The end of cash and the last money counter

With apologies to Francis Fukuyama for a twist on his book's title but I think it is safer for everyone if central banks stop printing paper money or minting coins. 

In times past workers were paid their salaries in cash. They would line up during paydays at the payroll teller's window or table, sign after their name on the payroll sheet and be handed envelopes containing their period's salary. Some companies did not even have envelopes. The payroll master just counted out the bills and coins in front of the worker.

Preparing the payroll sheet was tedious. You needed to have a typewriter with a very wide carriage because the sheet was twice as wide as the length of a legal size paper. If the payroll typist was not lucky enough he would fold up the sheet before he could insert it into his standard typewriter. And the payroll master needed to have the correct number of bills and coins for all those envelopes. Therefore he must figure well in advance the number of each denomination to be withdrawn from the company's depository bank.

But the risky side was bringing the cash from the bank. Many payroll money were lost to robbers or lost on the way to the payroll office of a firm. Good for those with big payrolls who had their cash brought to them by the bank's armored vans.

The worker also faced the risk of being robbed of his earnings for the period because his envelope  contained all his salary for the preceding 15 days of work.

But that changed with the introduction of ATM payroll accounts.  One does not need anymore to carry all 15-days worth of money. An employee does not even have to withdraw cash in order to pay bills. You can pay through the ATM.

However,  even with an ATM account a person can still be  robbed of his savings. A robber can just force him to withdraw money from the ATM and flee away with the cash.

We should make the next step: doing away with cash completely to make the world safer.  The First to disappear will be kidnap-for-ransom operations. Kidnappers cannot just ask the family of the kidnap victim to deposit the ransom to their account because it can be easily traced. Secrecy of bank deposits can be waived by the courts in criminal activities. 

What ransom will kidnappers demand? Jewelry? Gold bars? They will find it hard hiding and transporting their loot. Perhaps they can demand that the ransom be paid by transferring credits to their mobile phone accounts as in GCASH or Smart Padala. But those can still be traced.

How will jueteng operators conduct their enterprise if their runners cannot collect in cash? Will they turn to cellphone loads, as some are doing now,  as a way of collecting bets? That will move jueteng a little above the underground economy because some of its income will be captured through more usage of cellphone loads which means more taxable income for mobile phone operators.

With the end of cash goes the last money counter. But the world will be a lot safer. And in the case of jueteng, a little increase in government revenue.

OK, I forgot about the problem of counterfeiting which will also go away with the last cash.

Where is my thumb drive, Canon?

A few months ago I bought a Canon printer at the COMDDAP exhibit at SM City, Cebu. It was supposed to come with a freebie: a 4 gig thumbdrive.

Following instructions in their exhibit flyers, I e-mailed a scanned copy of my purchase documents to the Canon distributor in Manila. But in return, I got an automated reply asking me to send the serial number of my printer. When I did, I got another automated reply.

The Canon Philippines website has an online inquiry but when I did I also got another automated reply.

My e-mail to the Canon Singapore regional office bounced saying the addressee was not in the Lotus Domino directory.

Now, a 4gig thumbdrive is but a measly P500 or so at any CDRKing stores. But it is the duplicity of the Canon distributor - Dentsuindio - that irked me.

Update: The thumbdrive did finally arrive last week. But I think the exhibitor should have had on stock enough thumbdrives or whatever freebie they advertised. They spent more than the cost of the piece in sending the thing first to the wrong address and then sending it finally to me. 

The COMDDAP contact person was quick to answer my complaint. More power COMDDAP guys!

All's well, that ends well!

My favorite economist wins the Nobel

Congratulations to Paul Krugman for winning the Nobel in economics. I devour the essays of Krugman because he writes like my other favorite - Richard Dawkins; concise and easy to understand.

Eat you hearts out Bush and Greenspan.

My forecast: Steven Levitt gets his in 10 years. 

My "prayer": Dawkins gets a Nobel too.

