Eldon-Online

A Piece for Peace

With our daily diet of negative media I am not sure whether any of you have noticed that outside the global financial meltdown, (with associated recessions/depressions and unemployment), the distressing tales of infant deaths in the United Kingdom due it seems to appalling negligence by the Social Services and the continuing loss of life in war zones such as Iraq and Afghanistan, there is actually some potentially positive news out there.

The New York Times, for example, has been running a series of full page advertisements in the last week during the occasion of Saudi Arabian King Abdullah's visit to the United Nations General Assembly. The one I noticed was inserted by a group promoting an event known as a "Weekend of Twinning". Twinning by 50 Mosques and 50 Synagogues across the USA and Canada to be held later this month. The message being jointly presented by the "Weekend" is one of an effort to confront Islamophobia and anti-Semitism. 

It's a start but it needs to go much further, and I hope it will. The signs, at least to me, look positive.

It is a truism that both of the "conditions" or phobias, that is Islamophobia and anti-Semitism, exist in large measure in our world, the latter for many more years than the former. Thus a greater degree of understanding through education can surely only be good. But dealing with the phobias alone does not deal with the broader issues - and the next steps, which would lead to co-existence. A co-existence by mankind in general - where a Muslim arriving in any country is not immediately branded a potential terrorist, where a Jew is not seen as a member of a tightly knit almost secret society with excessive influence in the corridors of power, and an historical financier of wars for financial gain. 

That said let me be the first to acknowledge that I am venturing on to shaky ground here. I am an amateur observer of what are some deeply rooted issues. But I suspect even so, having lived a good number of years in the Middle East, and continuing as a regular visitor I have a better understanding of those issues than many who present their opinions as "experts". Nevertheless, I am receiving some clear pictures in my mind, and verbal messages in my ears that the senior leaders in the Middle East are beginning to stick their necks out and send ever clearer signals that the world must have peace in the region. Peace that must start first with an acknowledgement that terrorism, threats from nearby countries, and the general state of "alert" that prevents human beings from going about their daily lives without the threat of being blown up, is unacceptable. 

I am not so naive as to believe that this is easily achievable, although I do think that former President Clinton came close to reaching an agreement just before he stepped down from the Presidency. But any agreement is only possible if Middle Eastern leaders, from both sides, genuinely want there to be peace. Will an agreement stop the hostilities immediately? It is unlikely, but those same leaders can put pressure on the perpetrators if they have a will to do. And they are showing signs of doing so.

It may be somewhat ironic, but what sort of a positive message would it send around the world if we really achieve something positive around the same time as the Christian faith celebrates its religious holiday? And before the end of the Chinese New Year of the Rat - a year that the soothsayers predicted would be every bit as appalling as it has turned out to be - a peace that would have a very significant impact upon a world that is fearful, beaten and miserable.

It doesn't really matter what you believe in, does it? It would be seriously good news whenever it happens - and if the event in North America is a start, there could be a boost very soon. 

However we choose to place our wishes and thoughts, this the time we should all put our minds to doing our piece for peace.   

Vote for Hong Kong

It's election time in the USA. It is where I am right now and as I write it is still Tuesday so it ain't over. Personally I shall be pleased when it is. Not because the outcome is not important, it is, but because of the months and months it seems to have been assaulting our ears in Hong Kong and elsewhere - and the money the process costs in America. Frankly I prefer the British electoral system. Call an election, keep the period for electioneering short and restrict the amount of money it costs.  (Similar to the USA, though, it still doesn't guarantee we get the right person at the top!)

So with elections being topical I started to think, as I often do, about Hong Kong. Not from a political leadership perspective, but from the point of view of Hong Kong's position in the world, in Asia and in China - particularly in the post "American Crisis" era.

 Historically Hong Kong has thrived on crisis; political or economic. It was done by a mixture of entrepreneurial and practical business people with common sense, a facilitative civil service and a hard working labour force. 

 What's changed? 

 Well not a lot when you think about it. The entrepreneurs are still there, university-educated perhaps but with less of the raw gut instinct of their fathers. The civil service is still there and has the ability to perform as before, even if it does not always show the inclination to do so (due partly to the presence and pressure of a less business savvy and more banana-driven and hirsute legislature), and the workforce still seems to be largely willing to perform as hard as before. So although we, along with everyone else, who has been caught up in the "American Crisis”, have some issues, we've nothing to be concerned about long term, right?

