FREE education + Guaranteed JOB - by Taylor

Analysis of Psychosis

On the quiet Friday following Thanksgiving, I read the “business life” of Sue Raby in the Financial Times, an Avon saleswoman slugging it out on the outskirts of Liverpool.

Sue Raby, coiffed shoulder-length brown hair, a grey shawl-collar coat, sets off down the road with a wheelie shopping bag full of Avon catalogues. The 52-year old single mother of two girls (22 and 11), sweeps her arm theatrically in the air. “This is one of my streets, this estate is my territory,” she says. This “territory” is a small patch of Formby, an affluent dormitory town for Liverpool, in the northwest of England.

This opening paragraph is not dissimilar to the interview scene in the opening of The Shining. Everything seems good and in order – even slightly uplifting. Sure, the main character calls a small patch of a bedroom community her “territory”, but who among us has not exaggerated the importance of his or her job/role/blog? What matters – the take away as they call it in the corporate parlance, the thing that one has to learn from the story – is that she has options, unlike those women in Afghanistan. A single mother of two driving to work in “her territory”: what was empowering women all about if not this?

If you cut Ms Raby, a former physics teacher, in half, she says, you would find Avon in the middle. The ringtone on her mobile is the sound of a doorbell, a reference to the 1960s advertising campaign catchphrase “Ding Dong, Avon calling.” When driving her silver Vauxhall, which has a pink sign advertising her website on the side, she plays motivational CDs to gee her along. Back at her suburban home, Avon boxes and catalogues are strewn around the sitting room, piled up in the hallway.

If we cut Sue Raby in half, we’d find Avon. Avon the company? Avon’s products? Avon’s certificate of incorporation?

Okay, so the former physics teacher is using poor imagery to say that she has “internalized” Avon. But that, too, does not square with what follows. “Boxes and catalogues strewn around the sitting room and piled up in the hallway” are more like an external intrusion; she, an outstanding example of a worker forced to take her job home.

This morning she is knocking on doors, selling silky-wear lipsticks and face-lifting creams while also on the lookout to recruit new sales reps. She earns 25 per cent commission on direct sales and a percentage of those clinched by reps in her team. The hardest bit, she says, is getting people to the door – “they might think I’m a Jehovah’s Witness, or the council or bailiffs”. If she is working a estate, she says, she wears jeans rather than a skirt, which looks more official. She also tends to steer clear of houses with dogs, although others push catalogues through the letterboxes with a spatula to fend off canine bites.

The “location”, like the Overlook Hotel in The Shining, is beginning to reveal things that we did not originally know.

The affluent bedroom community has turned out to be a place where, if you knocked on a door, they would think you were a bailiff or the council; the coiffed Ms Raby has to dress down to even have her knock answered. And her territory, far from being hers, is an open field for an assortment of aggressive and enterprising competitors who brave dogs and who want to eat her lunch.  No wonder she listens to motivational speakers: she needs some stimulus to carry her through the day. Before she could sell, she had to buy into the confidence game of the confidence men selling confidence. It’s a mighty hard time, but I’m on my way, they have no doubt told her to constantly mutter to herself.

 

Suddenly she sprints off towards a blonde woman pushing a pram with one hand, grasping a toddler’s arm with the other. Ms Raby is – in the parlance – “buggy bashing”, stopping a young woman in the hope of recruiting her to her sales team. “Would you like to earn some extra money?” Ms Raby enquires tantalizingly.

Why would Ms Raby want to give her own customers to someone who has confessed to being incapable of making a sale? She insists she has spotted a potential “gem”. “You need confidence. I could get Kate up and running.” She knows this from personal experience. “When I first did sales I would go around houses with my one-year old with the catalogues under the buggy. I ran away from the door before anyone saw me. I was that under-confident”.

Forget the recruitment system that is modeled on degenerate cell mutation. I recruit you and you recruit another person who then recruits someone else and before you know it, the entire population of the earth has turned into Avon reps.

Look at buggy bashing, which is in the “parlance”. The FT writer, one Emma Jacobs, defines it as “stopping a young woman”, but she is being intuitively evasive and dishonest. She ignores the word buggy, which is central to the expression. Buggy bashing is recruiting a young woman with an infant. The infant is where the focus is because children elicit sympathy. Ask any beggar in Bangladesh. Better yet, read Oliver Twist, which is culturally closer to Ms Raby. Why, she herself was one such recruit, in her salad days when she was “under-confident”.

And that word: under-confident!

What a word! To know what it really means, you have to know the mentality of the people who have created it, their orientation and angle of vision to life. Both are adequately explained by Alec Baldwin’s character in this clip from Glengarry Glen Ross:

How effective is this kind of talk? It is effective enough to have come to use and stay in use. You saw a variation of it in terms of framing the issues in Part IV of the EU crisis. But it works on any scale. After being pumped up by Ms Raby’s faux can-do and you-need-confidence speech, even Emma Jacobs of the FT chimes in to describe a young nurse as having “confessed” to be “incapable of making a sale”.

She is already talking like Baldwin's character!

The psychosis in the title of this post is not about Ms Raby alone.

(And did you recognize the ABC – Always Be Closing? It is the “ding dong” ringtone of Sue Raby’s cell phone. When her phone rings, it is Avon Calling. But Avon is calling her. It is a reminder that she should always be closing!)

“If I can get Kate up to speed she’ll be doing me a favour. If not, she’ll be off my Christmas card list, and I’ll take my old customers back.”

Here, Sue is creating a “win-win situation”, as she is taught to do in her sales classes. Everything must be framed as a win-win situation.

If Sue Raby can get the under-confident nurse “up to speed”, then she – Sue Raby – will win: she would get a percent of her recruit’s 25% share of a £3 lipstick. Else, she will have one less name on her Christmas card list.

This latter expression – one less name on the Christmas list – Sue Raby has learned in the sales classes. The expression is on one hand allegorical. But at the same time it is very real in the sense that that concept of friendship (and Christmas cards) as means towards closing a sale are the Alpha and Omega of the salesmanship as spelled out by the grand daddy of all salesmen, Dale Carnegie. The Avon Lady is following him to a “t”. I quote from the upcoming Vol. 4:

Given this centrality of sales and its practically limitless sub-specialties in a Capitalist society– in the U.S., one could find hiring ads for “nuclear waste salesman” – it is natural that the subject is deeply embedded – intertwined, really – with culture. Often, it is the driver and creator of the culture, especially in the “Anglo-Saxon” U.S. and U.K., where the influence of businessmen goes further than other nations. The culture in these countries is the culture of a salesman, as it is shaped by the habits, sensibilities, tastes and priorities of salesmen. The influence is in plain view in Dale Carnegie’s How to Win Friends and Influence People. 

