2011 Prediction For Markets

As the year draws to a close, I get more and more queries as to what's in store for 2011. My view is that I think we will have a super bull market in most of Asia and other emerging markets.

What we had in 2010 is by and large still muted and did not have the requisite liquidity participation by private investors. 2010 was largely dominated by funds flow and institutional rebalancing.

In Malaysia, retail participation was still low. There is no doubt that there is ample liquidity on the sidelines, although much of it is actually in properties. Those in it would have had a fantastic run over the last 4-5 years, more incredibly brushing aside the global financial crisis merrily along the way.

Having a view is easy, justifying it is harder. Even if I can justify it brilliantly, if it does not come true, its pretty pathetic to me. Hence predicting and having it come to reality is more important than justifying or arguing it well.

So, what is the basis for my views, they are not that important anyway, I could b.s. my way very well. I think its more important that the weight you attribute to a person's view is their track record and the integrity of commentary. Its been nearly 6 years, not every post was a gem, but I hope the readers will be able say to themselves "enough said, say no more".

But I am only confident of the first 6 months, I cannot tell for the second half because I believe markets will overshoot in the first half, and that could bring the markets to highly vulnerable levels then, which would make prediction useless.

Blog Update

I was sitting here nursing my bloated Christmas stomach and regretting that final glass of Port last night and I started to wonder if there is anything I could do to improve my blog.
I am pleased as punch to have recieved over 2000 page views from all over the world but I got to think that I might be confusing too many people by trying to inject humorous memoires alongside serious industry comment.
As a result I have introduced two new blog sites to cover each story type. These can be found on:
http://travelprotales.blogspot.com/
and
http://businesstravelcomment.blogspot.com/
If you would like to read both types I am continuing with this address which will still feature everything I produce.

Thanks so much for reading and PLEASE tell me if there is anything you would like me to pontificate about. HAPPY NEW YEAR!

Have You Been To Lan Je?

I think this restaurant needs little introduction. They have one signature dish, the steamed tilapia (fei chou yue). They do not drown the fish with much soya sauce or cooked oil. Its loaded with ginger and hot chillies. Owing to the turnover, you can bet that the produce is very fresh. You don't get the mud-after-taste which is prevalent for this kind of fish. You can have normal or spicy, trust me, take the normal, the spicy one will be way too much chilli padi all over. The over generous amount of ginger is a trademark, will make you hot but ginger is good for you anyway.

The salty prawns is a decent dish as well. As it is probably farmed prawns, the taste of the prawns lacked something but its crunchy and pretty good overall.



Or you can go to their 4 other restaurants, two in Cheras and the HQ at Rawang. The other is in Kepong I think. The other dishes worth sampling are: fansueyip, and probably the kungpo chicken (as I saw many tables ordering that).

Rawang:
27-28, Block C, Jalan Rawang
Gerai MPS, Batu 16
Rawang

Cheras:
No. 10G & 12G, Jalan Kasturi 3
Plaza Kasturi
Batu 11, Jalan Balakong
Cheras

Kota Damansara:
F-50G & 51G, Jalan Teknologi 3/9
Bistari “DE” Kota
Kota Damansara
PJU 5, Petaling Jaya

A secure life Abroad 2 - Zambia

Zambia was my main overseas posting and I stayed there for 2 years. It was around 1973 which was the time when the battle for independence was in full swing in neighbouring Rhodesia (now Zimbabwe). That did not bother me much as I was posted to the Zambian ‘city’ of Kitwe up on the Copper Belt and a long way from the border conflict. Or so I thought.

What I failed to grasp was that although the actual fighting was taking place in the south the fighters themselves had many reserve and base camps around Kitwe. This meant that not only did residents have to cope with the numerous local gangsters but also raw army recruits who had no money or food but plenty of assault rifles and grenades. Unfortunately it was not rare to see troops selling Kalashnikovs to the local bad guys for money and food thus increasing their dangerousness by 1000%

We looked after ourselves as best we could. Most houses had razor wire around their gardens, barred windows, alarms and fierce dogs. We had our fierce cat called Sooty which I told you about in an earlier story. At least he had hospitalised the next door Dobermans once which was a pretty good reference!