Well, maybe we'll be lucky, but this is no time for complacency and it is pleasing to know that at least some in the business community are looking seriously at the subject. Mind you, looking, debating and agreeing are only a part of the sum; action is harder.

 I was delighted to be asked recently to give my views to a group of business people. Delighted because at this stage of career I am pleased to be asked my opinion about something - well just about anything actually.

 I used a couple of stories to illustrate the points I was making but my main thoughts from the first story, in brief, looked at:

 - the world over the next 30 years; a more interconnected, interdependent and international world. A world in which Hong Kong, despite the ties with China and the obvious synergies, must remain international in focus unless we want to become just another city in China - and a small one at that.

- whether we need to ask ourselves some basic but sensitive questions. For example have we become all too comfortable in relying largely on China? Do we realise there are markets in directions other than north? 

- Simply put, Hong Kong is where it is today because of our international focus. Because this is a city where people from different places can do business together. If we want to remain relevant to China, and the world, our internationalism cannot be left behind - unless we want to be left behind.

 In terms of the second story, the salient point was that as Hong Kong moves forward we have to increase our appeal. In the comments above, I talked about our interconnected world. In such a scenario people we need in Hong Kong will only be attracted here if our city offers them and/or their families the best lifestyle. This means being honest with ourselves. Are we sometime soon going to go beyond paying lip service to cleaning up our environment or do we expect to be able to do as little in the next 30 years as the last 30 and still have a city worth living in? Simply put, if Hong Kong hopes to compete going forward, it must be a desirable destination for both business and leisure.

 Lastly I made a few points about aggression; being aggressive in defending our turf and our reputation. There is a re-balancing taking place in world economies. We are becoming increasingly volatile in the global economy - a volatility that is being partly driven by flows of information and misinformation. But in this environment we need to consider what we must do to stay ahead of the competition. 

Once again, these trends raise some sensitive but basic questions for Hong Kong. Questions about how to best fend off the competition, to make sure we stay ahead of ALL those cities in Asia that want what Hong Kong already has? But also questions about dealing with negative perceptions transparently and promptly and aggressively protect Hong Kong's regulatory reputation.

So, a few thoughts on this Election Day but for me - and I hope for those of you who have an interest in your future, when you have an opportunity - Vote for Hong Kong.

"We Will Survive"

With the above words Tony Tan, Deputy Chairman and Executive Director of Singapore's GIC, concluded his remarks at a session of the Institute of International Finance's Annual Membership meeting in Washington DC last month.

I agree.

The world has suffered many madnesses in its history, and if you have never lived through one previously you will always believe that yours is the most extreme, the worst ever, the absolute end of the world, and that we should never allow such a thing to happen again. But are the problems we face today truly worse than previous disasters? I missed the Second World War but my parents did not - so I can only imagine what they and millions of other people, ordinary people, went through. My parents missed the crash of 1929, or were too young to notice. History is littered with examples, experienced I am sure by our ancestors. Disasters of varying degrees of magnitude beset us on a regular basis, it seems, but we always seem to manage to get through it. 

Certainly in such times, and sadly, people who should not suffer - often do so. While others, already at a relative advantage perhaps, find ways to turn the crisis into an opportunity. (And do not be misled into thinking that the word for crisis in Chinese, weiji or 危机, actually means both danger and opportunity; lovely theory though it may be, it seems that whilst wei is indeed danger, ji means something like "incipient moment; crucial point, when something begins or changes. Which could, I suppose, give the idea of opportunity – or it could mean more trouble. But I digress).

In plotting the course of this particular crisis, it does seem that the severity of it has been underestimated all the way down the line, with the result that each Government or Economic Bloc's solution has proved to be nothing more than a band-aid, requiring more and stronger medicine on a regular basis. There are signs, however, that we are getting closer to some kind of stability, albeit still very fragile, and I have no doubt there is more to come.

There are questions that will be asked, once the dust has settled, and I am sure there will be additional regulations imposed as a direct consequence of some of the answers. There will be people considerably more erudite than I am who will provide all the economic arguments you want to read; so many arguments, in fact, you may also become as confused as everyone else. And they will tell you what, in their view, was the cause and the real effect and how it should have been spotted, (some will even tell you that they did spot it, but no-one listened) and stopped.

