Behavioural finance?

I don't get today's oil prices. As we speak, oil is trading at 1.58 below close, at 99.60, a 6-month low, the day after hurricane Ike hits Texas, the United States' largest oil production centre. This happens the same weekend of Lehman's impending collapse and the renewed fears of the US credit market. This is an excerpt swiped from Reuters. I'll just quote pertinent bits so I don't get sued for any sort of infringement.

On oil
"The oil market is selling off because the early indications show Ike didn't do as much damage as feared," said Chris Jarvis, senior analyst at Caprock Risk Management. "That said, this sell-off could prove to be a bit premature, since it could be a while before things get back to normal."

On financial
U.S. stock futures and the dollar sank late on Sunday as the first official trades of a new business week took place while talks to sell Lehman Brothers <LEH.N> faltered, shaking confidence and pushing dollar-exposed investors towards safe haven U.S. Treasuries.
"It appears that Lehman will file for bankruptcy and the risk of an immediate tsunami is related to the unwind of derivative and swap-related positions worldwide in the dealer, hedge fund, and buyside universe," Bill Gross, the chief investment officer of Pacific Investment Management Co (Pimco), told Reuters. Pimco oversees more than $812 billion in assets.
Uncertainty about the health of the U.S. financial sector was running high with the fate of the 158-year old investment bank Lehman Brothers still unclear. In addition, a takeover of Merrill Lynch & Co <MER.N> and huge asset sales by American International Group <AIG.N> were being talked about in markets.
Britain's Barclays Plc <BARC.L>, which had appeared to be the frontrunner to take over Lehman -- excluding its bad mortgage-related assets -- pulled out of the bidding early in the afternoon, according to a person familiar with the matter.
That raised the risk of a Lehman bankruptcy. Lehman hired law firm Weil Gotshal & Manges to prepare a potential bankruptcy filing, the Wall Street Journal reported on Saturday in its online edition, citing a person familiar with the matter.

I think the only explanation that would make sense for the crude to be this way is demand destruction. Either on the refinery side, or the consumption side. There seems to be no other explanation.

Mensa Invitational

This is arguably one of the funniest emails I have received, ever!

The results of the Washington Post's Mensa Invitational which once again asked readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter, and supply ing a new definition.   The winners  are:
 
1. Cashtration (n.): The act of buying a house, which renders the subject financially impotent for an indefinite period of time.
2. Ignoranus : A person who's both stupid and an asshole.
3. Intaxication : Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.
4. Reintarnation : Coming back to life as a hillbilly.
5. Bozone ( n.): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future.
6. Foreploy : Any misrepresentation about yourself for the purpose of getting laid.
7. Giraffiti : Vandalism spray-painted very, very high.
8. Sarchasm : The gulf between the author of sarcastic wit and the Person who doesn't get it.
9. Inoculatte : To take coffee intravenously when you are running late.
10. Osteopornosis : A degenerate disease. (This one got extra credit.)
11. Karmageddon : It's like, when everybody is sending off all these really bad vibes, right? And then, like, the Earth explodes and it's like, a serious bummer.
12. Decafalon (n.): The gruelling event of getting through the day consuming only things that are good for you.
13. Glibido : All talk and no action.
14. Dopeler Effect: The tendency of stupid ideas to seem smarter when they come at you rapidly.
15. Arachnoleptic Fit (n.): The frantic dance performed just after you've accidentally walked through a spider web.
16. Beelzebug (n.) : Satan in the form of a mosquito, that gets into your bedroom at three in the morning and cannot be cast out.
17. Caterpallor ( n.): The color you turn after finding half a worm in the fruit you're eating.
 
 
The Washington Post has also published the winning submissions to its yearly contest, in which readers are asked to supply alternate meanings for common words. And the winners are:
 
1. Coffee , n. The person upon whom one coughs.
2. Flabbergasted , adj. Appalled by discovering how much weight one has gained.
3. Abdicate , v. To give up all hope of ever having a flat stomach.
4. Esplanade , v. To attempt an explanation while drunk.
5. Willy-nilly , adj. Impotent.
6. Negligent , adj. Absentmindedly answering the door when wearing only a nightgown.
7. Lymph , v. To walk with a lisp.
8. Gargoyle , n. Olive-flavored mouthwash.
9. Flatulence , n. Emergency vehicle that picks up someone who has been run over by a steamroller.
10. Balderdash , n. A rapidly receding hairline.
11. Testicle , n. A humorous question on an exam.
12. Rectitude , n. The formal, dignified bearing adopted by proctologists.
13. Pokemon , n. A Rastafarian proctologist.
14. Oyster , n. A person who sprinkles his conversation with yiddishisms.
15. Frisbeetarianism , n. The belief that, after death, the soul flies up onto the roof and gets stuck there.
16. Circumvent , n . An opening in the front of boxer shorts worn by Jewish men
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The Sandwich Solution

This really doesn't just apply in the context of marriage, but in any interpersonal relationship. An interesting read.