The book’s title is precise. It telegraphs the content, so attention must be paid. Carnegie wants to win friends. Why? Because he wants to influence them. But the purpose of this influence is not bringing the newly acquired friends to the righteous path. Carnegie is not an Islamic zealot practicing the Prevention of Vice and the Propagation of Virtues. He wants to influence people in order to sell to them. Friendship is a mere strategy, a means, towards that end. Note the word “win” – not finding friends or making friends but “winning” friends. The purpose is exploitation, after which “friends” become what they always were: people. It is a singularly calculating and cynical title.

But Baldwin’s character in the above clip does not fit the bill of a congenial salesman in search of friends. What gives?

The answer is what links Ms Raby to the EU crisis: the falling rate of profit. From Vol. 4:

When the “conduct” of the salesman changes in a fundamental way, the effects reverberate across the social and cultural spectrum.  

One such fundamental change took place after the collapse of the Bretton Woods system in 1973. The change which began gradually and continues to date was the intensification of competition due to the falling rates of profit. Coupled with the gradual desensitization and resistance of the population to the advertising pitches, the increased competition made selling a more stressful occupation than it was in the heydays of the U.S. industrial power.  

This gradual, but persistent and grinding trend, forced the salesman be more “productive”; he had to sell more than before in less time than before. But other salesmen faced the same conditions, so it became tough for everyone to make a living. The ensuing stress darkened the salesman’s mood, with the result that passive Willy Loman gave way to the obscenities spewing, conniving and downright criminal salesmen of Mamet’s Glengarry Glen Ross. How much can a man take!

We continue.

Cars and phones are dangled in front of them as incentives. Gatherings at countrywide Avon events are said to induce cult-like fervor. Worshiped are the gurus – the high earners. In Britain, there are no bigger stars than Debbie Davis and her partner Dave Carter. Ms Davis turned to Avon after being made redundant from a printing firm. Within three weeks, she had sold almost £19,000 of products and recruited her partner. Now the two have an 8,000-strong team and have turned over £13m in the past seven years.

You probably smiled reading about cars and phones being dangled in front of sales reps as incentives. Alec Baldwin’s character offered a Cadillac Eldorado and steak knives!

The ultimate incentive, though, are the high earners. They are real flesh and blood, people like just us, and they show that it can be done. It is only a matter of confidence and pushing forward and being steadfast in the face of adversity.

But then, there is the math.

Avon now operates in more than 100 countries with more than 6.5 million sales reps around the world (just over half the company’s earnings are from emerging markets). Last year, the company’s revenues were $10bn. Sales in North America account for about 20 per cent of this, while the UK is one of its top five markets.

$10bn in revenues divided by 6.5m sales reps works out to about $1,500 per rep, of which they get 25% commission. So a rep, probably a young mother with a child, can expect to make just under $400 a year.

With that, we go to the final scene in the FT story where Sue Raby has “put on” a “Christmas Party” in her mother’s house, no doubt because her own has no room thanks to Avon catalogues and products. 

That afternoon Ms Raby puts on a Christmas party in her mother’s house, down the street from her own. Plastic holly garlands hang around the fireplace, gold tinsel wraps the light shades and Merry Christmas signs are on the wall. Purple, orange-and-green packaged creams and perfumes are arranged in pyramids on tables. Mini-vanilla slices and bite-size doughnuts defrost in the kitchen. Cups of tea are handed out to the nine female guests who arrive, some with young children, some with their free old-age bus pass, to browse the catalogue.  

Ms Raby is on top form, showing off creams and fixing appointments to visit the guests in their homes. “You get out of it what you put into it,” she comments. 

What does she want to get out of it? “I don’t want to get myself a target as that would limit me. But maybe £80K a year. No, let’s say £100K.

How do you write a modern Gothic story?

I could begin with a Christmas party:

Plastic holly garlands hung around the fireplace, gold tinsel wrapped the light shades and Merry Christmas signs were on the wall. Purple, orange-and-green packaged creams and perfumes were arranged in pyramids on tables. Mini-vanilla slices and bite-size doughnuts defrosted in the kitchen. Nine female guests, some with young children, some with their free old-age bus pass, had arrived to browse the catalogue. 

You say that this is not per se Gothic, that it could be an O’Henry story about the warm hearts of the poor during Christmas? Perhaps. Try now:

The host, a single mother of two who was made redundant from her job teaching physics one supposes because all the knife wielding Liverpool students had mastered Newtonian mechanics, was taking down guests' name to later visit them in their homes for a sales pitch for lipsticks and facial creams.

Psychosis is, to use a term favored by Sartre, situational. Its dictionary definition is "profound disorganization of mind, personality, or behavior that results from an individual’s inability to tolerate the demands of his social environment whether because of the enormity of the imposed stress or because of primary inadequacy or acquired debility of his organism especially in regard to the central nervous system or because of combinations of these factors and that may be manifested by disorders of perception, thinking, or affect symptoms of neurosis, by criminality, or by any combination of these".

Those weasels at the American Psychiatric Society! How conveniently and cynically they shift the blame from the situational, which is always at least partially social, to individual. 

Inability [of the individual] to tolerate the demands of his social environment either because of the enormity of the imposed stress [on him] or because of primary inadequacy or “acquired debility” of his organism.

Let us define psychosis properly, for what it is:

Psychosis is the breakdown of the individual who, persistently and as a matter of his working condition, is put in a situation where he must perform at levels that the general, controlling conditions, will not allow.

The twin drugs of sermon and motivational speech that are commonly prescribed might at short term delay the onset of the disease – which is why they are commonly prescribed – but in the long run they exacerbate the tension and make its flare-up more violent.

The impossibility of reconciling the contradiction between an individual’s particular situation and the general conditions surrounding him is the trigger for the breakdown.

In The Shining, Jack goes mad because he cannot write. The Shining, according to Stephen King, is about writer’s block.

Writer’s block is a modern phenomenon. Billions of people throughout centuries could not write, in the sense that they were bad writers. That was perfectly alright.

Then, modern economic conditions forced some people who could not write into the craft. Here,  force is social.  People are forced into writing for the same reason that they are forced into sales: because they need money and that is the only option. That is the social element in “writer’s block”. In the absence of social force, only those who could would take up writing. Can you imagine a Tolstoy struggling to tell a story or a Hemingway having trouble with a sentence?

What is one to do if he has to write but cannot? His particular situation could offer an escape route. If he has to take care of a young child, for example, or there was an extended illness in the family, he could point to them as circumstances beyond his control standing in the way of completing the work. Everyone would understand and the psychosis might be avoided or at not least not intensified.

But when the situation eliminates all the excuses – think of the quiet setting of a remote hotel for a writer, cut off from any distraction – the tension from the inability to perform finds no outward outlet and turns inward. If the situation persists, the result is psychosis and madness.

Look, now, at the position of Sue Raby. She expects to make £80K a year – no, make it £100k – from selling £3 lipsticks on which she collects 25% commission.  The average rep makes about $400 a year. But some reps make millions, so her goal is not really overly ambitious, is it?

