Take out Pho

There is a lot to like about the national noodle dish of Vietnam, pho, but one thing about this relatively quick meal is that it is difficult to buy it to go, or so I thought.

Here is how Pho24 does its takeout:

The whole shebang, pre-assembly.  Note how many plastic containers one get just for one simple bowl of noodles.  Man, how much does this kill their margins?

This is the top vessel, containing the rice noodles and the meat portion.  This was the pho bo dac biet (special beef pho) version, I think.

Enter the veggies, mostly bean sprouts and sliced white onions and other sundries.

Don't forget the greenery.

Be careful with the splashing when you pour in the MSG goodness.  

A multitude of containers, keeping the cold side cold, the hot side hot.  This is like the McDLT or something.  And you know how that went in the marketplace.  

Airport Troubles

So I'm flying in a coupla days and I read in the paper this morning that the Saigon airport (Tab Son Nhat) just burned down last night!

Ok, so it didn't literally burned down, but a fire ravaged thru the place enough to shut down the domestic terminal. Good thing they built that international terminal. 50% incapacitated is better than a 100% shutdown.

True, True

The funny thing is that McCain's wife's fortune is based off of a Budweiser distributorship.

HCMC Falafel

Pretty darn good and worthy of Dagwood Bumstead in size. 39k makes for a good value in the Pham Ngu Lao area.

Veal at Terrace Cafe

Had some veal with a straw mushroom sauce at Terrace Cafe, which is located in Saigon Centre in D1.

Other than being super salty, it was good. Portions are teensy here, even at 85k, so I ordered a second main entrée of chicken mien (rice vermicelli) soup. And I was still hungry.

Please Dial "3"

This month, the local, which is to say, national, which is to say *only*, landline telephone company, Vietnam Posts and Telecom (VNPT), announced a change in all landline phone numbers.  

In HCMC and Hanoi, all landline numbers now grow from 7 digits to 8 digits.  Plus the two digit city code.  In the outlying provinces that used to have 6 digit numbers, they also grow by one to 7 digits.  While provinces that got recently "upgraded" to 7 digits stay at 7.

For all of HCMC and Hanoi numbers, you now add a leading "3" to the old numbers to create the new 8 digit telephone number.    

A lot of business here, even more than in the US, is conducted via mobile phones.  With no wide acceptance of voicemail, folks carry multiple cell phones.  But still a lot of folks, like us for instance, will be affected by this new landline number change.

And this change is idiotic.  The more reasonable way to go about things is to add an area code "overlay," and not to simply lengthen numbers.  Split HCMC and Hanoi into new area codes, instead of just maintaining one city code.  My hometown has four new overlay area codes since the time of my childhood - and my childhood home number didn't change for 25 years until we sold the joint and moved.  

This new VNPT edict will just create business for the print shops, because now all our business literature - business cards, letterheads, envelopes, marketing materials, etc., etc. - will need to be redone.  Arrgghhh.

And given that short term memory is about 7+/- 2 digits*, as I remember from Psych 101, these new 8-digit phone numbers will start messing with your head.  Mobile numbers in Vietnam are at least 8 digits long, plus at least a two digit mobile provider code.  No one can remember these long assed numbers, that's why people buy and peddle "so dep" - pretty numbers.  One buys a nice and pretty mobile number just to have a number that can be remembered.  

After two years, I've finally been able to memorize my own mobile number!            

* this magical 7+/- 2 standard was put forth in a 1956 paper, since then, and my time in the lecture hall, new research has suggested that we can remember 2 seconds worth of spoken content.  For English speakers, this would be 7 plus or minus 2 digits, depending on how quickly one normally speaks.  For Chinese speakers, the number of digits recallable in short term memory is closer to 10, because the words are shorter.  My impression is that the Vietnamese speak slowly and they'll be closer to the 7+/-2 measure.     

Feds in the Money Market

Ok, I am more interested in food, with a side of business/economics, than say, a dude like Tyler Cowen, the George Mason econ professor, with a foodie side.  But the current business/economic discourse in the media just seems so wrong that I can't just talk about food here.  

So skip this if you're looking for food pictures.

I read this USAToday Op-Ed about the benefits of small banks today.  The basic argument is that small banks (whatever that means.. though the authors allude to a George Bailey-esque bank - from A Wonderful Life - as the model) are better than big banks because they make loans that do not default.  "Better" loans makes for "better" banks.  Small banks can make such better loans because they have an "informational" advantage - they know their customers and know the good credit risk from the bad. For good measure, the Op-Ed proposes some sort of special tax on securitizations.

Wow, what a load of naive crock.   

There are no banks that serves big population centers in America that works this way.  The closest thing to a "small" bank that most of us see is our local credit union.  Credit unions are not inherently better at assessing risk than my Citibank branch - the only extra information they may have on me is the activity in my accounts. What's my savings history, my checkwriting history, etc.  But if you get a regular mortgage (as opposed to those "no-documentation" ones), you've disclosed such account history to Citibank as well.

And what's wrong with making loans to folks with higher credit risks?  If there is any failure here in this mortgage business, it is the failure to properly price risk.

Now the momentum has swung the other way.  People with money (banks and investors) are charging too much for risk. That is why the markets are stuck - no one is lending at prices that are business appropriate.  

Thankfully, the Feds are stepping in to not only issue commercial paper directly (i.e. short term loans to provide working capital to functioning businesses), it also has just set up a money market facility to buy current commercial paper from financial institutions that are seeing massive redemptions from their money market investors.

If the Feds play their cards right (i.e. pay appropriate prices for the asset purchases), they (or we, as taxpayers) can end up making a killing when markets are talked down from this pricing panic.

Of course, we're talking about the US government here, so the "we" who will end up making money will not be the taxpayers, but political cronies.  Sounds like current day Vietnam.

HPV and Vietnam

I wrote this comment on Ching's blog (Real Life Online), in reference to a post about cervical cancer.

I'm a guy and all, so take this comment in that light. But I think that women get cervical cancer because of simpler reasons - namely HPV, an STD that is very prevalent, nearly a 50% infection rate, and very infectious and people die from cervical cancer because of a lack of access to medical care (i.e. Pap smears).

