By Aurelio O. Angeles
Philippine Daily Inquirer
First Posted 21:20:00 10/12/2008
THE US GOVERNMENT HAS APPROVED the bailout. Where to now?
The bailout is a temporary relief to a disorder and malaise brought about by a century of unprecedented economic growth alongside growing errors and unrestrained character flaws.
Unless we know the root causes that brought about this disorder, we would be like a doctor providing aspirin to a patient with a high fever and severe headache.
The US stock markets may indeed recover by 100 points for a week; a huge sigh of relief is heard from the Chicago Mercantile Exchange to the Philippine Stock Exchange; those in government who have been heavily engaged in financial speculations may now be jumping with joy.
But what next? What is the big picture in all this?
There are two sides to the economy.
First, there is the real economy which produces real goods and services to satisfy human needs placed in a hierarchy by Abraham Maslow.
The growth of business in the real economay results in savings.
At first, these savings were small and were hidden under mattresses. As wealth accumulated from all sectors in the economy through the years, banks were formed to serve as depository of these savings as well as as a source of funds for those in business.
The accumulation of wealth from centuries of economic growth brought about the proliferation of all types of banks, insurance services, investment bankers, fund managers, mutual funds, hedge funds, etc. This became the second side of the economy—the financial markets.
As working men created wealth, a purse keeper accumulated and secured their wealth.
The existence of these financial markets had clearly one purpose—to serve the real economy and people by gathering their savings and making this capital available back to the real economy and to people at less cost.
Leaders in the financial markets saw that this purpose was good.
And they said, “Let us create more financial services to the real economy and provide capital requirements and liquidity for those in need.”
Thus, they conceptualized the idea of the corporation, legislated it as a form of business and developed the concept of shares of stocks, debentures and preferred shares. They also created bonds, treasury notes and bills, foreign exchange as vehicles for moving people’s savings.
And they saw that it was good. And they said, “Let us now put up stock exchanges where corporations could raise funds to expand operations and where people with excess funds could invest their savings with greater yield. And they were extremely happy for being of such great service to the economy and for making money in the process.
So long as financial markets operators were focused on this purpose, to serve the real economy, their relationship had symbiotic benefits.
But the 20th century severely changed that focus.
Deviations started to appear. Instead of serving the real economy, financial markets developed strategies to serve themselves at the expense of the real economy.
The first visible sign of deviation was the collapse of the US stock market that started on Oct. 21, 1929 and continued on till Oct. 29, 1929—the Great Wall Street Crash.
There are interesting events in this crash that echo in current events.
The following data comes from Jeremy Kingston and David Lambert’s book, “Catastrophe and Crisis,” published by Aldus Books Ltd. in 1979.
First, the economy before the crash seemed to be booming, people had easy access to money and people were living in prosperity.
According to the book, “this availability of money was one of the reasons for the boom. Shares in the climbing market could be bought on margin—that is to say, the buyer paid the broker only a small portion of the cost of the share, the difference being made up with money borrowed by the broker from a bank and loaned to the buyer.”
Second, the engine of growth was the culture of getting rich quick.
The book states: “It is an unhappy fact of speculative buying that when prices are rising fast, whether the rises occur in land, or shares, or even tulip bulbs, people cease to look for the reason why they are rising. The items may be intrinsically worthless but what counts is that they can be resold at a profit—sometimes a very great profit.
In 1928 and 1929, Americans became dazzled by the real possibility of becoming very rich very quickly.”
Third, in the initial shakeouts and downturns that happened before the 1929 Crash, the chairman of the powerful National City Bank, Charles E. Mitchell, offered to lend $20 million “to avoid any dangerous crisis in the money market.”
According to the book, “Mitchell, who was speculating heavily, had strong reasons for wanting the boom to continue, and his words rallied the market. (Five years later, Mitchell was arrested and tried on charges of tax evasion.)”
Black Thursday
Fourth, on Oct. 24th, Black Thursday, as stock prices were falling like lead, the vice president of the stock exchange “walked onto the floor as representative of the banker’s pool and bought heavily in 20 assorted stocks.”
“Again, the volatile market recovered ... But Tuesday Oct. 29 was the most devastating day in the history of the American Stock Exchange ... Even after Oct. 29, the market went on falling. It reached its lowest level of the year on Nov. 13th.”
What happened to the man, Richard Whitney? He was later tried and sentenced for misappropriating stock exchange funds.
Fifth, when rich and poor people plant unbridled selfishness, they harvest ruin alike.
The book continues: “Men who had called themselves millionaires a week before were now irretrievably ruined. Large fortunes, small savings, all wiped out ... Billions of dollars worth of profit—some real, some paper—had vanished, and the office clerk, the chauffeur, the window cleaner, the salesman had lost all their capital.”
Sixth, note the month and dates of the crash—Oct. 21 to 29.”
Another sign of deviation is the government regulation allowing short selling of stocks.
Shorting is an investment strategy in a declining market when an investor sells stocks he does not own at a certain price and later buys them in the market when prices, he speculates, will fall lower than his selling price.
The difference in price is his profit. The lower the buying price turns out to be, the greater will his profit be. He wins when the market goes down in a tailspin.
Another deviation is the creation of Futures Exchange that promotes selling and buying of contracts for speculative purposes and allowing financial intermediaries or their conduits to play the game.
For example, a buyer agrees in April 2008 to buy from a seller an oil contract at an agreed price, say $110 per barrel for future delivery in June 2008. Under this arrangement, the buyer and seller of oil may not actually be in the oil business, have no intention of receiving, delivering or keeping actual stocks of oil and have no actual need for oil.
They are in the business of speculating on the selling and buying of paper contracts—derivatives. The prices that are transacted are based on the volume of buys and sells for the paper derivatives, not on the demand and supply of the actual oil commodity by mankind.
The same goes for buys and sells of foreign currency futures, interest rate futures, stock index futures and many other exotic types of investments.
These derivatives are traded in futures exchanges, the most notable among them are Chicago Mercantile Exchange and New York Mercantile Exchange.
Deviation
The most recent example of deviation is, of course, the buy and sell of financial papers called collateralized debt obligation (CDO) and collateralized mortgage obligation (CMO) that brought about the subprime crisis in the US property sector and the collapse of Fannie Mae and Freddie Mac.
Media interestingly attributes the cause of the entire present crisis in the economy entirely on the subprime debacle in the property sector.
