Eldon-Online

The Pot and the Kettle.

Communist China is destined for the ash heap of history because they are not a country of virtues.

Republican Presidential hopeful Rick Perry.

For those unfamiliar with the expression "The pot calling the kettle black", it is an idiom used to accuse a person of being guilty of the very thing of which they accuse another.

I have been accused of anti-American sentiment in these columns before which, happily, American friends willingly deny on my behalf, but I have never (yet) been accused of being totally stupid. (And I am equally critical of other nations too, when warranted).

But I just wonder what Mr Perry had in mind by referring to China lacking virtue, and which country was he using as a benchmark - the USA? Does he really believe that the "American example" is the one that everyone else should follow? Does he seriously believe that the country that brought us the origins of the latest global financial crisis (not being well handled by European political leaders, in my view) is one whose greed is to be admired? There are surely, if one but reads or listens to the news, cases of rights abuses, fraud, shootings, and many other defects in the USA - in some cases many more than elsewhere.

Or is this "merely" electioneering rhetoric, not to be taken seriously? Let's face it "Destined for the ash heap of history" is pretty strong, but I don't think the Chinese leadership are going to be quaking in their shoes at Mr Perry's pronouncement.

I suspect, instead, that China is more inclined to the Kissinger view of US influence in China, when he said words to the effect  "China managed to get through 5,000 years of history without significant advice from the United States. That is why they do not take as self evident that their domestic affairs should be prescribed by the United States." I have seen this written in a variety of ways, all attributed to Mr. Kissinger, but all say the same thing.

Don't get me wrong. I am not defending China from the comment made about virtue. Is China a country of virtues? Of course it's not, but I believe that it is making progress, which is slow at times, and it is determined to do more. But with a population four times the size of the USA it is going to inevitably be a long process. The USA has been trying to "get it right" since 1776; China, only really from it's re-entry into the modern world in the late 1970s. It is far from ideal - particularly from a Western perspective - and anyway frankly, is there a country anywhere that could truly describe itself as virtuous? Which one is the role model? Mr Mugabe's Zimbabwe doesn't seem to be criticised much these days - but then I suppose it is too insignificant to be considered a threat to America.

And why the China bashing anyway, are you really that scared of China's return to influence? Its return, if you like, to the prominent position it once held globally and long before a young America came onto the scene.

Actually, I wouldn't worry too much about it. China, along with much of the rest of Asia is much more likely to link up with South America, Australasia, Africa and the Middle East over the next century or two and will leave the USA and Europe to go and figure out the future for themselves.

It does worry me though that in this world of ours we are becoming increasingly nationalistic and protectionist. Although I do understand that when we have the sort of levels of debt and unemployment we are facing today, particularly in the West, that this is perhaps a natural reaction. But when you add inflammatory comments to the equation from politicians who, frankly, should know better - in the long run it will come back and bite us.

Oh, and by the way, isn't this the same Mr. Perry who just been accused of hypocrisy for an investment in America's largest pornography distributor? The pot calling the kettle black - perhaps?

It's going to be a long winter!!

Reflections - Of Worms and iPads

In recent years I have been saddened by the things that people can no longer do in our so-called "civilised" and modern society that would have been commonplace in my time.

Aged seven and eight years old I would walk down to the end of our road and catch a bus to school by myself, get off at the right stop, walk the rest of the way to school, and come home the same way. Now, it seems, if an innocent child wanders off they become at risk of being snatched. The rise of child pornography surely sickens any right minded person, but such appears to be the demand for its production that there is obviously a substantial enough depraved community.

And we now seem to need to be protected from ourselves by laws, rules and regulations because we have stopped being aware that we need to take responsibility for ourselves through common sense. We no longer understand what "principles" mean, therefore we try and legislate them. We eat too much of the wrong thing, but we can get pills to help us from dying of gluttony. Everything we eat and drink needs to be labelled, so we are at least well enough informed to know how we are killing ourselves!

The trouble, for me at least, is that this is irreversible. George Orwell, author of "1984" which, like some of his other books railed against totalitarianism, must be smirking quietly to himself (he was a man of wit) in the knowledge that actually it didn't in the end need communism to introduce the concept of a nanny state and "big brother is watching you" into our lives; we managed it all by ourselves!

