Hot winter

This is the greeting season time. Normally, as seen in previous years, the center must be decorated lavishly by now. But it is not at the moment. There are decorations, but for the new year event. Big hotels fire their Santa Claus and reindeers. The only Christmas-themed thing that still thrives well this year is Christmas tree which does not cost too much. What happens? Do people no longer enjoy Christmas?

Fortunately and sadly, the answer is no. People still love Christmas. The only problem is that they cannot afford it now.

It has been a tough year.

There was a lot of hope when this year began 11 months ago. It is the year of dragon.  After year 2011 with too much inflation that dragged down people’s lives, many hoped that the economy would fly again with the dragon. It has not. In contrast, things seem worse than the last year.

It is true that in the first months of this year, there were some positive signs. VN-Index recovered and spiked. Inflation halted. Trade deficit decreased. However, it was just a matter time till the problems appeared. Together with the decrease of inflation was the GDP growth reducing. Inventory increased to 30% as VN-Index stopped going up.  Credit became more and more inaccessible since interest rate was still too high. More than 200,000 enterprises went bankrupt. Foreign Direct Investment left us. For a moment, Vietnam paused.  People had no idea what happened and what to do next.

It is difficult to find out the root of all the problems. Was it because of the financial sector? Or the real estate market? In economics, nothing stands alone. They all have links and connections to others. Banks were the victims and also the culprit. They had given too much credit to the real estate market. The estate market, on the other hand, had been valuated too high. How can people with income of just $700/month afford a $70,000 apartment? The bubble formed. Anytime a bubble formed, bad things were going to happen soon. Things might get worse since it was the housing bubble, the most valued asset in the economy. The bubble busted when hardly anyone was able to buy a house, even speculator. Banks had fueled the bubble. Now they are the victims of that bubble. Debt was not repaid. Capital flow was stuck. Bad debt rate was over 8%. Only a few constructions still run as projected. Without the demand from construction sector, cement, brick and wood companies faced great difficulty. Banks, therefore, were afraid to lend more. Ironically, people, too, were afraid to borrow. The whole economy lost its good credit. And without credit, nothing can continue. After all, the answer for all the problems is simple, and sadly, familiar: the misallocation of capital. Business is not only about making money. It is the art of allocate and connect things.

When things are good, mistakes are often ignored. People can do whatever they want as long as they do not get caught and what they do still brings profit. But now things do not look bright. People turn against each other.

In the spring of 2012, one of the biggest banks of Vietnam had problems with its share owners. Months later, a leader of a famous bank was arrested. Then, that bank’s CEO resigned. Stock market crashed, losing $5 billion. Rumors helped spread the panic. People look more closely to the recent banks’ activities, their assets and equities to know what was really going on. Finally, it came out that there were too many problems and violations. Crossed-owning, gold business, interest rate, … There was one M&A between two banks which caused the former CEO of one bank to be a normal officer. However, she was still lucky because many bankers were fired. Financial sector is now a dead field.

Government policies were issued to improve the situation. Gold is now a monopoly business. It would be idiot to judge the effect of those policies now. All the policies have its lag. It needs time to blend into the market and effect the economy in long-term. However, monopoly is never a good idea.

Though things seem dark, there is some brightness recently. People are talking about reconstructing the whole system. In the next year, the housing market may hopefully get a little warmer. Bad debt will be paid due to the preservation fund.

If we ever have a chance to read newspaper or watch TV at this time of a year, we will see or hear some predicts about the next year. However, not this time. Things have never been so unstable and unpredictable. The storm has not been over. The dragon has failed to bring Vietnam fly with it.

May God help me and my friends.

Kz

in the last days of 2012. seven months before his graduation.

Hunters and Pickers

Have you ever wondered why women usually appear in joke about traffic accident while men are more frequent drivers? Normally, women are considered as traffic disaster. They are said to have a bad sense of space. But is it true? And from where did such concept origin?

Since the dawn of mankind of history, we had divided the labor force into two groups: hunters and pickers. Hunters were the ones going far, chasing and killing animals. In contrast, pickers stayed close to the tribe, picking fruit from trees and taking care of the younger generation. While picking fruit demanded little afford, running after a deer and throwing pikes required much energy. Therefore, in order to improve the productivity of the whole community, men were responsible for hunting and women took the job as a picker. Since then, this division has led to a biological gap between men and women.