Condoms do not prevent HPV infections. Because of this, in the narrowly focused, conservative political right of the U.S., the scare tactics surround HPV is used to press for ineffective abstinence only sex education.

Good thing for women these days is the progress on HPV vaccines. While it does not prevent all types of HPV infections (there are like 100 strains or something like that), Guardasil is a recently introduced vaccine that is effective against some significant HPV strains.

In the U.S., again for political reasons, it is marketed as an anti-cervical cancer vaccine instead of as an anti-HPV vaccine. Guardasil faces an uphill battle for acceptance in the U.S. marketplace. And there are enough politicians who will make sure that tax dollars will not support Guardasil vaccinations for those who would otherwise qualify (medically and economically).

Interestingly, I recently read in the Vietnamese local press that the government here will start a Guardasil vaccination program for its citizens. Of course the Vietnamese government likely cannot afford to vaccinate all young girls / young women, but they'll get to some of them and it'll be a start.

Funny that Vietnam will be more advanced on this issue of HPV infection than the U.S.

There are a lot of things that are 'backwards' in Vietnam as compared to the U.S. - ok, backwards is a harsh term.  There are a lot of things here that I'm not as comfortable with.  But one thing that strikes me is that, every once in a while, this Socialist government which at its apogee is one of technocrats, gets it right with technical policy decisions.    

Tailor at Work

Here's the tailors at work. They haven't been perfect, but overall they've been decent. As mentioned in an earlier post, I've gone back after mistakes because it would cost more time and money to find someone else.

X Marks the Spot

I was doing some cleaning up and found these in a drawer.  I'm pretty sure they're not baby aspirins.  Probably left by a former tenant or something.  

If you're interested, they can next be found in an undisclosed dumper in D1.  Look out for amorous rats around Saigon in the next few days.      

Left, Right, Middle and Joe The Plumber

The other day I was invited out to drinks by Kevin and I ended up meeting some new faces as well as reconnecting with some old faces.

You know how it goes at these things: meeting new folks + beer = a dorm room style discussion of politics.  People ended up talking like they were in college, except for the fact that everyone engaged in the conversation had actual money that they made (and lost), so it was a bit more personal and vivid.

I ended up between an earnest ultra-lefty and a concerned economic libertarian.  Through the conversations, well lubricated with beer, it occurred to me that our discussion distilled the problem with the left-wing of the Democratic party.

I disagreed with both of these guys, for I'm a pragmatist occupying the soft middle politically.  It's a difficult position to hold, because you are out-flanked, and you can't rely on stock ideology as a crutch.  But it's a reasonable position to me, as life is all about shades of grey.

While I disagreed with both guys, the lefty just sounded flat out crazy - it is hard to be taken seriously when one complains about big business and demonize it all.  The percentage of Americans who want to tend to their own subsistence garden, wear burlap and live in a yurt is, shockingly (!!), small.  Very small.  You people are crazy.

The economic libertarian was of the school of absolute freedom of contract, minimal-to-no government regulations, etc.  I was enjoying the beer too much to mount much of a convincing rebuttal, but overall I can see how folks are more easily seduced by this extreme of the political spectrum.

Who doesn't want complete freedom?  It's like asking a kid whether the school should get rid of its stern principal - of course!  Recess all the time.  How cool is that?

But in the end, most so-called libertarians do not really believe in complete freedom of contract.  If they did, then they cannot ideologically object to child labor, indentured servitude, organ harvesting, among other things.  It is neat and tidy to assume and expect that the free market will, over time, resolve everything in the most efficient means possible, which is the libertarian position.  Such ideology denies the humanity in all of us - a humanity that contains faults and inefficiencies that are culturally ingrained and will not disappear over time unless there is a concerted push back against such inefficient culture.

Overall though, the far-right libertarian position is easier to accept than the far left position, because it does not sound nutso.  The pinnacle of the far right is a successful business person unencumbered by government regulations.  The pinnacle of the left is a person who is self sufficient, unencumbered by the corporation.  The choice is between being pampered and being an ascetic.  An easy choice to make.

It all goes back to Joe The Plumber - putting aside whether he's a licensed plumber, whether he's a Mccain plant, etc. etc. - his story illustrates the left's problem.  The ultra-lefty websites have had a field day mocking the idea of the guy.  One line of mockery has to do with his complaints about the Obama tax plan.

In short, the proposed Obama plan would increase taxes only to those who make over $250k.  Joe The Plumber admittedly does not make over $250k, but he expressed concerns that Obama would tax him more.

Places like DailyKos rips Joe The Plumber for this - how can you complain about taxes 'that you will not pay, and will likely never have to pay' is the line of inquiry.

What the left does not account for is the nature and ethos of America.  We are a country of strivers - we are a country of the "PreRich."   Joe is not rich today, but he plans to be rich someday.  He doesn't vote his current economic interests, he votes his aspirational economic interests.

Just like the average person thinks that they are better looking than average, the average American thinks that, someday, and soon, they will be richer than average. And so they vote this way.

Is it a bad thing that Americans are a society of PreRich?  No, because that's just one expression of our cultural optimism.  Meet other folks and you'll quickly learn that Americans are very a optimistic sort.  Perhaps socio-economic movement is as stolid in the States as it is in the UK, but the average Briton is less optimistic than the average American about their future prospects.

I've met a few folks from the UK who've expressed to me that they're in Vietnam to, in part, escape the socio-economic situation back home.  Every single American I've met here have said that being in Vietnam was about adventure and future possibilities.  Not about escaping America.    

The left will always lose in America because they do not cater to the PreRich optimism of our culture.  IMO, Bill, Hilary, and yes, Barack, are more of the pragmatic centrists type than the Kossacks want.  This is why the strident left railed against Hilary.  And I suspect that they'll turn on Barack Obama once he's in office (assuming he'll proceed on and win).   Or, if we're lucky, they'll grow up a little.  

Beef and Tofu for Lunch

Here's a beef and tofu rice dish from Pho 2000.  I've eaten here a lot, but this is the first time I've ordered this - somehow I've never noticed it on the menu before.  It's pretty good, with a smattering of veggies to satisfy my fiber deficiency.  30-35k.

It may sound odd, but I eat less fruits and veggies in Vietnam than I do back home.  This is in part because we don't cook here, and in part because I shy away from fruits without a peel.  Ya know, "night fertilizer" and all.  