If she cannot reach her goal, it could only be that she was under-confident and incapable of doing what others have done.

“You get out of it what you put into it,” says she, blissfully unaware of what she is saying, for what she has put in, beside some mini-vanilla slices and a few bite-size frozen doughnuts, is her time and labor, which is all but worthless as per educational authorities in Liverpool.

In Cameron’s England, for a 52-year old single mother of two, conditioned to believe in she-believed-she-could-so-she-did bullshit, if that is not the set-up for potential horror to come, I don’t know what is.

Leverage 2.0 - How will you leverage ?

How will you use the power of leverage ?

LEVERAGE 1.0 : I have $1 and I know how to earn $2 from it.  But earning $2 is not interesting to me.  So I found a way to borrow $30 to do it.



My debt ratio is 30:1

Supposedly after it is done, I earn $60, pay back the $30 and $5 interests/fees.  I could have earned $25 instead of $2.  This is the power of leverage, amplify my earnings.

But when things go south, I haven't earned the $60 yet but I have already owed someone $35.  I just needed more time and I CAN get more time by just paying more interest/fee.  This time its another $8.  So I will need to pay back $43 but if I could earn the $60, I still have a profit of $17.  Not as good as $25 but still better than $2.

Just in case my $60 still hasn't come in yet, I could extend my time again by paying another $10 interest/fee.  By then my potential profit is $7, much worse than $25 or $17, but still better than $2.

However eventually the interests add up so much that I don't get any profit even if I get my $60.  So it is NOT exciting again.

time            loan    interest  potential earning
1st round : $30 +    $5         $25
2nd round : $35 +   $8         $17
3rd round : $43 +  $10          $7
4th round : $53 +  $15         -$8
5th round : $68

What happened above is considered a 'traditional' scenario.  I thought I could earn $2 from $1 but I was wrong.   I use leverage to amplify my earnings, however after 5 rounds of trying I still fail and I ended up amplifying my lost!  So I have to pay $68 tuition fee to learn a lesson, both on my business skill and also on the power of double edge leverage.

LEVERAGE 2.0 : What could also happen is that when I first get my $30.  I put $15 aside.  So it would look as if I have $15 and I have borrow $30, although my $15 is actually from the $30.  So my debt ratio is only $30 : $15 or 2:1.

When I realize I couldn't get my earning in the first round, I could borrow another $60 because my debt ratio is low.  Then I pay the earlier loan and interest ( $60 - $35 ) so I still have an extra of $25 to do more business.

I can continue borrow more and more to cover my previous loan and yet I have more money to do more businesses.

time            loan   ratio  interest  buyStock  potential earning
1st round  :  $30   2:1    $5          $15              $10
2nd round :  $60   4:1    $9          $25              $26
3rd round :  $120  8:1   $17         $51              $60
4th round :  $240 16:1  $33          $103           $130

As soon as I hit my debt ratio limit, I can set aside some money as if it is my capital/earning like how I did the first time.  Says I add another $15 to make my capital to $30.  Borrowing $240 is only a debt ratio of 8:1.  This can continue indefinitely.

With this method,

• it appears as if I pay off my loan on time, every time. = good paymaster
• I gets lower interest because of my good records and higher loan amount
• I always have some extra money even before my real earning comes in = strong cash flow
• my potential earning actually increase every time as I keep turning = good strategy
• as long as I eventually realize one earning , I offset ALL my previous risks and I still make a REAL profit.

Don't get me wrong.  Although many people did the above illegally with the wrong methods.  But there are actually perfectly legal and legitimate ways.  As a matter of fact, almost ALL big businesses or even governments are doing exactly above.

As you may have observed, the risk is much higher now.  By the 4th round, I owe $273 instead of just $68 comparing to the earlier traditional method.  But with all the great benefits mentioned above (better strategy, stronger cash flow etc), this increased risk could still be justifiable.

Things still haven't really gone wrong yet with above creative strategy assuming it was done legally.

Things go wrong when

• I didn't really know how to earn $2 from $1 = it was a bluff and people found out
• I didn't really try hard at all to realize any earning 
• I didn't use the extra cash flow to grow the business
• I use the extra cash flow for new house, cars etc. = corruption

So the 'finance system' has opened a whole new world to us but at the end it is 'ourselves' who collapse it.  Don't blame the system, blame the greed and ignorance within ourselves who are playing with the power of leverage for the wrong reasons.

How will you use the power of leverage ?

The Origin of the [crisis in the] European Union – 4: A Refresher on Finance Capital

THE FOLLOWING PART IV OF THE EU CRISIS WAS POSTED ON SEPTEMBER 8, 2011, AT 12:08AM. FOR WHATEVER REASON, IT IS NO LONGER THERE. I AM POSTING IT AGAIN. THE PART TITLED "Capital, as the Union's Main Driver", HAS BEEN DULY CORRECTED TO PART V.

***

Force is a vector. That is physicists’ way of referring to a phenomenon that requires more than one characteristic to be fully and adequately described. A force must have magnitude and direction. With either of these attributes missing, a force is inconceivable.

When Macbeth asks: “Is this a dagger that I see before me?”, we do not know whether he has found a dagger in the street or a mugger is threatening him. Then we get the clue: “its handle towards my hand.” So, there is no threat and the dagger is being “presented” to Macbeth. That is the direction of the force.

As for its magnitude, we intuitively know it. “Just a little”, if we want to scratch our back with a dagger; “a lot”, if we want to stab someone.

The direction of force is singular. It is always one specific direction. It follows, then, that force is incompatible with freedom and negates it, freedom being defined precisely in terms of existence of alternatives. Force is the absence of alternatives. Conversely – and the proposition is convertible – we could say that if there is no alternative, a force must be present.

Now, observe, these sample quotes from the EU crisis:

• Mr. Barroso [the president of the European Commission] also reinforced calls for Greek politicians to endorse the austerity measures. “If anyone thinks that without the program agreed with the E.U. and the I.M.F. we can still get by somehow, there’s an alternative program, that’s not true. There is no alternative.”

• In words that recall former Prime Minister Margaret Thatcher of Britain, Mrs. Merkel says there is no alternative to trimming Europe’s entitlement programs.

• This [Portugal returning to growth] will involve “a very rigorous programme of austerity and structural reforms” covering everything from slashing public deficits and extensive privatizations to shake-ups of justice and education. “There is no alternative,” [the country’s new prime minister] says.

• Constrained by the unpopularity of bailouts at home, political leaders appear able to act only at the 11th hour, when they have no alternative.

So, a force is acting “on” Europe; there has to be, with so many leaders telling us that there is “no alternative”.

I have showed elsewhere that the force in question is finance capital. The upcoming Vol. 4 of Speculative Capital will explore this point in further detail. I merely note here that acting alongside finance capital is its latest, most advanced form, speculative capital. The two are not different forces but two movements of the same phenomenon; the latter can be explained by the former but cannot be reduced to it.

