John Wayne is the Duke. Elvis is the King.

John Wayne's Holster: July 2008
John Wayne's Holster
Visit my main blog at Monkey Wrench Revival. Visit my birdwatching blog at The Birding Nerd.

Tuesday, July 29, 2008

Bankers Need a Kick in the Fannie

Today's Bankers Are Like Mr. Potter (It's a Wonderful Life)

Here in Taiwan, Typhoon Fung-Wong is blowing through town. As such, my plans of climbing Ali Shan in search of Formosan Magpies have been rained-out. So here I am in front of my computer listening to the Steve Miller Band while trying to catch-up on the news back home.

I stumbled on this report in the UK Telegraph stating that the US House of Representatives just approved a deal to bail-out the mortgage giants, Freddie Mac and Fannie Mae. Coincidentally (or perhaps not) Steve Miller's Take the Money and Run is playing in the background.

While I am outraged at this latest example of corporate welfare, the bail-out deal does not suprise me. As an American, I have come to expect such things.

All this Freddie & Fannie stuff can be traced back to the sub-prime mortgage fraud, the bursting of the housing bubble, and the criminal actions of the banking industry.

The banking industry lowered its loan requirements so that it could lend more money (i.e. collect more interest payments) from borrowers. Apparently a borrowers ability to repay was not fully taken into accout. I suppose the slogan of the bankers was "No income, no job, no assets....No problem!" On the surface, this seems like gross negligence on the part of banks, as they would have to assume a higher risk of default by these so-called "sub-prime" borrowers. In order to make it all work, the banks transferred their risk to third parties in the form of mortgage-backed securities (MBSs), structured investment vehicles (SIVs), and other forms of packaged debts. The bankers pocketed the money.

What happened to these sub-prime loans? For starters, many of the loans were provided as adjustable rate mortgages (ARMs) with long mortgage periods. With ARMs, borrowers frequently make low initial payments, but must assume a risk of a possible rise in the interest rates. Many sub-prime borrowers purchased properties with ARMs with the hope of selling those properties later at a higher price. But then, the housing bubble burst, and the value of many properties tanked. Many borrowers defaulted on their loans, leaving investors and some creditors who bought up the packaged debts on the hook.

You may be asking yourself how the bankers duped investors into buying these junk loans. They did so by packaging the junk with other "good" loans. They then colluded with securities ratings agencies to give them high ratings (A-AAA ratings). It's a process akin to making scrapple. Sweep up all the scraps, bones and cartilage, mix in a few pieces of real meat, throw in some spices for masking, grind it all up so that the individual components are indiscenrible, then sell it as USDA-approved grade A steak.

So, what to do now? With the current and looming loan defaults, someone is going to loose. Its either the investors and creditors (i.e. the big campaign contributors), or the little guy (i.e. me and you).

The Feds could let Fannie and Freddie go bankrupt, or take them over and sell off their assets. This would probably wipe-out some investors and creditors. But we must remember, they assumed that risk when they purchased the junk loans in the first place. The ripple from this would most definately shake-up the banking industry. Investors would lose faith in the solvency of banks, and would sell-off their investments and withdraw their cash. Banks that made bad investments or were poorly managed would go belly-up. In essence, this puts the banks (but not the bankers - they have already pocketed their cash and fled the scene) on the hook for irresponsible loan practices.

Alternatively, the Feds could present a "sweetheart" deal to the semi-private corporations, effectively bailing them out. Essentially, the Federal Reserve would simply turn on their printing machine, crank out a few billion extra dollars, and loan it to Freddie and Fannie at rates you and I would love to have for our own mortgages. This would give the loan giants enough money to remain solvent - at least for now. Incidentally, it would also add a few billion to the national debt, but whose counting. Oh yeah - I almost forgot to mention. This deal puts you, the taxpayer, as well as your childfren and grandchildren, on the line. You'll be making the interest payments.

Whom do you expect the government will choose?

I know. It's a stupid question. I just thought I would ask. As expected, Congress has already decided that it will be you and me.

The answer to the "What Would Jesus Do?" question would be to hold the fradulent bankers, and securites rating agencies accountable. Seize their assets and sell them off, drag them in front of a judge, and send them to prison. But Congress doesn't have the courage to do that. Doing so might hurt somebody's feelings, or, even worse, result in the loss of a campaign contribution.

And who said statesmanship was a thing of the past?

Sunday, July 13, 2008

Taiwan's Betel Nut Culture

Areca Palm Plantation

Every culture has its vices. Taiwan is no differnt. Smoking cigarettes and drinking alcohol are common past-times here. Although prevalent, these vices rank well behind betel nut chewing in popularity.