People also hired night security cards from a local company to patrol their perimeters until dawn. These guys were supposed to be there as protection and to scare off intruders but in actuality they spent most of the time asleep. Unlike the murderous guard I had in Ghana these people were mainly weak, hungry and very poor and, in some ways, I could understand why they were not willing to risk their lives for a bunch of wealthy Europeans. I used to recognise this so I paid mine extra, gave them food and said that all I wanted was for them to scream a warning before running. That and to stay awake and not smoke the local drug called Dagga.

The security company recognised the problem of guards sleeping on the job and they employed supervisors to cycle around the neighbourhood tinkling their bells and calling ‘guard’ until they got an answer. More often than not they used to get no reply so the volume kept on increasing until they were shrieking ‘GUARD! GUARD!’ at the top of their voices. By this time everybody in the house was awake…except the guard.

Our most regular guard was called Greatson. He was a little better than the rest so I ended up pampering him quite a lot. It got to the point that I would play his favourite ABBA record every night. He used to lean back on his patio guard chair until his head half entered the lounge window and join in with a baritone drone. I also gave him a case load of my dad’s old clothes and told him to help himself.
Unfortunately the better I treated him the more complacent he got and the less reliable. Things came to a head when he turned up one evening drunk and dressed in an old silk smoking jacket/dressing gown which he had found in the case of cloths. He flopped in his chair looking like Noel Coward on a bad day and started singing Chiqitita from ABBA’s greatest hits. I went to bed in disgust.

About 2 in the morning I was woken from an uneasy sleep. As I regained consciousness I started to hear tinkling of bells, loud shouts of GUARD, GUARD and the loudest snoring possible. Clearly Greatson was out cold and his employer had lost patience. The next thing I knew a stone crashed through the bedroom window. It had come from the security supervisor and been aimed at Greatson but missed him by yards.

‘That’s it’ I cried and stormed outside to confront Noel Greatson Coward who was tucked up in his dressing gown smiling angelically in his sleep. I shook him again and again with no success. He is not going to beat me I thought. This man is going to wake up the hard way I thought and I picked him up. I held him for a moment in my arms and was about to drop him on the patio when he started nuzzling his head up against my neck still with that daft smile on his face.

No, I decided, the patio is too good for you my friend, and I carried him around to the swimming pool. It was well illuminated by the security lights and I lurched to the edge of the deep end. I dropped him. Well actually not dropped, more stumbled. We both went over and crashed into the water. Greatson woke up when he was about 3 feet under. His eyes dilated and his mouth opened discharging a large bubble of water. My face which was about 2 inches from his was being held in a panicked and vice like grip.

With a little bit of help we finally managed to get out. We looked sorry figures. Him in his soggy smoking jacket and me in my now transparent pyjamas. Greatson kept saying he had not been sleeping. ‘I was resting my eyes Bwana’ he said. Yes, and ears and senses I thought. His supervisor who had managed to climb over the garden gate to help pull us out started hitting him over the head with a stick and it took 10 minutes to throw them both out.

I heard they had sacked Greatson and I was very sorry. After all he had only let us down once and I felt responsible for him being thrown back on the streets. A couple of weeks later I went a nearby friend’s house for dinner. It was a great evening and we sat in his lounge drinking brandy and listening to the African night sounds. Suddenly I could hear some faint deep singing from around the corner. Someone was singing ‘Super Trooper’ by ABBA. I peeped around the corner and yes, it was Greatson reclining in his new security guard uniform and smoking something suspicious!

Now We Are On To Something ... Malaysian Football

Finally, after years and years head shaking by Malaysians whenever we talk of the national or state football teams, we now have something to sink our teeth in. Its very easy to be critical of everything when asked why Malaysian actual footballing standard is nowhere near the average Malaysian's passion for the game. First let's get some common questions/doubts/assertions out of the way:

a) the best years are behind us - that's a bullshit sentiment, it all depends on what we put in, its never too late to change or modify our ways, if we keep a negative attitude... that kind of defeatist attitude will get everybody nowhere but a dead end

b) K. Rajagopal - for the past 15 years, there is no better coach than K. Rajagopal, authorities please bear that in mind

c) racial imbalance - is there a racial imbalance in the current squad, well yes... but nobody should really complain because many Chinese do not play football after their teenage years, its worse now with the proliferation of internet and PC games, guess who will be still at the fields playing ... take the Singapore experience, they even have a pro league and Singaporean Chinese make up less than 20% of the players ... its reality. Now, the only time you see Chinese playing football in Malaysia is on weekends when the old farts play futsal.

