Are you Prepared for the Unpredictable Financial Consequences?

Here are a few quotes from Alan Greenspan's latest book The Map and the Territory.

For those of you who may have forgotten, he is the former Chairman of the Federal Reserve of the United States a position he held from 1987 to 2006. He served under 4 presidents and was, early in his career, considered something of an economic guru, a one time media "rock star".  

He arrogantly still sees himself a guru and doesn't take any responsibility for the bubbles and financial crises created during his tenure or the financial mess he left behind ... which has since been multiplied many times over by "Helicopter Ben".

In his book he states "conventional method of predicting macroeconomic developments. . . had failed when it was needed most, much to the chagrin of economists." In simple English ... we didn't have a clue what the consequences of our decisions would be.

He blatantly admits that the 'science' they rely on to make decisions is fundamentally flawed. Going on to state that "virtually every economist and policymaker" (include Bernanke) completely missed the warning signs.

The warning for you comes from John Maynard Keynes, the godfather of their economic models himself, who wrote: 

"The process [of debasing the currency] engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." 

Politicians rely on people like Greenspan and Bernanke (and every other central banker lackey in the world) for their own personal political agendas ... not to protect you. 

Have you prepared your own protection agenda? Are you following it? 

Working in Cebu

At the ripe young age of 65 I have been afforded the fantastic opportunity of working at something I really enjoy and experiencing a completely different culture and environment.

But like all things in life there are the odd hurdles that have to be overcome.

During my travels over the last few months I've come to realise that one thing that is growing far faster than any economy is bureaucracies. All around the world, crammed into every nook and cranny, we have growing numbers of people employed by the state who are there to "look after us".

Protecting us from all the mean and horrible people like money launderers and "terrorists", or unscrupulous capitalists who ignore health and safety and environment issues in the pursuit of profits, or people coming to steal our jobs or our social security.

I have experienced a few instances of these "new age bureaucrats" over the last few months and wonder when their empires will start crumbling? How long the value adding few can continue paying for all these "non value adding" faces.

However I had a very different experience when I went for my interview with the Department of Labour for my work permit in the Philippines.

After the massive earthquake in Bohol earlier in the week their building had been declared unsafe and they were now working from their car park. Carrying on as if nothing had happened. The process all went along smoothly ... although there were some delays as people had to find their way from section to section.

Earthquake building damage - Cebu

I was fortunate enough to have Zenny, our human resources lady, along to take me through the process. We handed in our forms (I'd updated my CV the night before as it had ended prematurely in about 2007!) and had to wait for the person who was to conduct the interview. She was busy in a meeting so we chatted and sat and watched the stream of people coming and going.

A while later the interview lady arrive and started paging through the very impressive pack of duplicated, notarized documents which Zenny had prepared. However, apparently one version of one document had been omitted. The detailed audited financials.

I thought of how often I thought I had everything required by a government department ... but some how there is always something missing.

After some animated conversation between her and Zenny it was agreed that in future this document would be submitted. She then asked me a number of questions about the company and seemed very impressed by where, and for how much, the products were sold. On to me, the questions were routine and quite innocuous and after commenting on the size of my salary she approved my work permit.

Then came time to pay .... PHP8 000 ($200) for the permit for one year.

The cashier was called and came out from another corner of the car park and disappeared with the cash to make out the receipt. As we waited the time (10:00am) came for the breakfast break. An enterprising lady had set up a facility at the gate and was coordinating the food and drinks.

They seemed quite amused when I called this time "tea time" and had obviously never heard it before. That's what comes from being colonised by the Spanish and the Americans ... you never learn British customs.

They chatted away animatedly as they ate takeaways from Jollibee (a very popular fast food chain) and some street made local dishes.

A while later the cashier returned and there was the normal admin of signing forms. As we were about to leave, the lady who had done the interview, gave me two warnings.

