Outside the Box: To know China, see the world through its eyes

Speaking Chinese without an American accent

Commentary: To know China, see the world through its eyes 

By Andrew Leckey 

PHOENIX, Ariz. (MarketWatch) -- Will the heavy national debt load of the U.S. turn it into another Greece? Could the U.S. cope if it was surpassed by China as the world's largest economy? Is the U.S. increasingly becoming a protectionist country? 

Those sound like loaded questions, yet they're fair game for an American interviewed on Chinese television, as I have been more than a dozen times in the past couple of years. You are responding on Chinese soil, after all, where the U.S. is a subject of intense analysis and criticism -- just as China is in the U.S.

Investors are bulllish about Brazil elections

Both candidates in Brazil's presidential election in October are regarded as safe bets for investors, according to Joe Harper of Explorador Capital, who says the markets are expecting continuity in the change in leadership. Claudia Assis reports.

Topics such as the value of the yuan and trade relations ignite intense feelings because economic growth, investment potential and national pride are at stake. Such issues are more politically demanding than when a question is asked about something less China-U.S.-centric, such as Russia's economy or BP's management.

It seems strange to label as emerging a nation with so many centuries of dynasties behind it, but global economic power is relatively new in this nation where ancient structures coexist with skyscrapers. As China chooses its own course, developed nations are suspected of conspiring to hold it back, whether through organizations such as the G20 or the policies of individual nations.

Volatility of Chinese markets is sure to continue, impacting the world just as it is affected by other markets. China's hot economy and real estate market have likely come too far, too fast, and cycles are unavoidable.
Nonetheless, the transition of China from a low-cost assembler of exports to the West to a major consumer of products and services and a seller of products to the rising middle class throughout Asia is ahead.

This likely will depend less on developed markets and more on emerging economies that need consumer staples, information technology and automobiles. There will be dramatic growth, despite the ongoing ideological, trade, currency, political and environmental differences between China and the U.S.

What China wants

Whether it involves investing, business dealings or debate, dealing with China requires mutual respect:
• Many Chinese take personally the criticism of government policy. While we are often loudly critical of our government, they consider China one entity that includes them. Outsiders criticizing it are, in effect, disrespecting the Chinese people and heritage. Harmony is important. Stick to facts when discussing issues of conflict and make sure your points stand on their own merit, which is not a bad idea no matter what the country.

• They know more about us than we know about them. Our clothes and technology were made in China, but our information is limited to news reports. They see our movies, follow the NBA, dine at KFC and Starbucks, buy Buicks and display posters of American actors and athletes in stores. They celebrate Christmas big-time, though not the religious part. Yet that's hardly a clear picture of America or Americans.

• Negative quotes about China from U.S. politicians are taken seriously by the Chinese, much as U.S. sports coaches tack negative quotes from rivals on locker room bulletin boards. The fact that many in Congress intentionally make statements to appeal to constituents is not always evident to the Chinese.

• When significant issues are brought up, Chinese of all ages point out that we should realize they've come a long way in a short period of time, even if where they're headed isn't totally mapped out. Bridging the gap between wealthiest and poorest will be one of the biggest economic tasks.

• Young Chinese are under pressure from country and parents to succeed, far more than U.S. young people. Chinese parents who grew up under a different economic system tell children to study and work harder. The one-child rule put added pressure on the young to succeed. Shopping malls throughout China are crowded primarily with those under age 30, indication of the younger generation's financial empowerment.

• And yes, the Chinese generally do prefer to deal with people they've gotten to know well. This isn't such a rare concept in any country, but friendships definitely build bonds that turn to business and shared information in China. Drive-by meetings won't accomplish much, while repeat visits are valued.

Americans these days study China much as they studied Japan 20 years ago -- with fear and a sense of urgency that we are about to be overtaken economically. I leave you with one last non-economic question posed to me by the Chinese host on a special talk show honoring legendary television news anchor Walter Cronkite:

Why was there no journalist of Walter Cronkite's stature in the U.S. who was able to draw to an end the war in Iraq as Cronkite did in Vietnam?

Sounds like a loaded question. But for an American interviewed in China, turnabout is fair play. After all, I always have my own set of loaded questions to ask the Chinese.

Andrew Leckey is president of the Donald W. Reynolds National Center for Business Journalism in Phoenix, and has been a frequent guest on China Central Television (CCTV) interview programs in Beijing.

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IPTV - Astro TV conducting trials with Time dotCom; Mobile Telcos Price War?

Astro TV conducting IPTV trials with Time dotCom

By B.K. SIDHU
bksidhu@thestar.com.my

PETALING JAYA: With Telekom Malaysia Bhd (TM) venturing into the broadcasting business with its IPTV (internet protocol TV) offering, Astro TV is not about to let any of its market share slip by without a fight.

