An 80-year old man was waiting in a queue at the bus stop. There was no sign of bus coming. Time and again, he looked at his watch anxiously, and murmured that he would be late.
A young woman behind said to him, "Sir, I just read the news on my iphone. There's an accident on the Harbour Bridge. The traffic is now very slow." The old man said sadly, "Thanks, so I'll miss my appointment at 9 o'clock then." Seeing the old man was still so anxious, the young woman tried to chat with him, "I believe you are retired. You don't need to be in such a hurry like us. It doesn't matter too much if you're late, does it?"
The old man hesitated for a second and said to the woman, "My wife is living in a nursing home. She'll have breakfast at 9 o'clock every morning. In the last five years, she liked me to have breakfast with her together. " He then paused for a few more seconds, and continued, "She's got dementia ... True, she doesn't know if I haven't come to see her today ..... In fact, she doesn't know if I have come to see her either ....... Frankly, she doesn't know me any more ..............."
Apparently not knowing what to say, the young woman remarked, "Then why ... why do you bother so much to be there everyday and in time?"
The old man looked at her calmly, and smiled, "But I still know her."
The answer was so simple, and yet firm, and it represented so much commitment and love from a husband to a wife!
We all have said in the wedding vows, "I (xxx) take you (yyy) to be my wife/husband, to have and to hold from this day forward, for better or for worse, for richer or for poorer, in sickness and in health, to love and to cherish; from this day forward till death do us part." ...... But can everyone do it?
Monday, February 20, 2012
Tuesday, February 14, 2012
Wrong Seat
An elderly lady called 000 on her mobile phone to report that her car had been broken into.
She was hysterical as she explained her situation to the operator, "They've stolen the stereo, the steering wheel, the brake pedal and even the accelerator!" she cried.
The operator said, "Lady, stay calm. An officer is on the way."
A few minutes later, the officer radioed in. "Disregard." He said, "She got in the back-seat by mistake......"
She was hysterical as she explained her situation to the operator, "They've stolen the stereo, the steering wheel, the brake pedal and even the accelerator!" she cried.
The operator said, "Lady, stay calm. An officer is on the way."
A few minutes later, the officer radioed in. "Disregard." He said, "She got in the back-seat by mistake......"
Monday, February 6, 2012
聲聲慢
李清照在其作品 '聲聲慢' 中, 以幾個簡單, 重疊的句子, 刻畫出愁的意景：
不過, 凡事都應該向好的方面看, 我們亦以幾個簡簡, 單單, 重重, 覆覆的字句, 急急忙忙地寫出以下的 '快快趣', 自我輕鬆一番 :
尋尋 覓覓 冷冷 清清 凄凄 慘慘 戚戚
：
愁字了得!
：
愁字了得!
不過, 凡事都應該向好的方面看, 我們亦以幾個簡簡, 單單, 重重, 覆覆的字句, 急急忙忙地寫出以下的 '快快趣', 自我輕鬆一番 :
旅旅 行行 飲飲 食食 開開 心心 爽爽
:
何愁之有?
:
何愁之有?
Tuesday, January 24, 2012
Hospital Service in Hong Kong
I went for an emergency treatment at the Accident and Emergency (A&E) Unit of the Queen Mary Hospital in Hong Kong on New Year Eve!
We went to Macau on holiday for a few days. I disembarked from the coach at the Macau Ferry Terminal when returning to Hong Kong. I tried to use my right leg to stand up from my seat and suddenly I had a very sharp pain. I rested for a while until the pain eased, and I managed to come back to Hong Kong afterwards. But the next morning at New Year Eve, it hurt very badly whenever my right leg touched the ground. I was worried that I might have a bone fracture given my age. So I was escorted by my family to the Queen Mary Hospital for an emergency treatment.
