Eldon-Online

Pause for Breath!

As an exhausted world staggers and crawls to the end of another Gregorian calendar year, how many of the players - major and minor - just wish the world could stop for a week to provide room to breathe, create and implement some sensible solutions, and put us all back on track? 

But even if this were to happen, would it actually make any difference, given the size of the burden we have to resolve?

Sadly, I suspect not. And news this morning from Britain is that more young people are expected to file for debt protection over the coming weeks, as their costs have blown out over the holiday period. As the line from the Pete Seeger song “Where Have All the Flowers Gone” says “When will they ever learn” And if they decide not to file for protection, where will they get the money from to repay their debts? - well it won’t be the Banks. It will more likely be the “payday advance” companies. Legal entities where a recent search (five minutes ago on a comparison web site) suggests that the interest rate is around 1,737% p.a. Read that number again and carefully; it is correct - and just in case you still don't believe me, it should show up if you just click here; 

 What happened to the definition of “usury”?  Such laws were repealed in Britain in the 19th century - and in the USA in 1980 by Jimmy Carter. A case for a revival perhaps?

But this is not intended to be a Blog about personal debt, or spending over the holidays to keep the children happy. It is more about the fact that 2011 has, for many people, been a difficult year. It is not just sovereign debt, political shenanigans, personal debt, unemployment - it is also the wider issues surrounding the world in general. Climate change, underemployment, the growing wealth gap, and it is something we need to take charge of ourselves.

Do not necessarily expect the current crop of politicians to have the answers (there are exceptions), but try to elect people not because they want to do things that are election-winning populist, but because they want to do things that are right... things that will address the problem of having an elephant in the boat.

 I do not want to end the year on a note of despondency, but on one that is positive.

A positive note that asks that section of the banking community involved to stop thumbing their noses at Governments and the public at large by demanding bigger bonuses, as if nothing has happened . (As the chair of a remuneration committee for a public company, I have just turned down a management-recommended fee increase for directors even though the current fees are below the average, on the grounds that the existing fees are “fair” for the amount of work involved. I am happy to say there were no dissenting voices).

A positive note that asks politicians not to think about the next election and their success or otherwise in such elections, but work out (and then implement) solutions that are practical and positive.

A positive note that asks media everywhere to become rather dull and report unusual things ... like “facts”, and positive news, instead of seeking out the “sensational” and interpreting things to suit their own spin.

A positive note that wishes everyone good or better health in 2012, and courage to do the things that need to be done now - rather than letting things ride and creating escalating problems for our children and grandchildren.

We may have “lost” 2011, and there is no II button available where we can pause for breath. The world moves on - and with the right attitude and commitment, we will succeed.

I am heading to Africa soon to visit a school in North Eastern South Africa that we support to see how they are doing, and January Blogs may be a little light as a result.

In the Chinese Astrological tables, next year is the Year of the Dragon and I, for one, hope his fire hasn’t gone out.

Happy and Healthy New Year.

 

Getting It Right - For Once!

"But my prediction is that in 2011 the "Dear Leader" will become the "Dearly Departed Leader" ."

Rather scarily, in December 2010 at an Economist Magazine event in Hong Kong called "The World in 2011", and in my Blog dated 20 December entitled "Whatever Next" I made the above prediction (alongside four others, in the hope I would get at least one right!). Although I was the "public face" of that prediction, in all honesty it was a joint effort. The creation mainly of my good friend and Canadian collaborator who eventually persuaded me that it was possible.

Today, 19 December 2011, we received the news that it has happened. Kim Jong Il, North Korea's leader for the past 13 years is no longer. Dead, apparently from a heart attack on 17 December.

The second half of the prediction as to the future of Kim's son will still need to be followed carefully.

The world may be nervous about the possible repercussions of a power struggle affecting the rest of the world, but personally I do not think it will amount to much. I do think that this could be the opportunity the world needs to start making inroads into North Korea. Kim Jong Un, 28 years old and "The Great Successor", despite his European "education" is understood to be a complete under-achiever of limited ability and intellect. On the one hand, this could be a dangerous, if not lethal, combination. But on the other hand - is this the opportunity "the Generals" crave? Hopefully the diplomacy has already started - and the world is on the same page. China has a major role to play here, and it can be statesmanlike and responsible within the global context.  

As a person who has never been happy about making predictions - especially about the future (partly because my success rate has not been high) - getting one as big as this right (I think I got them all right actually - but the others were dead certainties) inevitably means that my forecasting days are over.

My crystal ball has never been better than that of anyone else, which remains the case, but it is always nice to get one right occasionally, particularly when you were beginning to doubt yourself. Always go out on a "high", they say. Quit while you are ahead. And that really is what I should do without tempting fate.

But ... with the Eurozone crisis unresolved, French elections that could turn everything upside down, the establishment of the new leadership in China, and a still uncertain Middle East ... there are many possible topics for predictions. None of them, however, are likely to be positive and I think that 2012 is going to be generally gloomy, but with a lot of hard work and probably considerable compromise, we will come through it and be facing the end of next year with renewed confidence. 

