Good article in today's paper

I extracted and reproduced the following here because I believe the author has a useful philosophical perspective into the current world financial crisis.

Definition of foibles: a quirk, idiosyncrasy, or mannerism; unusual habit or way (usage is typically plural), that is slightly strange or silly;
Definition of hubris: Excessive pride, presumption or arrogance

Markets are ruled by human foibles, not by science
Daniel Cloud

March 31, 2009

To understand how we got ourselves into our latest economic mess, complicated explanations about derivatives, regulatory failure and so on are beside the point. The best answer is both ancient and simple: hubris.

…. The problem is that no matter how "scientifically" these new beliefs were formulated, they are still false. Capitalism is, among other things, a struggle between individual people over the control of scarce resources. Like boxing and poker, it is a soft, restrained, private form of warfare. Military strategists have known for centuries that there is, and can be, no final science of war. In a real struggle over things that matter, we must assume that we are up against thinking opponents… if profit can be made by understanding the model behind a policy… , sooner or later so much capital will seek that profit that the tail will begin to wag the dog, as has been happening lately.

…. The truth is that such models are most useful when they are little known or not universally believed. They progressively lose their predictive value as we all accept and begin to bet on them.

…. If investing is simply a matter of allocating money to an index, however, liquidity becomes the sole determinant of prices, and valuations go haywire. When a substantial fraction of market participants are simply buying the index, the market's role in ensuring good corporate governance also disappears.

.… Despite this, in the course of the past 20 years economists began to act as if we thought we could genuinely predict the economic future. If the universe didn't oblige, it wasn't because our models were wrong; "market failure" was to blame.

…. We repeatedly rescued bubbles, and never deliberately burst them. As a result, our financial markets became a pyramid scheme.

…. But a market is not a rocket, economists are not rocket scientists, and moral hazard is, in human affairs, the risk that matters most.

…. Governments think we can stop this process by throwing money at it, but there are many reasons to believe that this won't work. The banking system is probably already past saving — many institutions simply aren't banks any more but vast experiments that didn't work out as predicted.

If we cleave to the false security of a supposed science that isn't working, and forget about the philosophy behind it and ideas such as personal responsibility and the right to fail, our leaders will very scientifically give us no recovery at all.

Daniel Cloud teaches philosophy at Princeton University and is a founding partner of two hedge funds, Firebird Fund Management and Quantrarian Capital Management. Copyright: Project Syndicate/Institute for Human Sciences, 2009. www.project-syndicate.org

Why some mobile plans are very expensive

(Update: A week after I wrote the following blog, I found that Hutchison 3's $19 plan gives you a free phone but includes only $70 worth of talk/SMS. Another $70 goes towards 3-to-3 calls. Goes to show how easily the brochures and ads can take you for a ride)

I did a quick comparison and the result shows how expensive Telstra really is. (Note that TPG is an internet service provider that has now ventured into mobile phone service.) As you can see from the chart below, although the plans cost $19-20 each, the actual usable time can be very limited. The assumption made regarding flagfall is that in one instance, it is assumed that one third of the calls are shorter than 30 sec, while in the other instance, it is one tenth of the time.

The chart below calculates how many minutes of usage per day you'll get under different providers for a $20 plan. Telstra gives you only 0.6 min per day, which is the equivalent of just one 36sec call per day; beyond that you'll be paying 94c per min plus flagfall! On the other hand, TPG gives you 9.7 min per day. That is nearly twenty blocks of 30-sec calls. Very few people know about TPG Mobile, but it is by far the least expensive. Even Hutchinson 3 is not too bad, in comparison with Telstra or Optus.

TPG, Hutchinson 3, and Optus all give you generous amount of free talk time to certain nominated numbers. Telstra gives you this priviledge for just ONE number. It is about time all of us start moving to lower cost providers to create a downward pressure on prices.

	TPG	"3"	Optus	Telstra
Monthly charge	$19.99	$19.00	$20.00	$19.00
Included cap	$300.00	$140.00	$50.00	$20.00
Call per 30s	$0.40	$0.45	$0.47	$0.47
Flagfall	$0.35	$0.35	$0.35	$0.27
SMS	$0.25	$0.25	$0.25	$0.25
Contract	none	24 mths	24 mths	(not clear)
Avg min/day:
Flagfall 33%	9.70min	4.13min	1.42min	0.60min
Flagfall 10%	11.49min	4.81min	1.65min	0.67min

Apostle Paul's (and our) dilemma

Very often, a Christian's behaviour is measured against the Ten Commandments, or the 7 Deadly Sins. Additionally, there's a lot of other do's and don't in the Bible. The Apostle Paul has the following to say about obeying God's law and other do's and don'ts:

(Paul also struggled against sin like us!)
Romans 7: ²¹So I find this law at work: When I want to do good, evil is right there with me. ²²For in my inner being I delight in God's law; ²³but I see another law at work in the members of my body, waging war against the law of my mind and making me a prisoner of the law of sin at work within my members. ²⁴What a wretched man I am!