However, this may not be so and the subprime crisis may just be a cover-up for a grosser fiasco and shame for financial intermediaries—their losses in highly speculative deals in the commodity, currency and stocks futures markets.
What is the ultimate purpose of financial intermediaries in the economy?
First, banks, insurance companies, fund managers and investment bankers are fiduciary trustees of savings accumulated by industries from centuries of serving the needs of people.
They are supposed to keep these savings, not lose them.
When Citibank, Morgan Stanley, AIG and hundreds of other financial intermediaries write off hundreds of billions of dollars of bad investments in a period of less than a year, they have spilled the milk of human endeavor gathered by hundred millions of workers throughout history.
Second, as trustees, financial market operators serve not just the investors who hand them their savings but also the real economy that produced the businesses that resulted in these savings.
The obligation of financial market operators ultimately is anchored to the fundamentals of protecting and promoting the interests of the real economy that brought about their existence in the first place.
Third, the financial markets are NOT the engine of growth in any economy. The engine of growth is the real economy—the world’s billions of people, past and present, who produce goods and services to satisfy man’s hierarchy of needs.
Believing otherwise would lead people to rush to exchanges and buy and sell paper certificates whose values swing up and down with the varying degrees of exhilaration, hysteria and back-room manipulation in the markets.
Asset bubble
Or, this belief may encourage players in the real economy to borrow for projects that will end up in bubble bursting just because interest rates are cheap, as in the 1997 Asian crisis.
Fourth, in formulating investment strategies, financial operators must come back to the original purpose for which financial intermediaries have been created—to serve the real economy and people and to make these savings readily available back to the real economy and to people at less cost.
The fact is, there is decent money to be made in this honorable role, as has been made in at least the past millennium.
Conclusions
These principles inevitably lead us to the following conclusions in bringing back confidence and growth in the economy.
First, the cause of the financial crisis takes its roots in the abandonment by the financial intermediaries of their raison d’etre, their original and true purpose of existence in the economy.
Trillions of dollars of the world’s savings earned through centuries of work are placed in the hands of a powerful and brilliant few. They in turn channel these savings in stocks, futures, currency exchanges as well as securitized papers. They may even create separate conduits and entities for this purpose and register them in the Bahamas to escape supervision and taxes.
If the real economy is not directly benefited from these investments and the financial market operators deprive the real economy easy access to funds because they make easier money from speculative investments, then they would be betraying their raison d’etre.
If the increase in the values of these investments depend ultimately on the weather, greed, get-rich-quick culture, human exhilaration or despondency, or mass hysteria, then they would be betraying their cause for being as fiduciary trustees of other people’s money.
If financial intermediaries are allowed to place the world’s savings in these investments, it would be like allowing your CFO to divert company funds from your usual operations and to “invest” them instead by playing roulette in the casino just because your CFO happens to be outstanding at numbers with a brilliant mind for probabilities.
Real story
Well, this is the story of the 2008 financial crisis. And the magnitude of the losses have been so staggering that the US Congress had to enact a bailout law.
Second, the bailout law of the US Congress must address the abandonment by financial intermediaries of their original purpose of existence and provide sanctions and penalties on violators.
If this is not addressed, it would be like providing a fresh amount of $700 billion to your same CFO to save the company by playing in the same roulette where he failed miserably.
No one can have confidence in that arrangement.
Third, the specific solutions to the crisis may lay between the theories of John Maynard Keynes who advocated the desirability of government intervention in the economy and of Milton Friedman who argued for the opposite.
In any case, the solution to the crisis needs to be insulated from greedy people, both in private and government sectors who will use Keynes or Friedman for their selfish motives. As they say, even the devil can quote the Bible.
It is a wonder how many of those who voted on the issue of the bailout in the US Congress belonged to the realm of the devil.
Finally, to bring back confidence in the economy and in turn in the financial markets, the real economy in the world must grow, provide employment and control inflation.
It is the real economy that gave life to the financial markets. It will be the same real economy that will bring back life to the financial markets. The financial markets cannot save themselves.
Relevant strategies
The time may come when the government will stop spending its resources on saving the financial markets from the cost of their errors, will mark them as sunk costs and will move on to the more productive endeavor of building up the real economy as a way to build up the financial markets.
It is time to study in greater depth the relevance to our times the strategies of President Franklin Roosevelt in overcoming the US Depression that came immediately after the Wall Street Crash of 1929.
This is a very sad commentary on the recent financial crisis: The financial markets with the wealth of nations, technology and influence in their hands succeeded in engineering securitized certificates and highly complex financial instruments in the exchange but failed to use this same wealth, technology and influence in increasing production, providing innovation and generating aggregate demand in the real economy throughout the world.
The common explanation is this: It is far more convenient, surer and faster to make money on derivatives in the exchange than to make money by putting up factories, research labs, roads, bridges and airports around the world.
And this is the irony of being rich.
When a man gets to be one, he loses his sight of the fact that he became rich by serving people, by making his customers number one and by exploring unchartered frontiers where other customers abound.
As he masters the time value of money, he figures he will make faster money in the exchange rather than in the exchange of real goods and services in the real economy.
He loses his touch of the opportunities that abound in the teaming population of Third World countries and underdeveloped economies where the demand for food, clothing, housing, education, infrastructure, transportation, information and communication technology, health and science facilities are boundless.
But people create demand. A billion people means a billion-people demand.
What is needed is to trigger the supply to satisfy this demand. The process of matching supply with demand creates opportunities, employment, income and purchasing power. These are created not just in underdeveloped economies but in the advanced markets where this capital—money, technology and education, machinery—comes from.
There is no bubble in that demand, no bubble in that supply, unlike the demand and supply of securitized papers.
New capitalism
This is the new capitalism that has just simply returned to its roots—serving the needs of the real economy and people of the Third World and underdeveloped sectors of the economy.
Have you wondered, for example, about the role of the Thomasites on our economic development when they introduced American education in the Philippines at the break of 1900s?
Let the financial intermediaries who hold the wealth of nations in their hands apply their brilliance in engineering the development and matching of this demand and supply in Third World countries and underdeveloped sectors of economies.
The era of the financial derivatives for self-serving and self-seeking investors has burst in bubbles and must now come to an end.
We have arrived at the new frontiers of capitalism. And there is real money to be made in them for all.