To understand how the gap had appeared, it is necessary to look at the job of each sex.

As mentioned above, hunters’ task was to killing the animal and bringing it back to the tribe. Simple as it may sound, such task has been the main motivation for the evolution of all creatures since the appearance of the first cell. To hunt an animal required the hunter to patiently wait for his prey’s mistake, to run after and away from the animal for many miles, and to observe the target from a long distance. The closer the hunter got to the prey, the greater the chance that he would be recognized was. Recall the moment we want to see something clearer, what do we do? We squint. And so did the hunters. They had to squint to make the vision better. They might not see things around them, but they had to see the prey as far as possible. The longer their vision was, the better. Moreover, being a hunter does not only require a good vision, but also a good sense of space. Normally, hunters had to travel a long distance to find the food. Therefore, without a good sense of space which could help him to determine the direction, he would not have been able to find his way home. Women did not go that far from the tribe, they did not need to obtain such ability.

However, all the things above belong to the past. Do they still hold true in this modern day when we no longer have to hunt or pick? The answer is “yes”, such things still exist, at least for now. Here comes the evolution machine. Men with better visibility would have more food and therefore, stand a better chance to help him and his tribe to survive, and spread his advantage to the next generation. Though after years of civilization, hunting is no longer so necessary or popular, one’s ability is genetically coded and will not be gone easily. Moreover, other tasks have appeared and required the ability of a hunter. 4000 years ago, it was the need of throwing a spike precisely. 3900 years later, it was the standard for soldiers to use gun from a very far distance. Nowadays, in transport, it is the ability to see a burden approaching and determine the direction. Due to their ancestors’ reputation as hunters, men still hold responsibility for such task and therefore, the ability to sense the space and look as far as possible has never been unused or lost.

Women, as pickers, in the other hand, did not need a long vision. However, as they stayed at home protecting their child, they needed something else. The advantage in women’s eyes over men’ is its ability to have a wider vision. They had to notice every movement in their surroundings. The wild animals could jump out at any moment and from everywhere. That is why women often criticize her spouse for looking too directly at a different girl. We men have to do this, because we do not have such a wide vision as yours.

Kz

A hunter

Just and fair

Let me ask you a question.

What is your reaction when you know about someone being bullied?

Keep it in your mind.

Would your answer change when I give you more information about the bullied? What if the bullied is a real nerdy asshole who we all hate in high school? Would it change how you look into the situation?

Let me tell you one thing. The one who bullies does not care much about his target. He does not care whether the bullied-to-be is a nerd, a nice guy or a bad guy. The only common thing among the bullied is their physical and emotional weakness in relative with others.

The same thing happens when we read about women got raped. If she is a normal woman, we feel sorry. If she is a teen, wearing mini skirt, flirting with boys all around and acting slutty, we would think different. Some of us may think that she deserves that. Again, rapist hardly cares. He locks his victims at the moment he sees them.

Why do we keep thinking like that? Why do we feel less sorry if the victims are not good persons?

It is because we do not want to be like them.

We want to believe that because those people’s behaviors are not appropriate, they deserve all the bad things happening to them. Throughout the history of mankind, we have evolved to serve one purpose: to control our life. We learn about geography to predict the next earthquake, the next volcano bursting. We study animals to have to better way to deal with those wildlife creatures. However, there still remain things that are beyond the human’s reach. We cannot tell what will happen to us when we walk out of the door. Unless we have a time machine, there will never be a way to know whether we will be bullied, raped, or murdered. The best thing we can do so far is to calculate the probability of the events which may happen to us. Therefore, we have “invented” a concept that can help ease that pain. That concept is familiar to us. That concept is called “moral”.