There will be comments from all quarters on the role of the investment bankers, the politicians (what elections??), and the people who decided they would no longer pay their mortgages for no better reason than there was no recourse to them as borrowers. There will be stories of the inappropriate selling of investment products to the wrong people, of rising inflation and how - in the end - the era of low interest rates that had created an overleveraged society brought about the "American Crisis". (Well, we like to call it that in Asia because we were pretty quickly dubbed as having the Asian Crisis a few years ago. A crisis that taught us many lessons, since heeded).

But, we will survive. We may take many years to return to the sort of free-wheeling lifestyles witnessed in various places, if that is really what we want to do, but I suspect we may be the better for it - until we forget all the lessons learnt and do it all over again.

Forget? Surely not! Perhaps the following few passages will give you a clue - 

"Bank failures we may have now and then, but not catastrophes like these. Our future failures, if any, will arise from imprudent banking, - from the locking up of deposits in unavailable forms of security..."

"The existence of Leeman's (sic) Act is another point in favour of our future outlook. Under that act, the broker who offers shares for sale must have the shares to sell. He cannot execute unlimited bear operations in the shares of any bank which he may select for attack and thus place its credit, and possibly its existence, at his mercy"

" The panics of the future will be influenced to some extent in their direction and force by the action of the public press. What any leading newspaper says today will be repeated throughout the land in a million or so news reports tomorrow"

Hmm; passages (a few of many) taken from "The Country Banker", a book by George Rae (a Scot, of course) first published in 1885! So - exactly what is it we have learnt in 123 years?

IN MEMORIAM - MAGGIE CHRISTINE GAUS (Née Peñaranda)

My Blog has been silent out of respect for a much loved Mother in Law and Friend who passed away unexpectedly but peacefully early this month. May she rest in peace.

Do not stand at my grave and weep,

I am not there, I do not sleep.

I am in a thousand winds that blow,

I am the softly falling snow.

I am the gentle showers of rain,

I am the fields of ripening grain.

I am in the morning hush,

I am in the graceful rush

Of beautiful birds in circling flight,

I am the starshine of the night.

I am in the flowers that bloom,

I am in a quiet room.

I am in the birds that sing,

I am in each lovely thing.

Do not stand at my grave and cry,

I am not there. I do not die.

                    

                            (Attributed to Mary Elizabeth Frye)

In the meantime, the world goes on and at the urging of my family, I will continue very shortly.

Non-Compete Clause

Britain has enjoyed its most successful Olympics and Paralympics in years - testament you may think to a training regime that has been instituted in recent years to make up for mediocre past performances. Turning on its head the more usual cry of "Jolly good show; getting the bronze medal was an awfully good effort". Even the Aussies were surprised, but couldn't resist taking a swipe at the fact that many of the gold medals were won from a "sitting position". Now then, jealousy will get you nowhere.

There is no doubt in the minds of the British team at least, that quite a lot of the difference in their performance has been as a result of the availability of funding channeled from the lottery. Funds that have been put into the building of new facilities and have helped to defray the costs of some of the athletes who could not otherwise afford financially to take out the necessary time for training.

So, something is clearly going right. The facilities are better, there is time to train and so now all we need to ensure is that the competitive spirit remains. The will to win. The British tendency - and I am not critical of it, in fact absolutely the opposite - to be good sports, and by and large to prefer fair play has, sadly, provided us with a reputation for "choking" when it comes to the big events. For not having that desire to come out on top. No single-minded determination.

Given the recent results, then, we seem to have taken a dramatic step forward. And for the next step? Well, why not try and bring something of the competitive spirit back into the schoolyards. Surely, properly channeled this should be the foundation for future generations of athletes with a will to win. To compete with the rest of the world, who take their games seriously.

"Ah but", says a section of the governing bodies and teachers in schools, "if we lionise successful children on the sports fields, we are going to permanently scar those who are less talented". I guess this means we need to bring everything down to the lowest common denominator. Make sure nobody runs faster than the slowest person on the track so the slowcoach feels good! Well, I bet the slowcoach doesn't actually feel good, and knows exactly what is happening.