This under-23 squad stands a good chance to make a mark as a top 5 Asian team, maybe even qualify for the next Olympics, if the cards are played right. If Japan and South Korea can be where they are now, Malaysia can certainly get there because these two teams' football standard were still lagging behind Malaysia back in the 60s and 70s.



Brief History of Malaysian Football Grandest Period

Top coaches, when we say top, we mean they were really good, 1960s coach Abdul Ghani Minhat, Dave McLaren, followed by in the 70s Jalil Che Din, M. Kuppan, Chow Kwai Lam and Karl-Heinz Weigang.

In the early 1950s until the 1960s, Malaya's best accomplishment was winning the Asian Games bronze medal in 1962 in Jakarta by defeating South Vietnam 4-1. Top players then include: Abdul Ghani Minhat ("King Football"), Arthur Koh, G. Govindaraju, Robert Choe, Edwin Dutton and Stanley Gabriel.

Following the formation of Malaysia, there were other great players including: Abdullah Namat, Shaharuddin Abdullah, Wong Fook Chuan, N. Thanabalan, Norbit and Abdullah Zulkifli Nordin. Malaysia managed to qualify for the 1972 Olympics in Munich by beating the likes of Japan, South Korea, Taiwan and the Philippines. Two years later, Malaysia once again won the bronze medal in 1974 Asian Games in Tehran after beating North Korea 2-1. Malaysia continued to be a force in Asia by qualifying for subsequent Asian Cups in 1976 and 1980.

In the mid-70s, this is where the Malaysian team was most balanced and talented. Each player is like a superstar in their own right. They include: Mokhtar Dahari, Harun Jusoh, Santokh Singh, M. Chandran, Soh Chin Aun, R. Arumugam, Shaharuddin Abdullah, Wong Choon Wah, P. Umaparan, Wong Hee Kok, Shukor Salleh, Lim Fung Kee, Wong Kou Foo, Isa Bakar, Ali Bakar, Syed Ahmad, ... If you have seen them in action, you would liken them to a very good Premier League team, seriously.

Malaysia also qualified for the 1980 Olympics in Moscow, but the government boycotted the 1980 Olympics to protest the invasion of Afghanistan. Even in the early 80s the players were still pretty fantastic, we had Reduan Abdullah, Serbegeth Singh, Hassan Sani, Chow Chee Keong, Lim Teong Kim, Zainal Abidin, Bakri Ibni ...

Wong Choon Wah (17 Feb 1970)


Shaharuddin Abdullah (12 Aug 1970)

Super Mokh deserves special mention here, in 1975, he represented the Malaysia national football team against English giants Arsenal. Malaysia won the game 2–0, with Mokhtar scoring both goals. After the game, Mokhtar was rumoured to have been offered a chance to play for the Gunners. He also famously scored a goal in a 1–1 draw against England national football team's B team in 1978, dribbling past half of the opposing team coached by Bobby Robson (almost reminiscent of Ryan Giggs' very special goal against the Gunners in that famous FA Cup semi final tie). Paul Mariner was on the score sheet for England that day.

We can all sit back and blame corruption in the local league, or the advent of subscription TV which brought fans closer to European football, as causes for the demise of Malaysian footballing standard - to be fair, there is a strong element of truth in both. It was never going to be a great way to earn a living, as a footballer in Malaysia and as our lifestyle options increased, as our country developed, we basically had a lot more things to do than play football in the fields.

When we had nothing, playing football was great and cheap and widely available ... if we had top spinning competition, badminton, sepak takraw contests then ... we would be more than capable and competitive. We just don't do much of all that now - when was the last time your kids or nephews played those games?

The Year In Review

As usual The Edge came out with its year in review wrap edition. I will try to follow the publication's focus page by page with my take.