We all have to agree that all the religions’ premise is to teach us to behave well and be moral. They all teach us that good men rest heaven, bad men go to hell. If you do good things, good things will happen to you. If you mess up, you deserve punishment. Except for some “special” beings, we all believe in that. We want to control our life by believing that if we do not do bad things, we will not end up in bad situations. By doing good things, we ensure that our life will be happy. It sounds logical. But logical is not enough. Life is not that simple and fair. It is more complicated. Believe it or not, some bad guys are still enjoying their life without any punishment for their sins. Vice versa, some good men who devote their life to the better society are now struggling, wondering whether they are doing the right thing. Logic, moral has their limits. After all, “moral is just a fiction used by the herd of inferior human beings to hold back superior men” [Friedrich Nietzsche]

However, I am not typing these words to discourage people from doing good things and be devil. Let’s continue doing charity, just because we want to see people happy, not because of a desire to be treated fair in the next incarnation. Instead, I want to provide a different perspective. No one deserves to be bullied, raped, robbed or murdered. The only reason for our feeling that some of the victims deserve what happens to them is because we want to control our life. Life is not that simple. To make the world more fair and just, we have to make it harder for evil thrive, not just by reducing the number of its potential targets.

Kz

[special thanks to "You are not so smart"]

The endless fight

Once every four years, people around the globe save their time and keep their eyes on an event whose consequences may shape the way the world function. I am not talking about the World Cup or Europe Football Cup. I am talking about the US presidential election. America is doubtlessly the dominant force in the modern world and its leader, the US president, is one of the most powerful men on Earth. Therefore, it is worth paying attention to see who will lead the world in the next 4 years. Though there are many parties in America, the presidential election is said to be the battle between the two mains parties: GOP and Democracy party.

There is a very common belief that the Republicans support the rich while the Democrats stand for the rest, the middle income. We usually hear of the GOD’s cutting-tax-for-the-rich policy, and also listen to the Democrat’s argument against it. Bear in mind that in any particular society, the rich only accounts for a very small part in the population (Recently, they are called the “1 percent”, while the rest is regarded as, of course, the “99 percent”). It makes us wonder why in such a democracy world like American, where every vote counts the same no matter where it comes from, the Republicans try to pursue a tax policy that goes against the majority of the society. Unless they are not so insane, there must be some reasons for that.

First, though the rich only make up for only 1% in the society’s population, they hold more than 80% of the total assets. It is needless to say that they are wealthy and powerful. They are the employer, the CEO, the celebrities, the one who has great influence on others. When a movie star states that he will vote for the Republican candidate, most of his fans will follow that action. When a company has its environment influenced by the boss who is a faithful Republican, the employees may change their political perspective. Besides, it is worth noticing that the poor do not vote as much as the rich do. When you have little to lose, you do not care about who will lead you. You do not have much faith in the system. In contrast, the rich consider voting right one of their basic human right, and they want to vote because the consequence may have an impact on their wealth. That helps explain why averagely the gap between the amounts of votes for both sides are not so much wide.

Second, Republicans pursue such policy because unlike their counterparts, they are conservative, which means they believe in the market mechanism. Their moto is “Capitalism makes everyone unequally rich. Socialism makes everyone equally poor.” One of the basic rules in economics is that we have to choose between efficiency and fairness. Put it simple, if you raise tax to make the world more equal and fairer, you will, as a consequence, demotivate people to work hard because a considerable amount of their income is now taken away. The whole society suffers from years of slow growth. Vice versa, cutting tax for the rich may drain the budget for social service which can help the whole society. Though we never know which option is more preferable, we are sure that the extreme extent of both ideas only leads to disaster. Hitler, Soviet in the late 1970s and 1980s are evidence against extreme equal society while the recent economic crises are the proof for the other side. Such different perspectives and beliefs have led to different targets between Republicans and Democrats for years.

Last but not least, the difference between Republicans and Democrats may be just an imagination. There are rich men who vote for Democratic Party as well as poor men who support Republicans. No candidates and no politicians will ever say that he will raise tax from the middle class and cut tax for the rich, or at least, not that obvious. However, if we look at their plans more carefully, we may find out what is truly behind those beautiful lines. For example, Mitt Romney this year has announced his tax plan is to reduce tax rate together with deduction. He also states that under no circumstances does he reduce the tax for the rich. But when analyze his tax rate reducing, we figure out that among many tax rates which are cut there is tax rate for capital gain. Normally, when we have our money in a bank, we are taxed from the capital gained from that. The same thing applies to bond, stocks and other investments. However, now when the tax rate for capital gained is cut down, you can earn more money from that source. Well, after all, the whole society benefits from that policy. The question is who has the most of the cake. In this situation, the rich win more than the poor. Most of the income of the middle class is spent on basic needs such as food, clothes, energy, house, but on investment on capital. Vice versa, the rich invest much money on stock, bank deposit and earns a lot. Therefore, such tax policy will have the whole society get richer but at difference paces.