Thursday, February 19, 2009
Saturday, February 14, 2009
LOVE’S IN THE HEAD, NOT THE HEART
So now we don’t call it broken hearted anymore, but brain damaged..and the songs "Going out of my head (over you)" and "Head over heels" makes sense after all.
Philippine Star: February 13, 2009
WASHINGTON – Like any young woman in love, Bianca Acevedo has exchanged Valentine hearts with her fiancé.
But the New York neuroscientist knows better. The source of love is in the head, not the heart.
She is one of the researchers in a relatively new field focused on explaining the biology of romantic love. And the unpoetic explanation is that love mostly can be understood through brain images, hormones and genetics.
That seems to be the case for the newly in love, the long in love and the brokenhearted.
“It has a biological basis. We know some of the key players,” said Larry Young of the Yerkes National Primate Research Center at Emory University in Atlanta. There, he studies the brains of an unusual monogamous rodent to get a better clue about what goes on in the minds of people in love.
In humans, there are four tiny areas of the brain that some researchers say form a circuit of love.
Acevedo, who works at the Albert Einstein College of Medicine in New York, is part of a team that has isolated those regions with the unromantic names of ventral tegmental area (VTA), the nucleus accumbens, the ventral pallidum and raphe nucleus.
The hot spot is the teardrop-shaped VTA. When people newly in love were put in a functional magnetic resonance imaging machine and shown pictures of their beloved, the VTA lit up. Same for people still madly in love after 20 years.
The VTA is part of a key reward system in the brain.
“These are cells that make dopamine and send it to different brain regions,” said Helen Fisher, a researcher and professor at Rutgers University. “This part of the system becomes activated because you’re trying to win life’s greatest prize – a mating partner.”
One of the research findings isn’t so complimentary: Love works chemically in the brain like a drug addiction.
“Romantic love is an addiction; a wonderful addiction when it is going well, a horrible one when it is going poorly,” Fisher said.
“People kill for love. They die for love.”
The connection to addiction “sounds terrible,” Acevedo acknowledged. “Love is supposed to be something wonderful and grand, but it has its reasons. The reason I think is to keep us together.”
But sometimes love does not keep us together. So the scientists studied the brains of the recently heartbroken and found additional activity in the nucleus accumbens, which is even more strongly associated with addiction.
“The brokenhearted show more evidence of what I’ll call craving,” said Lucy Brown, a neuroscientist also at Einstein medical college. “Similar to craving the drug cocaine.”
The team’s most recent brain scans were aimed at people married about 20 years who say they are still holding hands, lovey-dovey as newlyweds, a group that is a minority of married people. In these men and women, two more areas of the brain lit up, along with the VTA: the ventral pallidum and raphe nucleus.
The ventral pallidum is associated with attachment and hormones that decrease stress; the raphe nucleus pumps out serotonin, which “gives you a sense of calm,” Fisher said.
Those areas produce “a feeling of nothing wrong. It’s lower-level happiness and it’s certainly rewarding,” Brown said.
The scientists say they study the brain in love just to understand how it works, as well as for more potentially practical uses.
The research could eventually lead to pills based on the brain hormones which, with therapy, might help troubled relationships, although there are ethical issues, Young said. His bonding research is primarily part of a larger effort aimed at understanding and possibly treating social-interaction conditions such as autism. And Fisher is studying brain chemistry that could explain why certain people are attracted to each other. She’s using it as part of a popular Internet matchmaking service for which she is the scientific adviser.
While the recent brain research is promising, University of Hawaii psychology professor Elaine Hatfield cautions that too much can be made of these studies alone. She said they need to be meshed with other work from traditional psychologists.
Brain researchers are limited because there is only so much they can do to humans without hurting them. That’s where the prairie vole – a chubby, short-tailed mouse like creature – comes in handy. Only 5 percent of mammals more or less bond for life, but prairie voles do, Young said.
Scientists studied voles to figure out what makes bonding possible. In females, the key bonding hormone is oxytocin, also produced in both voles and humans during childbirth, Young said.
When scientists blocked oxytocin receptors, the female prairie voles didn’t bond.
In males, it’s vasopressin. Young put vasopressin receptors into the brains of meadow voles – a promiscuous cousin of the prairie voles – and “those guys who should never, ever bond with a female, bonded with a female.”
Researchers also uncovered a genetic variation in a few male prairie voles that are not monogamous – and found it in some human males, too.
Those men with the variation ranked lower on an emotional bonding scale, reported more marital problems, and their wives had more concerns about their level of attachment, said Hasse Walum, a biology researcher in Sweden. It was a small but noticeable difference, Walum said.
Scientists figure they now know better how to keep those love circuits lit and the chemicals flowing.
Young said that romantic love theoretically can be simulated with chemicals, but “if you really want to get the relationship spark back, then engage in the behavior that stimulates the release of these molecules and allow them to stimulate the emotions,” he said. That would be hugging, kissing, intimate contact.
“My wife tells me that flowers work as well. I don’t know for sure,” Young said. “As a scientist it’s hard to see how it stimulates the circuits, but I do know they seem to have an effect. And the absence of them seems to have an effect as well.” - AP
HAPPY VALENTINE'S TO ALL!
Philippine Star: February 13, 2009
WASHINGTON – Like any young woman in love, Bianca Acevedo has exchanged Valentine hearts with her fiancé.
But the New York neuroscientist knows better. The source of love is in the head, not the heart.
She is one of the researchers in a relatively new field focused on explaining the biology of romantic love. And the unpoetic explanation is that love mostly can be understood through brain images, hormones and genetics.
That seems to be the case for the newly in love, the long in love and the brokenhearted.
“It has a biological basis. We know some of the key players,” said Larry Young of the Yerkes National Primate Research Center at Emory University in Atlanta. There, he studies the brains of an unusual monogamous rodent to get a better clue about what goes on in the minds of people in love.
In humans, there are four tiny areas of the brain that some researchers say form a circuit of love.
Acevedo, who works at the Albert Einstein College of Medicine in New York, is part of a team that has isolated those regions with the unromantic names of ventral tegmental area (VTA), the nucleus accumbens, the ventral pallidum and raphe nucleus.
The hot spot is the teardrop-shaped VTA. When people newly in love were put in a functional magnetic resonance imaging machine and shown pictures of their beloved, the VTA lit up. Same for people still madly in love after 20 years.
The VTA is part of a key reward system in the brain.