Finance capital is a force because it causes change. And it is a social force because it changes the social systems and relations. But unlike natural forces whose “purpose” is unknown – no one really knows why electromagnetic force exists –the purpose of finance capital is clear: It wants to maximize its profit. Its direction follows from that purpose. Finance capital pushes in the direction of maximizing its rate of return.

As for the magnitude, it is a function of the resistance it encounters.

In places where finance capital has managed to be an insider and there is little or no resistance, its magnitude is barely perceptible, as when gently scratching one’s back with a dagger. Then finance capital could be said to be “polite”. Like in Cameron’s silly Big Society, it speaks in terms of “initiatives”.

When there is the need to put the impertinent representative of a periphery country in his place, the force magnitude increases, as reported in the Financial Times of June 29:

Olli Rehn is nobody’s idea of hothead. A mild-mannered Finnish economist, he is regarded even by his countrymen as unassuming – verging on dull.

But twice in recent days Mr Rehn, who is the European Union’s senior economic official, has been forced to get angry.

At an emergency meeting of finance ministers a week ago Mr Rehn came down like a ton of bricks on Greece’s Evangelos Venizelos, who had the temerity to suggest reopening talks on the €28bn ($40bn) austerity package that Athens must pass this week to avoid sovereign default.

Those present were taken aback by Mr Rehn’s ferocity, and Mr Venizelos backed down.

It was smart of Venizelos to back down. Otherwise the mild mannered economists might had pulled a knife on him – or threatened his wife. The dull Finn is a trained dolphin at the service of finance capital and performs on its behalf, however much he might be unaware of that role.

Finally, for the rabble that disturbs the peace, the magnitude is ratchet up to crack the skulls.




But where does the magnitude of the force come from? How and where, exactly, does finance capital muster the ability to cow politicians, intimidate ministers and beat the populace in broad daylight, even though it operates in democracies where the majority of the population opposes its diktat? Recall Le Monde Diplomatique’s editorial which I quoted in an earlier part:

How is it that in a democratic system, the people are forced to accept cuts and austerity simply replace one failed government with another just as dedicated to the same shock treatment?

Think about it. People go to the ballot and vote for political leaders who then turn against them and their interests. How could that be?

It is simplistic to assume “corruption” explains everything. Corruption of politicians and the political process, while very real, does not explain this:

Mr. Papandreou went into the historic vote with a five-vote parliamentary majority. But the outcome was not certain, as the austerity plan strikes at the heart of the Socialist Party base.

Why does a party enact austerity measures that strike at its base? One can easily accept that Social Democrats of Papandreou ilk are unprincipled boors who will do everything to stay in power. But then why would they weaken the machinery that is the means of their assuming political power?

The common forms of the corruption of politicians – cheating on expenses, illicit affairs, accepting kickbacks and expensive gifts – are all illegal. They can only take place beneath the surface. When exposed, they must stop.

But the Greek legislators who voted for the crippling cuts and the drastic social re- engineering of the country did so with their heads held high and patriotic tears in their eye:

Most Socialist legislators said they would back the measure, in some cases only grudgingly, and with most stressing that patriotic duty must go before party ideals.

Elsa Papadimitriou, broke ranks with her New Democracy party and voted for the measure. “There is only one act of patriotism: consensus and cooperation,” she said. “Fiscal suicide is not an alternative. “

Nor is the unapologetic, in-your-face short-changing of the citizenry limited to Greece or Europe. Across the Atlantic, the U.S. political landscape offers a treasure trove of Exhibit A's in that regard in every bent.

Everyone knows, for example, that the cost of health care in the US is increasing in double digits year on year.

Everyone knows that a major component of that increase is the rise in the price of prescription drugs.

Everyone knows that the U.S. government is the largest purchaser of the prescription drugs through Medicaid and Medicare.

Everyone knows that wholesales prices are cheaper than retail prices.

Yet, by the act of the same Congress that is obsessed with reducing government spending, the US government is expressly prohibited from negotiating price discounts for prescription drugs.

This is not corruption in the usual sense. Yes, pharmaceutical and insurance companies pay the US legislators and buy their votes. But those are all legal campaign contributions. So the practice goes on in the open view of the public.

Perversion of democracy, you say? No, democracy manifest, I say; the government of the people by the people for the people. The only catch is people, which people misunderstand, because the strong biological/anthropological connotation of the word obfuscates its social/political context. But social/political is precisely what we deal with in talking about people and democracy.

This change in connotation is subtle, the resulting disconnect between the anthropological and political man easy to miss. Even some of the great minds who wrote on the subject fell prey to it.

Consider Socrates, Plato and Aristotle. All three had contempt for democracy; they considered the rabble unfit for the affairs of governing. More to the point, reading them, you will never know that they lived in a slave owning society. There is no mention of salves. People and democracy pertain to free citizens only. Slaves are mere objects.

More than 2000 years later, we run into the same suggestive mentality in the U.S. Constitution. Again, the authors of the document were among the most outstanding citizens the US ever produced. To take Benjamin Franklin as one example, legend has it that he never wasted a minute of his life, which must have been true on the evidence of the astounding body of works that he produced alongside his many activities – and first rate works in that. At merely 23, in A Modest Enquiry Into the Nature and Necessity of a Paper Currency, he espoused ideas about the role of money and the nature of value that half a century later Adam Smith used in his magnum opus. (Even the full title of Smith’s book, An Inquiry Into the Nature and Causes of the Wealth of Nations seems to have been inspired by Franklin.)

Yet, a man with such obvious intelligence and experience saw no irony in signing his name to a document that starts with “We the People” and excludes blacks. Nor did any of his compatriots.

The explanation lies in the anthropological/political dichotomy. The Founding Fathers did not doubt that slaves were human. Surely George Washington who fathered a child with a slave servant must have known that.

But they were writing a document in governance and not in biology or anthropology. It is in that sense – with respect to having a say in the running of a republic – that blacks were left out of the Constitution; they were excluded from the political process. So were women, who did not gain the right to vote until 1920. (In Switzerland, it was 1971!) “Not being counted as people” is an inference that followed from that exclusion. But the issue was always political.

The U.S. Constitution is about the rights of property owners. Those rights arise from ownership and not a person’s biological or anthropological attributes. In that context, it did not occur to its authors to recognize slaves and women. That would be absurd, akin to recognizing pets or trees as people.

This calculus of power was on display at the Philadelphia Convention of 1787. The Convention elevated blacks to 3/5 of a person for the purpose of distribution of taxes and the apportionment of delegates to the House of Representatives. The arithmetic gerrymandering was a concession to the Southern plantation owners who were demanding more representation and thus, more power, on account of their property which also included slaves. Otherwise, it had nothing to do with the liberty of the black population whose fight for civil rights continues to date. (The Voting Rights Act – notice the name – was not passed until 1965.)