Here is some cha gio (aka fried spring rolls, shrimp here).  Normally I don't order this, but I was hungry enough to eat something more, but not enough for a full blown main course.  That's the point of an appetizer, I guess.  29k or something like that.    

MSG Soup

One of the things I like about ordering a rice dish is the bowl of
soup that usually accompanies it.

It is mostly a bit of veggies in a broth heavily laced with MSG. But
that's ok because I like my MSG.

Indian Dinner

Good thing I am not on Atkins. Potato masala and shrimp biryiani. 102k inclusive of a beer.  

I'm starting to think that the best food values around where I live is either the Vietnamese hawker stand or the Korean BBQ place.  

Xuxu Chicken

Back to some food - here is the famous Xuxu (alternatively spelled Susu, aka chayote) chicken dish, as blogged by Kevin and Lawrence, among others.

It is good and messy for 35k or so. I don't think their prices have changed since the last time I was there 9 months ago. At 55 Tu Xuong in D3, it is too far from me to eat there on the regular.

9 Things to Do in Vietnam

As any long term (be it two week or two months) blogger in Vietnam is wont to do, here is my obligatory "things to do in Vietnam" post.

1. Go get your hair washed

A lot of guidebooks that write about Vietnam gush about the affordability of it all.  I would generally disagree with this - yes, it is easier and cheaper to live comfortably here, but this country is certainly not cheap, but maybe that is because I've been to China a few times and compare Vietnam's prices to there.

Most everything here is cheaper than the US, but also most everything here is more expensive than in China. But that makes sense, for they were all made in China!  So you won't find much in the way of inexpensive goods, but you can find mind-blowing deals (if you're used to US prices) on services.

Housework, chauffeur and childcare services are insanely cheap in comparison, and about equal or less than China even.  But the average tourist isn't gonna use such services.

Instead, take in the affordable and very Vietnamese luxury of getting your hair washed. The hair salons in Vietnam do more business providing hair washes than they do in actually cutting hair. They'll also provide other expected services, such as mani- and pedicures, Asian style services, such as earwax picking, face washes, and clothed massages.  If you look real hard I'm sure you can find places that provide other services, but I'm pretty blind on that account.

A hair wash can be 50k or less.  Just remember to tip.  If you don't like to get your hair wet then go get a foot massage.

2. Enjoy the herb

I don't me the sticky sorta herb, but rather the panoply of SEAsian herbs that are virtually part of every local meal here.  In the US, even at decent Vietnamese restaurants, you're limited to generic things like cilantro, mint and thai basil.  Here, there is so much more, half of which I can only identify by smell and taste.  Out of all the food products in Vietnam, I think I'll miss the basket of herbs the most.  The main reason I like to eat seafood on the streets here is because of the herb mix that comes with it.

3. Go to the beach

I haven't really travelled around all that much in Vietnam, but I've been to some of the beaches here and they're definitely worthwhile. With its long coastline, Vietnam has a whole host of beaches to choose from - some are small and desolate (Sam Son), some are wide, crowded and dirty (Vung Tau), and some are pretty and peaceful (Cua Dai). Sure, it probably doesn't compare to Thailand, but life is pretty good whenever you have sand between your toes while swigging a beer, looking over the sound of crashing waves to the sun peeking over the horizon.

4. Get some clothes made

Before making this recommendation, a few caveats: custom tailored clothing is much cheaper in China (about 50% less), and labor costs here are cheap. Why is the latter a warning? Due to cheap labor, the concept of measure twice, cut once isn't employed here in Vietnam.

In all my dealings with the local labor pool, I find that folks are generally careless and error-prone. At first I attributed this to a lack of work ethic.  But I've slowly come around to the thought that such errors are due to cheap labor.  It costs so very little to rectify mistakes that it doesn't make sense within the local work culture to spend extra resources upfront to minimize mistakes.

It's sorta like the low-cost manufacturing facilities in China and elsewhere - it is cheaper to make 100 items with a 5% defect rate than 95 items with a 1% defect rate. If you engage in the former, you'll pay less and get more good product.

So, even though you should expect mistakes in your tailored clothing, and even though it isn't the cheapest in the world, why do I suggest getting clothes made here?  Because you'll likely end up looking pretty good when all is said and done.

Most Americans, myself include, wear off the rack clothing that is just too big for us. The locals, men and women, almost regardless of age, wear clothes so tight fitting, it would make Fredrick's of Hollywood proud.  So the tailors here are geared towards a more fitted, slimmer cut that ends up more flattering, no matter the customer.  Just make sure to emphasize that you want a more comfortable fit, or else you'll end up with some nut-hugger pants.

A dress shirt made in D1, depending on the fabric choice, costs between a regular off-the-rack Brooks Brothers shirt and the same shirt on sale. But the fabric and the cut will be much better.

5. Go to the mountains

As a country geographically oriented like Chile, the beaches are on the forefront of a tourists' itinerary. But if you want something slightly different, head to the mountains. Places like Fan Si Pan (the highest point in Vietnam), or Dalat or Tam Dao. One of the best times we've had was when we visited Tam Dao.

Of course there is Sapa also. But be aware of the "Sapa Curse" - it's a relatively well known and well subscribed to phenomena amongst the locals.  People say that if you go to Sapa, which is home to the ethnic minorities such as the Hmong and Yao, the women there will put a spell on you and you won't leave until you end up marrying a local ethnic minority and taking them back to the city with you.

It may be an old wives' tale, but I've heard of business colleagues who went to Sapa on vacation, disappeared for months, and returned with a Sapa wife.  And I personally know of a long term Hanoi ex-pat who met and married his wife in Sapa.

6. Play some golf

If you're an American golfer, you have got to play some golf when you're in Vietnam. The courses here are generally in very good condition, but besides that, having a caddy is just something that needs to be experienced. Sure, most of the caddies are not the sort that you would rely on for tournament golf, simply because, unlike the States, the average caddy here does not play the game so their knowledge of it is limited. But if you've thanked the inventor of the Izzo dual-strap, then you'll appreciate someone else humping your bag around the course.

