Google’s Self-Driving Cars Still Need Human Help - TIME

Google’s Self-Driving Cars Still Need Human Help

Posted: 13 Jan 2016 09:07 AM PST

Google’s fleet of self-driving cars have now traveled millions of miles, while some version of autonomous vehicles are expected to go on sale in the next few years. Before that happens, though, they’ll have to get better at navigating traffic without the need for human intervention.
The search giant has issued a report to California regulators showing how often its autonomous driving software malfunctioned while on the state’s public roads between September 2014 and November 2015. During that period, Google’s self-driving cars reported 341 safety-related “disengagements,” or instances when a human driver sitting in the vehicle needed to take control.
The vast majority of these disengagements had to do with technical glitches. Google reported that hardware issues like a broken wire, or software problems like an inaccurate GPS, led the self-driving car to disengage 272 times during the period. The test drivers who sit in the cars were alerted to these disengagements by audio and visual signals and claimed control of the vehicle in 0.84 seconds on average.

There were also 69 instances when a human driver preemptively took control of a self-driving car in order to ensure the vehicle’s safety. Thirteen of those incidents would have resulted in collisions if the self-driving software was left to act by itself, according to Google. In the other cases, the car performed an incorrect action, like running a traffic light, but wasn’t in danger of a crash.
Google uses a simulator to recreate the driving conditions after the fact to determine whether its cars would have crashed without driver intervention.
While the new data illustrate that Google’s cars aren’t perfect, the number of disengagements has been steadily decreasing over time. Disengagements caused by technical glitches or failures fell from one per 785 miles in the fourth quarter of 2014 to one per 5,318 miles a year later.
Overall, Google has clocked more than 420,000 miles on California public roads. The vast majority of Google’s incidents occurred on city streets in the Mountain View area, near the company’s headquarters. The company is focusing on learning to navigate city streets because the number of obstacles in an urban environment (traffic lights, pedestrians, cyclists) is significantly higher than the number encountered on a freeway.
Other automakers such as Mercedes-Benz, Volkswagen and Nissan also reported disengagements on their self-driving vehicles, but they’ve driven significantly fewer miles than Google’s cars.

Financial Tsunami ( FT ) ( continued ) - ( 21 ) - Feb., 20, 2011

The Financial Tsunami ( FT ) ( continued ) - ( 21 ) - G20 in Paris ( ( 巴黎G20高峰會 ) - Feb., 20, 2011

( Report from BBC NEWS : http://www.bbc.co.uk/news/business-12499214 )

First of all, I must express my deepest regret that the aftermath of the 2008 financial tsunami is still hindering the recovery of the world economy. This is my #21 blog post on the FT. Had there been better cooperation between the different economies in the world a full recovery should have been a reality by now.
首先，我想表達我的遺憾，因為2008年八月開始的金融海嘯餘波，到了兩年多的今天，仍現然持續，令世界經濟未能復元。這是我有關金融海嘯的第二十一篇部落格 （ BLOG ）文章。假若各國衷誠合作的話，世界經濟早已復甦了。


At the ongoing Paris meeting of G20 to deal with the aftermath of the 2008 financial tsunami members sadly failed to agree on targets to address economic imbalance. I list out below the various important issues under discussion :-
正在巴黎進行中的G20 峰會，可悲地又無法同意，如何調整經濟不平衡的目標。他們討論的主題如下:-


( 1 ) The exchange rate of the Yuan
人民幣的匯率


There is a continued call from the western countries to pressure China to revalue the Yuan. The RMB is by all standards undervalued but the true extent cannot be objectively determined unless it becomes a freely circulating currency which value could then be decided by supply and demand. This in turn would more fairly reflect the strength of a country's trading position. Despite the huge deficits accumulated by USA the dollar did not devalue accordingly because it is also a banker or reserve currency of most economies. Therefore, it is not solely China's fault that this is so. As numerous economic entities are holding assets in US dollars no one wants to see it fall drastically. If it really does this will again precipitate another financial tsunami. This is both a privileged and vulnerable position of a banker currency the advantage being higher purchasing power despite huge spending deficits and the disadvantage being less competitive in trade. As for the devaluation of the Yuan, there is not much room for devaluation without hurting her economy. This is so because China mainly depends on cheap labour to accumulate her surplus. The profit margin for such low value added production is but a few percentage points. Devaluing too much would completely wipe out her competitive edge over other developing economies. Anyway, by the current practice of money printing to finance her deficits USA is actually devaluing the dollar unilaterally. Mind you this is a fast track down to a third world country once people can find a replacement reserve currency. This is happening fast. Please see ( 2 ) below.
以西方國家為首的予會者，又再度要求人民幣貶值。確實地說， 人民幣的價值是偏低，沒有完全反映中國的經濟強化。至於確實低了多少，是十分難以確定，除非它是自由匯兌的貨幣，則可以由供應和需求決定其價值。這也可以 反映中國的貿易狀況。儘管美國累積了巨額赤字，但是美元仍沒有大幅貶值。這是因為它也擔當其他國家儲備貨幣的責任。因此，美元的偏高，不完全是中國的責 任。有很多經濟單位都擁有大量美元資產，沒有人希望它大幅貶值。如果這成為現實，更會導致全球災難性的金融大慘劇。作為儲備貨幣，有益處也有害處。益處在 巨大赤下也能夠保持購買力，害處在降低了競爭能力。就以人民幣貶值一事，其實它的貶值空間不大。原因是中國以廉價工資為優勢，高增值工業佔少數。邊際利潤只 有幾個百分比，大幅貶值會摧毀中國的競爭能力。其實，美國現行以印鈔票的方法去支付花費，已經是在單方面自行貶值美元了。可悲的是，這會令美國淪為第三世界國家，別人會更換其他貨幣為儲備，不再倚靠美元了。這會十分快成為事實的，請看以下（ 2 ）段。


( 2 ) Including the Yuan as a part of the IMF Special Drawing Rights ( SDR )
將人民幣加入為國際貨幣基金的特別提支權利中

This is a first step to using it as a reserve currency like the US Dollar. China may not like it at this point in time because her autocratic political system requires total control over everything. Anyway, it is not very feasible at this stage because it is not a freely circulating currency as yet. Special Drawing Rights are financial support provided by the International Monetary Fund to its members in case of financial emergency. Members contribute to the setting up of the reserve of SDR according to their agreed share. SDR are composed of various major currencies that are mostly freely circulating although this emergency asset is denominated in US dollars for accounting purposes. However, it is a good start to sideline the US dollar as the main reserve currency of the world which signifies a decline in the dominance of the US economy.
這是將人民幣變成一種儲備貨幣的第一步。中國在這個時刻，未必想這樣做。為因中國政府是要求在各個範疇都可加以控制的。而且，在人民幣未成為自由匯兌貨幣前，這做法意義不大。特別提付權，是國際貨幣基金給予成員國的緊急金融支援。富有成員各自提供金錢，以主要貨幣組成SDR。不過在原則上，這是降低美元在SDR 的比重， 是明智的做法。這也意味到美元地位的下降。

Apart from the discussion of revamp of the SDR some economists at the meeting have squarely put the blame on China for contributing to the 2008 financial tsunami by buying up US government bonds ( when bond prices are high the effective interest rate will be low because bonds are fixed monetary value debt instruments ) causing US interest rates to remain low thus culminating in the tsunami. While this is a contributing factor the root of the tsunami had actually originated from over spending in USA which was not in line with the corresponding increase in her productive efficiency. Excess speculation and more importantly illegal and unethical practices of some Wall Street gurus are the final straw that broke the camel's back. The evils of excessive speculation are now obvious in the drastic increase in food prices which is another looming catastrophe. Please see ( 3 ) below.
除將SDR改進外，有些經濟學家指控中國的大量購買美國政府債券，因而推低美國利息，是2008金融海嘯的懸凶。由於債券是固定價錢的債務，所以價錢越 高，回報利息便越低。雖然這是原因之一，但是更重要的因素是美國花費遠超過其生產效率，加以過分投機，和華爾街不良經紀的非法活動，才導致大災難。過度投機的禍害，可在飛漲的基本商品價格中看到。請看以下第（ 3 ）段。


( 3 ) The drastic increase in prices of basic commodities.

