Friday, May 30, 2008

"Peru Guards Its Guano as Demand Soars Again"

This will constitute material for another post later (much later). Still need to do more reading.

From the New York Times

Peru Guards Its Guano as Demand Soars Again
Published: May 30, 2008

ISLA DE ASIA, Peru — The worldwide boom in commodities has come to this: Even guano, the bird dung that was the focus of an imperialist scramble on the high seas in the 19th century, is in strong demand once again.

Workers collect guano on Isla Guañape off Peru, which conserves the resource to prevent depletion. Guano's status as an organic fertilizer has increased demand. Surging prices for synthetic fertilizers and organic foods are shifting attention to guano, an organic fertilizer once found in abundance on this island and more than 20 others off the coast of Peru, where an exceptionally dry climate preserves the droppings of seabirds like the guanay cormorant and the Peruvian booby.

On the same islands where thousands of convicts, army deserters and Chinese indentured servants died collecting guano a century and a half ago, teams of Quechua-speaking laborers from the highlands now scrape the dung off the hard soil and place it on barges destined for the mainland.

“We are recovering some of the last guano remaining in Peru,” said Victor Ropón, 66, a supervisor from Ancash Province whose leathery skin reflects his years working on the guano islands since he was 17.

“There might be 10 years of supplies left, or perhaps 20, and then it will be completely exhausted,” said Mr. Ropón, referring to fears that the seabird population could be poised to fall sharply in the years ahead. It is a minor miracle that any guano at all is available here today, reflecting a century-old effort hailed by biologists as a rare example of sustainable exploitation of a resource once so coveted that the United States authorized its citizens to take possession of islands or keys where guano was found.

As a debate rages over whether global oil output has peaked, a parable may exist in the story of guano, with its seafaring treachery, the development of synthetic alternatives in Europe and a desperate effort here to prevent the deposits from being depleted.

“Before there was oil, there was guano, so of course we fought wars over it,” said Pablo Arriola, director of Proabonos, the state company that controls guano production, referring to conflicts like the Chincha Islands War, in which Peru prevented Spain from reasserting control over the guano islands. “Guano is a highly desirous enterprise.”

Guano is also an undeniably strenuous enterprise from the perspective of the laborers who migrate to the islands to collect the dung each year. In scenes reminiscent of open-pit gold mines on the mainland, the laborers rise before dawn to scrape the hardened guano with shovels and small pickaxes.

Many go barefoot, their feet and lower legs coated with guano by the time their shifts end in the early afternoon. Some wear handkerchiefs over their mouths and nostrils to avoid breathing in guano dust, which, fortunately, is almost odorless aside from a faint smell of ammonia.

“This is not an easy life, but it’s the one I chose,” said Bruno Sulca, 62, who oversees the loading of guano bags on barges at Isla Guañape, off the coast of northern Peru. Mr. Sulca and other workers earn about $600 a month, more than three times what manual laborers earn in the impoverished highlands.

Peru’s guano trade quixotically soldiers on after almost being wiped out by overexploitation. The dung will probably never be the focus of a boom as intense as the one in the 19th century, when deposits were 150 feet high, with export proceeds accounting for most of the national budget.

The guano on most islands, including Isla de Asia, south of the capital, Lima, now reaches less than a foot or so. But the guano that remains here is coveted when viewed in the context of the frenzy in Peru and abroad around synthetic fertilizers like urea, which has doubled in price to more than $600 a ton in the last year.

Guano in Peru sells for about $250 a ton while fetching $500 a ton when exported to France, Israel and the United States. While guano is less efficient than urea at releasing nitrates into the soil, its status as an organic fertilizer has increased demand, transforming it into a niche fertilizer sought around the world.

“Guano has the advantage of being chemical-free,” said Enrique Balmaceda, who cultivates organic mangoes in Piura, a province in northern Peru. “The problem is, there isn’t enough of it to meet demand with new crops like organic bananas competing for what’s available.”

That explains why Peru is so vigilant about preserving the remaining guano, an effort dating back a century to the creation of the Guano Administration Company, when Peru nationalized the islands, some of which were British-controlled, to stave off the industry’s extinction.

Since then, Peru’s government has restricted guano collection to about two islands a year, enabling the droppings to accumulate. Workers smooth slopes and build walls that retain the guano. Scientists even introduced lizards to hunt down ticks that infested the seabirds.

The guano administrators station armed guards at each of the islands to ward off threats to birds, which produce 12,000 to 15,000 tons of guano a year.

“The fishermen instigate the most mischief here,” said Rómulo Ybarra, 40, one of two guards stationed at Isla de Asia, which otherwise has no regular inhabitants. (The island has a tiny cabin called Casa del Chino, a reference to the Asian ancestry of former President Alberto K. Fujimori, who used to come here to unwind in solitude.)

