June 2009


A phenomenon that had had been declining is making a comeback. The seedy dangerous world of the loan shark is experiencing a new surge of popularity as progressively greater numbers of people are refused credit by the major and sub-prime lenders.

‘Loan sharks’ is the term used to describe money lenders who operate illegally. These lenders are not licensed by the financial services and so are completely unregulated. The Office of Fail Trading (OFT) issues guidelines to first and second line lenders. These guidelines must be adhered to or the lender will lose its licence. They concern a raft of items, however they specifically lay down a set of rules that are designed to protect the interests, livelihood and privacy of the borrower; for instance licensed lenders are prohibited from using unethical tactics to pursue debt arrears and are not permitted to charge unethical interest rates.

On the other hand the loan sharks operate with a completely free rein. Examples of this are interest rates and repayment terms. Loan sharks will often charge enormous rates of interest and offer loans on extremely bad terms for the borrower. Should the borrower fail to make scheduled repayments on the loan, the loan shark will often use extremely unethical tactics in order to get their money back. Often they will make further loans in order to enable the borrower to repay the first one. Gradually the borrower will become entrapped in a debt mountain with which they are unable to cope.

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The mantra of the times is cost cutting. The axe of cost cutting invariably falls on the employees. It is either through wage reduction, reduced bonuses, reduction of other benefits, reduced work hours or in a worst case scenario in the form job losses.

In most countries unemployment rates are hitting close to double digits, the worst case scenario might soon become a reality for anybody including you. In such a situation, it is imperative that you should have a plan B ready.

Instead of waiting for a surprise and acting re actively, it is important for you do a realistic assessment of your current situation.

Each and every one of you must have an understanding of your employer’s financial situation and strategy, your own function/department current state and whether there is any danger of retrenchment at your level. Once you access the macro and micro level picture, you need to play your next steps accordingly.

You may not have a choice but to look out for alternate employment if you feel that you may be in the firing line. It may not be easy in the current situation. However the current economic situation gives you an excellent opportunity to do what you always wanted to do.

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His girlfriend’s house was surrounded by Federal agents in black SUV’s this afternoon, they told him to walk out and introduce himself. So he did, and he asked them, ‘If you’ve got a warrant, take me into custody. If you don’t, I’m going to Houston.’ And they did, so they arrested him.

Chairman of the troubled Stanford Financial Group, R. Allen Stanford surrendered to FBI agents in Virginia Thursday afternoon, his attorney said. Law enforcement officials said Stanford is in custody after surrendering in Stafford, Va. Authorities plan to unseal an indictment charging Stanford on Friday, the officials said, speaking on condition of anonymity because they were not authorized to discuss the case.

Stanford Financial Group has been under investigation by a grand jury in Houston. The Securities and Exchange Commission filed civil charges earlier this year accusing Stanford and his top executives of conducting an $8 billion fraud by advising clients to buy certificates of deposit from the Antigua-based Stanford International Bank.

The SEC’s lawsuit charged that the bank advertised its CDs in a brochure touting a conservative investment philosophy. But instead the bank’s portfolio was “misappropriated by Defendant Allen Stanford and used by him to acquire private equity investments and real estate,” the suit says.
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I’m not a professional tennis player. I’m not even a tennis player. The last time I touched a tennis racket was 5 years ago. But I did read about how a professional tennis player aims to hit as many balls to the opponent to make him miss, in order to win. An amateur , on the other hand, aims to try to catch as many balls as possible, aiming not to make any mistakes till his opponent eventually makes a mistake and causes himself to lose. That’s defensive playing.

I’m not a professional stock investor either. I admit neither I have the time nor the patience to go through every financial report, visit the companies I’m interested in buying and whatever else it takes to be really confident enough to put a huge chunk of my hard-earned money into the stock. So I have to invest defensively. I aim to minimise my losses while riding the general upward trend of the stock market, rather than maximising my gains on the individual hot stocks. It may limit my gains a little, but in the event of a crash, I hope to come out relatively intact. I basically expect a crash, even in the longest bull run ever. It’s like having a Plan B even though you hope you never have to use it, or buying insurance though you don’t really want to die or get a critical illness just to make the most of it.

So how do I play my defensive game ? I protect myself the following ways.

1. I stick with what I know. It’s easier to figure out that maybe the market has over-reacted when you are familiar with the industry. For example, I bought Bank Of America at $4 and Citigroup at $1. The prices were crashing as people anticipated a further crash and that didn’t happen. Today they are holding at $13 and $3.5 respectively. Do the exact opposite of what the average investor is doing. I bought Merck when it was being sued for one of its drugs , Vioxx. The price crashed as people anticipated huge lawsuit payouts, which never happened.