After I registered at the reception of the A&E, I was shortly directed to the Triage section for an initial assessment. I was classified as Grade 4 severity (Grade 1 being the most serious which will be given top priority treatment whereas Grade 5 is regarded as non-urgent and will be turned away by A&E), and was asked to wait in the waiting area until called. There were some others in the waiting area who also seemed to be of low severity like me. During the time waiting, we saw other more serious patients urgently brought in by ambulances, and we observed the A&E staff attending to them quickly with due medical care. So we watched and waited willingly and patiently.
I was later called into one of the A&E cubicle to see the doctor. She asked me in detail what happened and how I felt, and examined my right leg. She then directed me to the X-ray section for X-rays. Luckily the X-rays showed no bone fracture but some bony out-growth in my right knee. The doctor said my case looked to be some bone inflammation on the knee, and prescibed me some medications. She felt the bony out-growth in the knee position is quite uncommon and suggested me to make an appointment with the Orthopaedics Department for a follow-up consultation. I said to her that I would only be in Hong Kong for a few more days and might not have enough time for the appointment. She then kindly wrote me a reference letter and reminded me to visit my doctor upon return to Australia. I was charged $100 for the whole visit including consultation, X-rays and medications.
Despite we have heard so much negative reports on public hospital services from the Hong Kong media, my own personal experience above in Queen Mary Hospital has been highly positive. The doctors, nurses and hospital staff were all attentive, caring and professional. The medical procedures were well organized, efficient and effective. The A&E set-up was systematic, neat and well equipped. The fairly low medical charge reflected high level of subsidy by the Hong Kong Government. I have to say the overall service has been extremely impressive by every standards.
While sometimes we should criticize on matters in order to forge on improvements, but over-reporting on negative aspects would be counter-productive. We should look more to the bright side and at times show appropriate and deserved appreciations whenever situations warrant. This will make people feel rewarded, reinforce staff morale and confidence and thus further help to improve the overall performance. In return, we can have a even better hospital service in our community.
We went to Macau on holiday for a few days. I disembarked from the coach at the Macau Ferry Terminal when returning to Hong Kong. I tried to use my right leg to stand up from my seat and suddenly I had a very sharp pain. I rested for a while until the pain eased, and I managed to come back to Hong Kong afterwards. But the next morning at New Year Eve, it hurt very badly whenever my right leg touched the ground. I was worried that I might have a bone fracture given my age. So I was escorted by my family to the Queen Mary Hospital for an emergency treatment.
After I registered at the reception of the A&E, I was shortly directed to the Triage section for an initial assessment. I was classified as Grade 4 severity (Grade 1 being the most serious which will be given top priority treatment whereas Grade 5 is regarded as non-urgent and will be turned away by A&E), and was asked to wait in the waiting area until called. There were some others in the waiting area who also seemed to be of low severity like me. During the time waiting, we saw other more serious patients urgently brought in by ambulances, and we observed the A&E staff attending to them quickly with due medical care. So we watched and waited willingly and patiently.
I was later called into one of the A&E cubicle to see the doctor. She asked me in detail what happened and how I felt, and examined my right leg. She then directed me to the X-ray section for X-rays. Luckily the X-rays showed no bone fracture but some bony out-growth in my right knee. The doctor said my case looked to be some bone inflammation on the knee, and prescibed me some medications. She felt the bony out-growth in the knee position is quite uncommon and suggested me to make an appointment with the Orthopaedics Department for a follow-up consultation. I said to her that I would only be in Hong Kong for a few more days and might not have enough time for the appointment. She then kindly wrote me a reference letter and reminded me to visit my doctor upon return to Australia. I was charged $100 for the whole visit including consultation, X-rays and medications.
Despite we have heard so much negative reports on public hospital services from the Hong Kong media, my own personal experience above in Queen Mary Hospital has been highly positive. The doctors, nurses and hospital staff were all attentive, caring and professional. The medical procedures were well organized, efficient and effective. The A&E set-up was systematic, neat and well equipped. The fairly low medical charge reflected high level of subsidy by the Hong Kong Government. I have to say the overall service has been extremely impressive by every standards.