It is learnt that Astro TV is conducting trials for its IPTV offering in Mont Kiara by riding on Time dotCom Bhd’s (TDC) fibre optic fast-speed network.

Astro TV needs an IPTV platform and if it were to wait till sister company Maxis Communications Bhd completes its network build-up, that may well give TM an edge in some places.

Hence, the trials with TDC which began at the end of July involving about 100 users.

Sources said this was a technical trial for the Astro b.yond to determine if the network was able to carry enough video content at fast speed. TDC is providing the GPON infrastructure for the trials.

A GPON access network not only enables telcos to build and support video services, but provides the ability to scale the network to deliver any bandwidth-hungry services such as HDTV (high definition TV) and VOD (video on demand), an IP-based broadband video service.

Astro needs a minimum of 15-20 megabits per second (Mbps) for content delivery and TDC’s network can provide up to 100Mbps. Sources said trial users were able to watch all of Astro’s programmes in HD and 3D quality.

The trials make TDC a potential contender for access to Astro besides Maxis. However, since TDC only focuses on multi-dwellings such as condominiums and apartments blocks, its reach may be limited. TDC finds it too costly to focus on fibre to the home as done by TM.

TM is bundling IPTV with its high-speed broadband service known as Unifi. But content will remain the differentiating factor in the IPTV business. For now, Astro has rights to loads of content but don’t underestimate TM as it is tying to link up with a lot of content providers to make its IPTV proposition appealing.

Maxis, on the other hand, is working overtime to get a fast-speed Internet network up. It has appointed Huawei as the exclusive supplier for the next generation network. Maxis said the job would also include the building and managing of a full-service Fibre To The X network using GPON technologies.

Maxis has also conducted trails for IPTV involving 50-odd users during the recent World Cup.
Whether Astro will need more than one player to deliver its IPTV content is unclear but Maxis certainly is building a fibre optic network in its quest to become a quad player and it will have to rely on content from Astro.

ASTRO :  [Stock Watch]  [News]
TM :  [Stock Watch]  [News]
TIMECOM : [Stock Watch] [News] 

Analysts don't expect lower prices for mobile phone services

By LEONG HUNG YEE
hungyee@thestar.com.my

Price war unlikely but telcos are expected to compete on device offerings, say analysts

PETALING JAYA: While cellular companies may have posted rosy profits during the latest reporting season, analysts say the second half will not be an easy period for them.

Analysts do not expect an all-out price war between telcos but they do see competition heating up on device offerings such as smartphones.

“Both DiGi.Com Bhd and Maxis Bhd will be offering Apple Inc’s iPhone 4 soon. Pricing details have yet to be revealed but consumers will always opt for the best bargain,” an analyst said, adding that the average revenue per user (ARPU) and earnings before interest, tax, depreciation and amortisation (EBITDA) margin for telcos would remain under pressure.

DiGi had earlier cautioned that its EBITDA margin for 2010 might be pressured due to higher level of handset subsidies.

“Both DiGi.Com Bhd and Maxis Bhd will be offering Apple Inc’s iPhone 4 soon. Pricing details have yet to be revealed but consumers will always opt for the best bargain,” an analyst said. Pic shows Apple iPhone 4 on display at the registration desk at the headquarters of KT in Seoul on Monday. Apple’s newest smartphone will be officially released to Korean consumers on Friday. — Reuters

 

AmResearch Sdn Bhd said that despite a recent reduction in interconnection fees to 5 sen from 8 sen previously, the competitive landscape between telcos remained status quo. “There is yet to be a full-fledged price war,” it said.

The research house said ARPU continued to decline on a blended basis and reckoned that ARPU was almost reaching saturation point.

Within the postpaid segment, AmResearch said ARPU increased 2% to 4% in all three companies in line with the growth recorded in usage minutes.

“Voice is taking a backseat to non-voice, parallel to other developed countries. This trend should persist to a saturated level, where voice usage would hit its floor – as observed in the fixed line segment – within the next two to three years,” it said.

AmResearch said all three mobile companies were recording significant growth in broadband usage, with Celcom Axiata Bhd leading with more than 50% market share followed by Maxis (35%) and DiGi (15%).

The research house said the telecommunications sector was still undervalued, with enterprise value to earnings before interest, tax, depreciation and amortisation (EV/EBITDA) ranging between 5.42 times and 8.11 times. It said regional peers were valued at an EV/EBITDA of at least 9 times.

An analyst said the possible slowdown in the second half could lead to a cut in consumer spending.
However, the analyst said he was still confident about the industry’s outlook given the number of new mobile devices being introduced into the market.