Fast forward to 2011 and we see the same practice in Murdoch’s News Corporation, where one Murdoch family member is counted as 4 regular types. From the Financial Times of July 21, under the heading US fund attacks New Corp’s share structure:

The two-tiered structure that gives the Murdoch family almost 40 per cent of the voting rights in a company where in owns about 12 per cent of the equity was a “corruption of the governance system”, said Anne Simpson, senior portfolio manager, of Calpers Global Equity and its corporate governance chief. “Power should reflect capital at risk”.

Power should reflect capital at risk.

Thank you, Anne Simpson. I could not have said it better myself!


Because at the age of self-destructive speculative capital, capital is everywhere at risk, to reflect that risk, capital moves to assume the position of power everywhere. The power commensurate with global risk is global power. That power is available only at the state and supra-state level.

In this way, finance capital assumes a new, more potent form. It is no longer the petty interests of a neighborhood “boss” enforced by physical violence or the diktat of a strongman enforced by more organized thuggery, but the international and state law, enforced by the machinery of state and international organizations. In this way, we arrive at democracy.

The Origin of the [crisis in the] European Union – 5: Capital as the Union’s Main Driver

If you are following the crisis in Europe, you know how complicated the whole thing is. You see the stressed looks on the faces of politicians, central bankers and the heads of places like the World Bank, the IMF, the European Commission, read or listen to their often contradictory comments and wonder that if they are at a loss for an explanation/solution, what chance do ordinary mortals have of making head or tail of the situation? Look.













If that is what you think, you have been had; chalk off one “mission accomplished” for your local papers and international news media.

What is taking place is Europe is quite simple to understand.

The EU was created as the answer to the problem of falling rate of profit in the industrially advanced European countries. Reversing the falling rate of profit is the objective. The EU is the vehicle for realizing that objective, the means of getting there.

Creating a vehicle such as the EU which must stand over the heads of the European nations and governments is no easy task; the very idea points to the audacity of the force behind it. The force is capital, with the “democratic government” being its immediate manifestation. The size or intensity of the force – that would be the governments’ agenda, vision and modus operandi – is a function of the local conditions and varies from country to country and situation to situation. The direction of force, toward a homogenous social system conducive to capital, is fixed and remains unchanged throughout; it is “remorseless”, in the words of a British official.

Let us look at these points in the case of Greece. It should suffice for illustration.

When the Greeks were invited to join the EU, they were jubilant. Here at last was the confirmation that Greece had “arrived”. With the military dictatorship gone, the country could take its rightful place among the advanced, civilized countries.

As the Iranian proverb has it, they went for the smell of kebab, only to discover that donkeys were being branded. But by the time that realization came, when the draconian cuts hit every aspect of social life in the country, there was no going back, short of a violent overthrow of the government, which was not going to happen because Greece was now a democracy.

This latter point needs elaboration.

Look at this sentence from a New York Times article this summer after the Greek parliament had approved the first in a series of slash and burn measures:

Markets rallied globally, and European leaders welcomed the passage of one of the most radical overhauls of the Greek economy since democracy was restored in 1974.

The sentence is written like an advertising copy. Nay, it is an advertising copy, a style of writing designed to create an association between a product and “positive” words – and thus, feelings– in the absence of any logical association. You know the routine: Selling a car? Then say power, beauty, freedom.

The Times uses the formula to a “t”. "Positive" terms – Markets rallied, European leaders welcomed, overhaul of the Greek economy, democracy was restored – are tightly packed into a sentence to “soften up” the reader. The racket is quite sinister and demands the picture of the street riots to work, which is happily supplied.


Now, reading the jubilant account of the reaction to cuts in Greece and seeing the bloody faces of demonstrators confuses the readers. They are presented a contradiction that they cannot resolve with the limited information provided. They cannot make sense of the events. Confused, they become ignorant spectators of events, accepting whatever is thrown their way and passively waiting for leadership – of both thought and political kind – to show them the way. Murdoch provides the former. Cameron, Berlusconi, Sarkozy, Merkel, Obama and Papandreou provide the latter.

But facts are not isolated events. Their relation, arising from the compulsion of reason, remains indestructible and comes through even from behind a confused text. We only need to rearrange the words and put the emphasis where it belongs.

Here is the logical rewrite of the Times sentence that eliminates all the internal and contextual contradictions of the text:

It was precisely because democracy was restored that the most radical overhaul of the Greek economy became possible, after which finance capital everywhere celebrated as it saw its grand design for increasing its rate of return one step closer to realization.

Democracy is the name of the form of the government created by capital. One does not have to be a supporter of the Greek Junta to note that the undemocratic colonels would not dare to subject the Greek society to so violent a shock therapy. More to the point, they would not accept or allow it.

Establishing democracy in Greece was the necessary condition for, and the harbinger of, a social order mandated by the EU whose sole objective is making the member societies an agreeable stomping ground for capital. That’s what the EU’s 100,000-page rulebook is all about.

Now, Europe is a divided entity, with the political and social divisions at times following the change in landscape. Belgium, for example, only recently managed to have its first government in one and a half years because the northern Flanders and relatively poorer southern Wallonia could not agree on the division of the country’s wealth. (The compromise government, far from being a unifying power, reflects the institutionalization of the separation of North and South.) Or take the equally small Switzerland, in which the culture and social concerns in Canton Ticino are more Italian than any part of the country north of Gotthard.

Only a fanatic doctrinaire, then, will seek to explain everything that has been happening in Europe in terms of capital and finance capital. I devoted Part II of this series to “defining” Europe precisely to highlight the political, cultural and economic differences among the European countries and even within them. There is a historical rivalry between France, Germany and England, for example, and Silvio Berlusconi would have had his rivals and enemies even without the EU.

But the falling rate of profit and the need for cheaper labor is the grand narrative of the EU. All other events take shape and play out within it, in the same manner that all events in War and Peace take place within the context of Napoleon’s invasion of Russia. No detail of the EU crisis (or War and Peace) contradicts that main storyline. That is another way of saying that all the contradictions of the EU, which have manifested themselves in a laundry list of banking crises, market instability and political gridlock, could be explained and resolved by that narrative.

Let us wrap up then.

The idea of the EU rose from the need of capital in the industrially advanced West European countries for lower labor costs and new markets, the one-two punch that the industrialist in those countries correctly calculated would solve the problem of the falling rate of profit.

Germany and France were the leaders of the movement. Italy, Nordic countries, Belgium and Luxembourg with the relatively small, less export-oriented economies, assumed a secondary, supporting role.

The so-called “periphery” countries – the Greece and Cyprus and the Ireland of the Union – were the mark. So were the German and French workers. And the workers in Italy, the Nordic countries, Belgium and Luxembourg.