While sometimes we should criticize on matters in order to forge on improvements, but over-reporting on negative aspects would be counter-productive. We should look more to the bright side and at times show appropriate and deserved appreciations whenever situations warrant. This will make people feel rewarded, reinforce staff morale and confidence and thus further help to improve the overall performance. In return, we can have a even better hospital service in our community.
Monday, January 16, 2012
Thursday, December 8, 2011
The Secrets of Life (5 of 5) - Crossover and Chromosome Inversion
An ordinary human has 46 chromosomes in each cell made up of 23 pairs; one half of the chromosomes are inherited from the mother and the other half from the father. In each chromosome, there are hundreds or thousands of genes. But to simplify our discussion, let's assume there are only four genes in a particular pair of chromosome; A, B, C, D in one copy inherited from the mother and A', B', C', D' in the other copy inherited from the father as shown in Figure 1. 
During the formation of the egg or the sperm, the chromosome pair separates so that the egg or sperm cell contains only one copy of the chromosome. If this egg or sperm combines with a sperm or egg of a partner at time of conception, an embryo of a child will be formed with a full pair of chromosomes. As we can see in this way, genes from only the mother or the father will be inherited to the child (i. e. either the chromosome with genes A, B, C, D or the chromosome with genes A', B', C', D' will be passed down to the child). So there is a possibility that a child inherits characteristics from the mother or the father only, and not from both parents.
Nature plays a wonderful role in this regard. In practice, before the pair of chromosome separates, the two legs of the chromosome line up very closely with each other. Genes in one leg of the chromosome may exchange with the corresponding genes in the other leg of the chromosome (e.g. genes C, D may swap with genes C', D' as in Figure 2).
The chromosomes then separate to form the egg or sperm. This process is called crossover which enables the egg or sperm to carry genes from both the mother and the father before conception, and hence enables the child to inherit genes (and hence characteristics) from both parents. With similar reasoning, we can see that a child can inherit genes from all his grandparents, all his great grandparents and great great grandparents back in many generations. Thus, with crossover, a child is able to inherit a little bit of each from any of his ancestors. The exact mechanism of crossover (i.e. when and how crossover will take place and which genes will exchange etc.) is not known. Hence, the exchange of genes is considered at random.
An individual with chromosome inversion has a normal chromosome and a chromosome with some genes inverted as shown in Figure 3.
The individual is completely normal as he/she has no extra or missing genes. It does not really matter which order the genes are as long as they are all present. During the formation of the egg or sperm, the two chromosomes line up very closely with each other, and crossover of genes may take place.
If the crossover occurs not in the inverted region (e.g. genes A, D swap with A', D' as in Figure 4) before the chromosomes separate,
both the normal leg and the inverted leg of the chromosomes still has the right number of genes. If the egg or sperm formed from the normal leg of the chromosome combines with a sperm or egg of the partner at conception, an embryo with normal chromosomes will be produced. Alternatively, if the egg or sperm formed from the inverted leg of chromosome combines with a sperm or egg of the partner, an embryo with inverted chromosomes will be produced instead.
If crossover occurs in the inverted region (e.g. gene B swaps with C' as in Figure 5)
before the chromosomes separate, both the normal leg and the inverted leg of the chromosomes will have an imbalance of genetic material. If the egg or sperm formed from either of these legs combines with a sperm or egg of the partner at conception, an embryo with a faulty pair of chromosomes will be produced.
In summary, when an individual with chromosome inversion has baby, one of three things might happen:
1. the individual passes his/her normal chromosome on in the egg or sperm. The baby will have a completely normal chromosome pattern with the correct number of genes in the correct order.
2. the individual passes his/her inverted chromosome on in the egg or sperm. The baby will inherit the inverted chromosome. However, since the correct amount of genetic material are present, the baby will be perfectly normal and healthy.