He expects non-voice revenues from wireless broadband and data value-added services, including mobile Internet, messaging and content services, to drive growth for telcos moving forward.

The analyst said his top pick was Axiata Group Bhd as it “has a good regional story with presence in 10 countries and good-performing assets in Indonesia, Sri Lanka and Bangladesh.”

Brain drain, education,racism

Brain drain gains momentum

ZIYING'S BRUSH

Malaysia’s brain drain is not limited to adults as increasing numbers of children are also leaving the country.

RECENT reports on the two school heads accused of racist slurs bring to mind a question that an expatriate, newly arrived in Malaysia, posed to me. “Why,” she asked, “do Malaysian parents send their children away?”

I was momentarily stumped. And then I realised she was right. So many people send their children overseas when they reach a certain age, sometimes right after primary school, or more often, after third year secondary school. Their kids are in Singapore, Australia, Britain – anywhere but here at home, and the situation has become so normal it didn’t strike me as strange.

It is said that some half a million Malaysians have left the country to work or live abroad and the papers these days are full of reports on the great Malaysian brain drain. Much has been written on the whys and wherefores, with much hand-wringing over how to get these brains back.

Preparing for change: Sweeping reforms are being implemented in schools across China to meet the needs of the next stage of the country’s development.

 

All the while, under the radar, children whose families can afford it continue to leave. After finishing secondary school overseas, they attend university. Chances are, unlike a decade or two ago, many won’t come back. It seems young brains, too, are draining away.

Malaysia likes to promote itself as a centre of educational excellence. So why is this happening, and is there a reality gap somewhere?

The two school principals’ racist remarks just seem the tip of the iceberg.

Racism is at the root of these ridiculous comments but I would venture a guess that ignorance also plays a role. After all, I was told by friends that history textbooks have been revised to exclude much of world and important segments of local history. I hope this is not true but from what I have seen at the National Museum (Muzium Negara), I find that perfectly believable. If a national repository can ignore the seminal role played by one-third of the country’s population – i.e. the Chinese and Indian minority ethnic groups – then this really comes as no surprise.

Given this one-sided view of national history, should anyone be surprised that a school head allegedly called certain ethnic groups “passengers”? Clearly, that also reflects the shortcomings in their own education and poor training as well as the quality of some Malaysian schools. Being educators, they should know better but with the shrill racist and religious rhetoric of certain extremist political factions, it should not surprise anyone if there are more who think that way.

Grooming leaders: Hawaii’s Punahou School has excellent facilities and teachers, and a curriculum that fosters creativity. It is the alma mater of President Obama and well-known business leaders .

 

Recently there have been debates on whether the two crucial subjects of Maths and Science should be taught in English or Bahasa Malaysia. Looking around Asia, it is obvious that developed nations like Japan and South Korea do not teach in English and neither do rapidly developing countries like China. Yet they have surpassed Malaysia in so many ways. Rather than the language of instruction, it is ultimately the quality of the syllabus, the materials, the teachers and the teaching that make a difference.

Given the situation, it is no wonder that parents are sending their children overseas at an early age or even emigrating with them. Away, the children can have an opportunity to develop their full potential in a meritocratic system that rewards ability and results without the suffocating burden of political and ethnic strictures.

Outside Malaysia’s borders is a competitive, knowledge-driven world where there are no protective mantles and only the fit will survive. One need not look far to see what is happening. In economic powerhouse China, for example, competition is part and parcel of the national fabric.

Meritocracy has been practised since the first imperial (civil service) examinations over 2,000 years ago, and is still practised through assessments like the annual gaokao university entrance exam. And the education system is currently being fine-tuned by a series of sweeping reforms to meet the country’s future needs.

As for attracting Malaysians back from overseas, I shall never forget what a potential employer in a listed Malaysian company told me when I applied for a job after several years working with a multinational in the Asian region. He glanced at my resume and said: “In Malaysia, it is not what you know, but who you know that counts.” Later, at the Human Resources department, I discovered for the very first time my overseas education and American university degrees were a negative as “things are different in Malaysia”.

Meanwhile, young and not-so-young human capital are continuing to leave Malaysia, the country is unable to produce enough engineers, managers and other professionals to make a difference and FDI has fallen through the bottom. What is needed now is the courage to step out of the comfort zone and make the changes that are so long overdue – or brain gain will just remain wishful thinking.

This column will take a break until early November. Ziying can be reached at ziyingster@gmail.com.

Racism Malaysia NAH!!! ... 

thestaronline 

Housing troubles are resurfacing

I'll regret saying it but housing troubles are resurfacing

Over the years the housing market has been one of my favourite subjects – and one that has provided rich pickings for my critics. It is time to face their ire again.

