group to assemble. At times, he would call out, “Kain Tayo”, to enthuse the group to either lunch or dinner. A perennially jolly guy, Lionel would always amuse us with his wise cracks about his “tigress” of a wife (we actually have the opportunity to meet his wife and inform her about his wise cracks about her, hehehehe). He is a Catholic and is a native of HeBei (河北省, the province wherein Beijing is situated), which is only logical given that his banner ancestry (most of the Banner people lives in and around Beijing for the most part of the 200 year Qing rule) and he lives in Beijing for a long time now. Anyway, the very instance that I received the manuscript of his work, I was to be quite honest dumb struck. I simply don’t know what to do. It is then I remembered my history (that I studied). In times past, aristocrats (the only ones who can afford a good education in ancient times) both in China and in Europe would host a party and invite friends and peers to the party and hand out his latest written works be it, a poem, a prose to everyone in the gathering. It is a marked sign of honor to actually receive such a personal gift from the gracious host and the guests would go about reading “the work” of the host and offer their opinions and suggestions on the latter’s work. Although time has passed and things have undoubtedly changed over the years, this practice is still being continued in literary circles. Having remembered this, I graciously accept his “gift”, set aside the book I was reading that morning and began to assiduously read his work. Lionel’s work is a 12 page historical romance fictional short story. Though historical fiction/romance short story is not really my forte or more aptly, a book that I don’t want to be caught dead with, I nevertheless plough through (my favorite fiction books are all Science Fiction and a few Wuxia novels, 武俠小説, a.k.a. Kung Fu novels and the books that I like the most are those laden with analysis, scholarly works of immense knowledge). Lionel’s short story is all about concubinage, a detestable practice; illegal because Chinese family laws throughout history doesn’t recognize it but is socially and morally acceptable in Chinese societies. The historical setting of the fiction is set right after the fall of the Qing dynasty and into the early period of the Republican era. The title of the fictional story is 暖被窩兒, which loosely translates to as “Warming the Bed and Blankets”. The protagonist of the story is a sweet, young innocent girl from the province who is never named in the story. Lionel told me the reason that the protagonist is not named is because he wants to put emphasis on the lowly status of women like her in Chinese society at that time (that however would prove to be a weak point in his writing because one has difficulty to ascertain as to when the protagonist is in the conversation or has entered the picture). The story begins with the protagonist being “bought” by a wealthy but childless jade merchant in Beijing who also happens to have 2 wives (still living), ostensibly to “warm” his bed at night (to be unambiguous about it, the protagonist is his sex slave) whenever he is on business trips away from home. Eventually, the relationship evolved and became one of affection and love. Later in the story, the protagonist bore the wealthy, childless lover of hers, 2 sons. The wealthy guy dies near the end of the story and she is left with the care of their 2 children, which she successfully manage to rear to adulthood. The story ends when the children turned into teens. Well, at least that is the first part of the story. Due to the nature of the story, the content is a bit sensual. Ok, sexually explicit at times (graphic in some parts?) but the idea of the story, the theme is pretty rich and powerful. As such, it could be elaborated further into a novel instead of a simple short story. Too bad, Lionel, the author probably don’t have enough free time to write because though the piece is well written, it needs further development, I mean, the story needs further development to become much more vivid than it is. Anyway, in keeping with the literary tradition, I gave a few suggestions and comments of mine to Lionel in a polite and nice way of course. Not that I’m a literary critic of some sort but as a responsibility that comes attached to the receipt of the gift of his manuscript, I felt I had to. Whether or not he accepts my suggestions and comments, well, that is his prerogative. At the least, I fulfill my part. Besides, I don’t have plans to take up literary criticism as a career. Well, it is my hope that someday I would be able to read a complete version of the story written by Lionel as he plans to publish his work sometime in the future. By then, I’ll probably ask his permission to translate and publish it in English, perhaps; that is of course, if I have time to write at all by then.
POST SCRIPT
It is during the time when I was reading Lionel’s work that I came to realize how much I owe my readers (of my blog) my sincerest gratitude for their patronage. I write to share my thoughts, my ideas, my views, my feelings. And honestly, I never well, didn’t care much if somebody actually read what I am writing. I just publish it. If people want to read it, so they read it, it’s free anyway. I never went out of my way to track the readership of my blog nor promote it nor advertise it. However, over time, I do get responses in the form of messages and comments from friends and strangers alike indicating their appreciation of what I’ve written on my blog and I felt I’ve haven’t thanked them at all. So here it is, I want to thank everybody who read my blog, those who have send me messages expressing their appreciation of my writings, those who posted their comments on my blog, their very helpful and to all those who just silently read my blog over the years. I thank you all. You may never know it but it feels GREAT to be appreciated. Thank you again.

BRANDING “MADE IN CHINA”

2009-01-08T18:10:00.000+08:00

Exchange rate:
1 USD = 7.3 RenMinBi (RMB) or Chinese Yuan
1 RMB = PhP 6.67
I soooooooooooooooooo hate shopping! And it so happen that in my recent vacation trip to Beijing, the tour guide set us out to not one but FOUR shopping tours in and around Beijing! The first expedition is to a 168 like tiangge type of mall, the second and the last shopping expeditions is at WangFujing (王府井), Beijing’s premier shopping district and the second most popular shopping district in all of China next to Shanghai’s Nanjing East Road while the third shopping destination is to a Jade Factory en route going to the Great Wall. Anyway, good thing for me is that I am an avid book lover and Wangfujing has one of the largest Chinese book store in Beijing, Xin Hua Bookstore (新華書店, which happened to have a branch here in Manila however, their book collection here in the Philippines sucks). The book store is also one of my favorite places in Beijing. In spite of that, I didn’t spend all of my “allotted” shopping time in the book store. This is because my sister is with me and like most women, she do like to shop, or more precisely, window shop. So, I struck a deal with her (on our second shopping expedition). I get to spend the first half of the allotted 2 hours of shopping time to buy my books (which I did! Bought 7 books for 341 RMB; Great deal!). Other than that, in most shopping expeditions where there is no book store in sight, I had to “endure” shopping. It is not that I dread shopping so much because it is “shopping” (as in the act itself) rather one of the reasons that I don’t like shopping at all aside from the fact that it is quite boring, (I really wonder why some people would find shopping an enjoyable experience, in fact, I strongly doubted that the word “enjoyable” is by any means a proper adjective for shopping) is the fact that I tend to “analyze” the business. Unlike most mortals who see the glittering store front, the merchandise on sale, and the price tag, I on the other hand, see business models, marketing positioning, merchandising policy, and overall business strategy (and of course, the beautiful sales ladies but that is a different matter). As a matter of fact, this window – shopping spree in Beijing has afforded me an insight into the Made in China products and brands (mostly fashion apparels). On our first shopping expedition right after landing in Beijing, the tour guide, Lionel bought us to San Li Tun Yashow Clothing Market (三里屯雅秀服裝市場?), a tiangge like mall near the San Li Tun Embassy Area. At that time, I really don’t have any appetite to endure the 2 hour shopping spree at the tiangge mall, so my siobe (little sister) and I decided to skip the tiangge or the bargain mall in favor of window shopping at the next door, ultra “modern” shopping mall. Incidentally, speaking of bargain hunting in one of China’s tiangge, this activity isn’t for everybody especially not for the faint – hearted ones. Bargain hunting in China is only for the prodigious ones. This is because bargain hunting in China is so incredulous and damn outright, a rip – off! Take for instance one of our fellow tour mates, she bought a hand bag in the San Li Tun Mall that is selling for 300RMB, which is very expensive but she was able to bargain it to 50RMB! Despite that, that particular tour mate of ours felt that she was cheated because she felt that she could have bought it for 30RMB. In another incident, I pick up this 2 set music CDs of Chinese classical music in a boutique shop. The sales lady quoted me a price of 200RMB but immediately and voluntarily lowered it to 150RMB. At 150RMB, that is something like PhP1000. Naturally, I balked at lofty price tag and had the good sense to back out from it and during my brief stopover at Shanghai on my way back to Manila, I discovered that the same CD set is selling at 88RMB right inside the airport! Outrageous, simply, outrageous! It seems that the bargaining’s rule of thumb (in China) of offered price divided by 2 and then less 10% afterwards in order to get the fair price is no longer reliable at all. Anyway, back at the next door, ultra modern shopping mall. I find the place really nice and it should be, considering the huge number of expensive brand - stores that had opened shop in it. And this is what really surprises me. It is not the sheer number of expensive brands – outlet store that I’d seen in this mall and in some other places in Beijing (most notably Wangfujing) and the rest of China as well that surprise me but the fact that this huge number of expensive brands could co – exist! I mean in a “small” market, one expensive luxury brand is just one too many in a crowd but having ALL the major luxury brands to co – exist in China speaks volume about the size of the luxury market here. It is said that the Chinese are zealous consumer of luxury since ancient time. This is due in large part of the cultural concept of “Face” (面子). As the saying goes, one can lose everything but not the “Face”. If your peers drives a car, you better have one as well else you stand to lose face. Furthermore, you don’t simply just going to have a car. You must have a car brand that matches with your peers’ car brands as well if not better. No wonder, China is the world’s fastest growing luxury market. It is funny however because a few years back during my last trip to Shanghai – Beijing. My tour guide then told me that the Chinese government imposes a hefty 40% consumption tax on luxury goods (verification needed). It was so hefty that local Shanghai Chinese felt that it is much cheaper to actually take a plane to Hong Kong and buy the luxury item in question and came back home right after the shopping spree. I don’t know if that anecdote is true or even still applicable but judging from the proliferation of luxury goods stores in China, I say that myth rings a bit hollow. Apparently, sales must have been good for foreign branded goods (both mid and high end) that finally, I saw local Chinese brands coming out in the market (most notably in Wangfujing district and in other places like Xian). Local brands especially the mid – end and the high – end ones are conspicuously absent during my several trips to China over the years (it is that or maybe I just so hated shopping that I avoided shopping altogether and may have missed the “change” altogether). It came to a point wherein when one thinks of brand in China, it usually means foreign brands and luxury brands and Chinese products are usually seen as cheap “stuffs” bought in tiangge. Funny, how such a predicament should have come to exist in the first place. I mean China is the world’s factory and most of the luxury items sold in China are most likely “Made in China”. Yet, there is no Chinese brand that purveys the top of the line, superior quality Chinese made products until recently. Hazarding a guess as to the reason behind this rather “late” conversion, I had to say that this has to do with the sputtering Chinese export being felt the past couple of years due to an appreciating RMB. As export markets become less lucrative to local Chinese companies over time, it is only logical for them to start to look for greener pastures and nothing is more convenient than the domestic scene. As the saying goes, better late than never. Chinese brands however aren’t exactly popular even to the local consumers. A friend of mine who happens to frequently shuttle between the Mainland and the Philippines mentions that Chinese brands are perceived by the local Chinese as “inferior” in every category compared to its foreign counterpart, which is quite ironic since the foreign brands might also be made in China. In spite of this, local Chinese brands do have a following among locals if judging from the fact that they are still “standing” however, I suspect that locals would almost always prefer foreign brands that is if they could afford it. It is probably due to this “fetish” for foreign brands among the Chinese buyers that local brands almost always adopt a “foreign” sounding brand name to the extent that they look practically similar to their foreign competitors. Furthermore, majority of the Chinese brand names are in ENGLISH without a Chinese name counterpart! What this reveal is that Chinese brands are exhibiting some degree of sophistication here however their ideas are far from original and creative. The few brands that sports a Chinese brand name counterpart along with their English brand names has English brand names that sounds well, how should I say, hilarious and totally “beyond this world”? For example, I’ve seen a pizza parlor whose name is PALATABLE PIZZA. Geez! With that name, I won’t even come 10 feet near it unless of course, I’m dying of hunger and there is no other alternative within a 100 mile radius. Other than that, I won’t travel thousand of mile just to eat a “palatable” pizza! If I am to ever to eat a pizza in China, it should be a GREAT pizza not just a palatable one! Another example, a hotel in Beijing (3 stars maybe) is named Yi Bi Si (宜必思), which could be loosely translated to “unforgettable”. Yet, the English name of the hotel is written as IBIS, which in Arabic is the word for “Satan”. Talk about cultural bobos. Even with purely Chinese name brands, some of the names are left to be desired. There is one shop in Xian which apparently sells clothes to “plump” women calls itself 肥太太, literally “fat wives”. I can’t really imagine seeing any decent women be caught dead in that kind of joint. Excellent marketing strategy (on targeting plump women as a market), really bad branding. It is quite clear that Chinese brands are in need of hardcore professional brand consultants that would help improve their image from just simply an imitation or from being lame. It is also just as apparent that Chinese brands are far from being international brands of note. To date, the only Chinese brand of international renown to my knowledge is Lenovo, the 4th world’s largest PC maker that bought out IBM PC some years back. Other than that, I can’t think of any. However, in my point of view, it would be only a matter of time, say 10 years perhaps before Chinese brands began “invading” the world just like the Japanese brands during the 80s and they would, given the manufacturing muscle of China, the fast technological evolution of it’s factories, and the growing sophistication of it’s marketers.

“NEW” BEIJING

2009-01-02T14:54:00.000+08:00

Note: To better understand this article, please read first my previous article, “Old Beijing”, dated May 11,2006.

It was 2 ½ years ago when I first visited Beijing. Back then, Beijing was just an “old” romantic city in the midst of a construction frenzy in time for the 2008 Olympic. My latest visit however had astounded me beyond my imagination. Beijing has changed so radically that I could barely recognize it. So much so, that I even thought that I was in fact in a different city altogether. However, I wasn’t in a different city. This is Beijing – post Olympic. It is a Mega City filled with tall buildings, glittering Shopping Malls, new Apartment Building Complexes, wide boulevards, and paved avenues. In addition to that, the buildings here in Beijing are well “aligned” and looked neat, most likely, a product of well thought-out urban planning. In fact, looking from the window of a plane several thousand feet in the air, one could easily recognize the geometric neatness of the cityscape. It seemed that all the construction frenzy that I saw 2 ½ years ago had not only been completed but several dozen more structures must have been added to Beijing, embellishing a proud capital eager to show to the world. One of such structures is the conspicuous sub – way stations that dotted around the city. Also, unlike before, one can no longer see the bicycles roaming the city streets instead, cars literally choked the streets. There are so many cars out in the street that the traffic is already as bad as those in Manila (I was getting a bit impatient waiting for the traffic, which I didn’t felt during my trip in 2006) even though Manila has lesser roads and highways within the city limits. Even the sanitation facilities received a massive upgrade. Long gone are the stinking neighborhood toilets that cater to the locals and in its place are malls and fast food joints, hotels, and fancy restaurants with supposedly clean and modern sanitation facilities (they still stink though because it wasn’t properly maintained). Even the star rating system of public sanitation facilities are fast disappearing, leaving only popular ancient tourist spots like the Forbidden City complex to sport such an “ancient” relic. Speaking of the Forbidden City, in the “Old” Beijing, the center of Beijing is the grand Tiananmen Square (天安門廣場) and the resplendently colossal Forbidden City (紫禁城) including its environs. In the New Beijing, the center of this universe is the Olympic village represented by the massive Bird Nest and the breathtaking Water Cube. While both landmarks provided dignity to such an august place like Beijing, the Olympic Village ostensibly lacks the romantic atmosphere of the old wonder that it replaces. Clearly, modernity has triumphed over history. The enormous facelift that Beijing has undergone has left it unrecognizable to an occasional traveler like me but strangely, the New Beijing looked so familiar to me not because of the ancient jewels that are left standing in the midst of this modern jungle rather the post – Olympic Beijing looked surprisingly like another Chinese city, Beijing is beginning to resemble Shanghai. In fact, one can say that Beijing has been thoroughly Shanghai – nized. Except that, in Shanghai, the architectural structures are more stylish and imposing while in Beijing, the buildings are less towering and a lot more staid. Even so, it is quite easy to see the shadow of Shanghai in Beijing. With this huge burst of modernization in the characterization of Beijing, Beijing has definitely joined the ranks of the great world cities of the modern age. It can now be compared to cities like London, New York, Shanghai, Taipei, and Hong Kong. Despite that, the New Beijing seemed to lose something that old one had. It no longer looked romantic. Call me a romantic fool but I liked the “Old” Beijing better. Outside what used to be the old city walls is that great battlefield of the old where together the invaders and the defenders consecrated the ground with their blood……….. That same spot now is inhibited by huge malls and fancy hotels. KFC and McDonalds, parking lots now stands in the ground of those who have fallen some centuries past. Sigh. The old Hutong (胡同), Beijing’s back alleys where one could see the low lying tiled houses of the old is fast vanishing like an endangered species. These ancient houses are actually an eye sore (and I definitely agree) but their disappearance to give way to newer buildings seemed to have permanently altered the character of the “Old” Beijing more than anything else. And the haze, that toxic cloud of pollution; it used to look romantic and picturesque whence the sun sets or rises among the trees and the old houses. Now, the same haze, the smog that covered the skyline emanating from tall chimney stacks in and around Beijing has become an irritating symbol of the “New” Beijing. Alas, what can I say. This is Beijing.

BACK FOR THE NEW YEAR

2009-01-01T18:54:00.000+08:00

It was drizzling when I got back to Manila last night (December 31,2008) but that is way, way much “cozier” than the freezing cold temperature (-8oC) that I’ve experienced in Beijing (北京) and in Xian (西安). Besides, there is something about Philippine New Year celebration that I always liked. There is the noise, more noise, a heck lot of more noise and the dangerous neighborhood firecracker spree that one can’t find anywhere like it in any other places in the world. Anyway, I took a vacation this yuletide holiday with a tour to Beijing and Xian (December 26 – 31). It was the second time that I’ve been to Beijing in 2½ years and my first to Xian. It was also the first time that I got to spend winter in China though there, I didn’t get to see any snow during my trip. Nevertheless, it was damn freezing cold even with 3 – 4 layers of thick clothing, 2 socks, thermal clothing, and gloves. The wind is especially harsh. For not only the wind aggravated the coldness, it was also dry and abrasive. In fact, the wind was so abrasive that I felt I’ve undergone a diamond peeling session every time I’m out in the open (which is quite a lot during the trip). And the fact is, I’d never asked for one nor been to one (diamond peeling). I was traveling with my sister during the trip along with 16 others, mostly families. The food during the trip was not really good unlike during my first trip to Beijing except of course for the long waited for Peking Duck at Quan Ju De (全聚德), which I really dig and missed. Don’t get me wrong, we were treated to five star hotels and restaurants every meal during the stay except that our meals are strictly under budget to the extent that we (me and everybody else in the tour group) felt that we are in a 5 star restaurant eating a one star meal. In fact, we are damn sure that the local KFC in Beijing or the Dad’s Buffet Restaurant in the Philippines could have been better than the food we had during the trip. Well, regardless of the disappointing food, my trip in Beijing – Xian is generally enjoyable and exciting except that whence before during my first trip, I was more of an adventurer and an explorer; in this trip, I was like everybody else, a tourist. Not that I’m less enthusiastic in my recent trip than my first trip, it’s rather that I felt less inspired and eager. Probably, it’s the weather, or maybe the food, or maybe it’s because of the fact that I had something else in my mind lately, or maybe, it’s because I’m “older” or maybe, it’s because I don’t have a little girl named Megan to bring cheers and add fond memories to my trip. Despite that, I had an added novelty in my recent trip. I actually had a “night life”, well, two to be exact. Whence before in my first trip, I was in my hotel room by 9 pm and be already asleep by 10. In this trip, I got to “stay out” or more aptly, “chill out” till 11pm. It helps that we have more youngsters in this trip (almost all of them are born in the early to mid 1980s except for me of course) and that they are a bunch of “gimikeros”. It was a nice vacation, a fitting end to 2008.

CRYSTAL BALLING 2009 – THE SLOWING PHILIPPINE ECONOMY – IS IT LUCKY?