Betel nut is essentially the Asian version of chewing tocacco. The locals call it bing lang. The name betal nut is misleading, as the nut itself is not derived from the betel plant. It is actually a small nut from the areca fan-palm nut.

To prepare bing lang, the palm nut is cut down the center and packed with a concoction of limestone or coral paste.

It is not uncommon to supplement the mixture with spices or tobacco. The nut is then wrapped in a small piece of betel leaf, thus giving the treat its popular name.

What exactly is the attraction to chewing bing lang? Part of the attraction is that the nut itself. It contains a mild stimulant that has a subtle effect akin to drinking tea. Users report that ,betel makes you feel strong. Your chest feels broader, your inhalations deeper, your back straighter; and an almost electric invigoration seems to run through your bones." In my own experience, betel chewing gives a mild head rush followed by a envigorating feeling of being on the top of my game. And salivation goes into over-drive. Within a few minutes, my mouth was filled with what felt like a quart of slobber. All in all, I felt pretty content.

While masticating the fibrous bolus, I began to think, "Who ever came up with the idea to mix these odd ingedients together and chew them?", and "What is the purpose of each component?" A bit of internet research, and an interrogation of my brother-in-law who turned me on to these phenomenon lead me to the following info. The alkaloids in the nut are responsible for encouraging salivation. The slaked lime mixture aids in the extraction of the alkaloids and stimulants from the nuts. Spices are added for flavor. The betel leaves are derived from a vine related to pepper. The leaves contain aromatic compounds and are also beleived to increase salivation. Apparently "betel drooling" is part of the pleasure derived from chewing.

Knowing and experiencing this, I can understand why betel chewing is the vice of choice. In fact, it is popular in many countries in southeast asia, and many Pacific islands. One statistic I read estimated that approx. 10% of the world's population chews the nuts. That beign said, betel chewing seems even more popular in Taiwan. Just about every truck driver, construction worker, food vendor, and merchant had a dolop stuffed in his cheek. I was even more suprised to learn that areca palm is the second largest cash crop on the island. Why has betel chewing arisen to be the cultural phenomonon that it is.

Perhaps the answer lies in the laps of the betel nut girls.

To drum-up business, scantitly-clad teens are hired to hawk nuts by the roadside. To get an edge on the competion, the betel nut girls essentially display their "finer charms" in glass booths that line the main thoroughfares. It's a culture unique to Taiwan.

One website describes the betel nut girls as, "a fast-living, fast-talking and fast-selling tangle of live wires". That seems apt to me.

Bing lang does have its down side. Because of its cash draw, many locals have illegally planted the palms on steep mountain slopes. Because the tree themselves have a relatively shallow root structure, mud slides are not uncommon, especially during typhoon season. Government officals have also expressed concern that the betel nut industry gives the island a bad image. Recently, direct flights between the mainland and Taiwan have been reestablished. Nantou county officals were afraid that the so-called scandalous appearence of the betel nut girls would scare away mainland toruist. As such, they forced to girls to dress "more appropriately". One Taiwan blogger quipped that the mainlanders would be shocked to discover that Chinese woman actually have secondary sex characteristics. Other negative issues are linked to public health concerns. Bing lang chewers spatter the reddish liquid on city streets and walkways, leading to unsightly and unsanitary conditions.

The chewers themselves often have grossly discolored teeth, as well as eroded and bleeding gums. Long-term use is linked with oral cancer.

Although officials have made attempts to ban or limit the practice, it is unlikley they will succeed. Native Taiwanese and Pacific islanders have a long history of chewing betel nut that goes back thousands of years. Betel proponents argue that infering with this ancient practice would be akin to cultural prejudice. Moreover, betel chewing is a vice largely confined to blue-collar or working class peoples. Restrictions on the practice would similarly be taken as class snobbery by the legislature. Taiwan also has a fairly large areca palm lobby composed of growers and sellers. They argue that many families depend on the income gained from nut harvests and sales to meet basic needs. As such, the bing lang culture does not look like it will go away any time soon.

Thursday, July 03, 2008

Taiwan - Just Like the US, Only Different

Sunrise at Yushan (Jade Mountain, Taiwan)

Travelling offers one the opportunity to see how people from different countries or cultures go about life. For me, it is always interesting to veiw my own culture through the lens of another. There are always lessons to be learned.

I am currently spending the summer in Taiwan. The main purpose of the trip is to visit family members and explore opportunities of (possibly) putting down some roots here.