Corporate Malaysia's New DNA - This I think is worthy page 3 material. The ETP and the corporate moves over the last 3 months in particular have seen a strong willingness by GLCs to work with non GLCs, either in a joint venture capacity or even a merger. Naturally this directive has to come from the top. This is an important step to leverage on each side's weaknesses and strength. Its a loud acknowledgment of what is lacking and what needs to be done that is synergistic. Its about reaching a goal faster. It means stop running around in circles with same bunch of issues and problems and results.

The accelerated approval for the LRT/MRT in appointing MMC-Gamuda was a pleasant shocker. I think investors are under appreciating the flow on benefits, and this actually underpins a brilliant run for at least 1Q2011.

2010 Best Deals - This one is hard to agree as they always put the biggest deals as the best deals, maybe they "had to do it". The Parkway Holdings deal to me was a poor deal. The bad moves were created when Khazanah allowed the other side to control the board. Then its a matter of playing hard to get by one side, and having to keep upping the offer for the other side. Its a good deal for Khazanah over the longer term but the deal should have been better strategised a long time ago.

The best deal is not Tanjong but the privatisation of Astro. Its thinking 3 steps ahead on why Astro is better off being privatised. It is infinitely better to relist when regional ops are better aligned and growth path is clearer for each unit.

The most audacious deal has to be STT's invetsment into U-Mobile. Till this day I am still trying to figure the logic. Too esoteric for me to comprehend this deal.

Best IPO - The Edge put MMHE as the winner but it should be the Luckiest IPO, not the best. It was damn lucky to find a foreign party willing to accumulate a strategic block of shares in the open market, thus pushing up the post IPO performance. Sometimes you have to be lucky to be a winner though.

Worst IPO - JCY, The Edge struck the right chord by highlighting the high pricing and why the controlling shareholder was selling so much shares as part of IPO. Now we all know why.

Loyalty Cards – What value?

There have been a growing number of reports recently about airlines reducing the number of ‘ex gratia’ cards negotiable within corporate agreements and I have no doubt whatsoever this will increase in future. There are a few possible reasons for this trend.

These cards started as a way of keeping the loyalty of regular travellers by giving a range of benefits from comfortable lounges and ‘free’ flights to priority for upgrades. They became a major instrument for wooing business people away from their competition, and possibly company policy by making the travellers feel special in a rapidly comoditising market.

Some corporations hated them and went to great lengths to try and cancel out their allure. A few tried with little success to confiscate the travel element (miles) for company use. Others took a different view and used the attraction of these loyalty clubs to underline and support the use of their chosen policy carrier. It was then that such awards became a significant beneficial component within corporate deal negotiations.

So all of a sudden airline loyalty clubs became valuable to corporates and a tool to sweeten a change in policy. This whole change thing became a great deal easier if you were able to hand out membership cards with substantial benefits to key travellers. As important were the top tier cards which appealed to status conscious senior executives. These Platinum/Black/Premier cards were usually allocated in very small numbers and linked to the company’s volume potential. Often you would see joint CEOs scrapping like alley cats as to who should get ‘The Card’ and TMCs being pestered to broker more of them.

Much of the above still happens now but the mood of the airlines is changing for a number of key reasons. Firstly the number of cards at high status (gold etc) has grown alarmingly causing lounges to become too full for comfort. The cost of these lounges and other benefits has risen correspondingly whilst their exclusivity has declined. I have been in some lounges which are busier and noisier than the seats outside them.
Equally there are fewer seats available for purchase with loyalty points which can cause problems.

The airlines in their quest to reduce distribution costs are now looking very closely at the value, and importantly, the cost of these schemes. They have gone from seeing these clubs as less of a marketing ploy and more of an out of control overhead. As a result they have identified the value and put a budget cost against it. This means that every time an airline salesman gives a card their budget gets debited accordingly. They now have to manage this cost in the same way that they do discount pricing and other overheads.

This state of affairs has reduced the number of cards being awarded within deals. Incidentally the same thing works within the airlines themselves. Senior airline management are having their own travel cards downgraded too and they are probably just as aggrieved as the corporate buyer. The problem is that if you take something away from someone it has at least twice the effect as giving it to them in the first place. What you never have you never miss!