In an integrated EU, the German industrialist could produce machinery with the Greek wages, which is why and how, in a double whammy, and using the threat of cheap labor in the newly freed East Germany and the southern flanks of the EU, they were able to push down the German wages by about 20%. That, in turn, allowed them to set the euro rate against the USD at a relatively low level, which helped boost the exports and thus, profits. That is the story behind Germany’s “strength”, its “EU leadership” or much admired “competitiveness”. I quoted earlier:

Helmut Kohl, the chancellor of Germany in the early 1990s, was so convinced of the need to bind a united Germany into the European Union that he was prepared to press ahead with the euro, in the face of 80 per cent opposition from the German public.

Now you know the story behind the conviction and determination of politicians. (The 80% opposition, by the way, was coming from the workers and ordinary citizens who, despite massive selling of the the EU idea, had not bought into its promises. In North America, NAFTA was sold using the same exact play book. It was supposed to bring jobs to the U.S. and Mexico.)

The periphery countries proved problematic. Their problem, in a nutshell, was – and remains – the historical problem of training a peasant workforce for industrial labor.

Peasants, because their life tempo generally follows that of nature, have large margins in their daily lives. The cows need not leave their stable at 5:10am sharp, the way a train leaves the station. Approximate “sunrise” will suffice. For coming home, in like manner, “sunset” will do just fine. No need for precise arrival time, as there are no connecting herds.

This margin is precisely what the industrial capital could not permit. An assembly line is nothing but the precise quantity of work performed in an exact interval of time. When peasants are brought into the factory environment, they must be trained to shed the old ways and become robots.

Robot is precisely the word. The sole condition for working in an industrial setting is performing the prescribed steps repetitively in the given time to the exclusion of thinking and individual initiatives. That is why assembly lines naturally lend themselves to automation: in them, workers are automaton.

(The robotization/dehumanization is enforced through a training regimen whose structure and content demands a post of its own. In the training classes of FoxConn’s Chinese plants, for example, peasant/workers are instructed to go from one corner of the room to the opposite corner. When they naturally walk across the room – even donkeys would do that to reach a stack of hay on the opposite side, proving that the hypotenuse is shorter than the sum of the two sides – they are fined. The point is conditioning them to shed their instinct and initiative lest they seek shortcuts. They must at all times follow the walls, like blind men do.)

At the technical level, the inability of the peasant/workers to perform at high levels of precision translates itself to inability of the emerging countries to manufacture high quality and high precision products. So we see that even in today’s competitive markets, the members of Germany’s Mittelstnad are thriving because the highly specialized machinery they produce cannot currently be manufactured by the Chinese workers.

At the social level, the absence of industrial discipline manifests itself in a more relaxed life style which itself arises from the looser and less formal documentation of property rights and legal/commercial relations. It is not uncommon for a property’s boundary to be defined by non-stationary reference points, say, a river. Over time, then, as the boundaries change, the land disputes begin and go on seemingly forever, paralyzing the legal system. And, of course, no one beside the government workers pays much tax because the government has no way of tracking people’s income. In that regard, the racist and ignorant Prof. Hans-Joachim Voth whom I quoted in Part I of this post was right to complain about Greece’s land registry and tax system:

A European country without a land registry, without proper tax enforcement and without a responsible political process to control spending and borrowing needs all the outside pressure it can get to increase state capacity. The economic evidence is unambiguous – the larger and more effective a country’s state apparatus, the higher output per capita. Pressure to improve state capacity and become a grown-up country is what Germany and European Union are currently providing, free of charge.

When a less industrial country such as Greece is forced into a union with an industrially developed country such as Germany under conditions that are defined for the benefit of capital only, its life style must change accordingly. Dinner starting at 9 and lasting till midnight – and that on a week night? Inconceivable! Retirement before 60? You must be kidding.

These habits and conventions, however much their roots might be economical, pertain to the old ways of doing things, i.e., they are cultural. So, as the mouthpieces of capital are quick to remind everyone, the cultural in these countries must change:

As a British taxpayer and therefore (via IMF), a contributor to the Greek budget, I was irritated to discover that all Greek students still have a constitutional right to a free, university education – and spend an average of more than seven years over their degrees. British students will be charged up to £9,000 ($15,000) a year in tuition from next year … Greece has been promised new money. Now it needs a cultural change. Otherwise the country really is going to the dogs.

And it is not Greece only. The Spaniards, Portuguese and even Italians had it too good for too long. But the party is over now and it is time to "grow up", time to pay the piper. The “piper” is the “democratic government”, which, as per Prof. Voth, must be strengthened so it could deliver the populace to the capital – lock, stock and barrel – until such time that its even minimal regulation gets in the way of capital’s expansion, at which time it should be dismantled through whatever means necessary, say a “big society” racket here or the installation of some mad man as president there.

That is it, then, all one needs to know about the EU. As for the roving sovereign/banking crisis which has been hitting the EU member states in the past couple of years, in one sense, the crisis is real. As the rate of profit across the EU members has fallen, the government expenditures that corresponded to the pre-fall era have become “unsustainable”, to use a word now in vogue. So expenditures must be cut, especially in the euro zone where government can no longer print money.

In the private sector, the main expenditure is the labor cost; hence the mass layoffs and refusal of the businesses to hire which has resulted in record unemployment.

In the public sector, in addition to labor costs, the retirees’ pension is a large expenditure. Naturally, then, it is the main focus of the “pension reform”, which aims to simultaneously cut off the pension payments and increase the retirement age so that the payments will start later.

But believing that no crisis should be allowed to go to waste, the architects of the EU are using the governments’ revenue shortfall as a bogeyman for further weakening the power of labor unions and pushing down the wages. The case of Italy shows us how the game works. FT’s political/financial commentator on October 12:

While [Italy’s] public sector debt is high at 119 per cent of gross domestic product, the private sector balance sheet is remarkably strong and the government budget is in primary surplus – that is, before interest payments. The surplus is forecast to increase significantly.

The short term position is thus comfortable and in ordinary times markets would be relaxed about default risk here.

So, Italy’s finances are in order. The country’s surplus is “forecast to increase significantly”.

But that is not the point and certainly no excuse. The commentator goes on:

In common with much of the rest of southern Europe it has a huge competitiveness problem, with unit labor costs reckoned to be 30-40 per cent too high relative to Germany. Even if we charitably assume that Italy’s underlying trend growth rate is 1 per cent, it is hard to see how the trajectory of public sector debt can be pulled back.

You see the sudden shift to the labor costs. Either Italy – now a “south European” country, and we know how those people are – increases the rate of profit by bringing down the labor costs or else. In the “else” scenario, the “markets” will discover that the Italians have been living beyond their means, the country’s bonds will tumble and the spreads on its credit default swaps will rise to the stratosphere. The country will no longer be able to borrow on capital markets and might be forced to default, with all the consequences that follow. To avoid all that, the draconian reforms must be implemented, including the “labor market reform” and pension reform.

Berlusconi could not play along so he was pushed out – for that reason alone and not for any of his long list of transgressions.

