In my humble opinion, the soundest possible advice at this stage of the FT aftermath is the famous saying by one of the most beloved Presidents of the USA - Franklin D. Roosevelt during his speech on the 2nd day of July, 1932 ( The Great Depression years ) :- " The only thing we have to fear is fear itself . "
One of my doctor friends said this about his cancer patients. Most cancer patients die of fear. Then there are those who die of anger ( My God, why me ? ...XYZ ... ( censored ) ). The third most common type of cancer casualties die from medical treatment ( with unwanted side effects from ultra potent drugs ) or maltreatment when they look to all sorts of unspeakable alternative therapies. This may be my friend's outrageous attempt to relieve himself and his colleagues of professional responsibility yet his reasoning makes a lot of sense.
The key word and only relevant word in managing the economy is CONFIDENCE - consumer confidence to be more accurate. The global financial system experienced a total meltdown at the height of the FT last year. The sole cause of this meltdown is a total loss of CONFIDENCE in the financial system due to dubious practices of the black sheep of the financial world. A wave of panic swept across the whole world. Fear as everyone can see is the worst enemy of CONFIDENCE because the latter is a very elusive entity. Everyone knows that all financial institutions have to utilize our deposited funds to make a profit so that we can get interest income from our deposited funds. There is always insufficient funds to meet the withdrawal by 100% of the depositors. Yet when everyone has confidence in the financial system nobody will care to queue up for a withdrawal.
At this point of the FT aftermath the only way out for all of us is to stick together through thick and thin as if we were all members of the same family. As a matter of fact, we all are anonymous and insignificant members of the global village and none is immune from any global catastrophe. So, we must take this kind of attitude just as in the vital issue of environmental protection.
No amount of reduction of the bank lending interest rate will revitalize our world economy if no one has any confidence in the money we use or in the financial system itself. It sounds so simple and yet why is it not possible to regain much needed consumer confidence at this point ? The simple answer can be found in a sociological concept called CONTINGENCY DECISION MAKING. To ignore the technical jargon this simply means our decisions are not independently made by ourselves but our decisions actually depend on the interaction of our own opinions and what we perceive to be the opinions of other people. It is just like a mutual guessing game in which everyone tries to guess what everyone else is guessing the right answer to be. Yet there is no absolutely correct answer to start with. The final outcome depends entirely on the tuck-of-war between optimists and pessimists and how these two categories win over the undecided majority to their side. ( Interested readers may like to view page 110 of my book - The Universe - on erratic investor behaviour in Chapter ( vi ) on the science of networks by hitting the above blog title to reach my website .)
The generally accepted thinking is that no one wants to make a fool out of himself by buying a house ( or anything for that matter ) at a higher price when it could be bought at lower one in a falling market. So, it becomes a self fulfilling prophecy. It is not a matter of the money but of FACE. We must not be seen as a fool or an idiot. There are very few people who are fools or running bulls ( how I wish there were one in the stock market ) like me by dishing out so-called wise predictions and suggestions and by sticking my neck out to be chopped off when I am proven wrong. The safest way seems to be to jump on the band wagon when an established trend is up and running. This way there can only be gains and no risk of any loss or damage to our pockets or pride. The only trouble is that someone must start the band wagon rolling by giving it a huge push. When one has seen some 25 % of the whole universe ( the portion of the observable universe covered by the SDSS digital sky survey database which is the subject of the Galaxy Zoo project - please hit this blog title above to reach my website which includes my astronomy research in the project ) it makes very little difference if I am called a fool or not in the grand scheme of the universe so long as I have the satisfaction of knowing that I am doing the right thing. Furthermore, I may even gain some reputation if by chance my predictions come true. At this point I would make a sincere invitation to the readers to watch and listen to my self performed music video of the song - " You'll Never Walk Alone " - from the great musical " CAROUSEL " on my YouTube channel at the home page of my website. The link to my website is embedded in the title of this blog. Just hit on the blog title above to reach my website. The lyrics of the song have some inspirational references appropriate to our present predicament.
If I did buy a new home at a higher price on hindsight I will simply chalk it up to experience and comfort myself by telling yours truly that I might not have bought the same one I like at any lower price as some else could have beat me in purchasing it first when the price becomes dirt cheap. Again, as said in my earlier blog - The Way Forward ( 3 ), it is more blessed to be the spender.