(fortunately....)
Romans 8: ⁵Those who live according to the sinful nature have their minds set on what that nature desires; but those who live in accordance with the Spirit have their minds set on what the Spirit desires. ⁶The mind of sinful man is death, but the mind controlled by the Spirit is life and peace.....

(... a Spirit-filled life....)
Romans 8: ⁹You, however, are controlled not by the sinful nature but by the Spirit, if the Spirit of God lives in you.

(Therefore.....)
Romans 8: ¹²Therefore, brothers, we have an obligation—but it is not to the sinful nature, to live according to it. ¹³For if you live according to the sinful nature, you will die; but if by the Spirit you put to death the misdeeds of the body, you will live

(Paul does not say that a Spirit-led believer automatically does not sin, but he says we have an obligation to live according to it. The Bible gives us this assurance....)
Romans 8: ¹Therefore, there is now no condemnation for those who are in Christ Jesus, ²because through Christ Jesus the law of the Spirit of life set me free from the law of sin and death.

(The Apostle Peter has this to say about leading a godly life that will ensure you are on the right track to heaven)
2 Peter 1: ⁵..... make every effort to add to your faith goodness; and to goodness, knowledge; ⁶and to knowledge, self-control; and to self-control, perseverance; and to perseverance, godliness; ⁷and to godliness, brotherly kindness; and to brotherly kindness, love. ⁸For if you possess these qualities in increasing measure, they will keep you from being ineffective and unproductive in your knowledge of our Lord Jesus Christ. ⁹But if anyone does not have them, he is nearsighted and blind, and has forgotten that he has been cleansed from his past sins. ¹⁰Therefore, my brothers, be all the more eager to make your calling and election sure. For if you do these things, you will never fall, ¹¹and you will receive a rich welcome into the eternal kingdom of our Lord and Savior Jesus Christ.

Movie: Little Women

This is an old movie that I watched with my family last Sunday. The movie is about four sisters who grew up in a time of economic hardship, and ended with them each getting married, save for one who died of scarlet fever.

With that introduction out of the way, what I wanted to relate is that one of the sisters became a writer. While passionate about writing romantic novels, she found herself writing stories that would appeal to the public but not what she enjoyed writing about. She befriended a German professor who advised her to write what is in her heart. She did that and eventually became a successful writer. I believe blogging is the same. One should write about what is in his heart bursting forth to be heard. Otherwise blogging becomes a chore.

Little Women is a classic novel written by American writer Louisa May Alcott in 1868-9. The novel is based on the writer's own childhood experiences with her three sisters.

An old mobile phone; a new discovery

When I bought the Nokia N73, I only wanted the use of a mobile camera at any time, anywhere. Little did I thought this would take me on a journey of discovery, gadget-wise. It just dawned upon me that practically everyone in the developed world carries a highly under-used and overpowered miniature computer in the guise of a mobile phone. I had a basic Nokia phone prior to this. It had a monochrome screen, no camera, no bluetooth, infrared, or wifi, and not even a music player. It was as basic as it could get (yes, it could send text messages). In contrast, my new N73 is a miniature computer-in-the-pocket.

The N73 was launched 3 years ago; a considerable antique in this age of mobile phones. Yet it is able to deliver lots more as an operating platform for mobile apps. You see, in addition to being a phone-cum-MP3 player-cum-camera, the N73 has an operating system, like all other smartphones. This means that one pick and choose various applications according to his needs. The N73 is built on an industry-wide standard OS called Symbian OS9.1, S60 ver 3. It runs on a dual ARM 9 220Mhz CPU, which is a CPU designed for mobile applications.

It is easy to find scores of Symbian applications, including many freeware, from the internet. This is just one example: http://www.symbian-freeware.com/. Now I no longer see my N73 as a camera phone, but a miniature pocketable computer that I have no qualms about carrying around. For starters, I have installed these freeware:
1. Five different Bibles (KJV, MKJV, WEB, BBE, and ASV).
2. One Bible dictionary and a regular dictionary
3. One collection of jokes (handy for parties)
4. A voice recorder that can automatically record phone conversations
5. A collection of English idioms
6. A book reader, plus a book by Josephus
7. My favourite arcade games: Sudoku, Tetris, and Space Invaders

The price? It cost me AUD$18 to add a 2GB miniSD memory card. With the above apps, plus 60 Mp3 songs, I have only used up 12% of the memory added. Still room enough for >2000 shots on the camera or a multitude of other apps. Just food for thought: lots of people are carrying a potential powerhouse in their pocket without realizing what they could do with it! Nevertheless, I won't browse the web on my mobile; for that I will use a regular PC with a big screen and high speed internet access)

Nokia N73, a personal review

If you own any other mobile phone, please don't be offended by what is written here. This mobile phone happens to suit my personal taste and preference. What I am writing about stems from my fascination for, what is IMHO, a well designed gadget.