Today is the election day in US. No matter who wins this time, he is going to enjoy a successful term. Not because he is good (maybe he is, hopefully), but because now it's time for a recovery. 

Vote wisely.

kz

We drink lots of beer, so what?

A recent research has showed that Vietnam is the top beer drinker in South East Asian. It illustrated that in the year 2011, Vietnam consumed nearly 2.6 billion liters of beer. Averagely, each of us drank nearly 30 liters.  Lots of people have complained we are drinking too much beer. They even blame our beer consumption for the recent economic downturn. But if beer is that bad, why don’t we ban it?

It is true that according to a research from A SINGLE company, Vietnamese last year consumed the total amount of nearly 2.6 billion liters of beer. And it is also true that Vietnam is the top drinker in the region. Even if we calculate the consumption per capita, Vietnamese is still the champion. However, if we look father than our small pot, we will find that Vietnam ranks 41th in the list of countries by beer consumption per capita of the world. Who ranks first? Czech Republic. Second? Germany. Austria is the third. Unless I am not so wrong, Germany is among the richest countries in the world and it also has the strongest economy in this difficult period. It looks like that now we have evidence for the good effect of beer. The fact is that beer has nothing to do with the ups and downs of an economy. The strongest country does not stand last in the list, and the weakest one does not top either. Therefore, it would be unwise to state that our difficult economic situation results from our drinking habit.

Imagine a scenario when everyone in the world starts to reduce drinking beer. The total consumption will be decreased. However there will always be a top consumer. No matter how much we try to be better and better, there always exist a champion and a loser. Therefore, in this case, it is not a good idea to view things from a relative perspective. Instead, we should consider the absolute number and reckon whether 2.594 billion liters of beer is too much. The population of Vietnam is around 87 million. Provided that only the population from 18 to 65 drinks beer, it would make approximately 60 million. And it is true that women drink less than men, thus, the total adjusted figure is about 50 million. Dividing the total amount of beer consumption with that number, we will have 52 liter per capita. It would make one liter a week, which means 3 bottles of beer. We have 3 meals a day, 21 meals a week. And we drink only 3 bottles a week.

Is 3 bottles of beer a week a little bit too much? It depends. But as a man in the age from 18 to 65, I myself find 3 bottles just fine. But one thing is sure and you can check it on Google: Doctors around the world recommend drinking a little beer every day because it does more good than harm.

Food for thought.

Kz

Across The Universe

For those who are not fond of stars.

Every night, look at the sky, what do we see?

We see the universe.

There are clusters of stars forming the Milky Way, planets and their satellites reflecting the light, comets and bolides scratching the darkness.

Big Bang was an explosion which created the universe. And that explosion has kept the universe expanding till now. Normally and logically, the explosion effect must wear out by time. It means after billions of years of expanding, at a particular moment, the universe must stand still. And if the gravity force does exist, it will pull everything back and therefore, create a Big Crunch.

However such scenario is not going to happen. In fact, the universe, for some reasons, will keep expanding forever. More crazily, the expanding rate has always been increasing. The universe is becoming bigger and bigger. The distance between galaxies is becoming larger and larger.  There will be no Big Crunch. The arrow of time will never stop. And, what does it mean to us?

We are able to see things because the light from that object reaches our eyes. We see a star because its light has traveled through a very long distance to the Earth. Sometimes the journey takes minutes, like our Sun. Sometimes it takes years or decades. And sometimes it will never complete its journey. The galaxies are moving away from each other, faster and faster. The light will have to travel a longer and longer distance. It will take more and more time for the light to reach us. And sooner or later, when the expanding rate peaks at the light speed, nothing will ever reach the Earth, even the fastest thing of the universe – the light.