“These are cells that make dopamine and send it to different brain regions,” said Helen Fisher, a researcher and professor at Rutgers University. “This part of the system becomes activated because you’re trying to win life’s greatest prize – a mating partner.”
One of the research findings isn’t so complimentary: Love works chemically in the brain like a drug addiction.
“Romantic love is an addiction; a wonderful addiction when it is going well, a horrible one when it is going poorly,” Fisher said.
“People kill for love. They die for love.”
The connection to addiction “sounds terrible,” Acevedo acknowledged. “Love is supposed to be something wonderful and grand, but it has its reasons. The reason I think is to keep us together.”
But sometimes love does not keep us together. So the scientists studied the brains of the recently heartbroken and found additional activity in the nucleus accumbens, which is even more strongly associated with addiction.
“The brokenhearted show more evidence of what I’ll call craving,” said Lucy Brown, a neuroscientist also at Einstein medical college. “Similar to craving the drug cocaine.”
The team’s most recent brain scans were aimed at people married about 20 years who say they are still holding hands, lovey-dovey as newlyweds, a group that is a minority of married people. In these men and women, two more areas of the brain lit up, along with the VTA: the ventral pallidum and raphe nucleus.
The ventral pallidum is associated with attachment and hormones that decrease stress; the raphe nucleus pumps out serotonin, which “gives you a sense of calm,” Fisher said.
Those areas produce “a feeling of nothing wrong. It’s lower-level happiness and it’s certainly rewarding,” Brown said.
The scientists say they study the brain in love just to understand how it works, as well as for more potentially practical uses.
The research could eventually lead to pills based on the brain hormones which, with therapy, might help troubled relationships, although there are ethical issues, Young said. His bonding research is primarily part of a larger effort aimed at understanding and possibly treating social-interaction conditions such as autism. And Fisher is studying brain chemistry that could explain why certain people are attracted to each other. She’s using it as part of a popular Internet matchmaking service for which she is the scientific adviser.
While the recent brain research is promising, University of Hawaii psychology professor Elaine Hatfield cautions that too much can be made of these studies alone. She said they need to be meshed with other work from traditional psychologists.
Brain researchers are limited because there is only so much they can do to humans without hurting them. That’s where the prairie vole – a chubby, short-tailed mouse like creature – comes in handy. Only 5 percent of mammals more or less bond for life, but prairie voles do, Young said.
Scientists studied voles to figure out what makes bonding possible. In females, the key bonding hormone is oxytocin, also produced in both voles and humans during childbirth, Young said.
When scientists blocked oxytocin receptors, the female prairie voles didn’t bond.
In males, it’s vasopressin. Young put vasopressin receptors into the brains of meadow voles – a promiscuous cousin of the prairie voles – and “those guys who should never, ever bond with a female, bonded with a female.”
Researchers also uncovered a genetic variation in a few male prairie voles that are not monogamous – and found it in some human males, too.
Those men with the variation ranked lower on an emotional bonding scale, reported more marital problems, and their wives had more concerns about their level of attachment, said Hasse Walum, a biology researcher in Sweden. It was a small but noticeable difference, Walum said.
Scientists figure they now know better how to keep those love circuits lit and the chemicals flowing.
Young said that romantic love theoretically can be simulated with chemicals, but “if you really want to get the relationship spark back, then engage in the behavior that stimulates the release of these molecules and allow them to stimulate the emotions,” he said. That would be hugging, kissing, intimate contact.
“My wife tells me that flowers work as well. I don’t know for sure,” Young said. “As a scientist it’s hard to see how it stimulates the circuits, but I do know they seem to have an effect. And the absence of them seems to have an effect as well.” - AP
HAPPY VALENTINE'S TO ALL!
Friday, February 13, 2009
INVESTMENT STRATEGIES FOR RELATIONSHIPS
In the spirit of Valentine's I'd like to share an investment advice we all could use, over an investment we all make sometime in our lives. just like other investments this is not risk-free, however the rewards more than make up for the consequence and risk by a wide margin, and this one is not dictated by the financial markets (sub-prime be damned)
From Slot Machine to Stock Market: Investment Strategies for Relationships
By Dr. John C. Maxwell
In the early years of my career, I did not have a correct view of life. I approached life as if it were a slot machine. I wanted to put as little as possible into it, and I always hoped to hit the jackpot. I'm embarrassed to say that I often had a similar approach in my interaction with people. I was more focused on what people could do for me than what I could do for them. As a result, I would try to make relational "withdrawals" without ever having made any deposits. Needless to say, I was not very successful.
As I matured, I begin to place a higher value on people. As I made this transition, I noticed a fascinating development: the more I gave to relationships, the more I seemed to gain from relationships. In my book, Winning With People, I named this phenomenon The Boomerang Principle. What you put into relationships has a way of coming back to you.
During my time in leadership, I've noticed that people fall into three broad categories with regards to how they view relationships.
1) Takers
Takers receive and never give. They are the people in life who have a me-first mentality. They try to extract as much as they can from the relationships in their lives, and they rarely, if ever, consider giving back.
2) Traders
Traders receive and then give. Traders will only send you a Christmas card, if you've mailed one to them. They picture relationships as an equation in need of balance. If someone helps them, they feel a debt of gratitude. If they aid another person, they expect a favor in return.
3) Investors
Investors give and then receive. These are the people who give purely for the joy of giving. They add value to others, not as part of a cold calculation, but as a habit. Although doing so may not earn them an instant return, in the long run they reap the gratitude and goodwill of those they have helped.
Investment Strategies for Relationships
Instead of viewing relationships as a slot machine, picture them like the stock market. To get rich, make regular deposits in people over an extended period of time. At first, you may feel like the value of what you're putting in isn't worth the investment. However, like the stock market, in the long run, you'll reap dividends and earn rewards.
1) Think "Others First"
Human nature tends to focus us on personal needs, but investing in relationships requires us to prioritize others. Instead of self-advancement, think others-enhancement. Like a responsible investor, resist the temptation to "time" the relational market, using someone only for short-term gain. That's a strategy doomed to fail. On the contrary, make a habit of adding value in relationships and trust that the long-term results will be in your favor.