Again, remember to tip, because they get very little, if any, part of the "caddy fee" that is on your bill. Locals tip between 100-200k per 18 holes.  I find that the local HCMC players tip more generously than their Hanoi brethren, so pay attention to where you're playing.

7. Go nhau

"Nhau" - it's a very Vietnamese word.  Loosely translated, it means go out drinking, but it's not really that.  "Go out drinking" sounds more like something you do on a Friday, Saturday, Sunday (and Monday, Tuesday, Wednesday, Thursday) night while in college. 

It's not really that.  It's probably more akin to 'getting a pint' - but I dunno, I'm not from a commonwealth country.

No matter the proper translation, you should go out and nhau, especially with some locals.  It's practically a way of life here.   It's fun to sit on some plastic stools, grab some peanuts and Vietnamese style bar food (i.e. stir fried stuff that you can share and/or eat with your hands) and drink the local beer. Don't worry about getting too drunk - for all the bravado of the locals, by and large they don't drink all that much. When locals drink, they end up drinking more ice water than actual beer.

8. Slow down and look around

Visitors pretty much hang in the cities of HCMC or Hanoi, and longer term ex-pats definitely count these cities as their main stomping grounds.  The only comparison to these places are other Asian cities (well, perhaps S.America, Africa and the Middle East.. but I've never been).  It's crowded, it's hectic, and there is so much going on.

But once in a while, just pump your brakes and slow down.  Really look at your surroundings, and the people that inhabit it.  Take it all in and connect with this time, this place.

I am not talking about observing folks and passing judgments, ascribing some sort of bs quiet nobility to the poor and the working poor.

Unlike most American cities, you can see all of Vietnam from virtually any street corner here.  So slow down and breathe in the beauty, the warts, the frustrations, the wealth and poverty, the yearning, and the humanity of it all.  This is current day Vietnam looking back at you, so take it all in before looking away.

9. Leave

At the end of it all you should leave.   You weren't raised here, you don't have many ties here, you're not really from here.  A life spent with an updated passport and a visa needing to be renewed yet again is a life in limbo.

Stay too long and you'll end up like the well-worn caricature - a bitter, whiny, complaining, ugly foreigner.  Do yourself a favor and leave.  Or marry someone local.  I hear the weather is nice this time of year in Sapa.

Subprime Problem in Vietnam?

This blog is mostly about the food that we eat in Vietnam, my quest to find a really decent martini and playing some bad golf in some beautiful settings. To feed all those cravings, in my non-blog life I'm usually thinking about how to make money.

As an inveterate New Yorker, some of those ideas have been of the illegal kind - such as taking advantage of all the young local idiots who have no concept of online fraud and therefore they post their personal information and bank account numbers (!) all over the internet. But thankfully I'm preoccupied with morals to proceed any further.

Given the current world economic climate, I've pondered a bit about the problems in the US (Overselling the Subprime Problem, Market Meltdown Hysteria), which, for all intents and purposes is a confidence issue. Banks do not trust each other, so they do not lend to one another = no money sloshing through the system to lubricate the economic engine. All this talk of doom and gloom in the US is fun and games, sorta like the perverse pleasure of picking at a scab, but optimism will prevail as more people will make more money selling optimism. I'm confident enough to have recently put my 2 cents behind XLF - check back in 6 months to see how that goes.

Spurred on after reading B. Hawkins Pham's post, "The New Look of Saigon," on Saigon Blues, I thought more about why at this point I'm not as optimistic in Vietnam. There are a host of reasons, the main one being that the down global market, and in particular the down US market, makes Vietnam comparatively less compelling. Life is relative, and so are economic opportunities.

As part of the doom-and-gloom trade, business commentators in the US are quick to cite thing such as the WSJ's estimate that 1-in-6 homeowners are underwater (i.e. owe more on the mortgage than the current fair market value of the house). While this is certainly not a good thing, is this really that bad? Surely, housing occupies a certain mindspace for housing consumers - likely a combination of being the largest purchase, the largest asset, the largest debt for the average person - it is still a purchase.

As long as folks can make payments, being underwater affects their psyche, but it does not mean that everyone will suddenly become homeless. "Underwater" - sounds scary and threatening, and meant to evoke the idea of drowning, but for nearly all purchases on credit you will be underwater.

Did you just buy an iPhone with a Visa card, or that shiny new aluminum Macbook? Guess what, you're underwater. Does that matter to you in that setting? No, not really. So too housing. 

Or take a look at most folks' second largest consumer purchase, an automobile. The auto trade is tanking right now, but historically (I'm young and naive enough to mean the past 15 or so years), 90+% of the folks who buy a car finance, and they on average put about 15% down. For the average consumer in the average car, with the well known phenomena of 'drive off the lot depreciation,' that means that the auto is instantly underwater. Where was that doom-and-gloom talk over the past decade? Non-existent. 

As a business/investment climate, the worse America gets hammered, the worse Vietnam becomes.

But that's not to say there are no issues here. As a relatively closed economy, Vietnam is not directly affected by the supposed US Subprime issue because banks here did not buy US debt and derivative instruments. The effect is an indirect one, caused by lowered FDI commitments and, more importantly, lowered actual FDI inflows.

But the banks here have a Vietnamese style subprime problem - that of non-performing loans (NPLs). The credit system here is relatively rudimentary and is based more on an antiquated asset-based lending standard than a modern cashflow-based lending standard.

If I was a lender, I would favor the cashflow outlook, because at the end of the day I want to know if you'll have the money to pay me back. I would not want to have an asset-based lending outlook, because I am in the business of making money on interest and fees, not on foreclosures.

Banks here that do asset-based lending typically have the infamous "red book/document" - the red deed book issued by the government and used to confirm use rights or ownership of property - as collateral. With local property price declines, and more importantly, an illiquid market, these asset backed loans quickly devolve into NPLs.

A reason for the rudimentary credit system here is a lack of credit ratings agencies. There is no such thing as a FICO score, so effectively most (all?) individuals and businesses are subprime borrowers. The indifferent legal environment makes it easy for borrowers to stiff the lenders - at worst, the borrower would walk away from an underwater property, and that action has little impact on their ability to get a subsequent loan from another bank using a different piece of collateral.