Firstly that the renewal of the permit must be at least one month before it expires ... one day late and there is a PHP 20 000 ($500) fine. Secondly, don't do anything illegal. Which from that I assumed that foreigners have a reputation for unsavoury dealings and practices.

I assured her that I had no such intention (which I suppose is what everyone says, whatever their intentions!) and we now all we have to do is wait for the work permit to be issued.

So I'm now one step work legal. There is also another work permit required for the special economic zone (MEPZ II) and we need our residence visas extended for a year.

Then it's over for another year.

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My next Cebu experience – a jeepney ride

Yesterday I added to my growing list of first of experiences … a jeepney ride! 

This would involve a tricycle trip to the jeepney station and then two jeepney rides to the Ayala mall.

Jeepney - heading to Ayala and SM malls

So, for those of you who don’t know what a jeepney is. It's simply a small bus but with many quite interesting features. It is about the length of a minibus, but generally narrower with two rows of seats in the back facing each other. The sides have no windows and when it rains the driver jumps out and rolls down a plastic shade.

There are thousands of them, many decorated in vibrant colours, others showing the scars of multiple confrontations and most of them belching black smoke.

Entrance and exit is out of the back and the loading of people happens in the exact reverse of what you'd expect. The first people who get in sit right next to the door. This means that all the other people have to shuffle past the early arrivals to the next available seat.

The headspace in the seating area is very low and as you shuffle along to your seat the driver will just pull off. With the likelihood of banging your head very good. At some point when you really think that the jeepney can't take another passenger. You are wrong ... it can.

The conductor (when there is one, stands on the step at the back, with notes folded around each finger) hollers at the driver, the Jeepney stops and another couple of people climb in.

Somehow everybody squashes tighter and tighter and the new passengers manage to find a seat. The last resort for loading more passengers is to extract a small stool from under one of the seats. Hey presto ... seating for another couple of people. 

After counting the others crammed in the front seat there were finally 27 passengers!.... and we think taxis in South Africa are overloaded.

To pay for your ride you pass your money back (when there is a conductor and forward to the driver when there isn't) from person to person and the change is returned in the same way. The standard fare for a tricycle or jeepney ride is nine pesos ($0.20).

So back to our ride. It certainly was a fun adventure (plus I think we amused a few locals judging by their smiles!), but not in the ideal weather conditions as halfway to town it started to rain. 

Carol wasn’t quite sure the exact place to jump off. As they had closed the side of the jeepney she was crouched down, peering out of the back looking for her one landmark. A hotel with a name starting with "D". 

This is certainly not easy, when you are crammed butt to butt with 24 people and you are sitting somewhere near the middle.

Very upmarket jeepney

The next thing I learned was to stop the jeepney you bang coins against the metal frame. But as it was raining Carol's banging was in vain. He didn’t stop (I think his intentions were good?) so at the next set of traffic lights we made our own decision ... clambered through the other passengers and jumped out. Across the street and into the shelter of a second-hand shoes store.

We thought it may be possible to wait out the rain but it just kept coming down. So decision time again. After spotting a jeepney going our way we raced across the street through the same intersection (when in Rome!!!) and jumped into it.

Unfortunately for the rest of the journey the shades were lowered, it was very hot and stuffy and the rain kept pelting down.

A driving characteristic of jeepney drivers is that they have no rules. Or the only ones they have are the ones they make up as they go along. Fortunately major accidents are infrequent as with the congestion it is only on rare occasions that you are doing more than about 40k’s an hour.

We arrived at the mall, did our shopping and after a very pleasant lunch decided not repeat the experience and took a very dilapidated taxi home.

Tricycle travel

My first experience of driving on the wrong side of the road, in a manual car and in the Philippines, was over and done.

I was now facing my next first. Heading off on a tricycle to do some grocery shopping at Robinsons (which has become a regular occurrence for Carol).

Going there was no problem as we were the first two passengers to get into the tricycle. So we could get the "best seats" sitting side by side, facing the front of the cab. Our destination was called "Tamiya" which I later learned is a large company in the economic zone (MEPZ - Mactan Export Processing Zone) where our factory is located.