“When the fishermen approach the island, their engines scare away the guanay,” Mr. Ybarra said, referring to the prized guanay cormorant. “And further out at sea, the fishing boats pursue the anchoveta, something we cannot control.”

The anchoveta, a six-inch fish in the anchovy family, is the main food of the seabirds who leave their droppings on these rainless islands. The biggest fear of Peru’s guano collectors is that commercial fishing fleets will deplete their stocks, which are increasingly wanted as fish meal for poultry and other animals as demand for meat products rises in Asia.

While the bird population has climbed to 4 million from 3.2 million in the past two years, that figure still pales in comparison with the 60 million birds at the height of the first guano rush. Faced with a dwindling anchoveta population, officials at Proabonos are considering halting exports of guano to ensure its supply to the domestic market.

Uriel de la Torre, a biologist who specializes in conserving the guanay cormorant and other seabirds, said that unless some measure emerged to prevent overfishing, both the anchovetas and the seabirds here could die off by 2030.

“It would be an inglorious conclusion to something that has survived wars and man’s other follies,” Mr. de la Torre said. “But that is the scenario we are facing: the end of guano.”

Wednesday, May 28, 2008

Inflation and the CPI

Inflation will still ease in second half: minister
Nicholas Fang
Mon, May 26, 2008
The Straits Times

SURGING inflation will ease in the second half of the year despite spikes in global food and oil prices, said Trade and Industry Minister Lim Hng Kiang...

When I read this two days ago, I had a thought: what the minister is saying really depends on what he means when he refers to "inflation".

Prices for a wide range of goods and services, many of them essential, have been rising at astonishing rates globally. This is well-known, widely reported on and discussed in the media.

What is much less well-known and understood are measures of inflation. Disclaimer: I am not an economist and have never taken a formal class in economics, so read what I write carefully.

Inflation at the retail level is typically measured in most countries by a Consumer Price Index (CPI). Very briefly, the CPI is the weighted average of the price indices for many classes of goods and services. Each individual price index is constructed to reflect the price levels of its components. The components of the indices, and the relative weightages of the indices from which the CPI is calculated, are chosen to reflect the consumption patterns of an average member of society. Information on how the CPI is computed in Singapore is available from the Department of Statistics. From a general eyeballing of a paper from the Department of Statistics, it would appear that the CPI in Singapore is computed largely along international guidelines (which is reassuring), and is free from some of the more glaring
issues that the USA CPI is accused of. Of course, it could just mean that the Singapore Government is more adept at concealing any chicanery to do with the CPI. Not that I'm saying there's any chicanery of course.

For media reporting purposes, and in the minds of the average citizen, CPI is inflation.  This isn't surprising, as the CPI is judged to be the best and most accurate measure of inflation at the retail level. And its probably what the minister was refering to when he said that inflation would ease. The problem that arises is that most people forget that the CPI is a construct, and that changes in the CPI may not reflect actual inflationary phenomena on the ground, particularly pertaining to individuals.

Do you drive? If you do, with oil at about USD130 a barrel, and climbing, your inflation experience is probably quite different from mine. I am fortunate enough that I live close enough to my workplace to walk
to work. Yes, I walk. So the oil price is a non-issue for me. What about people who rely on driving to make a living (taxi drivers, real estate agents)? Their inflation experience is probably considerably worse than yours. The key point here is that the CPI is constructed to reflect the price experience of an average member of society. The problem is that no one is strictly average. It's like the family with 2.5 kids; it doesn't exist. The man-in-the-street is as mythical as the Sphinx, especially in this age of personalization, self-expression, customized solutions and targeted marketing.

The CPI is a measure of inflation, but it should only be used as a yardstick. It is likely that your experience of inflation varies from changes in the CPI. Think about that before you swallow the line that "inflation" should ease. It may not mean very much to you even if it does.

What about the housing component of the CPI? The concept of imputed rent sounds arcane, but it has real consequences in how the CPI is calculated. Suffice it to say, if you own your own home or you don't pay rent (say, because you still live with the 'rents), then a fall in housing prices and by extension rentals means little to you (unless you're shopping for a place). Yet the CPI will still fall to reflect those changes. And hence "inflation" eases a little. Oh look, I think the steam is finally coming out of the Singapore property market...

