Tuesday, March 31, 2009
Friday, March 06, 2009
Too Big to Fail versus Moral Hazard
If it is any consolation the Sage of Omaha in his letter to shareholders also paints a grim picture having experienced the worst year. Has he lost it too I wonder?
On the same note I was watching CNBC the other the focus has been on Obama’s rescue will it work, where is it heading to etc…etc and they had Maurice Greensberg (former CEO of AIG) on Squawk Box understandably he was angry at what was happening to a once good business. “I have lost over $2bn in personal wealth at AIG”. Why didn’t he sell when things started going wrong? Like the rest of us AIG was just too big to fail we could not just take that in.
‘AIG management didn’t understand international business’ and to think that the government is essentially running AIG is scary. Come to think of it the government has blundered left right and centre in our case when it comes to management – from oil distribution to maize. I understand those who are jittery at the current trend – good intentions are not enough.
Its collapse was unthinkable.
Moral hazard - the tendency of bankers to make bad loans based on an expectation that lender of last resort (CBK) will bail out troubled banks.
Too big to fail syndrome – AIG, Fannie Mae, Freddie Mac
On the same note I was watching CNBC the other the focus has been on Obama’s rescue will it work, where is it heading to etc…etc and they had Maurice Greensberg (former CEO of AIG) on Squawk Box understandably he was angry at what was happening to a once good business. “I have lost over $2bn in personal wealth at AIG”. Why didn’t he sell when things started going wrong? Like the rest of us AIG was just too big to fail we could not just take that in.
‘AIG management didn’t understand international business’ and to think that the government is essentially running AIG is scary. Come to think of it the government has blundered left right and centre in our case when it comes to management – from oil distribution to maize. I understand those who are jittery at the current trend – good intentions are not enough.
Its collapse was unthinkable.
Moral hazard - the tendency of bankers to make bad loans based on an expectation that lender of last resort (CBK) will bail out troubled banks.
Too big to fail syndrome – AIG, Fannie Mae, Freddie Mac
L’Economie en Crise:
Remember my struggles in opening a CDS account? There was a huge sigh of relief to read in the papers that I could get an account through my bank at about the time government ‘infrastructure bonds’ were on offer. With renewed vigour I was there only again to be disappointed they only open CDS account for those interested in the shares market. I don’t why but to me shares are synonymous to weapons of mass destruction (derivatives?) so it is a no go zone.
Actually I couldn't’t help over hearing the discussion between a lady behind me and a bank official. It had something to do Safaricom shares she bought financed by a bank loan – she cleared the debt/loan for some reason her shares were frozen and in the process she had lost in excess of 30K. I think she was warning me indirectly if I was going to deal with shares because all that time I was filling out the form thinking the CDS account would be used in ‘infrastructure bonds’. Yes we had to tear the forms – they were useless to me.
“Disclaimer: Past performance is not necessarily a guide to future investment performance, the value of units as well as income there from may go down as well as up…”
If you have any investments linked to the NSE these are worrying times – if you are young you could easily ride out the storm (long term view). But for the older generation and pensioners it is confusing should I hold on or jump ship? Many are angry as they watch their investments fall in value – just get into these offices and see how ‘financial advisors’ are struggling explaining what is happening. I guess we never anticipated tough times ahead
PS: The group of politicians who were against Safaricom IPO are quiet, shouldn't’t they be gloating over the current scenario. It was touted as an opportunity for Kenyans to make wealth I thought it was for the masses (Kenyans made wealth I guess – stock brokers and investment bankers, or is it few in the Board at NSE?)
Safaricom shares are going for less than 3 bob – I only wish I was brave enough…
Shouldn't’t we be clamouring for changes especially at the NSE/CMA? Stock market affects us all even the most risk averse like me.
People are scared they have lost money the strategy has to be capital preservation rather than investing.
Actually I couldn't’t help over hearing the discussion between a lady behind me and a bank official. It had something to do Safaricom shares she bought financed by a bank loan – she cleared the debt/loan for some reason her shares were frozen and in the process she had lost in excess of 30K. I think she was warning me indirectly if I was going to deal with shares because all that time I was filling out the form thinking the CDS account would be used in ‘infrastructure bonds’. Yes we had to tear the forms – they were useless to me.
“Disclaimer: Past performance is not necessarily a guide to future investment performance, the value of units as well as income there from may go down as well as up…”
If you have any investments linked to the NSE these are worrying times – if you are young you could easily ride out the storm (long term view). But for the older generation and pensioners it is confusing should I hold on or jump ship? Many are angry as they watch their investments fall in value – just get into these offices and see how ‘financial advisors’ are struggling explaining what is happening. I guess we never anticipated tough times ahead
PS: The group of politicians who were against Safaricom IPO are quiet, shouldn't’t they be gloating over the current scenario. It was touted as an opportunity for Kenyans to make wealth I thought it was for the masses (Kenyans made wealth I guess – stock brokers and investment bankers, or is it few in the Board at NSE?)