2) Focus on the Investment, Not the Return
If you've ever purchased stocks personally, then you know the agony of watching the vicissitudes of the market. Like a roller coaster, your portfolio climbs up one day only to lurch down the next day. Instead of agonizing over returns, a shrewd investor focuses on making the investment. The same principle holds true in relationships. Don't expect specific and immediate benefit from your relational inputs. Through time, you'll be taken care of as long as you're willing to invest.
3) Make Educated Investments
Not all investments yield the same interest, and not all relationships produce the same reward. As a leader, make investing in others a general principle, but be deliberate about putting energy into low-risk, high-reward relationships. Seek out talented people with teachable dispositions, and offer your relational capital to those who will make the most of it.
4) Initiate the investment
A stockbroker won't hack into your bank account and invest money on your behalf. You have to be willing to take the first step. Don't be stingy with your relational investments, giving only to those who've first given to you. Rather, take responsibility for setting the tone of adding value in your relationships.
From Slot Machine to Stock Market: Investment Strategies for Relationships
By Dr. John C. Maxwell
In the early years of my career, I did not have a correct view of life. I approached life as if it were a slot machine. I wanted to put as little as possible into it, and I always hoped to hit the jackpot. I'm embarrassed to say that I often had a similar approach in my interaction with people. I was more focused on what people could do for me than what I could do for them. As a result, I would try to make relational "withdrawals" without ever having made any deposits. Needless to say, I was not very successful.
As I matured, I begin to place a higher value on people. As I made this transition, I noticed a fascinating development: the more I gave to relationships, the more I seemed to gain from relationships. In my book, Winning With People, I named this phenomenon The Boomerang Principle. What you put into relationships has a way of coming back to you.
During my time in leadership, I've noticed that people fall into three broad categories with regards to how they view relationships.
1) Takers
Takers receive and never give. They are the people in life who have a me-first mentality. They try to extract as much as they can from the relationships in their lives, and they rarely, if ever, consider giving back.
2) Traders
Traders receive and then give. Traders will only send you a Christmas card, if you've mailed one to them. They picture relationships as an equation in need of balance. If someone helps them, they feel a debt of gratitude. If they aid another person, they expect a favor in return.
3) Investors
Investors give and then receive. These are the people who give purely for the joy of giving. They add value to others, not as part of a cold calculation, but as a habit. Although doing so may not earn them an instant return, in the long run they reap the gratitude and goodwill of those they have helped.
Investment Strategies for Relationships
Instead of viewing relationships as a slot machine, picture them like the stock market. To get rich, make regular deposits in people over an extended period of time. At first, you may feel like the value of what you're putting in isn't worth the investment. However, like the stock market, in the long run, you'll reap dividends and earn rewards.
1) Think "Others First"
Human nature tends to focus us on personal needs, but investing in relationships requires us to prioritize others. Instead of self-advancement, think others-enhancement. Like a responsible investor, resist the temptation to "time" the relational market, using someone only for short-term gain. That's a strategy doomed to fail. On the contrary, make a habit of adding value in relationships and trust that the long-term results will be in your favor.
2) Focus on the Investment, Not the Return
If you've ever purchased stocks personally, then you know the agony of watching the vicissitudes of the market. Like a roller coaster, your portfolio climbs up one day only to lurch down the next day. Instead of agonizing over returns, a shrewd investor focuses on making the investment. The same principle holds true in relationships. Don't expect specific and immediate benefit from your relational inputs. Through time, you'll be taken care of as long as you're willing to invest.
3) Make Educated Investments
Not all investments yield the same interest, and not all relationships produce the same reward. As a leader, make investing in others a general principle, but be deliberate about putting energy into low-risk, high-reward relationships. Seek out talented people with teachable dispositions, and offer your relational capital to those who will make the most of it.
4) Initiate the investment
A stockbroker won't hack into your bank account and invest money on your behalf. You have to be willing to take the first step. Don't be stingy with your relational investments, giving only to those who've first given to you. Rather, take responsibility for setting the tone of adding value in your relationships.
Thursday, February 12, 2009
THE TRUTH ABOUT LOVE AND LIES
In the spirit of the season of love, let's be amusing for a while....
It helps to be deluded when you are in love, according to scientists who study how humans mate. Men and women are “designed to misconstrue, misread and misunderstand each other.” And this is good. For one, delusion helps us avoid costly mating errors. Men over-estimate women’s interest in them, so to avoid not seeing what is there (false-negative errors). We can’t afford to pass up a woman who might be interested, so we assume all women are interested. On the other hand, women overestimate men’s interest in casual sex.
They need to avoid their “false-positive errors,” Because of women’s greater investment in reproduction; their safest strategy is to be cautious and to assume ALL MEN ARE JERKS! Men and women lie to each other when they are interested, but the lies women tell tend to make them seem more faithful (that lying bitch!) while men lie about wealth or their interest in a long-term commitment.(watta jerk!) Delusion helps us stay together, too. We believe our beloved is somehow special (definitely) and our exes are all duds. (aren’t they?) The more we believe our delusions, the happier we will be, according to anthropologist Helen Fisher. So, go ahead..fool yourself and be happy. HAPPY VALENTINE'S
Source:
Men’sHealth Magazine August 2007
It helps to be deluded when you are in love, according to scientists who study how humans mate. Men and women are “designed to misconstrue, misread and misunderstand each other.” And this is good. For one, delusion helps us avoid costly mating errors. Men over-estimate women’s interest in them, so to avoid not seeing what is there (false-negative errors). We can’t afford to pass up a woman who might be interested, so we assume all women are interested. On the other hand, women overestimate men’s interest in casual sex.
They need to avoid their “false-positive errors,” Because of women’s greater investment in reproduction; their safest strategy is to be cautious and to assume ALL MEN ARE JERKS! Men and women lie to each other when they are interested, but the lies women tell tend to make them seem more faithful (that lying bitch!) while men lie about wealth or their interest in a long-term commitment.(watta jerk!) Delusion helps us stay together, too. We believe our beloved is somehow special (definitely) and our exes are all duds. (aren’t they?) The more we believe our delusions, the happier we will be, according to anthropologist Helen Fisher. So, go ahead..fool yourself and be happy. HAPPY VALENTINE'S
Source:
Men’sHealth Magazine August 2007
Thursday, January 15, 2009
Career and Business Predictions for 2009
Builders make plans. Entrepreneurs make goals. Gamblers make bets. Fools make predictions.