And now we have the professional sports bodies joining the fray. England's Football Association has now decreed from this season that the scores of matches played between teams of young people must not be published, that league tables cannot be kept and that prizes should not be awarded. The rationale? It is to allow young children to nurture their skills without facing the pressure to win.

Look, pressure is all around us today. The number of young adults who find the pressure of life generally to be too much for them saddens me. They are depressed; they seek solace in binge drinking. It's a modern phenomenon. Adults too face pressures, but I think that perhaps those of us who have reached a certain age are better equipped to deal with it, than the younger generation. 

I know I'm getting old and crotchety. Policemen are looking very young, a sure sign of old age, and I am much better at remembering what I did as a kid than what I had for lunch yesterday, but please - if this is where Britain is headed, then get used to being the perennial runners-up. Or, teach children properly, and at an early age, that an element of competition is healthy, and that while you may not be a good runner yourself, the good runner may not be good at other things. 

The best thing Britain can do, to honour the present breed of Olympian, is start to nurture their successors.

Obituary - Farewell to Common Sense

Some time ago a friend forwarded to me an obituary. Not his in anticipation nor, happily, mine. I filed it away because I knew it would come in useful one day - as it had clearly been useful before. An obituary, lamenting the passing away of common sense. I suggest you read it before you go on.

If the structured finance crisis was not already enough to demonstrate the toxicity that a mixture of greed and insanity can bring, then surely we learnt the lesson that paying out millions of dollars in compensation to Chief Executives of institutions that had been brought to their knees was not morally acceptable; particularly to the people in those same companies who had lost their jobs. Didn't we?

Okay, so the amounts are now lower, but the headlines scream as loudly. Today's UK Daily Telegraph newspaper greeted its readers with the headline "Failed bank chief is £2m winner". This, of course, relating to the ousted head of HBOS, who has presided over the failure of a bank where, at the time of the forthcoming merger with Lloyds might see a loss of upto 40,000 jobs, according to some estimates (a little overdone, in my view). Oh - and he gets to keep a job in the new organisation!

In the meantime, across the pond, incredulity remains that a company like Lehman has gone, the folk at Bear Stearns who were rescued thank their lucky stars for achieving "first-loser" advantage, AIG were happy that they were too big to fail (insurers to the Government perhaps?), while toilet paper sellers are still doing a roaring trade around the offices of the likes of Morgan Stanley, Washington Mutual and Wachovia Bank. Everywhere across the globe, speculation is rife about the future - and now the US Government has acted to help shore up the world economies by chucking a couple of hundred billion US dollars at it!

Well, at least the markets have reacted positively today in response to this (rather late) gesture - but the British Government, in case they are uncharitably feeling a sense of schadenfreude,  can take the smile off their faces if they think they have acted expeditiously and smartly; think Northern Rock first of all, and then heed the words of an adviser to Hong Kong's Monetary Authority and to the Bank of England (now former adviser), Sir Charles Goodhart, whose view was that HBOS might have survived if the Government had acted more quickly. Back on the lap of poor old Gordon Brown - blamed again. It seems, they say, that if you meet him, make sure he doesn't wish you good luck!

But is all of this enough? Despite the market rally, have we now bottomed out in the west or is it just a temporary "happy blip" to make us feel better over the weekend? To be followed by the stark reality that on Monday morning we will still not have created any more jobs, an increasing number of people will realise they can no longer afford the rent on their swanky apartments, and the credit card repayments will continue to come under pressure.

No I do not think the world is coming to an end in financial terms, and we will muddle through eventually, but common sense not only suggests we should not live beyond our financial means. It also means that beyond finance, we should not condone (by turning a blind eye) the farce that appears to be Zimbabwe and other similar situations; that hiding behind religion - whichever one - is not an excuse for terrorism, and that many other of todays idiocies (see next blog;  "Non-Compete Clause") could be addressed appropriately by a strong dose of common sense.

Let's hope there is a cure for the apparently deceased.

Another Nice Mess You've Got Us Into....

It was bound to happen. The often touted, but spoken in whispers, demise of Lehman Brothers - and the realisation by the US Government that there is a limit to the amount of taxpayer money you can use to bail out wayward and, dare I suggest it, greedy investment bankers? 

As western nations continue to "prod" Asia and others to get their financial houses in order, we now have more questions to ask about the ability of the west to look after itself, let alone provide advice to the "developing" economies. 