3. the individual passes his/her chromosome with an imbalance of genetic material on in the egg or sperm. The baby will inherit a chromosome which carries an incorrect number of genes. This may result in an early miscarriage or stillborn (usually in the first 3 months of pregnancy). The baby, if born, may have problems in his/her physical or intellectual development.
Given the facts that there are hundreds or thousands of genes in a chromosome and inversion usually occurs in a small portion of the chromosome, the probability of crossover in the inverted region is relatively small compared with crossover not in the inverted region. Hence, the probability of having the baby with genetic problem is relatively small. Nevertheless it is not possible to predict which of the three events would occur in a particular pregnancy. It is therefore important to have prenatal testings during the early stage of pregnancy to examine if the baby has inherited the correct amount of chromosome material, and thus to determine if the baby is genetically healthy before his/her birth.
During the formation of the egg or the sperm, the chromosome pair separates so that the egg or sperm cell contains only one copy of the chromosome. If this egg or sperm combines with a sperm or egg of a partner at time of conception, an embryo of a child will be formed with a full pair of chromosomes. As we can see in this way, genes from only the mother or the father will be inherited to the child (i. e. either the chromosome with genes A, B, C, D or the chromosome with genes A', B', C', D' will be passed down to the child). So there is a possibility that a child inherits characteristics from the mother or the father only, and not from both parents.Nature plays a wonderful role in this regard. In practice, before the pair of chromosome separates, the two legs of the chromosome line up very closely with each other. Genes in one leg of the chromosome may exchange with the corresponding genes in the other leg of the chromosome (e.g. genes C, D may swap with genes C', D' as in Figure 2).
The chromosomes then separate to form the egg or sperm. This process is called crossover which enables the egg or sperm to carry genes from both the mother and the father before conception, and hence enables the child to inherit genes (and hence characteristics) from both parents. With similar reasoning, we can see that a child can inherit genes from all his grandparents, all his great grandparents and great great grandparents back in many generations. Thus, with crossover, a child is able to inherit a little bit of each from any of his ancestors. The exact mechanism of crossover (i.e. when and how crossover will take place and which genes will exchange etc.) is not known. Hence, the exchange of genes is considered at random.An individual with chromosome inversion has a normal chromosome and a chromosome with some genes inverted as shown in Figure 3.
The individual is completely normal as he/she has no extra or missing genes. It does not really matter which order the genes are as long as they are all present. During the formation of the egg or sperm, the two chromosomes line up very closely with each other, and crossover of genes may take place.If the crossover occurs not in the inverted region (e.g. genes A, D swap with A', D' as in Figure 4) before the chromosomes separate,
both the normal leg and the inverted leg of the chromosomes still has the right number of genes. If the egg or sperm formed from the normal leg of the chromosome combines with a sperm or egg of the partner at conception, an embryo with normal chromosomes will be produced. Alternatively, if the egg or sperm formed from the inverted leg of chromosome combines with a sperm or egg of the partner, an embryo with inverted chromosomes will be produced instead.If crossover occurs in the inverted region (e.g. gene B swaps with C' as in Figure 5)
before the chromosomes separate, both the normal leg and the inverted leg of the chromosomes will have an imbalance of genetic material. If the egg or sperm formed from either of these legs combines with a sperm or egg of the partner at conception, an embryo with a faulty pair of chromosomes will be produced.In summary, when an individual with chromosome inversion has baby, one of three things might happen:
1. the individual passes his/her normal chromosome on in the egg or sperm. The baby will have a completely normal chromosome pattern with the correct number of genes in the correct order.
2. the individual passes his/her inverted chromosome on in the egg or sperm. The baby will inherit the inverted chromosome. However, since the correct amount of genetic material are present, the baby will be perfectly normal and healthy.
3. the individual passes his/her chromosome with an imbalance of genetic material on in the egg or sperm. The baby will inherit a chromosome which carries an incorrect number of genes. This may result in an early miscarriage or stillborn (usually in the first 3 months of pregnancy). The baby, if born, may have problems in his/her physical or intellectual development.