I guess what everybody will have to realise is that if you drive mainstream airlines to behave like, and compete with low cost carriers you will see the continuing decline in such ‘luxuries’. Also, if you manage to finally be successful in mandating policy to your travellers then the need for such loyalty inducements disappear anyway.

A Blessed Christ-mass To All Readers

My favourite song for Christmas time has always been Grown Up Christmas List ever since I heard Amy Grant sang it years ago. She was the original singer even though you could find many artistes covering it now (Michael Buble, Kelly Clarkson and Natalie Cole, to name a few). The song was composed by David Foster and Linda Thompson Jenner. At a time when we are busy buying and receiving presents, or maybe take it as an opportunity to drink too much, we get lost in all the merriment. Its the birthday of Jesus, does anybody know what he wants for his birthday?

Too often the church and fellow Christians fail to share the message of Christmas, we get all caught up in the theology. While we trumpet the need to be "saved", the underlying message is to bring mankind together and lookout for each other. We try to hate the sin but love the sinner ... but at times I wonder "where is the love"? When we judge others' lifestyles, sexual preferences, ... how we treat our fellow human beings though their occupation may be maids, labourers or beggers ... where is the love that you say you possess??? .... when we burn buildings, trigger off bombs in the name religion ... where is the love that you say you possess??? I think God when he appears, might say to all: "That's NOT what I meant!!!"

In the end, its human frailty that needs attention. I loved Amy Grant's version but the recent one by Charice (though I regard her singing as a bit precocious at times) was very good as well.




Do you remember me
I sat upon your knee
I wrote to you
With childhood fantasies

Well, I'm all grown up now
And still need help somehow
I'm not a child
But my heart still can dream

So here's my lifelong wish
My grown up christmas list
Not for myself
But for a world in need

No more lives torn apart
That wars would never start
and wars would never start
And time would heal all hearts
And everyone would have a friend
And right would always win
And love would never end
This is my grown up christmas list

As children we believed
The grandest sight to see
Was something lovely
Wrapped beneath our tree

Well heaven only knows
That packages and bows
Can never heal
A hurting human soul

What is this illusion called the innocence of youth
Maybe only in our blind belief can we ever find the truth

p/s some of you may say, its not just Christianity that wants all that ... so true, so true ... maybe its time for you to find out where's the difference.



Well, as they say, its easy to love the world, but its hard to deal with my cantankerous neighbour ... supporting big issues/causes is easy, loving someone or dealing with a difficult friend is hard. First of all, don't be "that difficult friend".

Anyway, I digress. No better time to get to write this, before my readers all fall off their chairs, ... my all time fav Christian album. Hymns used to drown me to sleep when I attended church as a kid every now and then with my aunt. Even in a progressive church setting, singing hymns was not a welcomed thing. When I got hold of this album some 20 years ago, it was so inspiring and fun to listen. Sandi's voice was exceptional, the arrangement was brilliant, the pacing was improved for many songs. In my mind hymns are exceptional pieces of music because they are theologically correct. The ones in her album are all gems. Get it if you can, its unbelievably good.

Sandi Patty Hymns Just For You Album Track Listing

---

1. It Is Well With My Soul 2. Fairest Lord Jesus/I'd Rather Have Jesus: Fairest Lord Jesus / I'd Rather Have Jesus 3. How Great Thou Art 4. In the Garden/Just a Closer Walk With Thee/What a Friend We Have in J: In The Garden / Just A Closer Walk With Thee / What A Friend We Have In Jesus 5. Old Rugged Cross, The 6. Lord's Prayer, The 7. Amazing Grace 8. To God Be the Glory/Holy, Holy, Holy/Blessed Assurance/Great Is Thy: To God Be The Glory / Holy, Holy, Holy / Blessed Assurance / Great Is Thy Faithfulness 9. Might Fortress Is Our God/Rock of Ages/Victory in Jesus/Because He Li: A Mighty Fortress / Rock Of Ages / Victory In Jesus / Because He Lives 10. Sweet Hour of Prayer/I Need Thee Every Hour/Just as I Am/Turn Your Ey: Sweet Hour Of Prayer / I Need Thee Every Hour / Just As I Am / Turn Your Eyes Upon Jesus