It is a good sign that G20 started to address the rapid increase in prices of basic commodities. While speculation is part and partial of a market or capitalistic economy it can be fatal at times. Speculation which involves buying and selling forward ( the futures market ) was originally meant to allowed consumers to cover their risk. For example, a Hong Kong citizen has bought a house in New York which he has to settle payment in six month. With the futures market in US dollars operating he or she can cover the exchange risk by booking the required amount of US dollars now. It is just like a kind of insurance. However, people can speculate purely on the future price without using the future US dollar contract for normal trading purpose. With the availability of financial leverage ( paying just a fraction of the total price of the future contract and paying interest on the balance owed ) and the prevailing low interest rate speculators can create what we call a lot of speculative demand on basic food commodities. That is the main reason for the sudden surge in food and petroleum prices apart from effects of natural disasters and political instability like the current crisis in the Middle East.
G20開始討論基本商品和食糧價格飛漲問題，這是一個好現象。雖然投機是市場經濟的一部分，但是在某種情況下，它是會致命的。投機是指買空賣空商品，本來是給 予消費者一個保險的安排。例如，一個香港人買了一所紐約的房子，要在六個月後付款。為了保險，他可以在期貨市場，以現在的匯率買下需要的美元，當然需要付 點費用，但可以保証不用將來付更高的匯率。不過有時，人們也可以為賺取利潤而投機的。如果利息低，人們更可以利用槓桿原理，或俗稱媽展(MARGIN)買 賣，只用價錢的少部分買更多的期貨。於是，這投機的需要，便構成了更多需求，引致基本商品價錢暴漲了。這便是近日，基本商品價錢飛升的主要原因。雖然，自 然災害和例如中東政治動蕩，都會影響物品價錢。


Although an ideal market should be totally free just like a full load of passengers on a cruise ship at sea ( who must be allowed to move around to enjoy their cruise ) there must , nevertheless, be some kind of safety precaution like asking passengers not to make a sudden rush to one side of the ship to avoid capsizing. Nothing is totally free in terms of action in this world. Therefore, some kind of restriction must be imposed on speculation of basic commodities that affect the lives of billions of global citizens. However, it must not be overdone to the point of creating artificially low prices which will not reflect the true demand needs and thus giving rise to short supply of a particular item. This will happen just like when governments are subsidizing the price of agricultural products for political reason leading to artificially low prices that will deter people from engaging in agricultural production. This will ultimately lead to a shortage of supply. We see this phenomenon in China where a lot of farm land is converted to real estate development thus leading to the need of more import of staple food items.
雖然一個理想的市場是應絕對自由的，但是在某些情況下，恰當控制是無可厚非的。例如，一艘滿載乘客的海上郵輪，乘客是必須自由活動，才可以享受旅程的。不過，某些安全指引，如乘客不可全部同一時間衝往船的一邊，以防發生意外，這是可以理解的限制。在 這世界裏，是沒有百份百的自由這回事的。例如關乎千百萬人的基本生活需要，便有需要加以恰當的監管了。話需要說回來，這些控制卻不能過量，引致有關商品價 錢過低，令到生產者卻步，最後會變成供應短缺，這便壞了大事。中國的農地，多變為地產項目，這都是因為國家補貼農產品所至。


Hopefully, common sense will prevail in the Paris G20 meeting. All countries must work hand in hand sincerely to put the world economy on the right path to a full recovery. Most importantly, a world food crisis cannot be allowed to materialize.
希望G20的予會國家保持理性的態度，拿出誠意來攜手合作，令世界經濟返回復甦之路。最重要的是不能容許食糧危機，成為事實。


JKHC. ( 鄭冠合 )

The Financial Tsunami ( FT ) - The Way Forward ( 20 ) - Revolutionary Reasoning for Revival

http://www.nytimes.com/2009/04/22/business/22markets.html?ref=business

My comments on the updated position of the global financial crisis :-


My comments on the update situation :

It has been some 5 years since the global financial crisis first started to engulf the world and caused unspeakable misery on the human race as a whole. Most unfortunately, my humble predictions as set out in the conclusion of my economic essay ( Section ( 14 ) ) below has become a sad reality. Specifically, I predicted that it may take up to 5 years for the world economy to start its upward trend from the dismal depression caused by the global financial crisis.

There are definitely evidence of a bottoming out but only feeble signs of a sustained recovery. I sincerely hope that my worst case scenario prediction of a 10 years recovery cycle will not come true. 

In view of the continuing crisis, it may serve a good purpose to revisit my essay on the basic economic principles from the lay person's point of view. Needless to say, your comments will be most appreciated.

JKHC ( May 31, 2013 ).

My comments on the latest situation :

According to the US Treasury the employment situation in USA is steadily on the recovery track. Therefore, they had previously indicated that the quantitative easing measure of Government bonds buying might be slowly wound down. However, they also decided to delay its implementation at this point in time which is a welcoming move. So, the long awaited recovery is finally on the way and my humble prediction of the 5 years' global economic recovery from the 2008 global financial crisis seems to be realising to my great delight ( certainly everyone should be delighted ). Please refer to the following news link from The New York Times for further details :-  

http://www.nytimes.com/2013/09/19/business/economy/fed-in-surprise-move-postpones-retreat-from-stimulus-campaign.html?nl=todaysheadlines&emc=edit_th_20130919&_r=1&

JKHC ( Sept., 22, 2013 )


Link to my economic essay - 2008 Economic & Financial Tsunami - An Overview for the Lay Person :-
https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxqa2hjbGlmZXN0eWxlfGd4OjY4MWY3YTM5ZDFmY2NmZTU

After all the excitement generated by the G20 summit has died down we are still faced with the stark reality of a volatile stock market as well as a growing army of the unemployed ( see above link to The New York Times report ). This kind of roller coaster rides in the financial market can be expected before the optimistic sentiments supported by a complete restoration of consumer confidence in the financial system return for good. It will take a tremendous push in confidence to revive the Wall Street bull which seems to be dead to many investors at the moment.

I am not retracting my assertion that the recession has bottomed out nor am I saying that the results of the G20 summit are not generating the required uplifting effects on the global economy. Apart from the fact that positive economic measures take time to work ( this is the famous or infamous - depending on how you look at it - time lag concept in economics ) there is also the most important element of consumer confidence not having been fully restored. The time lag in the manifestation of the positive results of the good economic measures lead to consumers doubting that the recession has actually bottomed out. Therefore, most of them will hold back their spending plans out of conservatism and hold a wait and see attitude. This unfortunate but understandable consumer reaction has the undesirable effect of counteracting the positive efforts of all government spending aimed at revitalizing the economy. This is also the main reason why no interference with the normal working of the economy should be made unless it is absolutely necessary in a market or capitalistic economy. It also highlights the defect of a planned or socialist economy. Nobody is to blame for this less than perfect situation which must be rectified before the global economy can get back on an upward trend.

So, where does the key to breaking this vicious circle created by the time lag effect lie ? In my humble opinion, the key lies in the rethinking or realignment of our value judgment or our value system. The concept of maximization of utility ( satisfaction ) or profit as has been generally accepted for more than 240 years since Adam Smith is actually letting us down. This maximization concept while holding true with the individual ( microeconomics ) spells disaster for the economy as a whole ( macroeconomics ). The hard lesson economists have learned from the Great Depression of the 1930s is this. Savings are good for the individual but bad for the economy at large. This is a well known paradox in economics called the PARADOX OF THRIFT. Being thrifty at the micro level is a virtue but it is a public vice when practiced by society as a whole on the macro level because the latter situation inevitably leads to a multiple ( under the ECONOMIC MULTIPLIER EFFECT - in this particular case, NEGATIVE MULTIPLIER EFFECT ) or more than proportional reduction in total national consumption that creates a miserable army of the unemployed. All these basic economic concepts are explained in the lay person's terms in my article - 2008 Economic & Financial Tsunami - An Overview for the Lay Person - here ( http://sites.google.com/site/jkhclifestyle/Home/2008-economic---financial-tsunami ) or access my website by clicking on the title of this blog and going to the navigation bar on the left hand side of my home page.

So, what is this rethinking or realignment of value that I am advocating ? It is simply this. While maximization of utility and profit is good and is a basic human economic right there is no need to maximize 100% which will bring about sorrow and misery for everyone. In fact, I would go so far as to argue that 100% maximization of utility or profit is another form of greed that the black sheep of the financial world have been guilty of and that has brought us to our present predicament.

Let us take a simple example. As the global economy free falls as in the past 8 months or so the property prices also fall drastically. All the prospective buyers will maintain a wait and see attitude. As some desperate sellers are eager to sell due the need for cash brought about by the financial tsunami prices of properties will crash. This is because buyers want to own a house for a song. In other words, buyers want to benefit ( as they are fully entitled to ) at the misfortune of sellers. Of course, there is a bottom line to any fall which is the cost of building those houses. When the bottom line is reached no one will build any new houses because no profit can be made. This will ultimately cause a shortage of supply and a gradual rise of the house prices due to deferred or built up demand. Sadly though millions of building workers and those in related industries will join the growing army of the unemployed before the bottom line is reached at which time the value of the properties currently owned by the well off sector of the population will also hit the bottom doing nobody any good. The message here is to buy when there is a reasonable rate of return on your investment. You can't win them all ( 100% ). Let us say you may not be able to buy the house you like when the price falls further because others may grab the bargain before you do. Also, if you earn every single cent from everyone on earth you will lose all your business ( in the case of running a business ) because you are such a perfect ( 100% ) business entrepreneur that you make the entire global population go bankrupt. Again, the clear message is leave something for others or you will ultimately suffer from your 100% maximization of profit at others' expense. The same reasoning applies to the ideal situation of an exact balance of payment in international trade between countries ( see my article mentioned above ).

Similarly, to hold back your original travelling plans, buying a new car every 5 years or reducing the frequency of your restaurant patronage will create the same multiple shrinkage in consumer spending and hence greater unemployment. Am I advocating spending beyond our means then ? Certainly not. I am just appealing to the still well off sector of the population to stick to your original spending patterns. This is the best and most moral thing to do to save the world from a deep recession and to help alleviate unemployment. I appreciate the financial hurt you rich guys have suffered through the endless greed of the black sheep of Wall Street. Yours truly has also met the same fate. My wife has bought a lot of HSBC Bank shares at around $100 ( Hong Kong currency ) per share. Now, the share is just half of that value. I contributed the entire sum for the current rights issue just to heal her wounded pride. Really, it is nothing more than their pride that the well off sector of the global village was hit badly by the financial tsunami. Most rich people cannot spend all their wealth in their own life time anyway. Besides, if we don't stick to our original spending plans we can never be certain whether or not we will be healthy enough or still alive to enjoy using our hard earned dollars when the present crisis is over. Of course, I sincerely hope and pray that we all will be. The only certain thing at this point in time is that the global financial crisis will never be over without our earnest efforts to save it from further free fall. In my humble opinion, any successful rescue plan must entail some revolutionary reasoning or a revaluation of our value system as outlined above.