So before I wander into a state of melancholy, I thought I would share with you something I received through my virtual mailbox a day or two ago that summed up my thoughts pretty well. Now don't get me wrong - some of the changes that we have made in modern times, like the banning of smoking are clearly beneficial to the community as a whole - but what follows really reflects the things we did, with a few amendments of my own.

First, we survived being born to mothers who smoked and/or drank gin while they carried us, and lived in places made of asbestos with no indoor toilets and just a zinc bath for ablutions.

They took aspirin, ate blue cheese, bread and dripping, raw egg products, loads of bacon and processed meat, sausages (with real meat in them), tuna from a can, and didn't get tested for diabetes or cervical cancer. (And before you start wittering about life expectancy, my Mother will be 92 next week, and her sister 94 next May!)

Our baby cots were covered with bright coloured lead-based paints. We had no childproof lids on medicine bottles, doors or cabinets and when we rode our bikes, we had no helmets.

As children, we might ride in cars with no seat belts or air bags.

On a summers day we drank water straight from the garden hose and NOT from a bottle.Take away food was limited to fish and chips. No Pizza Hut, McDonalds, KFC, Subway or Nandos. We shared one soft drink with four friends, from one bottle and NO ONE actually died from this.

Even though all the shops closed at 5:30 pm, as well as on Saturday afternoons and sometimes Thursday half-days, and didn't open at all on a Sunday, somehow we didn't starve to death!

We ate cupcakes, white bread and real butter made from cow's milk. We drank soft drinks with sugar in them, but we weren't overweight because....WE WERE ALWAYS OUTSIDE PLAYING!! We would leave home in the morning and play all day, as long as we were back just before it got dark, or when we had been told to be home. No one was able to reach us all day - no mobile phones. And we were OK.

We would spend hours building go-carts out of old prams and then ride them down the hill, only to find out we forgot the brakes. We built tree houses, made camps and played on river banks -or in the river itself, in our underwear - unsupervised. We did not have Playstations, Nintendo Wii , X-boxes, no video games, no 999 channels on SKY, no video/dvd films, or colour TV, no personal computers, no Internet or Internet chat rooms..........WE HAD FRIENDS and we went outside and found them!

We fell out of trees, cut ourselves, broke bones and teeth and there were no lawsuits from these accidents.

We ate worms (admittedly, usually by accident) and mud pies made from dirt, and the worms did not live in us forever.

We were given catapults for our 10th birthdays and our parents taught us how they should be used safely.

We rode bikes or walked to a friend's house and knocked on the door or rang the bell, or just yelled for them!

Not everyone made the rugby/football/cricket/netball team. Those who didn't learnt how to deal with any disappointment. Getting into the team was based on MERIT. Our teachers used to hit us with canes and gym shoes and throw chalk or even the blackboard duster at us if they thought we weren't concentrating....

Our parents would tell us to ask a stranger to help us cross the road, and the idea of a parent bailing us out if we broke the law was unheard of. They actually sided with the law!

Our parents took responsibility for us. For our upbringing, our behaviour, our social education if you like. They took an interest, and didn't abdicate their responsibility to the teachers. And if you got told off, it was usually because you deserved it, and it wasn't a matter for an enquiry.

We had freedom, failure, success and responsibility, and we learned how to deal withit all. And if you are my age, or perhaps 15 years or so younger, you have survived. Congratulations!

Today our world is very different, and so are the pressures. I am neither that naive nor that stupid not to have noticed. I look at my own children - adults now themselves. I am hugely proud of my own kids, how they have turned out and their own attitudes to life, as I am sure many parents are of theirs - I understand them (I think!) and their values, to which I can relate. But I don't think they had as much natural fun as I had growing up. Even if I had my own disappointments.

But my question now is this: if we managed to successfully navigate a different way of life, and if our own children are the decent types of human being you wanted them to be, but we now bemoan and criticise what that world has become,where the hell did it all go wrong?

That's it!I've said my piece. I am typing this on my iPad on yet another flight, so that when I land I can "post" it on the Internet for people in a number of countries to read it immediately without waiting for the postman to arrive, and just scratch my head and smile at the memories - because let's face it, what else can you do?

Who's For Turkey?

