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Wan's Column - Recession, Inflation & Running to Survive

Since the hefty 40% petrol price increase on 5 June 2008, life has not been the same for many of us. Each time we meet up with friends and colleagues, the issue of increased costs of living would come up during our discussion. Many are comparing their experience with the 1997/98 Asian Economic crisis, some even went on to say that it is going to be as bad as the 1930 Global Recession.

I am a risk manager in my investment bank and it is part of my job to watch the economy, update with the latest economic news locally and abroad. These days we are living in such a global world that what happened in the far corner of another country could impact us tremendously.

Prior to July 2007, most Malaysians would not have heard of the term “sub-prime” but for the last one year, we read or hear about this term almost everyday. The increase in prices of almost everything; food, fuel, construction materials and any other products or services can be very nerve wrecking. The name Fannie Mae and Freddie Mac sounds very alien to Malaysians and if you do a quiz on 10 Malaysians, probably only one can tell you what they are. However, what is happening to them will impact the economy the world over. (Fannie Mae & Freddie Mac are two United States of America government supported mortgage corporations that control half the mortgages in the USA.)

No one really have a solution to all this and market forces will eventually solve the problem itself albeit it may take a while to do so and along the way, there will be suffering and casualties. I can recall the 1997/98 Asia Economic crisis when I was 10 years younger and a lot less experience as to what can we do at all. Personally, my wealth took a beating and my health deteriorated then. My cholesterol reading went up sharply due to stress from the office. I bloated up to more than 175 pounds and that was my heaviest ever recorded as an adult. The last straw that broke the camel back was when capital control was invoke, it was a big bet then by the government as we have seen countries with capital control losing the value of their currency. I made one critical decision then, I decided to stop worrying…….more precisely not to worry about what I can’t control but focus on what I can control. I decided that I need a couple of activities to take my mind off the deteriorating economy and focus on living.

In the banking industry we were luckier; we did not have significant retrenchment, we just did not get pay increase and bonus during that period. After feeling terrible for one year, I went back to run in the third quarter of 1998. I took part in a 10km run, clocking one hour 19 minutes, much slower time than what I can do today even though I am 10 years older. I also went back to play harmonica with my friend Tay Keng Seng who has started some basic lessons at YMCA Brickfields. These two activities helped me to ride through the crisis as I begin to feel healthier, happier and more optimistic. I became a more cheerful person going into office each day to deal with the issues.

During economic difficulties, the mode is somber and if we start feeling miserable, we do not see hope and opportunities. The Chinese translation of the word “crisis” is made up of two words, danger and opportunity… true. It is said people make money during the crisis when they can see the opportunities and take the risk investing in it.

Recently, I met up for breakfast with Rahmat Kislan age 61, my former Vice-president of PACM from 1998 to 2001. He is sort of semi-retired but keeps his business running just to take on opportunities when they come along.

Wan is all ready for more harmonica playing with his neighborhood Carol singing in the coming Christmas season.

We both agree that our health is the most critical to us as we can only move on provided we have good health. We told ourselves, whatever the state of the economy, we put on our running shoes each day to exercise. Those of you who are reading this column, I urge you to do the same, take up some form of exercise, something that is sustainable and preferably engage with your friends. Last Sunday I organized a private run at Forest Research Institute with a few PACM buddies (Chai Weng Moon, Chong Ting Chow and Peter Lim, all senior veterans!) as a change of environment. After the run we have some breakfast together, have a yarn before going back home. These are economical activities that we can all afford and it does a lot of good, both to our health and fellowship.

Last Saturday, I rediscovered Madras Lane for the street food, famous for Laksa, Yong Tau Foo and Chee Cheong Fun. Those of you who may not be familiar with China Town, this Madras Lane is parallel to Petaling Street, towards Jalan Tun HS Lee. This area used to house Madras Cinema that I have watched numerous Chinese movies during my younger days. It was burnt down in the seventies and is a car-park now. Unexpectedly, I stumbled upon an old records shop nearby, Yan Kee (selling CDs, VCDs and DVDs now) that I used to patronize way back in the seventies. They have a fine collection of singers from my era that may not make it to the newer departmental stores. I can now buy some of these collectors’ items to get me back to some good old songs and music; something that I did to manage my mood at the last recession as well.

Taking part in local events like the Siemens Run is a healthy economical activity
for the weekend. Photo courtesy of Tey Eng Tiong

Have the average Malaysians adjusted their lifestyle? Many have but still many have not, especially when come to vices. Last month I took a taxi to the LCCT and the taxi driver was smoking away while waiting for me to wear my shoes. I asked him how much he smokes in a day; he smokes 2 large packs of cigarettes each day. It costs him RM18 each day to smoke. My normal lunch cost me RM6.50 for a bowl of noodle and a drink, pale compared to his cigarettes costs. I went on to ask him the taxi rental cost; RM55 a day. Gas costs RM8 per tank. He went on to tell me that my trip to LCCT (RM60) will pay for his rental for the day and his second trip would be profit. I advised him to stop smoking for his own health and also save some money but I knew from his body language, he is not willing to kick the habit yet. If he could drop his smoking habits, he could easily pay the loan for a medium cost house with the RM540 savings a month! The point I am putting across is that there is some room for some adjustments in our personal expense, we just have to decide which to cut and just do it.

Proactively, I have reviewed my family expenses without being too drastic. I decided to defer an overseas holiday I plan to take in September 2008 to Yunnan, China. Instead, I have now committed to the Borneo Marathon in October 2008 at Kota Kinabalu and a short holiday to Kundasang / Mount Kinabalu Park at about 30% of my original China budget. It is an easy adjustment, but I do not think it is any less enjoyable as I have good company; my wife Clara, my running buddies, Chai Weng Moon and Kim. I think the important thing to remember is that difficult times will not last forever, they will eventually blow over once the economy has adjusted or re-balanced. There will be opportunities for some good investments during this difficult period, you just have to look out for them. The most important thing we need to do is to focus on living, spend time with your family, friends and carry on doing what you enjoy while adjusting your budgets. I will skip the Standard Chartered Singapore Marathon in December due to the relative high costs but will do the Ipoh Road Runners Annual 10km run in Ipoh during November instead, an example of adjustment without taking the joy out of running. We must continue to spend within our means as our consumption will help to keep the economy going. I hope a good outcome that comes with this recession is that we learn not to waste, the excessive food or the unnecessary impulse buying of stuff that we don’t need. It is also a good time to learn some new skills that would be useful to us in the long run. Live life and run on…………my friends!

Wan Yew Leong
12 Aug 2008  


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