We arrived at the "terminus" and had a very hot, short walk around the area. Again we were struck by the difference in the buildings and conditions from house to house, shop to shop and building to building. They range from modern and clean to dark and disgusting. The pavement is littered with water pipes and water meters. Electricity wires and electricity meters. And at times the stench of sewage makes one gasp. With all this it has a certain charm and fascination.

Close to Robinsons we found a delightful little Japanese restaurant where we had a delicious lunch washed down with some local beers and Sprite which set us back the princely sum of PHP250 (around $6). Feeling well fed we then went shopping. At we left with 3 packets I was quite keen to take a taxi, but Carol Ann was persistent that we complete the tricycle experience.

Private trip from shopping- $1.70

Arriving at the "terminus" there are rows of tricycles and someone who appears to be loading them with arriving passengers. Requesting a tricycle to Abuno (the only reference I can find to Abuno on Google maps is a school down our road, so they are possibly related), we were then directed to a tricycle in which the best seats (inside facing forward) were taken. So I hunched down and shuffled into the seat facing outwards with my back to the driver. Carol sat just in front of me with her feet outside the cab.

This was to be a short term arrangement. My back was obstructing the handlebars so I was asked to take the seat behind the driver. There was already someone sitting there so I sat in front of him. Side by side we filled the pillion seat.

Carol had the three bags of shopping and was precariously balanced on the outside of the cab. One more passenger arrived, the driver climbed onto the petrol tank and we set off home.

As the tricycle went along passengers started getting off and Carol eventually moved into a safer inside seat while I happily (although occasionally a bit nervously as the cars and motor bikes shot passed my knees) sat side saddle and watched the passing scenery.

Another very different experience was over. And an increased appreciation of what a privileged and indulged life we are fortunate enough to live.

Driving in Cebu

The traffic here is hectic!!! And I really mean hectic as it makes its way like a river in flood drifting from one side of the road to the other.

The roads are narrow and filled with tricycles (this picture is a good example of how to fit at least 6 people onto a stuffed out, small motorbike with a tiny side car), motor bikes (mostly small but driven like Citi Golf's at home winding in and out of the traffic) noisy with little power, but when everyone else is only doing 30 kph even a bicycle looks like a performance machine, bicycles (varying from BMX's to delivery bikes) and a stream of pedestrians.

In this context I decided to have my first outing early on a Sunday morning. As we headed out at just after six thirty I realised that these people don't sleep. The basketball courts were full and there were a number of people who appeared to be out shopping.

The first kilometre or so wasn't too bad and then we hit the highway. Dispel every thought you have of a highway. This highway is a narrow (just wide enough to get two cars through) strip of concrete which would be the standard road in some remote suburb. Things were going okay and then we hit the rebuilding of the road.

The new section is a concrete road being built about 20 to 30 centimetres above the existing decaying track. The challenge was now to make the transition from the low road to the high road. I've always had a problem driving a left hand drive car as I've found it difficult to judge exactly where the right front ends. Needless to say I failed perfection with my first attempt and the temporary sign was hit with a solid thump.

Fortunately modern wing mirrors are designed for these situations and it folded neatly against the side of the car. As I flusteredly pressed the various buttons the windows opened and now I was forced to pull up and sort out the various problems. It wasn't long and we were on our way.

The next major obstacle was the left turn in the direction of where we live. Firstly the landmark (the old bridge to Cebu) was on the right so I nearly didn't make it. And then as I swerved across the face of the oncoming motorbikes I realise I was in the wrong gear. At that moment I realised that people who normally drive right handed automatic cars should never convert to left handed manual cars. Too late.

As we lurched through the intersection I was grateful that the drivers here are used to slamming on brakes and swerving so we got through there without a scratch. It should have been plain sailing from there but very close to home there is a large Catholic church. The service had just ended and there were tricycles scattered all over the road collecting church goers.