By Roger Bootle
Published: 8:19PM BST 05 Sep 2010
47 Comments

Wishful thinking? Mortgage approvals have been low all year.

 

Last week's Nationwide house price figures showed a second successive monthly fall, this time of 0.9pc. What's more, this data followed other signs of weakness. Mortgage approvals for house purchase have been low all year, while the RICS new buyer enquiries balance has been negative for the past two months. Could the market be on the turn?

Lower house prices would make a lot of economic sense. In the UK, as in the US, a surge in house prices was right at the centre of the wider economic boom which ultimately ended in the financial crisis. 

Since then, most asset markets have undergone a major adjustment. In the US, even though the housing market never got as overvalued as ours did, house prices fell by 32pc. In the UK commercial property prices fell by about 45pc. Equities fell by about 50pc, and still stand 20pc below their peak. The pound fell by about 25pc. Although average UK house prices initially fell by 20pc, they then recovered and currently stand only about 10pc below their highs. So the UK housing market sticks out like a sore thumb.

 

Moreover, as a multiple of earnings, average house prices are, at 5.2, way above the long-term average of 3.7. Admittedly, this indicator has been flashing red for ages. And measures of so-called affordability – the ratio of mortgage payments to take-home pay – show no sign of undue strain. Mind you, if housing is not affordable when official interest rates are at virtually zero then when will it be? My view is that official interest rates will stay at this level for ages. But at some point they will go up to something like 5pc, probably taking mortgage rates to about 7pc. At current prices, how affordable would housing be then? In any case, many potential buyers find that even if they can afford the mortgage payments they cannot save enough to meet the now larger deposit requirements.

Nevertheless, movements in house prices need a catalyst. There are a few candidates. Mortgage availability is getting tighter as lenders wake up to the risks, face closer regulation and anticipate the imminent expiry of the Bank of England's special liquidity scheme.

Meanwhile, the pressure on personal finances is set to intensify as the rate of increase of average earnings edges down, higher taxes reduce disposable income and job losses in the public sector both reduce total personal incomes and erode confidence about job security. At the top of the market in London, support from foreign buying in the wake of sterling's collapse has softened as sterling has recovered. The higher rate of income tax and continued doubts about the outlook for the City point in the same direction.

That said, there are no certainties. The housing market has seen false dusks before. This could be another one. Because of low interest rates, it is possible the market will hold these levels and that housing is eventually returned to reasonable value by the continual upward march of salaries, rents and the general price level. But I doubt it. The issue is whether the market falls sooner or later.

So bring on the ire. (You know who you are!) Doubtless I shall soon be told that there is no such thing as "the" housing market but rather umpteen micro markets, or that I have forgotten about supply and demand. (A pretty bruising criticism to an economist.) Or that I have ignored the fact that we are a small island, that we don't build enough houses and that Aunt Mabel is set to remain in her three bedroomed semi, despite having a gammy leg etc.

Let me say that the average level of house prices is determined by the balance of supply and demand. But the supply is the stock of houses, and that stock does not change much from year to year. So movements in prices from one year to the next are principally caused by shifts in demand. And demand does not mean the airy aspiration to live somewhere nice, or the "need" for housing, neither of which has any economic content. Rather, it means the willingness and ability to pay the going price.

Ability is affected by income, interest rates and the availability of credit. Willingness is affected by many things but one of them is what people think will happen to prices in future. Like other asset markets, therefore, housing is subject to a substantial speculative influence. If prices are expected to fall then much "demand" which was present when prices were expected to rise will evaporate. I suspect that both the ability and the willingness are about to fall.

roger.bootle@capitaleconomics.com
Roger Bootle is managing
director of Capital Economics
and economic adviser to Deloitte

The brain speaks: Scientists decode words from brain signals

Enlarge

This magnetic resonance image (MRI) of an epileptic patient's brain is superimposed with the locations of two kinds of electrodes: conventional ECoG electrodes (yellow) to help locate the source of his seizures so surgeons could operate to prevent them, and two grids (red) of 16 experimental microECoG electrodes used to read speech signals from the brain. University of Utah scientists used the microelectrodes to translate brain signals into words -- a step toward devices that would let severely paralyzed people speak. Credit: Kai Miller, University of Washington.

In an early step toward letting severely paralyzed people speak with their thoughts, University of Utah researchers translated brain signals into words using two grids of 16 microelectrodes implanted beneath the skull but atop the brain.

"We have been able to decode spoken words using only signals from the brain with a device that has promise for long-term use in paralyzed patients who cannot now speak," says Bradley Greger, an assistant professor of bioengineering.