Manila gamblers make it to best-seller

I've heard of our bigshot politicians accompanying Manny Pacquiao to Las Vegas during his boxing bouts. These big shots are also famous for their bigtime gambling habit. But I never suspected they are that big thus meriting a mention in a best-selling book. This passage from The Black Swan confirms:

All they had to do was control the "whales," the high rollers flown in at the casino's expense from Manila or Hong Kong; whales can swing several million dollars in a gambling bout.

The Black Swan comes flying again!

This passage from The Black Swan by Nassim Nicholas Taleb is very interesting in the face of the current financial turmoil.

In the summer of 1982, large American banks lost close to all their past earnings (cumulatively), about everything they ever made in the history of American banking—everything. They had been lending to South and Central American countries that all defaulted at the same time—"an event of an exceptional nature." So it took just one summer to figure out that this was a sucker's business and that all their earnings came from a very risky game. All that while the bankers led everyone, especially themselves, into believing that they were "conservative." They are not conservative; just phenomenally skilled at self-deception by burying the possibility of a large, devastating loss under the rug. In fact, the travesty repeated itself a decade later, with the "risk-conscious" large banks once again under financial strain, many of them near-bankrupt, after the real estate collapse of the early 1990s in which the now defunct savings and loan industry required a taxpayer-funded bailout of more than half a trillion dollars. The Federal Reserve bank protected them at our expense:
when "conservative" bankers make profits, they get the benefits; when they are hurt, we pay the costs.

The US president at the time was Bush Sr who was also in the midst of a war with Iraq.

Fund managers often drown would-be investors in statistics to show that the investment schemes they are marketing would surely rake in money for their investors. Taleb updates us on this pseudo-science.

Lehman trouble worries my colleagues

The collapse of Lehman are making my colleagues walk with their fingers crossed and in daze.

They have placements, big placements, in the local subsidiary of American International Group (AIG) because of the big returns on their investments.

AIG is skittering on the brink and my friends are praying real hard. Well, win some; lose some.

People like me who have nothing to invest have nothing to lose. And no hope of winning anything. :-(

The Obama Speech - a must read (and view)

I have lumps in my throat while reading the text of the speech of Barack Obama. And later I had tears in my eyes when I watched the video. On the amusing side: my family and I counted 30 "thank you's" from Obama before he could go on to his speed.

Will the Philippines ever have a Filipino Obama? Ninoy Aquino could have been one. Except that unlike Obama, Ninoy had the pedigree for politics. So Obama's story is more astounding.

I am optimistic. Since I plan to live for 30 more years, I know the Philippines will have decent leaders before I die. And I hope to see my grandchildren enthusiastic to vote for one. That will be the day that I will cast my ballot again. Just like those old Americans who went back to the primaries and will vote again on November 4 just because they see hope in Obama.

First, a transformation in our society should come before we can elect a Filipino Obama. That is what happened to America. Paul Krugman says America has been transformed that is why it is now possible for a Black (or a woman I should add) to be elected to the highest office.

I believe transformation comes with the creation of a strong working middle class with enough voting clout to counter the tendency of the masses to vote for a populist politician and the bias of the elite to choose from among their own.

Periodically I get to lecture to group of students who come to the office as part of their class requirements. I always make it a point to show them the need for upright politicians, honest government bureaucrats and hardworking entrepreneurs to get this county out of the rut it is in.

The hope of the Philippines are in these young students. Those of us who have been in politics, in government bureaucracies or in business for more than two decades and still have not done anything, our time is up. Let's give way to the young, nurture their idealism and provide them with the opportunities for the sake of our grandchildren.

My thoughts on the Mindanao conflict

This is only a draft. I hope I have enough time this weekend to complete this blog.

(I am introducing my out-of-school son to Visual C++ this weekend. He stumbled on Java a week ago. But I think Visual C++ would be better since he is interested in game programming.)