2008-12-14T23:36:00.005+08:00

Disclaimer: This is an article based on research and on my own opinion and analysis. Use this information on your own risk. I will not be held liable for any loses that might arise from the use of the information from this article. However, I would very much appreciate if people who manage to profit from the use of the information contained in this article to share their “profit” with me. “ )

If you were to read the business section of any newspaper nowadays, all you could read are bad news, more bad news, and much more bad news about the global economy. And this you get to read every day and every hour (if you follow the news channels and the internet). Almost every day, there is news about the on – going recession, the free – falling commodity prices, the depressed corporate earnings resulting into stock prices hitting multi – year lows and employment and other economic data hitting multi – decade lows. The reports are so negative that as if there is no longer any good news out there about the economy. So it is rather surprising actually to hear from some quarters that the Philippines is actually “lucky” for being rather mildly affected by the contagion that is the Global Financial Crisis of 2008. Is this assertion true and well founded or rather, this is just a political spin let out by an unpopular administration to score some brownie points? If the Philippine economy isn’t really immune to the global crisis, then exactly, how bad is it? Well, I’ve managed through diligent research to cobble together some figures to try to portray the economic future of the Philippines in 2009 and 2010. But before everything else, a few points should be noted first. As much as I’d tried to get the latest figures for the forecast, I’m hampered by two things. First is the dearth of the forecasts available since most forecasts are actually internal research of companies (and as such, I took pains to acknowledge my sources in the reference section). It is difficult therefore to get as much data as I would have wanted much less the concise analysis behind the figures. Second, some of the forecasts listed are in my opinion outdated already. This is due to the extreme volatility happening in the world markets today. To say that most analysts are caught surprise by the steep and rapid deterioration of the world economy is a huge understatement. The markets are just simply too unstable and unpredictable for the moment. An example is the fact that most of the forecasters I’ve researched kept constantly revising their forecasts every month based on the latest evidence available. I included these “outdated” forecasts as well in my analysis because of the scarcity of the data. Anyway, a good forecast is always better than a bad forecast and a bad forecast is invariably better than having no forecast or guidance at all. Another point need to be noted here is that the analysis are Philippine specific, i.e., one cannot apply the same analysis on another country. A case in point is the GDP growth rate. A 3 – 4% growth maybe pathetic by Philippine standards but is considered a huge improvement in an advance economy like the US. On the same account, a 7% growth rate is a huge reason to celebrate in the Philippines but the same growth figure is a cause for sleepless nights in China.
TABLE 1. PHILIPPINE ECONOMIC FORECAST
INSTITUTIONS/2009 GDP/2010 DP/2009 INFLATION/2010 INFLATION
IMF1/ 3.5%13/ 4.5%/ 4.3 – 7.0%/ 3.5%
ADB2/ 3.5%13/NONE/ 8.0%/NONE
State Street Global Advisor3/ 3.8%/NONE/ 7.0%/NONE
UN4/ 3.5%/ NONE/ 7.2%/ NONE
WB5/ 3.0%13/ 4.0 – 4.5%/ 8.5%/ 5.5%
DBS6/ 3.8%/ NONE/ 3.2%/ NONE
ATR Kim Eng Securities7/ 6.0%/ NONE/ NONE/ NONE
BDO7/ NONE/ NONE/ 8.6%/ NONE

Bank Of America7/ NONE/ NONE/ 5.0%/NONE
BPI7/ 4.0%/ NONE/ 6.0 – 7.0%/NONE
CITIBANK/ 3.0%10/ 4.6%/ 6.5%7/ NONE
Deutche Bank7/ NONE/ NONE/ 7.0%/ NONE
EIU12/ 1.8%/ 3.2%/ 6.0%/ 4.5%
Forecast Pte Ltd7/ NONE/ NONE/ 6.4%/ NONE
HSBC7/ 3.9%/ NONE/ 5.9%/NONE
IDEA7/ 3.7%/ NONE/ 10.0%/ NONE
ING Bank7/ NONE/ NONE/ 6.4%/ NONE
Nomura Securities7/ NONE/ NONE/ 6.7%/ NONE
Philippine Equity Partners7/ 3.1%/ NONE/ 6.6%/ NONE
RCBC7/ NONE/ NONE/ 5.7%/ NONE
Standard Chartered Bank7/ 3.1%/ NONE/ 3.2%/ NONE
DBCC8/ 3.7 – 4.7%/ NONE/ 6 – 8%/ 3.5 – 5.5%
UBS9/ 1.8%/ NONE/ 3%/ 3.8%
Fitch Ratings11/ 2.5%/ NONE/ NONE/ NONE
Global Source/ 3.5 – 4.0%/ NONE/ NONE/ NONE
JP Morgan/ NONE/ NONE/ 2.5 – 4.5%/ NONE
S&P/ 3.3 – 3.8%/ NONE/ NONE/ NONE
UOB/ 4.0%/ NONE/ 7.0%/ NONE
RANGE/ 1.8 – 4.7%/ 3.2 – 4.8%/ 2.5 – 10.0%/ 3.5 – 5.5%
AVERAGE/ 3.29 – 3.39%/ 4.08 – 4.20%/ 6.11 – 6.39%/ 4.16 – 4.56%

The above table list the various forecasts made by different institutions. It showed a forecast range of 1.8 – 4.7% for the 2009 GDP growth rate, which is quite a wide range. The various forecasts actually posit 2 differing views about the Philippine economy in 2009. Those whose forecast GDP growth rate of below 3% actually viewed the Philippines experiencing a sharp slowdown due to a prolonged and deep recession among the advance economies led by the US, which translates into lesser demand for exports from countries like the Philippines. This is collaborated by government forecast through the DBCC which sees export growth at 1 – 3% in 2009. Also, the economic downturn in the advance economies would result in lay – offs among the OFWs where a majority are located. This in turn would lead to diminish remittances from OFWs, which in the past 5 or so years is actually the main growth driver in the Philippine economy since remittances from OFW fuels domestic consumption. Again, this is collaborated by forecast such as the WB, who predicted remittance growth for 2009 would only be at 4% and 5% in 2010 (the remittance growth so far in 2008 is 15%). On the other hand, those forecasting a GDP growth of above 3% are more optimistic though they also acknowledge a slowdown from 2008 (which churn out 4.6% based on the latest figure) but not that much. Though these forecasters think that export would be severely trashed by the ongoing financial crisis in 2009, they held the belief that remittances wouldn’t be that bad. This is shown by the rather optimistic forecast of 6 - 10% remittance growth in 2009 by the government. It is also noteworthy to point out that of all the forecasts listed, the government’s figure through the DBCC are the most optimistic of the lot. In fact, the government’s forecast are so optimistic that it would seem unrealistic compared to the majority of the forecasts. And in the past, government most often downgrades their GDP growth forecasts to conform to “reality”. Despite this, government’s forecast cannot be simply ignored no matter how “unrealistic” it may seem. This is because the government’s GDP growth forecasts aren’t really forecast at all but more of a performance target. While the rest of the forecasters are simply “guessing” what the 2009 picture might be using their complex mathematical models, the government on the other hand is in a position to “realize” their targets. Nevertheless, it is but only prudent to place just the right amount of trust on government forecasts. So having said that, the next question is “would the economy be in a good or bad shape in 2009”? What does 1.8% or 4.7% GDP growth rate actually mean? Well, to understand that, we need to make a few comparisons but first thing first. The first thing we need to understand is what is GDP? A GDP is a measure of the total domestic output of an economy minus foreign receipts such as income of multi – nationals from other countries, earnings of OFW in other countries, etc. A positive GDP growth rate “may” signify that the economy is growing or expanding while a negative figure points to a shrinking or contracting economy and two consecutive negative GDP growth rate is by definition, a recession. A prolonged economic contraction (like more than a year) indicates that the economy is in a depression. The more prolonged, the deeper is the economic depression. Moving along, the first significant comparison that could be used for analysis is to compare the forecast growth figure with past performances most especially the current year, 2008. The GDP growth rate as of the 3rd quarter of 2008 is at 4.6%. Now comparing this figure with the average forecast for 2009 of 3.29 – 3.39%, the forecast growth rate is just down by 1.21 – 1.31% however, if the current GDP rate is compared to the lower end of the forecast growth range, which in this case is 1.8%, the difference is a whopping 2.8%. To conceptualize the magnitude of the “slowdown” and get a feel of what is it like. Imagine driving a car at 80 kmh. A 1% or less drop – off would be like gently applying the brakes such that one would have a smooth stop. It is therefore a slight slowdown with business volume likely down from the previous year. Depending on how badly hit a company is, a few might begin to downsize. A 1 - 2% drop – off in GDP growth rate is akin to stepping the brake a little harder in such a way that the halt is a bit sudden. That is what we call a major slowdown or a soft landing (depending of course of the magnitude). Expect some business to downsize either mildly or drastically depending on the magnitude of the loss of demand loss. Expect also some business to close though it wouldn’t be that many. Now, more than 2% fall off from the GDP is very much similar to the Motorlite commercial of “Kagat Agad” wherein you virtually “kicked” the brake and felt the force of the brake hurling you out of the windshield and into the street if not for the restraint of the seatbelt you’re wearing. That in economist’s parlance is called a hard landing. In this case, expect bankruptcies and closure to happen. Beyond that, it is a total collapse. Just use your imagination to conjure what the scenario would look like. A second comparison that could made for the forecast GDP growth rate is to compare the forecast GDP growth rate with the population growth rate. The Philippine population growth rate according to the 2007 census is at 2.04% and the current population size is at around 90 million, making the Philippines the 12th most populous country in the world. So what does population growth rate have to do with GDP? Picture this, a moderate size family of say 5 earning a respectable income as a result of taking advantage of the opportunity that is abound in the economy would have sufficient resources to not only provide the basic needs for the family but to also manage to live in some level of comfort. Now, if a new baby is born to the family, strains on the family finances would be surely felt. However, this would be mitigated if economic opportunities are readily available such that the family could easily exploit it and thus alleviate their financial condition but if the opposite happens, i.e., the rate of increase in income cannot sufficiently cope with the rate of increase in financial burden as a result of the addition of a new member. Deterioration in the quality of life for the family would be felt. This is the logic behind the comparison between the GDP and the population growth rate. Now at the current rate of 4.6%, the figure is grudgingly acceptable. A 3% GDP rate is a real cause of concern while a 1.8% GDP rate is for all practical purpose pure hardship. The third comparison that could be made with the forecast GDP is with the forecast inflation rate. The relationship between inflation rate and the GDP rate can be discern from understanding the total sales revenue equation. To calculate a company’s total sales (assuming that the company is selling a single product only), we use the equation: TOTAL SALES REVENUE (R) = SELLING PRICE (SP) x SALES VOLUME (V). To compute for the sales growth rate, SALES GROWTH RATE (GR) = R2 – R1 = (SP2 x V2) – (SP1 x V1). Assuming that the selling price is constant, the total sales equation can now be simplified into GR = SP x (V2 – V1). What this meant is that we could increase our sales growth rate by simply increasing our sales volume without increasing the selling price. Conversely, if the sales volume were to remain constant, the only way we could increase our growth is through increasing our sales price or GR = V x (SP2 – SP1). Since the economy is just the aggregate sum of all businesses/ companies within the country, we could expand the sales equation applicable to a single company by a million fold and apply it to the economy as a whole and instead of Sales Growth Rate, we use GDP. Instead of Selling Price, we use Price level and replace Volume with Economic Activity Level (GDP = (P2 x AL2) – (P1 x AL1)). What this tells us is that an economy could “apparently expand” without creating much jobs and opportunities simply by inflation (of course, in reality, GDP driven purely by inflation doesn’t exist). Therefore, one shouldn’t be overtly ecstatic just because of the GDP figure registered positive. Inflation should also be taken into consideration. It is for this reason (and along with the population growth rate issue) that Celito Habito, the former NEDA director under President Ramos said that in order for the economic growth to have a significant, real impact on the lives of the ordinary Filipinos, the Philippine GDP has to grow by an average of 7% annually. With that in mind, we could come up with a fair idea about what the GDP numbers meant. For GDP rate below 1%, the economy is contracting. Expect demand for goods and services to fall resulting in business closures and high unemployment rates. Between 1 – 2% growth, depending on population growth rate and inflation rate, the economy could either be stagnant or worst, shrinking as well. The same thing would happen, poor sales, business closure and high jobless rate. Growth between 2 – 4%, again depending on inflation and population growth rate, the economy could be either stagnant or chugging along sluggishly. At this point, demand could be described as either paltry, or pathetic, or thriving demanding on the magnitude. Furthermore, this is only applicable to basic commodities. Sales of luxury items or durable goods like automobiles and real estate could be pretty limited. With 4 – 5% GDP, growth is decent, fairly moderate. At this rate, basic necessities could be doing well while luxury goods are doing so – so. At 5 – 6% rate, the rate is respectable and one could expect consumption (including luxury goods) in the economy to be fairly robust. By the time the GDP hits 6 – 7%, better take that bottle of champagne out, uncork it and celebrate. Good times are here but unfortunately, it is unsustainable on the long run in the Philippines’ case because inflation would hit near 10% at that point (due to “structural problems”). Some years back, I remember my economics professor in MBA used to say that there is one particular Philippine product whose consumption perfectly mirrors the economic growth of the country and that is the sale of San Miguel Beer (not condoms as one of my classmate loudly answered). So if I were to venture to create a scenario using that logic, less than 1% growth, nobody is drinking SMB because they don’t have money to keep their stomach full. 1 – 2%, probably a beer once in a full moon. 2 – 4%, a beer every week. 3 – 4%, a case of beer every weekend. 4 – 5%, a beer every day. 5 – 6%, beer drinking session every weekend on top of beer every day. 6 – 7%, why drink beer when you can have gin or rum instead. So, in assessing the 2009 Philippine GDP, the economy is definitely slowing down and rather abruptly perhaps with demand contracting if not stagnant or sluggish. Things would start to only brighten up however from 2010 onwards assuming that the worst of the global financial crisis would be over by mid 2009.
TABLE 2. ECONOMIC SECTOR FORECAST

INSTITUTION/ AGRICULTURE/ INDUSTRY/ SERVICE / PCE / GOV’T EXP
/ 2009/ 2010 / 2009 / 2010 / 2009/ 2010 / 2009/ 2010 / 2009/ 2010
I.D.E.A /4.6%/ 4.3% /5.6% / 5.6% /3.6% /4.6% /1.8%/ 2.4% /1.8%/ 2.4%
DBS / / / / / / /3.4%
The GDP growth rate is a very broad measure and at times companies might find it too unwieldy for use in forecasting and planning. This is precisely the reason why economic sector forecasts are more useful. An example would be that retailers would rather used PCE as gauge in assessing the demand for the next year while agro – industrial companies would look at agricultural growth rate for planning their sales strategies for 2009. Sadly, however, economic sector forecast data are very difficult to come by if it wasn’t paid for. Luckily, I manage to garner some numbers for “free”. According to economic theory, the economy can be described from two perspectives, the supply side and the demand side. The supply side of the GDP refers to the production output of each individual “sector”, which in this case refers to INDUSTRY, SERVICE, and AGRICULTURE. The idea of using the demand equation for GDP is to understand which of the sectors contributed more to the output in the economy. Take note that by Industry, the definition used in economics refers to the economic sector encompassing MANUFACTURING, CONSTRUCTION, and MINING. SERVICE on the other hand comprised of that part of the economy engage in BANKING and FINANCE, TRADE, TRANSPORTATION, and SERVICES like business outsourcing, restaurant etc. AGRICULTURE is comprised of CROP like rice and corn, POULTRY, FISHERY, and FORESTRY like lumber. The demand side of the GDP refers to the consumption pattern or the spending behavior of the economy by the 3 major spenders in an economy, namely: Government, Consumers, and Private Businesses. The idea of scrutinizing the GDP into its make – up component is to discover what “drives” the economic growth. By Government Spending, what is referred here is the money spent on infrastructure projects like roads. It also includes money spent on defense and into the built up of a war machine as well as national public healthcare system. Personal Consumption Expenditures (PCE) of consumers refers to money spent by any kind of consumer be it in class A, B, C, D or E on practically everything under the sun. Private Investments of businesses do not refer to stock investments at all by these entities rather it refers to the investments of businesses in productive capacities that can be used to create products and services to satisfy consumer needs. This also includes investments on inventories for eventual sale. It quite apparent from the ongoing description of the above that though each account are separate, the three (Gov’t spending, PCE, Private Investments) are actually interrelated to each other. Increase government spending could create economic opportunities for the general populace and this would in turn put more money in their pockets, which could boost PCE. With increased PCE, businesses would be “motivated” to increase their investments to meet the increasing demand. Economic theories also hold that the both sides of the equation (the demand and the supply sides) should be equal since the economy only consumes what it produces. The story of the Philippines for the past few years is that the GDP is buoyed by two growth drivers; private consumption on the demand side and services on the production side. The two however have lost momentum in 2008. Private consumption last year grew at about 6% every quarter. This year, its growth eased to 5.2% in the first quarter and pulled back to 3.4% in the second as inflation accelerated and consumer spending sentiment cooled. For next year, PCE is expected to grow by a measly 1.8% while SERVICE sector growth rate would slow considerably as well to 3.6% from 4.3% in the 2nd quarter of 2008. By the way, the service sector contributed 46% of the GDP. The rather dismal forecast of PCE for 2009 is largely attributed to the projected slowing of remittances from OFWs, since they might be severely affected by the mounting job losses due to the ongoing global financial crisis. The service sector, which largely caters to the domestic clientele (which in turn derive their spending power from remittances) would thus be dragged down by the spending slowdown. In addition to that, there are some unconfirmed reports of lay – offs from the BPO (business process outsourcing, aka, call centers) sectors. This is due to the fact that the majority of the BPO’s clients are banks based in the US (the worst affected sector in the US currently). On the other hand, the more optimist forecasters are saying that remittances may not be that badly hit. Besides, the depreciating peso in 2009 may actually be a boon because remittances would be worth more in peso terms and these could potentially crop up consumer spending. Looking at the other numbers, agriculture is forecast to do better in 2009 but this is after that sector took a severe beating in 2008 due to the high crude oil prices. As a result of high crude oil prices, fertilizer prices increase by leaps and bounds “forcing” some farmers to go “organic farming”. This unfortunately had the effect of decreasing crop yields. In addition to that, the fishery sector also got hit by the high oil prices since fishing vessels are power by diesel oil derive from crude. Fishermen got reluctant to go out fishing if they felt the yield wouldn’t be enough to break – even. Apparently, paddling was never considered an option. In short, the forecast figures for agriculture in 2009 represent more of a recovery from 2008 lows rather than actual growth. The 2009 industry growth forecast is also seem to be fairly steady considering that industry is growing more or less around 4% for years. Well, this is because the industry sector is recently buoyed by the construction sub – sector. There are actually numerous construction projects going on right now, mostly catering to OFWs residential needs and to the booming BPO demand for commercial space. Over the spending side, the most surprising figure here is actually the forecast for government expenditures, which is a pittance at 1.8%. I mean with the looming passage of the 2009 national budget of 1.4 trillion peso, which is 15% higher than 2008 and with infrastructure spending also 20% higher plus the fact that 2010 is a presidential election year, 1.8% is too low a forecast. Well, maybe the forecast is outdated as some of the figures are. Speaking of presidential election, the election is just 18 months away and campaigning at this time is not in any way early by Philippine standard. By historical precedents, politicians would try every means to get government to spend on their pet projects so as to ingratiate themselves with the electorates in the hopes that they would get re – elected come payday. If that is the case, what more could you expect in a slowing economy wherein conventional economic theory would strongly support massive government spending? Expect unbridled, aggressive, irresponsible spending by the government, which would naturally bloats the budget deficit and could probably send the Philippine economy in a downward spiral in the future (after 2010) but would do miracles in 2009. Looking at the inflation forecasts, we could discern a huge disparity in the forecasts varying from 2.5% to 10%. Granted that some of the figures are already outdated and thus, obsolete, the figures still varied widely. Again, the forecasts revealed two widely divergent views on inflation picture in 2009. On one hand, some forecasters are one in saying that with the free fall in commodity prices in the global market the past few months, it is only but natural for inflation to move slowly in 2009. Inflation by the way is the rate of increase in the general price level within an economy. On the other side of the divide, some forecasters are telling a different story, that the inflation would remain high in 2009 especially the early part. This is because they believe that businesses still hold expensive stocks in their inventory, which they bought when the prices of goods sky rocketed in July of 2008 in anticipation of further increases. And these inventories haven’t been flushed out of the system yet. As a result, businesses saddled with high cost inventories are less likely to sell them at cheaper price otherwise they would incur losses (maybe they would if the economy sputters even more in 2009). A case in point is the oil companies. International crude oil prices has plunged by 60% since their July peak into 4 year lows, yet, the prices of gasoline in the Philippines haven’t fallen to their levels at the start of the year yet, much less to their price level 4 years ago. Another factor in the works in 2009 that affects inflation is the potential depreciation of the peso as a result of “deleveraging” or the massive pull out of US funds from non – cash assets and into near cash assets like the US treasury notes. By average, using the collected forecast data, inflation in 2009 is expected to be around 6%. To appreciate what 6% means, picture this. Inflation rate of less than 2% and even though the number maybe positive, the economy is experiencing deflation. Deflation by definition means that prices are falling and to consumers, it is good news however, far from it, deflation is a bad news. Using the logic of demand and supply theory, an increasing demand and a stagnant supply, prices would increase as buyers competitively bid for dwindling supplies whereas a falling demand and increasing supply situation would force prices to fall as suppliers saddled with high fixed costs would be tempted to shade their prices just in order to incur sales and break – even. In an economy, price rise and fell regularly over a period but not simultaneously or “all” at the same time or even prolonged like during a deflationary spiral. In a deflation, there is so much demand destruction that virtually nobody is buying and business trying to stave off impending doom would cast off prudence and engaged in an indiscriminate fire sale trying to get hold of cash just to survive through the bleak period. However, as business gets more pessimistic over their future, they would also withheld further investments and scale down production, which would in turn affects employment and with bleak employment prospects, consumers would crimp further their spending creating a debilitating spiral that would get worst over time. An inflation rate of between 2 – 4% is for all intent, mild. Consumer would barely felt the hurt in their pocket. Between 4 – 6%, inflation is moderate. Consumer would notice the increase in prices but in general wouldn’t feel much. Some might feel the pinch more than others but their numbers are few. Inflation of 7 – 9% is somewhat high. Consumer would definitely notice and more would feel the pinch. From 9% to 10%, inflation is high and the pockets of a large majority would feel the pain of relentless price increase resulting in a marked change in spending behavior. Above 10%, inflation is relentless and raging and nearly everybody would feel the pressure, drastically altering established spending behavior into a crisis mode spending focusing on daily essentials. Above 20%, very high inflation, demand would drastically halt on virtually every item except bare necessities. Beyond that level, ditch the peso for there is no point in holding “those worthless pieces of paper” in a hyper inflationary regime. Also, it is likely that we would be in the midst of a war to experience such extremities. So base on this line of thinking, prognosis on inflation in 2009 is a bit high but not much too drastic as to seriously alter spending pattern like the one seen this year. Overall, to proclaim that the Philippines is “lucky” is to my view, an unfounded optimism. It is not hell either but definitely hardship will be felt in 2009, which could be worst than 2008. However, recovery could be expected in late 2009 and in 2010. In short, 2009 will not be a year of the raging bull as one would dream of but rather the year of the snoring bull. Hopefully, 2009 would lay the foundation for 2010, the year of the roaring tiger!