As the saying goes in the US, 'if you owe the bank a million dollars , it is your problem; if you owe the bank a billion dollars, it is their problem.'  The same is true in Vietnam, except you replace "dollars" with "dong" - and a billion dong is low barrier, so the banks are holding a lot of problems.

But I am an optimist, and I see good things going forward for the Vietnamese economy and like elsewhere, as an economy improves the financial sector will lead the gains. It's just that the American financial sector will make more gains in the near future. So why deal with the Vietnamese issues?

Weekend Eats and Other Stuff

I was walking about D1 this weekend to do some shopping.  Ended up at the Parkson's Mall when hunger kicked in.  Unfortunately their food court is undergoing renovations, so I hit the street, hit the wall of steam and quickly decided that I neede to get indoors stat.  So I ventured to the food court at Eden Mall across the street instead.  This is the second time I've eaten at this food court, and again I'm impressed. Maybe I should go here more often.   

I got the above from Little Manila, which also has a full fledged outlet in PMH.  What captured my fancy on the menu was the whole fried Tilapia, for 45k.  Not bad, especially for an aircon food court.  The entirety above was like 120k.  

I don't know if it's a Filipino thing, or if it was just prepared incorrectly, but when the menu said "whole fish" I didn't really expect a whole fish, guts and all.  Maybe someone can enlighten me.  Save for the guts, the rest of it was pretty good.   

It's been a long while since I've had pizza in Vietnam.  It's one of those 'why bother' foods for me in this country.  As in, why bother eating it when you can wait for the next trip home.  But I was lazy and therefore wanted delivery.  Ordered from Pepperoni's in the backpacker area, and it was delivered in about 20 minutes to the CBD.  It was pretty decent, considering where I was eating it.  This large, 8-slicer good for about 2 adults was 110k or so.         

Of course, once in a while one has to do "work," so I attended the grand opening of the first HCMC branch of Tien Phong Bank, which may be more commonly known as the bank FPT (with some others) started.

I didn't do anything but watch the proceedings, yet it was freaking exhausting.  Whomever thought to have a protracted outdoor ceremony in the midday sun in Vietnam should really rethink their event planning skills.    

But the expected dragon dance was still cool.  

It was late, the restaurant was starting to shutter its operations for the day, so the older lady who owns the place broke out her Wii to get some tennis in.  This was more amusing to me than the drunk dude below.

Some dude by the name of Thirsty has been stalking me.  Here he is rolling on a moto, smoking up a cigar.

And again, next to a guy who had a really, really good evening out.  

I've been on a chao kick recently; here is the way they serve it at this particular Chinese joint on Nguyen Trai, which is one of the places in HCMC to grab some late night food after having your fill of beer. 

Fish at Jaspas, Pre-Inflation

As a comparo to the recent photo in Fish at Jaspas, here is a similar fish dish on the Jaspas set lunch menu from about 6 months ago.  Same fish species too (barramundi, if you're interested), so it's not like a bigger slice of salmon vs. a more delicate cut of something pricier.  

Visual evidence of the recent inflation, perhaps.  Actually, I don't really pay all that much heed to the local inflation - I'm more focused on inflation in the U.S.  

Corporate Communications Problem?

So the Highlands rat story hit the local Vietnamese language media.  See this VNExpress web article.  The persons who bought that infected cake refused to be interviewed by the press, according to the story.  

This blog is not very popular, as it's really geared towards a small circle of family and friends back home.  But in the last few days there is a bunch of search engine traffic - the screenshot above is of the recent keyword search term.  Apparently a lot of people are looking for rats.

I wonder how much of this negative pr is caused by the slow response of the staff at the coffee shop.      

Fish at Jaspas

Had the set menu for lunch at Jaspas, which I do about once a month. Inflation finally hit their menu, as it has gone up to 144k (from 120k). And the fish seemed smaller. Didn't matter because I still felt a bit sick and didn't finish my meal.

Asian Chicken Soup

In the States you have chicken soup, or perhaps matzo ball, if you're sick. In Vietnam and Southern China, it's chao/jook/congee.

I had some streetside seafood in the Pham Ngu Lao area, followed by a few drinks over quiz night (note: be suspicious of iPhone toting folks at quiz night!). The next morning I woke up sick as can be.

Perhaps it was the clams, or the beers in glasses cleaned on the sidewalk, or those vodka red bulls. Who knows?! But now isn't the time to look back and play the blame game. I'm a Maverick! And I'm puking.

When I was finally comfortable enough to eat, I went around looking for some plain rice porridge and ended up at my fave Vietnamese hawker stand. Ordered a bowl with no meat, extra ginger and some pickled eggplants on the side. Finished that and had another. Totalled 27k and it was the best money that I've spent in a while.

Overselling the Subprime Problem

These days the US Presidential race is getting down to the final days - less than a month left. As with most Presidential races, it boils down to 'the economy, stupid.' Two months ago, talking about the indifferent economy mainly dealt with oil prices, and those big, bad guys, the "oil speculators."

That was a joke of a bogeyman, and now, a few months later, when oil is down to less than $90, no one is talking about those speculators - now those folks who bought when oil was $140 are no longer evil speculators, just bad investors. Then, the mainstream business media didn't really explain how oil "speculation" could have a negative long-term impact on things.

These days, the monster under the bed is subprime mortgages. You know, those Wall Streeters and their financial engineering, their "securitizations" - my gosh, what a long word, it must be a complex and difficult to understand concept, I mean, it even has a 10-point Scrabble tile in it, it must be nefarious!

The popular understanding of securitization is some sort of fancy slice-and-dice that turns bad assets (subprime debt) into multiples of good assets, but this understanding is just wrong.

Everyone knows what a mortgage is, and most understand correctly that subprime mortgages means loans to people who, on average, will default on their loans more often than the regular ("prime") market. To offset the fact that they will default more often, you as the bank charge a higher interest rate. Makes sense, and simple enough.

Making a loan and pricing the loan (i.e. setting the level of interest to charge) is a forward looking bet. All else being equal, the price you charge for a loan depends on how likely the borrower will pay you back. So how do you predict whether the borrower will pay you back? You use things such as credit scores, and divide borrowers into subprime and prime markets.

But what if you can make a backwards looking bet? What if you can build a time machine, so you don't need to predict whether someone will pay you back (regardless of their credit score), you'll actually know if they will pay you or not?