My outline for this piece:
1. I have a stake in Mindanao. The first casualty in our family was an uncle who was killed (early 1950s) in Zamboanga del Norte by bandits.
2. I spent my early childhood up until my grade 1 (1958) in Zamboanga del Sur. From Grade 2 until my high school I stayed with my grandparents in Cebu.
3. For college I went back to Mindanao and studied fisheries hoping to spend the rest of my years tending to our family fishpond.
4. My father was murdered by his political opponent (a fellow Bisaya) in 1971. My mother moved the family back to Cebu. My father's kins stuck it out. A little later the "Muslim-Christian" conflict erupted. Our town was razed to the ground.
5. My uncle and his second wife and children were killed by the rebels presumably Maguindanaos. My cousin and his family were killed also by rebels.
6. I think the Maranaos and the Maguindanaos and other natives of Mindanao have plenty of reasons for feeling aggrieved.
7. Peace and progress can only be achieved if these grievances are properly resolved. Some kind of closure, of restitution, is needed because of the past injustice the natives of Mindanao suffered at the hands of those not from Mindanao.

Not the only atheist in Cebu. Thanks God!

I was at the Powerbooks at SM City Cebu with my wife a few weeks back. Just for curiosity I asked the saleslady about any book by Prof. Dawkins. She promptly answered, "Ah, the God Delusion book, it is already sold out".

I kidded my wife that I finally found out I was not the only atheist in town. At the office I am frank about my non-belief and would jestingly describe myself as the only one without four Cs: no cellphone, no credit card, no car and no Christ.

I really would like to have a printed copy of The God Delusion in my bookshelf alongside with the other books of Prof. Dawkins. But I think I have to wait for his next science book on evolution.

Troubled Groups Pontificating

I am always amused when a person or a group with credibility problems propounds an opinion or makes predictions on a public matter such as the economy. These predictions are usually intended to persuade some sectors in the public or influence policy makers.

Citigroup recently came out with a commentary on the Philippine economy. OK, there is something, maybe all things, wrong with the economy. But coming from a company that almost went bankrupt on its subprime investments, that's presumptuous.

Economists of Citibank, an affiliate of Citigroup, also proffer their economic analysis every now and then. But BSP has dropped Citibank as one of its fund managers for some investment violations.

Other troubled firms make a lot of PR noise such as large-scale advertisement trying to drown out the losses their parent firms are racking up abroad. AIG , parent company of Philam Life, comes to mind.

I'd rather stick with Mr. Bearbull's predictions. At least Ron Nathan is entertaining.

Roasted chicken with two butts from Sr Pedro

Saturday morning while on our way home from buying groceries at the Gaisano Fiesta Mall we dropped by the stall of Sr Pedro to buy roasted chicken. There were few chicken still turning brown on the charcoal roaster but the fellow manning the stall handed me a prepared styrobox of chopped chicken.

On returning to the tricycle, my wife told me about the story of the driver concerning some bad practice of the guys working at the stall. They would chop the chicken in an enclosed glass partition which was meant to prevent the chopped particles and oil to splatter all over the place. But somehow the glass partition has been covered with something opaque so that one could not really see how the chicken was chopped up.

This is where the guys do their clever trade. When they push the chopped up parts to the styrobox they drop some pieces to the side of the thick and wide chopping board. Either they sell the collected parts or have them for their meals.

I sort of defended the guys. I made a big speech about how a business would lose its customers by these tricks. And Sr Pedro is already a successful business with many stalls in Cebu.

During lunch, I picked out the wings which are usually the parts I eat otherwise I am mostly on a fish diet. I finished eating first and while I was on the phone talking to my brother, my wife called out and showed me two butts (isol in Cebuano) of the chicken and she was firm that she could not find the breast parts (pecho for Cebuanos).

I hope the management of Sr Pedro is not complicit with this malpractice. We have come to like the taste of Sr Pedro roasted chicken. Andok's chicken is just too pricey.

So we have decided that next time we'll just buy but roasted chicken straight from the roaster and chop it up ourselves.

Duke, Duchess and the CIA

I've been tracking this for sometime and finally got it.

In November 2005 there was a news clipping announcing that a Filipina with the name Duchess Marie Cruz got the Gold Medal Award for the Certified Internal Auditors examination. The award means she was the first placer in the whole world for that exam sitting.