LIST OF ACRONYMS AND ABBREVIATIONS
1. ADB = Asian Development Bank
2. BDO = Banco De Oro Philippines
3. BPI = Bank of Philippine Island
4. DBS = Development Bank of Singapore
5. DBCC = Development Budget Coordinating Committee, Department of Budget, Philippines
6. EIU = Economist Intelligence Unit
7. FAO = United Nations Food and Agriculture Organization
8. GDP = Gross Domestic Product
9. GEO = Global Economic Outlook
10. GNP = Gross National Product
11. Gov’t Exp = Government Expenditures
12. IMF = International Monetary Fund
13. IEA = International Energy Agency
14. OFW = Overseas Filipino Workers
15. OPEC = Organization of Petroleum Exporting Countries
16. PCE = Personal Consumption Expenditures
17. RCBC = Rizal Commercial Banking Company, Philippines
18. S&P = Standard and Poors
19. UBS = Union Bank of Switzerland
20. UN = United Nations
21. UOB = United Overseas Bank of Singapore
22. WB = WorldBank
REFERENCE
1. World Economic Outlook Update, IMF, November 6, 2008.
2. Asian Development Outlook Update, October 2008.
3. Asia Economic and Bond Outlook – Q42008, State Street Global Advisor.
4. Global Economic Outlook; United Nations, Department of Economic and Social Affairs, Expert Group Meeting on the World Economy. October 2008.
5. Quarterly Update, The World Bank, November 2008.
6. Philippine Daily Inquirer, November 22,2008
7. Inflation Report, 3rd Quarter, 2008. Bangko Sentral ng Pilipinas.
8. Philippine Daily Inquirer, November 14,2008.
9. Philippine Daily Inquirer, November 18,2008.
10. Philippine Daily Inquirer, December 3,2008
11. BusinessWorld, December 4,2008
12. BusinessWorld, December 5,2008
13. BusinessWorld, December 12 – 13,2008

PERHAPS I AM LAZY

2008-11-11T22:10:00.000+08:00

Lazy (adjective)
1. Unwilling to do work or make an effort. (Wikipedia)
2. Disinclined to activity or exertion : not energetic or vigorous (Merriam – Webster)
3. A disinclination to work or to take trouble (Merriam – Webster)
I’ve been taking stock of my life thus far the past few days and I suddenly came to realization that perhaps I am lazy! I’m not lazy as in lazy, lazy but rather I’m lazy in terms of taking charge of my life. I just go about doing the same thing again and again and again, over and over and over, day in and day out without taking charge of the direction of where I’m going towards the direction I wanted to go. It’s quite a paradox on how one could be working 12 – 18 hours a day from Monday till Saturday and almost always focused on work even when not working to be actually lazy! Perhaps, I’ve grown accustomed and comfortable with what I am doing now to actually risk venturing into an alternative. Maybe so. If that is the case, I may just be risk – averse. But then again, is the implied risk of taking an alternative that insurmountable or nearly impossible? Maybe the risk is not that great and in which case, I am definitely “lazy” (see definition) for not taking the alternative and challenge the risk associated with it. I just merely took the excuse of risk in rejecting the alternative. Or perhaps, I maybe too engrossed with my everyday “rituals” to actually care for a better alternative to the one I have. I’m too busy with fixing what is wrong on Earth and too distracted by it to dream for the star and actually reach for it. In which case, I am still “lazy” for not breaking the routine once in a while and giving an effort to make the alternative real. I just took being busy as an excuse. Or perhaps, I’m just too boring, too close minded, too unimaginative, too myopic to see past what is before me and look for alternatives around me. I’m just not thinking about alternatives. Definitely, I’m just being lazy for not even opening my eyes and see the possibilities of what the alternatives got to offer. In which case, there is no excuse. I’m just being dumb and lazy. Regardless of the reasoning, my little mental exercise the past few days yielded me one conclusion, that I am lazy! Then again, I just wondered. Am I the only one? Is there anyone like me? Perhaps I am not at all “lazy”. Instead, I just to belong to a generation of people or maybe a group of people who are just:
1. Comfortable with what they have and what they’re doing and put up an excuse of risk to reject an alternative even if the associated risk is that not great.
2. Too busy with their daily “routine” to actually pursue an alternative however better it might be and claim being busy as an excuse for not considering an alternative.
3. Plain boring, unimaginative, close – minded and myopic to even figure out a better alternative to what is existing.
Now, that is a tough call. Perhaps, I am ……………..

CRISIS OF CAPITALISM

2008-11-03T19:16:00.000+08:00

The two most talked about issues that are hogging the headlines nowadays aside from the upcoming American election are the Global Financial Crisis and the Melamine Milk Scare, two different and independent issues but in reality, the two are connected. Both issues are actually symptoms of a greater malaise that is affecting our lives today and that malaise is the crisis of capitalism. For starters, this isn’t the first time that capitalism is mired in crisis. Over the course of centuries, capitalism has spawned many crises and perils of its own doing but somehow, capitalism as a socio – economic system had not only survived the many crises. It even manages to come out stronger and even weathered the challenges of other socio – economic systems to the point that it outlasts other systems that threatened to replace it as the dominant way of life. From the exploitation of labor that led to the rise of communism and the resultant cold war to the exploitation of the resources of third world countries leading to the 19th century colonialism and the World Wars to the exploitation of the environment that threatens human survival for the next hundred years, capitalism has more than once pushed human civilization to the brink of extinction. From the first stock market crash during the Holland Tulip Mania in 1637 to the Global Depression of the 1930s to the Asian Financial Crisis of 1997 to latest Global Financial Crisis of 2008, capitalism has authored one too many of a banking and financial crisis that destroyed the wealth of many and dashed their dream of prosperity. From the Foot and Mouth Disease to the Mad Cow Disease to the Salmonella Scare to the latest Melamine Milk Scare, capitalism had more than once toyed our health and played a cruel and sadistic joke with our lives. All of these are committed under the system that is known as capitalism and the reason for it lies in the very nature of capitalism – that of a system based on the individual’s boundless pursuit of profit to the extent of insatiability – greed. Too often than not, human beings under the capitalist system has systematically undervalued the “cost” (not simply the financial cost as in the cost of production) versus the profit to be derived. Most of the time, humans turned a blind eye to the “cost” or more bluntly, blinded by the dazzling profit to even care for the “cost”. Although, it could be argued that capitalism doesn’t have a monopoly on greed and that other socio – economic system is as guilty as capitalism but the fact is, greed has found its greatest expression under capitalism in a scale unrivaled by any other system. However, capitalism is not without its merit. Because of the emphasis on individual’s right to pursue profit based on their own volition rather than based on some whimsical authority figure, capitalism has manage to bring forth prosperity to a large number of people worldwide, creating a entire new social class – the middle class out of the vast number of poor. It has succeeded what no other socio – economic system could have done in “spreading the wealth” to the greatest number of people. So in the final analysis of what is good and what is bad about capitalism, the conclusion drawn would find capitalism superior compared to the other system that have been known so far but somewhat lacking and that a better alternative would be a welcome change. Unfortunately, such alternative are nowhere to be find. There is no emergent system, no “better version” of an old system that could sufficiently replace capitalism. Therefore, for the time being, it seems that capitalism would again survive. Even so, capitalism would have to undergo changes much like the changes it was forced to accept with the onslaught of communism and socialism – that of regulation– reining in its greed and which at the same time, constraining its dynamism as well. There are actually two fundamentally different approaches to regulation. The first one involves government regulation with it’s over burdening, time consuming, and slow moving bureaucracy. The other involves voluntary self – regulation, i.e., business ethics, corporate social responsibility, corporate citizenship, which might not be effective considering that not everybody would subscribe to it. At any rate, whatever form would it takes, there is no escaping the fact that the future of capitalism is in more regulation but not too much hopefully.

DISHONORABLE PROFIT

2008-10-27T21:50:00.000+08:00

Sick Corny Joke of the Day:
1. Avoid “Fortified Milk”, because melamine maybe used to “fortify” the milk.

One of the biggest news that is hogging the headlines lately is the Chinese Melamine Tainted Milk Scandal. Actually, it is one of the biggest news globally because of the far – ranging reach of the Chinese export machinery. A lot of milk and milk – derived products, confectionery, and milk – based beverages of both big name companies and little known producers are affected by this scandal causing panic among buyers and inducing an aversion to milk based products among consumers. And they are rightly to be afraid, for the melamine tainted milk has so far claimed the lives of 4 babies and sickened some 53,000 more in China. It has become a nightmare for parents with babies and toddlers, for these parents do not know what “safe” brand of milk to buy for their babies, i.e., safe as in a milk formula with no trace of melamine. Melamine based on my research is a nitrogen based macro – molecule with a formula of (NH2)n. It is a highly toxic substance in large dosage and is used as raw materials in the production of melamine resins plastic, which in turn is used in the manufacture of melamine wares (plates, cups, saucers). It is used in building construction as a super – plasticizer. And in the 1950s, melamine was also used as fertilizer due to its nitrogen based chemical structure as well as a non – protein nitrogen source for feed to cattle. However, melamine use in fertilizer and in feeds was largely discontinued (not totally, I surmised) by the 60s basically due to the fact that melamine doesn’t easily break down into its useful nitrogen form during the digestive process in cattle and during photosynthesis in plants. There is however no indication of toxicity being the reason for its discontinued used. It is very probable that the fact that melamine is used in cattle feeds may have prompted it’s use in “watering down” the milk. I mean melamine is readily available to dairy farmers who are using melamine as cattle feeds and because of its nitrogen structure, addition of melamine in milk would produce a high nitrogen yield during laboratory test suggesting that the milk is “rich” in protein, which is in fact the opposite since the “fortified” milk has already been watered down in the first place. Milk is watered down to artificially increase the output from the same inputs and therefore fatten the profitability of whoever is the culprit behind this despicable scheme. Anyway, aside from melamine, another compound used as non – protein nitrogen for cattle feeds is cyanuric acid. Now, when melamine and cyanuric acid enters the bloodstream, it reacts to form melamine cyanurate which is a crystalline compound and once these crystals entered the kidney, it damages the cells resulting into kidney malfunction, which ultimately led to the deaths of those poor babies. As previously mentioned, melamine is added solely to increase the profitability of the milk producers. And this illustrate a very disturbing point, that some people can be highly ingenious and would go great lengths and at the same time, being unscrupulous enough to do something such as lacing milk with melamine just to earn more. And this is the crux of the problem, the greed for more profit. Taken in this light, it’s not only the producers of melamine tainted milk that are “blinded” by this greed for more profit. There are others like them and melamine tainted milk is just simply the tip of the ice berg and one of the latest case in the long lists of tainted product cases (although not all of them are as toxic as the melamine laced milk, some may even be considered “safe”). Furthermore, this is not limited to food products only. As a businessman and an MBA graduate, I’m all for profit, the more, the merrier however, I and many business people like me draw the line between what’s honorable and what’s not. Being honorable means you don’t “cheat” your customer just to earn a few quick bucks, you earn it the hard way, which is providing what the customer paid for even if that means ultra thin profit. Unfortunately, there are a few of these unscrupulous business people who are not bound by this code of honor. A case in point would be adding extenders to food products. Adding extenders is a common practice among food processors. It is not only a fact but a way of life as this could reduce cost in a price competitive environment and help shore up profit. Even so, there is a limit for adding extenders and in most cases; it is likely in the vicinity of 5 – 20%. It is not surprising however to see that the most unscrupulous ones would use extenders up to say 60% or more to the extent that they practically substituted the product with something entirely different (adding melamine to milk actually started out as simply adding extenders to milk). Adding extenders is just but one of the tricks. Another trick usually resorted to by unscrupulous business people of whom they are in the minority, is size reduction. So instead of 1/8” thickness, these unscrupulous ones would offer products that are thinner say maybe 1/16” and still sell it as 1/8” thick but with huge discount from the regular price. As I mentioned before, a majority of businesses are honorable and we don’t cheat. We even balked at cheating because we care much for the welfare of our customers and that our ethical beliefs prevented us from committing such a grave act. As such, we couldn’t really imagine that somebody could actually do that or gone to that great length but apparently, we are wrong in our assumption. As a result, we are usually caught off guard by the actions of these unscrupulous business people especially since these very same people are engaged in predatory selling, which drive some of the honorable ones out of business. In short, honorable business people are also victims, not just the buyers. I remember this lesson I had in business school. It’s about a firm’s competitive advantage. According to my professor, competitive advantage is that firm’s capability, or organizational ability, or assets that help provide an edge to a company versus other competing firms in attracting customers in the market. So if a company could produce their goods more efficiently than others and maintain superior quality as well and they are able to parlay such efficiency into a reduced price for the consumer, it is only but natural for such a company to attract a great deal of buyers from the market and with the expanding revenues as a result, such company would not only stay afloat but would grow substantially as well. Conversely, a firm who fails to deliver what the consumer want because it lacks the skills, the abilities, the capabilities, and the material resources to do so, it would eventually fail because it wouldn’t be able to attract any would – be buyers from the market. That is what the theory says. Reality however has a different take and this is what they didn’t teach us at business school; that unethical practices and unscrupulous attitudes can be and has proven to be a source of competitive advantage as well. If one doesn’t play fair, one always have an advantage no matter what. Well, one could always argue that customers are not stupid and that sooner or later, they would have discovered the hoax and drive these unscrupulous businesses out of business. Though that is true but the problem is that by the time, these unscrupulous businesses went bankrupt, the damage is already done for some of the “honorable” businesses would not be around by then as the latter were “priced out of the market” by these unscrupulous firms in the first place. So what then? What are we going to do? Well, the most effective solution to punish these unscrupulous businesses is for the buyer to exercise vigilance. Remember, the ultimate decider in the marketplace is not the competing firms nor the government regulators but the consumers and only you, the consumers. If the consumers demanded only the best quality before price, I don’t see how these unscrupulous businesses would succeed in the first place. Remember, the customer is always right.

Reference:
1. Wikipedia

REWARDING RULE BREAKERS

2008-10-21T21:35:00.000+08:00

It is one of those usual rainy afternoons in Manila; heavy downpour causing flash floods during rush hour followed by traffic mayhem afterwards as people tried to get a ride after the rain and cars barely get moving at all due to both the floods and as well as due to public transports blocking the road. At any rate, in the worst of this kind of situations, monstrous traffic could extend for kilometers and a normally 30 minute travel could take as long as two to three hours. Traffic was so slow that one felt that it would be faster just to leave your car in the middle of the road and just walk home. Just when you think that you’re in a traffic nightmare already, you suddenly noticed vehicles usually jeepneys and tricycles but also other vehicles as well breaking from the “established traffic column”, overtaking virtually everybody else by travelling at the opposite lane and before you know it, what was once a 4 – lane 2 – way traffic (with no concrete barrier in the middle) has now in effect become a 4 – lane one – way traffic, which completely blocked the flow of the opposing traffic. As a result, somewhere down that lane, the same thing happened with the opposing traffic and whala! We have a gridlock! And what was expected to be a 2 – 3 hour traffic nightmare has now morphed into a traffic hell wherein cars barely crawl from their place. It take some time before a traffic cop came along and untangle the mess and guess what he did to solve the “crisis”? He lets the overtaking vehicles occupying the opposite lane to go first so as to “create an opening” for the opposing traffic to “flow” and eventually, traffic “normalizes” (as in reverting back to the “old” 4 – lane 2 – way traffic) and the flow “smoothens”. The traffic cop never even bothered about confiscating the licenses of these “rule breakers” and yet alone punishing them for creating the mess in the first place. What this story illustrate to us is that once a “rule breaker” or a “trouble maker” acting upon their self – serving interest and trying to grab a “fleeting” opportunity manages to “clog” the system to such an extent that the system breaks down entirely and that these “clog” of a rule breakers are so vital and strategic that they became the “key” to the solution to the mess that they created in the first place. As such, it became practical to reward these “clog” of a rule breakers by giving to them the gain they so desired (which in this case, getting to go first ahead of everybody else who diligently lined up in traffic) just in order to get the system back up running again. Of course, such scenario aren’t exclusively seen in Manila’s traffic during the rainy season, for the recent financial crisis plaguing the world is also an exemplary case in point. Here, we have a handful of financial institutions whose unbridled greed has managed to bring the entire global financial system to it’s knees and yet, instead of going the way of dinosaurs for being similarly “stupid”, we have to bail them out from the mess that they single handedly created because failure to do so would spell “the end of the world” as we know it (by “the end of the world”, think of it as the 21st century version of the Great Depression of the 1930s). Under “normal” market conditions, a company that makes a big mistake has to pay for it’s mistake big time; a company that commits a costly error has to pay dearly for that error and a company that happens to make a huge, momentous, and critically mortal “bubu” has to pay for it with every cents it had to the extent of going belly up. That’s, the law of the market. Well, at least that is true for “small” companies that don’t cause critical “strain” to the well – being of the economy. For companies that are too large, too vital, too strategic, too “important” to fail, the laws of the market are simply inapplicable. Being too large however, doesn’t necessarily exempt them from the laws of the market, a company must also be a “vital clog” as well as in the case in point. If AIG were allowed to fail, then, we would see the unwinding of derivative positions worldwide precipitating a catastrophe of incalculable proportions as funds from bank deposits, from retirement savings, from governments would just disappear. Or if the US government failed to bailout Wall Street, the credit market would be utterly destroyed forcing us to pay everything in cash (including global trade) and thus, drastically reduce the scale of economies worldwide (one reason why economy grows is because of credit as one can purchase and eventually sell more from what little capital they have). Yet, it is these very same companies that are the very reason why we’re in such a mess in the first place. And therefore, we “reward” these companies by bailing them out without “punishing” them in the way we punish lesser companies with little clout. Rewarding rule breakers are not really fair nor right but in scenarios wherein they are the “vital clog” to the smooth functioning of the system, “rewarding” these rule breakers are the most pragmatic thing to do if not the best solution to the problem. Even so, it is still hard to swallow and is still distasteful.

THE GLOBAL FINANCIAL CRISIS OF 2008

2008-10-16T21:23:00.001+08:00

Quote for the day:

1. Cash is King – anonymous.

The biggest news hogging the headlines for the past 10 months or so is the total unraveling of the global financial system that till now has wiped out trillions of dollars (one new stories gave a figure of $12 trillion) and requires trillions more in bailout money. What started out as an American sub – prime mortgage crisis has now officially become a global financial crisis engulfing every nation on earth. And why has this happened? It is because of 3 things: (1) The creation of the derivatives market, (2) over – leverage of the typical working middle class, and (3) the globalization of finance. Derivatives are securities on a security (a security is a financial instrument indicating ownership or claim on a property or asset, be it an equity like common stock or debt such as bonds that has financial value and is tradable). To illustrate, imagine a 5 year tenor bond that pays 5% per annum quarterly that is bought by a financial entity. The financial entity in turn issues 5 – one year tenor bonds based on the 5 year tenor bond (obviously the two should have the same maturity). The interest to be paid for the 5 – one year bonds is derived from the interest income coming from the original 5 year bond. The financial entity makes money by pocketing the difference between the interest payout to the one year bonds and the income derived from the 5 year bond. Using the illustration, supposed that the interest rate of those one year bonds is set at 4% per annum, then by calculation, the financial entity makes a profit of 1% every year from the difference between the interest payout and income. The original 5 year bond is the security, while the 5 – one year bonds created from the original bond is the derivative. Based on the illustration, one might say that derivatives are not that complicated and it is a simple thing but in reality, the truth is much farther. Derivatives are way, way more complex. There are many derivatives in the market such as options, warrants, bond derivatives, Collateralized Debt Obligation (CDO), futures, etc. Now, if betting in a security is a tough call because nobody can really predict the future and the behavior of a security whether it would go up value or collapse the next day is highly volatile, imagine then betting on a derivative that hinges on these volatile and unpredictable securities. It’s a lot tougher. If buying on security is like playing a dinner table poker, playing derivatives is like gambling in a high stake casino. Now, the present financial crisis started out as a sub – prime mortgage crisis. Sub – prime mortgages by it’s term refers to real estate mortgages (loans for purchase of real estate and using the real estate in question as collateral) made to people with poor creditworthiness and/or to people with good credit standing but due to certain circumstances, the loans to be made do not conform to certain standard requirements and hence rendering these people with good credit standing ineligible to apply for the loan. In short, sub – prime mortgages are pretty risky loans with high default risk that normally, a prudent investor would shriek at putting their money into. However, due to their high risk nature, the commensurate pay – off is also high, i.e., the interest charged on this type of loans are quite high, very much higher than the prevailing interest rate. As such, it becomes “enticing” to some investors looking for means to “maximize” the return on their investments but their numbers are however, few. To broaden the appeal of the sub – mortgages to the greater number of investors looking for high return and relatively “acceptable” risks, investment banks began to package them as Collateralized Debt Obligations (CDO), a type of bonds whose cash payments to the bond holders came from the payments made on mortgages by the mortgagor (the borrower). In this set – up, the investment bankers are the ones who technically assume the risk of credit default by the mortgagor. Usually, investment bankers in order to assure bond investors of the steady stream of cash flows payout in spite of the erratic cash flow payment behavior of these high risk loans, would pool together numerous mortgages and creates a “basket” from these mortgages with more or less a predictable cash flows. The investment banker makes money from the whole scheme of things through charging commission on the sale of the bonds and the fees from obtaining the loan, management fees and etc. Investment banks don’t make money from the loans. This is entirely different from the traditional commercial mortgage loans obtained from a commercial bank. In the commercial bank mortgage loans, the banks obtained their loanable funds from depositors and in return pay, the depositors a fixed interest for the deposits which are usually low. The commercial bank would then in turn lend out these amassed funds to borrowers in return for interest payment. A commercial bank makes money from the spread between the interest paid to the depositors and the interest earned from the loans. In addition to that, the commercial banks assume the risk of credit default of borrowers. In this traditional set – up, due to the fact that the profit of commercial banks came from the interest spread between loans and deposits, return of investments on the part of the depositors are hideously low. Furthermore, banks are fiduciary financial institutions i.e., they are institution of trusts and as such are highly regulated by the government. Henceforth, commercial banks cannot just simply give out loans freely to anyone and this in turn forced them to apply stringent credit evaluation guidelines. As a result, poor credit quality borrowers were often unable to obtain loans from a commercial bank and sub – prime mortgages wouldn’t have existed at all. In contrast, the CDO deal would technically create a win – win solution for all the parties involved. The investor (the equivalent to the depositor of a commercial bank) would earn higher rate of return from his funds, the investment bank makes money through commissions and fees, and because the whole set – up is not regulated like that of commercial banks, poor credit quality borrowers can actually get a loan. It is precisely because of this supposed “win – win” scenario that makes CDOs the more preferred form of mortgage lending than the traditional set – up except for one caveat, the risk assumed by the banks. For investment banks, the credit default risk is very high, higher than the risks assumed by commercial banks because of the credit quality of the borrowers. To circumvent this problem, investment banks created another derivative product called credit derivatives and the types usually employed in this deals are the credit default swaps (CDS). This is where AIG comes in. Credit default swaps are very much like insurances. The investment banks basically buys a cover against credit defaults from the sub – prime borrowers and pays a certain sum for that cover with the basket of mortgage loans as reference not as collateral. In the event of a credit event be it a default on payment or a declaration of bankruptcy or pre – payment of loans, etc, the seller of the credit default swaps (in this case, AIG) pays the buyer of the swaps (the investment bankers) an amount equivalent to the difference between the actual market value of the defaulted security and the agreed value. So if the security is initially valued at let say, $1 million and after the credit event, the market value of the security is say $800k, then, the seller of CDS would pay the buyer the difference, which in this case is $200k. CDS may seem simple enough but it is actually not. CDS differs from a regular insurance in one aspect, namely, the collateral or the property or asset to be insured. In an insurance, there is a property or an asset to be insured and serve as collateral (in the case of insurance, the collateral is usually irretrievable in the event that triggers a payout). In CDS, the property or asset in question which in this case refers to the basket of mortgage loans serve only as reference for the calculation of the premium payments and eventual payout. There is no collateral at all. In short, investment banks or any financial entity doesn’t have to hold the reference securities in question but they still could buy for the cover and receive payout in case of credit defaults. In addition to that, there is no regulation to supervise the creation and sale of CDS. So what the whole set – up suggest is that CDS like any other derivatives are tradable instruments for profit gain and not simply just for cover of risks. So in the event that an entity felt that likelihood of default increases due to some macroeconomic changes and therefore increase the likelihood of a payout from the seller of the CDS, the holder of the CDS could sell it to a third party for a certain amount of profit. Or, the seller of the CDS could “sell” the swap to a third party in return for cash up front while the third party receives the premium payment from the buyer of CDS granting the likelihood of default is minimal at that juncture. Now, with the understanding of the underlying financial basis of the sub – prime mortgage loans, one would get a feeling that the entire complex and supposedly, “win – win” dealings hang by a very thin hairline, which is the paying capacity of the mortgagor or the borrower. If the borrowers pay their mortgages diligently and timely, the wheel of this dizzying meshwork of a clock would keep on going. On the other hand, if a few borrowers were unable to pay and defaulted on their mortgages, the “clock” would suffer a jolt but it will still tick but if there is a massive bankruptcy of the borrowers, the clocks utterly breakdown and the result is catastrophic and chaotic as we’re in right now. This led us to the second of cause of the global meltdown, which is the over leverage positions of the middle class Americans. Since the 1990s, with the launch of the dotcom boom, the ensuing prosperity has greatly increased the “paper wealth” of the average American thus laying the foundation for increase in spending. Couple this with a healthy economic growth for almost 2 decades, American spending increases dramatically to the extent that during the aftermath of the 1997 Asian financial crisis, American consumers became “the consumer of the world”. Two recessions, the Mexican Peso Crisis, the Russian financial crisis, the 1997 Asian Financial Crisis, the dotcom bubble burst, and the 2001 terrorist attacks had temporarily tempered the American economy but failed to completely dampen it. This is due in large part to the aggressive rate – cutting authored by the Federal Reserve under the guidance of Alan Greenspan. As a result, American spending continued to roar on. This time, it is abetted by cheap credit. It became common at that time for a typical American to possess multiple credit cards with credit transfer features. It was also at this time when American began to translate their paper wealth into hard assets via investments in real estate and automobiles. So what all this translate to is that the claims on the future cash flows, i.e., the money that had yet to earn of the average American grew significantly such that not much could be saved from what remains of those future earnings. Given this scenario, in prosperous times where opportunities for economic gains abound, future incomes are assured and were enough to cover all these claims. However, in bad economic situation, future cash flows becomes unstable and claims has caused an added burden to consumer struggling to make ends meet. This is what happened two years ago when inflation sky rocketed mainly due to a surge in oil prices and the spiraling increase in the cost of food. Added this to the aggressive rate increases to curtail inflation by the Federal Reserves, the claims on future earnings grew and ate whatever little surplus those future earnings had if not totally outstripped it. As an immediate consequence, Americans first reacted by withholding payments for big ticket items like mortgages or selling their fixed asset holdings like real estate. However, in a struggling economy wherein a few can afford to buy, the influx of so many real estate for sale resulted in precipitous dropped of real estate prices. This is in turn exacerbated the worsening mortgage crisis as paying mortgagor suddenly find themselves saddled with expensive debts with soaring interest rate backed by real estate whose value is declining rapidly. And so, it came to a point that defaulting on expensive mortgages packs more financial logic than holding onto it. This in turn creates a snowballing effect that produced the sub – prime mortgage crisis late last year. On the financial side of the sub – prime mortgage crisis, the patchwork of derivative deals has broken down completely as the cash flows from mortgage payments dried up forcing investment bankers to pay up the bondholders (the buyers of CDOs) from their own pockets and since investment banks normally don’t take in deposits, they’re hard pressed for cash. This in turn force some bondholders to call in the CDOs whenever possible which further aggravate the already perilous state of investment banks. Now, the CDS should in theory cover for the mounting losses from sub – prime mortgages but since the value of tradable CDS are way, way bigger than the actual mortgage default and the fact that the seller of CDS didn’t set aside a contingency fund in the event of default and that the default is no longer a distinct possibility but a reality, the fund required for payout of the cover is simply too much for a insurer of credit default and this is what led AIG to sought for government bailout. Now, with CDS being somewhat “useless”, investment banks are left alone to fend for themselves. With no revenue income (due to defaulting mortgages and restricted payouts from CDS), pricy debts (due to high interest rate CDO’s), and virtually no funds on its own (since investment banks don’t take in deposits like a regular commercial banks), investment banks are left with no choice but to find ways to raise funds and payout the bondholders. They do this by either selling their shares in return for cash infusion or borrowing heavily to finance short term debts. But as we all know, one cannot survive by raising debts at least, not that long. Because of the deteriorating financial conditions, financial institutions with excess funds became apprehensive about lending out precious cash to firms with doubtful survivality. And this triggers among other things, the fall of investment banks led by Bear Sterns and (hopefully) ended with Lehman Brothers, thus, precipitating, the Wall Street Financial Meltdown. Even so, the Wall Street Meltdown was actually an American crisis and limited to the USA only. It morphed into something greater because of a third factor and that is the globalization of finance. Since the end of the cold war in the beginning of the 1990’s, nations around the world began to realize the “superiority” of the capitalist system and quickly adopted it by opening up their markets to foreign trade and investment through the removal of tariffs and the removal of restriction on the flow of capital in and out of the country. The result is the alignment and integration of the national financial systems to the world financial markets dominated by Western Europe and Japan and led by the United States and this in the process gave birth to the global financial system that we see today. Financial markets of every nation around the world became more closely linked and highly dependent on each other. It is therefore no surprise to see American companies having financial interest across the globe and that the rest of the world has financial interests in America. One of the greatest American exports aside from Capitalism, Democracy, automobiles, computers, the internet, and McDonald’s is the derivative instruments (and the financial crisis if one is to be sarcastic about it). Companies around the world including their government’s central banks usually invested in American debt, a major part of which are in treasury notes but with sizeable investments in bonds issued by venerable Wall Street institutions with superb credit rating like Bear Stern and Lehman Brothers. So when Wall Street is crumbling, the rest of the world became apprehensive about buying into American debt and this in turn created a credit squeeze on these once high flying investment banks. As the value of American debts kept falling, the finances of some of these companies outside America are also gravely affected resulting into their shaky financial situation and expose their vulnerability to sudden adverse changes in the macro environment. And that adverse change was triggered with the fall of Lehman Brothers (a venerable financial institution with long history and previously good credit standing) and it’s eventually bankruptcy. Soon, companies with poor financial foundation and huge exposure to the toxic American debt followed suit and this in turn forced companies especially commercial banks to become even more apprehensive if not outright fearful about lending precious funds to other banks who maybe in intensive care. The net effect was the frozen the credit market. You see some companies for one reason or the other cannot turn their paper profits into cash easily that could fund their daily activities and they therefore turn to the short term debt market like the commercial papers market for their financing needs. However, with the credit market frozen, cash suddenly becomes scarce and companies are fraught with to panic on how to “sustain” their operations even if they are profitable and the old adage about “Cash is King” became the cardinal rule in the market. With little cash and nowhere else to borrow money from, the next logical step among companies was to sell whatever asset they could sell in order to raise cash and the most liquid of all assets available to them for the moment are their marketable securities that they’re holding, i.e., stocks (other assets like fixed assets are harder to sell and could materially affect their operational sustainability). After all, a dollar in cash is much better than a dollar in stocks whose value may become next to nothing overnight. This caused the global sell – off in stocks that we bear witness to the past few weeks. The global stock selling frenzy cause the companies to sustain loses which makes finances of these companies all the more precarious and this in turn feed more fear and panic contributing to the ceaseless downward spiral into total chaos necessitating unprecedented bailouts and intervention by governments around the world last week. And that folks, is in a nutshell (and 6 pages long), the 2008 global financial crisis, which is unraveling as we speak.

Reference:

1. Bond Markets, Analysis, and Strategies, 5th edition, international edition. Frank J. Fabozzi, Pearson Prentice Hall, 2004.

NESSUN DORMA

2008-10-13T21:13:00.001+08:00

Nessun Dorma, the Latin phrase for “None Shall Sleep Tonight” is a highly popular classical opera song and is considered by many to be Puccini’s magnum opus. I first heard the song a long time ago at near the ending of the movie, “The Mirror has Two Faces” and then again during the climax – resolution phase of the movie “The Sum of All Fears”. I was since then smitten by the song and was mesmerized by the elegance and the grandeur of the music. However, there was a problem. I never knew the title of the song and for the longest time possible, I was searching for that mesmerizing music with not much of a success until recently when I “discovered” the music’s title rather accidentally. I was watching TV sometime ago and I came across Paul Potts and to my excitement, he was singing Nessun Dorma then as his award winning song. From there, I scoured the net, looking up for the name Paul Potts and finally discovered the music that captivated me for so long and last Sunday, I finally bought a copy for myself. Nessun Dorma based on my research over the internet (well, mostly at Wikipedia) is the one of the climatic song written by Puccini for his last play, Turandot. Turandot is a play about the story of a cold hearted “Chinese” princess who finally discovered love. Princess Turandot (the name is actually Persian in origin rather than Chinese but the play cast Turandot as a Chinese princess) is a strong willed and a cold hearted woman who vowed to never submit to any man however, her father, the emperor Altun wanted Turandot to get married at the soonest possible time. Eventually, Turandot relented to her father’s wishes on one condition, that the suitor should answer her 3 riddles. Turandot agreed to marry the suitor who will able to answer all the three riddles however, if the suitor failed to answer the riddles, he would be beheaded. And so, many young men came forth and tried to win the hand of Turandot but only to lose their heads. The last of these was a prince of Persia, he too failed at his task and was sent to meet his fate and it is here where the play begins. In midst of the commotion of the impending execution, a young wanderer came forth to see for himself what the commotion is all about and he chanced upon a blind old man with a slave girl who was shoved to the ground by the unruly crowd. The blind old man happened to be his father, himself a former prince and the slave girl was named Liu. Quickly, the young prince came to help up his father and father and son were rejoiced to have met up again. During the reunion, the young prince however, forbade his father to call out his name in public for fear of political persecution because of his past political ties. It is during this time when the gathered crowd witnessing the execution begged loudly for mercy for the unlucky Persian prince. In the middle of the clamor, Princess Turandot appeared in the balcony of her palace and ordered the execution to proceed showing neither mercy nor remorse (and witnessing for herself the execution). It is at this moment when our young prince caught a glimpse of this terrifying beauty of a princess and he immediately fell in love (call it love at first sight). And in his dazzled state, the young prince rushed to the palace door and strike at the gong, 3 times announcing to the world that he has taken up the challenge and at the same time, declaring his love for the cold – hearted princess. The crowd was shocked to hear the sound of the gong and equally shocked by the audacious stupidity of the young prince. At any rate, the palace door opened and three ministers, Ping, Pang, and Pong came to dissuade the young prince to give up his quest but to no avail and therefore, the three ministers led the young romantic to the court chamber to meet either his destiny or his doom. At the court, the young prince met both the emperor and the princess and proceeded to answer the 3 deadly riddles. The first riddle asked by the princess was, “What is born each night and dies each dawn?” To this riddle, the young prince easily answered, “Hope”. Unnerved, the princess presented her second riddle, “What flickers red and warm like flame but is not fire?” Now, the second riddle was rather difficult but nevertheless, the young prince prevailed after giving some thought for he gave the correct answer, Blood. Now, the princess was badly shaken and was rather angry when the crowd cheered for the young prince for now she presented her third and final and perhaps the most difficult riddle. “What is like ice but burns like fire?” It may seemed though that the princess has finally claimed another poor victim and our young prince has failed like those before him for he was unable to answer the question for a long time and then, just then the prince finally figured it out. He shouted his answer, “Turandot”! Shocked by the turn of events, Turandot fell on hers knees and pleaded with her father not to allow the marriage to take place but the emperor has spoken before and his word is the law of the land and he is bound to honor it. Seeing this, the young prince put forth a proposal to the princess. If the princess could answer by tomorrow morning the one riddle that the young prince would ask, the young prince would be willing to die but if the princess failed to provide the correct answer to the riddle, then she is bound to marry the young prince. Seeing her chance, Turandot agrees to the proposal and asked for the riddle, to which the young prince asked “What is my name?” In an instant, everyone was dumbfounded for nobody knew who the young stranger is. That night as the stranger was ushered to his quarters, the Princess Turandot sent out her guards with this explicit instruction, “None Shall Tonight until they find out what the stranger’s name is, if they fail by tomorrow morning, they shall all be killed.” It is in this context that our hero witnessing the frantic acts of desperation, that he sang “Nessun Dorma”. Soon afterwards, Ping, Pang, and Pong came to the chamber of our hero and offered him a bribe and asked him to leave during the night and so as to avoid the inevitable come morning but our hero flatly refuses the offer. It is not long afterwards that the guards brought in the blind old man and his slave for questioning since somebody have pointed out that the old man was seen conversing with the young prince. Running out of time and patience, Turandot have both of them tortured to reveal the identity of the stranger but none of them spilled the beans until Liu the slave girl in order to save her master and as well as repay the young prince for having smiled at her once (Liu is madly in love with the young prince) confessed to know the true name of the stranger. Liu told the princess that his name is “Love” and drove a dagger into her heart and killed herself. By this selfless act, Liu, now forever silent took the secret to her grave. The young prince on hearing the death of Liu was so enrage by the cruelty and the cold heartedness of the princess rebuked Turandot. However, he was also madly in love with the heartless princess that he gave her a kiss and tried to convince her of his true love for her. And in an act of love, he revealed to her, “My name is Calaf, son of Timur”. In this stroke of either ingenuity or stupidity, the young prince Calaf has placed himself in the hands of the princess for her to destroy or save. The next morning, the emperor Altun summoned the princess and asked her if she knew the answer to the stranger’s riddle and to which the princess replied, “yes”! “And what is his name?” The emperor demanded. Guess what the princess answered? “His name is Love”, that was the princess’ answer. Both Turandot and Calaf kissed and they eventually got married and lived happily ever after (as always the case in story – telling). Well, personally I think the storyline is quite bizarre (but I don’t know if the 19th century audience would find it bizarre as well or simply find it to their liking; I think it’s more to their liking). Then again, that’s the beauty of classical music. I mean, unlike modern pop music, which no one could barely “get” the message of the songs, classical music has an entire back story to rest on, which makes the song more enjoyable and entertaining. Enough said and speaking of Paul Potts, the guy is really one lucky Brit. Paul Potts used to be a phone salesman and rode a bike to work (based on what I heard) but he took his chance, his one shot at his dream and made it. He joined the reality show, “Britain Got Talent” (similar to American Idol and Simon sits as one of the judges there as well) and won with his rendition of Nessun Dorma. He became an overnight sensation and a darling in the internet circuit with his performances being shown in YouTube. Since then, he had begun his recording career and his album has become a certified platinum hit (if I remembered correctly). Furthermore, he also went on a world tour and last October 8, he came to town to perform his piece. I was never a music guy and I never dig going to concerts but in this case, I really liked to watch him sing. I really liked his rendition of Nessun Dorma. Unfortunately though, I wasn’t able to watch Paul Pott’s performance last Wednesday for no particular reason at all except for that I don’t have a date…….. (At least, Calaf has Turandot to listen to him sing).

Nessun Dorma

By Giacomo Puccini

Nessun dorma! Nessun dorma!

Tu pure, o, Principessa,

nella tua fredda stanza,

guardi le stelleche tremano d'amoree di speranza.

Ma il mio mistero è chiuso in me,

il nome mio nessun saprà!

No, no, sulla tua bocca lo diròquando la luce splenderà!

Ed il mio bacio scioglierà il silenzioche ti fa mia!

(Il nome suo nessun saprà!...e noi dovrem, ahime, morir!)

Dilegua, o notte!

Tramontate, stelle!

All'alba vincerò!

vincerò, vincerò!

Translation:
Nobody shall sleep!... Nobody shall sleep!

Even you, o Princess, in your cold room,

watch the stars, that tremble with love and with hope.

But my secret is hidden within me,my name no one shall know...

No!...No!... On your mouth I will tell it when the light shines.

And my kiss will dissolve the silence that makes you mine!...

(No one will know his name and we must, alas, die.)

Vanish, o night! Set, stars! Set, stars!

At dawn, I will win!

I will win! I will win!

PRICING HUMAN BEHAVIOR

2008-10-08T21:49:00.000+08:00

Quotes:
1. To be greedy when everybody is fearful and to be fearful when everybody is greedy. – Warren Buffet.
2. In business, it pays to be a cynic and a skeptic.
I remember this quiz I had in my Controllership class during my years in business school. The quiz was actually the first one in the said class. It was basically a sort of a review of our basic accounting knowledge, i.e., return on equity, leverage ratios, current ratios etc and our professor at that time gave us the previous year’s published financial data of the top 5 corporation in the Philippines as our test case. However, that particular quiz had a very interesting twist. I remembered that the last question asked in the quiz was which of the top 5 corporations we want to lend money to. I also remembered that the number 1 corporation at that time was Petron Corp which at that time is hemorrhaging badly and is deep in the red. The number 2 company at that time if my memory serve me right was Texas Instrument and MERALCO was like number 3. Anyway, all our financial analysis indicated that the number 2 company, Texas Instrument was the best choice to loan money to but guess what did I picked? I picked Petron! At the following session, the professor brought out the topic of our quiz and she frankly admitted that she was in a bind as to how to grade two particular answer sheets, mine and another guy’s paper. According to her, the correct answer was Texas Instrument (TI) which was quite obvious from our financial analysis but why in the whole wide world would 2 guys answer differently from the obvious? The other guy picked MERALCO and he reasoned that although MERALCO’s number were less than stellar compared to TI but her financial statement was by all means strong and furthermore, MERALCO has the stronger cash flow than TI, i.e., it is cash rich. So instead of crowding up at TI, a loan to MERALCO could prove to be more of a bane. Nice answer indeed! On my turn to defend my choice of Petron when I was asked the same question, my answer was relatively simple. Petron was and is still is partly owned by the government and it carries an express guarantee of the state on its debt obligation. Therefore, who cares if Petron was in the red, the government would simply pay the debtor regardless and from the state coffers. Although my answer was by and large practical, my professor rejected it and I scored the lowest at that quiz though I didn’t fail (at any rate, it was a minor setback; I eventually passed the subject with flying colors, 3.5/4.0; not bad for a non – accountant in an accounting subject). What was missing in the question at that time however was how much would we charge for the loan to our respective choice of company? For all practical purpose, Petron would probably be charged more for their weak balance sheet and if that were part of the question, I’m pretty sure that my answer would be the best one. Looking at hindsight, I can say that most of my classmates (99% of them are accountants by profession) at the controllership class are good accountants and auditors and nothing more. The other guy who answered differently is an example of a good value investor while I am the archetypal maverick Wall Street trader that everybody loathes nowadays. And this is my point, why would a guy like me (back then) and rest of the many who got “burned” in the latest subprime crisis would skirt the “obvious” safe choice and invest in high risk securities and end up in the mess that we are seeing right now? By the way, I didn’t get “burned” at all, I simply end up with the lowest score in that quiz taken years back but the great many lost their hard earn savings in this recent financial debacle. So what really is the cause? The answer is because of the need to maximize the return on investment. Put it simply, it is the “how much more could I get from the dollar or peso that I had invested be it in a financial instrument or in a business or in an asset?” It is human nature to want more “profit” for the little that we own. Nobody can blame anyone for wanting to maximize their return on investment. However, one had to remember that though almost everybody handles finance, very few do actually understand what finance is. Finance is not simply about managing returns. It is as much of managing risk as well (and allocating funds and managing cash flow). Finance is not just getting more bucks from what we have or maximizing return. It is also making sure that that buck is safe or in short, minimizing risk. Taken in this light, it puts the very idea of maximizing return in jeopardy. How we could maximize return if we are constrained by risk? For how could we be sure of getting that much money given the risk? And this is where the “magic” of Wall Street comes in. That “magic” is called pricing models, the pricing of human behavior and the human behavior in this particular case is Greed. Most people have a “healthy” appetite for risk, i.e., for a certain limited range of risk, people are willing to take their chances (if that didn’t happen, you won’t see people getting married). And for every risk, there is a commensurate return. The bolder ones getting rewarded with better pay offs. However, for huge risks, 99.99% of the people are avoiding it even if the return “commensurate” with the risk involved and one doesn’t need financial analysis to come to that decision. However, Wall Street has managed to skewer the risk appetite curve towards risk taking bordering on gambling and they do this by simply offering “bigger” return on investment, much bigger than the “commensurate risk” which in essence is stoking greed. Such is the case of the current sub – prime mortgage financial crisis wherein investment banks package mortgages with poor credit quality into a high yield debt instrument and resell it to investors looking to maximize their return. And as these sub – prime mortgages fumble under the weight of a falling economy, the debt papers backed by these mortgages became essentially a worthless piece of paper. This has in turn, triggered the massive selling of these debt instruments or calling in of these debts issued by some of the most venerable Wall Street institutions resulting into their bankruptcies and eventual demise. Alas, Wall Street has done what behavioral scientists had failed to do, that is to quantify or more specifically, to put a price on a human behavior – greed. Essentially, this is the same mechanism employed in pyramiding schemes. Greed however is not the only human behavior that is explicitly witnessed in these turn of events. Panic is one. Panic is the extreme fear that defies logical reasoning. By logical reasoning, it refers to logical financial reasoning and this is quite funny because how does one expect people to be logical and reasonable along the established rationale of a financial analysis when the rationale of their decision has turned from one of maximizing return to that of preservation? Interestingly, unlike greed, no one has priced panic yet. Perhaps somebody already did if one considers the bailout package as the ultimate price of panic. But then again factoring panic into the price decision could very well prove to be useful. I mean in regular appraisals of assets to be mortgage, most lender would only lend out a portion of the total value of the asset in question. The difference between the actual value of the mortgaged asset and the loan amount is the buffer that lenders seek in order to protect them against a devaluation of the mortgaged asset in case of a default and the ensuing fire sale. However, in times of panic wherein the price of the assets in a defaulted mortgage would precipitously dropped below its reasonable fair market value, lenders stand to lose because they wouldn’t be able to recover their money through the sale of the asset in a defaulted mortgage. Henceforth, pricing “panic” is essential if one is to stay afloat in times of market hysteria. However, there is an inherent difficulty in pricing panic since the rationale is no longer that of obtaining a return on investment but on securing the investment. Would somebody buy a $1000 asset for just $100 in a panic market especially when that person has been “burned”? Most likely not. After all, a dollar in cash is better than a dollar in a risky security. But what if the same $1000 asset is sold for say $10, would somebody buy? What about if it were sold for a dollar? If one can determine the discount from the fair market price of an asset that would entice a jittery investor to purchase the said asset, we would have our price on panic. Opposite panic, we have euphoria which in a not so long ago time, is the prevailing mood of the market. I remember before during my early days in business school, the fair valuation of a corporation’s common stock trading in the market was 15 times the projected future earnings of the said company. By the time, I’m halfway through MBA, that multiple has jacked up to 22x average with some valuation going as high as 30 to 50 times (that is during the internet bubble era). Furthermore, the valuation then is no longer based on projected earnings, which is properly defined as net income from operations after tax and interest and after deduction of one time charges. Instead, the market back then was talking about pro – forma income, which was accordingly defined as income from operations before tax before interest charges and before deducting other charges which was a very “creative” way to define profit. At any rate, how do we valuate euphoria or in the former Fed Chairman Alan Greenspan’s word, irrational exuberance? But before we could price euphoria, we have to define what a fair valuation is. Is 15x, 22x fair? This is aside from the fact that each analyst employing different methodology has their own forecasts and projections, which then should be used for valuation? So many questions, so little answers and this is basically why market swing and swoon. This is also why some people make money and some people lose money. All because of the volatility of human behavior and our inability to accurately price them for our own sake.