The Sandwich Solution
How one wife returned good for evil
By Gary D. Chapman

Has your spouse ever cursed you? I hope not, but if it should happen, Jesus gave us clear instruction: "Love your enemies, do good to those who hate you, bless those who curse you, pray for those who mistreat you" (Luke 6:27-28). That approach to verbal abuse is so counter-intuitive that it seems almost incredible. We're so accustomed to "fighting fire with fire" that the thought of putting water on the fire by means of kind words and actions has seldom crossed our minds.

Too many of us have become so intent on holding each other accountable that we have difficulty even hearing the words of Jesus. Many believe that if they take Jesus' words literally, they'll end up being "stepped on" by their spouse.

I believe the opposite is true. Undeserved kindness has the potential of deeply penetrating the heart of your spouse. Isn't that God's modus operandi? The apostle Paul recognized this when he said, "God's kindness leads you toward repentance" (Romans 2:4). God is our model, and with the help of the Holy Spirit, we are able to return kindness in the face of harshness.

One husband told me that his wife had tried to have a conversation with him while he was watching a football game. He responded harshly, "Can't we discuss this later? I want to watch the game." His wife left the room and 20 minutes later returned with a tv tray with a sandwich, chips, a drink, and a cookie. She placed it in front of him, kissed him on the cheek, said, "I love you," and walked out of the room.

The husband said to me, "I was overwhelmed. I didn't deserve her kindness. By the time I finished eating the snack, I knew I had to apologize. I turned off the tv, walked into the room where she was reading a book, and said, 'I'm sorry I snapped at you. I hurt you, and you turned around and made me a sandwich and told me you loved me. Will you forgive me for being so insensitive?' She smiled and said, 'It's okay. I forgive you.'"

He told me that he offered to talk with her immediately and not to watch the rest of the game. Her response was, "No, I can wait. I know you really want to watch the game, and I wasn't thinking about that when I started talking to you. We can talk when it's over."

Not many of us have learned to apply the teachings of Jesus to our marriages. We're happy to leave his words on the pages of Scripture and never translate them into life. However, those who do will soon discover that blessing those who curse you is a powerful way to enhance marital unity.

Many of us have read so much about "tough love" that we've failed to practice "tender love." I'm not suggesting there's no place for tough love in marriage. I'm suggesting tough love should be the last resort, not the first option. When you return good for evil, kindness for harshness, and pray sincerely for the spouse who mistreats you, you're creating a relationship that will make tough love much more effective if and when it is necessary.

If there's been no warmth, no tenderness, no turning of the other cheek, then tough love will often lead to divorce. The attitude of the offending spouse will be, Good riddance. Your spouse will shift his or her own guilt to you and blame you for the breakup of the marriage. If, on the other hand, you've walked the road of kindness, the offender who refuses to change his behavior will realize in the face of tough love that he's about to lose someone who is important to him. The erring spouse is far more likely to be repentant and seek reconciliation.

I am fully aware that without divine help, none of us will be able to follow Jesus' teachings. Our natural inclination is to respond to harsh words with harsh words and to mistreatment with mistreatment. However, this approach leads us spiraling downward in our relationship. The apostle Paul summarized Jesus' teachings when he said, "Do not be overcome by evil, but overcome evil with good" (Romans 12:21). Taking the high road of "blessing for cursing" creates a climate where we can more readily process our differences and learn to work together as a supportive team.
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Sanity (Or lack thereof)

Went out to run errands with the brother. We were stuck in a traffic
jam for about half an hour and were kidding around in the car. Suddenly
he uttered a scream.

"What's wrong?"
"Nothing"
"Must be the sun."
"No, actually it's the daughter."

(Wahahahhaha)

I think extended exposure to me does things to my brother's sanity.

The 3 Little Bears

Probably one of the hardest challenges in working life is navigating people issues. There is a convoluted tangle between ambition, hidden agenda, greed, pride and lust for power (among other things).

Last night, the little bear was trying to make porridge for the family. It was a very adult thing to do, and Little Bear felt very responsible and grown up. "Let's see," thought Little Bear, "Mama said to put salt AND pepper", and so he did. The porridge looked very nice when it was cooked, and so very proudly, Little Bear presented his concoction to Mama and Papa bear.