Safaricom shares are going for less than 3 bob – I only wish I was brave enough…
Shouldn't’t we be clamouring for changes especially at the NSE/CMA? Stock market affects us all even the most risk averse like me.
People are scared they have lost money the strategy has to be capital preservation rather than investing.
Friday, February 27, 2009
RBS Woes.... Sir Fred
The former boss is having none of it – no one should touch his pension as RBS recorded its massive losses. I feel I contributed to the losses to after closing my account there last year but nobody should touch my pension too!
Let's see who will blink as the pressure mounts, some have even suggested these financiers should be in jail.
Let's see who will blink as the pressure mounts, some have even suggested these financiers should be in jail.
Weekend is here ... AGAIN!
I came across the cartoon just after my interview - I think from The Times. Something to make me smile.
Another hectic week has gone by – I get fidgety and restless when I’m put on hold or rather when looking forward to something (read interview). My life has simply been on hold throughout the week – I got an email at end of last week inviting for an interview (honestly I’m tired of this, why can’t someone just call to surprise me with a ‘you’re hired!’). I could not remember ‘applying’ for the role but what the heck I asked for the job description and confirmed that they had my details right. From the CV they had I was still in the UK. The last time I can remember applying for a role on there website was around January 2008!
I have no problem getting such calls – but from the little experience I’ve had dealing with regional organisations is the slow pace of events. The process can drag FOREVER! Did I mention that in late November I attended another interview up to now a decision has not been made – initially I was told it would take 2 weeks for my fate to be known. We were 3 candidates as far as I know two of us were interviewed on the same day the 3rd guy missed his flight and therefore his interview was re-scheduled.
Up to now our fate is unknown – well I still keep in touch with the guy I met at the interview. Of course contacting the HR office I’m informed to keep on waiting! So much when dealing with foreign funded project roles – probably funding was not forthcoming.
So it is impossible to maintain a standard routine at the moment. Just getting ready for an interview kind of takes over my life – I’m literally forced to prepare (though it is the same questions!)
I’m waiting AGAIN! They were frank to apologise that it is a slow process it could take like a month. I don’t mind but could someone tell these people it would be nice to inform me of the progress.
PS: I had to cancel my trip to Nakuru – 3rd time! Someone down there must really be getting pissed with me. To think that I don't get enough time to even write more - even read - someone is slowly taking over my life I suspect.
Damn!
I have no problem getting such calls – but from the little experience I’ve had dealing with regional organisations is the slow pace of events. The process can drag FOREVER! Did I mention that in late November I attended another interview up to now a decision has not been made – initially I was told it would take 2 weeks for my fate to be known. We were 3 candidates as far as I know two of us were interviewed on the same day the 3rd guy missed his flight and therefore his interview was re-scheduled.
Up to now our fate is unknown – well I still keep in touch with the guy I met at the interview. Of course contacting the HR office I’m informed to keep on waiting! So much when dealing with foreign funded project roles – probably funding was not forthcoming.
So it is impossible to maintain a standard routine at the moment. Just getting ready for an interview kind of takes over my life – I’m literally forced to prepare (though it is the same questions!)
I’m waiting AGAIN! They were frank to apologise that it is a slow process it could take like a month. I don’t mind but could someone tell these people it would be nice to inform me of the progress.
PS: I had to cancel my trip to Nakuru – 3rd time! Someone down there must really be getting pissed with me. To think that I don't get enough time to even write more - even read - someone is slowly taking over my life I suspect.
Damn!
Bargain hunting
Although I look after my pennies I have to confess bargain hunting is not my strength. Usually after glancing through a range of products or services I’m a mid table kind of guy. Take the maximum price and the lowest see how much I have to spend – most likely I will be in the mid range. Unless of course it is a life or death scenario – they rarely come though – where you throw caution out of the window.
I honestly cannot remember if I have ever had anything that is on the ‘top range’ in the market. I dress simply to cover nakedness I’ve noticed, if it is a computer it simply has to do its job, a car of course it has to be able to move without much persuasion when I’m on the steering wheel. Actually when I see an advert of Chrysler 300C available in Kenya (thanks to DT Dobie) for US$ 72,600 – surely it is not meant for me; I would look at the cheapest model they have and probably climb a little higher to the mid range models!
So next time you see someone walking in the building and you don’t really notice the guy – it could be me! Probably I will have an old beat up car if the public transport system is not in existant!
I’ve been helping mum as she continues to finish the new place. Every now and then I’m called upon to help in deciding big issues like the tiles for the kitchen and bathroom among other things. Last week and early this week I was dragged to help in deciding the on the colour and exactly how much should be spent.