Then there's that time-honored place where economic sentiment in Singapore is discussed. That's right, the hawker center. Perhaps you've noticed that the portions are getting less generous, or that there's less meat or vegetables with the rice or noodles. But the prices remain the same. Hawkers lack pricing power, so they make it up by reducing their food costs. So, how is that kind of inflation captured in the CPI? "Hedonic regression" the economist answers, but because that's a huge can of worms, the Department of Statistics doesn't do that with the CPI, and rightly so, I agree with that stance. It's one criticism that has been leveled at the USA CPI. But it still points to the CPI in general being an imperfect measure of inflation.

Still think that "inflation should ease" necessarily means clear skies ahead?

Tuesday, May 27, 2008

Choosing credit cards (in Singapore)

In Singapore, many people carry multiple credit cards. This is due in no small part to the aggressive credit card promoters and promotions that encourage people to sign up for every new piece of plastic peddled by the banks out there. So which card to sign up for? I hereby declare that I make no recommendations as to which cards are the 'best', since what works for one person may not work for another. What I am going to talk about are a set of guidelines that I use to pick my credit cards, and as far as I know, the guidelines I use are fairly uncommon, or at least not talked about often.

All the conventional wisdom of credit cards applies

Anyone picking up an (USA-centric) book on personal finance will find the advice familiar. Pick cards with low interest rates, try to pay off your balance each month, never use cash advance facilities unless you desperately need the cash because they're expensive and interest starts accruing immediately etc.

That said, discard the advice that is immediately irrelevant

That means that if you're like me and pay off your balance completely each month, you can ignore interest rates as a comparison measure between credit cards, because the interest rate is irrelevant. Be what the credit card industry calls a 'convenience user'. The same applies for cash advance fees and interest rates; completely irrelevant if you never use cash advance facilities.

Never pay annual fees

Singaporeans will be familiar with this, even though almost all credit cards on the market ostensibly carry annual fees. All it takes is a phone call to customer service to threaten a card cancellation and the annual fee will be waived for that year. The cost of acquiring a new customer is more expensive than retaining one, so banks will always acquiesce. The catch is that many banks reduce or cancel away reward points for annual fee waivers. This isn't surprising as fee waivers are built into the reward system as a possible redemption award.

There are only a handful of cards on the Singapore market that expressly state that they do not have annual fees. Most of these are associated with priority banking programs (anyone with SGD200000 to spare?). So if you have one of those, rest assured that you're already more than paying the annual fee with the fat-margin business you're providing the bank.

The value of rewards and credit card perks is tricky to calculate

Anyone who travels frequently will be familiar with the airline equivalent of this: frequent flier miles are difficult to value [rule of thumb used to be 1 mile = 1 US penny, but with oil at USD135 and airline cutbacks, all bets are off].

The first important measure to look at for credit card rewards is the duration that reward points are valid. There's no point (sic) applying for a card with juicy rewards if you know for a fact that you're unlikely to charge enough on the card in 1 or 2 years (the typical duration for most cards) to redeem for those rewards.

The second important measure is to consider merchant discounts associated with (co-branded) credit cards. If you would spend your money at those merchants anyway, then the credit card is usually a good product to choose. If not, getting the card for the discounts is not a good reason to alter your normal patterns of spending. You'll only be wasting money on unnecessary purchases. And complicating your credit card management, which could lead to late fees or interest charges if you don't pay off your balance promptly.

As a corollary, like frequent flier miles, consolidation of spending on one or two cards is the most efficient way of accruing points quickly. So consider choosing cards that give the best discounts or rewards for the broadest range of your normal expenditure.

The third important measure to look at for credit card rewards is:

Reward Ratio = Redemption value of an reward that you actually use / Spending needed to accrue that reward

So if a $40 gift card/voucher at your favorite book store requires 1600 points, but if one point requires $5 in expenditure (and not 'spend', as most banks are wont to call it, nouns versus verbs people!), the reward ratio actually works out to 0.5%.

Reward ratios are generally higher for less popular merchant vouchers/store credit, and lower for more popular ones, and lower still for cash credits given by the bank itself. Balanced against this is that merchant vouchers typically cannot be combined with existing discounts or promotions, while cash credits apply everywhere. Also, remember to compare like for like when comparing reward ratios between credit cards.

In the Singapore market, reward ratios range mostly from about 0.3% to 2% for general categories of spending. Some cards give cash rebates for spending at specific merchants or restaurants, and these can be particularly high (2-5%). However, as stated previously, do not allow the accrual of reward points to influence your normal patterns of spending. A credit card is a convenience tool, not a reward point generator. The reward points are an incidental benefit. Always remember that.

There are some fees that you should check on

One charge that very few people in Singapore check on, and practically every customer service officer in Singapore that I've spoken too is unfamiliar with as well, is the charge for overseas credit card transactions.