DIAMONDS ARE FOREVER

2008-09-28T16:55:00.000+08:00

Last Friday night, I bear witness to one of life’s most unforgettable and endearing moments, that of my grand uncle’s (mother side) 60th wedding anniversary. The event was actually a family affair, an extended family affair to be more precise. All known family members and relatives were gathered together to celebrate the unwavering union of two people that has lived through life’s thick and thin, in sickness and in health, in prosperity and in trying times, through war (World War Two) and tumult for the last 60 years. As the night progresses, we were treated to the visual retelling of their family history, as well as story – telling, songs, and poetry recitals by my grand uncle’s grandchildren (I’m not included by the way). There was such warmth in the affair that one would feel that one is all part of a big happy family. Speaking of family, my grand uncle has six kids, all grown up, married, had kids and had stable careers or business. One of the grandchildren has actually gotten married and if things went well, my grand uncle and grand aunt could very well be a great grandparents soon enough. Anyway, the climax of the affair was really the visual retelling of their 60 years of being married to each other and the surprising thing was it was not about the vacations that my grand uncle and grand aunt spent together nor about the things they do together rather the highlights of their married life was all about their children, all six of them and their grandchildren. One could see all those pictures of my mother’s cousins growing up from their baby pics to their kiddie years then to their high school grad pics, then their college grad pics, then to their wedding picture, then the birth of their children (the grandchildren). All this seemed surreal because everything seemed to have happened in an instant. 60 years in just an hour. I can’t tell what my grand uncle and my grand aunt were thinking that night but I bet they were probably reminiscing about the past, the whole 60 years and how they have “breeze” through it. They may be thinking about their concerns in the beginning of their shared life, of their worries of their kids, their future, the next day, the next month, the next year, the year after that, the next ten years……. Of their hopes and dreams, of the hardships and joys that they been through. All of these now are moot to them and maybe, they will find that at times that it was silly as their worries back then are unfounded. I don’t know either if they are satisfied with what they had done for the last 60 years together or that they just simply feel elated neither do I know if they felt that they had lived a wonderful 60 years together and counting but for everybody else at the party that night, my grand uncle and my grand aunt do live a wonderful life so much so that one, actually I felt that spending my life with somebody I love and care for the next 60 years is worth it and to look back at it afterwards………. My grand uncle and my grand aunt are two of the luckiest person that I known and I wish that I’ll be that lucky.

POLITICS OF PAUPERIZATION

2008-09-18T22:16:00.001+08:00

Quotes for the day:
1. Politics of pauperization: Politicians nowadays are pursuing policies that tend to pauperize the populace in order to guarantee for themselves an audience for their populist rhetoric.
2. There is no greater insult to the poor than to remind them of their poverty.
3. There are those who inspire people to become better and bring the best out of ourselves while there are those who kept reminding us about the worst that we are.
4. The present is the new past and the future is the new present.
I was passing by the old neighborhood where I grew up in Manila sometime last week and I was taken aback by the marked scene of deterioration. Gone are the neighborhood pananderia that I used to buy pandesal as well as the botika where I bought my medicines before. Disappeared as well were my old neighbors, Mr. Lim, who runs the neighborhood hardware store and Mang Roger, who owns the barber shop where I used to cut my hair when I was child. In its place are old dilapidated buildings and torn down houses and the stench of decay that is very much evident in the air. What happened to my old neighborhood? What led to its creeping destitution? Well, it is plainly obvious for everyone to see that it is our government who is to blame for our lot. While in other countries, skyscrapers being built every day, in our country, they are left to rot. Why the stark difference? Well, that’s bound to happen if we elect people who are more interested in getting elected than in getting things done. All you hear nowadays from politicians were how much they sympathized with the poor; how their heart bled for them; how they would endeavor, if elected to protect them; and best of all, how they would hand the poor “dole outs” as if they are beggars asking for it, which they are not. Gone were statements of hope, of encouragement, of visions of a better nation, of a future filled with opportunity and success. I’m no fan of Marcos but we do have to admit that despite his corruption and cronyism, the guy does have a vision. For since when after 1963 do we again hear the slogan, “This Nation Can Be Great Again” (in spite of what he promised, Marcos failed miserably in his “mission”). We, Filipinos are not really a hopeless lot. For given an opportunity, we Filipinos, like the rest of the world could rise from our station. Just look at the Filipino emigrants who made it around the world. They’re quite aplenty. Speaking of emigrants, it is quite funny that our emigrants could succeed in a country that is not theirs own yet they couldn’t succeed here in their native soil! Well, this is simply because there is no opportunity in this country! Such tragedy! Politicians, instead of enacting policies that provides opportunity and allows equal access to such opportunity for Filipinos are more focused in pursuing policies that provides charity. Charity, however can only sustain that far. Beyond that, life is pretty much the same, hopeless. For those who didn’t want to be trapped in this quagmire, emigration seemed to be a logical choice. As such, the exodus to a foreign land in search for a better life continues. With the flight of those who are capable of leaving and the persistent lack of opportunity plaguing those who are left, it is no wonder that urban decay is becoming even uglier. And that is what happened to my old neighborhood.

WIKIPILIPINAS

2008-09-16T20:46:00.001+08:00

In my visit to the 29th Manila International Book Fair the past Sunday, I came across a booth that is promoting a new web site aptly named, WikiPilipinas (www.wikiphilippines.org). As one might guessed, this web site follows the concept and format of the popular Wikipedia. Whether or not, WikiPilipinas is an offshoot of Wikipedia or has some form of relationship with the latter or it is an independent non – affiliated web site, I never know. Anyway, what is important to discover here is that we now have a dedicated information center cum online encyclopedia about the Philippines. And it’s about time. I mean I’ve visited Wikipedia almost every day but I came across only with a few articles regarding the Philippines, it’s culture, it’s society, and it’s personality. Now we have a website dedicated only to the Philippines exclusively! Immediately after I came home from the book fair, I proceeded to visit the WikiPilinas website and my first impression about it after reading some of its article is that it is quite staid, neutral, and overtly generalized lacking depth at times when compared to the other articles in Wikipedia, which are more in depth and presents a totally different perspective and view from what is the generally accepted “truth”. Another thing I’ve notice about WikiPilipinas is that of all the articles I’ve read in it, it is 99% similar to the same articles posted in Wikipedia. This either suggests some affiliation with the latter or simply somebody just cut – paste and copy the whole enchilada from Wikipedia to WikiPilipinas. However, WikiPilipinas do have some notable differences with Wikipedia and this pertains to the category of Philippine restaurants guide and hotel guide although, again the article is rather staid and neutral; nothing helpful. Anyway, after visiting the website, I had to admit that I can’t contain my excitement. Finally, we have an online encyclopedia for ourselves. It made me feel proud being a Filipino – Chinese. In addition to that, I suddenly felt this urge to contribute to the “cause” – of enhancing the image of the Philippines and the Filipinos through WikiPilipinas. However, I am stumped by a single thought; what would I write about? I mean writing an article for WikiPilipinas is akin to writing a blog with one notable exception. In blog writing, the articles are highly opinionated – my opinions about world around me. In Wikis, the articles are not opinions but facts (if one were to stay true to the concept of an encyclopedia). This is the fault of the original Wikipedia, a lot (not all) of the articles I came across sounded like an opinion, which are at times inaccurate and often debatable. The spirit of Wikipedia is that let the “best qualified person” (which in a conventional encyclopedia refers to the best among the experts) writes the subject matter that they know best and let the whole wide world decide on the “accuracy” of such written article. But the point here is that not all people are well versed with the subject matter and with opinions disguised as facts, many are misled. So how do we root out “heresy” from the facts in this situation? How can we “decide” as a collective on the “accuracy” of the written articles if we are not well versed with the subject matter in the first place? (In some Wikipedia articles, some authors would create a section in the article that contains the “controversial” aspect of the subject matter and hence allow a more balanced point of view). So in short, what I need in order to write an article for WikiPilipinas are (1) it should be factual and not fictitious and it should have a credible basis, (2) it should be accurate and if it is debatable, (3) it should offer a balance view point. Well, given that criteria, the only article that I can think of writing is actually my own autobiography but writing an autobiography in Wikis would be the height of narcissism and vanity. Anyway, I am still figuring out on what to write on WikiPilipinas. A book summary perhaps? But it should be Filipino books which I admit I have read a little. Or a Filipino all time favorite dish recipe? But I don’t know how to cook except for the simplest of dishes which I even wonder if it has any semblance of a genuine Filipino cuisine. Hmmmm, tough decision! Anyway, I enjoin any Filipinos be it Pinoys or Chinoys reading this article to actually take up the “cause” and write something for WikiPilipinas, it is after all about us.

BOOK LOVERS ALL

2008-09-15T23:42:00.000+08:00

“One’s work maybe finished someday but one’s education never.” - Alexander Dumas

Went to the 29th Manila International Book Fair yesterday at the new SMX Convention Center and boy, what an event! The place is teeming with books and jam-packed with people – book lovers like me! I spend 4 hours going through the shelves for books and in the process bumped into several people, mostly my old classmates at MBA, relatives, business colleagues, and a high school classmate. I actually never expected to meet a lot of “old friends” in a book fair because I had this notion that “not great many” people read books. To say that I’m happily proven wrong on this is an understatement. In fact, I’m pleasantly surprised to discover that book fairs could be a place not only for looking up for new books but also to look up for old friends. Books sure can draw people together. Anyway, I was only able to buy 2 books from the fair not because I didn’t find any interesting books on display but on the contrary, I felt there are a plenty to buy this time around. The only problem is the book merchants don’t accept credit cards except for hard cold cash. The two books I bought is already worth around Php4,480 (which brings my total book purchase for the month to close about Php8,000). It actually burned a hole in my pocket and I actually had to break my bank – my long dormant ATM account just to buy the books. Anyway, it’s actually a good thing also since I might end up with books that I would regret buying. The two books I bought are: “Competing in a Flat World: Building Enterprises for a Borderless World by Victor Fung et al” and “Factory Physics, 3rd ed by Hopp and Spearman”. The first book is published by Wharton School and is hard bound while the second book is published by McGraw – Hills. With these two latest additions, my total book holdings now tallies at 249 plus the 62 college books that I had in my possession; all in all, my mini – library now holds 311 books (that is excluding my other siblings book holdings). I made a quick survey of the books I had and discovered that of the 249 books, I had only read about close to a hundred which leaves me with about 150 books yet to be read. As of now, I’m on my sixth book in my reading list and assuming that I could finish 10 books a year (with each book containing about 300 pages or more, or roughly 3000 pages to read in a year). The 150 books remaining would take me about 15 years! In short, I would be able to finish reading all my books I had right now before I turn 50 assuming of course that I stop buying books or attending another book fair from this moment on for the next 15 years, which is highly unlikely I supposed. Ahhh, so many books………. At the rate I’m buying books, I would probably be able to set up a public library sooner than later. Not a bad idea, though that entails a place and a librarian which means additional costs…….. Oh well, I guess I would keep the books to myself to read in the meantime.

P.S. The 29th Manila International Book Fair is held in SMX Convention beside the Mall of Asia and will end on September 16.

NOT ANOTHER MANAGEMENT BOOK ON SUN TSU

2008-09-05T21:59:00.003+08:00

I went to a book buying spree a few weeks back at Fully Booked at Serendra. It’s been quite a while since I went into a book buying frenzy for I spent more than 3000 pesos for 4 books that Sunday. Anyway, in the course of my shopping spree, I came across an entire shelf in the business book section filled with management books based on Sun Tzu’s Art of War. Not that I have anything against Sun Tzu’s Art of War or the authors who “distills” his genius into management principles but I hardly find the idea of Sun Tzu’s Art of War as a management book appealing if not outright preposterous. I mean The Art of War is a book about warfare, period and nothing more. Even if the wisdom contained in the 2000 year old book is timeless and applicable to basic business management, still it is out of its context and premise when it is applied to business. The primary reason people used The Art of War as a management book is because of the seeming similarity between warfare and business. In both arenas, it’s about the battle between two opposing forces vying for dominance with each marshalling their resources for the inevitable titanic clash and by logic, if The Art of War can be successfully applied in the battlefield, then why not in the bloody dog eat dog world of business. It is quite a strong and convincing argument indeed. It is not only The Art of War that is being used in “discovering” enlightened management truth; other military thoughts mostly in the form of military maxims are useful as well. In the words of the imminent management “theorist” Henry Mintzberg, the very first and oldest school of management thought is the school of military thinking exemplified by the famous military maxims that we came to learn about. However, though military maxims make good management principles, they hardly constitute good management at all, i.e., you can’t simply piece together a coherent management philosophy by piecing together military maxims. This is where The Art of War comes in. Unlike military maxims, the Art of War represents a coherent philosophy and not just some chop – chop thinking on how to fight a contest between two adversarial forces seeking dominance but that’s where the similarity between war and business ends. In warfare, the contest is basically a zero – sum game, you either win or dead, nothing in between. Even in victory, there is always casualty – corpses littered in the battlefield. It is in these circumstances that Sun Wu wrote his treatise in the Art of War. How to win a war without actually fighting a war? How to transform war from a literal fight to the death into a battle of wits, of maneuvers, of stratagem, of tactics? And his answer is simple - - - deception. The art of war is the art of deception. Sun Wu if he were alive now would have told anybody about that straight forward. You feigned, create diversions, launched a propaganda campaign of misinformation, psych out your enemy such that your enemy would be clueless about your motives, misread your intensions, misjudge about your plans and as a consequence cloud his thinking, lowered his guard, and fooled into making a wrong decision that expose his weak side for you to exploit thus handing over to you an opening, an opportunity, and ultimately victory if you’re not stupid enough to have bungled it. That’s what the Art of War is all about. The game of business on the other hand is not a zero – sum game not like war. And unlike war, there is an arbiter between feuding business competitors – the consumer. Lest one forgets, business is about satisfying a need or want of a consumer within his paying capacity. It is about providing a choice for the consumer to choose and in the process becomes The Choice. The objective of business is profit which in the simplest description is the difference between the revenue exacted from provision of satisfaction to the consumer and the resources expended to provide such satisfaction. The central premise in business is efficiency. The more efficient you are the more profitable you are. In war, we can’t talk about efficiency, for how we are going to define efficiency in warfare? The ratio between the number of soldiers killed versus the number of enemy killed? That sick. The objective of business is profit which hinges on efficiency meaning maximize the gain at the least cost possible. The objective of war on the other hand is nothing but the gain itself regardless of the cost however pyrrhic it can be; be it territorial conquest, strategic advantage, prestige, tribute or any perceived economic benefits. And this why I never liked the idea of Sun Tzu as a management philosophy because it is really out of the context and not in synch with the premise of business. If you’re anywhere good with deception in war, you’re a good commander; if you’re a master in the art of deception at war, then you’re a freaking military genius. Now, if you’re really damn good at deception, you’re a bloody god of war. In business, if you’re good at deception, you’re probably dishonest. If you’re a master at it, you’re a shrewd businessman but if you’re damn good, you’re a con man not a businessman.

CHANGING PHONES

2008-08-23T23:41:00.001+08:00

Bought a new phone 2 Sundays ago to replace my aging and dilapidated Sony Ericsson P900. I didn’t purchase a new phone out of mere fancy but rather, I did so out of no choice. With scratches here and there, chipped edges, and crack keypads, using my P9 has increasingly become difficult even tortuous at times. And so with a heavy heart, I had to forego my old phone, my favorite phone. I love my P9 because it is the only phone that I actually “bought” for myself. Don’t get me wrong but I had phones before my P9 but I didn’t actually “choose” those phones. Rather, I rely on my brother’s or my sister’s recommendations on purchasing a new phone. You see I’m not what they call a “gadget enthusiast” and frankly to me, a phone is a phone is a phone. As long as it could make a call and send a text message, it’s a “good phone” for me regardless of the model. All that changed when I bought my P9. I like my P9 because of its metallic casing and the fact that they advertise it as a PDA phone for the executive and I’m a sucker for such (It turns out that the P9 is the cell phone of choice among DLSU MBA). Anyway, one of the most important reason I liked my P9 is that my P9 has a “Jotter” function, which is actually a notepad for me to write anything I want and that is important to me since I had a habit of scribbling down my thoughts whenever it popped up (I have a notoriously poor memory). Way back in high school, I came across with “famous quotes”, those “sacred” words of advice that came out of the mouth of the “sages”. I immediately fell in love with it and I began to earnestly find and collect these quotes. By the time I’m in college, I was not only collecting quotes but am also writing a few of my own (which I term “my thoughts”). Back then, I always carry a pocket size notebook that fits my shirt pocket to write on (a bit of ancient history; back then, there was no handheld device to use to write down my thoughts, cell phone were just in the drawing board and I’m the only one in class who carries a pager, “Easycall”). After college and for sometime in business school, I stopped writing down “my thoughts”. It is not because I ran out of ideas but because I don’t have anything to write on. I got tired of “carrying” a notebook (in fact, I never did bring anything to business school except for a ballpen). And it is under this situation that I got my P9 and it is why I loved it. For 4 years, my P9 was my companion in solitude, my confidante in silence. And now, when I am changing my phone and transferring my P9’s content that I realized how much my old phone has kept much my thoughts over the past 4 years. These thoughts are very personal to me. They are the very crystallization of my thought process and I’m sharing it to those who want to listen.
05/03/04: Life doesn’t wait for anyone. Take charge and siege the day.

05/05/04: Life today is not an abrupt jump from yesterday but the summation of the gradual accumulation of evolutionary changes that happen in the past.
Elaboration: Events or things don’t happen out of the blue or suddenly or dramatically. Instead the seed is sown way, way before in the past and builds over the years until it becomes “noticeable” to the extent that it is abrupt, sudden, and dramatic. If you want to be a step ahead, notice the little things along the way and be prepared for it for these small incremental changes would become a major event in the future.

05/08/04: The 4 models of “perfect man”
1. Confucius’ “Sage – King/Gentleman”, a morally upright but aggressive man.
2. Plato’s “Philosopher – King”, a logically thinking political/military leader.
3. Machiavelli’s “Prince”, a legally upright but ruthless leader.
4. Nietzche’s “Superman/Caesar with a Christ’s heart”, a compassionate but ruthless and aggressive man.
The underlying theme is balancing compassion with aggressiveness or to be an upright aggressor.
Elaboration: Different philosophers in both east and west have different conception of what is a superior man but strikingly, all of them tend to advocate a man who is aggressive but is within the bounds of human compassion. In short, aggression isn’t really wrong as long as it within a certain bound.

05/08/04: Everybody loves a hero, even the rich but especially, the poor and the weak.
Elaboration: Actually, I was I think reading about American history then in Wikipedia and I was reading about President Andrew Jackson, a populist in his time and I was comparing that to the electoral situation in 2004 wherein candidates are turning to populism to win elections and that middle and upper class rhetoric are riling strongly against “dumb” populist candidates who are perceived to be incompetent and incapable but what little they know that election is not about choosing capable leader but rather it is about choosing a “hero”. The Americans are very good in choosing heroes for presidents as in the case of Andrew Jackson.

05/10/04: The problem with Filipinos is that they justify poverty by saying that we could not bring our wealth to heaven once we’re dead. Because of that, they forego work in favor of other people’s charity. It’s a stupid excuse for indolence and lack of ambition or goal in life. I do not for all intension want to bring my money to my grave but to use it to enjoy life and best of all, bequeath it to my children.
Elaboration: I am sick and tired of hearing the popular Filipino phrase, “if you are dead, you won’t be able to bring your money to heaven.” At first, I thought this is some self content ideology being preached by the church to the believers to calm down their “greed”. In short, it is a religious thingy. But the more I hear that phrase coming from “poor” Filipinos, the more I realize that Filipinos are using that as a justification of remaining in poverty. They seem to say, it’s ok to be poor since I won’t bring my money to heaven after I die and everybody dies, therefore what is the point of earning money?