To recapitulate, the realignment of our value judgment needed to overcome the financial tsunami is this. Don't aim at 100% maximization of our utility or profit. If we wait for others to spend first and they wait for us to do the same the economy will never improve regardless of how much government spending is injected into the economy. Furthermore, private consumption is always superior to government spending because the individual knows exactly what he or she needs so that there will not be any wastage. Then, the main bulk of private consumption is related to consumer products that can create immediate employment and a direct boost to business and consumer confidence. Besides, what the government spends will be ultimately borne by all of us - the taxpayers. Rather do our part in the normal way by keeping to our original spending plans. This is my earnest appeal to the rich and privileged sector of the global village. Of course, faith in the market system and the goodwill of our fellow citizens is required. A lack of faith in the future of our economy reflects on a lack of confidence in the collective power and potential of the whole human kind especially in ourselves. Please spend and prop up the economy and the global economy will be back to her healthy and normal self in no time !

JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 19 ) - Scattering of the Stars

http://www.nytimes.com/2009/04/12/business/12wall.html?_r=1&th&emc=th

According to the New York Times ( see above link ) the top talents on Wall Street are scattering to the wind because of government scrutiny of the top financial firms ( in particular the crackdown on excessive remuneration packages to top executives ) where our present predicament of the global financial crisis has originated.

There seems to be a sense of sympathy and a lot of lamentation on this scattering of the star performers on Wall Street as if the new regulatory measures had forced the exodus of our best financial talents and that we had done them a great injustice.

This kind of attitude we can do better without. If the so called talents left their fold for greener pastures ( or more greenbacks - unlimited remuneration ) they are totally justified in pursuing their personal goals. However, we must respect history and learn from our mistakes or else we all risk endless future catastrophes of a similar nature.

The basis for both democracy and free enterprise is the sanctity of basic human rights but that is not to say that the public interest must be sacrificed for the unfettered exercise of our insatiable greed for individual wealth at the expense of our fellow citizens. It is time for a more moral team of financial talents to take the helm of the Wall Street financial engine - an enlightened bunch who do not labour purely for personal gains but do hold the ideal of striving for the greater good of society as a whole and a fair go for our fellow citizens. By all means reward the talented. After all, this is the best part of a market economy in terms of incentive for personal efforts which will ultimately lead to efficiency and an optimum distribution and utilization of always limited economic resources including the most valuable category of them all - brain power or talented human resources. The catch word here is " LIMITED " without which there would not have been any need for the vital discipline of ECONOMICS. If our resources were unlimited we could just waste them to our heart's content without the fear of hanging ourselves high and dry in times of scarcity because there would never be any shortage.

Similarly, there can be no unlimited reward of efforts. The top financial talents are all supposed to be experts in economics so how could they have missed this most basic of all economic concepts of " LIMITED " everything ? The short and simple answer lies in another evil concept - DOUBLE STANDARDS. For the black sheep of our talented financial genius it has always been " LIMITED " reward for everyone else but themselves based on the basic economic principle of SCARCITY. Perhaps, I have underrated their wisdom. They are, in fact, working hard on applying this sacred economic principle. Based on the principle of SCARCITY, the less for other people the more for themselves - this is perfect logic !

I have yet to hear from any Wall Street star performer about their talented ideas on how to save ourselves from our present predicament so graciously bestowed upon us by the SCATTERING STARS OF WALL STREET. Not to say positive proposals to save the world from another Great Depression just give us their insights into their dirty tricks that had reaped themselves billions of dollars in remuneration would be a good start. This would help us to put in the right kind of regulatory system in the global financial system to prevent more future disasters.

I hereby challenge any one of the SCATTERING STARS OF WALL STREET to put up an open defense for their heinous crimes if you dare ! Or are you all standing by your Fifth Amendment right on silence lest you may incriminate yourselves ?

JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 18 ) - One Giant Leap for Mankind

http://news.bbc.co.uk/2/hi/business/7979606.stm

Amid all the unfavourable talks of unbridgeable differences and threatened walkouts by France and strong opposition in further fiscal spending by Germany the G20 summit in London ended happily as ONE GIANT LEAP FOR MANKIND ! A big sigh of relief from every global citizen is now on the cards. Nor is this relief just a psychological one. Like a sweetener to any national budget this global budget for our future presented something positive for each one of us. I seldom praise the politicians but I have to say for once that G20 leaders did not let us down at the extremely critical moment which could mean make or break to our world economy. Luckily, thanks to the prevailing of common sense among all participating countries representing two-thirds of the total global population, 90% of world productive power and 80% 0f total world trade WE HAVE MADE It at least for the time being. I can comfortably say as I so boldly predicted in my article - " 2008 Economic & Financial Tsunami - An Overview for the Lay Person " ( accessible on my website by clicking on the title of this blog or any other blog on this FORUM ) that a stablization of the global economic tailspin within 3 months of the inauguration of the Obama administration should lead to a relatively bearable recession of possibly 3 years. I am really optimistic that my prediction will more or less hold true.

The implications of the measures declared in the G20 joint communique ( as per link above ) will certainly be far reaching. It is not an overstatement in any sense to say that it is ONE GIANT LEAP FOR MANKIND. Never before have the world leaders shown such common sense and wisdom coupled with foresight and great humanity. There is, indeed, a unity of purpose and forsaking of narrow national interest and pride. It is also pragmatic and far reaching and thus should form a solid foundation for the strengthening of global co-operation in future that will hopefully give rise to some form of proto global utopia operating on an enlightened form of capitaliism ( not just laissez faire devoid of human feelings and consisting of raw materialism motivated by greed and a blind search for efficiency ).

Having sung praises for the positive and encouraging measures outlined in the G20 statement I must raise some, shall we say, comments on the less than perfect aspects of the G20 proposals. For one thing, there is not yet a formal admission ( in the statement at least ) that the present dysfunctional mechanism of the international financial institutions like IMF, World Bank and other Multilateral Development Banks ( Asia Development Bank, etc. ) is the result of unfair representation of the majority of countries affected by the policies of such organizations. They are mainly private vehicles for the rich countries which have all the say. The only reference to this sensitive subject is in clause ( 20 ) : - " We agree that the heads and senior leadership of the international financial institutions should be appointed through an open, transparent, and merit-based process ". This is definitely an improvement but does not correct the " rich boys club " syndrome in a fundamental way. Perhaps, the abolition of veto rights of the rich nations ( as I humbly suggested ) will enable these international financial institutions to function properly for the greater good than simply serving narrow national interest of the rich countries.

The second of my comments or reservations on the G20 statement is their rather empty " to do whatever is necessary " stance in fiscal spending to revive the global economic growth. In clause ( 6 ) of the statement G20 declared that : - " We are committed ( did not say how ? ) to deliver the scale of sustained fiscal effort to restore growth." Nor was there any definite promise to co-ordinate those efforts. Without overall planning and each country setting her own priority I am afraid there is an unacceptable risk of overall failure in stimulating growth based on scattered and isolated fiscal spending plans left to the fancy of individual nations. Although it would be too much to ask of every nation to give up their own budgetary policies I would expect at least some small % such as 10% to 15 % of each country's budget for the next 3 years be planned on a joint internationally coordinated efforts. When the global economy has recovered to her old healthy self such strict international budgetary co-ordination could then be relaxed.

All in all, the G20 summit has done exceedingly well and its achievement is beyond our most optimistic expectations. If all the measures are successfully implemented there will be a really bright future for the global economy and a completely new page for international co-operation. The world will undoubtedly be a better place operating on an enlightened market mechanism with a human heart and a higher level of moral code. My sincere congratulations to all world leaders for exercising their wisdom and common sense. I will be writing a more detailed analysis and implications of the G2o communique but before finishing today's blog I must compare my own proposals to those in the communique to hopefully improve my understanding of the rationale behind the declared G20 measures. So, here it is : -

The paramount goals of the G20 summit are clearly set out in clause (4 ) : - They are as follows

( a ) Restore confidence - ( my ( A ) ( 1 ) )

( b ) Repair financial system - ( my ( A ) ( 2 ) )

( c ) Reform financial regulatory system - ( my ( A ) ( 3 ) )

( d ) Reject protectionism - ( my ( B ) ( 1 ) )

( e ) Build a green and sustainable recovery - ( my ( B ) ( 6 ) )

I am so glad to say that I have not missed any of these paramount goals. These are so basic in economics that I should have my degree in economics stripped off had I missed anyone of the above. My related proposals ( reference number in my yesterday's blog are given in parenthesis after each of the above goals ).

My proposals that are " accepted " or appearing in the relevant clause of the G20 communique : -

( 1 ) Keep the credit flowing - ( A ) ( 2 ) - Clause ( 8 ) : - " Our actions to restore growth cannot be effective until we restore domestic lending and international capital flow."

( 2 ) Overhaul the financial regulatory system - ( A ) ( 4 ) : -

I proposed the setting up of international financial regulatory and monitoring body. Clause ( 15 ) : - " - to establish a new Financial Stability Board ( FSB ) with a strengthened mandate .....that FSB should collaborate with IMF to provide early warning of marcroeconomic and financial risks and actions needed to address them ".