If you can know the future, you can make money. This is what securitization tries to do.

A few decades back some financial types and lawyers (I'm assuming) got another simple idea: let's build something close to a time machine.

How do you do this?

First, let us assume that 25% of all subprime loans will default. That sounds bad, but that also means 75% will pay you.

So if you make one loan, you have a 75% chance of getting 100% of your money and a 25% chance of getting 0% of your money back (disregarding partial payments prior to default).

Second, we would quickly realize that if you make 100 loans (or 1,000 or 1M, etc.), then you know that statistically you will get 75% of your money back.

So how do I build this (imperfect) time machine with these realizations? Well, you first bundle up a lot of subprime loans to get statistics on your side (law of large numbers and everything), and then you divide up the loans into discrete packages.

So we bundle up 100 subprime loans and then divide them into four packages, each package having the rights to payments from 25 loans. And now, to sprinkle on the (imperfect) time machine dust, we say that the first package will be entitled to the first 25 loans out of the 100 that gets paid off, the second package will be entitled to the next 25, and so on.

This is the financial engineering magic - instead of having 100 random subprime loans with an expected value of 75%, we can bundle up the loans and then divide them up into smaller packages *with conditions attached* to turn the 100 loans into four packages, the first three having an expected value of 100% and the last package of 25 loans having an expected value of 0%.

If you are an investor buying package 1 or package 2, you'll feel pretty confident of getting repaid. If you are buying package 3, statistics say that you will get repaid 100% but you are a little bit uncomfortable.. so Wall Street gets an insurance company, say AIG, to guarantee that, out of those 25 loans, AIG will pay after the first 5 defaults. The expected default rate for package 3 is 0%, so AIG is comfortable in accepting an insurance premium to write this type of insurance - after all, statistically and if the assumptions hold up, it will never have to pay out on the insurance. Now, with the insurance, the investor is comfortable that it will get repaid and therefore will buy package 3 at a price that makes Wall Street money.

That, simply put, is what securitization does. The idea is that simple. And because the financial and legal types like to think of themselves as geniuses, they call these packages "tranches."  So is this creating value out of crap? Financial mumbo-jumbo, a slice-and-dice that ends up shredding investors?

No, it's just unlocking hidden value. 100 random subprime loans can (and are) worth more when you package them into tranches. There are a lot of things in life that are worth less than the sum of its parts.  Look at a car junkyard - it's a business only because a car parted out is worth more than the whole car.  So too subprime loan, parted out through securitization, are worth more than the original loans.

There is a lot of talk about Wall Street securitizing loans, and making all these fancy and exotic investment vehicles which then turned out to be worthless, but I just don't buy it.  No matter how many packages you divide a bundle of loans into, you cannot create more than the original 100 loans, so financial engineering doesn't expand the universe of loans (i.e. doesn't expand the universe of risk), it just divides it up into smaller packages.

So the subprime collapse only happens when reality is different from assumptions. We assumed a 25% default rate. What happens when it is actually 35%? Well, tranche 1 and 2 are still the same (65 loans get repaid, and 1 and 2 "take up" only 50 loans). Tranche 4 is still the same, it's still crap (0 loans get paid).

For tranche 3, the investors expected to get fully repaid (i.e. 25 good loans), but with a 35% default, there are only 15 good loans left (65-50 = 15).  AIG, our insurer, also expected 25 good loans remaining when it insured against 5 bad loans.

With a 35% default rate, the tranche 3 investors will collect on the 15 actual good loans and the 5 insured loans from AIG, and will take a loss of 5 loans.  AIG will take a loss of 5 loans against their income from the insurance premium.

So is there a subprime problem?  Yes and no. Yes, in reality default rates have likely been higher than the assumed rates in the models used to price the tranches, but the failures are not due to problems with black magic. It's a simple error in assuming default rates by investors and insurers.

Investors and insurers only lose more money than expected when the default rates are higher than expected.  Outside of "naked" insurance policies (aka naked Credit Default Swaps), there is no expansion of risk in securitization.  AIG lost money because it did not assess the risk in providing insurance properly.

And the answer is "No" because, for all the negative press on the subprime market, it is surprisingly not that bad.  While the data is dated, as of last year the total dollar amount of outstanding subprime loans is 1.3 trillion, with a default rate of 14.5%, and the average loan amount being $180k.

That means that about $200B worth of loans is in default. So why is there a $700B bailout?

Market Meltdown Hysteria

As a foreigner in a foreign land, one of the touchstones to home is sports. We don't really get ESPN here, instead we get an ESPN/Starsports hybrid, alongside three other sports channels. There is an African sports channel, an Aussie one and a Thai channel.. it can be interesting at times because you'll see a lot of obscure sports, like deep sea fishing, futsal world cup, all sorts of para-olympic sports, equestrian events, etc. But in the end, I probably watch the ESPN hybrid the most.

So yesterday, the two lead stories on this version of Sportscenter was about soccer and F1 racing. Good enough, because I've grown interested in the former and I've always been a car guy, so the latter is up my alley.

Except that the stories weren't sports stories, but rather they tried to inject the current economic crisis in the stories. For the soccer bit, the reporting was about how much top teams in the English (Barclays') Premier League were paying their players in salary, opinion that given the current world financial situation those salaries may have to go down, and a report about how UEFA is looking into punishing teams that have too much debt. The ESPN dudes go on to make it sound super-ominous that teams have debt and that somehow this was a bad thing for the game.

Ugh. This is like a lot of bad journalism that goes on these days within the business press and in the general press corp. There is all this hysteria about, and frankly it is sickening.

I mean, it's a *good* thing that EPL teams have debt - it shows you that someone must think that the team as a business is a good risk, and that's why they lend the team money.

EPL teams have no salary cap, and undoubtedly more money buys you better players. If I'm a fan of a team, darn it, I want them to spend as much money as possible in buying players. And getting into debt will allow that (just don't raise ticket prices too, too much!).

This shallow sort of reportage is such an affront to my sensibilities. Don't these reporters and editors understand that debt can be a hallmark of a good business?

Just imagine you're Ray Kroc and you opened the first McDonalds' and proved the concept of your business. So how do you expand? You can do a cash-financed expansion, which is basically waiting until you've saved enough profits from the first location in order to pay for opening the second location. Or you can do a debt-financed expansion, which is basically borrowing money (from a bank or your franchisees) to open your second location.