Now the “technocrat” Monti has been brought in with much hoopla to save Italy. The ignorant consumers of news are jubilant:

“We finally have a competent government, not one of dwarfs and ballerinas,” said Antonio di Pietro, the former anti-graft magistrate and head of the Italy of Values party.

Perhaps Berlusconi’s government was a circus. But alas, the joke is on the ex-magistrate and the technocrat Monti will do exactly, precisely what capital demands of him – and not an iota more or less. The Financial Times of November 15:

Mr Monti has plenty of ideas to promote in the long term through liberalising the labour market, weakening the powers of fiefdom of professional services and making it easier for public and private sectors to hire and fire.

At the end it makes no difference who is in charge because capital is ultimately in charge.

I will return with the concluding part.

I'm Still Around

When Rumi finally completes the long-delayed Vol. 3 of Masnavi, his explanation in the opening verse of the book is the most compelling: It takes time for blood to turn into milk! His excuse/reason is doubly profound if you know the background story which had to do with his son's prolonged illness from which he happily recovered.

I have no such exquisite reason but reasons good enough. I had several commitments, some quite time-consuming, that came due one after another in September and October. Then I began a long-planned month-long trip to areas with spotty, slow and blocked internet access which made writing very difficult and posting impossible. Let us say that all was a Black Swan. That should explain everything.

My apologies and thanks for the kind inquiries. I am not back to my base yet but getting there. Will return shortly.

Get ALL Your Tax back . . .

Visit http://howmuchtaxcanisave.co.cc/

Lets say this year your gross income is $20,000 ( about $ 1,700 a month ), you may start to pay tax.  ( about $10 a month ).

Click the extend + sign to see everything.  Then think of which item is relevant to you.  For below case, this guy can

• buy a life insurance of $ 3,800
• buy $500 magazines
• buy a $2,000 PC 

Make sure keep all the receipts and the receipt dates show 2011.  Then comes 2012 when you are filing your tax, you can get back all your tax deducted by your company !!

The web site is just an estimator or for fun or for educational purpose only.  Your actual tax plan and figures may subject to your very own unique condition.  Do consult a proper tax consultant or IRB is providing FREE advices when it is near tax submission date.

Enjoy !!

Robert Kiyosaki copied our article ?

Finally, even a guru like Robert Kiyosaki has to copy MalPF article and post as his own ...

just kidding, of course.

A new level of Frugality

Frugality in Kuala Lumpur has just gone one level deeper.  A saving of about $550 monthly, a 2 hours exercise sessions for FREE and an opportunity to explore natures within the city has just been proven recently with just ONE simple ACT !  As everything goes, there is some trade off or 'risk' too ...

Its Cycling To Work !

Mathew was a guy who suffers from a terrible 24.3% inflation in 2009.  After he started to follow this blog, he has learned a trick or two to keep things going smoother.  Today he is working as a top executive in a public company but situation hasn't changed much.  He is still in middle level income group.  After his 5 figures income divided by the number of people he has to support, his actual cash-at-hand per person monthly is much less than average personal income ie. $1,500.

Many staffs who worked for Mathew always complains about how tough their lives are and demand a salary increment without extra performance to the company ( while their single income is about $1,500 as well).  Mathew thinks it was obvious his staffs weren't educated well enough in personal finance so he decided to role model to show a point - live frugally.

He used to drive about an hour to work, commute about 22 km and then spent about $10+ for parking fee.  Now instead of doing all that, now

He cycles to work

After the decision was made, he first bought a huge term insurance to cover this temporary needs.  After all, he doesn't want his teaching to his staff to affect his even more important loves to his families.

Once the insurance is approved, he started cycling to work.  It wasn't easy.  He first followed his driving route.  It was dangerous as cars and motorbikes are cruising fast by, ignoring his existence.  But the good thing about cycling . . . is that its both a pedestrian and a driver.  So very soon he found a much shorter and safer path, only 12.1km instead of driving 22 km away.

It took him about one hour to cycle to work.  ( Above 2.5 hours was for walking time )  So practically this doesn't affect any of his schedule at all.  As a matter of fact, this improve the stability of his schedule.  Even when there is an unexpected traffic jam which would cause a normal 1 hour driving to 2-3 hours, his cycling time remains the same as 1 hour.

Mathew also lost 6-8kgs since then, has a much tougher built body now.  He used to pay a lot joining fitness centers etc. but never got the time to actually exercise because he is a workaholic.  Now he HAS TO exercise 2 hours a day.

Mathew also started a health diet to eat more veggie and fruits even before this cycling idea.  Thanks to this cycling exercise, his cycling route passed by a local market at Chow Kit ( one of the oldest and largest wet market in Kuala Lumpur ), he now manages to buy 5 star fruits for only $1, which fuel his breakfast and lunch.

There are much more indirect benefits he received since he started cycling to work.  But as everything goes, there must be some Cons that comes with the Pros.  Should one accident happens during his cycling commute, it would most probably cost him his life.  While he was well aware of the risk, he took action to insure against that rick and he also find ways to improve his own skills and awareness to maximize his own safety.

There are quite a lot of tips and tricks he has developed since he cycles to work.  If you were moved by this article and wanted to try this too . . . be warn ahead, there is some risks involved.  Do spend some time to buy me a cup of coffee so I can share with you whatever those tips and tricks are so that you can minimize your risk and maximize your return / saving / investment.

	Driving	Cycling
Time	1 hour	1 hour
Petrol	$10 per day	$0
Parking	$5 - $10 per day	$0

I am just glad living frugally in a city like Kuala Lumpur has just gone one level deeper.  With tons of other extra benefits and with only ONE major risk that a person who really cares can mitigate easily with skills and experience.

Have you managed to find any innovative ways to cut your expenditure or increase your saving by 25% !?

Interview : FatherSez - fathersez.com

FatherSez is one of the pioneers in Malaysia Personal Finance blogsphere.  He started his first blog post on 8 September 2007, one year earlier than this blog.  He has always been one of the great minds I wanted to meet in person one day.  But little did I know back then, opportunity fade away sooner than I thought.  FatherSez passed away on 4 August 2009.

Although we never met and now lost the chance to ever meet again, we never feel far apart.  During earlier years even after 100 posts, I was still a skeptic about blogging.  It was actually FatherSez who found my sharing useful and kept me going.

Even years after his departure, I never forget every single word we transact online; through our virtual identities.  But he was busy with his venture and I was busy with my entrepreneurship back then as well.  We never met in person although both of us wanted to.  Well, at least I wanted to ( Fathersez received too many requests to meet that he couldn't accommodate to all . . . )

FatherSez is unique in his own way because it was clearly a message from parent to kids.  It was written with a legacy in mind, for the kids and the future.  I haven't read a personal finance blog that is as parental, as philosophical, as practical and most truthfully show his love toward his kids without reservation.