Because the method needs much more improvement and involves placing electrodes on the brain, he expects it will be a few years before clinical trials on paralyzed people who cannot speak due to so-called "locked-in syndrome."

The Journal of Neural Engineering's September issue is publishing Greger's study showing the feasibility of translating brain signals into computer-spoken words.

The University of Utah research team placed grids of tiny microelectrodes over speech centers in the brain of a volunteer with severe epileptic seizures. The man already had a craniotomy - temporary partial skull removal - so doctors could place larger, conventional electrodes to locate the source of his seizures and surgically stop them.

Using the experimental microelectrodes, the scientists recorded brain signals as the patient repeatedly read each of 10 words that might be useful to a paralyzed person: yes, no, hot, cold, hungry, thirsty, hello, goodbye, more and less.

Later, they tried figuring out which brain signals represented each of the 10 words. When they compared any two brain signals - such as those generated when the man said the words "yes" and "no" - they were able to distinguish brain signals for each word 76 percent to 90 percent of the time.

When they examined all 10 brain signal patterns at once, they were able to pick out the correct word any one signal represented only 28 percent to 48 percent of the time - better than chance (which would have been 10 percent) but not good enough for a device to translate a paralyzed person's thoughts into words spoken by a computer.

"This is proof of concept," Greger says, "We've proven these signals can tell you what the person is saying well above chance. But we need to be able to do more words with more accuracy before it is something a patient really might find useful."


Enlarge

This photo shows two kinds of electrodes sitting atop a severely epileptic patient's brain after part of his skull was removed temporarily. The larger, numbered, button-like electrodes are ECoGs used by surgeons to locate and then remove brain areas responsible for severe epileptic seizures. While the patient had to undergo that procedure, he volunteered to let researchers place two small grids -- each with 16 tiny "microECoG" electrodes -- over two brain areas responsible for speech. These grids are at the end of the green and orange wire bundles, and the grids are represented by two sets of 16 white dots since the actual grids cannot be seen easily in the photo. University of Utah scientists used the microelectrodes to translate speech-related brain signals into actual words -- a step toward future machines to allow severely paralyzed people to speak. Credit: University of Utah Department of Neurosurgery.

People who eventually could benefit from a wireless device that converts thoughts into computer-spoken spoken words include those paralyzed by stroke, Lou Gehrig's disease and trauma, Greger says. People who are now "locked in" often communicate with any movement they can make - blinking an eye or moving a hand slightly - to arduously pick letters or words from a list.

University of Utah colleagues who conducted the study with Greger included electrical engineers Spencer Kellis, a doctoral student, and Richard Brown, dean of the College of Engineering; and Paul House, an assistant professor of neurosurgery. Another coauthor was Kai Miller, a neuroscientist at the University of Washington in Seattle.

The research was funded by the National Institutes of Health, the Defense Advanced Research Projects Agency, the University of Utah Research Foundation and the National Science Foundation.

Nonpenetrating Microelectrodes Read Brain's Speech Signals

The study used a new kind of nonpenetrating microelectrode that sits on the brain without poking into it. These electrodes are known as microECoGs because they are a small version of the much larger electrodes used for electrocorticography, or ECoG, developed a half century ago.

For patients with severe epileptic seizures uncontrolled by medication, surgeons remove part of the skull and place a silicone mat containing ECoG electrodes over the brain for days to weeks while the cranium is held in place but not reattached. The button-sized ECoG electrodes don't penetrate the brain but detect abnormal electrical activity and allow surgeons to locate and remove a small portion of the brain causing the seizures.
Last year, Greger and colleagues published a study showing the much smaller microECoG electrodes could "read" brain signals controlling arm movements. One of the epileptic patients involved in that study also volunteered for the new study.

Because the microelectrodes do not penetrate brain matter, they are considered safe to place on speech areas of the brain - something that cannot be done with penetrating electrodes that have been used in experimental devices to help paralyzed people control a computer cursor or an artificial arm.

EEG electrodes used on the skull to record brain waves are too big and record too many brain signals to be used easily for decoding speech signals from paralyzed people.

Translating Nerve Signals into Words

In the new study, the microelectrodes were used to detect weak electrical signals from the brain generated by a few thousand neurons or nerve cells.

Each of two grids with 16 microECoGs spaced 1 millimeter (about one-25th of an inch) apart, was placed over one of two speech areas of the brain: First, the facial motor cortex, which controls movements of the mouth, lips, tongue and face - basically the muscles involved in speaking. Second, Wernicke's area, a little understood part of the human brain tied to language comprehension and understanding.