You get my drift I was in the middle mum understandably was sensitive on price my sister was more onto ‘quality’ – I was more on affordability/quality. I did not see any bargains, confirming my theory they don’t exist. Starting from somewhere near Tom Mboya Street we ended up on Mombasa Road where the deal was done on Saturday and Monday morning. On Monday I had to wait for the delivery while at the same time my mind focused on the up coming interview.
My theory bargains rarely exist the market is almost perfect. Don’t get me wrong you can still get a bargain but at what cost? I fit the commonly held view that guys do not enjoy shopping – honestly I dread the exercise. Moving from shop to shop or was it website to website. I end buying something because I have to and I see I need it otherwise I drag the options till I have none left.
In retrospect most of the gadgets I bought were actually recommendations from a buddy of mine. I only appeared on the last day to check out the specs and price of course armed with credit card.
I honestly cannot remember if I have ever had anything that is on the ‘top range’ in the market. I dress simply to cover nakedness I’ve noticed, if it is a computer it simply has to do its job, a car of course it has to be able to move without much persuasion when I’m on the steering wheel. Actually when I see an advert of Chrysler 300C available in Kenya (thanks to DT Dobie) for US$ 72,600 – surely it is not meant for me; I would look at the cheapest model they have and probably climb a little higher to the mid range models!
So next time you see someone walking in the building and you don’t really notice the guy – it could be me! Probably I will have an old beat up car if the public transport system is not in existant!
I’ve been helping mum as she continues to finish the new place. Every now and then I’m called upon to help in deciding big issues like the tiles for the kitchen and bathroom among other things. Last week and early this week I was dragged to help in deciding the on the colour and exactly how much should be spent.
You get my drift I was in the middle mum understandably was sensitive on price my sister was more onto ‘quality’ – I was more on affordability/quality. I did not see any bargains, confirming my theory they don’t exist. Starting from somewhere near Tom Mboya Street we ended up on Mombasa Road where the deal was done on Saturday and Monday morning. On Monday I had to wait for the delivery while at the same time my mind focused on the up coming interview.
My theory bargains rarely exist the market is almost perfect. Don’t get me wrong you can still get a bargain but at what cost? I fit the commonly held view that guys do not enjoy shopping – honestly I dread the exercise. Moving from shop to shop or was it website to website. I end buying something because I have to and I see I need it otherwise I drag the options till I have none left.
In retrospect most of the gadgets I bought were actually recommendations from a buddy of mine. I only appeared on the last day to check out the specs and price of course armed with credit card.
Thursday, February 12, 2009
All Fall Down
After spending the last few days mulling over what had to be done – I knew what to do it just felt bad – maybe brooding is the right word.
“This is not working”
That’s the expression we use when we wish to terminate a moribund relationships (nothing to do with Valentine’s Day). I saw it coming I hope they were not caught unawares. It was a civilised parting of ways though I must confess I feel cheated – you know how it feels after settling a divorce case (I don’t) but I suspect that is almost how it feels. But as the saying goes life goes on, I hope I have learnt from that, besides it is life you win some you lose some.
Feeling the blues
Roman Abramovich is one person who has ‘lost’/spent, depending on how you look at it, so much in the past few years in his investment at Stamford Bridge. 3 managers gone – at a hefty fee, in the process paid off his ex-wife too as if that’s not enough the price of oil has fallen remarkably. Sad for the blues we are staring at grim season – what started out as a promising prospect suddenly became a nightmare. I’m justified in boycotting watching the rest of the season.
Saturday, February 07, 2009
Licking my wounds
I should have known better.
After my plans to open a CDS Account were indefinitely postponed I ended up investing in my mums Balanced Fund Trust investment (that's a mouthful!)and I've been watching the prices going down really fast.
I thought this would be a safe haven for my few earthly possessions, well until I get settled. From around KES 112 by Friday it had fallen to 96.91 to redeem the units bought. Top on the agenda next week is to get the chums and put them under the pillow - probably having them close/next to me will make me think fast!
On a serious note my small sis is contemplating getting a mortgage - with the rents in Nairobi that is a good idea. I'm even thinking we could do this together. I'll provide the down payment and let her sweat with the monthly payments. Fingers crossed I get some source of income soon. I think as a family we could pull this deal - I can't afford on my own and since she's already paying rent why not get her own place (oops actually get our own place!)
Of course it is just a thought at the moment - I'm not even sure where we can get a house. The indicative prices are honestly exorbitant as expected I can't think of anywhere in the big cities where getting into the property ladder is easy.
Let me go and lick my wounds in the meantime - I hope it doesn't get worse.
I should have known better!
Sunday, January 25, 2009
First Interview
I had my first ‘interview’ with a ‘small’ (they actually describe themselves as medium sized) accountancy firm. It was a short notice – was called the day before the interview.