Given the facts that there are hundreds or thousands of genes in a chromosome and inversion usually occurs in a small portion of the chromosome, the probability of crossover in the inverted region is relatively small compared with crossover not in the inverted region. Hence, the probability of having the baby with genetic problem is relatively small. Nevertheless it is not possible to predict which of the three events would occur in a particular pregnancy. It is therefore important to have prenatal testings during the early stage of pregnancy to examine if the baby has inherited the correct amount of chromosome material, and thus to determine if the baby is genetically healthy before his/her birth.
Thursday, December 1, 2011
How To Spend To Save
I present below a simple way to save on grocery spending. This is not something new nor anything special. It's just some usual practice undertaken by most retirees and astute housewifes!
1. Prepare your shopping list in advance.
2. Visit shopping mall with presence of both supermarket giants - Coles and Woolworths (see list further below).
3. Have quick tours of these supermarkets in turn, jot down (or memorise if you can) the lower prices between the two for the items you intend to buy.
4. Go to the first supermarket (e.g. Coles), select and buy those items with lower prices. Get the fuel discount voucher for further savings when you make the appropriate amount of purchase.
5. Unload bought items to your car in the car-park.
6. Go to the second supermarket (e.g. Woolworths), select and buy those items with lower prices. Get the fuel discount voucher for further savings when you make the appropriate amount of purchase.
7. Unload bought items to your car in the car-park and go home.
Following are the shopping malls in the Sydney metropolitan area with presence of both Coles and Woolworths. Surprisingly, the supermarkets are usually located fairly close to each other (as shopping malls usually set aside only certain region for groceries). As such, you don't have to spend too much extra of your time to compare prices between the two supermarkets. But the saving could be quite rewarding:
Bauulkham Hill - Stockland
Bondi Junction - Westfield
Brookvale - Warringah Mall
Burwood - Westfield
Campbelltown - Macquarie Square
Carlingford - Carlingford Court
East Garden - Westfield
Hornsby - Westfield
Liverpool - Westfield
Mt. Druitt - Westfield
Parramatta - Westfield
Rouse Hill - Rouse Hill Town Centre
Sylvania - Southgate Shopping Centre
Warriewood - Centro Warriwood
Happy shopping!
1. Prepare your shopping list in advance.
2. Visit shopping mall with presence of both supermarket giants - Coles and Woolworths (see list further below).
3. Have quick tours of these supermarkets in turn, jot down (or memorise if you can) the lower prices between the two for the items you intend to buy.
4. Go to the first supermarket (e.g. Coles), select and buy those items with lower prices. Get the fuel discount voucher for further savings when you make the appropriate amount of purchase.
5. Unload bought items to your car in the car-park.
6. Go to the second supermarket (e.g. Woolworths), select and buy those items with lower prices. Get the fuel discount voucher for further savings when you make the appropriate amount of purchase.
7. Unload bought items to your car in the car-park and go home.
Following are the shopping malls in the Sydney metropolitan area with presence of both Coles and Woolworths. Surprisingly, the supermarkets are usually located fairly close to each other (as shopping malls usually set aside only certain region for groceries). As such, you don't have to spend too much extra of your time to compare prices between the two supermarkets. But the saving could be quite rewarding:
Bauulkham Hill - Stockland
Bondi Junction - Westfield
Brookvale - Warringah Mall
Burwood - Westfield
Campbelltown - Macquarie Square
Carlingford - Carlingford Court
East Garden - Westfield
Hornsby - Westfield
Liverpool - Westfield
Mt. Druitt - Westfield
Parramatta - Westfield
Rouse Hill - Rouse Hill Town Centre
Sylvania - Southgate Shopping Centre
Warriewood - Centro Warriwood
Happy shopping!