I was very scare and afraid after confirming the fact that he did pass away 7 months after his departure.  I worry his web site will be shut down very soon.  But 2 years down the road, I managed to contact one of his legacy, Azah.  And words cannot describe how grateful I am when I know FatherSez is still alive today.  This simply means whatever message FatherSez wanted to deliver has been well received.

What else can be more grateful 

than after you are gone, 

your messages are still 

being hold tight by someone ?

I have conducted email interviews to some of the personal finance web sites or blogs recently.  Fathersez is one of them.  Since I couldn't reach Fathersez anymore, I made a request to his legacy.  To my surprise, she accepted the interview request ...




At young age, Fathersze was one of those where today's basic necessity was not readily given by nature.  He had to walk 12km to school.  Luckily his uncle had supported him mostly not from any monetary form but most critically important - the existence of love and family tie.  Also thanks to his uncle?  Fathersez was exposed to accounting at early age, as early as his primary school time working in a cloth selling shop.  This was one of the key differentiation why he was able to contribute so much to our personal finance blogsphere today.  For other luckier kid like me, I was only worrying what lunch I can have with my 50 cents pocket money for that day.

. . . here is the original interview scripts . . . with minor censorship for privacy reason.

If you were also a FatherSez follower before you read this, you would most probably agree with me that a FatherSez 2.0 is in the making.  The way Azah write and feel for herself and also on behalf of Fathersez, clearly show how great a legacy FatherSez had left behind.  And how similar she is to her father.  And yet with a touch of 21st century of her own.

Lastly, a word for my dear friend Fathersez, for science or for faith, I hope one day you can read this . . . one way or another, I want you to know without a single doubt, a stranger like me . . .  miss you very much too.

Retire 55 or 60 ?

Now even the star has written article to support the idea to postpone retirement age from 55 to 60.  It brought up a few points that seem inevitable but . . .

every sensible personal finance guy would feel something has gone wrong somewhere.

The fact remains that retiring at 55 in today's world seems a waste. The mortality age for Malaysians has risen

Since when the definition of wastage of my retirement is up to anyone else to say ?  I may live longer and what is that got to do with you holding my money longer than you have promised before ?

In the advancement of personal finance world, we are talking about retiring at 40's.  Since when retiring later become a good thing ?

The retirement age in Indonesia and Thailand is 60 

No one stop you to migrate there.  But right now the hot thing going is 1 Malaysia where all we talked about is how much we love our own land bla bla bla.

A longer life based on a finite and short working career certainly would put a strain on the finances of many a retiree.

and therefore we don't give them money at the time when they are suppose to be ?  Since when delaying giving money can help a financially strain guy ?

 73% of contributors have less than RM50,000 saved

So most of us are poor, and you want to solve it by NOT giving us our own money ?

the more workers a country retains as the population ages the more the benefit to the economy

Yes, wisdom and experience are invaluable.  What has that got to do with delaying paying us our money ?  All the wise old men never stop doing something anyway through out their whole life.

Based on life cycle hypotheses, people tend to spend more during the early age of their careers and save more as retirement approaches.

I am sure he just cook that sucker hypotheses up when he was drunk written that article.  People who have gone through most parts of their any life cycles knows that singles tends to save more (30-50%) than later years of loans, family and kids etc.  The middle income trap ( rat race ) clearly says that the more we earn, the less we have.

Now that they know retirement is postponed for five more years at least, those people who might be thinking of building a nest egg have the opportunity to spend.  Spending more now will certainly be a boost to domestic consumption which is a main driver of growth.

Can you believe what he has just said ?  Take away my money and I can spend more !  OMG .... WTH is this sh!T ?

it will be illogical to have separate retirement ages for the public and private sectors.

Since when it is logical to make them the same ?  What is the difference between them then ?

other benefits the Government can save on such as healthcare bills

Huh ?  People who continue working has no healthcare or people who retire has no healthcare ?  Are you suggesting another bigger problem here ?

Young people who might be worried about not moving up the ladder or getting a job should not.

What has that got to do with not paying the old people the money they were promised ?  Old people don't get paid and young people should be happy !?!?

remove all unproductive workers, you can bet others will emerge at later years. It's best that talent management is exercised to ensure such workers are minimised at all times.

Why hasn't EPF office exercise talent managment then ?

====

Change the guideline all you want since we voted you to have the power to do so.  But all the folks who were promised for the past 54 years to be paid out at age 55 before should continue be honour so.  Changing this payout age to 60 should only affect NEW work force.  All existing to-be-retire however can have the option to follow your new guideline.

Fundsupermart October Seminars 2011 - Value Investing

Market is down, many people are sad but how about you ? Have some extra money at hand ? Looking for opportunity to invest ? Even you don't have cash but do you know you can invest into mutual fund with your EPF ?  Fundsupermart says its time to go in because the price is below the value now - buy low now !

 ... read here for their October FREE seminars, 1 Oct in KL and 8 Oct in Penang.  Prepare your EPF statements ( print for FREE from EPF office or login online ) ... They are going to whack your EPF hard that day :)

You can also use your EPF $ to invest into stocks market but you may want to check out this article first.

Warren Buffet 6 billions strategy ?

Follow up on a concern if Warren Buffet's era may come to an end soon posted in August 2011, the figures are now out and considered as 'correct' as calculated by Forbes ...

Steven who works in Forbes has calculated that Warren Buffet is officially the BIGGEST MONEY LOSER, at an amount of USD 6 billions.  But this is not the first time Warren Buffet going through this kind of challenge.  He has always come back up stronger for the past 8 times but can he makes it again this round ?

There are 2 key distinct differences in his challenges today.

1. His age : Warren has come to a stage that he would give everything he has, back to the country or people he loves truly.  Business ( Berkshire Hathaway ) is surely something he hold on to very strongly but NOT necessary to all the investors themselves.  If one day he realizes 'most' of the investors in his business is no longer 'his investors' like last time, he may just pull the plug.  After all, as far as his business is concerned, a successor plan is already in place.
2. When USA gets into trouble by its own doing in the past, everyone forgive him because he is the  ONLY entity who can fix the situation.  There were NO ONE ELSE we could keep our hopes on except USA itself.  Hence, we always go back and work with USA politely.  Today, although still without an apparent replacement for such a giant over the centuries ... but there are clear candidates for many to put their hopes onto.  Hence, almost no one is expecting USA to fix anything today, not even their own citizen.  This ... is also something that hasn't happen in the past, at least not to this scale.

Having said all that, my bet is that Warren will come back up stronger than ever because

1. Today's indicators shows that whoever already in the market and want to continue to stay in the market would need a staying power of about 1.5 years.  BH has no problem with this requirement because of their low operation cost.
2. Warren doesn't really love anyone else more than BH.  But as indicated above, Warren doesn't love his investors as much as he used to, simply because his today's investors are rather different now.
3. Warren needed a good bye event . . . well, to say good bye.  And this is NOT it !