The study was conducted during one-hour sessions on four consecutive days. Researchers told the epilepsy patient to repeat one of the 10 words each time they pointed at the patient. Brain signals were recorded via the two grids of microelectrodes. Each of the 10 words was repeated from 31 to 96 times, depending on how tired the patient was.


Enlarge

An array of 16 microelectrodes -- known as a microECoG grid -- is arranged in a four-by-four array and shown next to a US quarter-dollar coin with a Utah state design on its "tail" side. University of Utah researchers placed two such microelectrode grids over speech areas of a patient's brain and used them to decode brain signals into words. The technology someday might help severely paralyzed patients "speak" with their thoughts, which would be converted into a computerized voice. Credit: Spencer Kellis, University of Utah

Then the researchers "looked for patterns in the brain signals that correspond to the different words" by analyzing changes in strength of different frequencies within each nerve signal, says Greger. 

The researchers found that each spoken word produced varying brain signals, and thus the pattern of electrodes that most accurately identified each word varied from word to word. They say that supports the theory that closely spaced microelectrodes can capture signals from single, column-shaped processing units of neurons in the brain.


One unexpected finding: When the patient repeated words, the facial motor cortex was most active and Wernicke's area was less active. Yet Wernicke's area "lit up" when the patient was thanked by researchers after repeating words. It shows Wernicke's area is more involved in high-level understanding of language, while the facial motor cortex controls facial muscles that help produce sounds, Greger says.

The researchers were most accurate - 85 percent - in distinguishing brain signals for one word from those for another when they used signals recorded from the facial motor cortex. They were less accurate - 76 percent - when using signals from Wernicke's area. Combining data from both areas didn't improve accuracy, showing that brain signals from Wernicke's area don't add much to those from the facial motor cortex.

When the scientists selected the five microelectrodes on each 16-electrode grid that were most accurate in decoding brain signals from the facial motor cortex, their accuracy in distinguishing one of two words from the other rose to almost 90 percent.

In the more difficult test of distinguishing brain signals for one word from signals for the other nine words, the researchers initially were accurate 28 percent of the time - not good, but better than the 10 percent random chance of accuracy. However, when they focused on signals from the five most accurate electrodes, they identified the correct word almost half (48 percent) of the time.

"It doesn't mean the problem is completely solved and we can all go home," Greger says. "It means it works, and we now need to refine it so that people with locked-in syndrome could really communicate."

"The obvious next step - and this is what we are doing right now - is to do it with bigger microelectrode grids" with 121 micro electrodes in an 11-by-11 grid, he says. "We can make the grid bigger, have more electrodes and get a tremendous amount of data out of the brain, which probably means more words and better accuracy."

Provided by University of Utah (news : web)

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The new young investor: Shunning stocks

By Hibah Yousuf, staff

NEW YORK (CNNMoney.com) -- When 18-year-old Robert White decided to jumpstart his retirement plan, he invested his life savings of $25,000 into an aggressive mutual fund.
Little did he know that just five years later, he would make a complete 180 and join the ranks of a new group of young investors who have become so risk averse by the wild market swings that they'd rather park their money in safety zones, like CDs or Treasurys.

Ultra safe to risky: How 10 Gen Y-ers invest

 

Surveys show young investors are strikingly less eager to take on risk now than they were in 2001. Why some are holding and others are folding. 

View photos

Today, only 22% of investors under the age of 35 say they're willing to take on a substantial level of risk, according to the Investment Company Institute. Compare that with 2001, when that same group outpaced every other age bracket.

"We're coming off a series of financial crises that hit this young generation at points in their lives where external events shape strong opinions," said Christopher Geczy, adjunct associate professor of finance at University of Pennsylvania's Wharton School.

When White's fund began to slip with the broader market in 2008, he yanked his savings, now at $35,0000, and put the money into a short-term certificate of deposit with an annual return rate of 4%.

"It's almost embarrassing to talk to anyone about my portfolio because I know how stupid it is to normally keep my portfolio in cash," said White, now a 23-year-old graduate of Northern Arizona University.

While most investors have become more cautious during the decade, the biggest change has come from White's generation.

"Many of them have witnessed a decline in the wealth of their families and seen their parents delay retirement or even return to the workforce," said Geczy, who also serves as the academic director of Wharton's Wealth Management Initiative.

A recent Merrill Lynch survey of 1,000 affluent Americans, who boast more than $250,000 in investable assets, showed 56% of young investors consider themselves to be more conservative today than they were a year ago -- the highest percentage among all age groups.

"If you're in your 20s and are just starting to save for retirement, you've seen the market drop 55%, climb 88%, and drop again in a short span...If you're in your 30s and have been saving for the past decade, you've seen the stock market return essentially 0%," said Vanguard Chief Executive Bill McNabb, at a recent conference.

