Mirror Mirror On The Wall - Who Is The Role Model For Us All ?

The last few weeks have been interesting.We have been seeing stories in The New York Times, The Financial Times, The Wall Street Journal  which we would normally have associated with the emerging markets rather than the developed world.

Europe is in a state of disarray.The European Union which was supposed to bring prosperity and create a market bigger than the United States finds itself on the edge of a cliff . The question remains " will she or wont she" the she being Chancellor Merkel. Will she put Germany's resurgent economy at risk by continuing to pump money into the economies of nations whose spending habits mirrored that of countries in Latin America in the seventies and eighties ? Unfortunately if the Chancellor pulls her finger from the dyke, it will likely start a possible tsunami of defaults, not just among the PIGS ( Portugal, Ireland,Greece, Spain) but possibly  Italy as well. Also the financial institutions in the better managed  economies will not escape  and will take huge hits as well and it will likely be beginning of the end of the Euro. The IMF, the ECB, and the governments concerned all are scrambling to protect the banks rather than letting them swallow the bitter medicine as they  recommended the Asian governments do during the late nineties.

The United Kingdom in the meantime is enthralling  the world with its drama, which could perhaps be called the The Last Days of the Murdoch Empire. The cast of characters include a strong willful patriarch who starting with a  newspaper in a small town in Australia, went on to become the most powerful media baron and kingmaker in a number of countries. The supporting characters include his son and heir apparent, second wife decades younger than himself, a flaming red head, the head of the ruling political party , the law keepers (rumored to be have been wined and dined)  who while resigning insisted that they were not the only ones, after all the politicians used to meet journalists more frequently than they did. Adding a bit of mystery was the unexplainable death of the whistle blower. The only thing missing is a hint of sex, but then the show is not over yet.Keep watching the space.

In case you were not titillated, you had the former head of the IMF's peccadilloes with the hotel maid- whether by  consent or force remains to be seen. In the meantime, he is once again being regarded as a possible candidate to be the next President of France. On the other side of the border  you have the Prime Minister of Italy  in his seventies  trying to  inherit  Hugh Hefner's Bunny crown with his bunga- bunga parties.

Across the pond, you had the sub-prime crisis about which many books have been written. This was  followed by biggest Ponzi scheme in history and the insider trading scandal. Where were the regulators and the auditors?

With that over, you now have the world's biggest economy  together with the rest of the world being held to ransom by the two political parties to see who will blink first. We would all like to think that at the last minute there will be a compromise, but in the meantime it continues to be a cliff hanger. This is supposed to represent the best of democracy and a two party system ?

These are the countries, the  politicians and bureaucrats who come to emerging markets  and tell us how we should free the markets in terms of currency flows and trade, we should  allow democracy and  be more transparent and do something about corruption. Yes we have our share of problems, scandals, corruption, unexplained deaths, dynastic politics and so on, but perhaps we are better off muddling our way through. After all  the Asian countries ( including India in the early nineties) while going through the financial crises bit the bullet and moved on and since then have made a remarkable comeback. Perhaps it is time the roles are reversed and the developed world look closer at the developing countries and learn from them.

Quote of the Year

 Wall Street Journal July 14th, 2011

Indian Home Minister P. Chidambaram said the three bomb blasts in Mumbai were the result of stealthy work by terrorists and don't signal a breakdown of intelligence-gathering by Indian security officials and police authorities.

"Whoever planned this attack worked in a very, very clandestine manner," he told reporters in a Thursday morning televised press conference. "It's not a failure of intelligence."

How Much Is Enough ?

This is a  question  which comes up frequently as we talk to friends  and as we see the level of greed among politicians and bureaucrats and business men.Also of late Bill Gates and Warren Buffet who have given away a substantial portion of their wealth have been going round the globe asking people to follow their example.

Over the last century there have been numerous examples of wealthy families Rockefellers, Fords, Andrew Carnegie, Tatas,  Birlas who have all endowed charities with substantial sums for the good of the community.

However my favorite is Charles Feeney one of the two founders of Duty Free Shoppers. Both the partners are total opposites. I remember from my days in Hong Kong reading about his co-founder,  Robert Miller's lavish parties at his house on the peak with guests flown in from around the world. He had big fat  weddings for his  daughters all married into European royalty or other similarly wealthy families.

Charles " Chuck" Feeney, at one time among the top 50 richest men has been giving away all his wealth through his Atlantic Philanthropies. The total amount is believe to be around $9-$10 billion  Unlike Bill Gates he has done so quietly. He does not fly around in private jets. He travels by subway and lives extremely modestly. I am sure there are numerous other examples such as this - the royal family of Travancore  who gave their wealth to the temple.

However on a lower level over the years I have had this conversation with my friends and colleagues during my life as a banker and now as a wannabe entrepreneur. Is  one million  enough  or is it five  million,or more ? At that time we referred to it as FY money - enough to be able to walk out of a job where you were not happy . For us  the yard stick was to be able to ensure that our children had a good education, no debt  and  to be able to maintain the life style we were used to plus have a nest egg for emergencies.

That was then. However when we meet now we dance around without mentioning  a specific number. The reality is that once you have covered  the basics mentioned above then everything beyond that  is to leave behind an inheritance for your children unless you totally change your life style.

Recently I was chatting with two of my oldest friends from  Hong Kong and that got me thinking .Both  are around my age plus or minus a few years  They have been very successful .

One was an entrepreneur who started a business and sold it off a few years ago. His wife  has ventured off  successfully on her own business. Together with a friend he started another business in a totally unrelated field. That is doing very  well. While talking I suggested another add on alternative to what he was doing. His reaction was " Yes I know and my clients would love me to do that. I could easily double my revenue, but frankly I have enough on my plate to keep me busy. I do not want the hassle"

The other friend a bachelor, is a successful professional who dabbles on the side by investing in  ventures which attracts his interest rather than from a  pure financial investment point of view.. He is a partner in a  business  which has a high profile in Hong Kong  catering to the rising aspirations and prosperity of Hong Kong's middle and upper class. They have over the last few years moved into China. I suggested that they look at India, as it was on the same growth pattern and would be a good market. The response was  similar . " I am in this to  keep busy and to enjoy what I am doing . I really do not want to be bothered ".

Perhaps the best story I have read and which very nicely summarizes the difference of opinions about how much is enough,  is an often quoted anecdote about Joseph Heller - the author of  Catch 22.

During a commencement address at  Houston's Rice University in 1988,  Kurt  Vonnegut ( Slaughter House Five)  recounted a conversation he had with his good friend Joseph Heller.

Joseph Heller and he were at a party given by a billionaire on Shelter Island. Kurt said, "Joe, how does it make you feel to know that our host only yesterday may have made more money than your novel 'Catch-22' has earned in its entire history?" Joe said, "I've got something he can never have."What on earth could that be, Joe?" His response was "The knowledge that I've got enough."

Do we all know when we have enough ? Unfortunately in most cases we do not.

RIP - Joseph Heller - the man who knew he had enough.