General

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.

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!

Last week I went to Melbourne for a 3-day business trip. I consider myself lucky as the day after I flew, Qantas Engineers had a strike causing massive delays of all Qantas flights and stranding thousands of passengers all around Australia. I will be flying again next week to Sydney and there’s a rumour that another strike will strike again. Fingers crossed that this won’t happen as I don’t want to be delayed and also there are a lot of people travelling to Sydney for the World Youth Day who will be affected.

In general, strikes are costly to both the companies and workers as they represent lost of income to both parties. The longer the strike, the more costly to both parties. This occurs because negotiations do not always run so smoothly. There is also an element of misunderstanding between the interest of both parties. Unions might believe that the company does not appreciate their effort and value to the firm. Management might believe that unions do not appreciate the willingness of the owners to earn high profits.

There’s a debate between economists whether unions are good or bad for the economy as a whole. Unions are a solution to the market power of the firms that hire workers. In the absence of unions, companies use its market power to pay lower wages and offer worse working conditions. In this case, a union balances the firm’s market power and protection to workers from being at the mercy of the owners.

On the other hand, if the wages demanded by unions rise above the competitive market level, companies would limit hiring workers causing some workers to be unemployed. This also results to decrease in wages in the rest of the economy and decrease in the business activities resulting to lower output. In some companies, successful unions benefits only union members at the expense of non-union members and other employees in other companies.

In the end, is there really a consensus whether unions are good or bad for the economy? I just don’t care as long as my flight next week will fly as high as this Qantas 747-476 plane on time!

We should consider ourselves luckier today than our ancestors in the past because we are enjoying a much higher standard of living. Even the kings and queens didn’t enjoy the simple luxury of having airconditioner, flying in the plane or even just using mobile phones. However, there’s been a debate recently whether our quality of living standards can continue in the future.

The world economies have grown because of natural resources like oils and minerals. Eventually, the supply of these natural resources would start to run out and when these shortages occur, they may stop economic growth and maybe force our current standards of living to fall!

Over the past 8 years, the price of oil tripled from $35/barrel in 2000 to $100/barrel in 2008. This is just one sign that the supply of natural resources such as oil may not be not enough to cope with the demand in the future. There’s speculation that the oil wells in Dubai will run out in 15 to 20 years time that’s why they’re trying to convert the place into a tourist destination by building the World and the Palm islands!

In spite of this, there’s a continued technological advances that might be able to avoid the development limits set by the fixed supply of world’s non-renewable natural resources. If we compare the economy today with the economy of the past, we see various ways by which the use of natural resources has improved. Modern cars are more efficient. Recycling allows reuse of non-renewable resources. Ethanol is now used as alternative fuel to petrol. There’s a recent Japanese invention of a car that uses only water as fuel. However, such invention is not economically viable to mass produce yet. Few decades ago, tin and copper were non-renewable resources that feared to run out. There was a campaign to conserve and make them available for our future generations. Tin was used as food containers and copper was used as telephone wires. But technological advances replaced tin with plastics and copper wires with fiber optic cables which are made of sand! Fiber optics give better quality sound transmission than copper.

But some questions still remain: Are all these efforts enough for the economic growth to continue? What will happen when the oil wells in the Middle-East run dry? Are we able to fly in a plane that uses only water as fuel?

The rice shortage in various Asian Countries at the moment is considered a silent tsunami affecting all people especially the poor. The recent cyclone in Burma and earthquake in China worsened the already dreadful situation. Rice is the lifeblood of almost all people across Asia and its prolonged shortage could make more than 2 billion people hungry.

The average price per kilo of rice in the Philippines increased from Php22 a year ago to about Php40 today or almost a 100% increase. This does not include inflated prices in very remote areas where additional transport costs are added. This escalating price is even worse in other countries where rice shortages are resulting in violent riots.

The law of demand in Economics tells us that the higher the price of a product the lesser would be the quantity demanded. However, consumers are not able to change their demand for rice since it is their staple food and often there is no close alternative substitute. Even if there is an available substitute, the prices are also high!

I have gathered the following main possible causes of rice shortage and skyrocketing rice prices in the world based on my reasoning as well as readings from various articles.

1. Population growth increasing rice consumption which is outpacing production;
2. Plant diseases that hurt harvests;
3. People hoarding rice supplies in anticipation of higher prices;
4. Drought in the largest rice-producing and exporting countries (e.g. Australia  suffered 6 years straight of drought. Australia was once among the largest rice exporting countries that supplied rice to millions of people around the world;
5. Increases in the price of oil which increases the cost of producing rice which eventually leads to lower production and higher cost;
6. The drive for renewable energies such as biofuel which converts food into fuel (e.g. In the Philippines they have started using sugarcane as an additive to petrol. This additive is known as ethanol). Although no one has used rice yet as biofuel, corn, as a close substitute for rice, has been widely used as biofuel, thus increasing the price of corn;
7. The conversion of ricefields into other uses like housing development and golf courses.

In the Philippines and in other Asian countries, the government is subsidising the rice supply to keep the price of rice at least affordable to poor people. However, this solution is just temporary as the government cannot afford to do this for long.

I have thought of only two possible long-term solutions. Can you think of some more?

• People should learn to shift to cheaper alternative substitute food like sweet potato;
• Governments should invest more on infrastructure, technology and research on genetically modified rice and higher yielding varieties that could increase rice harvests.

The second one is the most lasting solution but developing countries may not be able to finance this. A well planned project and reliable courses of action are needed to attract the confidence of foreign capital providers. Another challenge is the project implementation which maybe affected mostly by unstable political situation in Asian countries where corrupt government officials may intervene and embezzle the funds!