05/11/04: Love is all hype and overrated. When you’re with someone you love, 80% of the time you’re miserable while 20% of the time, you’re happy. But somehow the relative short period of happiness outweighs the miserable 80% and made it more tolerable and even worthwhile.
Elaboration: Funny thing about Love is that although it hurts a lot, we continue to ask for more and I think this is the reason.

05/15/04: On the 2004 elections, the aristocratic elite and the “masaphobic” middle class relentlessly criticize the illiterate and ignorant “masa” for supporting an “uneducated” and “unqualified” candidate. As the election outcome shows, the so called “masa” are not blindly stupid. They elect persons who are perceived to be their “hero” or champion. Persons they perceived to protect their interest rather than those who have the capabilities or leadership qualities. Come to think of it. It’s a wise and logical choice.
Elaboration: This is what election is all about. It is not electing a capable leader but rather electing a person that one perceived to be “in the same interest as ours” and therefore would without hesitation protect our rights. This is the original concept of democracy and elections and not in choosing a capable leader because if we were interested in capabilities then we don’t have to go through an expensive election to find out who is the more capable one. We could simply have a national examination open to all or an IQ test or a quiz bee contest to find out who is the more capable one and we could be sure about the result, I mean numbers (test results) don’t lie. If that is the case, I’m sure I could be president someday.

05/15/04: The new model of a perfect man in the 21st century is The Perfect Competitor or The Competitive Man.
Elaboration: This is my proposal for what is a superior man, The Perfect Competitor, a man who aims to win in competitions of any form but observes the rules of competition.

05/27/04: Conflicts happens whatever one do. It can’t simply be avoided nor prevented from happening. Instead, conflicts could be managed to minimize the negative impact and to gain the benefits of it. Therefore, a conflict management system should be in place to manage conflict. Failure to manage conflicts would lead to emotional distress and loss of control initiative.
Elaboration: When I was a lot younger, I tried to avoid conflicts. In fact, I abhor them. But as I grew older, I realize that conflicts cannot be avoided or eliminated. It just happened and it is as natural as breathing. And I came to understand that the best way to face conflict is to manage it.

06/03/04: Little people read the news. Great men make them.

06/04/04: Due to advancement in communications and transportation technologies, executives’ span and reach of control has greatly expanded. As such it is possible for governments to remove all together the middle level of local government, e.g., towns, municipality, and even provincial government without hampering government’s efficiency. In this way, the government can undermine the power of the local elites and prevent centrifugal tendencies.
Elaboration: Again, I was reading about history and the growing complexity of governance with the development of multiple layers of local government i.e., village, towns, city, province, and region etc. Governments of the old had to rely on the local elite in order to be able to enforce their effective rule. It is ironic that governments had to decentralize in order to achieve centralization. All that would change in the advent of newer communication technologies. Centralization could be achieved without compromising local interest. Anyway, this not only applies to governments but also to all form of organization including business organizations.

06/07/04: Cosmetics and beauty is very important to women as sex is to men.
Elaboration: I really can’t fathom why women would go agog over cosmetics except for this comparison.

06/12/04: Frameworks, especially theoretical business frameworks are a guide to logical deduction of a situation leading to its logical conclusion. However, this is by no means should be a stifle to creativity and a chain to creative thinking.
Elaboration: As a graduate of business school, I am trained to use frameworks to analyze and ultimately arrive at a decision but sometimes I felt stifled, for I am constrained to think a certain pattern. In short, I’m no longer thinking “out of the box”.

06/15/04: Life is like a conveyor. It brings you there when you least expected regardless if you are ready or not. Regardless if you wanted to or not, you have no choice but to face it. Whether you have a plan or not, you have face it, react to it even without finesse. However, we still have a choice on which conveyor we want to be in.
Elaboration: There are things in life that you don’t have a choice or that the only choice you have is yes or no and not whatever but there are things in life that we could choose specifically, the path we would want to go and as in the poem, “The Road Less Travelled”, that makes all the differences.

06/25/04: Emotions like anger are neither positive nor negative. Emotions are what make us human. The only problem with emotions is how we handle them or react to them. Emotions can cause us to behave irrationally, lose our focus and objectivity, and blinding us form thinking logically. Then again, emotions expertly handled can be a powerful motivator and a potent force for change. History could be said to be a story of a lot of angry people, angry of the status quo, of injustice. This causes revolutions that finally change the course of history.
Elaboration: The funny thing about reading history is that emotions had never quite figure in the development of events in history (at least that is how history is being narrated). Ironic because history is about the story of human beings and human beings are creatures of emotions. Furthermore, there are many of those who think that emotions are a liability to us humans (I was one of them before). I mean you get emotional, you do crazy stuffs that one would regret in the future. But thinking again, emotions are not bad. It is what makes us human without which we would just be some organic 386 computers attached to a loudspeaker. It is emotions that drive us, that make life “spicy” and colorful.

06/27/04: History repeats itself. It has repeated itself. It is repeating itself as we speak and it will keep repeating itself again and again if we don’t heed the lessons of history and remain vigilant about it.
Elaboration: A historian has the ability to see events or progressions of events beyond one’s lifetime. He could compress thousands of years of history into one gigantic panoramic view. And what is particularly distressing to a historian is that that picture is familiar to him because it is happening now. Not everybody is a historian and most people have a very short memory. As humans, we have the same need, the same want, and ran amok by the same emotion. And when we are faced by the same challenges, our choices for a solution is indeed very limited given the same need, want and emotion. As we such, we keep on making the same choices over the same problems and this in turn produces events that warrant us to make the same choice over again and again. That is how history repeats itself. The only way, we could “break” this cycle is to learn from the lessons of the past.

06/27/04: Life is all about inches. Crawling forward inch by inch and fighting every inch of it. – Al Pacino in “Any Given Sunday”.
Elaboration: “Any Given Sunday” is a football movie starring Al Pacino. The quote is an analogy of life and the game of football.

06/28/04: Westerners and many other people who believes in Christianity or the likes always personify evil as in good and evil are two entities battling each other for dominance. The objective of one is the total annihilation of the other. In this kind of thinking, a person could actually be 100% good. What is puzzling here is that the other cannot exist without its opposite after its destruction. How can we know to savor “goodness” when we can no longer abhor evil? How could we value life if there is no death? Good and evil exist as one in everybody and not separate. It is a result of choice. Hence, evil cannot be destroyed but avoided or suppress. If evil were to be “vanquished”, the lesser good will become the next evil.
Elaboration: The underpinning of this thought is the ancient Chinese philosophy of Ying and Yang, the concept duality of nature wherein one contradicts the other and also needs the other to exist. It is futile to totally remove the other from existence, instead, it is worthwhile to accept its existence and make a choice.

06/28/04: Faith is the individual belief of the human spirituality while religion is the organize worship of such faith manipulated by a malevolent genius.
Elaboration: Religion is an organization complete with a hierarchy and a doctrine. Faith is simply believing.

06/28/04: We humans live in a culture of death. We define our existence based on our impending doom. It is funny that people lived to prepare for their inevitable death.
Elaboration: Some people are obsess with leaving a legacy of their existence and spend a lifetime achieving it while others are into worshipping a supreme deity in order to ensure they have a “nice” afterlife and spend every minute of their existence to attain it but what happened to living the “now”?

07/03/04: Who are we to determine the fate of another person? By firing someone, we take away their financial income, their food, their hope and happiness. However, if we do not exercise the power, we could end up at the disadvantageous end of the deal. It’s killed or be killed. Sad but no choice.
Elaboration: The hardest part of being a manager to me is firing people. It sucks but there is no way around it.

07/16/04: What is the value of infinity? If we could determine the value, then we could be gods! To our forefathers, hundred, thousand, millions, billions, and trillions are mind boggling and for all practical purpose then, equal to infinity. To us, those figures mean nothing. We aren’t going to be mind boggled at all. Infinity is a limit and a barrier. Putting a value to it meant that we have overcome a limit.
Elaboration: Infinity is a concept. It signifies that things are unreachable, things that are unfathomable. If we could mentally convince ourselves that it is reachable, is everything else impossible?

08/01/04: Don’t be afraid about the end of a chapter, there is always a next chapter. Don’t be afraid about the end of a story. There will always be a new story. Don’t be afraid about things coming to an end, there is still tomorrow. The sun still comes out tomorrow. There is still life tomorrow. There is still hope.
Elaboration: Sometimes we have a hard time facing the end be it in a relationship, a career, a project, or even a book. To the extent, we can’t see what is beyond the end and that we get afraid of the coming end and we tried to delay it but we had to realize that things do comes to an end and that there is life after “the end”. Just move on.

08/27/04: We can’t win everything nor we have to in order to be victorious. We just need to win the more important ones. We can’t have everything but we don’t need everything to be happy. We just had to have the most important things in life.
Elaboration: Sometimes we do things just for the sake of doing it without realizing that we don’t have to do everything to make us happy.

08/27/04: Money isn’t everything but it buys ALMOST EVERYTHING ELSE. That’s good enough for me.
Elaboration: The quote, “Money isn’t everything” is a good quote except that when it became an excuse for being “lazy”. Remember, money may not buy you everything but it does buy you the rest of the things that can be bought.

08/29/04: Don’t judge a book by its cover, judge it by its content. However, for a reader who haven’t read or seen the book, it’s the cover that entices them to read the book and judge them later.
Elaboration: In the end, presentations and first impressions do counts regardless what other people say.

08/30/04: The meaning of life:
1. Life ends and continues.
2. Life is everything that happens between birth and death.
3. Life is the one possibility to have a million more possibilities.
4. Life could be a meaningless 4 letter word or a vivid and lively 100 discs DVD or an interesting volume of books.
Elaboration: If you lay dying and suddenly a genie pops up from nowhere and wants to give you one last wish, what would be your wish?

09/03/04: I have a lot of teachers that taught me about knowledge and skills but only a handful of them that I consider my mentor that inspire me and taught me about life.
Elaboration: Once in a lifetime, there comes a person that teach you not only knowledge but also wisdom. Cherish it.

09/03/04: Even geniuses need an inspiration and a mentor.
Elaboration: Some people needed a guide to get going in the “right” path while others simply needed someone to point the way.

09/06/04: There is no crueler fate than a man with a broken will and has lost hope.

09/06/04: There are things that changes and there are things that doesn’t change at all. There are things that changes which you can’t do anything at all. There are still things that change which you can choose what it would be let alone choose not to.
Elaboration: Sometimes change happens when we least expected and we have no say at all but there are times when changes are laid before our eyes to choose. Make a choice.

09/17/04: Leaders are individuals who make ordinary people do extraordinary things, Andrew Grove
Elaboration: The classic definition of a leader, the ultimate motivator.

09/17/04: It is extremely important that you show some insensitivity to your past in order to show the proper respect for the future. Robert Goizueta
Elaboration: Sometimes, the past can be a burden especially a glorious past, for this “past” becomes a sort of a formula of success and henceforth, shapes our expectation, which in turn constrict our freedom of action to craft a “creative and effective solution” against future challenges that is totally different from anything in the past.

09/17/04: Indifference kills an organization by making it less susceptible to change and thus unable to adapt to its environment.
Elaboration: The theory of challenge and response of Arnold Toynbee states that civilizations that still exists up to this day and would continue to exist in the future were able to do so because these civilizations had an effective response to the challenges that threaten their survival. Individual indifference in my point of view tends to make us individually “numb” and shrugged off challenges that threatened our collective existence and this would in turn hamper our collective response which would eventually result in our demise.

10/23/04: The only thing that separates me from my glory, my success, my goal, my future is me.
Elaboration: I am my worst enemy.

10/23/04: There are many revolutions in history like the industrial revolution wherein technological breakthroughs comes in droves within a 50 to 70 years span. The developments afterwards are merely innovations. We are now seeing the end of a revolution that of the computing revolution. A new revolution has dawned and that is the genetic revolution. Elfren Cruz.
Elaboration: Well, this is the topic of my professor’s discussion during one Christmas party. He was talking about the world we’re living in from a historian and a businessman’s perspective. We are currently living in an exciting time, a world between two revolutions, the end of one and the beginning of another.

10/26/04: The best thing a friend or a sibling or a parent or a spouse can do to a person he/she loved and cared is to believe in the person even if the person doesn’t believe in himself or herself.

11/03/04: You can outwit a competitor but there will always be competition.
Elaboration: There are times when we so hate our competitor that would do everything to “demolish” our competitor but lest we forget, competition exists and will continue to exist even if you manage to run your competitor aground.

11/08/04: The system of checks and balance is never meant to be a replacement of morality but a reinforcement.
Elaboration: In reading the history of democracy, the reason that political thinkers of the time came up with the idea of checks and balance is not to replace public morality totally but to make sure that all those in power to conform to the establish public morality by having someone “checking” the other. It was never meant to replace public morality of the ruling elite much like in our case right now in the present.

11/16/04: I exist therefore I matter.
Elaboration: Rene Descartes has a famous conclusion from his mental exercise, “I think therefore I exist.” But my question is, “do we only live to exist?” This is not some theory on predestination wherein everybody has a role to play in this world. My thinking here is that, we exists and we should make the most out of it.

11/16/04: You are what you do.
Elaboration: Based on Jean Paul Sarte’s philosophy of Existentialism. Actions define the person.

11/29/04: A true great man doesn’t need fame. People just remember him for what he did.

12/21/04: History is about people correcting the mistakes of the past with blood to set a path for the ideal future. Are we going to make our children correct our faults with blood so as to have a future for themselves?

12/21/04: Mencius once said that the duty of man is “to carry the burden of society till their death”. I disagree. The burden is not till ones death but onto the next generation.

01/07/05: Choice is given by the one who has power to the one who has none –Merovingian, The Matrix Reloaded. Freedom is not the right to choose between the choice given to us instead Freedom is the right to create the choices we are going to choose from.

02/13/05: My view of the Phantom of the Opera. Within the depths of the human soul lurk the horrifying darkness and the seed of man’s eventual downfall. However, within the same core lies the eventual redemption and ultimate salvation of mankind.

07/19/05: Money is a terrible master but an excellent servant. PT Barnum.

01/24/06: Excerpts from I, Robot. “Ghost in a Machine”. Random segments of codes linking to form an unexpected protocol and programs. Why is it for some who are in the dark would remain in the dark while others would stick together? And there are others who would seek the light?
Elaboration: This is an excerpt from I, Robot the movie. Of course, the movie talks about sentient robots but I do wonder about the “sentience” in human setting. Makes me wonder, how come each human being similar be they are to each in terms of a possession of a brain would be so different in terms of individual thinking?

01/24/06: How much we got? The answer is not in the clock. The answer is NOT MUCH and that is why life is precious.

07/10/06: Diversity is the art of thinking independently together. Malcolm Forbes.
Elaboration: This is given to me by Professor Cruz.

07/10/06: Isaac Bashevis on being asked if he believed in freewill or predestination. “We have to believe in Freewill; we got no choice.” Quoted in Fadiman.
Elaboration: Again, from Professor Cruz.

09/04/06: Hardwork is ain’t enough to succeed nowadays. Inventiveness, shrewdness, and risk taking are as important. In the agricultural era, hardwork is the only prerequisite to success for one cannot have a good harvest without it. In the early industrial age, hardwork is also the sole requisite of success since demand is great and the supply little, ones income depended on how much one can produce. However, in the era of hyper competition, it is not enough that you can deliver, you also have to outwit your competition.
Elaboration: When I was younger, my parents would always extol the virtue of hardwork but there comes a point wherein one would realize that no matter how hard a person work, you’re not reaping the kind of reward you’re expecting and this is why.

11/20/06: The faith revolution of the 20th century. There was a time when human life was uncertain and man turned to religion to give them certainty. There was a time as our world grew, those uncertainty vanishes and we question the necessity of religions. It is believed that as our understanding grew further, logic dictates that religion would no longer be necessary. But the opposite happened. As science advances, religion strengthened. For humans no longer turn to religion for certainty, we turn them for answer to the question, why we are here? What is this all about?
Elaboration: It is an observation of mine. How come a person seeped in the knowledge of modern science that tends to question the existence of an all powerful deity would surrender to such a belief of its existence.

01/26/07: The Socialist me. I encountered a beggar yesterday cleaning my windshield as I was waiting for the traffic. His intention might be noble but he is dirtying my windshield and I turned on my wiper in response and it hit his hands. I immediately regretted doing that. Here he is trying to eck out an honest living despite his poverty. He could turn to a life of crime but he didn’t and here I am turning an honest guy down. If circumstances were different, he having a good education and a bright future, he wouldn’t be cleaning my windshield. I should be more tolerant the next time.
Elaboration: Never to put a good man down.

02/20/07: This terrifying world is not devoid of charms, of the morning that makes waking up worthwhile. WISLAWA SZYMBORSKA
Elaboration: From Prof Cruz

02/17/07: We are not the same persons this year as last, nor those we love. It is a happy chance if we, changing, continue to love a changed person. – Somerset Maugham
Elaboration: From Prof Cruz

02/21/07: A great many people think they are thinking when they are merely rearranging their prejudices – William James.
Elaboration: From Prof Cruz

03/25/07: Celebrate for a nanosecond then moved on. Michael Dell
Elaboration: Success is fleeting and so should the celebration.

03/25/07: This is only the first step of the marathon. Michael Dell
Elaboration: The story goes that one of Michael Dell’s manager successfully opened a factory in Malaysia and as a consequence, was celebrating his success. Michael Dell sent as a congratulatory gift to the guy, a pair of running shoe and extolled him that this is the first step of the marathon. I actually used this to extol my students in the special class to continue work on their paper and defend it in their OCE, pass OCE and graduate, which some 50% of them eventually did.

04/14/07: Know your limits but never be limited by your limits.

04/22/07: Those who cannot remember the past are condemned to repeat it. George Santayana

05/29/07: If you can’t find the book you wish to read, write it. Prof Cruz

06/12/07: “Why independence if the slaves of today will be the tyrants of tomorrow? And they would be without doubt, because he who loves tyranny submits to it.” Jose Rizal
Elaboration: From Prof Cruz

12/14/07: Only those who doesn’t possess power obey the rules set by those who possessed power.
Elaboration: Only the powerful set the rules, the rest just follows.

02/03/08: The world is dynamic. It’s constantly changing. There is no such thing as a status quo. For the moment a status quo is established, somebody is already working to overthrow it. People who are displaced by the new status quo, people who haven’t or never gained anything, people who are threatened by the new status quo and lastly people who wanted to grab more but couldn’t. They are the ones who drive change.
Elaboration: Ever wonder why the world is dynamic and change is the new reality. It is because of this.
There are two lasting bequest we can give to our children – one is roots, the other wings. A toast to all moms!
Elaboration: From Prof Cruz

For last year’s words belong to last year’s language, and next year’s words await another voice and to make an end is to make a new beginning. – TS Eliot
Elaboration: From Prof Cruz

Live your life with so much love in your heart that if by mistake, you were sent to hell, the devil himself would deliver you up to heaven. Paulo Coelho
Elaboration: From Prof Cruz

04/10/08: With money comes culture and taste.
Elaboration: There is no point in maintaining an acquired taste or culture if you have a hungry stomach.

05/11/08: Well behaved women seldom make history, that is according to Laurel Thatcher Ulrich. Well, I completely agree. It’s the slut and bitches that we remember in history!
Elaboration: “Well Behaved Women Seldom Make History” is actually a book written by Laurel Thatcher Ulrich, a book that I came across during one of my visits to the bookstore but never read. Anyway, in most times in history, for women to get what they want in a male dominated society, they either have to wear a man’s pant or they could get into another man’s pant…..

05/15/08: In a free economy, not only people are given a choice but there exists a plethora of choices; a competition of choices. For a choice to win in this competitive environment, it is necessary for it to offer the RIGHT product at the RIGHT price at the RIGHT time at the RIGHT buyer.
Elaboration: In business school, we are trained to look in terms of product offerings, quality, price, service offerings, etc but to a customer, they do not see product offerings or anything. All they see are choices; be it tall or short; green or blue; now or next week. It’s all about choices. And market competition is not about competition of the best product or the best priced but rather it is the competition for the “better” choice.

05/23/08: There is no such thing as public governance. There is only public and personal interest. It is only when public and personal interests are aligned that we’ll have public governance otherwise, we have tyranny.
Elaboration: Just look at the present government.

05/24/08: The true measure of success is not how much profit was made during the good times but rather on the conduct of facing the tough challenges during the worst of times.
Elaboration: Remember evolution and the survival of the fittest? It is always easy to succeed when all the ingredients of success is laid on your feet. To succeed in a challenging environment, now that’s different.

From Robert Guizeta: Opportunity……… Ours to sieze…….Ours to live…… and ours to defend or otherwise, ultimately, ours to lose.

06/23/08: The most resilient businesses aside from food and medicine are cosmetics, porn, and politics.

06/26/08: A lot of people think that the world misunderstood them or can’t understand them at all. They never realized that the world has no obligation to understand them much less the desire to understand them.
Elaboration: Once in a while you came across with people who poured out their problems in PUBLIC, thinking that their problem is the only problem that the world needs to know.

07/15/08: Every disease has a cure or can be cured sooner or later. Stupidity has none.

07/24/08: Though power corrupts, power belongs to those who know how to use them.

07/27/08: It takes love to get married but it takes patience and toleration to stay married.

08/05/08: History doesn’t repeat itself. It’s the fools that keep repeating history!
Elaboration: History is a concept, a frame of observation. It doesn’t have flesh. It cannot think. It cannot react or pro act hence, history never repeats itself. Human beings on the other hand are the actors of history. To blame a mere concept for the repeated failures in history is irresponsible. Human beings, especially the stupid ones; the fools, they are the ones that keep on repeating history again and again and again because they never learn.

08/05/08: It takes a fool to bring down an empire and several geniuses to prop it up.

From my brother:
Money can’t buy you love but love is miserable without money.
Elaboration: Who ever said living in a shanty is romantic?