So, let us regain our collective CONFIDENCE by being the leaders in our CONFIDENCE BAND WAGON push. Counteract the bad effects of the CONTINGENCY DECISION MAKING process. Stick our necks out once in a while in the comfort of knowing that we are in a way minor heroes who made sacrifices for the great and noble cause of rebuilding CONSUMER CONFIDENCE. Who knows ? We may even land ourselves on some real good bargains whatever the product or service of your choice may be . Having a healthy sense of humour will go a long way in weathering any storm including the devastating FT.
So, let us heed the advice of the great FDR and boost our mutual confidence by FIGHTING FEAR FACE TO FACE. Be a rash running bull like me once in a while. The Ox or Bull ( if you prefer ) is the most auspicious animal symbol of the new lunar Year of the Ox ( if you believe in that kind of a thing ) that commenced on 26th of January, 2009 and will end some time in early February of 2010. I sincerely hope and pray that the global economy will be right on track to a full economic recovery by then though the present signs indicate that it may take a little while longer ( hoping that my predictions are wrong! ). May I wish everyone a healthy and peaceful Year of the Ox . Do substitute CHEERS for FEAR !
JKHC.
Saturday, January 31, 2009
Friday, January 30, 2009
The Financial Tsunami ( FT ) - The Way Forward ( 3 ) - And justice for ALL !
The US President has just condemned the exorbitant remuneration paid to the Wall Street financial gurus as SHAMEFUL. The collective amounts paid to high ranking executives of Wall Street financial institutions for their disastrous performance in 2008 came to an unbelievable total of 18.4 billion. This has highlighted the worst possible display of human greed. Human beings will line their own pockets to the total disregard of the dire consequences on the public well being. Now, everyone will suffer the painful fruits of their greed. It is about time that high ranking corporate executives are held accountable for their despicable callousness. This is not revenge but the right way forward with a view to recovering the huge portion of the overpayment for the purpose of mopping up the aftermath of the FT. Investigating each and every CEO and their buddies will send a strong message that such irresponsible behaviour is not longer tolerated by society. If they get huge bonuses for the fat years why should they not be held accountable for the mess they have created for all of us ? They must now publicly justify in a satisfactory manner the manifestly excessive remuneration they have paid themselves.
There is a legally set limit for the minimum wage in many countries. Why should there not be a maximum limit for corporate executives ? Better still, all high ranking corporate executives should be required by law to publicly justify the remuneration they have received as part of the annual auditing process. You see there is some folly in the traditional belief that the " sky is the limit " concept to attract the best candidate for the CEO of public corporations. The possibility of endless remuneration will simply motivate endless greed not endless efforts as expected. This is the dark side of human nature which has been sadly overlooked in the naive form of capitalism. Furthermore, the grand argument ( no doubt put forward by the cunning corporate executives themselves ) that the management's first duty is to maximize shareholders' profits is no longer tenable because the black sheep of the corporate hierarchy are those who have benefited most under the disguise of this seemingly selfless goal. While the hierarchy lay off their employees at the slightest sign of economic recession they continue to draw their excessive remuneration regardless and have the cheek to order new 40 million dollar corporate jets like the Citi Group. Luckily, the watchful Obama and his new team call a stop to it.
I am not advocating a return to the socialist or welfare system. I am simply asking for a more enlightened form of capitalism supported by a democratic system. If I were the CEO of a public corporation employing some 4 million people worldwide I would have been more motivated by a sense of mission to society and my fellow global citizens in keeping up their welfare than any amount of money over and above say, US$ 5,000,000. Yes, I am as greedy as everyone else but as a human being who is supposed to be the cream of all creations I can and must control the dark side of my human nature. It is pathetic to be motivated solely by money or its misplaced symbolic indication of success. There are numerous higher goals to be achieved. Don't diminish your own importance. Nor should you overlook your potential to do good. So, I am proposing a revolutionary measure. Impose a maximum limit on the amount of remuneration that can be paid to corporate executives. This will not only reduce the temptation to let our greed run wild. It will also attract the right type of more enlightened corporate executives to hold those important and influential positions in society. The most fundamental way to overhaul our present flawed economic system is, of course, to educate everyone especially the younger generation to steer away from the materially inclined social values to a more balanced value system.