I am quite sure that some of the following predictions will make me look foolish by the end of 2009, (I’m no expert) just the same, I’d like to share with you an article by self-help guru Michael Masterson of early to rise, I have edited it to make it more compatible with my plans, and maybe I hope also with yours. Which is why I’d like to share with you a few of the actions I plan to take, business-wise, this year.
Prediction: Not only is the sub-prime crisis not over, but we will actually start to feel its effects (Recession) this year, in which case the financial markets will still be in the negative, whatever that means.
What I will do about it: Remind my clients to hang on to their investments, as this is the worst time to redeem, actually this recession is still the best argument for saving. (that’s how I look at it)
Prediction: The information industry will hold up relatively well in 2009, particularly among those businesses that give advice. Haven’t you noticed? Computer stores don’t advertise selling computers-they offer biz solutions.
What I will do about it: Remind myself that information itself is unwanted. Today consumers are looking for advice. In which case I will upgrade from being insurance and Mutual funds Agent to a financial planner, consultant or adviser, and continue to learn everything about the financial markets and being an information marketer.
Prediction: General advertising's decline will accelerate. Dozens of newspaper and magazine publishers will feel the pinch. At the same time, direct (there are a lot of them here at Multiply-take note A-frame) marketing will continue to grow, attracting some of the money formerly spent on general advertising.
What I will do about it: Continue informing pinoys about the virtues of savings through my blogs. I will also recommend to my clients who are in business that they learn more about direct marketing and consider doing business here in the net-maybe I might suggest they sign in @ multiply and see the vibrant economy going on here. (I sure hope the term “vibrant” is not an exaggeration nor a hyperbole)
Prediction: The Internet will continue to become a larger and more active medium for commercial transactions. The Great Recession will make other media – print advertising, direct mail marketing, and TV advertising (to name a few) – less economic. Businesses will continue to spend more of their budget on the Internet.
What I will do about it: Learn more about copy writing and search engine optimization (SEO) web-page design (the new visual marketing) and continue to learn about successful marketing on the Internet. I will recommend everyone to do the same.
Prediction: I saved the best for last-Despite the recession, surfing in the Philippines will continue to grow (in case you didn’t notice, its starting to be an all pinoy showdown last time at the Lanuza surf contest) more surf spots will be discovered (dunno if its good or bad) and Global warming will bring in more waves.
What I will do about it: Duuuuuuuuuuuuh!
I am quite sure that some of the following predictions will make me look foolish by the end of 2009, (I’m no expert) just the same, I’d like to share with you an article by self-help guru Michael Masterson of early to rise, I have edited it to make it more compatible with my plans, and maybe I hope also with yours. Which is why I’d like to share with you a few of the actions I plan to take, business-wise, this year.
Prediction: Not only is the sub-prime crisis not over, but we will actually start to feel its effects (Recession) this year, in which case the financial markets will still be in the negative, whatever that means.
What I will do about it: Remind my clients to hang on to their investments, as this is the worst time to redeem, actually this recession is still the best argument for saving. (that’s how I look at it)
Prediction: The information industry will hold up relatively well in 2009, particularly among those businesses that give advice. Haven’t you noticed? Computer stores don’t advertise selling computers-they offer biz solutions.
What I will do about it: Remind myself that information itself is unwanted. Today consumers are looking for advice. In which case I will upgrade from being insurance and Mutual funds Agent to a financial planner, consultant or adviser, and continue to learn everything about the financial markets and being an information marketer.
Prediction: General advertising's decline will accelerate. Dozens of newspaper and magazine publishers will feel the pinch. At the same time, direct (there are a lot of them here at Multiply-take note A-frame) marketing will continue to grow, attracting some of the money formerly spent on general advertising.
What I will do about it: Continue informing pinoys about the virtues of savings through my blogs. I will also recommend to my clients who are in business that they learn more about direct marketing and consider doing business here in the net-maybe I might suggest they sign in @ multiply and see the vibrant economy going on here. (I sure hope the term “vibrant” is not an exaggeration nor a hyperbole)
Prediction: The Internet will continue to become a larger and more active medium for commercial transactions. The Great Recession will make other media – print advertising, direct mail marketing, and TV advertising (to name a few) – less economic. Businesses will continue to spend more of their budget on the Internet.
What I will do about it: Learn more about copy writing and search engine optimization (SEO) web-page design (the new visual marketing) and continue to learn about successful marketing on the Internet. I will recommend everyone to do the same.
Prediction: I saved the best for last-Despite the recession, surfing in the Philippines will continue to grow (in case you didn’t notice, its starting to be an all pinoy showdown last time at the Lanuza surf contest) more surf spots will be discovered (dunno if its good or bad) and Global warming will bring in more waves.
What I will do about it: Duuuuuuuuuuuuh!
2009 WILL BE AWESOME!
By Boo Chanco
That was some year we just had. It is one year people couldn’t wait to forget. Our first working day finds us full of hope about what 2009 will bring, fully aware that the worse of 2008 isn’t quite over and will spill into 2009. Indeed many economists say we won’t see real relief on the economy until 2010 or even 2011.
After reading a lot of economic forecasts that were understandably inconclusive, I decided to have a talk with my astrologer friend. Because she could be pretty scary (she predicted among other things the explosion at Glorietta many years before it happened), I only wanted her to tell me the general lay of the land. What should we expect in 2009 given the turbulence of 2008? After our talk, I got the impression that astrology and economics share some things and I don’t just mean the ambiguity of some of their predictions and their technical language.
For one thing, astrologers and economists talk about cycles. “Z” my astrologer friend of long standing, puts it beautifully: “to study cycles is to realize that events occur within a continuum of time. Every event, in effect, carries within it the seeds of forthcoming events. The astrologer’s task is to determine the starting point of current operative cycles to know at what point in the cycle a corporation, country, or individual stands at any given moment — in order to map out the direction to which it is headed and predict the outcome of the ‘journey’.”
Economists talk of cycles in these terms: “Predictable long-term pattern changes in national income. Traditional business cycles undergo four stages: expansion, prosperity, contraction, and recession. After a recessionary phase, the expansionary phase can start again. The phases of the business cycle are characterized by changing employment, industrial productivity, and interest rates. Some economists believe that stock price trends precede business cycle stages.”
Kuya Kim explains in street language what the astrologers and economists are saying about cycles, ang buhay ay weather weather lang.
