Tuesday, May 12, 2009

Economic Crisis Cartoon - Got Questions?


Healthcare Sector

Are you going to reduce healthcare cost? YES.
Is there anyway for us to track if you actual cut cost? NO.
Are there any consequences if you don’t do it? NO.

Real Estate Sector

Are the toxic assets held by the Government? YES.
Are you still holding on to good assets? YES.
Are the taxpayers going to pay for the toxic assets? YES.

Financial Sector

Have they forgotten about the financial pandemic? YES.
Are there suckers out there who believe the crisis is over? YES.
Are you going to pay big bonus this year? YES.

Education Sector

Did they to improve your sector? YES.
Was anything really done? NO.

The Rescue Plan Looks "Good".

Friday, April 17, 2009

Taxes. They Pay For Stuff.


Interesting cartoons on the products that the Federal Government are spending on illustrated based on the average man’s tax money.

From paying for the nation’s education to buying a fighter plane, it is nicely criticized in the cartoon below.

So now do you have a better picture how they spend the tax payers money?

Thursday, April 2, 2009

Global Economic Crisis – The US Story


Why the US economy is going down the drain?

1. Bailout is not working

Despite the $10.5 trillion committed to bailing out the economy and the $2.5 trillion already spent, banks aren’t lending, earnings aren’t improving, people aren’t spending, unemployment is rising, the housing market is tanking and some of America’s most iconic businesses look likely to go to the wall.

2. Team Obama doesn’t get it

What Team Obama doesn’t get, is that companies fail for a reason. Maybe they make products that people don’t want to buy. Maybe they’re badly managed. Maybe they concede too much ground to unions.

The United Auto Workers (UAW) union now has about 190,000 members. In 1979, the heyday of the US auto industry, the UAW had 1.9 million members. This changed because US auto makers got caught napping by the Japanese.

That’s how capitalism works: the fittest survive and productivity innovations clear away the dead wood. Stand in the way of this process and you get zombie companies – ones that can only stand up thanks to government support.

And that’s if you’re lucky. If you’re unlucky you get the likes of Fannie Mae and Freddie Mac – entities that cause massive disturbances in the markets and trigger the kind of disastrous economic collapse we are seeing now.

Given that estimates of the total bailout to the auto industry are in the region of $130 billion, they total $684,000 for each of the 190,000 UAW members.

Everyone should join the UAW now – free money! :p

3. Fed doesn’t get it

In its statement, the Fed announced its intention to purchase an additional $1 trillion worth of US Treasury and agency debt. The purchases, of course, will be made with money created out of thin air through the government’s printing presses.

Few can doubt that it will persist with these operations until the economy returns to its former health. Whether this can ever be accomplished with a printing press alone has never been seriously considered. Bernanke himself admits that we are in uncharted waters, with no map or compass, just simply a hope that more dollars are the answer.

4. More interventions lead to disaster

Rather than solving our problems, more inflation will only add to the crisis. Falling asset prices, the credit crunch, declining consumer spending, bankruptcies, foreclosures, and layoffs are all part of the necessary rebalancing of our economy. These wrenching movements, however painful, are the market’s attempts to resolve the serious problems at the root of our bubble economy. Attempts to literally paper-over these problems will lead to disaster.

5. Dump the Dollar

Now that the Fed has recklessly shown its hand, the mad dash to get out of US Treasuries and dollars should not be far off. The more the Fed prints to buy bonds the less the dollar is worth. Holders of our debt (China and Japan) understand this dynamic. We must expect that they will not only refuse to buy new bonds, but they will look to unload those bonds they already own.

6. Digging a deeper hole

Under normal circumstances, if creditors grew concerned that inflation was eating into their returns, the Fed would raise interest rates to entice them to buy. However, the Fed will avoid this course of action as it fears higher rates are too heavy a burden for our debt-laden economy to bear. To maintain artificially low rates, the Fed will be forced to purchase trillions more debt than it expects to as it becomes the only buyer in a seller’s market.