( 3 ) Under my ( A ) ( 4 ) I also moved to regulate hedge funds and crack down on tax havens. Clause ( 15 ) also proposed : - " to extend our regulation and oversight to all systemically important financial institutions, instruments and markets. This will include, for the first time, systemically important hedge funds ."

( 4 ) Under my ( A ) ( 4 ) I proposed crackdown on tax haven operations. Clause ( 15 ) likewise proposed this : - " to take actions against non-cooperative jurisdictions including tax havens ."

( 5 ) Again, under my ( A ) ( 4 ) I proposed banning of conflict of interests in respect of multiple financial roles. Clause ( 15 ) said this : - " to extend regulatory oversight and registration of Credit Rating Agencies to ensure they meet the international code of practice, in particular to prevent unacceptable conflicts of interest ."

( 6 ) Refrain from accusations and counter accusations - my proposal in ( B ) ( 3 )

No finger pointing or even implications of fault finding can be found in the communique to create a total sense of unity and pragmatism.

( 7 ) Promote an enlightened form of capitalism - one of my long-term proposals in ( B ) ( 5 )

By helping the poor nations for whom 100 billion have been set aside mainly through sale of IMF gold and international contribution to 500 billion extra SDR to IMF to boost total available emergency funding for countries in trouble through IMF rescue efforts the foundation of an enlightened form of capitalism has been solidly laid. There were many repeated mention of taking the interests of poor nations and the underprivileged sectors of the global population as well into consideration. This is truly a new era for raising the standard of international morality and social responsibility.

( 8 ) Don't delay the environmental measures in the name of expedience - another one of my long-term proposals in ( B ) ( 6 ).

Clause ( 4 ) clearly stated in paramount goal ( e ) of G20 that " build a green and sustainable recovery. "

My proposals not appearing in G20 communique are as follows :-

( i ) The issue of FT rescue bonds to raise rescue fund in a wise manner. My proposal in ( A ) ( 6 ).

( ii ) The capping and investigation of CEO remuneration. My proposal in ( A ) ( 4 ).

( iii ) Boost public spending on the rescue package wisely - my proposal in ( A ) ( 5 ). There was, in fact, disappointingly little on this important aspect of the rescue efforts probably because of French & German opposition to further fiscal spending before the reformed financial regulatory system is put in place. Hopefully, the important topic will feature prominently in the Fall 2009 follow-up summit and the G20 financial ministers meeting in early 2010.

Perhaps, the most encouraging consensus was the setting of a 2 % global economic growth rate by the end of 2010 as declared in clause ( 10 ). All in all the G20 summit in London is successful beyond preliminary expectations. I would not hesitate to award a 70 % grading for the G20 efforts. As for my own proposals and predictions, it is for the readers to decide. See you all soon at my next blog !

JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 17 ) - Golden Gifts for the G20 Global Summit

I must start with an apology for the lapse of 2 weeks before resuming my blogging. As advised in earlier blogs I was working on my proposals for the G20 Economic Summit to be held in London on 2nd April to decide on the joint international efforts that should be made to rescue the world from falling in to a deep recession akin to or possibly worse than the Great Depression of the 1930s.

Today's blog contains a summary of the more detailed proposals that are set out in a separate article written on the same important subject to be linked to this blog in the next few days. I have attempted to categorize my proposals under different headings for easy reference. Important advantages and disadvantages to each proposal are also briefly set out together with the relevant economic principle or rationale behind them. It is highly recommended that the reader should study my more detailed discussions in the linked article referred to at the beginning of this paragraph in due course.

Link to my economic essay :- 2008 Economic & Financial Tsunami - An Overview for the Lay Person

https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxqa2hjbGlmZXN0eWxlfGd4OjY4MWY3YTM5ZDFmY2NmZTU


( A ) Urgent Measures to be taken :-

( 1 ) Restore public confidence in the financial system.

Specific measure recommended : - Reconfirm existing government guarantee on all personal bank deposits and extend it to all countries. Those governments not in a strong financial position to do so must be supported by the IMF to which all leading and developed countries must contribute to a special FT emergency fund (IMF-SEF ) set up ASAP for this purpose. The existing contributions to IMF by member countries in the form of credit facilities are called Special Drawing Rights ( SDR ) to be allocated to all countries in need. Thus, IMF is,in fact, acting as the international lender of last resort just as the central bank is to the banking system of each individual country.

Advantage :- Consumer confidence in the financial system in every corner of the world is immediately propped up. The FT was started by the failure of just a few large US merchant banks. Any further failures in even some smaller countries may trigger another FT.

The fact that there will be no weakest link ensures that there will not be any need to utilize the special drawing rights relating to this proposed IMF-SEF.

Disadvantage : - At a time of great upheaval in every financial market and in most countries the leading nations may be reluctant to increase their contribution to IMF.

( 2 ) Keep the credit flowing

The drastic lowering of interest rates by all leading countries has not succeeded in the resumption of commercial credit flow. The reasons are two fold. Firstly, monetary policy relating to the interest rate mechanism is by nature passive. By lowering interest rate it is hoped that consumers and businesses will take advantage of the lower costs for capital thus leading to higher spending in both sectors. In reality consumer confidence is so low that business investment decisions are also adversely impacted. Secondly, even with partial government guarantee on a large range of consumer and small business loans by some government banks are still reluctant to extend credit because even a 90% guarantee by government may lead to a 10 % loss if the business or consumer loans under 90% government guarantee go bad. Thus, credit flow has been stagnant so far despite drastic reduction in the lending and deposit rates.

Specific measure recommended : - a drastic proposal to guarantee 100% by government on loans extended by banks of up to say, US$ 1,000,000.

Advantages :- This will definitely cause credit flow to smaller businesses to restart. More business activities in all sectors will create a positive atmosphere which is a great help to consumer confidence. At present the government such as USA are favouring collapsing giant corporations like those in the motor industry and the banking sector to the detriment of the small businesses. Understandably governments are under more public pressure to rescue large firms where many more jobs are at stake. The congregation of job losses under one roof ( or corporation ) attracts a lot of political attention while smaller individual groups of job losses over a wide cross section of small businesses could make an even bigger total number of job losses. The only difference is that the latter case though equally tragic does not attract as much political attention and pressure as those in the well known giant corporations.

Disadvantages : - Politicians are less inclined to give priority to small businesses which have less political bargaining power.

( 3 ) Overhaul the financial regulatory system

Specific measure recommended : - Disallow multiple roles with potential conflict of interests. For example, the same CPA firm cannot act as act both as independent auditors and financial advisers and account keeping for the same client corporation. Fund mangers & merchant bankers cannot become financial commentators and credit rating agencies at the same time. They can only do one or the other. Directors cannot vote on their own remuneration package. It must be approved by shareholders in AGM.

Set up an international monitoring and regulatory body ( possibly a branch of IMF ) to review existing and the reformed financial system in all countries especially the major financial markets and to investigate complaints on irregularities.

Put a cap on the remuneration package that can be paid to top executives. Disallow any incentive scheme that favours high risks investment activities.

Disallow multiple and inter-related derivative financial products that can be traced to tax heaven as the ultimate ownership control. For example, hedge funds based on multiple linkage of derivatives that make their true and fair market values quite impossible to be ascertained.

Dubious financial products like CDO should be banned altogether.

Advantage : - restore confidence of the general public in the financial system and prevent future recurrence of FT.

Disadvantage : - It could be a long and arduous process with heavy resistance from all interested parties.

( 4 ) Investigate and annul unreasonable remuneration packages already paid out to CEO & Top Executives

Specific measure recommended : - Investigate all excessive remuneration packages with a view to seeking a refund and annul any unreasonable remuneration contracts concluded under dubious circumstances including collusion between board of directors and top executives under corrupt corporate cultures.

Advantage : - raise the morale of the depressed general public and deter future rip off by top executives. This is also an important part of the overhaul of the whole financial system.

Disadvantage : - With the help of their cunning legal advisers these black sheep of the financial world will definitely make use of the gray areas in the law to try and get themselves off the hook. In such a likely scenario a lot of time consuming and legal efforts are required to successfully punish these criminals but it is worth our while to do so.

( 5 ) Boost public spending on the rescue package wisely

Massive spending by all leading countries has been underway since the beginning of 2009 but it has been a trial and error process unfortunately. For example, US rescue of the car industry has been a poor show of throwing good money after bad. Only now has the Obama administration just started to impose strict conditions on any further funding by requiring the resignation of incompetent CEOs and compulsory amalgamation with foreign but more efficient operators like FIAT in the case of Chrysler.

Specific measure recommended : - Try to divert part of the rescue package to directly making interest free loans to consumers on some useful items such as upgrading home computer equipment, environmentally friendly cars, etc. This is a more direct boost to consumer spending. China is making this smart move to subsidize Chinese citizens in purchasing home appliances thus raising the living standard of the village population.

Advantage : - This is a direct stimulus to consumer spending unlike indirect boost through the passive reduction of interest rates working through the banking system which is very sluggish for reasons given above. Furthermore, direct consumer spending can generate jobs and confidence through the positive multiplier effect.