Members of Generation Y are also having a tougher time finding a job than their counterparts. The unemployment rate for workers under the age of 35 in August stood at more than 13%, compared to the nation's 9.6%.

Prolonging retirement

White has mustered up the courage to return to the market but he is only dabbling in stocks with about 10% of his $60,000. That's a far cry from the 70% advisors typically recommend for young investors. The rest of White's cash is tucked away in a savings account.

He's hopeful he'll gain the confidence to boost his stock allocation to 75% this fall when he returns to his hometown of Maui and starts a job at a financial planning office.

"I'm just waiting to get the next piece of advice or news that will make me more comfortable about my decisions," said White.

Experts say White and his peers may be doing themselves a disservice by shunning stocks.

"The biggest risk for this generation is that they'll live too long. With medical breakthroughs, the reality is that many of them will live beyond 100," said Barry Nalebuff, a strategy professor at Yale's School of Management and co-author of Lifecycle Investing. "The only way they have enough assets to last them is to invest in stocks. If they don't, a lot of people will have to keep working way past when they want to because they won't have enough money saved up."

How to save $1 million by 65

Nalebuff argues that young investors have decades of earnings to rake in, so they could plow 100% into a diverse portfolio of stocks and still offset the market's risks.

But that's little comfort to people like Neil Sowinski, 30, who remains unnerved by the market's swings. He pulled his money from stock market in January and dumped it into a Pimco bond fund, and advised his wife to do the same.

"We watched the tech bubble bust and then the housing bubble bust, and we lost money left and right but rode it all out," said Sowinski, an industrial mechanic in Racine, Wisc. "After the market climbed back in 2009 and put us up about 15%, we pulled out because I felt that rally was just based on the government's stimulus and corporations cutting costs -- it wasn't sustainable."

0:00 /1:42Where to invest now

He has $95,000 in bonds and is pleased with the 8% return so far, but he hopes to move back into the stock market for the long term.

Stocks have yielded an average of up to 7% each year after inflation over the last 200 years, while bonds have had a hard time squeezing out a 1% return rate, according to Wharton finance professor Jeremy Siegel.

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Think, then judge

IKIM VIEWS
By MD ASHAM AHMAD,
Fellow of Centre for Shariah, Law and Politics

To evaluate the arguments and bickering going on around us every day on TV and in the newspapers takes a critical mind coupled with sound judgment.

SOME people erroneously think that open-mindedness means to accept all opinions and to avoid making judgment over those opinions.

A rational person will not make a blind, hasty or an uninformed judgment nor will he accept ideas and opinions indiscriminately.

He will listen to what others have to say and suspend judgment until what is being said is properly understood.
That is open-mindedness but ultimately, judgment has to be made regarding the true worth of an idea or opinion.

Life is about decision-making and every decision-making is actually a judgment that the decision is the correct one or the best among all other choices. So, everybody is basically a judge.

It is easy to judge. What is difficult is to make a sound (correct) judgment.

A wrong judgment could ruin one’s life and perhaps the life of others as well.

But life is too precious to be wasted just like that, hence every thinking person would work hard to make the best of his or her life.

Everyone desires to live a good life. But what is actually a good life?
More than 2,000 years ago, Socrates proclaimed that “an unexamined life is not worth living”.

To live an examined life means to live a conscious life. It means not to take things for granted.
Actually, that is what a rational human being would do.

He would carefully and critically examine the soundness of all the premises upon which important decisions in life are made.

In order to do that, he must be able to gather facts and evaluate them intelligently.

He must also be able to express his ideas clearly and concisely using the correct and proper words.
He would do all that because he is very concerned with misjudgment or wrong judgment, because he values his life.

Just consider for a moment all the arguments and bickering that are going on around us every day on TV and in the newspapers.

Some social scientists are trying to convince us that our society is not progressing well because the way we understand and practise our religion is no longer relevant.

Some religious leaders are so supportive of a certain popular motivation programme while others are telling us all that it is against Islam.

Politicians and social activists are arguing and disagreeing among each other as to which policy is best to promote unity among the citizens.

To tell the difference between what is right and what is wrong, or between what is true and what is false, one must have adequate knowledge.

To say “this act is wrong” or “that statement is false” means to propose that a particular act or statement is contradictory to what is right and true.

It assumes the person knows the difference between a true and false statement about reality and the difference between what is right and what is wrong in terms of human conduct.

To arrive at that knowledge one must have a critical mind and know the right techniques or methods needed.
Behind all the issues, questions and suggestions posed by social scientists, religious leaders, politicians and social activists are certain facts which must be researched, analysed, defined, discovered, uncovered and so on.