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Is it luck or skill that gets us to the goals and objectives we set for ourselves— gimmicks and software programs or practice and understanding? How many golfers are still using the putter they started with decades ago at a nine-hole cow pasture? How many of you are still bouncing between investment gurus and hedges in your search for the investment holy grail?

The best athletes come to the competition with sound fundamentals, well thought out objectives, and the discipline to hone their basic technique with countless hours of practice. The most successful investors come to the process with sound fundamentals, realistic goals and objectives, and a consistently applied discipline that embraces the cyclical nature of markets and economies.

Discipline is an ingredient in most long-term success recipes— business, sports, relationships, politics, veal scaloppini, etc. Well, maybe not politics. There are “fundamentals” involved in each.

Favorite foursome conversations provide clues to the particular fundamental that just failed you, as your duck-hooked tee shot comes to rest at the base of the dead pine tree, and possibly, just beyond the white stake. “Have you weakened your grip?” comments Larry. “Nah, he was lined up that way; went right where he aimed it,” Curley offers.

“Might have worked out just fine if he hadn’t picked his head up so soon,” spouts Moe. “What are you guys talking about? I was set up to fade the ball but I swung way too hard at the bottom and closed down the club face,” you bark as you tee up a provisional.

Grip, alignment, focus, target, and tempo— some major golf fundamentals.

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You might not see how the past affects your ability to reach goals in the future. How can your past life affect what’s going to happen in years ahead? It is really quite important to understand that your past experiences affect you strongly in all you do.

Some of these past experiences may hinder you directly in working towards a goal and some might just be slight hurdles. In all cases these memories can affect you as to how well you do when heading towards a new goal.

Some of you go through life dragging an imaginary anchor around with you. It slows you down, it makes you unable to react to the changes in your life and it certainly weighs you down when trying to work towards new goals.

Releasing that weight would enable you to move quicker and succeed more easily. Perhaps that’s you holding on to past hurts, past incompletes, past resentments, anger or fear. Yet letting go of those anchors could be what you need so that you can fly into the future.

Have you allowed past failures to slow you down in achieving new successes? Have you remembered a friend telling you that you will never achieve anything? Do you remember the teacher at school who told you, you were an idiot and couldn’t do anything anyway?

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Make space for those goals in your life. That seems an obvious statement doesn’t it. But what if you want to study a course that will help you to further your career. Take a look at your life and see how much time do you actually have available.

Will a new goal fit into your life if you are already rushing every day to complete the tasks you have to do in terms of your commitments to work, your relationship with your partner, the time with your elderly parents, the hobby you have, the musical instrument you are trying to learn, the marathon you want to run for the first time and never mind keeping in touch with your friends?

Where in the busy schedule would a course fit? Not very likely. But you sign up for it anyway. Within the first month you find yourself not attending the evening classes and not handing in assignments. You just don’t have time.

You need to make way for that goal if you are serious about achieving it. University Business Schools know all about the falls off rate of students who sign up for MBA’s or Management Advancement Programs.

The drop out rate is something like 40% within the first term of the course and only about 70% or so finish. And yet at sign up time every student is informed as to how much time they will need to free up for this course.

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Achieving ones goals will depend on celebrating the successes you have on your journey. Nobody likes to continue working on something when there are only defeats. It’s the successes that spur us on to achieve greater heights.

It’s therefore really important when working towards a goal to keep track of your successes. The best way to do this is to write them down, or journal those in a file on your computer or even better write about them on a blog.

There is also great project management software available online that allows you to keep accurate track of what’s happening on your journey towards your goals. Many of these are free if you use the basic entry level option.

Keeping such an accurate track of your successes makes you appreciate your achievements. It allows you to pat yourself on the back and to encourage yourself to achieve even more. It also provides you with a history of your activities which will allow you to reflect in future years on the steps that you took to reach your goals.

Set up your journal to show the day and date and then compile a list of activities that you completed during the day. If your goal is to lose weight you might want to fill in the first block of your journal with the point that your scale showed you had lost some weight.

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You’ve written your goals down for the year. You’ve identified the little steps you want to take to achieve the goals and you feel positive that this time you will be able to attain your goals. It’s time that you finally you get around achieving those goals.

None of the above steps are going to ensure you have success in reaching your goals. They are great ones to work towards a goal, but there are many further processes that will need to be completed as well to ensure that you reach your dreams.

One critical process that will help you with achieving your aims is to evaluate and check your progress every day. The best time for this is in the evenings just before going to bed. Consider this preparation time spent to help you with the next day’s tasks.

This is the time when you acknowledge your successes, review your goals, focus on what you wish to happen in your future and make plans to accomplish them. Specifically you want to know what you will be doing the following day to work towards your goals.

If one of your main goals is to lose weight then you will reflect on how much exercise you managed to fit into your busy day, how well you stuck to that healthy eating plan you had set up for the day and how you felt about yourself all round.

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