Marketocracy Portfolio As At 22 December 2010

price history
		SMF m100 S&P 500 DJIA Nasdaq
		Graph Period: [7 Days] [30 Days] [90 Days] [6 Months] [1 Year] [2 Years] [3 Years] [4 Years] [5 Years] [Since Inception]

recent returns vs. major indexes
		Beating Today MTD QTD YTD SMF 1.02% 8.26% 13.20% 17.02% S&P 500 0.60% 5.73% 9.76% 14.03% DOW 0.48% 4.29% 6.40% 10.07% Nasdaq 0.68% 6.06% 11.86% 16.76%

recent returns
		RETURNS Last Week 1.17% Last Month 6.82% Last 3 Months 14.72% Last 6 Months 20.57% Last 12 Months 18.88% Last 2 Years 110.06% Last 3 Years N/A Last 5 Years N/A Since Inception 47.82% (Annualized) 17.62% S&P500 RETURNS Last Week 0.54% Last Month 4.11% Last 3 Months 9.95% Last 6 Months 15.34% Last 12 Months 15.41% Last 2 Years 46.90% Last 3 Years N/A Last 5 Years N/A Since Inception 4.85% (Annualized) 1.99% RETURNS VS S&P500 Last Week 0.62% Last Month 2.70% Last 3 Months 4.77% Last 6 Months 5.23% Last 12 Months 3.47% Last 2 Years 63.16% Last 3 Years N/A Last 5 Years N/A Since Inception 42.97% (Annualized) 15.64%

alpha/beta vs. S&P500
		Alpha 15.77% Beta 1.15 R-Squared 0.78

turnover
		Last Month 0.00% Last 3 Months 9.49% Last 6 Months 29.37% Last 12 Months 111.43%

		Symbol Price Shares Value Portion of Fund Inception Return NYB $18.35 6,000 $110,100.00 7.37% 67.50% FMC $80.25 1,500 $120,375.00 8.06% 43.39% Details F $16.99 8,000 $135,920.00 9.10% 53.08% Details QSII $71.30 1,500 $106,950.00 7.16% 32.09% Details PLD $14.26 8,118 $115,762.68 7.75% 29.26% Details MIDDLE C $4.74 25,000 $118,500.00 7.94% 27.19% BP $43.54 3,000 $130,620.00 8.75% 27.41% WFMI $51.35 2,500 $128,375.00 8.60% 25.50% GE $17.90 4,000 $71,600.00 4.79% 20.87% UCO $12.06 6,000 $72,360.00 4.85% 17.35% Details AFL $56.60 1,500 $84,900.00 5.69% 1.70% Details BAC $12.98 14,000 $181,720.00 12.17% 11.20% Details

Close Date	Type	Symbol	Shares	Net Avg. Price	Net
Oct 29, 2010	Sell	SUN	3,000	$37.4391	$112,317.29
Oct 28, 2010	Buy	AFL	1,500	$55.6517	$83,477.58
Oct 21, 2010	Buy	BAC	5,000	$11.75	$58,750.02
Aug 17, 2010	Sell	POT	1,000	$140.3169	$140,316.93
Aug 12, 2010	Buy	F	8,000	$12.4259	$99,407.51

Empire@Subang Jaya and Di Wei

The newish Empire shopping mall @ Subang is one snazzy place. Its not too big and parking is not too bad (for now). There are not that many chain stores which gives the place a bit of character. There's the hair salon on 3rd floor that gives you an iPad to play with while getting your hair done (yes, they have more than a few laying around). The Loaf is there at the foodie floor and you must check out the other end, a little cafe that serves great coffee and macaroons and stuff. There is a place called Vanilla on the top floor that serves the best lasagna, ready made for take home as well.

Then there is this funky Chinese restaurant Di Wei (Royal Taste/Cuisine). Its modern Chinese decor will unsettle your senses but the food is usually good to pretty good. They have an unbelievable Christmas set dinner - tell you the price at the end.


This has to be the tastiest lormaifan ever, its very light and mini, could have 3 of these.

There's your veggies and pork rib (the cod fish ran out). Decent.