Thanksgiving Week, and not a good one for turkeys in the USA. But if you think the rest of the Blog is going to be about a member of the genus Maleagris, sorry - think again.

I have in mind a somewhat luckier Turkey; as depicted below:

A country of almost 75 million people, predominantly of the Muslim faith but with no official religion - in other words a secular state. And if it can stay that way, it will likely do well.

A country which has been somewhat schizophrenic in its outlook - Janus-like, facing as it does in both geographic directions, never sure whether it was a part of Europe or the Middle East. And yet with strong connections even to China where the Uigers exist as a Turkic minority race.

A country with a strong desire to join the European Union, although I suspect right now it must be breathing  a huge sigh of relief that it had been unsuccessful. But now a country with some desires and designs of its own.

For many years Turkey has been viewed as somewhat chaotic. Out of touch. An occasional holiday destination. A haven for terrorists. A producer of cheap goods (and not good quality) but at least one that could cope with lower volumes and orders rather than having to compete with the monster factories established in China, for example, who could only operate profitably on large volume orders.

But the last decade has been changing all that. Political stability. Better education, leading to a more skilled workforce. A successful economy. A serious tourist destination - and now Turkey sitting as it does on the outer edges of the Arab Spring, and looking both East and West, is being considered as a sea of stability and a conduit through which businesses and people can safely trade, East to West and vice versa. A country with aspirations and a growing belief in its ability to succeed.

A detour. I have just been in both Saudi Arabia and Egypt. The contrast today between those two countries is striking.

The Saudi heads of Saudi businesses were sharp, bright-eyed, intellectual, progressive businessmen. No reliance on Government handouts and a feeling that they didn't have to work too hard, that might have been the impression of them in earlier years. In a word they are impressive. If the country as a whole was able to move faster down the reformist line they have travelled so far, the global business world would be the better for it (and so, I believe would the country).

Egypt as you might expect given the turmoil in the country, and I have to confess I was only in Cairo, was looking depressed. Of five business people questioned in depth, one was extremely bullish about the country, two were depressingly negative, the fourth was slipping down the "happy" scale the more he talked and the fifth had a "party" line about him. The verbal language was mutedly positive, the body language decidedly defeated. A colleague who had a number of other meetings found no-one positive about the country. The roads are jammed as police seem to leave drivers to sort themselves out. It appeared in some places the general public were actually directing the traffic. It is sad to see, but the longer the country drifts, the greater difficulty there will be in restoring order. It is like an illness where a cure is harder to find the longer the disease has been allowed to continue untreated.

But there was one striking common feature about the discussions in both countries. Turkey.

A similarity of opinion from people that we spoke to who agreed that Turkey was the future place to do business. And I have tested it out here in Hong Kong where the level of serious interest in Turkey is also growing.

Turkey probably cannot ignore the West - 55% of its exports head for Europe at present, but that's a market where demand is going to fall at least in the short term. It is a stable, democratic state with strong Middle Eastern roots, and I suspect investors will be closely looking at what more they can do in Turkey. And the demographics of certain parts of Asia, like those of Turkey are similar where half the Turkish population is around 28 years or under.

If you had to put a country on your watch list for your future business, one would have to ask "who's for Turkey?" Unless they do something incredibly insane - I am!

PEP Talk ... Two

Now, where was I? I think my intended short Blog of 17 November started to grow legs once I got into it - and if you have come into this Blog "cold" as it were, PEP stands for People, Economics and Politics!

It started off by saying that you should never judge a person's intelligence by the way they dress and look, and then I was suggesting that our global Economic woes were largely caused by People. We have to a large extent brought this current crisis on ourselves, (but of course are quick to blame everyone and anything else!). I then started down the "Economics" path - busily distancing myself from any specialist knowledge on the subject, but just speculating (oops, that word again!) on what might happen next, in particular in the Eurozone. And it is this Eurozone region, to me anyway, that is currently at the heart of what is likely to happen next.

We all know Greece has a problem. Unless they are prepared to accept tough measures that will undoubtedly impact their lifestyle, they will go bankrupt. Why will anyone want to lend more to a Government that cannot repay its debts because they cannot raise enough money to do so? This is serious enough, but it has other implications too.