Only a critical mind will be able to evaluate the arguments underlying an advertisement, the finding of a scientific study or the most recent survey presented to us in the media and tell what’s true, what’s false and what really doesn’t matter at all.

Instead of appealing to the intelligence through logical argument, it is easier and more effective to use rhetoric (the art of persuasion) by appealing to feelings and emotions.

Politicians, then and now, are notorious for their use of rhetoric to promote and defend corrupt ideas in order to gain money, fame and power.

They know that not many people are intelligent enough to weigh arguments and verify the evidence presented to them.

Today, rhetoric coupled with rigorous advertising and public relations exercises are used extensively to influence public opinion.

Rhetoric uses language without logic while advertising and public relations manipulate images and events to mislead the innocent public. And those who control the media easily control one’s choices and decisions.

Democracy, by the way, is about who commands the support of the majority, not about who is right or wrong.

Free media, in the sense of being free from political affiliation or patronage, does not guarantee that people would have the freedom of choice.

The public has to be freed first of all from ignorance.
They have to be made aware of the assumptions, inconsistencies and contradictions of the politicians on major issues affecting them.

Who else can do that more effectively than the scholars?
This, however, will not happen if the scholars themselves are corrupt because “corruption of the best is corruption at its worst”.

It is indeed worse than the corruption of the politicians and public administrators.
Hence, universities should not be allowed to be the breeding ground for corrupt leaders devoid of intellectual and moral integrity.

Professors who profess nothing other than their allegiance to their political masters should not teach in our universities.

They will only perpetuate cowardice and flattery.

Money Buys Happiness Only Up to a Point

By Jeanna Bryner, LiveScience Managing Editor

Money might give you a sense of overall satisfaction with life, but the extra dough won’t ensure days full of laughter and joy, a new survey analysis of income and happiness suggests. 

Results showed that as a person’s income increases so does their overall satisfaction with life, but the moment-to-moment enjoyment of those days depended more on social and physical factors, such as whether a person smoked or spent the day alone. 

These findings agree with a similar analysis of global happiness, in which the wealthiest nations, such as the United States, weren’t necessarily the happiest. For instance, the United States came in at No. 26 out of 132 nations on daily happiness. Another study on overall satisfaction showed those living in the wealthiest and most tolerant states were happiest by the measure used in the study. [Happiest States Revealed] 

Happiness surveys

 

In the new study, Daniel Kahneman and Angus Deaton of Princeton University took a stab at figuring out whether and how income affected each of the two well-being types: emotional well-being and overall life satisfaction. To do so, they analyzed more than 450,000 responses to the Gallup-Healthways Well-Being Index, a daily survey of 1,000 U.S. residents conducted by the Gallup Organization. 

They looked at percentage changes in income rather than absolute numbers. 

“In the context of income, a $100 raise does not have the same significance for a financial services executive as for an individual earning the minimum wage, but a doubling of their respective incomes might have a similar impact on both,” the researchers wrote this week in the journal Proceedings of the National Academy of Sciences. 

For life evaluation, participants indicated on a scale from zero to 10, from worst to best possible, how they would rate their lives. For emotional well-being, participants answered yes/no questions about whether they had experienced various positive and negative emotions a lot during the prior day. 

About 85 percent of respondents indicated they experienced a lot of positive emotions, including feelings of happiness, enjoyment and laughter/smiling on the previous day, while 24 percent felt a lot of sadness and worry. The average life-evaluation score was 6.76 (with 10 being the best possible life). 

Physical illness, headaches, loneliness, and caring for an adult were linked to lower emotional well-being. Being a college graduate was associated with high life evaluation, but that diploma didn’t do much for daily enjoyment. 

The limits of money 

 

Low income seemed to magnify the emotional pain of life’s misfortunes, including divorce, illness and loneliness. For instance, for those with a monthly income of at least $3,000, 38 percent who reported headaches also reported a lot of sadness and worry, compared with 19 percent without headaches. But headaches seemed to take a greater toll on those making less than $1,000 a month, who reported “blue feelings” at rates of 70 percent when they had headaches and 38 percent when they didn’t. 

Beyond an average of $75,000, annual income no longer played a role in boosting how happy a person felt daily. 

The researchers suggest that making anything more than $75,000 no longer improves a person’s ability to spend time with friends, avoid pain and disease and enjoy leisure time – all factors involved in emotional well-being. 

“It also is likely that when income rises beyond this value, the increased ability to purchase positive experiences is balanced, on average, by some negative effects,” they write. For instance, a past study revealed a link between high income and a reduced ability to savor small pleasures, the researchers noted.

• 7 Thoughts That Are Bad For You
• 5 Things That Will Make You Happier
• Market Madness: 5 Tastes that Change with the Economy 

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