During my time here, as well as during several previous vists, I have made a lot of observations. Actually, I spend a great deal of my time observing, as my Mandarin language abilities leave much to be desired. But I am slogging away at it, and making (very) slow but steady progress.

The island has a long and complicated history. Taiwan has historically been inhabited by Malay and Polynesian peoples. Many other peoples have also made Taiwan their home. Mainland Chinese have emigrated to Taiwan over the years for one reason or another - typically to escape oppressive governments or to search for a better life. The Japanese ruled the island several times as well, with many Japanese settling here. As such, Taiwan has a fairly rich demographic and cultural composition. That being said, the character of the island is overwhelmingly Chinese.

In many ways, Taiwan is similar to the United States. In many more ways, it is not. I think it is fair to say that modern Taiwanese admire the western (i.e. US) lifestyle. To ensure that lifestyle, Taiwan has modeled its economic system after the US. As such, the goings-on on Wall Street and inside the beltway affect Taiwan almost as much as they affect the US itself. According to a popular local saying, "when the US get a cold, Taiwan sneezes."

Taiwan's economy is a capitalist system strongly driven by exports. Unlike the US, Taiwan enjoys a large trade surplus and has averaged about 8% real GDP growth over the past three decades. Although the government still maintains some control over the economy, the current trend is toward a hands-off or laizee faire approach. This deregulation may result in the same kind of trouble for Taiwan that the US banking industry is going through.

If the worldwide economy does experience a downturn, I think Taiwan will fare better than the US. For starters, I have seen a much stronger work ethic among the Taiwanese than I have seen in the US. In addition, the people here do not have the same "entitlement mentality" that many Americans have. In other words, the Taiwanese are not going to sit around and wait for the government to bail them out. Moreover, the Confucian family principle still remains strong here. People generally put the needs of their family and country before individual needs. It is not uncommon for two or three generations of a family to live under the same roof. And people take care of their parents and grandparents when they are old or sick, rather than shipping them out to nursing homes and such for someone else to take care of.

Overall, the country is pretty safe. Certainly, Taiwan has its share of crime, especially since marial law was lifted in the late 80's; however, compared to the US, its rate of violent crime is low. During my time here, I have rarely heard police sirens. And about the only time I have ever seen a police officer, he was standing by the roadside holding a radar gun.

Speaking of roads and radar guns, driving in Taiwan can be hazardous to your health. Surely there are road signs, traffic lights, and such, but no one seems to notice them. Red lights are taken as mere suggestions. Double yellow lines painted on the road simply indicate where the middle of the road is. Drivers are free (apparently) to drive on either side of it, or straddle it if they so choose. Making a left turn is more akin to a game of chicken or a test of wills. J. Edgar Hoover must have developed his aversion to left turns during a visit to Taiwan. Crossing the street is an adventure. Of course, crosswalks are present at most intersections, but these are not reminders for motorists that pedestrians may be about. Rather, they seem more like reminders for pedestrians to keep their eyes peeled for vehicles whose break pedals are wired directly to the horn.

Traffic concerns aside, the condition of the roads in Taiwan is quite good. With the exception of some rural or moutainous areas, the roads are maintained quite well. Traffic jams are sometimes encountered, but by New York or San Francisco standards, they are not that bad. About the only time of year one can expect major delays is during the Chinese New Year and the Double-Ten holiday.

Environmentalism is a mixed bag here. The large export industry of Taiwan is driven by industrialization. Industry in turn generates a lot of pollution, especially in the south where a great deal of industry is centered. Although Taiwan does have an EPA, it does not appear to be as effective as it should be. Industrial pollution in Taiwan is pretty bad. In Kaohsiung county, the air quality is among the worst I have ever experienced. The water quality is not great either, but I must say that it is getting better. The Love River in Kaohsiung was notoriously famous for its stench - a funk that gave Cho Dofu (aka Stinky Tofu) a run for its money. However, the government has recently done a great deal to clean the river up. That being said, reports of the governor retrieving a crab from his pocket after swimming in the river was ridiculous. And as far as the river's fetor goes, I don't think Chanel stockholders will lose sleep if someone starts marketing a Love River fragrance line.

In other areas, environmentalism is alive and well. Formosa Plastic's plans to operate a steel processing plant near the Cigu Estuary was turned down due to the potentially negative impact on both the endagered Black-faced Spoonbill and Pacific Humpback Dolphin. Recycling is also widespread in Taiwan. Just about every neighborhood has a recycling center, many of which are staffed by volunteers. And just about everything is recycled.