To the black sheep of the corporate world - your day of reckoning is at hand !
JKHC.
There is a legally set limit for the minimum wage in many countries. Why should there not be a maximum limit for corporate executives ? Better still, all high ranking corporate executives should be required by law to publicly justify the remuneration they have received as part of the annual auditing process. You see there is some folly in the traditional belief that the " sky is the limit " concept to attract the best candidate for the CEO of public corporations. The possibility of endless remuneration will simply motivate endless greed not endless efforts as expected. This is the dark side of human nature which has been sadly overlooked in the naive form of capitalism. Furthermore, the grand argument ( no doubt put forward by the cunning corporate executives themselves ) that the management's first duty is to maximize shareholders' profits is no longer tenable because the black sheep of the corporate hierarchy are those who have benefited most under the disguise of this seemingly selfless goal. While the hierarchy lay off their employees at the slightest sign of economic recession they continue to draw their excessive remuneration regardless and have the cheek to order new 40 million dollar corporate jets like the Citi Group. Luckily, the watchful Obama and his new team call a stop to it.
I am not advocating a return to the socialist or welfare system. I am simply asking for a more enlightened form of capitalism supported by a democratic system. If I were the CEO of a public corporation employing some 4 million people worldwide I would have been more motivated by a sense of mission to society and my fellow global citizens in keeping up their welfare than any amount of money over and above say, US$ 5,000,000. Yes, I am as greedy as everyone else but as a human being who is supposed to be the cream of all creations I can and must control the dark side of my human nature. It is pathetic to be motivated solely by money or its misplaced symbolic indication of success. There are numerous higher goals to be achieved. Don't diminish your own importance. Nor should you overlook your potential to do good. So, I am proposing a revolutionary measure. Impose a maximum limit on the amount of remuneration that can be paid to corporate executives. This will not only reduce the temptation to let our greed run wild. It will also attract the right type of more enlightened corporate executives to hold those important and influential positions in society. The most fundamental way to overhaul our present flawed economic system is, of course, to educate everyone especially the younger generation to steer away from the materially inclined social values to a more balanced value system.
To the black sheep of the corporate world - your day of reckoning is at hand !
JKHC.
Thursday, January 29, 2009
The Financial Tsunami ( FT ) - The Way Forward ( 2 ) - It is more blessed to be the Spender than the Scrooge.
The FT has developed into a catastrophe of such an epic proportion that the world's governments alone cannot revive the global economy to her healthy old self without the help of their citizens. Those who can still afford to spend must do so to save the world including themselves from falling into the endless abyss of a chronic economic depression. It really hurts to have, say 30 % or even 50 % of our wealth evapourated overnight but it will hurt even more should the world economy tail spin into a vortex of downward and unstoppable vicious circle of deflation.
Money is just paper or an I OWE YOU ( IOU ) given to you by the issuing authority. It means nothing until your hard earn dollars are SPENT ! Besides, you cannot take a single cent with you to heaven or hell if your number is up. Furthermore, money is always losing its real value by the day. You can never tell for certain when your health will catch up with you although we all wish we could stay healthy, happy and alive forever. For the rich and famous like most of you what real difference does it make to have 5 million out of, say 10 million evapourated except the temporary frustration of being taken for a ride by the high ranking crooks in the financial market.
I am certainly not advising everyone to be extravagant and wasteful with your money. What I do seriously urge you ( especially the really rich and privileged section of society ) to do is to keep to your original spending plans such as changing your car every 5 years or your video equipments and computer hardware every 2. Your travelling plans should not be held back simply because your financial pride has taken a beating. Do whatever you like ( subject to all natural and just human laws ) and as you have planned before the FT and refuse to be rendered unhappy by the financial terrorists and criminals who must be brought to justice ASAP to restore confidence in our financial system. After all, no one can guarantee that he or she will be as fit as a fiddle same time next year. I 've got to run. I have promised to take my wife out for a sumptuous seafood dinner to prop up the economy. Who will listen to my jabbering next time if yours truly never does what he advises others to do. Be the SAVIOUR of the world - be a SPENDER and not the SCROOGE. Cheers for now !
JKHC.