For example a similar story might now be emerging in Italy. This is a country that has to re-negotiate approximately Euros 350 billion of debt next year. That is, renegotiate or repay. It cannot do the latter. But if you borrow - you pay interest. As a "sovereign" borrower, previously they might have had to pay 3 or 4% interest annually but the most recent issue of Italian Government 10 year bonds had an interest rate of around 6.8% per annum; expensive - very! If that trend continues, then next year's re-negotiations could be at historic highs making it hard for Italy to even service the interest repayment! The same story is repeated in Spain and Portugal.

But if you are still with me - it gets even worse. Banks who make these loans to Governments have in the past not had to put any capital reserves to one side against this sovereign debt, because Governments always repay!! But Greece has now asked its lenders to take a 50% reduction in the amounts it will repay, which means that Government debt can no longer be considered "risk-free". Therefore, in future banks will probably be asked to provide some capital cover for this type of lending. Maybe it will be 50%, maybe it will be 20%. I don't know the answer, but what it will mean is that banks will have to raise more capital in the market - and how much is available for them to borrow to increase their balance sheets? Already one Italian bank has started the process, others will have to follow and the French and German banks will not be immune at all. The two major French banks are already showing signs of strain.

And I'm not finished yet. With the gloom already in the markets, add to that the fact it is becoming clear in Asia that shipments out of the region to the West particularly, USA and the Eurozone - are sharply down as people spend less in those econmies and you can see that there is going to be a ripple effect into the markets here, in Asia.

As matters stand today, we have problems. And they are not being tackled well. In fact the structure of the Eurozone doesn't help. Too many countries are involved when it comes to making a decision, which renders the process to make decisions neither easy nor quick. And each month's delay in taking action compounds the problem.

 So, we have thought about the People. We have done a little about the Economics - and which is the last part of the piece - the true villains, perhaps? The Politicians. That breed of people who bear a strong resemblance to analysts and rating agencies.

Like analysts because they have short time horizons. The next election is their key target. How to maximise their people-popularity - which by the way is not usually achieved by taking strong measures that affect lifestyles even if their reluctance is likely to shove the country deeper in debt. (Of the "bad" economies in Europe at present perhaps Ireland is the stand out success. They know something has to be done, and they do seem to be doing it).

Like rating agencies because they have a CYA mentality (with apologies to readers of a gentle disposition). 

Thus the dilemma. Most people I speak to believe that the economic reality of all this mess at present can only be resolved by firm and swift action. If letting Greece go is the answer - let them go. If re-designing the Eurozone, even putting it back to the original founding members (with or without Italy?) is the answer - then do it. BUT - the politicians have an eye on their own futures, their jobs, their pensions ... and not losing face by having created, and then having to disband a concept that has grown out of control. So we have "Economic Reality vs Political Expediency". 

Is this a game to win or lose - or will it more likely end up as just another "muddle through" - with compromises all round.

Oh, I almost forgot. If you want China or anyone else like them to help do not think they will do so through Europe directly. They won't. There is no upside for them. But keep an eye on the IMF instead - and there, maybe, you will find an answer.

A PEP Talk

Really - a pep talk? You mean one of those rah rah things to get everyone jumping up and down to happy clappy music and pretending to feel good about life in general afterwards? About life in a world that seems to be full of mostly bad news? 

Umm, well no, actually! I mean PEP as in People, Economics and Politics. I have, of course in previous Blogs admitted to knowing not a lot about Economics, and I have never been particularly Political - so this could be mercifully short! 

The initial inspiration for this Blog actually came from a musically related piece I read recently, together with some discussions I have been a part of during the last week concerning Europe in particular.

Look at the picture below and before reading on, see if you can identify the person - and consider the impression you get from the picture.

Identity? Anyone?

If of course you said it was probably an early and previously unpublished picture of me in an earlier life - wrong!!

But if you said it was obviously Gene Simmons, the frontman of the hugely successful rock group Kiss, congratulations, although I suspect that few of the people who I believe read this Blog would have been terribly sure! But whether you knew or not, I suspect the image in your mind created by the picture would have led you to stereotypical thoughts about someone who dresses and looks like that - musically talented probably, but not terribly articulate or capable of original intellectual thought or business sense, and definitely someone you hoped your daughter didn't fancy! If that was your view of Mr. Simmons you would be ... mostly wrong.