6. China No Longer Wants Dollar

There is a growing consensus that if China no longer wants to buy our bonds, we can simply print the money and buy them ourselves. This naïve view fails to consider the consequences implicit in such a change.

When the Treasury sells bonds to China, no new dollars are printed. Instead, China prints yuan, which it then uses to buy Treasuries. This effectively allows America to export its inflation to China. However, now that we will be printing the money ourselves, the full inflationary impact will fall directly on us.


With such a policy in place, America has now become a banana republic. It won’t be too long before our living standards reflect our new status.

Got Gold?

Tuesday, February 24, 2009

How to use the Stimulus for a Better Future

Economy Stimulus

Looking at the huge stimulus that the governments from all over the world are “dropping” into the economy, I was wondering who would ultimately gain from such a move. Does injecting more money into the system makes the world’s economy healthy again? Or are they prolonging the death of the companies that managed to convince the world that it is cheaper to put them under life support than to pay for their funeral expenses?

If you look closely at these failing companies, what causes them to fail is that they do have any more consumers supporting their business. So in terms of business evolution, you should just let the weak and useless extinct, and let the new and fit emerge and multiply! For example, if the dinosaurs did not extinct, do you think we human race can thrive in this world? And in today’s context, if the big auto cars manufacturer were to carry on producing their “offspring” – inefficient and environmental unfriendly vehicles, how are we able to shift the paradigm for consumers to drive in environmental friendly and energy efficient vehicles?

I strongly believe there are better and more sensible ways to spend the stimulus than to support these “dinosaurs”:

1. Saved it! There is no point prolonging the suffering of these companies and paying their management for the jobs badly done in the expenses of the tax payers and future generations. Let them reap what they sow!

2. Invest in entrepreneurs. New seeds must be planted to replace the unhealthy crops. Almost all the previous depressions or recessions recovery depends on new found sectors that change the world economy. For example, the auto/aviation replaced the rail, the electronics replaced the auto, the computer replaced the electronics, the internet replaced the computer. So where do you think will be the sectors that can shift the economy? It is unlikely to be in the rail, auto or aviation business.

3. Invest in clean energy. Which do you think is wiser, putting money to find more oil wells that will some how deplete in times to come, or putting money into technology to harvest free and ever lasting energy like solar, wind, waves and lightning for the long run? Obviously the latter should be the focus that we should be looking at and this is probably the new sector that will shift the economy.

4. Invest in minds not mouths. As the old saying goes, “Give a man a fish and he can feed himself for a day. Teach a man to fish, and he can feed himself forever.” Giving out spending vouchers for consumers to spend is like giving a fish to them. If it is any vouchers that they are giving out, they should give out education vouchers. In that way, consumer will still spend, but on education, and not a new high-fi or laptops. By the way, education is environmental friendly as it does not produce any waste and unlike most other investment, you can never loss money if you are investing in your brain.

Of course all these suggestion can only work if the government or corporate leaders can forsaken their personal “beliefs” and "political goals” for the future of our generations and mankind. Without a clear vision from these leaders, the world will just have be bear with the giddiness in this economy merry-go-round. Hopefully, it will stop or slow-down so that everyone in it can have a better view of their friends, family and environment outside the merry-go-round.

Friday, January 30, 2009

Silver Lining


For sure the situation is getting ugly and all the newspapers are reporting gloomy news by the minutes, but good news should exist in this recession - they always do, it's just a matter of finding them sometimes.

I thought I will share with you some good news and maybe you can find other ways to make this economy work for you.

How has the financial crisis affected us positively?

1. This crisis has gotten people nervous about their job security and from what I have observed, there are more people going to church, seeking spiritual “security”  - which is a positive news.

2. Those who loss money to the economy will understand, their investment portfolio may have devalue, but the price of their lives and family will never depreciate, in fact they are priceless.