On the cultural front, Taiwan would seem a bit odd to the average westerner. Karaoke Bars (aka KTV Bars) are everywhere. The bars are pretty fancy as well. They are not your typical American dive with a microphone and projection screen TV. KTV bars have private rooms with plush sofas, flat screen LCD TVs, and state of the art karoake machines. They provide high-class waitress service where one can order cocktails, mixed drinks, finger foods, sushi, etc. But like the US, most people can't sing. Perhaps the private rooms is a blessing in disguise.

While we are discussing music, I should also mention that, suprisingly, the Carpenters are immensely popular here. I heard them so many times on the radio that I think their lyrics are permenantly stuck in my head. If I hear Yesterday Once More once more.... Hip Hop music is also popular here, but not the Snoop Dog or Dr. Dre variety. It's Chinese rappers apparently mimicing American hip-hop. It's a pretty good facsimile, but comes off more like Jackie Chan donning an NBA jersey, low riding pants, a backwards Yankee's hat (Chien-mien Wang is home-grown), and lots of bling. But unlike the US, Chinese character tatoos are not all that popular here.

The food in Taiwan is excellent. But don't try ordering General Tso's Chicken or Egg Foo Young. Nobody knows what that is here. When you explain to them what it is, they laugh and wonder how westerners can eat that crap. As far as variety goes, anything goes. The locals have a saying, "If it can walk, crawl, fly or swim, it can be eaten. And that is not far from the truth. As for quality, most restaurants here serve good quality, great tasting food. Even your roadside vendors sell food that is better than some five-star restaurants in the US. And to be fair, some are worse than rat-infested KFCs. Speaking of KFC, it is very popular here. So are Starbucks, McDonalds and Pizza Hut. McD's even delivers.

On the negative side, people waste a lot of food here. It is fashionable among the young professionals to entertain large groups of friends, ordering immense amounts of food that no party could hope to finish. It's sort of a way to flaunt your wealth, or at least paint the facade of wealth, to your colleagues.

Politics here is also highly polarized - even more so than the US. Part of the country wants to declare independence from mainland China. They resent everything the ghosts of Chiang Kai Shek and Chiang Ching Kuo, and the KMT party (aka China pigs) stand for. The other part of the county respects the contributions of the KMT party and wants to maintain the status quo with China. Neither can apparently see eye to eye with the other. It is not uncommon to see fist fights - actually slap fights - in Taiwan's parliament. And the woman can (and do) dish out the slaps as well as the men.

Smoking here, like mostly everywhere else, is also popular, but not nearly popular as chewing betel nut. This cultural feature is so fascinating, that it deserves its own blog article. As such, I will follow-up this post with a betel nut post.

Lastly, issues of privacy or personal space are treated much differently here than in the US. For the most part, they are not issues. Siblings often share bedrooms, not just with each other, but with their parents and/or grandparents. And there are few (if any) secrets in a Taiwanese home. Houses in the cities are typically so close, that neighbors often know the goings-on in each other's homes. It is not uncommon for neighbors or relatives to invite themselves over to your house, unannounced, late at night. When they come in, they expect to fed. And the hosts do not feel imposed upon. It's the way things go in a tight-knit community built on Confucian principles. I guess Hillary was right, it does take a village.

Personal space issues don't end at the village gate either. While visiting the Science and Technology Museum in Kaohsiung, I had (in my mind) my personal space violated. I was in the men's restroom relieving myself of several cups of green tea. Seeminly out of nowhere, a little old lady with rubber gloves and a scrub brush started cleaning the urinal to my left. When she finished, she stood next to me, apparently waiting for me to finish so she could get on with her work. I thought this was an anomoly, but it happened to me again at a restaurant a few days later.

Anyway, those are some of my observations of Taiwan. In many ways, Taiwan is like the west. In fact, it has (unfortunately) modeled itself as such. I fear that if Taiwan continues on this path, they may find their way of life eroded until they are left with the selfish, valueless, ethically bankrupt moral relativism of the west. In fact, this has already begun to happen. Cartoons in Taiwan often show crude behavior, such as public urination or abuse of women. Drug and alcohol abuse are increasing. Young people are becoming less family centered and more focused on personal happiness - at any cost.

Fortunately, Taiwan is also different. Traditional asian and family values are still strong in the culture. However, these values are being diluted in the quest for all things American. In my opinion, Taiwan would be better off to model themselves after other asian countries (Singapore comes to mind). Or better yet, create a uniquely Taiwanese identity grounded on Confucian principles.