Kiss is one the world's most talented and awarded rock bands, and have maintained their appeal for over three decades. But what is perhaps less well known is that frontman Simmons is also a successful businessman who recently made a speech at the London Business School where amongst other lines were things like:

 - Countries are businesses — they have imports and exports and you want your exports to be higher than your imports so you can have a profit.

 - Government makes money by taxing and spending. It's so simple. If you spend more than you tax, you're out of business. MPs don't know what they're talking about.

 - And we created this miserable economic state. It's like fat people who think it's the bakery's fault they got fat. No, you kept going in there and you kept eating cake. It's not the bakery's responsibility to tell you not to eat so much.

 - (In the same way that) banks shouldn't have to tell you not to borrow so much. They're banks — they're supposed to lend you money. If you can't afford to take out £100,000, don't take out a £400,000 mortgage.

And I particularly like the last one

 - It's your responsibility to be a grown-up and take care of yourself.

This all sounds remarkably like common sense to me. For too long have some people believed in the theory that the world owes them a living. In some countries it seems to be worse than others. When they have worked for a few years, they believe they now have earned the right to put their feet up aged 50, and take a full pension - to which they have not contributed nearly enough - for the rest of their lives (Greece). Or they have been politicians whether for 30 years or 30 days, they are also entitled to a full pension (Italy).

You know what? When Chancellor Bismarck first thought, back in the days when life expectancy was around the late 40s, that it would be fair to let someone be looked after by the State if they worked beyond a certain age, he came up with the idea of a retirement age of 65. Given today's longevity tables, I am told that to qualify for a pension now on the same terms, you would need to live to be 112.

So, that's something about "people". Don't judge people by the way they look, for a start. And wake up to the idea that we need to fend for ourselves more. If you are in debt, is it because the banks have forced money on you ... or because you were undisciplined in your spending? Our society - at least some of it in parts of Europe (and elsewhere I am sure) - needs to temper its expectations. Do these people who want to "occupy" things (like Wall Street, St Pauls) really think they are hard done by, or is it just rent a crowd becasue it's something to do?

And so, as we move to the "E", I now realize this is getting to be longer than I had intended. Let me attempt some brevity.

You are not paying attention to the world around you if you are unaware that Europe is in an economic mess. But it will all be sorted out soon, won't it?

Actually ...... it doesn't look like it any time soon! And to add more depressing news to fuel the fires of uncertainty, there are not going to be (m)any places anywhere in the world unaffected to some degree or another. The American Financial Crisis has now hit Europe hard. There is more to follow.

According to Gene Simmons, you cannot spend money when you don't collect enough to spend. You certainly can't run your household like that can you? If you do not have enough money to pay the butcher, you don't eat meat. If you live in Greece, where people do not seem to pay their taxes, for example, then the country does not have enough money to pay for pensions or their other obligations - like loan repayments.

Already some banks are in as much trouble as the countries themselves, and a continuation of this situation will spill over into business and growth. This will lead to a slow down in their economies and unemployment. I wonder how many people have grasped this yet, because judging by many media articles the potential seriousness of this has not got through.

But in the interests of space and time, let's keep that for the next Blog.

A Little Self Publicity

When the subject of my Blog is brought up, it is usually by others because I rarely mention it myself. But then I sometimes get asked how I promote it and how can people find it?

The short answer is "I do and I don't". The only places you will find reference to it are under my email address signature, if you get one from me, and on Wikipedia - and how I got an entry there I have no idea. It certainly wasn't me! Not my style - a bit like not having a personalised car number plate. (There is a car in Hong Kong with the number plate ELDON. It's not mine!). So finding my Blog is not exactly easy.

It all started when there were a couple of issues that arose that I really wanted to let off some steam about. I thought a "letter to the editor" would be a waste of time, but then a chat in Hong Kong with my technophile eldest son led to the establishment of the Eldon-Online Blog. It was designed to be a place where I could say what I felt about various issues. If others found it, perhaps by word of mouth or being linked in to it, and it gained a wider audience that was genuinely interested, then that would be a bonus, and I would carry on writing. It would, I thought, be moderately regular - I aimed for about 4 postings a month initially although if any pressing issues came into view, I would write something outside that time frame.