Lehman has gone, strongly aided by the problems that existed in their commercial mortgage book (see my blog of 21 January 2008 - "What, Me Worry? - Yes, Me Worry"). Merrill Lynch has been saved, at a price.

Others look decidedly uncomfortable. AIG currently being the main case in point of course, and by the time you read this they may also be closer to the undertaker than the intensive care ward, but are we really so certain today about the likes of Wachovia and Washington Mutual? By the way, I am not casting doubts about their ability to survive, but they are prominent among the names I have heard over the last 24 hours at the SIBOS Conference being held in Vienna.

It has been an interesting conference, commencing as it did the day after "Black Sunday", but as I might have expected, I do get asked about the impact of all this "chaos" on Asia. In response, I think the best I can do is follow the succinct words of a friend whose biggest concern is the "psychological impact on the region". And I agree. (Ironic isn't it that psychological is made up of psycho and logical - a one worded oxymoron?) But I digress.

 Asian economies, by and large, are in reasonable shape. They continue to grow, albeit more slowly than before, but they grow nonetheless. Meantime, courtesy of events unfolding elsewhere, wealth throughout the region is being adversely affected by the copycat falls in the Asian markets that ape the falls in western markets. Falls in Asia that are not representative of the reality of economic performance. 

Sadly, there is more bad news to come out of all of this, but even now maybe we can learn some positive lessons from the west. For example, recognizing the fact that the future is never a linear extension of the past or the present. Understanding that markets are cyclical, which is a fact you ignore at your peril, as many seem to do. Also, in my experience it is rarely "different this time"; that is, problems often stem from similar roots, historically. And Governments as well as regulators need to recognize the value of understandable and enforceable rules and regulations, as well as the necessity for swift and decisive action. Or even determining, equally swiftly and making clear that they are going to take no action, leaving the market to find its own solutions Through no fault of it's own, Asia has been done a disservice by the "developed" world (well, the USA actually) - a real case worthy of Laurel and Hardy's famous catch phrase that I have used for the title.

Hard Labour, Darling?

Is Gordon Brown facing the first signs of "the final revolt" within his UK Labour Party?

It has been noticeable in recent weeks that beleaguered British Prime Minister Gordon Brown has been looking for party support, which has indeed been coming from at least some of the party faithful. But it has not been convincing to an outside observer, as rather wooden stock-phrases have been trotted out about supporting the best man for the job. Reminiscent of the sort of language used by government and company chiefs when a trusted lieutenant is found embroiled in a scandal - and whose resignation is subsequently, and "reluctantly", accepted. 

The end of last week saw the person generally portrayed as the "grey man" of British politics, Alistair Darling the Chancellor of the Exchequer, don the mantle of honest politician (an oxymoron to some), and tell the British public that they have never had it so bad - economically.

In fact, he said, this is the worst slump in 60 years. And he basically said he needed to tell it straight, and make people aware of the difficulties ahead. All of which seems to suggest that Brown is unwilling to give the bad news himself - and why might that be? 

Clearly bad news is not good for his own tarnished image, or that of a party battered in the by-elections and showing poorly in all the opinion polls. (All forgotten briefly by the news of Britain's Olympic successes, and shadowed for a few days by the interminable reporting on the US elections). But might such news not also reflect rather badly on the performance of the previous Chancellor of the Exchequer who was, of course - Gordon Brown.

The move by Alistair Darling is a brave one. It puts him - at present - alone in his concerns at least within the party. Even Gordon Brown himself said the other day that the economy was "resilient". But it seems to suggest, given his previous non-confrontational history, that he either has very quietly harboured deep-seated ambitions to become Prime Minister himself, or he is "fronting" for a group of disgruntled Labour Party MPs who believe that their only hope to avert a total disaster at the next General Election is to do so with a new leader at their head.

The Labour Party now refers to Mr. Darling's comments as a "gaffe" - not a view shared by Mr "Daring" himself it seems. Somehow I get a sense there is a lot more to this than meets the eye.

Is this the real beginning of Mr Brown's demise?

Pride of Place

The British author and TV Presenter, Jeremy Paxman, summed up the English (specifically) as being "... polite, unexcitable, reserved, and who had hot-water bottles instead of a sex-life". A summing up that could, perhaps, apply to the British generally although we Scots have been known on occasion to thump our chests, albeit usually prematurely, having scored the first points in a Six Nations rugby against the "Auld Enemy", from which we go on to snatch defeat from the jaws of victory!