Disadvantage : - It could be difficult and tedious to assess who is in need of what unless some kind of across the board cash subsidy like what the Australian government have done twice so far. Then, there is the possibility that people will just hoard the cash because of failing confidence about the future economic outlook. This can, however, be remedied by issuing spending coupons like the step taken by Taiwan but with related administrative costs.

( 6 ) Raise the rescue funds wisely

So far, the US government has relied mainly on money printing ( which it has unwisely publisied on a high profile basis to apparently reassure the financial circle of enough liquidity in the system ) and issuing more treasury bonds in the normal commercial way. The bonds are usually auctioned off in lots. As they are fixed interest instruments, the fall in their prices would mean a higher indicative interest rate which is bad for economic recovery. To a certain extent the fall in bond prices ( implying the undesirable rise in indicative interest rates ) are inevitable with more of them being supplied to the financial market to raise much needed rescue funds.

Regarding the above two rescue funds raising measures I would humbly recommend a lower profile and less reliance on money printing which simply means Uncle Sam robbing the pockets of every US Dollar holder. This is a morally questionable move. It is also a fast track to becoming a 5th class nation ( just look at Zimbabwe ). As for the increase in the issue of treasury bonds which could lead to the undesirable effect of raising the indicative interest rate their issue can be supplemented again by the issue of fixed interest rate FT RESCUE BONDS not subject to auction but promoted to fight this financial war just as Uncle Sam had done in WWII.

Specific measure recommended : - This measure of which we have plenty of experience and with existing governing laws and readily available mechanism to save much time in implementation can provide the urgently needed rescue funds for the rescue package. Besides, it is the scared duty of every citizen to defend his or her country in time of war. Heavy propaganda must be carried out to provide an atmosphere of patriotic duty to pressure the rich to channel their still abundant savings into rescue funds for rejuvenating the economy to everyone's benefit including their ( the wealthy sector of society ) own. Why have I never hear about this simple and ancient idea discussed during the whole of the FT , I wonder ? It should be done on a global basis.

Advantage : - This is a controversy free measure with existing legal, philosophical and historical basis for its immediate implementation. It also provides a beautiful opportunity on educating the public and our younger generation as regards our social responsibility.

Disadvantage : - With the interest paid on these FT RESCUE BONDS all going to the rich but ultimately financed by taxation on everyone this measure is not conducive to a fair distribution of income but this shortcoming has to be accepted in times of emergency like the present crisis.

( B ) Longer term measures

( 1 ) Fight protectionism

This is public enemy no. 1 for the growth of world economy. Historically, it has led to devastating wars and extreme poverty for all as in the Great Depression of the 1930s. It is a recipe for certain world economic disaster. Unfortunately, very few politicians can stand up to the political pressure from their electorate. Already there are signs of its raising its ugly head again in the aftermath of the FT. France protecting its motor industry, US Congress pushing for the " buy American " clause in legislation to approve rescue funds to large US firms are just a few unfortunate examples of the petty politicians at work flying in the face of the public interest of the world at large.

Specific measure recommended : - strengthening the functions of international trade organizations such as WTO and forming an impartial and effective panel to mediate trade complaints between nations. The decision of the panel must be binding and the process must work quickly before the disputes spill over to the whole world.

Advantage : - This is an ideal vehicle to set trade dispute and for the prevention of protectionism. In theory, this must be done and soon.

Disadvantage : - The rich nations have an undue weight on all trade and, in deed, world issues. Perhaps the abolition of the right of veto is a first step to remedy this less than desirable situation in international affairs.

( 2 ) Set up a separate body under WTO to organize frequent multilateral discussing and monitoring of trade unbalance

Meetings should be held say, every 6 months before the situation like the China -USA unbalance that has been dragging on for over a decade ( why is trade balance important - please read my article on 2oo8 Economic & Financial Tsunami - An Overview for the Lay Person by clicking on the title of this blog to reach my website ) runs of of control.

Advantage : - Prevention is better than cure.

Disadvantage : - Same as in ( 1 ).

( 3 ) Refrain from accusations and counter accusations

Pointing the finger and passing the buck do not solve any problems especially in the midst of this devastating aftermath of the FT. It serves everyone better to for get about differences and embrace co-operation. Nowadays, the global village is so intricately intertwined that no single country can isolate herself fro the madding crowd. Let us face the crisis with pragmatism, a sense of fairness and wisdom.

Specific measure recommended : - Put any accusations or complaints up for arbitration by an international panel set up along the line as set out above. Meanwhile, the G20 summit should carry on with discussions with a view to reaching consensus on the urgent measures required to arrest the downward spiraling world economy. global unity and consensus is the key to the success of this very important economic summit.

Advantage :- Hopefully, this no accusation policy will hasten the reaching of consensus.

Disadvantage : - Same as (B ) ( 1 ) & ( 2 ) above.

( 4 ) Don't overlook the positive multiplier effects of public spending

Everyone knows that with her over 2 trillion in reserve China will play a major role in the rescue efforts. As a matter of fact, 50% of China's reserve is tied up in US treasury bonds. This again proves the intricate relation in the world economy. There is a negative feeling and tendency toward China probably because of the Chinese government's ( mind you, not the Chinese people ) less than democratic system. I for one hates Communism ( which is actually no more ! ) or any repressive regimes. That is the sole reason for my emigration to Australia after the infamous June 4, 1989 Tiananmen Massacre of the students & workers demanding democracy and an end to corruption in the Chinese Communist Party.

As I have just said this is no time for politics or ideology. Although the GDP of China is only roughly 10% of USA according to IMF data China's positive moves such as putting forward infrastructure projects and subsidizing domestic purchases of the village population are very helpful to the world economy in terms of boosting consumer confidence and providing a positive economic outlook for the world. The multiplier effect on China's spending will be a deciding factor in the success or failure of the FT rescue. When it comes to finance and economics the multilateral interaction between individual economic units plus contingency decision making ( more popularly known as the Flock of Sheep Psychology ) imply a more than one-to-one relationship. It is not an exact science so that one plus one can be far more than two.

Advantage : - The Multiplier effect ensures the more than proportional result form any given amount of spending. Hopefully, China's contribution can ( not on her own though ) save the day.

Disadvantage : - It could give China more political leverage which can give a misleading impression of the success of a less than democratic regime.

( 5 ) Promote an enlightened form of capitalism

Capitalism is still the lesser of two evils compared to a totally planned economy in terms of economic efficiency and incentive to personal efforts but it is the latter goal that has been far too excessively overdone in Wall Street. So much so that greed has become the sole driving force hence the FT. This coupled with an almost criminal negligence in failing to regulate the US financial market and letting its corrupt corporate culture run wild are the ultimate origins of the FT. A more balanced and less materialistic but higher moral standard based incentive system should be put in place if the FT is to be avoided in future. An enlightened form of market or capitalistic system where human beings are treated as such is urgently needed. Our future survival totally depends on that !

Advantage :- An enlightened capitalistic system is the only way to save us from our present predicaments for good.

Disadvantage : - It will take a long, long time, perhaps a few generations to achieve this noble goal. Every long journey starts with the first step. We will never get there if we hesitate to take the first step.

( 6 ) Don't delay environmental protection measures under the excuse of expedience

For the long term welfare of mankind none of the existing proposals on environmental protection should be delayed because of the FT. For one thing some damages to Mother Earth are irreversible. Secondly, do not forget that environmental measures can generate economic benefits and employment as well. Kill off a few black sheep of the financial world and we are home free.

I sincerely hope and pray that some decisive and positive measures can come out of the G20 summit in London later today and that common sense will prevail for the good of the entire global village.


JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 16 ) - Blocking Bonuses is the Best Bet

http://news.bbc.co.uk/2/hi/business/7945774.stm

Obama was literally choked with anger in condemning the proposed payment of huge bonuses to the derivatives managers and other high ranking executives of the embattled AIG insurance giant which is receiving enormous amounts of rescue funds approved by the US Congress ( please refer to above news video from BBC ). When it comes to money people have will not give a damn whatsoever to decency or proper restraint. Enough is enough. What kind of logic is behind this payment of bonuses to the custodian of a failed financial institutions through greed and possibly fraud and incompetence ? Some black sheep corporate custodians are now public enemy number one who should be severely punished instead of richly rewarded.

No doubt these black sheep will fall back on their so called legal contracts of employment and their claim on the sacred protection of the law to justify their claim to the proposed bonuses. Mind you if any contract is drawn up unfairly the court has the power to annul it. Just think about the general circumstances under which most corporate employment contracts of CEOs and their likes are concluded. They are approved by the board of directors who are all ( with the fewest of exceptions ) aiming at maximizing their own remunerations at the expense of shareholders that are mostly absentee owners. Even when the directors are major shareholders of the corporation in question they can still benefit by drawing huge remuneration packages part of which will be born by the minority absentee owners. This is the basic pitfall of all limited liability companies as explained in my article on the FT ( entitled " 2008 Economic & Financial Tsunami - An Overview for the Lay Person ). The reader can access my article by clicking on the title of this blog to reach my website or click on my complete profile.

Let me put it this way. If I were the CEO of a big corporation how else can I justify my own out of proportion remuneration package if I do not hire my subordinates with substantial amount of salary and bonuses ? Let me quantify this for you. If my assistant does not get $5 million a year how can I justify my $10 to $15 million annual salary ? It is all a matter of you scratch my back I scratch yours kind of situation. Furthermore, who votes for the unreasonable amount of most CEO remuneration packages at the board of directors' meeting ? Of course, it is the directors themselves. There is a clear conflict of interest here which I will propose to disallow in my summary proposal for the reference of the G20 summit to be held early next month. You may say that some CEO may not even be a board member. True in so cases but the prevailing corporate culture makes it easy for a collusion between directors and high ranking executives to stick together to benefit themselves at the expense of shareholders and now the society as a whole as a result of their greed and callous behaviour. In short, it is an exclusive boys club that teams up to rip off shareholders. Basic reform on corporate law is urgently needed.