So borrowing money can help businesses become bigger and better businesses. After all, if the business borrows money at 10%, then that business expects to get returns at 10+%. And if a business does not expect to get returns at 10+% and therefore chooses to not borrow money, couldn't an argument be made that such business should just sell itself off and close up shop? Then they can just take that money and loan it to someone else at 10%. You'll make 10% without having to work, isn't that better?

It's frustrating enough these days to watch TV and read the papers, can't I get my sports free from malformed economic thoughts?

Highlands Rat

This picture made the expat email rounds within the last week - I received it from Mr. Thirsty himself, after he told me about it over some drinks.  Because it seems that he no longer posts on his blog and is consumed by all things Twitter instead, I thought I should throw it up here.

The back story from the emails is that an expat couple went to Highlands Coffee for some cake, and ended up with a surprise.  Some on the email thread was thinking that may be a gecko, but that doesn't look like a gecko to me.  Too bad it's not Mardi Gras, then Highlands could pass it off as a Vietnamese style King Cake - congrats, you've found the hidden prize!

     

Saigon Sights

Some sights while walking about HCMC:

I saw this boat anchored in the tributary near the golf driving range I hang out at.  It's odd to see this sort of pleasure craft in Vietnam, I'm guessing because you can use it to sneak things (and people) across the border.  I've come to find out that the person who owns this also owns an airline without any planes.  I guess they traded a Boeing for a 30ft boat.   

A friend told me that there was a Mercedes McLaren in town, but I was a bit incredulous because said friend wasn't a full-fledged car guy.  Turns out he's right, as I spotted this outside of Diamond Plaza on a weekend.  

The "new" Vietnam is filled with fat kids.  Family sizes are much smaller than they used to be, in both the white collar class and the blue collar class in the city.  I believe this kid is a valued son to a shopowner nearby.  It's hard to blame parents for overfeeding their kids when they themselves can so easily remember existing on rations.  The bike is a start though.        

This picture is a small example of how things seem weird here until you look more closely... if you do, then maybe only half of the things are weird here!

I walk down this street a lot.  One day I see a small pile of bricks and debris, and I just though that the street cleaners hadn't come by yet.  But the pile was still there the next day.  Over time, it would grow, and then wane after a rain storm.  

One day I walked past during a heavy downpour and I finally realized what this was.  This debris sits outside a building that has underground parking.  You get to the parking spaces by taking a subterranean ramp that feeds out to the street.  When it rains moderately, the street corner drains are quickly overwhelmed and the parking ramp funnels the collected downpour into the garage.  This mound of discarded construction materials helped to provide a lip blocking that flow.  An interesting, if temporary and ugly, solution.     

Top Gear in Vietnam

Jezza and the boys of Top Gear are/were? in Vietnam to film a segment for their show.  Wha!?  This is more interesting to me than Brad and Angelina... I wonder if they are still in HCMC, or if they've already booked out of town on their rumored motorcycle tour.  

Vacation Martini

Only ok, as it was kinda watery. This place, Sandy Beach Resort, in Danang, Vietnam, caters to a mix of local and foreign tourists, but I was still  surprised that they knew what a proper martini was on the first go around. 

Other than that, the service sorta sucked at this resort.  Good location, indifferent service = go to Hoi An Beach Resort when you are visiting Danang instead.  

Pastries for Brunch

Single serving pastries brunch. That's some sort of croque monsieur,
raisin bread, strawberry and cream dessert and a milk-free shake. I
figured I'm getting enough Chinese melamine in the cream pastry.

Totalled 70k, not bad for a food court in the Diamond Plaza in D1.

Past is Prologue

I came into work late this morning because I stayed in to watch the much anticipated Biden-Palin show off.  That, and to watch the Cubbies continue to frustrate their fans.

Anyhow, like most things political in the U.S. these days, I don't see this debate changing the landscape must.  As Denny Green said in a different context (coincidentally also in reference to a Chicago team), "they are who we thought they were." Folks' opinions are entrenched and it won't change - I thought Palin was under-qualified before and this performance just furthered that narrative in my mind.  

I'm not really a Biden fan, but I appreciated his homerun (or at least a triple) performance.  The media will latch onto things, like Palin's odd multiple winks to the nameless Americans behind the camera lens, and Biden's retort of "Past is prologue."

You'll likely hear that line quite a bit in the media analysis of things - the funny thing is, I would gather 75% of Americans don't exactly understand it.  I certainly don't.  I mean, I understood his intent given the context of the debate, and I've probably read more prologues than the average American, but such usage of the term "prologue" is wholly uncommon.  

The media will love it because most journos believe they are great writers trapped in a more pedestrian position.  To me, it just sounds like someone speaking over the average informed person's head.

On the flip, Biden spoke about his family some and paused a bit in the middle, due to the sadness in his heart, when he recounted the tragic death of his wife and two (?) children in an auto accident.  I paused a bit while listening to him.  

And yet again, I didn't know such personal history - but I sure know the background on Palin, her husband, her kids, and her in-laws.  The Dems really need to work harder at personalizing their candidates.          

Best Martini in HCMC

The best martini in town (HCMC) is served at the Park Hyatt lobby level lounge.  

I first grabbed a drink here months ago because a friend of mine who was holed up in the Park Hyatt on business told me that the live lounge act was pretty good.  I went one night, grabbed a drink to test out the bartender's skill and waited for the solo act to start.  

After a bit of waiting, I asked the bartender if the music act was on tonight, and if so, when it would start.  The person sitting near me chirped up and said it will start soon - because she was the act.  I guess that's one reason for drinking tea in a bar.

She - Jen Woodhouse - was pretty good - a nice mix of familiar covers of singer-songwriter material and original stuff.  The performers have gigs of 6 months at a time, and, interestingly, they are recruited off of Myspace!  The Saigon Park Hyatt management uses Myspace, how odd is that?  

One funny thing is that the Park Hyatt is very Vietnamese in overstating the truth when advertising their lounge acts.  The Park Hyatt ran week-long full page adverts stating that the act following Jen Woodhouse - Kat Parsons -  was from Austria.  I met her briefly and it turns out that she was merely born in Austria and grew up in the DC area.  Heck, we even went to the same schools.  I guess I'm Austrian too!       

