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When a cop yelled out at my friend, “Stop in the name of the law!” , my friend, naturally, said, “Huh?”

(That picture is not from the event I am about to retell)

I never go out. Ever. Partly because of a need to hold on to my money (and then spend it all on expensive things in the US to bring back to Vietnam), and also, well I don’t really like people. Talking, spending time, etc.

But I do, from time to time.

A couple of weeks ago, met with some friends here(I will withhold names simply because it’s a cop story, which is quite a sensitive issue here) in District 1 along with my cousin. Had a pretty big group, quite possible close to 15 people, that died off as the hour got late. Had a few drinks at this first bar, went on to Cage Bar, which is not really a bar but more of a club, next to Legend Hotel, had more drinks, and an emerging late night full of alcohol but no dinner was starting to ware some of us (me) down.

On to the motorbikes and food, we cried!

On the way to a Chinese food place on Nguyen Trai, one friend, whom I shall call the Human Thong (HT), wasn’t wearing a helmet. A few blocks before we got there, a cop saw him and rode up next to him to get him to pull over.

The Thong said no, but in an “Huh?” manner, like a foolish dumb-witted foreigner (which he definitely is not).

Again, told to move over. Ignored!

Third time, the cop (he had a buddy in the back of his motorbike too) was a bit pissed and basically forced HT to stop. It looked like he was going  to swing at him.

After this was at least 20 minutes of HT acting like he didn’t know what was going on, couldn’t understand any Vietnamese. Not only that, HT was a bit of a belligerent drunk, so when one cop tried to hold his arms down (handcuff hold), the Human Thong struggled, crying out, “What’s going on, what’d I do?”

We were on a busy street, and because of the his refusals, causing unwanted attention.

Ideally in this situation, you want to do English only, but also do it quietly so cops can save face and get paid off or whatever it is so they let you go.

No face saving here. The crowd was here, people were talking trash (arrest him!), and I (and other friends) was worried.

Arrest. Jail. An invite to leave the country.

Meanwhile, my cousin snuck off and went to pee in a corner. A building guard saw him and was not so pleased.

Back to the Human Thong. There was a guy there who seemed to have weird relationship over the cops. Some of us later thought maybe he was a gangster, and at first he told the cops to let HT go, he was a foreigner. Then as HT was a bit of a jackass, he changed his mind, saying, arrest him.

How this all went down is still a bit confusing. On one side, the cops really don’t want to bring foreigners in- that could mean trouble for their own careers in case that guy knows someone. Plus, they just want they money, so bringing the guy in doesn’t help.

On the other side, you have to save face with the crowd around. You can’t show everyone, if they’re watching, that people can just do whatever they like, even if everyone knows it’s true (for some).

In the end, the cops got another helmet, put it on HT’s head, and HT nodded “OH! Wear a helmet! OK! OK!”, and they let him go.

And off we went to discuss the story together over some Chinese, with me really needing water and food to avoid going over that “one drink too many” line. (Success!)

A little bit of luck, a little bit of drunken stupidity, and little too much excitement for my wussy butt.

On another note about nightlife, one of the topics of discussion at the restaurant was, “I wonder how old that prostitute is?”

What one man called 40, I felt was 28, not because she looked that young, but in VN people can look very old very quickly. A little like white people, yes.

Once we were outside the restaurant, I noticed prostitutes were everywhere, almost like sitting down in front of the restaurant waiting for customers. And it’s not even like that area is some dirty red light district or something.

This is Vietnam.

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I really like this site. After all, I’m spending money on it, and only a few people occasionally read it, so it must have some value to me. Wordpress is really fantastic, and if I were in the US, it would be so much better (because of how slow my US-based host is from here).

Now, with the newest version of the Global Translator plugin for WP, the developers have just included Vietnamese as one of the translations (you can click on the flag above, or click http://www.ispithotfire.com/vi/)

I haven’t gone through it super in detail, but from the examples I saw, it looks pretty good. As in I, with my lousy Vietnamese, could read the translation of my English and understand what I was saying….in the translated Vietnamese!

So I could basically learn Vietnamese….from myself.

This also means more Vietnamese people can reach this blog, which could be troublesome in the future (note to self: don’t talk trash about Vietnam anymore)

PS. I just noticed that “Home” as in “Home Page” gets translated as “Family”. So your home really is your family.

I learn something every day!

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I’ve been in Saigon for nearly a month, staying a friend’s place while I try to find a place, specifically a 1 bedroom apartment. (Studios don’t really exist here)

Hanoi, this is not.

In Hanoi, I had an awesome place, a converted fully furnished studio apartment for close to $300 in rent. I walked to work. I would have never moved from that place as long as I lived  in Hanoi. Coming to Saigon, though, I figured I couldn’t get the same quality of place for that price, but I figured around $350, could do ok. 1 bedroom apartment with kitchen and bathroom.

Wrong.

The going rate, in fact, is $500, and that’s not for a super nice place, that’s just for a place. That could be anywhere from 40 to 60 square meters. Whether you can get a nice place or not is up to luck and patience. Thankfully, I’m not paying $50+/night on a hotel so I’m not completely broke. But I am looking at a 75% increase in rent, with 0% increase in pay, not such a good formula.