It means one day in the very far future, when looking at the sky, humankind will see nothing. No stars. No Milky Way. No moons. Only darkness, infinite and silent darkness. That is our children’s vision of the universe. Nothing. And if they cannot observe anything, will they have enough imagination to believe in our knowledge, their ancestors, on the universe? Will they have enough inspiration to look beyond the empty space to know that long time ago, the sky is full of light from stars, lots of stars? Will they have enough motivation to explore the outer space which is mysterious and scary? Will they accept that sometimes our naked eyes fail to tell the truth? And will they believe that we are not alone in this universe?

Welcome to the most remarkable era in human’s history, when the stars are still reachable.

Tonight most people will stay at home, waiting for tomorrow to see their lover. The stars will wheel forth from the daytime hiding places. And one of those lights, slightly brighter than the rest, will be your wing tip passing over.

1631.2km

Across the universe.

K

Driving people mad

Traffic. Always a big concern.

Unless you are unplugged from the world, what is happening out there in the streets always bothers you. Even when you are staying at home, it still can drive you mad for your pizza delivery is late because of traffic jam. And if you are in a developing country, the situation may get worse due to the lack of public transport, according a popular belief. However, it may be not true. In developed countries such as USA, lines of car waiting in street is a very common scene. It has me wonder about the true solution for traffic jam? Why does public transportation help? Of course I am not able to give a practically ultimate solution, though I really want to. What I am trying to do is to provide an economic perspective for this problem.

What causes a traffic jam? Mostly personal transportation, from small vehicles such as motorbikes, bikes to big machine like cars, trucks, buses. Some people may not contain bikes in this list, just because it is environmentally-friendly. However, when it comes to traffic, bikes are even worse than motorbikes for it only carries one person while taking a similar amount of space as motors. Traffic jam has a “price”. It is the cost of energy and time lost when you get stuck. Therefore, reducing traffic jam is one of the most priorities of all governments in the world.

If we consider traffic as a product, there are 2 ways to reduce the “price” of traveling: to increase supply or to decrease demand.

To increase the supply for traffic sounds a little bit vague. Put simple, it is to make more space for traveling. And to achieve that goal, we often choose to improve the infrastructure, which means building more roads, more streets, more bridges, more tunnels… It only takes a little time for this solution to take effect. When the new road is completed, almost immediately traffic on that road will be better. Vehicles can move faster because there is more space available. The same effect happens when it comes to public transportation. If people change from driving a car to taking a bus, the street will be less crowded and therefore creates more space. That is why most of budget used to improve traffic is spent on building roads and buying buses. However, though the effect is obvious and instant, it does not last long. Sooner or later the street will be full of transports again, even when the population does not increase much. How can it be possible? It is because if the traffic is better, it will lead to a greater desire to use personal transportation. When facing the fact that they may get stuck in a street for 3 or 4 hours, people give up the idea of buying a car or go out at rush hour. But now the streets are bigger and many people are taking bus, why worry about the traffic jam? Let’s buy a new SUV and enjoy the streets. And 2 years since the new metro, everything is bad again. Since roads are public goods, everyone wants to take the most out of it. Therefore, no matter how big your road-to-be is or no matter how effective your city’s public transportation is, traffic jam will always come back.

For increasing supply does not help much, we need to turn to the second solution: kill the demand.  The number of transports should be decreased. One of the easiest ways is to use tax or fee. But as all economics books say, taxes will create a dead-weight-loss for the whole society. Therefore, taxing is not a good answer. However, we can easily notice that traffic jam is not an every time and everywhere phenomenon. Only at some specific moment and at a certain amount of places. It gives us a hint about how to solve the problem: redistribution. We need to rearrange the time people go out. We need to rearrange the routine people take. We cannot rush out at the same moment. Neither can we travel in the same streets. We need a better time table for everyone.

We can see that before the working time, everyone rushes to downtown. On the contrary, in the evening, the crowd moves back to the suburban areas. The traffic is, therefore, like a pendulum, swinging from one place to another with all of its weight. If we can make people work in their neighborhood, things will be improved. They do not have to travel a long distance to their office. Student will walk to school instead of jumping in a car. We will not NEED to travel in the street much. As a result, there will more space for those who really need to travel.

Of course, once again, all the solutions above are just pure theory. Building a road is easy. Reorganizing the whole city is much tougher. But given the current technology in transportation, it is the ultimate solution for this complicated problem.

Kz