3. The financial crisis has prompted many more people to follow our dreams and re-examine their priorities in life. I have left my job last year to pursue my MBA and I am now looking at services that I can provide for non-profit organizations.

4. With more uncertainty, people are saving more than before. Saving is a good habit and saving more is great for us! (But not so great for the economy. :p )

5. The interest rates have gone down significantly if you compare it to a year back and this is the best time to refinance your mortgages if you have any. Another great saving tips!

Have you found a silver lining to the economic crisis?

Saturday, January 24, 2009

Debt For Our Children


Are you one of those who:

  • Call your parents only when you need money
  • Borrowed money from your parents and never pay back
  • Have brochure from old folks’ home
  • Never visit your parents
  • Moved back with your parents
  • Won’t move out of your parents house

Even though this is just a comic, but is still pretty disturbing to see the points that the artist is trying to convey. As children or grandchildren, are we becoming more like a burden to our parents or our grandparents?

The next time before we complained about the huge debt that our parents or ancestors have left us, think about these:

  1. When was the last time you called your parents or grandparents because you miss them?
  2. When was the last time you gave any money to them?
  3. Do you want your children to send you to old folks’ home?
  4. When was the last time you visit your parents?
  5. Are you living at the expenses of your parents?

Thursday, January 22, 2009

President Barack Obama

President Obama I believe most of you have seen, if not, read the inauguration speech given by President Barack Obama. By comparison, the speech is not as bombastic as the ones given during his election campaigns. His speech did not even end off with the usual rock style celebration which many felt disappointed, including myself… I turn off the TV and went straight back to bed. This morning as I watched the repeat telecast of his speech, give a thought about it and finally found the sense in it.

1. The first presidency speech usually marks the branding or tone that will depict the way a president will run the nation. And to tackle the greatest economic crisis since the great depression in 1929, President Obama has to first wakes the nation. We are living in reality and if there is no pain, we couldn’t have evolved or progress to where we are today. He reminds us how the forefathers of United States overcome adversities by fighting with real blood and tears in the cold winter for a common goal - the future generations.

2. Getting the priorities right. In the previous presidency, the priorities were all wrong - sending soldiers to war, helping corporate expansion, controlling oil prices and output. Instead, priorities should be sending more people to schools, improving the medical system and finding ways to be more energy efficient or environmental friendly. The $850 Billion stimulus package that his office proposed should do just that.

3. Isn’t it better to have one more friend than a foe? If you are willing to lend a hand to your friend, open your heart to an enemy and make a stranger felt at home, the world would be a better place. President Obama wants US to open up to all nations in the world including the little village in Africa which his father was born.

4. He admits, it is not an easy task and time is required. Nevertheless, he is confident the problem will be solve, as always. The first 100 days will be the crucial period. Politicians, economists and the world will be watching and benchmarking him. Can he live up to expectation? Only time can tell…

Monday, January 5, 2009

Economic Storm

economic storm

The Perspectives:

1. The economy wild ride is not over. (The tough ride in the choppy waves)

2. There are more economy bad news coming. (There are dark clouds and lightning, but the rain has yet to come)

3. Expect the worst when you least expect it. (Lightning can strike twice)

4. Those who have faith and prepared themselves for the economic disaster will survive and prosper. (Noah’s Ark story)

5. We should wait patiently for the bad economy to turn to good. (No matter how bad a storm is, there is always an end to it)

2008 is finally over and happy 2009 to you guys!

For me personally, the most significant event in 2008 was to leave my banking job to pursue my personal interest and to further my studies. It wasn’t easy leaving a comfortable life that I was so used to. And for a while, I was still thinking whether did I make a wrong move.

For the last few months that I rested, I began looking for a new story that I want to include in my life journey. I started reading and the more I read the more I am glad I moved on (forward). For life is more about the journey then the destination, and if I did not move away from my comfort zone, how would I improve? 

What was the most significant events for you in 2008?