 

Barbarity Is Not A "Cultural Difference".

No cartoons this time around. Not in the mood for humour as I read once more about the barbarity of certain members of this world in which we are all supposed to live in harmony together. Barbarity disguised (excused even?) in the name of "cultural differences". I am sorry but there can be no place today for the actions of men principally in parts of the Islamic world - particularly in Pakistan, Bangladesh and Afghanistan with regard to women.

I have been described in comments on my Blog as an apologist for China, which I do not think I am, preferring instead to try and balance anti-Chinese Western driven rhetoric. China, a country with many imperfections which, nevertheless, is trying to improve and has done pretty well from a standing start of only a little over 30 years.

I have been described, also in comments on the Blog, as being anti-American. A comment that again I would defend, supported by many of my American friends many of whom who have actually agreed with my comments.

And I have been described to my face, accusingly, of being an Arab-sympathiser; actually by someone who has never lived in that region, no less. And on the basis that much of the world sees any Arab as a potential terrorist, I would defend myself against that comment on the basis that I know many Arabs who are perfectly decent and reasonable men - and women. And yes, there are indeed some genuine cultural differences in Islam that I completely respect.

But if Islam wants to know why it has a bad name - here is one place to start which is just not defensible.

So called "honour killings", for example, where women have been killed because they have brought "shame" to their community by just talking to the wrong person. This seems to happen in Britain, but if you want to carry out an honour killing in Birmingham England, you cannot - or should not - expect to be saved because you are "culturally different". There are laws in Britain against this sort of thing, and despite attempts in some quarters to make the country religiously neutral by making even the wishing of Happy Christmas seem somehow inappropriate, Britain is still predominantly Christian. 

And  now the recent reports out of Bangladesh where a man cut off his wife's fingers because she wanted to study is not - at least to my mind - a cultural difference. It is a pure act of barbarism and has no place in our world. It follows on from an earlier report of the man who gouged out his wife's eyes, also because she wanted to study.

We are not supposed to intervene in the affairs of other countries, but how can one stand back and allow this sort of thing to happen? Okay, so human rights groups are demanding life imprisonment for this crime, but will they get it? It will be interesting to see if the media keep an eye on it and follow up. Certainly the comments from the police chief in Bangladesh would not give me comfort that this will be treated very seriously. "He was enraged", said the Chief, "He was jealous." Draw your own conclusions!

In an attempt to bring some balance to my thoughts, the west has not always behaved properly either - but it was a few centuries back with things like the Catholic led Spanish Inquisition, and the Puritans with their witch trials. We have learnt from those mistakes. And this is the 21st Century. And whatever your religious persuasion, barbarity is NOT amongst them and is not condoned in Islam either. 

While on this rather depressing subject, I just want to share with you a link sent to me the other day by an old school friend. I hope you can open it, and that you will watch it through. It's not long and will cost you nothing, but it provides a story of hope. It is organisations like the Hoshyar Foundation, and my old and continuing favourite Room to Read that are doing so much to try and change the world for the better. Particularly by educating girls and women.

 

Isn't It Time To Bite The Bullet?

Back to Europe yet again for this Blog because, whether we like it or not, what happens there is ultimately going to affect us here in Asia. It is all very well for us to continue to pat ourselves on the back and say we are in good shape in places like Hong Kong, but I think we would do well to remind ourselves of the Boy Scout motto “Be Prepared". 

But before I spread more gloom and despondency, as in recent writing, I remarked to a good friend a day or so ago that after all this prevarication, on and off discussions, no decisions, and “will they won’t they” diplomacy, it was probably time that the major players took a deep breath and decided to bite the bullet

Talented man that he is, I got this by return.

 

An original, no less.

But he doesn’t stop at creating cartoons. We were discussing the European events in September or October in the wake of a stock market up-turn, - “a frenzy of blind optimism”, he said, "rather flimsily based on rumours that European leaders were suddenly ready to act”. “Where did that come from" he added "they hadn’t taken any action in the previous 18 months, so “sudden” was rather unlikely”. And so it has been proved.

Clearly one cannot take a snap decision over something as complex as this, but by the same token one cannot delay forever. There is certainly no shortage of advice out there from the media, the professionals, the laymen and the politicians, but little consensus beyween them. Suggestions run the gamut of reverting to the original Eurozone members and letting the "new" joiners either sink or swim in another pond. That, to me as a non-expert, seems to be a reasonable suggestion, but it leaves the big question of what do you do with the remaining 21 members? Anarchy in their own countries perhaps, spreading into the rest of Europe? It would seem there are enough people out there who are ready for a fight.