By challenging the remuneration contracts of these greedy executives despite their skill ( with the help of their black sheep legal advisers ) in manipulating through the gray areas of the law we can force them to justify their claim and so learn their dirty tricks for our future reference when planning the regulatory reforms. Needless to say, bringing them to court and hopefully getting the court to annul their contract because of their bad performance will no doubt raise the morale of the struggling public who are all suffering tremendously as a result of their evil deeds.

I have delayed the summary ( which is in progress ) of my proposals to combat the FT so as to draw everyone's attention to the basic weakness of the limited liability concept which unfortunately we cannot do without in our modern market economy. Since this concept is indispensable to economic growth and full employment by channeling savings into investment we had better improve our regulatory system in the right way to deal with this problem if the FT is not to be repeated.

JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 15 ) - The Madness of the Madoff Mess

http://news.bbc.co.uk/2/hi/business/7939145.stm

The above link to a BBC report on Madoff's road to perdition reveals huge loop holes in the US financial regulatory system. It was a tragic story from rags to riches and then falling from grace due to a pathetic fraud. As usual greed is the culprit but the story has also revealed the lack of effectiveness of the US financial regulatory system. It is not as if Madoff's operation is so perfectly planned that it has completely evaded detection. Instead, the US financial regulatory body - the Securities & Exchange Commission ( SEC ) has investigated Madoff's operations 8 times in total during his 16 years in operation and failed to detect any wrong doing. This is the hardest part to swallow.

There are three logical inferences to be drawn from these circumstances. Firstly, Madoff's deception is highly skillful. This does not seem to be the case. Preliminary assessment of the facts simply show that the so-called investment portfolios did not exist. He simply used new investors' funds to pay back to old investors so it is just like the crude carry over method very often used in cash embezzlement by some third grade petty cashier. Any standard audit procedures of requesting for third party independent documentary confirmation would have unearthed the sinister scheme. This points conspicuously to possible collusion between Madoff and some professional regulators along the way in respect of the annual statutory audits of Madoff's investment accounts.

The second logical inference that could possibly be drawn is an outright neglect of the SEC's regulatory functions. It would amount to a total dereliction of duty and a fragrant violation of the principles of due care and diligence on the part of the US regulatory authorities. My theoretical conjecture in this respect would be tragic if proven true. I must not speculate further until the case has been heard in court. However, with Madoff's guilty plea to all 11 charges that carry a total maximum sentence of 150 years' imprisonment the details may never be officially known except through a congressional hearing. I strongly support this move to see what lessons could be learned for the benefit of the financial regulators and in the public interest.

The third possible logical inference is the worst case scenario. And that is the existing regulatory procedures are totally inadequate to detect even the most simple kind of fraudulent scheme. This is not likely to be the case which reflects on the higher possibility of possible corruption and collusion. In any event, a public inquiry seems to be the best move to restore public confidence in the regulatory system through further enlightenment from the circumstances of this tragic case. Madoff has be nicked named " the Jewish T- Bill ". T- Bill stands for US Treasury bills meaning his investment policy has been so secured and reliable. If T-Bill could be faked what could happen to the whole US financial system ? This is again one of my rhetorical questions that does not require a response.

JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 14 ) - The Day of Reckoning is at Hand !

http://www.nytimes.com/2009/03/12/business/12crime.html?th&emc=th



The above news headline from today's New York Times brings encouraging news that the US Justice Department is getting tough with mortgage fraud. Reportedly, a few dozen mortgage brokers, bankers and officers of some financial institutions have been booked to face court in the near future to demonstrate the determination of the Obama administration to exercise zero tolerance on mortgage fraud. This is really welcomed news. Apart from deterring future perpetrators from proceeding to their evil ways this will also uplift the morale of the general public who feel a deep sense of betrayal by the black sheep of the financial sector.

However, I must voice my earnest hope that this is only the beginning of the reckoning process because those have been prosecuted are really the small flies. The Wall Street black sheep of the highest ranks are the real culprits of the present global disaster. These cunning lot with their devilish helpers in the legal profession are experts in manipulation through the grey areas of the law. To prosecute and successfully convicting these financial criminals are the true litmus test for the efficiency and tanacity of the Obama administration. This is one battle that the Obama administration cannot afford to lose.

I am working on a concise summary of all the effective measures I have proposed to combat the FT put forward by me in my blog thus far. This will be the highlight of my next blog which should hopefully see the light in the very near future. In any event, my summary of proposed measures to counteract the devastation of the FT must be systematically set out before the start of the G20 summit in April.

JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 13 ) - Thundery Cloud Before the Storm

http://www.nytimes.com/2009/03/07/business/economy/07jobs.html?th&emc=th

The above link to today's headline in the New York Times points to a thundery cloud on the global economic horizon that could easily lead to a devastating tempest. The current unemployment rate in USA has reached a staggering 8.1 % the worst in 47 years. It rightly said that the whole economic scene is about to change in the biggest economic system of the world. On top of the fact that GM is at the brink of a total collapse with the potential loss of hundreds of thousand of jobs there is now the possibility of huge corporations withdrawing from some of their traditional lines of trade permanently, again resulting in the same catastrophic loss of jobs.

Everyone in the financial circle is correct in appealing for bigger spending but so far the main emphasis of the call has been on the Government to raise a bigger rescue package. This is a lob-sided call because most governments of countries operating on a market economy ( the capitalistic system ) generally account for only 15 % or thereabouts of the GDP. In any event, it will be labeled socialistic if the government budget reaches 20 % or more of GDP. Let us say there is a drop of 10 % in total consumer spending due to the FT. This will mean a 8.5 % drop in GDP ( being 10 % of 85 % of private sector spending in GDP ). It will take an increase of 56% of government spending to make up the short fall ( 8.5 / 15 ). Even if this is done the increase will partly be spent in infrastructure projects that are not directly consumer or retail spending. Thus, the consumer sector will not immediately get the confidence boost. There will only be a delayed consumer spending effect through the marginal propensity to spend ( the % income that will be spent at a given income level ) and its subsequent multiplier effect on the actual increase in consumer spending. At this point of our crisis , consumer confidence especially those who still have the savings to spend is of top priority. To hit the nail on the head, what I am saying is that we cannot depend on the Government alone to do the job of rescuing the tumbling economy.

So, what am I recommending ? Well , it is simply this. I am appealing to the well off sector of society to keep up their normal spending pattern. If you usually change to a new car every 4 years or upgrade your computer equipment in 3 keep to your original schedule. If your wealth has been drastically reduced by say, 50 % as a result of the FT what was actually hurt is not your ability to survive financially but a badly wounded pride and a sense of betrayal. I honestly do not believe that people have to change their spending schedule simply because their wealth has been reduced from say, US$10 million to US$5 million. Besides, one cannot know for certain when heaven calls or one's health can always keep up its level 5 to 10 years down the road. Without the intention of spreading a pessimistic view, this is your truly's private guess of the possible duration of the present crisis. Money is stored up value which is not yours until it is spent.

My second recommendation is to suggest to governments not to finance the rescue package by taking the seemingly easy way out - simply by printing more money. This is morally dubious and could possibly lead down the path to a becoming a fifth rate country. The fact that the US$ is still stable despite all her economic woes is mainly due to the situation that too many people and countries are holding US$ denominated assets both for investment and as a reserve currency. No people would like to see the US$ depreciate in value to their own detriment. People are not fools as the great President Lincoln wisely said :- " You can only fool most people some of the time but you can definitely not fool all the people all the time ! " If this money printing trend goes on people will ultimately find another haven or reserve currency one of these days.

What to do then with the much needed funds for the Government's urgent economic rescue package ? I think the short and sweet answer is to issue FT rescue bonds which must be promoted like WWII war bonds for we are, indeed, fighting a financial war of an enormous magnitude. It is high time that the well off sector of society and, indeed, every patriotic citizen should share in this rescue burden in whatever way they can contribute. Besides, your Government will guarantee the repayment of such interest bearing bonds. It is also a good opportunity for civic duty education. As all the theoretical justification and implementation mechanism are already in place this is the fastest way to channel savings into investment and create employment with the related boost to consumer confidence.

It is time for immediate action both by Governments and the responsible citizen. Further delays will spell certain global disaster and a second gigantic wave from the unabated FT. As for yours truly, I am planning my usual holidays with the possibility of a side trip to the UK for a get together of amateur astronomers of the Galaxy Zoo community. What is the Galaxy Zoo ? Please refer to the Web Encyclopedia - WIKIPEDIA ( click on link below ) and see my astronomy research in my personal website by clicking on the ( green coloured title of any one of my blog postings ). Please act on my above recommendations now, both Uncle Sam & citizens of the home of the brave before it is too late !!!

( http://en.wikipedia.org/wiki/Galaxy_Zoo )


JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 12 ) - Enough is Enough !!!

CEO ! Oh , CEO ! Where is your conscience ?