Wednesday, November 23, 2011
The Secrets of Life (4) - Faulty Genes and Close Relations Marriage
An ordinary human has 46 chromosomes in each cell made up of 23 pairs. In each chromosome, there are hundreds and thousands of genes, and it is estimated that there are about 25,000 - 35,000 genes (exact number is not yet known) in a single human cell. Genes may become faulty due various reasons (e.g. inherited from parents, during the formation of egg or sperm or during the lifetime of the individual due aging or radiation etc). As chromosomes come in pairs, genes also come in pairs. A single faulty gene in a chromosome usually will not cause any problems as there is another working copy of the same gene in the other leg of the chromosome. Ordinary human usually has several faulty genes in the body at any time, and the body still functions perfectly normally. Only when both copies of the same gene in both legs of the chromosomes become faulty, then genetic problem occurs which will then affect the health and development of the individual.
During the formation of the egg or sperm, the two legs of each of the 23 pairs of chromosomes separate. The egg or sperm then has only single legs of the 23 pairs of chromosomes. At the time of conception, the egg and the sperm combine to form the first cell of the child. Each leg of the egg will combine with its corresponding counterpart of the sperm forming 23 pairs of chromosomes like the parents. If there is a faulty gene in the chromosome of the egg, AND if there is a SAME faulty gene in the chromosome of the sperm, then the SAME copy of the genes in the chromosome will be faulty resulting in genetic problems in the child.
Given the facts that there are 25,000 - 35,000 genes in human, a healthy human usually has only a few faulty genes and the faulty genes exist randomly, the chance of having a SAME faulty gene during conception (hence causing genetic problems) of two UNRELATED individuals is extremely low. But when the two individuals are close blood relatives, they share a greater proportion of genes in common than unrelated individuals do because they have a common ancestor from whom they inherited their genes. As such, they have a greater chance of having a same faulty gene in common in their chromosomes. When their egg and sperm combine at time of conception, there is a greater risk of having a child with a same copy of faulty genes in the chromosomes and hence a greater risk of having genetic problems.
The table below shows the proportion of genes shared between close blood relatives:
The closer the blood relations (i.e. the lower the degree of relationship), the greater is the proportion in having genes in common, and hence the higher risk of having offspring with genetic problems .........................................
During the formation of the egg or sperm, the two legs of each of the 23 pairs of chromosomes separate. The egg or sperm then has only single legs of the 23 pairs of chromosomes. At the time of conception, the egg and the sperm combine to form the first cell of the child. Each leg of the egg will combine with its corresponding counterpart of the sperm forming 23 pairs of chromosomes like the parents. If there is a faulty gene in the chromosome of the egg, AND if there is a SAME faulty gene in the chromosome of the sperm, then the SAME copy of the genes in the chromosome will be faulty resulting in genetic problems in the child.
Given the facts that there are 25,000 - 35,000 genes in human, a healthy human usually has only a few faulty genes and the faulty genes exist randomly, the chance of having a SAME faulty gene during conception (hence causing genetic problems) of two UNRELATED individuals is extremely low. But when the two individuals are close blood relatives, they share a greater proportion of genes in common than unrelated individuals do because they have a common ancestor from whom they inherited their genes. As such, they have a greater chance of having a same faulty gene in common in their chromosomes. When their egg and sperm combine at time of conception, there is a greater risk of having a child with a same copy of faulty genes in the chromosomes and hence a greater risk of having genetic problems.
The table below shows the proportion of genes shared between close blood relatives:
| Relationship Type | Relationship | Proportion of Genes in Common |
|
| Twins (雙生兄妹, 姐弟) | All – 100% |
| First degree relatives | Brother and sister (兄妹, 姐弟) | Half – 50% |
| Second degree relatives | Half brother and sister (同父異母或同母異父兄妹, 姐弟) | Quarter – 25% |
| Third degree relatives | Cousins (堂兄妹, 姐弟, 表兄妹, 姐弟) | Eighth – 12.5% |
Thursday, November 17, 2011
How to Do a (Right) Research
I read this article in a weekly news bulletin of the Knox Grammar School.
The teacher asked his science students to research some of the latest and most amazing genetic developments using new biotechnology procedures.