Britons have usually been more apologetic than proud of their country and its achievements - at least since they lost the Empire! Rare sightings are seen of anything other than a stiff upper lip, and competitiveness on a school sports field seems to have been banned because it disadvantages the less talented. Not so, it seems in the world of art, where a dead sheep suspended in a tank of formaldehyde is considered worthy of rapturous outpourings. Thank goodness art, like beauty, is in the eye of the beholder. Abroad, the average Brit will not open his or her mouth in a foreign language unless there is a high degree of confidence that, mentally at least before utterance, the words and the sentence construction are correct; (and I did say "average" before my own children who are at least bi-lingual and in most cases tri-lingual, take me to task!). We tend not to stand out in a crowd in case we stand at the wrong time. We are self-effacing to the extent that you realise we would have been just as happy with getting a second place. A jolly good show!

That was until two weeks ago.

The usually staid "Daily Telegraph" newspaper headline for 20 August read "A Great British Olympics". Since I arrived a few days ago, I have seen a level of pride rising in Britain in a way I have not seen before. A pride in being British, even. Not an arrogant, huffing and puffing, chest-out pride of course, (let's not go overboard!) but just a genuine pleasure in seeing British athletes in all disciplines bringing home medals many were not expected to win. And even taking a good natured "dig" at the Australians for a change, to whom we seem to lose at so many other things.

But the point is this. Success is infectious. It has been the wettest August in Britain for many years, maybe since records began - and we are only just over half way through the month, but you wouldn't know it, from the glow of the Olympic successes. There is an attitude of mind that is positive, and it has been achieved in a short space of time. A real feel good factor. And it brought me back to thinking about Hong Kong.

Thinking about how, so often, we look for the negatives even in a positive environment - or an environment that is least better than that elsewhere. If attitude of mind is the key, then we need to be highlighting those events that should make us feel proud of Hong Kong. Start with our part in the Olympics - a successful equestrian event, thanks to the Jockey Club in large part. Continue by promoting democracy, and electing people to Legco next month whose interests are in the future prosperity of Hong Kong. 

I feel the world is watching us rather more closely than we might think, and a positive attitude will demonstrate that we are awake, alive and not suffering from complacency. We must be proud of who we are and what we have achieved. If the British can do it - so can we!

Right Choice - Convicts Not Wanted

The decision by the Hong Kong Government, according to the latest news I have heard, not to permit convicted British paedophile Paul Gadd, (better known to an older generation perhaps as Gary Glitter) to enter Hong Kong is rational, sane and should be applauded. I just hope hope that no one changes the Government's mind!

But the decision will be met with dismay by at least one British Member of the European Parliament, Godfrey Bloom, who is the UK Independence Party's representative for Yorkshire and North Lincolnshire.

I heard Mr Bloom today on Britain's Radio 2 advocating strongly that Glitter should be permitted to stay in Singapore or Hong Kong if that is what he wants to do. After all, Mr Bloom says, "why would we want a paedophile brought back to Britain, at the taxpayers expense, just so Britain can keep an eye on him?" He went on to say that as Glitter had served his time for his recent conviction, and as he had made his strong desire known that he did not want to return to Britain but preferred to stay in South East Asia, he should be allowed - even encouraged - to do so. 

I must admit to a heart-sinking feeling when I heard that Glitter was, indeed, on his way to Hong Kong, in First Class, but good sense it seems has prevailed.

The laws in Britain covering people convicted of paedophilia are much more stringent than they would seem to be in Asia generally. A register of persons convicted of this most heinous of crimes is maintained, and the physical movement of paedophiles is monitored carefully, to the extent of taking away a person's ability to travel. Sadly, few Asian countries monitor such activities as carefully, leaving young children down as young as babies at serious risk from these sick people. No wonder Gary Glitter doesn't want to return to Britain, as his activities will be severely curtailed - and he might even be the target of some unpleasant abuse.

And, Mr. Bloom, I am sure you don't want Mr Gadd returning to his home country particularly if you have young grandchildren who might be at risk as a result, but don't try and foist this disgusting specimen of the human race onto us in Hong Kong.