Thin turkey chop in black pepper sauce, surprisingly very good. There's also the prawns dish which was forgettable.

Are we in a museum? The chairs a bit modern, the longest chopsticks you have ever used, and wait till you see the lighted catwalk in the middle.

Abalone, wukai, dried scallop and meat - very very soothing. This soup alone I'd be willing to pay RM35.
The whole shebang: RM98++ ... but will last till 23 Dec only. They even let me substitute the dessert for my fav ginger tea with sesame tongyuen and my companion switched to thunsuetyee, great tasting. Oh, and you also get a glass of red or white wine, I told you this was modern Chinese!!! Merry Christ-mass!!!

A Christmas Tale of Travel Distribution – 2

Cast of Characters:

Air Schizophrenia Services (ASS Air) – A major airline from Never Never Land.
Pass it on Travel (Past Travel) - A neurotic TMC who misses the old days
Scrooge Global Inc (Scroogey Inc) - A global corporation that hates travel budgets
Vera Merchant Fee ( VeraCard) - A credit/charge card that does not add up
Online Travel Agency (Ollie OTA) – Illegitimate love child of Air Schizophrenia.
IATAmania (Colin Cartel) - An airline association that interprets
the rules as they go along.

Globally Dysfunctional (Gordon GDS) – A misunderstood much maligned cog in
the Distribution wheel who nobody wants to pay

(Again, a work of absolute fiction and all the characters are simply a result of my overactive imagination)



It was a quiet peaceful Christmas Eve. It was mainly quiet because half a teaspoonful of snow had landed on the tarmac at London Heathrow causing the entire airport and access road infrastructure to go into meltdown and stop completely.

ASS Air barricaded himself in his office, switched off the passenger information announcements and tried to turn his mind away from the groaning, lamentation and anger coming from those selfish passengers in the departure hall. After all he had given them foil blankets so what were they moaning about?

Finally he decided to think back over the last year and consider what he might do in 2011. He tried to focus on all the fun things and the new friends he had made which lasted about 20 seconds so he then moved onto the progress he was beginning to make on distribution matters. He had quite a busy year in this area but he considered it mere positioning for what was planned for the coming year. He would show those vultures (I mean ‘partners’) a thing or two.

He started ticking off the successes and failures of the past. He congratulated himself for his success in transferring a major chunk of his own selling costs down the line. Who would have thought it could be so easy! Just put the squeeze and expense onto Past Travel and watch them ricochet onwards to Scrooge Inc. Job done! Except Scrooge being a savvy customer had let it happen in order to commoditise and claw back.

He was however beginning to understand Scrooge a lot better. It was difficult to start with but when he realised that old Scroogy played by different rules and was not impressed by his arrogance he found more subtle ways to play him at his own game. He discovered that as long as the up front price made Scrooge look good he could tinker away with the ancillaries rather like those ‘ghastly and common’ No Frills guys do.

It had been a shame about the black sheep of his family. After the wild euphoria of creating his very own online travel agency Ollie OTA had ultimately disappointed him. Now he had to try and undo the damage by putting him down in as humane way as possible. So off he had gone with his ‘content club’ and bludgeoned poor old Ollie as if he was a seal pup. Trouble was Ollie had a tougher infrastructure than he realised. ‘Memo to me’, he thought. Get in touch with Colin Cartel in IATA land and get him to come up with some kind of ‘creative’ rule interpretation to help me. After all good old Colin will do exactly what I say if he knows what is good for him. I am after all his boss.

That left just VeraCard and Gordon GDS to sort out. Both were thorns in his distribution sides but he was beginning to make serious progress. All he had to do was close his eyes to what travellers want and appeal to Scrooges desire for cheap nets and he would be nearly there. Vera would be much easier than Gordon. All he had to do was introduce a premium for using Vera (preferably higher than she cost) and watch old Past Travel do the rest. Scrooge would have to accept, especially if his competitor chums followed suit and they sure would like they always do.

Gordon GDS is another prospect entirely. Yes, Gordon is as anti change as he is and yes, he wants it all his way and yes, Gordon wants to increase his wealth not to diminish it. But like AssAir, Gordon does not appear to be able to come up with any more positive solution than more deep-seated intransigence. “Everything must change”, they cry, but not me! So Gordon hides behind the walls of Fortress Full Content while poor old AssAir tries to bash it down access brick by access brick. Meanwhile Scrooge and Pass It On shout for him to stop before they get hurt by the aftermath..