When I asked “Z” what’s in store for 2009, she explained everything in terms of “sub-cycles of crests and troughs of the various economic cycles from now till 2024 – some of which began more than a century ago and beyond.” It is in this sense that “Z” thinks 2009 will be a pivotal year — memorable and significant for the massive economic changes it will bring upon the world.
2009 will be different from 2008, “Z” explains, because numerous astrological configurations and signatures not normally seen in other years occur in 2009. According to “Z”, new cycles begin in earnest now — the very same cycles that, when they last unreeled, wrought havoc in world markets which led to the Depression in the 1930’s and precipitated World Wars I and II.
For those of us stuck in the stock market of 2008, 2009 brings only limited hope. According to “Z”, 2009 begins the waning cycle of stock exchanges and investment markets that begun its waxing phase in the early 1980s, peaked in the late 1990s, and will be completed by 2028. In other words, there may be short rallies here and there but the exuberance of the market of the last few years will no longer be experienced in the magnitude and duration that we saw. As “Z” puts it, rallies will occur but lower and lower from the levels wherein they started their descent.
In more specific terms, “Z” sees continued turmoil in world bourses and financial investment houses in 2009 — and beyond. Recovery will take longer than economic analysts, using traditional tools of predicting market movements, forecast. The parameters and models they use will be outdated and need to be discarded, “Z” says. New ways of looking at things and thinking out-of-the-box in a most drastic and revolutionary way is the only way for them to go if effective solutions are to be found at all.
“Z” does not think talking up the market will do any good. We have to go through a long dark tunnel of financial purgatory before seeing any real light of economic redemption.
“Z” also made some predictions of general trends in global terms. Globalization is over, she says, at least as the world knew it in the cycle just past. Governments will turn more insular and more concerned with providing basic necessities for its hungry, jobless, desperate masses.
“Z” sees a waning of terrorism based on religious fundamentalism because groups will worry more about survival. The fight will be for food. There will be outbreaks of hostility in the usual trouble spots where extremists operate, “Z” concedes, but these will be isolated incidents — just as it was in the past cycle.
“Z” sees more failures of banks and investment houses in the global environment, not to mention hedge funds. More revelations of accounting shenanigans and malpractice will come to light. This cycle acts as a cosmic plunger, she says. Shady, if not downright criminal, banking practices will surface — like scum. The collapse of ailing financial institutions will escalate in number and speed as the cycle runs its course. The survival of the worthy ones will be a result of something akin to Darwinian “natural selection.”
But in the face of the negatives, “Z” sees some positives. Everything, she says, will seem like bad news. But even the Depression of the 1930s (and the financial panics of late 1700s and 1800s) brought positive change to the markets and allowed the progress that brought the world the prosperity and standard of living many now enjoy.
“Z” takes a very philosophical view of transpiring events. “Seasons, as the rotation of the Earth shows, follow a rational cycle. So, now: first — Winter, the “return of the Sun.” The Earth on the Winter Solstice (longest night of the year, after which the days get longer as the earth begins its northward journey around the sun). Winter clears the ground for planting new seed. .Then, Spring: a new beginning. The evolutionary spiral is ever upwards — though sometimes it looks otherwise to those unaware of, or choose to, ignore nature’s cycles.
I have known “Z” for many years now. She was a former journalist who took an interest in astrology and took it up seriously to the point of actually taking and passing an international credentials test for it. She explained to me that astrology is mathematical but at the same time requires a keen sense of history. It is not unusual for “Z” to crosscheck her findings by doing historical research in various libraries and archives.
I decided to feature today some of the insights “Z” unselfishly shared with me not because I believe or do not believe in astrology. I am incurably curious about anything that offers an explanation of what makes the world go around. With the proper perspective, I don’t think it conflicts with my religion. After all, we yearly celebrate the feast of Three Kings, the best known astrologers in the Bible who predicted the time and place of the birth of our Savior. The Bible calls them “wise men”. If astrology was good enough then, maybe was even one of God’s ways of communicating with man, it must hold some insights too that can benefit us now.
But what is astrology doing in a business column? I know for a fact that many top businessmen consult astrologers like “Z” before making any major decisions from inaugurating an office to making a major investment to choice of partners. In a sense, there is an element of faith involved. But there is also a large element of faith involved when one takes in the stuff churned by the dismal science of economics.
Some articles about the present crisis say many economists are probably working on the wrong assumptions in their present models. That explains why they are having difficulty figuring out what’s happening and what to expect now. Quantitative models of Nobel Prize winning economists have failed spectacularly in our recent past (LTCM comes to mind). The once great Alan Greenspan himself had to apologize for being mistaken about his assumptions.
In the end, no matter how quantitative they may try to make modern economics, it is simply difficult to predict human behavior. It is no longer tenable to assume consumers will always make rational decisions on what’s best for them, as recent experience and adherents of the relatively new field of behavioral economics will tell you. The environment has drastically changed as we enter a new cycle and it is constantly changing.
Then again, I don’t claim to understand astrology and economics as well as the professionals in those fields. I just read enough of what the more knowledgeable of them say and figure out who seems to make sense and build from there.
May our New Year be a lot happier and infinitely more prosperous than the last! “Z” says it will be awesome!
That was some year we just had. It is one year people couldn’t wait to forget. Our first working day finds us full of hope about what 2009 will bring, fully aware that the worse of 2008 isn’t quite over and will spill into 2009. Indeed many economists say we won’t see real relief on the economy until 2010 or even 2011.
After reading a lot of economic forecasts that were understandably inconclusive, I decided to have a talk with my astrologer friend. Because she could be pretty scary (she predicted among other things the explosion at Glorietta many years before it happened), I only wanted her to tell me the general lay of the land. What should we expect in 2009 given the turbulence of 2008? After our talk, I got the impression that astrology and economics share some things and I don’t just mean the ambiguity of some of their predictions and their technical language.
For one thing, astrologers and economists talk about cycles. “Z” my astrologer friend of long standing, puts it beautifully: “to study cycles is to realize that events occur within a continuum of time. Every event, in effect, carries within it the seeds of forthcoming events. The astrologer’s task is to determine the starting point of current operative cycles to know at what point in the cycle a corporation, country, or individual stands at any given moment — in order to map out the direction to which it is headed and predict the outcome of the ‘journey’.”