Even newly constructed  places, there’s no guarantee that’s a nice place. You just have to see it for yourself and perhaps, accept things.

Real estate company CB Richard Ellis (CBRE) believes that the housing market for foreigners is going to be really bad starting next year- simply not enough housing. That means as high as rents may be now, it’s going even higher.

Jimmy/Hai/Ben have found a good place though. $1200 for a 3 bedroom (also a small guestroom). Good location, close to District 1 (main downtown area). Very nice place, and I could have roomed with them, but the guest room was too small for me, and I think I have to live alone.

If I’m willing to live more than 30 mins away (this is a really long time in Vietnam time, trust me. It’s not like a commute in your car listening to the radio or sports talk radio), I could definitely find a good but cheap place. But I have to work in the main business areas, so it limits a little how far I’m willing to live. One of my coworkers, amazingly, lives over an hour away; that’s just insane, but part of it she’s Vietnamese, and that’s where her family house is.

I’ve visited a few different buildings here already. I think 20 mins away is acceptable for me. I guess there are 3 types of buildings. One’s the upscale style (not USA upscale, just Vietnam upscale). An example of this is The Manor, which exists in Hanoi now as well, but really far from the main Hai Ba Trung district. This type of place is for foreigners or wealthy Vietnamese. Rent at a place there is $1200+. The second type is for foreigners, but perhaps, just not with the same kind of bankroll. There, you’re looking at $600-$1000. Sometimes, Vietnamese who have had their property purchased for development will be given an apartment in this type of building, but on a low floor (closer to that $600 rang).

Even if you’re paying $1200, that doesn’t mean you necessarily in District 1 either. In fact, you’re probably not.

Finally, what I’m looking in, the third tier, is in the $300 - $600 range, and there is a huge variance in quality in those $300. It’s hard to explain unless you’ve seen it, but it’s distinctly Vietnamese. Foreigners will live in places like these, of course, but you can expect things like aluminum instead of wooden doors, a less secure feeling of privacy (maybe people don’t know what you’re doing, but they know if you’re home). People might leave their apartment doors open while they hang out in the living room, people put their shoes outside their apartment doors.

At one place I visited this week, the color inside of the complex and the way the apartment felt small with fluorescent lights glaring, I felt like I was a child again. Parents working double jobs, going to school, trying to afford something better. It made me feel poor again, but now I’d be old enough to understand.

It’s hard to imagine that place would be “home”, a place I could just relax for hours on end. (This is also why I don’t want a “room” or to live with other people. I life to be alone in my own home type of place)

Yet, that was still $500. And taken quickly.

It is the rate, and there are people willing to pay it. And I am now becoming one of them.

The hunt for housing goes on…

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Vietnam (finally) instituted a helmet law for motorbike riders last December (2007). I’d heard that they’d tried it once a few years prior, but it just failed miserably.

Surprising, the time, it’s worked. Instantly. The day before it got enacted, people still hadn’t bought their helmets- in wait-and-see mode. But once that Friday came around, everyone had theirs own.

Cops were out everywhere, ready to enforce, helmet shops were making a killing.

A couple of months later, even I got pulled over for not wearing one (completely forgot). 150K VND (9 USD) per occurrence. Some unlucky people would get pulled over multiple times during the same day, maybe even during the same trip- luckily, there was a 3 fine maximum per day.

So, sounds like a win-win situation right? More people, less injuries.

But not quite.

If I were to guess the law would have gone something like this: Everyone on a motorbike must wear a helmet in all situations. To find the right helmet, you can go to a shop and check a helmet to make sure it has been officially approved for safety by the government, probably with some kind of sticker. Government makes some money of each approval to fund the initiative. All these ideas, as it turns out, are wrong.

Truth:

• Children under a certain age do not need to wear helmets. In a 15mph accident, who do you think has a better chance of survival if flung into the street, a 25 year old, or a 2 year old child? Some might say claim there are no helmets for youth, but this is from lack of demand, not inability to produce helmets.
• Helmets have stickers on them. Makes them look official and shiny. But these aren’t government stickers or official safety approvals of any kind. They’re just shiny.
• The government law itself is loose. It’s basically, if you’re X age, wear something on your head that could be construed from far away, as a helmet. Whether it’s a helmet or not, or a safe helmet, does not matter. Your safety is in your own responsibility, even if maybe that’s what the law was made to eliminate? Force people to wear helmets, otherwise they will not?
• Before the law, I didn’t want to wear a helmet because I figured it would me fear driving faster/more recklessly less. This is true. Not only for me, but I’ve heard that accident numbers are not so good. Maybe lower deaths, but people are driving more dangerously.

What’s happened now in the fashion of helmets here, is everyone is wearing baseball cap helmets. I was intrigued by these myself, but then Thuy told me, no way, they’re unsafe. But I said, how could they be unsafe? They have to be approved for the government right?

Wrong.