Jim, Tom and Peter used Google as the search engine on the internet for their work. Jim presented a picture of a mouse with what looks like an human ear growing on its back. His source was from the BBC News. Tom found the same picture in Wikipedia and found it was the Vacanti Mouse. Peter found the same picture in Dr Karl's Great Moments in Science on ABC Science. Each boy used the information from Google to write up a report on the Vacanti Mouse.
While their effort on the research work were all commendable, only one was right!
The questions are:
1. Which boy got it right?
2. How, using the internet, can information be validated?
3. What does this mean for finding 'truth'?
BBC, Wikipedia and ABC are all reputable sources. But they provided different interpretations of this genetically engineered ear growing on the back of a mouse. Among them, the ABC Science program, Dr Karl's Great Moments in Science was correct ....... the others wrong.
So how was this determined?
The best (and correct) way is to go to the source of the work - in this case Dr Vacanti. Search for the original reports by Dr Vacanti, then consider the original reports with those given by sources like BBC, Wikipedia and ABC.
The key is to (try the best to) validate straight from the horse's mouth.
The teacher asked his science students to research some of the latest and most amazing genetic developments using new biotechnology procedures.
Jim, Tom and Peter used Google as the search engine on the internet for their work. Jim presented a picture of a mouse with what looks like an human ear growing on its back. His source was from the BBC News. Tom found the same picture in Wikipedia and found it was the Vacanti Mouse. Peter found the same picture in Dr Karl's Great Moments in Science on ABC Science. Each boy used the information from Google to write up a report on the Vacanti Mouse.
While their effort on the research work were all commendable, only one was right!
The questions are:
1. Which boy got it right?
2. How, using the internet, can information be validated?
3. What does this mean for finding 'truth'?
BBC, Wikipedia and ABC are all reputable sources. But they provided different interpretations of this genetically engineered ear growing on the back of a mouse. Among them, the ABC Science program, Dr Karl's Great Moments in Science was correct ....... the others wrong.
So how was this determined?
The best (and correct) way is to go to the source of the work - in this case Dr Vacanti. Search for the original reports by Dr Vacanti, then consider the original reports with those given by sources like BBC, Wikipedia and ABC.
The key is to (try the best to) validate straight from the horse's mouth.
Monday, November 7, 2011
European Debt Crisis (3 of 3) - Solutions! or Solutions?
As the European Debt Crisis deepened towards the end of 2011, European leaders are under tremendous pressure to find ways to contain, if not to solve, the problem. On 26 October, 2011, EU leaders met in Brussels to hold marathon talks and worked through the night into next morning to come up with an agreement described as vital solutions to the huge debt crisis. Essentially, the agreement consisted of three parts:
1. The European private banks holding Greek bonds agreed to write off 50% of their face value. Effectively, this will lower the Greek debts from the expected 180% to 120% of their GDP by 2020. Although the figure is still enormous but now is more sustainable for an economy driven into recession by austerity measures.
2. European banks will be required to raise about 106-billion euros in new capital by June 2012 to increase their holdings of safe assets to 9% of their total capital. This would help protect them against potential losses resulting from any government defaults, and hence avoid any potential bank crisis.
3. The main euro bailout fund - European Financial Stability Fund (EFSF) - will be expanded from 440-billion euros set up earlier this year to 1-trillion euros. This would be sufficient to provide guarantees for bonds issued by countries including Italy and Spain.
The first part provides a short-term action to alleviate Greek's debt burden. By having the European banks writing off 50% of their debts, it would give some breathing space for Greece for some time. But with the still staggering figure of 120% debt to GDP ratio (doubling the EU limit of 60%), coupled with the weakening economy due to the austerity measures imposed on the country in exchange of the EU bailout packages, will Greece be able to repay or reduce its debts by itself?
The second part aims to provide a medium-term firewall to protect European banks from any potential government defaults. However, this is just a target set by the EU leaders. No information is yet available on how to raise the 106-billion euro of fresh capital. Given the banks taking up 50% loss of their Greek bond assets in support of part 1, will the banks be able to further raise that level of capital by June, 2012?