Actually, I don't know how to publicise the Blog, and indeed have no great wish to do so. I would certainly never be so presumptious as to tell all my friends I have written another one - they might not be interested.

Since inception, happily, readership has grown. The site does not get visited by masses of people daily, but it's steady, and that's fine with me. I try to keep it varied as to content - serious and less so - fair (although some American readers seem to think I am anti-American - for the record I am not!), and objective.

So if according to all of the above this is "designed" to be a bit low key, why am I writing about it?

Just because I gave an interview very recently where the subject of the Blog came up, and the subsequent printed interview actually provided a link to the site. Thus in a fit of very uncharacteristic self publicity, I thought - here is an article which provides some background about me that doesn't generally appear anywhere else, so why not make it available to a wider audience?

Here it is

Tempus Fugit!

tem·pus fu·git: foreign term \ˌtem-pəs-ˈfyü-jət, ˌtem-pu̇s-ˈfü-git\: time flies

 OR: What the hell happened to the last two months?

I am sitting in an airport lounge at one of Beijing’s Airport Terminals sipping a moderately hot chocolate (I pressed the Cappuccino button, honestly!). It seems like a good move now, albeit accidental, seeing as the room is fiercely air conditioned when it is a "brisk" 10degrees Celsius outside. They are probably putting hot chocolate into all the drinks on offer. 

But in the process of waiting for my flight to Seoul, I have been reflecting on the fact that I was taken to task this week by a variety of colleagues and friends who all suddenly noticed that my Blog seems to have suffered from a lack of activity for almost two months. Heavens above, people check this stuff? I must admit though, it surprised me rather too. I didn’t think it had been that long since I last headed off with some tangential commentary, and it made me realise once again that this idea of retiring and slowing down might indeed be an aspiration of generally sane and intelligent people but not for me, it seems. (Which makes me ….? – Answers in a sealed brown envelope please!)

To miss a couple of months in this manner is either a function of selective amnesia or I’ve been busy. I’ll choose the latter, thanks! And that was what I have said to those who have kindly said they missed the odd comments. (I prefer to assume they meant "odd" as occasional, rather than "odd" as in strange!). But a repeated response was - "... well, you don't have to write too many words in each piece. Little and more often would work just as well." Sounds more like my dietician, but I get the point.

Just because my lack of erudite commentary on subjects as diverse as the daily performances of the "Greek Tragedy", Wayne Rooney’s apparent inability to understand that the idea of football is to put your foot to the ball, not to other people – (otherwise it would be called footpeople or something similar wouldn’t it?), marvelling at the wonderful UK Daily Telegraph caption on “The Return of the Leerer” (go on, click the link!), does not mean to say that I have been unaware of the world around me. I have. Only too well.

It’s just that I haven’t found the time to write about it. Something to do with having visited 9 different countries, taken 15 different flights, and been in Hong Kong for just 17 of the last 53 days perhaps? And to the question about what do I do about jet lag? Nothing. I am permanently jet-lagged, so I don't notice it. (And I am neither looking for a medal nor am I complaining. It's just all so much fun).

Anyway, for what it's worth - the political expediency of keeping Greece afloat may not reflect the economic reality of what should happen. It is a sorry state of affairs when austerity measures to be introduced in Greece, such as increasing the retirement age on a full pension to beyond 50, create riots. As one of my children suggested succinctly recently " Didn't you know that € is the Greek for "Oh sh*t".

Europe generally looks to be in a bit of a bind that it is unlikely to come out of for some time. The USA is taking some comfort from the European mess to deflect from its own less than stellar performance. The Middle East remains in a kind of limbo in certain areas, Egypt particularly where I am going in 10 days or so, and our friends in the UAE are still a little tender. I haven't spent much time looking at Africa or Latin America recently, but Asia continues to be somewhat positive despite the fact that growth rates are falling. But there is no room at all for complacency.

The banking industry continues to attract bad publicity, and the subject of directors pay certainly in the UK has attracted some pretty negative comments. When will we learn that you cannot in all conscience continue to think that it is alright for the gap between the rich and the poor to widen.

Enough ammunition in that lot to keep me "on blogs" for a while, so I will find Tempus to Blogit.