21 Wilson Street

I can’t believe President Gloria Arroyo is running for Congress in the election next year! She said she wants continue her commitment in serving the Filipino people. She also considers it as an act of humility to run for a lower office after holding the highest office of the country!

I think it’s really a greed for power! There are a lot of other things she can do if she’s serious in public service.

She faced several impeachment complaints while in office for corruption allegations. Though none of these attempts succeed during her term, she might face them after she stepped down as President next year. By running for a seat in Congress she will keep herself immune from legal suits. Good thinking Ms Arroyo! Your act just proves that the corruption cases against are most probably true!

I have effectively closed down my blog for not posting for the past two months. During that time, I contemplated if I really have the interest in blogging or I’m just too lazy or too busy. This is not the first time that I have done this but the third time already. I know everyone deserves a second chance. I don’t know if I deserve the third chance. Do I?

(Long exposure photo courtesy of George G’s Nikon D90)

It was year 2003 when I saw the movie ‘Finding Nemo’ which featured the Sydney Harbour and the Opera House. I dreamed one day of visiting Sydney and look for nemo! But that dream is now a reality only that I haven’t found Nemo yet. I now live and work in Sydney with our office located in the 32nd floor of the Deustche Bank Plaza overlooking the Opera House. I’m planning of buying a binocular to spot Nemo during breaktime.

Here are more of Sydney…

Darling Harbour Bridge overlooking the central business district.

The Monorail..

View from the office..

The ANZ stadium used for the year 2000 Olympics. The largest Olympic stadium ever built.

Watching Australian football at the Sydney Cricket Ground, a match between the Sydney Swans and Saint Kilda. Too bad Sydney lost by 1 point!

Reuters via Tacloban Times – News today that local born Wilson Justo, currently residing and operating out of Australia, completed the first stage of a major new housing development in the bustling port of Pinamopoan, on the northern coast of Leyte Island in the Philippines.

His plan is said to include a number of luxurious villa style mansions, to be built overlooking the ocean. As is often the case with big property magnates, to promote the development, he has taken the title on the first building himself to use as a residence for local members of the Justo clan.

On the strength of this first property, he is currently seeking funding to convert more of the older style residences in the area to modern dwellings. Sources close to the project say the aim is to turn the town in to a Monaco of the East, with a casino and resort style hotel on cards if sales go well.

GFC

Welcome everyone to the new 21 Wilson Street!

Over the past year, our world has been shattered by the Global Financial Crisis or better know as the “GFC”. It has been considered the most severe crisis since the Great Depression. Everyone has felt the slash of the GFC whether you are the US Government, an individual living in the remote country of Africa or a business operating in Asia or Europe!

However, there are a lot of things that we have learned out of the GFC! Can you think of any? I have listed below few things on top of my head. Feel free to add anything in the comments.

Things I learned from the GFC:

1. The higher the risk, the higher the losses and forget about the return!

The basic premise of investing is that “the higher the risk, the higher the return”. During the GFC the priority of investors is to get out from deals immediately to limit losses or prevent bankruptcy! Numerous companies didn’t survive. Lehman Brothers and Merrill Lynch to name a few.

2. Savings is important

Saving for rainy days is not enough. You should save for the storm. Some jobs have disappeared and unemployment around the world has risen to near all time high. Workers who have been fired can’t easily get new job. Savings of equivalent to one year of salary is ideal as they say but sounds unattainable.

3. Loyalty to employers is an illusion!

I have heard from friends that some people in their companies who were really hardcore and technically the best in their profession were still sacked. At the end of the day business is still business, they will do everything to survive even firing good people. Thus, during boom time employees should not be blamed from jumping to another company when it offers higher pay and good career options!

4. Regulators sucks!

The main cause of the GFC is the subprime mortgage lending issues in the US and some complex financial transactions that regulators fail to regulate. Most brilliant people work in the private companies and they would design things to escape regulations! But when bad things happen, they are ready to make bailout which means paying for their dumbness!

5. Cash can be a risky investment

In the investment world, cash is cash and it has no risk. But if you keep your cash in bank you may still end up losing it with most banks in the past year asking bailouts others didn’t survive. Most governments offered deposit guarantee to certain amount.