That she was Filipino was not the interesting part (I think it is a sign of inferiority complex to trumpet about any accomplishment of an individual who has even the slightest hint of Filipinoness in his/her blood. I am a believer in the Homo sapien.)

The interesting part is that I remembered that in the previous year the first placer was named Duke Bajenting. That he was a fellow Cebuano is not the interesting thing. (Am I repeating myself?)

I have a daughter who is taking up accountancy. She just passed the Certified Bookkeeper exam. We paid with hard-earned money for the exam. But that was not meant to be the end of it, I found out. The certifying agency, it seems, does not make money only from the exam fees but also from registering with them before they give the passer a certification. I told my daughter I allowed her to take the exam to test what she has learned to date. That she passed was enough for me. Who cares about a piece of certificate.

At our office there are two of us who get calls not only from within but also from other branches in the country from colleagues who refer to us their problem about computers and applications. Interestingly, as far as I know, only the two of us do not have any certificates in computer training.

So I told my daughter to wait until she qualifies for the Certified Internal Auditor exam. Her second name is Hara which is Cebuano for Queen. After a Duke and a Duchess who knows. A father can dream, can't I.

Here is where I tracked the Duke and the Duchess of CIA. Just excuse the little "hambog" about who are tops in the world. That is part of the advertising of the group.

Vitamin C and multi-level marketing

We contracted a young man, actually a family friend, to paint two rooms of our house. He estimated the job would take a week. I was adamant that it would be finished within the time frame because I could not stand the smell of paint. In fact my son and I slept two nights on the living room floor until the paint dried. But the painter could not finish on time because he took a few days off in the middle of his work. One to attend a church function; the other to attend some sort of seminar

It turned out he was attending a seminar which was recruiting salespeople and he told us near the end of his job he would go full time selling vitamin C. He said he'd be earning better than what he gets for painting jobs.

But isn't vitamin c readily available over the counter? Yes, he said, but what he was going to sell was a different kind; one that does not cause tummy trouble because it was alkaline instead of acidic like the common ascorbic acid. He would be selling sodium ascorbate.

Weeks later a group was peddling vitamin C at the office during one noon break. It was sodium ascorbate too under the brand of Vital C. I told them I heard about Fern C from somebody else. One of the salesmen promptly announced that their vitamin c was better. Huh!

There are other vitamin c of the sodium ascorbate type that are marketed in the internet. Ultima C, High C, Bio C, Daily C. Unbranded sodium ascorbate are even sold in drums. So far only Fern C and Vital C appear to be sold via multi-level marketing (MLM) .

This brings the story back to my house painter. And I have two things about what he was about to do.

First is that he was getting enticed by MLM hocus pocus. I have always had some serious reservations about MLM or networking, as it is known in the Philippines. Simply put, I believe only the original organizers of a networking scheme benefit from the business. They suck the profit; the rest are the suckers.

Amway used to be the epitome of MLM. Many people's dreams died with it. Read the story here. Wikipedia has a good article about MLM. This piece is blunt about it. And I say amen to it!

The second thing I have about this is the dubious claims about sodium ascorbate. The list of ailments that sodium ascorbate can cure ranges from cancer to erectile problem. One fact conveniently ignored is that it is not good for people who need to stay away from salt in their diet.

Linus Pauling is the icon for sodium ascorbate peddlers. They trot out the vitamin c megadose that Pauling promoted in his lifetime. There are two things wrong here. Pauling did not use sodium ascorbate. He was megadosing with ascorbic acid. But here's the clincher. Pauling who claimed that vitamin c, which in his case was ascorbic acid, could cure cancer died of prostate cancer.

Well, OK, sodium ascorbate peddlers could always claim that Pauling used the wrong kind of vitamin C. Prostate cancer, you said? Perhaps he was using Frenzy, eh?

There are no mongols in government offices.

In many places mongol has attained generic status. It means pencil just the way that xerox means photocopy even if you are using Minolta or pentel means marker pens even when the brand is Pilot.