Fist of all, the candy bar design, well suited for singlehanded operation, is equipped with a centrally-placed navigation button. Thus, using either just the left or the right hand, one can easily operate all the functions. A touch screen would have required both hands to operate. The camera is switched on and ready to operate by sliding the back cover open... even when the keys are locked. The screen is large and the size is just right. Any bigger, the phone would be uncomfortably large for most people. Yes, the camera takes great pictures and the screen has great resolution. The matt surface on the body is just right; it feels good to the touch and leaves no finger prints. Although this phone has been in the market for 3 years, I find many of the newer phones seem to have lost these desirable attributes.

In terms of software and CPU speed, perhaps the N73 could use a faster CPU speed as chip technology must have improved a lot since 2006. However, switching between functions is fast enough for me (considering the small sticker price). The menus are intuitive and all keys and functional buttons are well positioned. Last but not least, I am able to download free apps that run on the N73's Symbion OS9.1 operating system. I have just installed a free Sudoku game and a complete KJV Bible. I have replaced the 128MB miniSD with a 2GB one that costs just AUD$18 and memory space is now practically unlimited. What a deal!

Introducing you to my online albums

You may have noticed on this blog site that I have 3 links under my Blog List. The three albums are quite different in nature and they appeal to my different photography needs. I love to take pictures but not all of them can be suitably contained in one album.

Hence I have:
1. The Photo Gallery. This is where I put specially selected pictures that I am very happy with from the aesthetics point of view. I do a bit of Photoshop work on these where necessary.

2. Holiday Shots. This is the typically family album, meant to record life's happy moments. Minimal amount of photoshop done, including cropping. Pictures may not conform to standard rules of composition, but that does not bother me.

3. The Photo Blog. This is a chronologically arranged "photo journal-cum-caption" type of shots. Except for a short period of experimentation, all the pictures here are un-edited photos taken with a mobile phone. The mobile phone gives me the ability to shoot whenever my heart desires. Key word here is spontaneity.

Pssst... Camry is cheaper to drive than Yaris

It just occurred to me that it may be cheaper to drive an LPG-powered Camry than a petrol-powered Yaris. So I did a quick search to find out the manufacturer's specifications. The Camry is spec-ed at 14lit/100km for town driving (and about 40% better for long distance), while the Yaris is spec-ed at 6.1lit/100km.

Translate that into running cost: At the low point of the week, LPG costs 49.9c per lit, while unleaded petrol is 117.9c per lit. Hence for Camry, that works out to $6.99/100km, while it is $7.19 for Yaris. It does not take much imagination to figure out that after gas conversion, the Camry will still have much more boot space than the Yaris.

So, to all you guys out there who want to cut costs, it is time to make the switch. I could be wrong, but I don't think there is an LPG conversion kit available for Yaris.

Why free competition will not bring down petrol price

Petrol price is not regulated in Australia. It is assumed that as long as there is no price collaboration among retailers, then the price of petrol will regulate itself to the advantage of consumers. This is a fallacious assumption. The idea is very simple, but then life is not so simple. Even if there is no price collaboration, if every petrol station is making lots of money, no owner is going to rock the boat. Over a period of time, the profit margin is going to be cast in stone and petrol price will remain high indefinitely.

Here is how this can happen:
Once all the retailers are used to a high annual profit, they are going to sell their business at a very high price when they retire. The guy who buys over the business is going to need a very high profit margin to service the bank loan he takes. Therefore he cannot lower his price. He has to maintain a high profit margin even if global oil prices tumble drastically.

The real profiteers are the early birds who have bought the petrol stations at a low price and sell out at a very high price. Let's hope the government is wise enough to exercise price controls on all essential goods and commodities. Self regulation is no regulation, as the whole world has just learned from the banking crisis of 2008.

Recollection of a money box

Today while at the Post Office, I saw a little gold-coloured cash box. It looked like the one I have at home; a reminder of an event that happened about twenty years ago. A feeling of sad remorse came over me when I thought about it. You see, about two decades ago, my two sons then about 3 to 6 years old took all their "ang-pow" money and spent it all on buying two money boxes from a bookshop near our home. It was the first time in their young lives that they purchased anything on their own. Obviously they did not know the value of money then.

I can imagine two little boys, excited with all the ang-pow money they had collected over the Chinese New Year, walking into a shop all by themselves. I should have been very proud of them. Instead, I flew into a rage when I came back from work and threw the boxes across the floor. I thought it was time I gave them their first lesson in economics. Now, older and wiser, I should have cherished them for their innocent way of expressing what they wanted; a money box to keep their savings. What an idiot I was! How I must have crushed them! Now my two sons are adults and this incident fortunately have not affected them one way or the other; thank God! As for me, I will have to live with the occasional remorse that I missed an opportunity to react as a good parent should, and show love to them at an important point in their young lives. One can only look back, but will never be able to change something in the past. Therefore live life the way you want to remember it in the future.