Money is just paper or an I OWE YOU ( IOU ) given to you by the issuing authority. It means nothing until your hard earn dollars are SPENT ! Besides, you cannot take a single cent with you to heaven or hell if your number is up. Furthermore, money is always losing its real value by the day. You can never tell for certain when your health will catch up with you although we all wish we could stay healthy, happy and alive forever. For the rich and famous like most of you what real difference does it make to have 5 million out of, say 10 million evapourated except the temporary frustration of being taken for a ride by the high ranking crooks in the financial market.
I am certainly not advising everyone to be extravagant and wasteful with your money. What I do seriously urge you ( especially the really rich and privileged section of society ) to do is to keep to your original spending plans such as changing your car every 5 years or your video equipments and computer hardware every 2. Your travelling plans should not be held back simply because your financial pride has taken a beating. Do whatever you like ( subject to all natural and just human laws ) and as you have planned before the FT and refuse to be rendered unhappy by the financial terrorists and criminals who must be brought to justice ASAP to restore confidence in our financial system. After all, no one can guarantee that he or she will be as fit as a fiddle same time next year. I 've got to run. I have promised to take my wife out for a sumptuous seafood dinner to prop up the economy. Who will listen to my jabbering next time if yours truly never does what he advises others to do. Be the SAVIOUR of the world - be a SPENDER and not the SCROOGE. Cheers for now !
JKHC.
Wednesday, January 28, 2009
The Financial Tsunami ( FT ) - The Way Forward ( 1 ) - He ain't heavy, he is my brother !
Regardless of our background everyone of us is affected by the FT to varying degree. It is a good time to take stock of the market or capitalistic system on which our economy is run. Some form of enlightenment is badly needed. I seriously think that the financial meltdown is the result of a financial laissez faire policy just as it was at the beginning of the inhumane industrial revolution in Europe in the 18th century. The original savage and unscrupulous form of raw capitalism that had led to imperialism was aptly superseded by the more enlightened form of market economy made possible by among other things democracy, education, a fair legal system, freedom of the press and equal opportunity for all.
The way forward after the devastation of the FT as I see it will be both painful and arduous. The first step in my humble opinion is for us to rough it out together. We must carry one another through the storm with reasonable sacrifice. Employers should only consider laying off employees after effecting a general across the board cut in wages with the upper management bearing a higher percentage cut. Once a wave of lay offs have taken effect the economic confidence of the general population will be totally eroded thus resulting in stark panic followed by a downward vicious circle of spending contractions. This should not and cannot happen or there will be a repeat of the Great Depression of the 1930s.
JKHC.
The way forward after the devastation of the FT as I see it will be both painful and arduous. The first step in my humble opinion is for us to rough it out together. We must carry one another through the storm with reasonable sacrifice. Employers should only consider laying off employees after effecting a general across the board cut in wages with the upper management bearing a higher percentage cut. Once a wave of lay offs have taken effect the economic confidence of the general population will be totally eroded thus resulting in stark panic followed by a downward vicious circle of spending contractions. This should not and cannot happen or there will be a repeat of the Great Depression of the 1930s.
JKHC.
Let all of us start expressing our views freely
Thanks to the web we can now all freely express our views on anything and at any time. Let us boldly but with discipline ( as gauged by generally accepted standards of morality and humanity ) exercise our basic human right of responsible expression. This is a tall order but I do hereby pledge my dedication to this high ideal which is the pillar of democracy.
This is also my earnest wish for all global citizens who subscribe and aspire to the ideal of a free and democratic society in this - my first post - at the inauguration of my first solo blog herewith.
Just one point of information before we start to exercise our basic human right of expression. THE LINK to my personal website - JKHC LIFE STYLE is embedded in every blog title in this FORUM. Please feel free to browse my website from time to time by hitting on any blog title. You may be surprised to see what you can find there. I sincerely thank you all for your kind support and contribution in advance.
JKHC.
This is also my earnest wish for all global citizens who subscribe and aspire to the ideal of a free and democratic society in this - my first post - at the inauguration of my first solo blog herewith.
Just one point of information before we start to exercise our basic human right of expression. THE LINK to my personal website - JKHC LIFE STYLE is embedded in every blog title in this FORUM. Please feel free to browse my website from time to time by hitting on any blog title. You may be surprised to see what you can find there. I sincerely thank you all for your kind support and contribution in advance.
JKHC.
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