There was a gap, iI think it was enough, but if the persistent bangs on the back window were an indicator ... it probably wasn't!! Anyway we slowly edged through and in a couple of hundred metres we were home.

Whew!! It was like being a learner driver all over again.

Earthquakes - Another First Time Experience

Tuesday was a public holiday in Cebu and started off like all public holidays should ... with a bit of exercise.

I had decided that I had to do something after a really long layoff. Many reasons (and excuses!!) while at home and also since arriving here. We (Carol and I) set off quite early and managed about 4k's  or so at something between a walk and slow jog.

It was pretty hot and I was happy that it was easy. It is also a different experience ... dodging motorcycles, goats, people and dogs as you make you way along. There is also an odd "Hello Sir" "Hello Ma'm" as you shuffle past a friendly local resting on his verandah.

When we got home I did some stretching and then headed off for a shower in the upstairs bathroom. It was interrupted by the sound of what I thought was a plane taking off from the airport. In seconds the sound turned to an earth shattering roar. The floor of the shower started shuddering and then rocking and rolling quite violently. The major impact lasted for about 30 seconds and at the time I was completely unconcerned.

My initial reaction ... it was actually quite a buzz. Fortunately I was completely naive to the potential consequences.

The next thing. Carol was at the door ... wide eyed, rather frightened and very confused. Apparently the thing to do once the shuddering starts is head outside,  which I did notice was the reaction of most of our neighbours. However I was also told, by one of the fellows at work, that the next best thing is to get to the highest floor - the theory being that you will land on top of all the rubble below.

Giving it some thought I think the first option is probably the safest and far less risky?

Thank goodness for the internet. As soon as I was dressed I started Googling "earthquakes". This started a whole new learning experience. I have subscribed to a earthquake warning site. And I now know that we sit very close to the Philippines Fault and how many earthquakes there are a day in the Ring of Fire.

As I sat there aftershock after aftershock could be felt. Some were very minor, a short shudder while others would briefly rattle the doors and windows.They went on all through the day and night and they carried on with varying intensity over the next few days.

With the people at work there was quite a lot of concern about the damage that could be caused by the aftershocks and for the safety of their families so the factory closed at lunch time. The family of one of the guys in our office lives on Bohol island, which was the epicentre of the quake and their house was extensively damaged with collapsed walls and roof.

Earthquake damage in Bohol

Life is certainly going to be really tough for the casualties.

P.S Two weeks after the main earthquake and a number of very strong aftershocks the latest statistics are over 210 people killed and 300 000 displaced.

Meeting a Long Time Filipino Scottish Expat

Last Friday night at Dionnes we met an interesting Scottish expat, Alan, who was managing the restaurant before it is taken over by a South African woman. Her name is Adele, who he told us is married to a Filipino.

Carol was very happy to hear that news, as around here there is a serious lack of non Filipino women. There are a number of older white guys ... many with a much younger Filipino woman in tow. Also a lot of granddad looking guys with very young children.

Dionnes is about a kilometre or so from here and we had walked there.

He has been here about 16 years and had a number of stories about where to go and what to do. He told us that to walk back home after 10 was not a good idea as it wasn't very safe. Funny how as we made our way back at just after 09h30 we managed to then see a few shady looking characters!! Imagination or what?

However there is traffic along there day and night and the risk is probably pretty low. We don't carry phones or wallets... one PHP1 000 (a thousand Philippine Pesos, or R250) note is more than enough for a good night out.

He also warned us that all foreigners are fair game to be ripped off by everyone from the motor cycle drivers to the policeman, which actually made me feel quite at home. Apparently if you have an accident you are to blame ... whatever the circumstances!! "Spot fines" are also apparently a common solution to minor traffic violations (so its advisable to keep a few PHP100 notes handy).

He seemed to spend his days having a pretty jelled time, swimming, having breakfast at one of the resorts and drifting around for the rest of the day.

Not the life for me but everyone to their own.