After loads and loads of scandalous corporate practices having been unearthed in the USA, Australia has also come under the unwanted limelight of corporate scandalous practices. The Australian corporation, PACIFIC BRANDS has just been accused of excessively remunerating the CEO and other top management corporate officials. After announcing a plan to lay off 1,800 workers it has been revealed that the CEO has trebled her annual salary from some A$ 600,000 to over A$ 1.8 million. Human greed has no bounds or is unlimited, a concept condemned by the fundamental principle of market economics or capitalism. If resources were unlimited there would not have been any need for economics, a discipline cater for the efficient distribution and consumption of economic resources. Yet the leaders and vanguards of capitalism such as CEOs of huge corporations resort to a motto like " sky is the limit " when it comes to their own remuneration and self interest. They always say that let the best person win. Let the top dogs earn whatever amount possible if the corporate profit ( or even losses ) can sustain their greed to fill their piggy bank. The silly defense provided by PACIFIC BRANDS in this incident is that the previous CEO had drawn A$3.6 million in salary per annum so the existing " generous " CEO is giving the corporation and its shareholders a dirt cheap bargain by drawing A$1.8 million. Should the shareholders and employees not pass a motion of thanks to the CEO in the annual general meeting of shareholders, then ? It is as if the murderer who has killed one person is innocent because other murderers have killed plenty more. " C'MON " as the Australian star tennis player, Lleyton Hewitt very often shouts. What do you take us for - suckers ?

Of course, another strong argument put forward by CEOs and their likes is that only the best remunerative package can attract the best talents to head the corporation. Some talent ! I must admit they are the best lot to rip the shareholders and their workers off to their selfish personal advantage. Where is your conscience ? I ask again. I think I am qualified to say something about scandalous corporate practices as I used to make my living in auditing and management & tax consultancy for 30 odd years before my retirement in 2006.

There is yet another strong and seemingly unassailable argument put forward by CEOs and their likes in defense of their ridiculously excessive remuneration package. It is legal and they acted within their rights provided by the law. Ah, ha, a very clever, logical and most importantly LEGAL argument but sorry, no dice ! If the law is inadequate to protect the public interest against greedy little creatures society must change the law into a more just and effective set of corporation laws. I will venture to propose some legal improvements to allow more effective regulation of corporate malpractices in my next blog. Yours truly as a voter who cast my vote for Kevin Rudd in the last Australian Federal election I have the right to appeal to the Rudd Government to do something about this less than ideal situation especially in the wakes of the FT. To feed one's own personal vice of GREED by creating unemployment at such a critical time of financial turmoil is a heartless, despicable and treacherous crime against society !

The argument of getting the best talent by unlimited amount of pecuniary reward is flawed. It will only attract the most greedy of the wolf pack which we can do better without. We want our corporate leaders to be clean, honest and they should be people with a social conscience. Such candidates are seldom seen on the corporate scene anywhere precisely because our present " sky is the limit " principle in remunerating corporate custodians is dead wrong in principle. It will not be an unwise move to place a cap on top management remunerative package as a matter of law. I will put forward my own suggestion in upcoming blogs. Obama is doing it to US corporations receiving the rescue package. Why can't this be extended, may be, to a less stringent degree to corporations in general ? ( There is no need for an answer to a rhetorical question, is there ? .... yet another rhetorical question !!!)

The other important issue which is relevant to all legal matters including corporate law is the manipulations by black sheep corporate custodians in the grey areas of the law to fatten their own pockets. This can be remedied by better legislation and developing a more balanced sense of value by steering away from the purely materialistic outlook on life. Australia should be well placed to achieve this grand moral goal having regards to the community spirit so eminently demonstrated by the tremendous support from the public in the recent bushfire appeal to assist victims of the tragedy.

If the reader is interested in knowing more about the pitfalls in the working of corporations in general please access my article on the basic working principles of economics and finance entitled :- " 2008 Financial & Economic Tsunami - An Overview for the Lay Person " highlighted on the navigation bar in my website by clicking on the ( green coloured ) title of this blog or any other blog in this FORUM.

See you all in my next blog on my suggestions on exercising an effective control over corporations.

Yours truly,

JKHC.

The Financial Tsunami ( FT) - The Way Forward ( 11 ) - Mastering the Mad Dog ? Madoff

After the uncovering of what I called the MAD DOG AFFAIR involving over US$ 80 billion in alleged financial fraud we are again confronted by the further bad news of the STANDFORD alleged financial irregularities involving his small banking chain. Notwithstanding the small size of Stanford's banks the psychological blow on consumer confidence is not at all minor. The scandal has severely affected banking operations in South American ( Venezuela, etc. ) and there are also rumours of instability in the EU banking system as well. The latter development is especially worrying because it may lead to the collapse of the whole EU monetary system which is up to now still holding up reasonably well. If the worst should be proven true a second gigantic wave of the FT is poised to strike with even more devastating power because the delicate financial systems in EU countries have already been weakened by the first wave from the FT.

Unless we can master the MAD DOG and the like no complete recovery for the tattered global financial system is possible. There appears to be a lot of possibilities for collusion and even corruption involved because many big banks and financial houses are victims despite their usual prudence. Why haven't professional auditing practices and verification procedures detect the alleged fraud much earlier ? This big question has a huge bearing on the effectiveness of our regulatory system regarding the financial institutions. Are there gross negligence and even collusion involved at different stages of the whole MAD DOG scenario ?

Apart from the stricter enforcement of more effective financial regulations there is also the concern about the best way to avoid grey areas in the financial laws & regulations from being manipulated to the advantage of the greed of MAD DOG operators and the like. The ultimate solution has to be, as I said in earlier blogs, the attainment of a generally accepted but less materialistic value system in which pure financial rewards on efforts are not the sole motivating factor. Perhaps the raising of over A$ 120 million by private charities alone within a matter of 10 days of the Victorian Black Saturday ( 7th February, 2009 ) Bushfire disaster despite the FT will bring a positive message on the value of and the need to have a less materialistic value system for the global village.

JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 10 ) - Homing on Homes

One of Obama's wisest moves on his rescue package so far has just been unveiled. A home rescue fund of US$ 275 billion will be set aside to help refinance the home mortgages of up to 9 million " responsible homeowners " to allow them to stay in their house and avoid foreclosure by banks. Those who lost their speculative investments through greed and misjudgment at the peak of the property bubble in the USA will not be included in the rescue package and so will those who bought beyond their means. This is a fair condition in applying precious and limited taxpayers' funds.

Economically speaking, the logical thing to do is to let people bear the consequences of their own economic decisions. If they had bought at the wrong time let them lose their homes and stay in rented property. However, strict economic principles may be too harsh on the ordinary citizens who acted honestly and spent within their means. Speculators and greedy opportunists apart, most honest and hard working folks are mostly victims of an impersonal capitalistic system run wild. Sometimes, pure logic and dogmatic adherence to rigid economic principles are not user friendly. Take for example. We are in the desert with only a limited supply of precious water and there is a millionaire among the travellers. According to the strict operation of the sacred economic law of supply and demand the millionaire can bid the highest price and so is theorectically capable of getting all the water for himself to save his own life. However, common human decency and generally accepted moral standards will dictate a fair rationing of the precious and limited water supply. That is where the enlightened form of capitalism should come in. No single consideration or working principle relating to any public issue should dominate relevant decisions on the matter.

Economic considerations aside, the psychological effects on boosting the morale and confidence of the general population through such a home rescue package are bound to be far reaching to the point of arresting the rapid decline of consumer confidence. This will in turn produce its desired economic stimulus in terms of consumer spending especially from those who still have savings that are horded because of a gloomy economic outlook. So, it can be easily seen that everything is inter-related in all human affairs and, hence, my personal motto of " ONLY CONNECT " borrowed from the famous and beloved British novelist - E. M. Forster - in his revered novel Howards End.

Three cheers for Obama for landing an effective punch on the Financial Tsunami. This is just a start but hopefully it will be a good start for all global citizens' sake.

JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 9 ) - Caps off to the Captain

The hero of last month's lucky escape for everyone on board US Airways Flight 1549 that forced landed in the Hudson River of NYC, Captain Chesley Sullenberger is exemplary among his peers. It was his professionalism and nerve of steel that were the main factors behind that miraculous escape for everyone. Of course, luck is always a dominant player as usual. I raise my hat to this real American hero who had made a critical difference at the hour of near disaster. Had every high ranking Wall Street executive possessed his qualities we would not be in our present predicament.

I haven't got the slightest doubt that all Wall Street gurus are tip top professionals but where had their professional skills been applied to ? The most important thing that would make the difference between a hero and a villain is not simply skill but a sense of duty and his sense of dedication to his fellow citizens. If one is to choose between skill and honour the latter has to be the better bet especially with regard to key financial institutions where integrity and a high moral standard are the only safeguard for public interest. No written law can effectively prevent the CEO of a giant corporation from benefiting from insider dealing based on sensitive information privy to the top management. Therefore, a basic change in the value system in a capitalistic society is badly needed.