Economists talk of cycles in these terms: “Predictable long-term pattern changes in national income. Traditional business cycles undergo four stages: expansion, prosperity, contraction, and recession. After a recessionary phase, the expansionary phase can start again. The phases of the business cycle are characterized by changing employment, industrial productivity, and interest rates. Some economists believe that stock price trends precede business cycle stages.”
Kuya Kim explains in street language what the astrologers and economists are saying about cycles, ang buhay ay weather weather lang.
When I asked “Z” what’s in store for 2009, she explained everything in terms of “sub-cycles of crests and troughs of the various economic cycles from now till 2024 – some of which began more than a century ago and beyond.” It is in this sense that “Z” thinks 2009 will be a pivotal year — memorable and significant for the massive economic changes it will bring upon the world.
2009 will be different from 2008, “Z” explains, because numerous astrological configurations and signatures not normally seen in other years occur in 2009. According to “Z”, new cycles begin in earnest now — the very same cycles that, when they last unreeled, wrought havoc in world markets which led to the Depression in the 1930’s and precipitated World Wars I and II.
For those of us stuck in the stock market of 2008, 2009 brings only limited hope. According to “Z”, 2009 begins the waning cycle of stock exchanges and investment markets that begun its waxing phase in the early 1980s, peaked in the late 1990s, and will be completed by 2028. In other words, there may be short rallies here and there but the exuberance of the market of the last few years will no longer be experienced in the magnitude and duration that we saw. As “Z” puts it, rallies will occur but lower and lower from the levels wherein they started their descent.
In more specific terms, “Z” sees continued turmoil in world bourses and financial investment houses in 2009 — and beyond. Recovery will take longer than economic analysts, using traditional tools of predicting market movements, forecast. The parameters and models they use will be outdated and need to be discarded, “Z” says. New ways of looking at things and thinking out-of-the-box in a most drastic and revolutionary way is the only way for them to go if effective solutions are to be found at all.
“Z” does not think talking up the market will do any good. We have to go through a long dark tunnel of financial purgatory before seeing any real light of economic redemption.
“Z” also made some predictions of general trends in global terms. Globalization is over, she says, at least as the world knew it in the cycle just past. Governments will turn more insular and more concerned with providing basic necessities for its hungry, jobless, desperate masses.
“Z” sees a waning of terrorism based on religious fundamentalism because groups will worry more about survival. The fight will be for food. There will be outbreaks of hostility in the usual trouble spots where extremists operate, “Z” concedes, but these will be isolated incidents — just as it was in the past cycle.
“Z” sees more failures of banks and investment houses in the global environment, not to mention hedge funds. More revelations of accounting shenanigans and malpractice will come to light. This cycle acts as a cosmic plunger, she says. Shady, if not downright criminal, banking practices will surface — like scum. The collapse of ailing financial institutions will escalate in number and speed as the cycle runs its course. The survival of the worthy ones will be a result of something akin to Darwinian “natural selection.”
But in the face of the negatives, “Z” sees some positives. Everything, she says, will seem like bad news. But even the Depression of the 1930s (and the financial panics of late 1700s and 1800s) brought positive change to the markets and allowed the progress that brought the world the prosperity and standard of living many now enjoy.
“Z” takes a very philosophical view of transpiring events. “Seasons, as the rotation of the Earth shows, follow a rational cycle. So, now: first — Winter, the “return of the Sun.” The Earth on the Winter Solstice (longest night of the year, after which the days get longer as the earth begins its northward journey around the sun). Winter clears the ground for planting new seed. .Then, Spring: a new beginning. The evolutionary spiral is ever upwards — though sometimes it looks otherwise to those unaware of, or choose to, ignore nature’s cycles.
I have known “Z” for many years now. She was a former journalist who took an interest in astrology and took it up seriously to the point of actually taking and passing an international credentials test for it. She explained to me that astrology is mathematical but at the same time requires a keen sense of history. It is not unusual for “Z” to crosscheck her findings by doing historical research in various libraries and archives.
I decided to feature today some of the insights “Z” unselfishly shared with me not because I believe or do not believe in astrology. I am incurably curious about anything that offers an explanation of what makes the world go around. With the proper perspective, I don’t think it conflicts with my religion. After all, we yearly celebrate the feast of Three Kings, the best known astrologers in the Bible who predicted the time and place of the birth of our Savior. The Bible calls them “wise men”. If astrology was good enough then, maybe was even one of God’s ways of communicating with man, it must hold some insights too that can benefit us now.
But what is astrology doing in a business column? I know for a fact that many top businessmen consult astrologers like “Z” before making any major decisions from inaugurating an office to making a major investment to choice of partners. In a sense, there is an element of faith involved. But there is also a large element of faith involved when one takes in the stuff churned by the dismal science of economics.
Some articles about the present crisis say many economists are probably working on the wrong assumptions in their present models. That explains why they are having difficulty figuring out what’s happening and what to expect now. Quantitative models of Nobel Prize winning economists have failed spectacularly in our recent past (LTCM comes to mind). The once great Alan Greenspan himself had to apologize for being mistaken about his assumptions.
In the end, no matter how quantitative they may try to make modern economics, it is simply difficult to predict human behavior. It is no longer tenable to assume consumers will always make rational decisions on what’s best for them, as recent experience and adherents of the relatively new field of behavioral economics will tell you. The environment has drastically changed as we enter a new cycle and it is constantly changing.
Then again, I don’t claim to understand astrology and economics as well as the professionals in those fields. I just read enough of what the more knowledgeable of them say and figure out who seems to make sense and build from there.
May our New Year be a lot happier and infinitely more prosperous than the last! “Z” says it will be awesome!
Tuesday, January 13, 2009
THE TOP 10 NEW YEAR RESOLUTIONS
Below is the result of a survey conducted on over 300,000 respondents worldwide. Take note that 3 of the list involves financial planning. (nos. 2, 3 and to a big extent-no.10). Actually financial planning could be applied to all of them:
1. Loose weight and get into better shape.
2. Stick to a budget
3. Reduce my debts
4. Enjoy more quality time with family and friends.
5. Find my soul mate
6. Quit smoking
7. Learn something new
8. Find a better job
9. Volunteer to help others
10. Get organized
1. Loose weight and get into better shape.
2. Stick to a budget
3. Reduce my debts
4. Enjoy more quality time with family and friends.
5. Find my soul mate
6. Quit smoking
7. Learn something new
8. Find a better job
9. Volunteer to help others
10. Get organized
Subscribe to:
Posts (Atom)