Or let Germany move out from the Eurozone and do its own thing. There appears to be a growing swell of public opinion in that country which runs along the lines of "how much longer are we expected to bail out people who cannot balance their own books?" The trouble for Germany would be that going it alone would see an appreciation of their currency that would have an immediate impact on its ability to export and earn revenues, bringing Germany to its knees.

There are more variations on a theme than those written by Elgar. But the time has come for real leadership from a group of politicians whose re-election hopes must be made secondary to the main role of resolving the crisis. They would work together with organisations including the IMF, and the financial community and the European Governments with a view to coming to a decision - and then implementing it! (I saw an article today that said the IMF should not get involved – or at least the non-European members should speak up against a bail out coming from the Fund. A short sighted view, I think, because this is a global problem).

It is important to get this resolved because the longer it drags through the winter months, and the uncertainty lingers, the more chance there is of matters turning ugly – and they will not just be economic issues but social ones. “Occupy Wall Street” will become focused on real issues and develop a sense of purpose. It will spread. We can do without that .

And for us in Asia, we are not immune. China is going through a leadership change that will take months to settle down, and the current level of inactivity will continue. We have our own – and rather ridiculous – “Occupy the space under the Bank because it is covered, but protest about the property developers” movement in Hong Kong, and also a leadership election. Korea is moving into an election year in 2012, while Japan seems to be having trouble keeping a Government at all. And that’s just the politics. Economically in Asia we are beginning to feel the effects of reduced orders, and rising inflation. Unemployment too, is an issue amongst the “young” populations particularly in South East Asia – which will lead to a testosterone imbalance, and add more anger and fuel to the fires of unrest that are already bubbling under the surface.

And from a crisis that had its origins in the USA – an economy that itself is still not out of the woods – and has spread with alarming and amplified effect vengeance into Europe, we need a resolution before it gathers more potency and hits us.

There is no “soft” option really – and measures that will actually resolve the problem are likely to be painful – but something has to happen, and be followed through.

Now is the time to bite that bullet.

 

What's That Smell?

Here's the scene.

You go into a bathroom on a plane. It smells really really bad but you're desperate to go. You finish, wash your hands but the smell is still there when you leave. The person outside wanting to get in after you, enters, looks back at you as if you were the one who had made the smell, and clearly thinks you need to see a doctor to check on whatever is wrong with you - and you feel guilty, despite the fact you were not the originator.

The parallel? The investment banking community in particular, but together with commercial banks, regulators, rating agencies, politicians et al create a bad smell - especially over matters like bonuses and pay - right minded and some sensible commentators and practitioners go in to try and bring some semblance of order, perspective and reality to such payments, but the original greedy culprits are still out there shovelling in the bonuses, totally oblivious it seems to public opinion.

 

This is going to end in tears, eventually.

I have just travelled from Canada (some semblance of order, I thought) through London. I had an early evening business meeting to attend with a colleague I had not previously met, and with the West End of London being mutually reachable territory we agreed to a lobby lounge in a location that neither of us knew much about. The lounge was full and we had not booked, so we went to find a seat in the bar. Mistake. You couldn't move comfortably because of the crowd - none of whom were going to allow you any space - and all you could hear amongst the popping of champagne corks were Hooray Henrys (and Henriettas) braying about their latest financial triumph.

It is clearly not enough that some European Governments (isn't it interesting that they all seem to be in the "sunshine belt" - except Ireland which at least looks as if it is making some good progress) are in dire straits because they are spending more than they "earn". And that their attempts to rein in the excesses are leading to riots.

You know what? There is going to come a time when the disadvantaged (in their eyes), are going to take seriously the fact that they are no better off than they were 10 years ago. Fact! New jobs are still hard to come by, there is rising inflation and a lack of income on their deposits, if they have any. But by contract there are still members of the community out there who are not affected. And they are getting richer. The gap widens. And as it widens, I suspect patience will narrow.

If patience narrows, intolerance grows. The nice cars on the streets - whoever they belong to, will indiscriminately be targeted for damage. The nice second homes that are left empty might gather unwanted occupants, who have the force of the law with them - not with the absentee owner. The places where "smart" people go will become targets for protests. Not a pretty scene, is it?

I must reiterate my views on bonuses and pay. I am not against them, as long as they relate to genuine value added and a job well done, using money that has been entrusted to you by investors or indeed using your own money. But not if you have been bailed out by Government and are now sticking your thumb to your nose because it hasn't affected you. You are then "playing" with other peoples money - and even if you lose, you still seem to get paid, or you move elsewhere equally lucrative.

People working in financial markets particularly have, over recent years, been receiving payments that the majority of people can only stare at and maybe dream about 10% of the amounts paid. It reached levels beyond anything linked to inflation and general increases in living standards - and if it is just left to continue unchecked - then don't be surprised if the world turns on you. Adapt to your surroundings and take notice of what public opinion is saying.

If you don't, then you might just end up with the contents of the bathroom being tipped over your own head - and instead of wondering what the smell is, you'll be sitting in it!