But there are still pencils in government offices but no more Mongols. And the reason is the procurement law (RA 9184). The law has a noble intent: to eradicate corruption related to procurement in government offices. But as things stand, devious people can get around it for big ticket items.

For procurement officers and end-users who abide by the law and whose procurement requirement is small it can mean substandard supplies and equipment. It means pencils that break easily and equipment that do not deliver the quality they want.

The implementing rules of the procurement law require government offices to procure their supplies from the Dept. of Budget and Management if they have them on stock. DBM stocks the cheapest items from the suppliers, usually China-made. Of course there are quality products from China but they cost more. Mongols, too, are pricier pencils.

When our office was procuring a multi-media projector two years ago I was asked to submit the specification. But specifying a brand is not allowed. Naturally we wanted the projector that could deliver the highest quality within the approved budget. We asked local suppliers to demo their top of the line items. We found one brand's model that was just introduced. It exceeded all our specifications but it was priced higher than our approved budget. However, as a promotional offer the dealer offered to match our approved budget.

But we could not justify getting it because a Manila supplier submitted its quotation for a Mitsubishi projector via the GEPS at a much lower price and the projector met the minimum required specifications. When it finally arrived from Manila we found its image quality a big letdown. I hated using that projector ever since.

What you get from the DBM warehouse, aside from substandard pencils, are glues that do not stick and marker pens (sorry no Pentels nor Pilots) that dry up fast. And our end-users shudder at the thought that we will be forced to buy our electric fans from DBM soon.

In fairness to to the fine guys at DBM, I know they despised the way they are fast becoming sales personnel.

So do not expect to see Mongols in the fingers of pencil pushing bureaucrats.

Paul Krugman on his Philippine stint

Paul Krugman has something to say about the Philippines. Depending on one's mood at the time or one's political leaning, he could be just attempting to be funny or was satirical.

But the comment in poetic form by Arjun Janah is worth reading. It is simply about experts foisting their expertise on other people. Instead, they ought to learn from the people.

That is how great teachers ply their craft. They learn from their students. They learn what their students needed to learn.

A dialogue with a Nobel Laureate

Yesterday, Feb 8, in the afternoon I attended a dialogue with Nobel Laureate for Economics Finn E. Kydland at the University of San Carlos. The place was the auditorium of the new Law and Business School of USC. Nice place, clean men's room (do I need to point that out?).

Prof. Kydland's hour-long presentation was entitled "Peace & Economic Development in the Era of Globalization". I like his sparse Powerpoint presentation because it did not distract from his speech. The foundation of his speech was of course the idea that won him and Ed Prescott the Nobel in 2004. This idea is that time consistency of policy will result in development. His comparison between what happened in Ireland (from very poor to being rich) and Argentina (previously rich and now poor) was very interesting.

One thing I don't like about open forums is that some people preface their questions with long presentation about themselves before shooting their question. It eats into the time. Yesterday was no different. Only seven persons dominated the forum. One professor wanted the speaker to explain some topics not in his presentation.

The briefest question was from a man who said he lived in Ireland when it was very poor and in Argentina when it was still rich. Then he asked whether it was the EU subsidy that propped up Ireland. Prof. Kydland in effect said that any subsidy going to Argentina wold have evaporated in no time at all. It is the time consistency of policies that can make a difference.

Kydland and Prescott's winning paper on "Rules rather than discretion" is available here .

Prof. Kydland concluded his presentation with a quote from the book "Barriers to Riches". It would be nice to have a copy of the book. But the original paper is available here.

Back to blogging

My last blog at http://rankm.blogspot.com was dated October 15, 2006. I have to create another blog because I do not have anymore editorial access to my site.

When Blogger updated its services in 2006 something went wrong with my account. Somehow my password would not match anymore. And Blogger would advise me that my original password was sent to my account at lycos which was the e-mail account I used when first creating a blog account. This was before there was any gmail. But my Lycos account was long ago suspended for disuse.

We have upgraded our home DSL to 512kbps. Altho my top speed is still well below that despite several complaints and follow-up. But that will be the subject of another blog.