"Here you go, mama and papa! I took the initiative to make you porridge, seeing that you're tired from a day of foraging in the forest!"

"Excellent! I'm hungry!" roared Papa bear, and he grabbed a big bowl and gulped it down, before coughing and throwing it all up on the floor. "What is this slop?", Papa bear growled. "It's too salty! It tastes like sea water mixed with mud!"

Mama bear took a little taste of the porridge. "Well it *is* a little salty, Little. Try soy sauce in the future." (because they were oriental grizzlies)

"You said salt, didn't you, mama?" asked Little Bear, confused and embarassed, for the neighbours were already crowding around the den to see what the commotion was about.

"That might have been another recipe, honey," replied Mama bear, "I've always used soy sauce."

"Perhaps," said Little Bear, sorely disappointed at the lack of appreciation.

Later that evening, Little Bear trawled through the recipe book, and found that it WAS salt, and not soy sauce. Mama must have adjusted the recipe to suit the taste of oriental grizzly bears, but Little Bear never really knew. However, that was the last time Little Bear would try something like cooking again, for the bears who stood to benefit were not appreciative, the information was only shared in a small group of like minded bear cooks (although unintentional), and Little Bear was publicly humiliated, and afraid to try anything new again.

Reflections: Malaysia

I was out in KL with YC over the weekend, and boy was it fun!! I didn't exactly tell her straight out, but I was really impressed by her courage and independence in living abroad, since there's also a constant need for her to fend for herself, chart her career, make new friends as well as excel in her job. All this without much counsel and sound wisdom. A lot of my friends are doing this. I'm not sure if I'm brave enough to. Probably not.

There's lots that I'd brought back with me in terms of wisdom, though this isn't exactly the medium in which I'd share it. Something that had struck me though was the inflation, if you will, in Malaysia. YC's blogged about it, and this is general knowledge, but it never struck me as hard as it does to be on the streets paying those ridiculous prices for food and stuff.

A rough survey at major shopping malls and even hawker centres generally tell the same story; that despite the relative strength of the SGD, things in Malaysia are no longer cheap. A bottle of shampoo that retails at SGD10 would cost RM24, a kinder bueno selling at SGD1.50 would cost Malaysians RM3. That would be ok to stomach if the Malaysian wages were double that in Singapore. I don't see that happening.

You see, as I understand it, Malaysians generally earn the same that we Singaporeans do dollar for dollar, for relatively non international jobs such as sales, project management, stuff like that. When I say that, I mean for example, that if a project manager in Singapore earns an annual income of SGD60k, a project manager in KL would earn about RM60k (give or take a few ks).

What's happening, in this case, is a massive hike in the cost of retail products and services, effectively halving Malaysians' purchasing power, since wages are not moving up to the same degree in tandem. What with the sudden lifting of petrol and agricultural subsidies, we're witnessing the dichotomy between the effect of world trade as a great equalizer of product prices and the closing of arbitrage gaps, and the inefficiency of the labour market to adapt to these changes.

Why is the labour market not following the retail market? Why is it that the added resource from savings in labour does not channel back into the labour market? It probably has something to do with the fact that labour, or services, is (or are?) not as mobile as goods. In a relatively conservative country such as Malaysia, where citizens are brought up in a culture of communal living, to have to choose between a higher paying job abroad and staying at home with the family earning a meagre salary is a no brainer. It could also be evidence of a widening income divide, where those that are willing to move are being paid more, and the ones that choose family over money are punished with increasing distress over his ability to support his family of 10 and extended family of 25. I am, of course generalising a lot of things here, but stay with me. I believe that there will come a point where an as-yet undefined wage tolerance will be breached, and there will be an outflow of talent overseas which will bring wages back on par with international standards... Or at least improve the situation over there.

Chao keng day

I was trying to convince Mel to lunch with me around Orchard where my
doctor was, because I think I'll be on sick leave tomorrow for my bad
tennis knee. Bloody clumsy idiot I am.

Mel: got to work.. you wanna come eat in woodlands?

(Of course not, Mel!)

Me: I got no car.. Parents are in KL..
Mel: roles reversed i'd say the same thing. you'll be much closer to
your parents in woodlands
Me: Haha. Nice try. I'm king of the hill here. The boss. I'm in charge
of the house. My brother has to do my bidding.
Mel: yeh yeh.. like wat? cook for you?
Me: No actually I cooked for him. *sheepish look* There are no benefits
being boss. Being my brother's boss, I mean. He's an evil little twit.

Well I meant that in the most loving way!