PostScript. My new phone is the Iphone clone and the twin brother of the Giorgio Armani phone by Samsung, the Samsung SGH F480 and I’m looking forward to write down more thoughts with it.

“INTJ”

2008-05-25T22:55:00.000+08:00

INTJ; these are the 4 letters that I used to describe myself in my profile at one of the social networking sites. And for sometime already, the 4 letters, INTJ remains a mysterious acronym save for a query or two (which incidentally indicates the popularity of my profile in that social networking site). Anyway, my girlfriend, Katherine recently inquired about it and actually looked it up at Wikipedia to find out what INTJ is all about. INTJ is short for Introverted, iNtuitive, Thinking, Judgmental. It is one of the sixteen possible personality types proposed by Carl Gustav Jung and refined further by Katherine Cook Briggs and her daughter, Isabella Briggs Myers. Dr. David Keirsey, a renowned psychologist identifies INTJ as “The Mastermind” in his book, “Please Understand Me” (for some psychologist, instead of identifying INTJ’s as “The Mastermind”, they would refer INTJs as “The Scientist”). Based on my understanding, the 4 letters represents 4 dimensions or aspects of a personality and each dimension or aspect has two opposing styles. The first letter indicates the motivation behind the person. Is the person Introverted (I) or energized by the world inside one’s own head? Or is the person Extroverted (E) or energized by the outside world? The second letter in the 4 letter combination refers to how a person understand a given situation or problem or simply gather information from the outside world. A person could rely more on his/her Senses (S) or he or she would prefer to grasp it via Intuition (N) i.e., mental observation to discern pattern. In other words, does the person prefer abstract evidence (I) or the more concrete evidence (S)? The third dimension pertains to how would a person process the information and arrive at a decision. In this respect, a person could be rational and analytical and therefore, Thinking (T) or the person may try to get a “feel” for a resolution to a given situation such that Feeling (F) predominates. In short, is the person relying more on IQ to get to a decision and hence “Thinking” or is the person using EQ to arrive at a resolution and hence “Feeling”. Lastly, the last letter of the combo tells if a person is methodical and orderly in the execution of a decision and therefore would be Judgmental (J) in temper or would be spontaneous and flexible and therefore would be Perceptive (P). Of course, there is no such thing as a 100% introvert or extrovert since most people are in some ways affected by outside events albeit in varying degrees even if a person maybe an introvert hence, all people are neither extrovert nor introvert in the strictest sense of the word but lie somewhere in between the two extremes. Neither of course there is a person who wouldn’t rely and be affected by their senses in gathering information. Neither is there a human being whose purely logical and rational in its decision making without taking in some emotional consideration not unless one is a Vulcan (incidentally, for those who aren’t a “trekkie”, a Vulcan is a highly intelligent and rational pointed ear alien beings that is purely logical in its thinking and behavior with almost no emotion at all, just like Spock). So in effect, what the 4 dimensions are saying is that people tend to have one style dominate over the other instead of purely operating in one absolute behavioral style. So in short, an INTJ would be a person who is heavily influenced by ideas going on in his head and trust more on his intuition rather than his senses and tends to be rational and analytical in its decision with little care on the emotional outcome of a decision and tended to be methodical in doing things with some occasional spark of spontaneity. Now, with 4 dimensions or aspects and with two opposing styles per aspects, one gets 16 possible combinations. However, these 4 dimensions of a personality are not entirely independent aspects i.e., they’re not a simple combination of different traits. Instead, the 4 aspects interact to create the personality. For example, linking the second aspect regarding how a person understand the given situation or problem with the third aspect on how they come up with a solution would define whether such person is utilitarian in nature (get things done efficiently and therefore pragmatic) or cooperative (rely on teamwork). This according to Dr.Keirsey created four distinct temperaments, namely: Rationals (Strategic; i.e., see the big picture and develops a pragmatic plan), Artisans (Tactical; i.e., see the whole picture and improvise or expedite things along the way), Guardians (Logistical; i.e., see what needs to get things done and rely more on close coordination of people to achieve things), and Idealists (Diplomatic; i.e., keep everyone happy and not rocking the boat in order to get things done). As such, the interaction of these 4 personality dimensions tended to create a distinct “capability” for each. Take INTJ/Mastermind for instance, an INTJ is referred to as The Mastermind simply because they are good in “entailing” or contingency planning. The following are the 16 personalities along with their temperaments, description and capability:
1. Rationals
1.1. ENTJ – Extroverted iNtuitive Thinking Judgmental – “Field Marshal” – Mobilizing
1.2. INTJ – Introverted iNtuitive Thinking Judgmental – “Mastermind” – Entailing
1.3. INTP – Introverted iNtuitive Thinking Perceiving – “Architect” – Designing
1.4. ENTP – Extroverted iNtuitive Thinking Perceiving – “Inventor” – Devising
2. Artisans
2.1. ESTP – Extroverted Sensing Thinking Perceiving – “Promoter” – Persuading
2.2. ISTP – Introverted Sensing Thinking Perceiving – “Crafter” – Instrumenting
2.3. ESFP – Extroverted Sensing Feeling Perceiving – “Performer” – Demonstrating
2.4. ISFP – Introverted Sensing Feeling Perceiving – “Composer” – Synthesizing
3. Guardians
3.1. ESTJ – Extroverted Sensing Thinking Judgmental – “Supervisor” – Enforcing
3.2. ISTJ – Introverted Sensing Thinking Judgmental – “Inspector” – Certifying
3.3. ESFJ – Extroverted Sensing Feeling Judgmental – “Provider” – Supplying
3.4. ISFJ – Introverted Sensing Feeling Judgmental – “Protector” – Securing
4. Idealists
4.1. ENFJ – Extroverted iNtuitive Feeling Judgmental – “Teacher” – Educating
4.2. INFJ – Introverted iNtuitive Feeling Judgmental – “Counselor” – Guiding
4.3. ENFP – Extroverted iNtuitive Feeling Perceiving – “Champion” – Motivating
4.4. INFP – Introverted iNtuitive Feeling Perceiving – “Healer” – Conciliating
There is no such thing as a superior personality or an inferior personality. Each personality has its own strengths as well as its own weaknesses and liabilities. Rationals for example tends to have difficulty grasping (ok, more like question the logic or rationality) establish customs, rituals, and way of doing things not unless they subject it under the microscope. What is important here though (which is why I even bothered writing this article) is for the person to know who he/she is. As Socrates once put it, one must “Know Thyself”. If you don’t know who you are, what is the point of knowing everything else around you? I mean with knowing who you are, you’ll know what you want, what can do and why you want to live. Otherwise, one would just be simply “floating” around life rather than “living” life.
P.S. if you want to know your personality type, go to. http://www.personalityzone.com and take the KTS-II test.

OVERWHELMED

2008-03-25T09:51:00.000+08:00

I am reading about histories lately for the past year or so, specifically about Chinese and Roman histories. Well, I did so because I’m a history enthusiast and my foreign travels during the past year or so allow me to purchase titles that I couldn’t find in the local bookstores. And so, it came to past that in my readings during the past year or so that I began to feel a sense of being overwhelmed by the sheer vastness of the subject matter. All along I thought I knew everything about there is to know about history (of China and Rome). For indeed I do, for a “layman”. My knowledge of history is in my assessment beyond the understanding of an ordinary “layman” or even an enthusiast. But as I dwelt more and more into my readings, I felt that I’m just skimming the surface of an unimaginably huge body of knowledge, which I never realized nor grasp before. Back in high school, I was already getting my hands on history books that are collecting dusts in the library so much so that the librarian would quip that “you’re literally the only one who opened those books and nobody else”. Those books are sleeping at the shelves since it was first bought! And every time I went to the library, the librarian would tried to “hide” from me or he would just get 1 or 2 titles that I requested and feigned that he couldn’t find the rest of the titles. Ha! It may come across as a puzzle to any ordinary layman and certainly my high school librarian as to why I kept on reading the same history but written by different authors. I mean history is history is history. It’s the past. One cannot change it simply by writing or reading it. Alexander the Great conquers Persia and Egypt and ruled the Mediterranean world as the Great King. Julius Caesar crossed the Rubicon and won the civil war against Pompey the Great and Qin Shih Huang Di unified all of China and ushered the imperial era in Chinese history. No matter what history book you read, no matter who is the author, history is the same. What then was my purpose in reading the same history again and again? Was I looking for something? Perhaps. In all honesty, I myself never quite knew what was I looking for back then. It is only fairly recent that I finally understood as to why. History is the study of humanity; humanity’s behavior under a set condition; humanity’s reaction to a stimulus either a threat or an opportunity and humanity as a collective whole struggling to survive and to continue surviving. Most people see history as “what happened” in the past but as I come to understand, history is not just about “what happened”. History is also about “how it happened” and “why it happened” and by extension, “should it happened at all”. Knowing “what happened” leads one to search for “who did it” and “what did they do” and “when it did happen”. And in the end, we end up with names of dead people that we find burdensome to memorize; that we don’t know nor care to know. Studying history as “how it happened”, “why it happened”, and “should it happened” takes a great deal more than just simply memorizing names and deeds. It involves analysis and plain simple, common sense to figure things out. Knowing “how it happened”, “why it happened” and “should it happen” would lead to fundamental truths about humanity: that humanity would do things based on “reason” and “logic”; that humanity would engage in intricate complex actions just to pursue an unbelievably simple motive; and that humanity tends to “complicate” an otherwise simple thing and therefore render solutions to problems next to impossible. Talk about ingenuity in being stupid.

Sonnet 43

2008-02-17T21:16:00.001+08:00

By Elizabeth Barrett Browning

How do I love thee? Let me count the ways.
I love thee to the depth and breadth and height
My soul can reach, when feeling out of sight
For the ends of Being and ideal Grace.
I love thee to the level of everyday's
Most quiet need, by sun and candle-light.
I love thee freely, as men strive for Right;
I love thee purely, as they turn from Praise.
I love thee with the passion put to use
In my old griefs, and with my childhood's faith.
I love thee with a love I seemed to lose
With my lost saints, -I love thee with the breath,
Smiles, tears, of all my life! - and, if God choose,
I shall but love thee better after death.

XI

2008-02-17T21:15:00.000+08:00

By Emily Dickinson

I've got an arrow here;
Loving the hand that sent it,
I the dart revere.
Fell, they will say, in 'skirmish'!
Vanquished, my soul will know,
By but a simple arrow
Sped by an archer's bow.

Be My Valentines, For I……

2008-02-17T21:13:00.001+08:00

Be my valentines, for I
Each day have thought of you.

My whole life couldn’t manage what
Your ready smile can do,

Vanquishing my loneliness
As though all light were new.
Let me be your valentine
Even as you’re mine,
Needing what I have to give
That each might each define
In friendship and in harmony,
Now you, now I the melody,
Each helping each to shine.

Things I Love About You

2008-02-12T09:13:00.000+08:00

By Anthony West

Your eyes
Which first held me captivated
Where I stood.
Your smile
To dazzle the sun
And warm every corner of my soul.
Your voice
Like a sparkling mountain stream
Which flows into my heart.
Your walk
And the way your gracefulness
Takes my breath away.
Your hair
About which I dreamed
Cascading into my face
As you leaned over me.
Your hands
Whose caress I crave
To hold my face
In their tenderness.
Your arms
I longed to have around my neck
As you pull me close
To your warmth.
Most of all
Everything you are
Changed the way I feel about my life.
I Love You.

I Love Thee

2007-12-03T18:40:00.001+08:00

by Eliza Acton

I love thee, as I love the calm
Of sweet, star – lighted hours!
I love thee, as I love the balm
Of early jes’min flow’rs.
I love thee, as I love the last
Rich smile of the fading day,
Which lingereth, like the look we cast,
On rapture that pass’d away.
I love thee as I love the tone
Of some soft – breathing flute
Whose soul is wak’d for me alone,
When all beside is mute.
I love thee as I love the first
Young violet of the spring;
Or the pale lily, April - nurs’d,
To scented blooming.
I love thee, as I love the full,
Clear gushings of song,
Which lonely – sad – and beautiful –
At night – fall floats along,
Pour’d by the bul – bul forth to greet
The hours of rest and dew;
When melody and moonlight meet
To blend their charm, and hue.
I love thee, as the glad bird loves
The freedom of its wings,
On which it delightedly moves,
In wildest wandering.
I love thee as I love the swell,
And hush, of some low strain,
Which bringeth, by its gentle spell,
The past of life again.
Such is the feeling from thee
Nought earthly can allure:
‘Tis ever link’d to all I see
Of gifted – high – and pure!

Sonnet CXVI

2007-12-01T18:42:00.000+08:00

By William Shakespeare

Let me not to the marriage of true minds
Admit impediments; Love is not love
Which alters when it alteration finds,
Or bends with the remover to remove;
O, no, it is an ever fixed mark,
That looks on tempests and is never shaken;
It is the star to every wand’ring bark,
Whose worth’s unknown, although his height be taken.
Love’s not Time’s fool, though rosy lips and cheeks
Within his bending sickle’s compass come;
Love alters not with his brief hours and weeks,
But bears it out to the edge of doom.
If this be error and upon me proved,
I never writ, nor no man ever loved.

My Love is Like A Red Rose

2007-11-27T13:17:00.000+08:00

By Robert Burns

O’ my luve is like a red, red rose,
That’s newly sprung in June;
My love is like the melodie,
That’s sweetly played in tune.
As fair art thou, my bonny lass,
So deep in luve am I;
And I will luve thee still, my dear,
Till a’ the seas gang dry.
Till a’ the seas gang dry, my dear,
And the rocks melts wi’ the sun;
I will luve thee still, my dear,
While the sands o’ life shall run.
And fare thee weel, my only love!
And fare the weel, awhile!
And I will come again, my love,
Though it were ten thousand mile.

Heartprints By The Sea

2007-11-24T09:48:00.000+08:00

By Hope

I was lost for words,

Where can they be found?

As I strolled by the shore,

I took a look around.

Sitting here all alone,

As I gaze the ocean blue.

Looking at the far horizon,

I was thinking of you.

Words left unspoken,

Since we are miles apart.

So I wrote upon the sand,

Feelings of my heart.

Words I have written,

In heartprints by the sea.

As ocean waves whisper,

Love flows endlessly.

A Sonnet of the Moon

2007-11-19T15:35:00.000+08:00

by Charles Best

Look how the pale queen of the silent night
Doth cause the ocean to attend upon her,
And he, as long as she is in his sight,
With her full tide is ready her to honor.
But when the silver waggon of the moon
Is mounted up so high he cannot follow,
The sea calls home his crystal waves to moan,
And with low ebb doth manifest his sorrow.
So you that are the sovereign of my heart
Have all my joys attending on your will;
My joys low-ebbing when you do depart,
When you return their tide my heart doth fill.
So as you come and as you do depart,
Joys ebb and flow within my tender heart.

Sonnet XVIII

2007-11-09T23:19:00.000+08:00

by William Shakespeare

Shall I compare thee to a summer’s day?
Thou art more lovely and more temperate;
Rough winds do shake the darling buds of May,
And summer’s lease hath all too short a date;
Sometime too hot the eye of heaven shines,
And often is his gold complexion dimmed;
And every fair from fair sometimes decline,
By chance or nature’s changing course untrimmed;
But thy eternal summer shall not fade,
Nor lose possession of that fair thou ow’st;
Nor shall death brag thou wander’st in his shade,
When in eternal lines to time thou grow’st;
So long as men can breathe, or eyes can see,
So long lives this, and this gives life to thee.

I LOOKED HERE

2007-10-27T10:44:00.000+08:00

By Stephen Crane
I looked here;
I looked there;
Nowhere could I see my love.
And – this time –
She was in my heart.
Truly, then, I have no complaint,
For though she be fair and fairer,
She is none so fair as she
In my heart.

THE SECRET TO SUCCESS

2007-10-16T22:23:00.000+08:00

One day, a few months back, my driver walk up to me and said that he is resigning from his job because he plans to put up his own business with his wife. Specifically, he was planning to set up a “lugawan” or a small food stall at his parent’s place which happens to be conveniently near a public market. Of course, I allowed him to resign and even gave him my blessing. Fast forward to last month, my driver came back to me and asked if he could return to work for me this November. It is not that his business failed. Conversely, his business is quite brisk and is doing extremely well. The problem is he is tired of it! He complains that he works everyday even on Sundays and holidays when business is much more brisk. He gets up early in the morning usually 4 am and cooks the food to be served that morning and closes late at night and went to bed even much later because he has to clean up the place and wash the utensils as well as prepare the ingredients for tomorrow. He told me that he preferred to be a driver than an entrepreneur. While his income as a driver is meager, he only works from 8 till 5 every day from Monday to Saturday and could have a good night rest plus he is off during Sundays and holidays. And he doesn’t have to worry about anything at all. Upon hearing what he said, I tried very hard to suppress my laugh. I’ve heard of business going belly up because of poor sales. I’ve heard of business folding up because of short funding. I’ve also heard of business shutting down its door because of poor rate of return on investment or low profitability but I’ve never heard of business closing down because of TOO MANY WORK. This is the first time I’ve heard that. Coincidentally, one of new clients who used to be a driver of one of my existing clients is also complaining very much the same thing as my ex – driver (who by the way will be reinstated). Unlike my driver, this new client of mine is not planning to shutter down anytime soon. It is not that both of them had no help at all in their businesses. They do hire some helpers but like many start up entrepreneurs, they do most of the jobs themselves. In fact, they have to go to the distance and cover the short comings of their staff when the going gets tough. They have to work doubly hard just to survive, prosper and grow. And these are the things that you wouldn’t learn in business school. Hardwork, perseverance, patience, and keen observation and learning (of the trade). More than just business plans and hypothetical business models, these values are equally crucial to the success of the firm be it a small “lugawan” or a manufacturing plant. And this is the reason why some aren’t cut out to be entrepreneurs. It is not that they’re lazy or anything. It’s just they don’t have all the values necessary to make it in business even if they have all the funds they could get their hands on. Incidentally, I remembered a story, a Chinese folklore I read in a newspaper years ago about the “secret of success”. There is this poor young farmer once who envied his rich merchant neighbor. One day, he got the courage to ask his neighbor about the secret of his success. And to which the neighbor replied, “It’s actually quite simply.” “I steal, I grab, I cheat, and I lied” was the answer the young farmer got from his neighbor and instantly, his eyes lit and a devilish smile came to him. And so, in the next few years, the once poor farmer grew rich, filthy rich, richer than a king and he did so by steal, grab, cheat, and lie. Until one day, the long arm of the law catches up with him and he went away for a long time. During his incarceration, he began to search for the reason for his failed lot and came to conclusion that he has his neighbor to blame for all the ills he has now for wasn’t his neighbor who told him to steal, grab, cheat, and lie in order to succeed?” With this in mind, the farmer vowed revenge when he got out of prison. And true enough, on the day, he was set free. He went straight to his old neighbor to settle some old score. The rich merchant neighbor was actually quite surprised to his old neighbor coming to see him after all this time and inquired as to latter’s business with him. The farmer then told the rich merchant that he came to settle an old score with the merchant for giving him false advice. Surprised, the merchant asked him what advice did he given to the poor farmer then and why is it false. To which, the farmer turned robber replied, “you advice me that in order to get rich, I had to steal, grab, cheat, and lie which I did and looked what happened to me?” “I ended up in jail.” “Now, tell me that wasn’t a false advice you gave me.” The merchant laughed upon hearing what the poor farmer said. Seeing this, the farmer got angrier and demanded an explanation as to why the merchant was laughing. The merchant then replied that it’s true that he did advice the farmer to steal, grab, cheat, and lie but the latter totally misunderstood him. The merchant explains that, “I didn’t give you a false advice at all for I myself practice what I’ve preached.” “I steal alright but what I’d steal is time itself. I woke up early in the morning and opened shop early while my competitors are still sleeping in order to get the early shoppers. I closed late at night when most of my competitors have already closed their stores so I can sell to the late shoppers.” “I do grab because I grab every opportunity that comes in my way whilst my competitors would probably give it up as a nuisance.” “And yes, I cheated.” “I cheated my competitors by opening my store at a better location, by offering better service and better products at lower prices. I essentially didn’t play “fair” with my competitors.” “And lastly, I’m guilty of lying for I lied to my customers.” “I told them that I cannot do what they requested and almost always manages to surprise them by surpassing their expectations. I under promise and over deliver to my customers.” “And that my friend is the secret to success, which are not secrets at all but basically one can manage to “learn” those things if he has hardwork, perseverance, patience, and keen observation and learning of the tricks of the trade.” And then, the farmer blushed in shame.