6. Keep it Simple

Warren Buffet said don’t enter into a business that you don’t understand. Most people and businesses that have gone bust were inexperienced in the deals that they have entered into.

7. AAA credit rating is unsafe

Who would imagine US and British governments are in the brink of defaulting on their treasuries? How much more other governments?

Hi everyone, it has been a while since my last post on 21 Wilson Street. The author has been into a hibernation stage for some reason!

To commemorate the come back of 21 Wilson Street, I want to share these pictures of beautiful tulips taken from Araluen Botanical Park as a symbol of resurrection. Tulips only blossom during springtime in Perth. Enjoy!

Previously, I posted a topic about whether the United States would adopt the international accounting standards (IFRS) since there have been numerous problems surrounding these issues. Just this week, the US SEC has approved for public comments its proposed “roadmap” for conversion to IFRS for public companies in the US. The proposal suggests US public companies begin reporting IFRS in 2014 (still six years from now), with full conversion to occur by 2016!

This decision of the US SEC is vital in the state of global economy at the moment. It is important for financial reporting language to be consistent all around the world to benefit investors and promote market efficiency as IFRS encourage more transparency. This will also increase comparability of companies from one country to the other.

It is interesting to note however that the US SEC approves this conversion in the middle of the credit crisis. Is this one of the responses of the US government to the recession?

Last weekend, my friends and I went on a 2-day road trip from Sydney to the Snowy Mountain Range! The idea of this adventure began three days before I was suppose to fly back to my home city of Perth after spending 3 weeks in Sydney.

The Snowy Mountains are the highest mountain range in mainland Australia where large snows fall every winter. It is the only part of the mainland Australia where constant snowfalls happen every winter season.

A breakfast stopover at Wollongong City 2.5hours from Sydney. It’s name means “songs of the seas” in the Aboriginal language!

The journey continues with a climb to the mountains from the beautiful beaches of Wollongong with the company of our great friend “Tomtom” the satellite navigation device. Without Tomtom we would not be able to reach our destination!

A long and winding road.

At 7pm, after a one day of driving we finally reached our final destination – Perisher Blue – Australia’s biggest ski resort! It was a long day but it was worth the time and effort after experiencing the first glance of snow fall in the freezing cold night!

And now time for a ski!

I would like to recommend to everyone to visit the Australia’s Snowy Mountains and experience the skiing adventure. It should be on your list of things to do before you reach the age of 30!

The result of the June 2008 CFA level 1 exams were out last night!
Congratulations to all who passed especially to my good friends Roderick and Michael! Well Done!

Now it’s my turn to wait for my level 3 exam result in three weeks time!

Imagine paying $500 billion for your dinner bill or spending $10 trillion for your grocery shopping. Well, it sounds impossible but it’s real and it’s happening in the hyperinflation-ravaged African country – Zimbabwe!

The country has a record breaking 2.2 million percent of inflation where all prices of goods double or triple every other day! The country’s central bank has been printing money of high denomination notes to cope with the skyrocketing prices and higher demand for money! Recently, the central bank just issued a $100 billion note.

Businesses, individuals and machines face a difficulty of dealing with so many zeros! Most calculators can only hold up to 12 digits making it difficult to do arithmetics. Price tags now have a caution sign saying multiply all prices by $1 million!

Inflation occurs when there are shortages in the supply of goods and services which is a rampant problem in Zimbabwe. With too much supply of money competing to buy a very limited supply of goods and services cause prices to go up. Shops and other businesses sometimes accept US dollar note when selling their goods. However, they face arrest when caught as it is illegal to do so.

The root cause of this problem is the political crisis of the country which has been going on for several years when their president started to forcefully confiscate the farms of white people in the country without compensation. The farms were given to the african people who do not have the necessary skills to continue the farming business which resulted to a shortage of food supply.

This fact only means that the political situation of a country has a direct and strong influence on the economy. For instance, statistical data show that unemployment rate in the United States is higher when Bush was the President compared to the time of Clinton!

 A head of the government has the control over the economy through the tax policy and goverment spending policy. That is why it is very important to consider economic programs of the candidate during elections!

Zimbabwe has already showed the world a living example of the direct relationship between politics and the economy. With the worsening political and economic situation of the country, I think it is about time for other countries and maybe the United Nations to intervene and remove the current President from office!