The third part aims to provide a longer-term pool of fund to help bailout euro countries with financial difficulties, especially larger economies like Italy and Spain. But how to boost up the fund to 1-trillion euro is still yet unknown. The head of EFSF traveled to China right after the EU meeting on 26Oct to discuss on possibility of China's contribution as China is one of the few countries with good financial reserves. But will China be willing to invest in this risky business? China may ask for political returns in exchange of their financial contribution if they do invest. Will EU be able to accept? If not, where will the money come from? Further questions may also be asked. Is the 1-trillion euro fund enough given the (seemingly endless) bailouts needed for the debt countries? Is the continual bailout a right strategy to resolve the crisis?
The EU leaders, especially Germany and France, are very determined to maintain the integrity of the EU and the Eurozone. They worked very hard to try to keep Europe intact from disintegrating due to debt problems of eurozone members. They are very anxious and keen in implementing the plan agreed on 26 October, 2011 to resolve the crisis. But with the ever worsening situation in Europe, especially recently with Italy which is the third largest economy in eurozone after Germany and France - an economy too big to be saved, lining up to a brink of falling after Greece, can it really solve the crisis? If not, what are the real solutions?????
Only time will tell!
1. The European private banks holding Greek bonds agreed to write off 50% of their face value. Effectively, this will lower the Greek debts from the expected 180% to 120% of their GDP by 2020. Although the figure is still enormous but now is more sustainable for an economy driven into recession by austerity measures.
2. European banks will be required to raise about 106-billion euros in new capital by June 2012 to increase their holdings of safe assets to 9% of their total capital. This would help protect them against potential losses resulting from any government defaults, and hence avoid any potential bank crisis.
3. The main euro bailout fund - European Financial Stability Fund (EFSF) - will be expanded from 440-billion euros set up earlier this year to 1-trillion euros. This would be sufficient to provide guarantees for bonds issued by countries including Italy and Spain.
The first part provides a short-term action to alleviate Greek's debt burden. By having the European banks writing off 50% of their debts, it would give some breathing space for Greece for some time. But with the still staggering figure of 120% debt to GDP ratio (doubling the EU limit of 60%), coupled with the weakening economy due to the austerity measures imposed on the country in exchange of the EU bailout packages, will Greece be able to repay or reduce its debts by itself?
The second part aims to provide a medium-term firewall to protect European banks from any potential government defaults. However, this is just a target set by the EU leaders. No information is yet available on how to raise the 106-billion euro of fresh capital. Given the banks taking up 50% loss of their Greek bond assets in support of part 1, will the banks be able to further raise that level of capital by June, 2012?
The third part aims to provide a longer-term pool of fund to help bailout euro countries with financial difficulties, especially larger economies like Italy and Spain. But how to boost up the fund to 1-trillion euro is still yet unknown. The head of EFSF traveled to China right after the EU meeting on 26Oct to discuss on possibility of China's contribution as China is one of the few countries with good financial reserves. But will China be willing to invest in this risky business? China may ask for political returns in exchange of their financial contribution if they do invest. Will EU be able to accept? If not, where will the money come from? Further questions may also be asked. Is the 1-trillion euro fund enough given the (seemingly endless) bailouts needed for the debt countries? Is the continual bailout a right strategy to resolve the crisis?
The EU leaders, especially Germany and France, are very determined to maintain the integrity of the EU and the Eurozone. They worked very hard to try to keep Europe intact from disintegrating due to debt problems of eurozone members. They are very anxious and keen in implementing the plan agreed on 26 October, 2011 to resolve the crisis. But with the ever worsening situation in Europe, especially recently with Italy which is the third largest economy in eurozone after Germany and France - an economy too big to be saved, lining up to a brink of falling after Greece, can it really solve the crisis? If not, what are the real solutions?????
Only time will tell!
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