Thursday 30 October 2008

(U.S.) Elections -- the hidden provocation

Not the US elections in particular, but election campaigns in Western countries in general.
  • The provocation is this: millions are spent on an elections show.
  • On the other hand, people out there are suffering to the tune of a minute fraction of the millions spent on the elections show.
  • The elections show is officially for the benefit of "the people".
  • With or without the show, some people are still starving. They could do with a little bit of that money.
From the view point of the needy, the whole election campaign thing is either very ironic or very tragic or a very tragic waste of money... or any combination thereof.

Again, it's not a matter of the yanks' elections -- it's all elections. It's just that the show being currently aired is the yanks' show. Since the US elections are imminent and Americans prepare to vote (or some of them do), their the whole shenanigan has received much airing. Hence the reference to them. It's also a really grand show, and their campaign seems to last for ever.
Now, how about if someone requested the candidates bail out a bank or support a few jobs being cut... say for a year?

Tuesday 14 October 2008

Wealth is Relative

...the road to wealth may not be relative or theoretical, however.

Wealth is relative to what other peoples' wealth may be. No doubt. As we found out in the past fortnight without a shadow of doubt, some forms of wealth sometimes tumble and crumble easily and fast. Indeed, wealth did tumble fast and easily for very many; some of these people were even well off until one month ago. Some probably planned to sit back and enjoy whatever life was left to them.
No longer.

Here's a very short story:
It was the 1st of September. A day I expect I'll remember.
A man, senior executive in a global corporation, wanted to purchase a small house on a Greek island. For many reasons, he believed this would be a good purchase, a useful asset and a family abode that would be put into frequent and good use. Frequent is the operand word. He had no real assets to use towards that purchase; a loan would be crippling.

He discussed with family, but most of the family was average income or cash-stripped. He ended up asking one member to consider. It was a bold move: on total net worth of, say, 10, the man was asking for a considerable share: no less than 10% of that family member's net liquidity.
As that member had no children and a monthly guaranteed income, the man promised a pay back and hedged the request with house ownership and other considerations.

Unfortunately, the two did not see eye to eye, and the family loan did not come through.

Unfortunately the money the man was asking for was tied up in stock.
  • By 30 days later (to the day) the family member was sustaining losses of 40% of her net worth.
  • The amount of her losses could subsidised the purchase of 5 houses.
  • Those houses would have provided something; as we discovered through this crisis something for nothing. I.e., by substituting an entry for cash and using said cash to purchase real estate.
  • Now, in our story, we are left with 40% less of the nothing we had 31 days ago.
What a shame no-one can predict the future!