Really it wasn’t an interview it was just a screening exercise to verify that I had what I claim to have. The interesting part was when it came to what my expectation as regards to compensation. Now this is a question that I prefer not to engage in at the initial stage.
Things have changed or maybe I just did not have my ears to the ground.
Perusing the jobs in the daily papers I’m surprised almost all require one to be a graduate with maybe ACCA/CPA, which is not bad. For one I think it shows the pool of talents employers have at their disposal. What is not amusing is when you read the what the role is all about – anyone who has basic accounting knowledge can do the job. Come to think of it what are the market rates at the moment when it comes to compensation?
By the way when I told the interviewer what my expectations were I could see he was shocked. I wish I had added and that was the net amount! If there are too many accountants around does that not mean I should quote a lower figure?
But I’m impressed I with the interview though I wouldn’t hold my breathe about getting to the next round, I needed to get that feeling of interviews probably will go down.
Part two, everything held constant next Wednesday morning I will be in Nakuru, officially I’m a hustler so to speak.
Really it wasn’t an interview it was just a screening exercise to verify that I had what I claim to have. The interesting part was when it came to what my expectation as regards to compensation. Now this is a question that I prefer not to engage in at the initial stage.
Things have changed or maybe I just did not have my ears to the ground.
Perusing the jobs in the daily papers I’m surprised almost all require one to be a graduate with maybe ACCA/CPA, which is not bad. For one I think it shows the pool of talents employers have at their disposal. What is not amusing is when you read the what the role is all about – anyone who has basic accounting knowledge can do the job. Come to think of it what are the market rates at the moment when it comes to compensation?
By the way when I told the interviewer what my expectations were I could see he was shocked. I wish I had added and that was the net amount! If there are too many accountants around does that not mean I should quote a lower figure?
But I’m impressed I with the interview though I wouldn’t hold my breathe about getting to the next round, I needed to get that feeling of interviews probably will go down.
Part two, everything held constant next Wednesday morning I will be in Nakuru, officially I’m a hustler so to speak.
Thursday, January 22, 2009
A new beginning
I feel to some extent like I’ve made an exit while making an entrance
Probably I have been too hard on myself, expecting too much in a rather short time. Being away for 7 years you are bound to be overwhelmed at times with what’s happening around you.
Actually at the back of my mind I thought I would arrive, send my CV to a few places and my phone would be ringing like crazy. A little bit dramatic but honestly it’s close to the truth.
7 years! You can’t just come back and expect everything had stalled waiting for you.
So there I stand. This week might be a turning point – not because of Obama’s inauguration, though that’s cool – I might end up in Rift Valley in quest of ideas.
Summer Bunny - the big debate rages on
I think that partly exonerates me from my pathetic attitude in the past few days. No joke it gets on your nerves please take my advice don't watch the news. You become restless with anyone or anything that you come across – from the weather when the suns comes out its too hot when it drizzles it’s too muddy, courtesy when you are out there is nought. I mean EVERYTHING rubs off you the wrong way.
It’s time to get your hustle on.
PS: These posts should have been sometime ago, the usual logistic problems are to blame.
Probably I have been too hard on myself, expecting too much in a rather short time. Being away for 7 years you are bound to be overwhelmed at times with what’s happening around you.
Actually at the back of my mind I thought I would arrive, send my CV to a few places and my phone would be ringing like crazy. A little bit dramatic but honestly it’s close to the truth.
7 years! You can’t just come back and expect everything had stalled waiting for you.
So there I stand. This week might be a turning point – not because of Obama’s inauguration, though that’s cool – I might end up in Rift Valley in quest of ideas.
Summer Bunny - the big debate rages on
I think that partly exonerates me from my pathetic attitude in the past few days. No joke it gets on your nerves please take my advice don't watch the news. You become restless with anyone or anything that you come across – from the weather when the suns comes out its too hot when it drizzles it’s too muddy, courtesy when you are out there is nought. I mean EVERYTHING rubs off you the wrong way.
It’s time to get your hustle on.
PS: These posts should have been sometime ago, the usual logistic problems are to blame.
Voila!
Finally I managed to get the Safaricom modem something I have been pondering over and agonising for a while now. I'm that stingy! I knew it had to happen soon.
The best part is my patience paid off because I got it under promotion price of 4K and monthly have 1G worth of download. The design too is better since it is the flashdisk size type. When I got here the one on offer was 10K I did not like the design (the long cable) and when lucky you could get it for 5K.
Even better it will cost me like 1000 pm - I'm sure I've been using more than that in the cybercafes around.
So I'm cool.
The best part is my patience paid off because I got it under promotion price of 4K and monthly have 1G worth of download. The design too is better since it is the flashdisk size type. When I got here the one on offer was 10K I did not like the design (the long cable) and when lucky you could get it for 5K.
Even better it will cost me like 1000 pm - I'm sure I've been using more than that in the cybercafes around.
So I'm cool.
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