Signing for purchases outside your home country while travelling is normally not a bad idea (except in developing countries where credit card skimming is a real issue), because the purchase is insured automatically, and the currency conversion rate is favorable, since it's typically an interbank rate and not a street rate. The catch is that Visa or Mastercard levies a charge on the bank, which in turn passes it on to you, sometimes together with an extra charge of its own. This charge is frequently not transparent, as it is built into the exchange rate itself, but sometimes banks do disclose it. 1% is ok, 2% is not so ok. Check with the bank. Even with the charge however, sometimes the interbank exchange rate is still better than the street rate, particularly in developed countries.   

So those are my guidelines. Some of you might wonder out of curiosity which credit cards I carry, given the complicated set of guidelines I use to inform my choices. Well, as I've said, I'm not making recommendations. But for the curious, I carry just 2 credit cards, which is a rarity among many Singaporeans. I won't explain why, since that's just too long and personal, but the two cards I carry are the POSB everyday card and the ABN AMRO Switch card. As an aside, I carry also the Citibank ATM/Debit/EZ-link card and the ubiquitous POSB ATM card with the NETS facility.

Note: ABN AMRO's consumer banking business in Singapore has been acquired by Royal Bank of Scotland. Given the banner ads RBS has placed in the arrival hall at Changi Airport, I'm expecting some serious rebranding to happen soon, so ABN AMRO credit cards may be discontinued in the near future.

Iliotibial Band Syndrome

This is a continuation of my previous post on running injuries.

I had ITBS a while back and got it again after a hiatus of about a month from running. It's a recurring problem for me, hence I have a separate post devoted to it.

As mentioned before, being one of the most common running injuries out there, there's tons of information out there on it. Not all of is clear though. Here's the low-down on ITBS that isn't that easily found out there on the Internet and tempered with my own personal experience. Most of the information in this post can be googled easily for clarification. As is often the case, once you have the name of what you're looking for, and the right specific question to ask, the information is easily found.

Don't confuse ITBS with patellar chondromalacia
ITBS for me always strikes on the lateral epicondyle. So the pain is localized to the knee. There's no pain but always some residual tightness all along the ITB from the knee up till the hip. For the longest time, I thought my knee problem had returned, but it wasn't until I read more extensively on ITBS that I realized that my knee problem really was an ITB problem. Apparently, Noble's test and Ober's test can be used to diagnose ITBS.

Stretching doesn't work for everyone
The conventional ITB stretch does exactly nothing for me, and I'm sure I'm doing it right. So don't put too much store by the ITB stretch, which is found and published all over. It may help in relieving symptoms and pain, but it doesn't address the real problems behind ITBS.

Strengthening the gluteus medius is key
I won't elaborate too much on this. One of the best papers I've read on this is by Fredericson et al ( Clin J Sport Med. 2000 Jul;10(3):169-75. Hip abductor weakness in distance runners with iliotibial band syndrome). Full text probably needs a subscription, but the abstract is available on Pubmed.

To completely prevent ITBS, the gluteus medius and other muscles for both legs must be strengthened and balanced. The clam shell exercise is good, as are side leg lifts (preferably done with the back against a wall and with the toes of the lifting leg pointed straight up to the ceiling). You must palpate your own gluteus medius muscle to check that it's actually working during these exercises. The body has a tendency to recruit stronger muscles like the vastus lateralis (part of the quadriceps) to compensate for the weaker muscles that you actually want to work. And always work both legs, not just the affected one. Balance is absolutely necessary.

There's something called 'Walt Reynold's ITB Special' that's a fancy pelvic drop exercise that may help. Other useful reading can be found here. If the descriptions for the exercises are too hard to follow, and the pictures too static, look for videos on Youtube.

On a sidenote, now that I do these exercises on a semi-regular basis, I have strange but painless popping sensations on my hips. Wonder if it has anything to do with this.

Running Injuries

Running occupies several hours of my time each week.

Running is exercise, the sport of the solitary, the challenge of the self, and meditations on the go. Running is life.

But this isn't a post on the pleasures of running. It's a post on one of the most practical aspects of running: injuries, their antecedents and solutions. This post should only be of interest to other runners and triathletes. Skip it if you find that it's boring.

After about 4 years of running and as many marathons, I've experienced several different types of running injuries. And it hasn't been pleasant, I can tell you that, not one bit.

Magazines like Runner's World routinely carry articles on injuries (just like they cycle regularly through diets, race tips, inspirational stories, interviews with Deena Kastor etc), but much of it is of little value, just like the magazine itself. I swear, periodicals that are non-news (Newsweek, FEER etc) are pretty much some of the most useless literature that you will ever read.

