GET A LIFE: Quick fixes

READERS know I’ve worked to make sense of the US subprime mortgage crisis, the Occupy Movement, uprisings in the Middle East and Greece’s chances at financial survival.

As citizens of a world that is increasingly borderless, I believe it is every person’s responsibility to understand the role we play in maintaining order and stability for the purpose of creating a more peaceful and progressive world.

Anyone remotely conscious would have heard about the Eurozone debacle. You may even be directly affected — your multinational clients cut spending, or your company delayed expansion because exports have declined.

You hear friends abroad say how tight the job market is and how institutional giants like HSBC have laid off thousands of employees... Oh yes, the crisis has us all entangled one way or the other.

Recently at the European Summit in Brussels on June 28 and 29, Italian Prime Minister Mario Monte confronted Angela Merkel and to everyone’s surprise, the German Chancellor agreed to let Spanish banks borrow money from two

European (not German) funds: The European Stability Mechanism Fund and the European Financial Stability Fund. Few understood the consequences.  

Merkel is on record for saying, “There will be no Eurozone bonds for as long as I live.”

The media went into speculation frenzy. If Merkel stands firm and there are no Eurozone bonds in her lifetime, can the Eurozone survive?

The two funds only have a combined fiscal strength of 500 billion Euros. Italy and Spain’s outstanding debt put together stands at 2.4 trillion Euros! Plus it would take at least until the end of this year for the EU to appoint a banking supervisor to oversee Spanish banks. Until that happens, there could be no direct recapitalisation of banks and Spain would continue to remain in need of a bailout, if negotiations stall.

Is EU survival dependent on one woman? While Europe stewed and the Euro depreciated, a correlation pattern emerged. Investors rushed to buy US dollars even though the US faces a deficit of US$2 trillion and the dollar is not backed by gold. Even when the US is technically bankrupt, people see its dollar a “safe haven” currency.

Why? Because of its high liquidity ratio. Not a triple-A nation, US rating agencies see fit to downgrade Spanish and Italian banks. Don’t you find this interesting? The combined gross domestic product of the largest emerging markets —

Brazil, Russia, India and China — rose to US$13.3 trillion last year from US$2 trillion in 2002 as their share of the global economy increased to 19 per cent from 8 per cent, according to IMF data. Yet their currencies posted the biggest declines since 1998.    

These four countries control US$4.4 trillion in foreign-exchange reserves, about 40 per cent of the total.

The reason for their currency decline is simply, fear of uncertainty, not because of weak fundamentals, economic performance or high deficits. Isn’t this astonishing? Don’t you find human sentiment totally absurd? It appears that the worsening chaotic situation in Europe benefits the US entirely.  

In uncertain times, investors panic and dump major currencies for US dollars. US dollars are then used to purchase US treasuries, which in turn finance the US deficit. The threat of war also creates added demand for US dollars and

US treasuries.  On June 30, the Pentagon submitted a document to Congress to buy US$9.6 million of missile launchers for installation on US patrol boats to protect vessels and personnel from the imminent threat of hostile fast-attack crafts used by Iran.

This request includes US$6.4 million to buy 40 Griffin missiles for installation on Navy Patrol vessels in the Gulf. The Defence Department has also asked for approval to spend US$29.9 million in addition to US$80.5 million already budgeted to accelerate development of a missile designed to intercept rockets fired from low elevation angles by insurgents in Iraq and Afghanistan at US diplomatic and military personnel. Irrational and emotional, humans are psycho-logical beings!

By looking for quick fixes, we ourselves fuel the fire that keeps markets volatile.

Study human behaviour and decode market trends! I propose investors should invest based on two time horizons:
• 3 to 6 months (short-term)
• 12 to 24 months (medium to long-term)

As long as we focus on companies offering goods and services of quality and strong branding, and invest in asset classes at strategically low levels, there are attractive returns to be made.

Is beauty an advantage?

I’M 22.  I’m at university and I’m working with a friend on a project to counsel people about nutrition. She is really attractive and an extrovert and I’ve started to feel insecure. She says that a pretty face is an advantage; if you’re beautiful, people will listen.  Is it true that beauty is everything?  Do people judge us by our appearance?

WELL, what do you think of beautiful people? By beauty, you mean physical attractiveness, I presume. Do you think attractive people are smarter? More trustworthy?

When you think of extrovert personalities, how do you feel? Do they make you feel uncomfortable? Are you more likely to warm to them, understand them? Do you think extroverts are smarter? More trustworthy?

If you think “Yes”, then you probably believe that beautiful and extrovert people have more success in life.

How would you define “success?”  Would you define success by level of happiness, number of friends, or amount of money? Before we go about generalising, it’s good to consider your concerns. What are you most afraid of as you ask me these questions?

Your discomfort began when you started to compare, didn’t it? Why not spend your time and energy working on how you can be your best instead of trying to copy or imitate somebody else’s style? We are all unique. We are all put in this world to be who we are. How can we be OUR best when we are working to be a reflection of somebody else?

Living in the head

MY bosses accuse me of not doing enough. I live in my head too much, they say. I seem to know what to do and  I’m talented but I can’t seem to build up enough steam to actually accomplish anything. I know my parents are disappointed because it seems I’m aimless. I want to do stuff, but how?

YOUR issue isn’t so much HOW but WHY. You know how. You’re just not doing enough, people say.  You’re not going places because you’re not “out there” — you live in your head!

The question isn’t, “How do I do stuff.” The question is, “Why would I do that stuff? For what purpose? Are the reasons important enough, meaningful enough? How would I enrich my life if I did those things?” These are the dots you need to connect before the great “Aha” strikes.

If stuff isn’t really important to us, why do them? You’ve got talent. You’ve got potential. You said so yourself. What you lack is the oomph to get up and get on with it. So what’s stopping you?  What would happen if you stayed exactly as you are? Probably nothing!  (Could that be the reason for your present condition?)

To build momentum for moving forward, ask:
• Do I lack self-confidence?
• Do I know what I want, what I really, really want?
• Do I fear failure?
• Do I worry what others think?
• Does thinking about achieving something overwhelm you?

These are good topics to get coached on: clarity, strengthening self-belief and creating a plan for your future.

Is the EU’s survival dependent on Angela Merkel?

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