Obama Eats Dog Meat

I was reading a Slate's piece about the Asian-American voting bloc, titled "Chinese Democracy: Why Don't We Ever Hear About the Asian-American Vote?

The basic thesis is that the Asian-American "bloc" gets ignored because it doesn't really exist due to the heterogeneity of this group - apparently the diversity within the Asian-American group is as diverse as America itself.  Interestingly, Slate suggests that the only states where Asian-Americans could be swing voters are Nevada and Virginia.    

One  link out of that Slate piece was to Jeff Yang's article in the SFGate, "Could  Obama Be The First Asian American President?"

I didn't know that Obama lived for a period of his childhood in Indonesia - I guess that is one of the sources for the false Muslim accusations.  His stepfather at that time was a Muslim Indonesian.  I'm relatively in tune with the news, but, outside of his Kansas hometown / Harvard Law Review / South Side community organizer / Illinois State Rep and Senate posts, I haven't learned much about the guy from his 18 months of campaigning.  On the flip side, I've read half of Bill Clinton's book and half of Hillary's book.  Throw a sex scandal in Obama's life and I'll promise to read at least half of his autobiography as well!

Here's a shout-out to the sizeable Vietnamese-American community in Virginia - vote for Obama because he has eaten dog meat!  One of the things I share with the dude.  

  

Some More Banh Uot

Apparently I am on a banh uot kick - night time snack again, and another futile quest to get some steamed buns.

Steamed buns are sold out of the same sort of steamers as banh uot, so I asked the first vendor that I saw with a metal steamer pyramid.

It came up as banh uot and the rice based dumpling that you see in the foreground. For a lack of a better description, a rice flour shu mai.

The price was about 85% of what I usually pay in the corner restaurant. So perhaps I paid an ignorance tax. But I'm hungry.

TIps for Vietnam Travel

As my days invariably wind down here, I've accumulated a bunch of (ok, a smidge of) local knowledge, with no avenue to apply it.  May as well throw it up on the blog for others to use.

But before reading the below, head over to Miss.Adventure's Guide to Living in Vietnam. This blogger just recently concluded her time as an expat in Vietnam, but the archives are informative.  

Anyhow, here's what I would add:

Money/Exchange Rates:

One tip for establishments where they allow you to pay in VND or USD - ask what the exchange rate is. And then decide, 'ok, if I were to sell USD today, would I sell my dollars for that much in VND?' It makes the decision to pay in VND or USD much easier, as I'm generally confused if it is a good thing or a bad thing if the exchange rate is 15,900 versus 17,900 (answer: it depends on what currency you have in your pockets).

Weather:

I know some people say that it actually gets cold in Vietnam, but my experience has not borne it out. Lived in Hanoi for an entire year, and I'm coming up to an entire year in Saigon as well. It does get slightly chilly in the fall/winter in Hanoi, but one can venture about in shorts and tshirts still, even if one does not feature the obligatory Northern American layer of organic insulation.

When folks say that Saigon is rainy, well, that they are correct on. It rained like a mother late summer to early fall this year. I mean, crazy amounts that kept me cooped up inside.

Travel/Immigration/Customs;

The in-bound customs officers are really anal about you bringing in laptops. HCMC's customs folks seem to be more difficult than their Hanoi brethren.

Recently I travelled abroad with two laptops, and then returned with two laptops. And they wanted me to pay customs duties on the second laptop. This is after I had paid fees to bring in these laptops the first time, although those monies didn't end up in the government's coffers, as detailed here.

My obstinance prevailed, and I didn't pay anything; the customs folk made me write onto the customs declaration form that I brought in two computers, and warning me that I will have to take with me two computers when I next leave the country, or else I would have to pay duties then.  

Let me back up and explain the customs process. Upon entering Vietnam, the flight attendants will give you a two part white customs form (for foreign passport holders). You declare items you are bringing in and the like, just like other countries. Upon landing, at passport control, they review your customs declaration, stamp one side of the form, keep the stamped part and then return to you the unstamped part. When you collect baggage and leave the airport, the x-ray your baggage, reconfirm the customs form, stamp it and return it to you. When you next leave the country, you are required to submit this customs form that you are required to keep all this time.

So instead of paying more duties, I wrote down that I have two computers on the customs document, and they allowed me to leave. I don't plan to leave with two computers and, because this is Vietnam, I don't plan to be required to pay any duties upon leaving.

First off, the customs guys were lazy and didn't stamp the part I kept. Second, Hanoi is much more lax with the customs procedures than HCMC. When I flew in and out of Hanoi, I never returned the second part of my form upon exit of the country, because I didn't know it was a requirement. They just give you a new form to fill out. These forms are lying around all over the place in Noi Bai airport.

Long story short, I got myself a blank form and will give the customs folks an unadulterated declaration statement upon leaving - if they complain about the lack of an official stamp, well, the explanation that it was never stamped by the lazy customs officers will be readily accepted, because they know that such lack of rigor is common.

The tip is, when you fly into the country, grab extra blank custom forms from the flight crew. Just tell them you made a typo on your form. Then keep it handy, just to have options. You know, just in case you need to forge shit.

If I really wanted to import shit, not get caught by customs and sell under the radar, I would bring in wristwatches. Vietnamese people are bling'n ballers yo, you can easily unload watches costing tens of thousands here.  I cannot think of a more gauche manner to launder money in Vietnam.     

Xi Muoi Drink

Here is a Xi Muoi (salted plums) drink. I finally noticed this on the menu and ordered it tonight.

This one is made from the dried red (artifically colored) plums, so it looks kind forboding. It looks less sinister when the brown salt preserved plums are used.

It seems like there are a few salted traditional drinks on offer in Vietnam.  Another favorite of mine is a salt preserved lemon drink, prepared pretty much like this Xi Muoi drink.  With the heat, and the resultant sweat, of tropical weather, I guess it would make sense.  It's Vietnamese Gatorade!  

Banh Uot

This is sorta similar to banh cuon, the southern thin rice crepe filled with ground pork and wood ear mushrooms. But there is no filling here, so it is easier to make. Costs the same though.