I've done extensive literature research on running injuries (it helps to have access to journal articles) and tried out some remedies. Here's my not-so-commonly found collected wisdom on the injuries that have afflicted me before in the past.

Delayed-onset muscle soreness
Not really an injury, but everyone experiences soreness at some point. Wikipedia has an article here. The lactic acid theory we all learnt about in school is toast, and actually has been for about the last 10 years. Now, the reigning hypothesis is microscopic muscle tears. The jury is still out on stretching too.

But one thing always works, and that's a good massage by a skilled therapist. An indulgence that's always a pleasure if I might add.

Catch-all term for pain in the shins. Sometimes properly called medial tibial stress syndrome. I've experienced a variant of this that I'm convinced is periostitis (tenderness while palpating the tibia one third of the way up from the ankle), but that could be just me playing doctor (which I'm not).

The cause of this is usually overtraining. Lay off the running completely, or run less so that pain never surfaces during training. Increment mileage very gradually, the 10% rule is a good rule of thumb to follow.

Plantar Fascitis
You know you have this when you wake up in the morning, get up and feel pain in your soles or Achilles Tendon when you take your first steps in the morning. Lots of stuff written out there about this injury, so I won't repeat it.

The plantar fascitis stretch is great for this (easily found by googling).
Other than that, when you're standing around and have nothing to do, or watching TV, do the reverse of the stretch. Scrunch up your toes, flex hard then relax, The aim is to strengthen the foot and its associated muscles.

Patellar Chondromalacia
AKA knee pain. Again, lots written about this. The usual advice helps. One important caveat, be sure not to mistake iliotibial band syndrome (ITBS) for this. I made that mistake myself. More on that later. In addition to the usual advice on knee pain, I would add that laying off the training to allow time to rest, not overtraining, and knee strengthening exercises like squats or knee bends (after the pain is gone, *obviously*) help. But don't overdo it.

Personally, taking glucosamine sulfate licked this problem for me permanently. But apparently it doesn't work for everyone. Forget the chondroitin, it's horribly expensive, is typically derived from shark cartilage, and some studies indicate that for it to be useful, it has to be taken in conjunction with glucosamine. You don't have to be a scientist to appreciate the difficulty in attributing beneficial effects to either solely glucosamine or chondroitin in studies like this. Read the literature with a healthy dose of skepticism.

More about glucosamine: take only glucosamine sulfate, not hydrochloride. The sulfate is apparently absorbed more easily. The so-called optimal dose is 1500 mg per day, usually 3 capsules, but the cumulative dose matters. So don't expect effects to kick in until at least 6 weeks after. Being a sugar, there's been speculation that taking glucosamine decreases insulin sensitivity, hence increasing the risk of diabetes. I hedge against that by taking only 1000 mg each time, and only right after a run (that's right, not everyday), when I figure my body is starved for sugar anyway. Absorption might be quicker too. But that's just me thinking aloud.

There's a topical application for glucosamine, developed by a Singapore company (surprise surprise!), but I've personally never tried it.

Iliotibial Band Syndrome
Ah, the biggie injury. The one that has plagued me many times before and continues to plague me when I'm not disciplined with my mileage.

Again, lots of information written out there. But not all of it clear. I'll have my own two cents to add to that in the next post.

“All our knowledge has its origins in our perceptions.” - Leonardo da Vinci

So, I've decided to re-start blogging.

"You mean you used to blog?!"

Actually yes, a few years ago, for a brief moment after graduation.

But it was poorly conceived, I was feeling vulnerable, major life changes were about to happen at that time, and I needed an outlet.

Come to think of it, I have no idea what happened to that faintly confessional blog that probably makes me cringe to read about it. With any luck, no traces of it remain on the web.

I have writer's cringe syndrome: I cringe everytime I read something personal I wrote a while back. Sometimes, this applies to opinion pieces published on the web as well.

This blog is going to be different from the previous one I started. It'll deal mainly with my thoughts on subjects important to me, and less so (or not at all) on personal issues.

It's a blog mainly for my own record. As a side-effect of writer's cringe syndrome, sometimes I experience an epiphany when I re-read something I wrote a while back. As in, "what was I thinking...idiot!".

So it helps to chart the evolution of my thoughts as time and knowledge progresses.

Hence, this blog is mainly written by me, for me, though naturally, since this is a blog, I'm expecting other people to read it as well and perhaps leave a few thoughts of their own. Otherwise I would just keep a diary.

It's going to be mainly text, with few pictures. Why? Because I'm lazy, that's why. The style may be lacking in detail, but that's because I keep most of what I know in my head and it's too painful to type it all out. Requests for more detail *may* be entertained. Links and tags should be plentiful.