What a lovely time of the year Ass Air mused as he snuggled deeper into the ego massage machine chair that had been installed behind the double-locked steel door of his airport office. Have those damn passengers stopped snivelling he thought as he eyed the lovely looking ‘humble pie’ his cabin crew had cooked for him. No, he thought, I can always eat that when I absolutely have to and it will be Spring by then.

He reclined his lounger into bed mode and drifted into a blameless sleep.’ Oh what fun I will have next year’ he thought in his last moment of consciousness. But then he had a terrible dream. It involved all his antagonists sitting with him in a room sponsored by corporate travel trade associations and he was being made to cut a deal that would be fair for all and serving to the travel community.

But that really would be a fairy story….

US Trade Deficit and China

While many have been harping about the US trade deficit and the role China has in it, that has been the key argument to support a stronger yuan. However, the reality is quite different. I have said before that about 60%-70% of China's exports are actually produced and manufactured by foreign companies operating in China. The WSJ has a brilliant article on the iPhone trade imbalance and perception. Two academic researchers estimate that Apple Inc.'s iPhone—one of the best-selling U.S. technology products—actually added $1.9 billion to the U.S. trade deficit with China last year, officially.

How is this possible? The researchers say traditional ways of measuring global trade produce the number but fail to reflect the complexities of global commerce where the design, manufacturing and assembly of products often involve several countries. A distorted picture is the result, they say, one that exaggerates trade imbalances between nations.

Trade statistics in both countries consider the iPhone a Chinese export to the U.S., even though it is entirely designed and owned by a U.S. company, and is made largely of parts produced in several Asian and European countries. China's contribution is the last step—assembling and shipping the phones.

So the entire $178.96 estimated wholesale cost of the shipped phone is credited to China, even though the value of the work performed by the Chinese workers at Hon Hai Co. accounts for just 3.6%, or $6.50, of the total, the researchers calculated in a report published this month.

"What we call 'Made in China' is indeed assembled in China, but what makes up the commercial value of the product comes from the numerous countries," Pascal Lamy, the director-general of the World Trade Organization, said in a speech in October. "The concept of country of origin for manufactured goods has gradually become obsolete." Mr. Lamy said if trade statistics were adjusted to reflect the actual value contributed to a product by different countries, the size of the U.S. trade deficit with China—$226.88 billion, according to U.S. figures—would be cut in half. To correct for that bias is difficult because it requires detailed knowledge of how products are put together.

Based on U.S. sales of 11.3 million iPhones in 2009, the researchers estimate Chinese iPhone exports at $2.02 billion. After deducting $121.5 million in Chinese imports for parts produced by U.S. firms such as chip maker Broadcom Corp., they arrive at the figure of the $1.9 billion Chinese trade surplus—and U.S. trade deficit—in iPhones. If China was credited with producing only its portion of the value of an iPhone, its exports to the U.S. for the same amount of iPhones would be a U.S. trade surplus of $48.1 million, after accounting for the parts U.S. firms contribute.

Other economists say some aspects of the researchers methodology may have led them to overstate their case. The study, for example, assumes that companies such as Toshiba Corp. and Samsung Electronics Co. that make components for the iPhone wholly assembled them in their home countries. But many of Apple's suppliers have manufacturing facilities in China, so it's likely that some portion of the components they build for the iPhone are made in China as well.

The latest results are broadly similar to analyses made by the Personal Computing Industry Center at the University of California, Irvine, of the trade and manufacture of another Apple product, the iPod. That research also found that Chinese labor accounted for only a few dollars of the iPod's value, even though trade statistics credited China with producing its full value.

Read more: http://online.wsj.com/article/SB10001424052748704828104576021142902413796.html#ixzz18TMfW1B5

p/s of course the other fascinating thing is how much an iPhone actually cost to produce, ... even if you lock in another $100 for advertising and marketing, Apple is enjoying incredible margins before appointing the "die hard telcos" wanting to work with Apple.