WHAT TO DO WHEN VISITING A CHINESE TRADE FAIR: A GUIDE FOR THE CLUELESS

2007-10-14T19:21:00.000+08:00

I was in China last May 20 – 24 visiting an industry trade fair/convention in Guangzhou (the Westernized name is Canton from which the famous Pancit Canton came from), Guangdong province bordering Hong Kong. It was my second time to visit Guangzhou with the first one sometime like 5 – 7 years ago. As it is now, I was visiting a trade fair back then, specifically, the twice a year Guangzhou Trade Fair (the Spring Fair in April and the Autumn Fair in October). The Guangzhou Trade Fair is China’s first, the longest – running, the most complete, and the mother – of – all trade fairs and although there are numerous trade fairs being conducted in China annually (one of which I visited recently), still nothing comes close to the Guangzhou Trade Fair not even Shanghai, which is fast becoming a venue of choice for Trade Fair/Convention hosting. Although strictly speaking, there is no “rules” in visiting China’s trade fairs nor was China’s trade fairs any different from trade fairs conducted by other countries but there are some nuances that a novice should understand and consider.
Guangzhou
Guangzhou romanticized as Canton by Westerners is the first region in China to be opened up by the current government to foreigners and foreign investments. It is China’s or probably the world’s first Free Port Area/ Special Economic Zone. As such, Guangzhou has a high degree of urbanization. At first look, Guangzhou looks very much like Hong Kong in terms of urban planning and architectural style but with the exception that its roads are cluttered with elevated highways and overpasses much like any major American cities. Compared to Shanghai though, Guangzhou is so last century. Though Guangzhou has its share of skyscrapers, none of them surpasses Shanghai’s skyscrapers in size and majesty. Furthermore, most of the buildings are pretty “old” in Guangzhou with many built in the late 80s to the early 90s. There are numerous attractions in Guangzhou, mostly historical places like ancient temples and pagodas, revolutionary shrines (Guangzhou is the locus of the 1911 Chinese revolution and the seat of the Nationalist government during the Warlord Era) and also, The Tombs of the Yueh Kings ( the Yueh Kingdom is a minority tribal monarchy established during the Han dynasty circa 200BC). In spite of the numerous attractions, it is pretty doubtful that anybody would be able to find time to visit all those places and attractions during Trade Fairs considering that everybody would be busy attending the Trade Fairs. While it is not a requirement to join a tour group in order to visit a trade fair in Guangzhou, it is highly advisable to do so. For one, the trade exhibition halls are located in the suburbs and rather difficult and expensive to get there by yourself. Besides, with the huge volume of people visiting the trade fairs, getting a transportation out of the Trade Hall is a very serious hassle. Furthermore, hotels in Guangzhou are always fully booked during trade fairs and the rates are usually double than the standard rates. By booking a tour group, one eliminates the hassle of finding a place to stay in Guangzhou as well as locking in a “suitable” hotel rate plus transportation.
Trade and Exhibition Hall
When I first visited Guangzhou, the Guangzhou Trade Fair is housed in 2 separate huge buildings just outside the city proper. In my recent trip however, the Trade and Exhibition Hall is now located in Pazhou, 1½ hour bus ride from Guangzhou. The Pazhou Trade Hall is actually new with the second phase of construction nearing completion. The Trade Hall looks like a huge elliptical tunnel lying on its belly and is made of glass and steel. It is a 3 storey structure. The phase 1 hall is about 1½ - 2 times the size of SM Mall of Asia and with the completion of the second phase structure; one would be looking at a complex that is 3 – 4 times the size of SM Mall of Asia. Simply huge. Even with it’s behemoth size, the Pazhou Trade Hall is actually quite visitor friendly much unlike the old trade hall in my previous visit for the former has a lot of benches in its lobby for resting as well as several VIP lounges (free passes to the VIP lounges are given to visitors entitling them an hour or two of use). In the “old” trade hall, there were no benches to speak of and during lunchtime, it was a common sight to see bodies, warm bodies (mostly males) “littered” the lobby floor with most of them sitting upright with legs crossed and some even lying on the floor taking a nap. This is because the “best seats” of the house are all taken by then. By “best seats”, I’m referring to the floor space near the walls where one could press his/her tired backs against the walls and rest. In additions to the presence of benches in the new Pazhou Trade Hall, the new trade hall has a lot of decent dining areas not found in the old trade hall. Incidentally, I still vividly remember my first visit when my friend and tour buddy took me to this food stand inside the old trade hall. The queue was quite long (and is still is as of now) but the cost was quite cheap, around 15 – 20 RMB (more or less 100 pesos). For that price, one would get a 3 – viand rice topping with one viand stack side by side to each other in a styropor lunch box and a can of soda and nothing else. By nothing else, I meant that there is no table or chair available for you to eat your food. So my friend and I ate our lunch while standing with one hand carrying the lunch box and the other hand scooping the food with a plastic spoon and our can of soda on the floor in between our legs (I saw some ladies doing the same and there are some couples who take turn eating with the other holding the sodas and his/her meal box while the other eats). Now, if one thinks that this is nothing to fuss about. Well, imagine this. You’re eating a food that has a “curious” taste (a mixture of rice and 3 viands stacked side by side one to the other along with their sauces) while standing………… beside a foreigner whose food aroma and body odor tended to totally mask the “curious” taste of the food you eat. Talk about the “best” food experience one could have in his lifetime! And so, it is really a great relief to know that the new trade hall has a better dining facility than the old one. And though they still serve the rice with 3 viand combo that has a “curious” taste, it is heartening to know that one has an even greater food choices at the new trade hall. As a matter of fact, I had lamb chops with rice for lunch on my first day of the latest trip of mine. Besides, there is always McDonald’s. Thank God for McDo! Be warned however, to take your lunches early, preferably sometime around 11am. This is because of the huge volume of visitors to the place and all of them tend to take their lunch at the same time around noon, that is if you want to avoid eating while standing up beside a foreigner ………
Attire and Accessories
Strictly speaking, there is no dress code during the trade fair and one can actually wear casual clothing to the trade fair but then again, this is a business meeting and in a business meeting, etiquettes needed to be observed. Chinese businesses are known to be formal hence wearing formal clothing do actually help in the negotiations and transactions. It is a known fact that some Chinese sellers tended to ignore “informally” dressed buyers not unless of course, you are an American or a European. Well, of course, one doesn’t have to dress formal wear to the hilt. One can actually wear a pair of denim pants with a matching long sleeves polo and a pair of rubber shoes as long as he wears a business coat or a blazer on top of his shirt with ties being optional, which I did (ladies can wear pants but again it should look formal). The choice of shoes is very, very critical not because of etiquette concerns but rather due to practical needs. Imagine walking thousands of square meters of floor area for 8 hours straight for 3 days with a leather shoe, at the end of the day, your feet would be killing you. I know because it did happen to me on my first visit. This is the reason why I wore a soft “walking” shoe on my recent visit. Now, if one thinks that they can take the punishment of walking around with a leather shoe or in a 3 inch heels, well, be my guess but consider yourself warned. One of the most important accessories that a visitor to a Chinese Trade fair should be bringing is an empty luggage bag with rollers. This is because of the sheer number of exhibitors on display (there are hundreds if not thousands of them there), one would probably end up with literally hundreds of brochure. Imagine carrying all those brochures while walking on a leather shoe. Don’t worry however, if one “forgets” to bring a luggage bag with rollers for it is available for sale at the trade fair hall itself. Another important accessory that one shouldn’t forget to bring during the trade fair is that of one’s calling card. Well, you could always print out your calling card right on the spot at the trade hall but it is not only expensive but murderously expensive. And don’t just bring one calling card. Bring 2 – 3 boxes of it (assuming that each box contains 100 calling cards).
Scheduling the Trade Fair Tour
Trade Fairs in China usually started around 10am (or was it 9am?) and ends around 5pm. The trade fairs in China usually lasts for four days to a week but for the Spring or Autumn Guangzhou Trade Fair, the entire fair is about two weeks separated into two main events each with 4 days of exhibition time with a 3 – 4 days break in between events. However, when you joined a tour group, you are usually given three days to visit the Trade Fair and quite frankly that is enough time for someone to tour the trade fair. Actually, one can finish “walking” through the entire trade fair in a day if one has a strong calf muscle. But then again, trade fairs were never an exercise of the calf muscle. What is the point of going to trade fair and do just walking without examining the wares and products on display, inquiring about the price, and trying to negotiate a “mutually advantageous” deal even if one is just simply “looking”? The “deal” about trade fairs is to look for possible items for trade and as such one doesn’t simply “walk” but also “look” around, analyze, and “talk”. And this is why one needs to schedule their tour of the trade fair because if one is going to simply looked into every stalls and booth in search of a “vague” deal, then at the end of the day, one wouldn’t find anything at all and it would be a big waste of time plus a sore foot that is going to kill you. The first thing to do before one even consider joining a tour group to a Chinese Trade Fair is to set an objective on what one would like to look for (raw materials, finish products, foodstuffs, etc). After that, look for the appropriate trade fair to join. Again, there are many trade fairs in China and most of them are timed near the Guangzhou Trade Fairs. Once you gotten cleared that, schedule your visit. My advice is that on the first day of the trade fair tour is to visit the section of the trade fair that interest you the most or the section that offers the products that you are looking (as set in your objective). Don’t hurry. Take a leisurely walk down that section on the first day. On second day, continue the “walk” of the first day if you haven’t finished it and began “exploring” other sections after you have done with the previous section. Again, don’t hurry, take your time. If you can’t finish on that day, continue on the next day. Now, if you fail to cover the entire trade hall on the three days allotted to you, don’t feel bad because you already covered the most important parts of the tour already.
Bargaining and Negotiating
If you are looking for the proverbial dirt cheap Chinese products that is on sale in 168 mall, well, you are looking in the wrong place because you can’t find any of that in any Chinese trade fairs. The participants in the Chinese trade fairs are usually companies that has export license. And a prerequisite of getting an export license in China is product quality assurance although there are some companies that could export their products out of China even without a license. There are 3 – 4 price/quality levels in China. The first price/quality level is the domestic quality level. This is the cheapest and yet the worst of all product quality levels that China has to offer and they are usually sold locally (although some manage to export it). This is because consumerism or consumer welfare advocacy in China is still in its infancy. And because of intense domestic competition, price has becomes the primary focus of most manufacturers. This in turn led to the subordination of product quality to a company’s pricing policies. The second price/quality level is the export quality level. By export quality, the standards are usually at par with other Asian export qualities. Prices of this quality level are of course higher than the domestic quality level but they are at the lower end of the price range of that comparable Asian export product. The third and fourth price/quality levels are those of Western and/or European quality levels. These are the products that meet the stringent standards of Western countries like the US and the EU. Their prices are of course the most expensive of all the Chinese products but are comparatively cheaper than similar EU or US counterpart. Usually, what is on display in the trade fairs are the second to fourth price/quality level products. One cannot see any dirt cheap domestic quality level products on display during the trade fairs. During the negotiations, Chinese sellers usually offered their best quality and their “best” price and that is usually where the price haggling starts. It is a common tactic among Chinese sellers to offer their best quality product first and upon intense haggling would substitute their best quality product with those of the secondary quality products (the third or second price/quality level) just to capture the deal at the desired price of the buyers and further haggling would result to substitution of a lesser quality products (usually the second price/quality level, rarely would this companies offer the domestic quality level on the world market especially nowadays). This is because Chinese businessmen subscribe to the motto, “one class of product, one class of price.” You pay more, you can better quality product. You pay less, you get less also. In short, you get what you paid for. Therefore, it is imperative to keep an eye on their product quality offering and not to solely focus on bargaining or getting the lowest price possible. It is advisable that while negotiating for the price, one constantly “reminded” them of the “desired” quality of the product in question. Never assume anything. Of course, it is possible to get a great product at a bargain but such are few and it takes a person of experience in the trade to identify one. Conversely, there are also high priced products that have a “lousy” quality. And the best way to avoid such a trap is to inquire about the brand, the corporate history (which is why brochures are important), and if possible, their client list (if they’re willing to divulge at all). One more thing about negotiating during the Chinese Trade Fair is that most businesses there are after the big purchase order. Chinese businesses are basically volume driven. The minimum these businessmen are willing to “discuss” about is a volume that will fill one 20 – footer container van be it just one machine or 1 million pieces of paper clips. Less than that volume, chances are they’ll ignore you if not dismiss you outright. By contrast, if you’re buying “a lot” (as in more than 1 container van), you can negotiate for a volume discount which they’ll be “happy” to oblige but watch out for quality. A trick during the negotiation is to inquire if the seller has available stocks or inventory of the item you want to purchase at the desired quality. This is because one can usually get a discount from the seller wanting to “get rid” of their “excess” inventories. Again, watch out for quality. Prices are usually quoted in terms of FOB (Freight On Board; sellers pays for the transportation of goods to the port of origin plus the loading costs, buyers pays for the freight costs, marine insurance costs, unloading costs at the port of destination, taxes plus transportation to the end destination). One should be very wary of these quotes however. Because one may find out rather belatedly that by adding the freight charges and taxes, the costs of the product in question would not only be “less profitable” but also “uncompetitive” at all. Therefore, it is highly advisable to negotiate price based on CIF (Cost, Freight, and Insurance; sellers pay for the transport costs to the port of origin, the loading costs, the freight costs, and the marine insurance as well; the buyers on the other hand shoulders the handling cost at the port of destination, the unloading and transport charges plus taxes). Now, if one is not really sure of the product in question and is hesitant in committing a large purchase order, well, ask for a sample or samples and they’ll be willing to oblige. Or if one is in a “hurry to buy”, one can always request for a plant visit of the said seller if the site is nearby and they’re willing to take you to it (by that point, the seller would be gracious enough to even treat you to lunch or dinner during the plant visit). In a Chinese trade fair, language was never an obstacle to a negotiation. In my first visit to Guangzhou, very, very few of the sellers could speak English. The few who can speak at that time, majority of them only speaks basic English. But again, as I said, language was never a problem for I saw an Indian national negotiating with a Chinese seller through a calculator and they still were able to close a deal. Nowadays, most Chinese companies hire Chinese graduates major in foreign language usually English and Japanese and hence, language is no longer a problem but just in case, if one encounters a “language problem”. Well, there is always the calculator.
Safety and Security in the Trade Hall
Security in the Trade Hall is quite strict with metal detectors in strategic locations and security personnel all over the place. However, due to the sheer number of visitors to the place, there are instances that petty thieves and hawkers were able to get in. Some hawkers were even brazen enough to occupy an empty booth and posed as a legitimate seller and sell their wares. The only way to distinguish them from the real sellers is that they are willing to sell you by pieces instead of by bulk as the usual practice of the real sellers. So, it is prudent only that one is careful and possesses some practical “street smartness” inside the Trade Hall. By far, the most number of “unwanted intruders” in the Trade Hall are the pamphlet or leaflet or flyer distributors advertising a local dining restaurant, local products, etc. Unless one is overburdened with brochures, getting one of the flyers maybe “informative”, who knows, you might get a good bargain.
List of Trade Fairs and How to Get an Invitation
In order to find out which trade fair to attend in China as well as get an invitation to the trade fairs, visit the Chinese embassy. They are more than willing to give you an invitation for free. An invitation letter however is not a visa and you still have to apply for it once you decided to go.
Tour Guides
If you happen to join a tour group and is handled by a Chinese tour guide during the trip, beware of his/her money making schemes and antics. The most common schemes are bringing the tour group to a store usually a Jade store or a Tea store or a Chinese medicinal herb store. Another scheme would be bringing you to a river cruise down the Chu Jiang river, over priced you, and let you stayed at the bow of the boat and let you get a lot of “fresh air”.
By The Way…
The next Guangzhou Trade Fair, the Autumn edition will begin in October 17 and will most likely finish by end October.

THE COMING COLLAPSE?

2007-09-26T21:39:00.000+08:00

Sometime a month ago, my mentor wrote in his column about the impending burst of China’s asset bubble. At first glance, one would think that such an article are but one of the many China bashing articles that is popping out lately in the press but on a closer reading, one would find out that his analysis (which he got from a broker friend of his) are quite true and right on the bull’s eye. His foremost thesis is that China’s stock prices, which is a proxy for the general asset prices in China is defying gravity. Whereas the global stock market is reeling from the unraveling of the US subprime debt market, China’s stock prices continue to grow to unprecedented heights. And what make this explosive growth trend quite worrisome is that the assets are very much overvalued with some stocks commanding prices of 20 – 50 times their projected 2007 earnings compared to the typical price – earning ratio of a stock is around 12 – 15 times their projected income for the year. An inflated PE ratio signifies that intense speculations are in the works. Of course, speculations are part and parcel of any trading activities and one cannot really remove it totally. Speculation exists because there is an expectation of getting a better price from one’s asset holdings vis – a – vis from the current bid price. Therefore, because of this expectation, people hold onto their assets until the current bid prices raises to match their price expectation. Speculation becomes detrimental only when the asset owner’s price expectation becomes unreasonably high to such an extent that current market demand cannot further digest such exorbitant price. Put it in another way, if a significant percentage let us say 30 – 50% of the asset price is based on pure speculation as in there is no underlying fundamentals to back the price (the value or the worth of an asset doesn’t justify the price), then the price becomes highly unstable for it could collapse anytime at the slightest provocation just like soap bubble that continues to rise but is easily burst at the slightest touch. Prices would finally fall when the asset owners perceived that their price expectations can no longer be realize because the expected demand for their assets do not exists due to that the assets become too expensive already and they began to sell their assets, “trying to cash in” while the prices are still high. Now, if they are only seller in the market and everybody else is either buying or even waiting, it’s not a problem. However, it becomes a problem or more appropriately a crisis when everybody else began to sell and this would degenerate into a panic – selling. Now if just everybody else in the market is selling without regards to their profit or loss and nobody is buying, then we have a stampede and prices will collapse way below their fair market value. And it is this scenario which we refer to as “the bursting of the asset bubble”. Going back to the present day China, signs of an asset bubble are getting obvious. Aside from the inflated stock prices, one can also see the numerous glittering sky scrapers, the new and trendy apartment buildings in the major city centers that remained empty and unoccupied up to now. That’s not all, the explosion of new factories and new manufacturing facilities all over the country added productive capacities in their respective industries in large increments. And these newfound capacities are not backed by real demand but fuelled by easy credit and the perception that good times would last forever. However, technically speaking though, these “over investments” in assets though pointing to a possible formation of an asset bubble wouldn’t be really be considered threatening or problematic as long as the underlying “value” of the assets “could still justify” the hefty price tag. There are signs however in China that shows that asset prices are getting unstable i.e., it might collapse anytime. In Chinese cities, urban dwellers are beginning to complain loudly about stratospheric housing prices prompting government intervention. Furthermore, rate of return on investments of most Chinese companies are falling and some steeply in the last year or so. This is because of chronic over – capacities due to over investments in factories. Companies facing high fixed costs due to amortization needs would most likely shade the prices of their products just in order to incur sales and hopefully break – even. This would in turn lead to a vicious cycle of price undercutting among competition which in turn reduces profitability, and eventually, lowers the rate of return in investments. Due to this development, the Chinese government has now implementing curbs on borrowing to certain sectors of the economy as well as raising interest rates on loans. Higher interest rates tend to deter potential investments especially when the expected return of such investment cannot cover the cost of borrowing to finance the investment. Beijing is hoping that the series of economic measures would be sufficient to “neutralize” the potential threats to the continuous economic growth. In addition to that, recent developments are also threatening asset price stability in China. One such development is in the export front which up to now is China’s main engine of growth. The product quality scare though has negligible effect on the long run is likely to cause a dent in China’s sterling export in the short term. The numerous limits imposed on Chinese exports by EU and other countries. Couple this with the slowing of the US economy due to the credit crisis, China’s export would likely suffer and this would only aggravate the over capacities experienced in many industries in China. Aside from that, government investments in fixed assets such as roads, harbor, ports, airports, etc. are likely to slow down as well given the completion of the construction for the Beijing Olympic Games which is one of the largest public investments made by the government. Without government money to fuel domestic demand, there will be no alternative way out for companies facing challenges on the export front. Hence, the likelihood of an asset bubble and it’s possible bursting especially in 2008 right after the Beijing Olympics according to my mentor. Probably, this is because the Chinese government would do everything it could to present “a prosperous image to the outside world” during the Games and an economic meltdown isn’t exactly showing “a prosperous image” but the story would be different after the Games. Whether or not the economic meltdown would occur as perceived, the real question that one has to answer is what would happen next if China collapses? Well, going back to history particularly to China during the 80s and early 90s, in which China received a trade embargo after the Tienanmen Crackdown. At that time, the economy is experiencing double digit inflations. Bankruptcies was also rampant as some financially weak companies facing a crunch on their cash flow due to lower ROE fails to pay back their loans. This in turn led to the banking system saddling on a huge bad loans. A particular problem that crop up during the 1980 – 1990 economic slowdown was the Triangular Debt Problem. The triangular debt problem came to fore because the State Owned Enterprises (SOE) couldn’t pay back their loans extended to them by State Owned Financial Institutions, which in turn sourced their funds from government particularly local governments. The governments in turn owed the SOE in the form of advances from capital investments in order to fund other fixed asset investments. The result is a huge financial mess. What China did back then to solve the problem was to separate the government from businesses by handing the management of SOE and SOFI over to professional managers instead to government cadres. The government also furthermore liberalizes the economy, privatizing many SOE and allowing foreign investors into China as well as encouraging local entrepreneurs to invest. Lastly, the Chinese government also tweaks the export taxation system and devalues the Yuan. This led to the revival of the economy, which sees it expanding till now. Of course, the side effect of these series of Chinese actions was to indirectly trigger the 1997 financial crisis (though most of fault lies with the various ASEAN economies, i.e., economic mismanagement). Given that, what would one expect that if China’s bubble did get burst in the near term? Well, first of all, one have to remember that China though a market economy isn’t rule by Market Forces alone, i.e., Supply and Demand. China’s economy is very much influenced by the market forces as well as simple administrative fiat of the government. And in the imperative of protecting China’s ruling party’s interest, China wouldn’t hesitate to do whatever necessary to return the economy to growth in order to forestall unrest. And one of the most probable measures is to devalue the Yuan in order to boost exports. Second, with the devaluation of Chinese assets and the massive bankruptcy that could happen, it is also probable that China would further liberalize their economy and allow more foreign participation. As of now, China is gradually tightening it’s control over the economy by putting in place foreign investment restrictions. And these restrictions would likely be relaxed when the time comes. Furthermore, government takeovers of private enterprises particularly strategic bankrupt enterprises are also highly probable given it’s nature for administrative fiat. So as a business people, what are to expect in case of such scenarios? Well, first, expect fierce price competition from China not only due to the devalued Yuan but also to their penchant for price competition resulting from excess capacities. Second, with the Yuan devaluating, it might trigger a round of competitive currency devaluation especially with economies whose exports are in direct competition with China. As such, inflationary pressures would be pretty strong in these economies especially if they are import reliant. Thirdly, for those exporting to China, a Yuan devaluation would make their exports expensive and hence, this would stifle their export growth. On the positive side, a bubble burst of the Chinese assets has its benefits. One of the benefits is the cooling of commodity prices like metals and oil. Commodity prices are breaking record highs lately due in part to China’s surging demand. With the China factor curbed, it is only logical for commodity prices to “fall back to earth”. Another benefit is that for importers of Chinese products either for retail or for use in manufacture, abundant supply and lower Yuan means cheaper price and hence, lower input costs, which could potentially translates to better profit or larger market share in their respective markets for these importers. Still another benefit is that with high bankruptcy rates and a more liberal economy, a fire sale of repossessed assets at rock bottom prices can be expected and this would provide investors who are left out in the current China boom a chance to gain a foothold in China. All in all, whatever happened to China in the coming years, as business people, we are intricately connected to China.