Instead of measuring people's success solely in terms of dollars and cents thus creating a lob-sided sense of value we should look to other qualitative factors such as how the environment is protected by a particular measure or how large is the proportion of the population that has been benefited by that measure. More attention must be paid to our younger generation in fostering their healthy sense of value. For example, the reward for getting good grades at school need not be monetary or materialistic in nature. The promise of a family trip or other more cultural rewards such as attending concert together could in the long run change the value of the younger generation. Down under where yours truly have my adopted home. The financially disadvantaged kids here need not fear that they will be totally ignored by other attractive young teenagers. If they surf well or have a good sense of humour there are endless opportunities to find a partner for life. Of course, the American way may find them not ambitious enough or they may even be considered as losers. But who could have imagined before 2008 that those who have failed the world most badly would be the ambitious and high flying Wall Street achievers. Everything has its time and place. Some issues take time to resolve or evolve to full maturity. The " instant noodle " culture or instant result ( at the expense of fairness or morality ) attitude can never stand the test of time. Chasing economic efficiency at the expense of moral efficacy has proven to be costly for the whole global village. We must think twice about keeping to the outdated " sky is the limit " view for remunerating or motivating people in the enlightened form of capitalism that would be a fundamental solution to prevent any more future FT. A balanced value system is the best safeguard against such disasters with a healthy financial regulatory system acting as a second line of defense.

So, let us hope and pray that all future key custodians of key financial institutions on Wall Street are like the real American hero, Captain Sullenberger who is a person of high professionalism with a nerve of steel in time of crisis because he puts honour before everything else including his own life and limb not to say the pathetic vice of greed. If the black sheep of Wall street were honourable they would have surrendered all their loots to their government to be used as part of the FT rescue package. Isn't it the honourable and right thing to do to make up for your mistakes by doing reparation ?

JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 8 ) - COMFORTING CORPORATE CAP

The New York Times has just reported that the Obama administration is imposing a maximum limit of US$ 500,000 for all high ranking executives of corporations which receive government benefits under the FT rescue package. However, this policy does not apply to the 350 institutions already rescued prior to this announcement of new policies. It is the first piece of good news for the new administration after some embarrassing bungles. It is, indeed, a COMFORTING CORPORATE CAP.

It has been suggested that because of this new limitation on corporate executives' remuneration some corporations intending to apply for the government rescue package may think twice before submitting their applications. This is good news if proven to be true. In the worst scenarios these marginally functioning institutions may fail without government aid but it is an economically sensible thing to allow inefficient entities to pass on so that a new leaf can be turned to cut them loose from past blunders. Sometimes, the worry about the resultant unemployment created by failed enterprises is blown out of proportion. Please do not misunderstand my intention. I am not happy to see more people becoming unemployed. There are bound to be more efficient owners coming in to buy the existing corporate structure with the related market share in that particular line of trade. New owners must be required to make the best possible arrangement with the existing work force and reduce lay offs to the barest minimum. A new start may not be a bad thing for some industries like the US motor industry to rid them of cumbersome labour contracts and other investment decision bungles.

Obama seems to be a bit apologetic about this new policy by reassuring the business world that there is no intention on the part of the US Government to curb personal efforts or create disincentives for successful business persons within the US market framework. If the report on the reluctance of marginal corporations to apply for the rescue package on account of the new cap on corporate executive remuneration is true it will imply that the high ranking executives are still intoxicated by the corporate piggy bank tradition of excessive remuneration. Not to be allowed to rip off the corporation of which they are custodians will piss them off. It would also mean that the traditional capitalistic concept of " SKY IS THE LIMIT " is still very much alive and kicking. As I have advocated in The Way Forward ( 3 ) - And Justice for ALL ! - there is no such thing as without limits. Such a concept is against the very basic principle of economics. If there are no limits to our resources there would be no need to have the discipline of economics to carry out the most efficient allocation and utilization of our imaginary unlimited amount of resources. Since resources are scarce and have limits in terms of availability so must corporate executive remuneration which is a factor ( or cost ) of production.

More open discussions must be conducted by the public on how to set a cap on corporate executive remuneration beyond a certain maximum amount for all corporations. Not just for those benefited by the FT rescue package. Such a cap may vary from one industry to another depending on particular circumstances but the cap must meet at least two criteria. Firstly, it must not be too low to discourage capable hands from running key industries. On the other hand, a reasonable cap must be set to do away with the traditional capitalistic concept of encouraging endless greed. The ideal thing is to introduce such a cap sooner rather than later. Anyway, it is high time for the public discussion on such a cap to start to allow for adequate input and consultation. Using the right size for a COMFORTABLE CORPORATE CAP will make everyone look economically smart.

JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 7 ) - Don't put your wrong foot forward.

Somethings you do not ever want them to come true. In the majorities of cases, the worst scenario will materialize out of all our fears. This is known as Murphy's Law in science. I was talking about the P word or Protectionism in The Way Forward ( 5 ) and the dark clouds have already gathered on the horizon of international trade fast. Apart from the currency manipulation accusation against China the US Government FT rescue package due to be put to the US Congress will specify that all government aided enterprises must buy from local US suppliers for the purposes of their trade. This is an undisguised act of protection. Already the EU has threatened to bring the US Government to the WTO for arbitration on the issue. A serious international trade dispute is in the making. Should a full blown international trade conflict occur the anticipated world economic recovery period could be stretched to a decade or even longer. This is unthinkable !

The US conditional FT rescue package will certainly win the hearts of US voters but is it really a good strategy in the long run ? It is an unqualified NO ! If every country falls back upon the P word to protect employment in their our country at the expense of free trade and economic efficiency the world economy will become a shrinking loaf of bread as a result of multilateral trade retaliations. This is the worst possible scenario that could come to pass. You see, being a world leader will come at a cost, sometimes a painful one. It means exactly what the term LEADER implies. There are obligations attached to the honour of being the world's leading nation. She must take the lead to do the right thing with the related sacrifices not just rhetoric. It can hardly be disputed that the origin of the FT can be traced back to the dubious behaviour of the black sheep on Wall Street. It is high time and a good chance to show the world that USA means what she has committed herself to do in Obama's inaugural speech :- " USA is a friend to everyone in the world." Taking a step towards the P word can hardly be seen as world friendly. So, think twice before you leap. Your tarnished image is already in dire need of a good polishing. Please do not start the FT rescue mission by putting your wrong foot forward. To push ahead in this wrong direction will be tantamount to creating another disaster on top of the already devastating FT. It will be the same as throwing petrol into an open furnace. Common sense must prevail !

JKHC.

The Financial Tsunami ( FT ) - The Way Forward ( 6 ) - Beat FT at its own game, with FT Bonds

Extraordinary times call for extraordinary measures but not at the expense of fundamental human rights ( at the legal level ) and decency ( in the moral arena ). It is not at all an exaggeration to say that we are fighting another world war, albeit a financial one. In a war, not just the government but every responsible citizen must get involved. This is the sacred mission of any person with a sense of duty and basic human decency. I am not advocating a declaration of a state of emergency to allow government access to all economic resources which bureaucrats and dictators would jump with joy. I am simply proposing to beat FT at its own game by the issue of FT FIGHTING BONDS ( FTFB ) either by the government or through some public agency closely monitored by law and the government. All repayments on maturity must be guaranteed by government because it is a national debt for the benefit of all. Let us discuss the pros and cons of my crazy proposal.

Firstly, for the pros it has been done many times before but only this time the bonds are issued to fight a genuine and devastating financial war. All blueprints on the set up, administration and monitoring ( with publication of annual independent audit reports, etc. ) are readily available. Therefore, it will take a very short period of time to implement. The time element is vital in a fire fighting operation as in the present scenario. Secondly, it will provide much needed funds for the government's rescue efforts - far, far better than the undesirable and morally dubious emergency measure of printing more money. The last measure is a certain and fast track leading to degeneration into a fifth class nation. Thirdly, promoting the sale of FTFB will serve the ideal purpose of re-educating the public on their civic sense of duty and thus will hopefully lead to a new and enlightened sense of value - the enlightened capitalism I am strongly advocating. Fourth, the concept should be easily sold to the public because of its dependable and historical reputation. Fifth, it is a healthy way to channel saving ( or hoarding at this point ) back to investment in infrastructure that has enduring benefits for all future generations. This is the least our present generation can do to sweeten the bitter fruits produced by those black sheep among our own generation. They have messed it up badly for all of us and for all future generations. How can you black sheep sleep at night or face your own kids after what you have done ?

Let us not be carried away by the above pros of my humble suggestion on FTFB. The obvious cons or disadvantages are not few. Firstly, more bureaucratic ( which means more red tapes and waste in administrative costs ) structures will be put in place. Secondly, it is not equitable friendly because the interest paid on FTFB will mostly go to the well off sections of society who can spare the cash to buy the bonds. It is just the same in the case of the disadvantages of national debt ( please see the appropriate section in my FT paper by hitting the above blog title to reach my website ). Thirdly, a lot of promotion will be necessary at this gloomy time to persuade people to buy FTFB but an appeal to their patriotism might help. To fight the FT is as urgent as fighting terrorism at this point in world history because we have all been mortally hurt by financial terrorists. Fourth, it can give some totalitarian regimes another excuse to further exploit their citizens but that is a sad fact of life with such despicable regimes. The same criticism can be leveled at all public projects when such regimes are involved. Fifth, as always with rescue packages it will take a lot of arguments to settle the priority in spending the FTFB funds. This is just a general issue with all public spending.

The above humble contraption of mine is by no means perfect. That is the whole point of setting up my forum. This is also the beauty and importance of the basic human rights of expression. More heads are always better than one walnut head like mine. Please comment and criticize my reasoning so that we may learn from one another and hopefully do our insignificant part to fight this war against the FT. As a wise Chinese saying goes :- " When you add more stuff into boiling water it will eventually become something substantial and sustaining like porridge ! "