These padded baseball caps, which are guaranteed not to save your life or keep you from becoming paralyzed, are perfect acceptable under the helmet law. And since they can be stylish (like 59 50s), it’s the huge trend here.

(I was going to put a picture here, but just haven’t gotten around to it- this post has been waiting for over a month while I tried to get that picture)

This also calls into the question of how safe legitimate helmets are. How can you really be sure you’re wearing life protection, and not a padded hard hat? For me, if I have to wear a helmet, I might as well e safe instead of trying to look cool. Otherwise, what’s the point? But how do I know the helmet which I bought to save my life really will do its job? There’s no one (government group) to check and let me know! So now, even though I’m worried about safety, I might be just as poor off as those stylish people trying to do the minimum to not get fined.

Great work Vietnam. Taking a great idea, and making it useless. But at least they can write that they did it on paper. Helmet law to save lives. Check.

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This is my final post in my series about Hue. Previously, we looked at the city itself, the nearby beaches, food, and former emperors’ tombs.

Now, back to the City.

The Citadel:

The Citadel, well, for a long time, Hue was the capital of Vietnam. The emperors and their many wives lived in the Citadel, which is right next to Song Huong (river), and basically an enclosed fortress. It stands out because it’s big, it’s protected by a moat, and house the first Samsung LCD in history.

That last one is a joke- for some reason Thuy and I saw an LCD TV in one of the rooms, a room otherwise preserved for historical/museum type of things.

While I’m not a fan of tours, I admit something like a map or tour guide booklet would have been helpful; I just had no idea what I was supposed to be looking at once I walked far enough in. Some places were being renovated, but it wasn’t clear if I was supposed to keep on going or leave those places alone. You just get the feeling there’s so much more history, so much more to learn, but the access isn’t quit there.

War Museum:

The War Museum is right down the street for the Citadel. It’s actually inside the citadel, just not part of the main palace. You’ll find a lot of original American and Russian war equipment like tanks and anti aircraft (I think?) machinery. You can even just post for photos (see below) and check out the insides of various vehicles. Free to enter, or at least free for me.

Thien Mu Pagoda:

Chua Thien Mu is probably one of the most memorable Hue highlights because it’s right next to the river, so anyone taking a river boat will see it stand out. From there, you can take some gorgeous snapshots of the Huong river as well as the skyline.

One interesting story comes from Wikipedia: The temple also stored the Austin motor vehicle in which Thich Quang Duc was driven to his self-immolation in Saigon in 1963 against the Diem regime. It was the first of a series of self-immolations by members of the Buddhist clergy, which brought the plight of Buddhists to the attention of the international community.^[2]

Basically, Thich Quang Duc set himself on fire in protest (and died). The car he used to get to Saigon in 1963 is at Chua Thien Mu (the blue car below).

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Previously, I talked about Hue in general. In this post, I’ll talk more specifically more about the tombs.

You can tour the tomb (called Lang in Vietnamese) sites in a couple of ways. One, take a river boat down Song Huong. Two, rent a motorbike, and create your own tour.

You can easily see all three in one day. Expect to be tired after a day of sun, though. I suggest buying a water bottle at each stop to keep yourself hydrated. If you’re worried about how much it costs to get into these sights, well don’t- It’s cheap enough for Vietnamese tourists.

Khai Dinh:

Khai Dinh’s tomb is my favorite of the three. Actually, there are four tombs altogether, but I don’t think anyone cares about the fourth one. This tomb is built on a hill/mountain side, so you have to walk up stairs to get in. If you’d like to do a Rocky impersonation, these stairs will help, running up them is not for the meek. Or weak. Once you’re up, you’ve got a great view.

Minh Mang:

Minh Mang is most famous or infamous for his love conquests. I don’t even remember the stories, but if you drink his wine (not literally his), you’re supposed to be able to add +10 to your own sexual conquest ability.

Tu Duc:

If anything, all 3 tombs are unique. That said, I don’t like Tu Duc. Maybe that’s because both times I’ve been there, it’s been the last tomb of the day. It’s not bad, but there’s nothing particularly noteworthy about it. I don’t think Tu Duc is too proud of it either. Altogether, though, do see all three. And drink water. And wear sunscreen. And…….

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Hue is a good place for those who want to be in the real Vietnam, getting away from more westernized areas like Saigon (TPHCM) or even places that are away from the city but booked with lavish resorts (Hoi An). There are tourist areas, locations for westerners, but it’s a great place for renting a motorbike and just traveling around.

Even though there are a million plus living there, Hue feels small. And I like that.

I’d been here once before, about 5 years ago on EAP. Unlike TPHCM and Hanoi, however, Hue has changed a lot slower, it still feels more quiet, more laid back.

Travel Logistics:

Hue’s in Central Vietnam, about 50 minutes plane ride from Hanoi. What’s much more pleasant about the plane ride, though, is the trip from the airport. Getting to town takes only about 20-25 minutes, and the roads are nice. In TPHCM and Hanoi, however, this trip is more like an hour, and the ride is nauseating and tiring.

The plane trip from Hanoi cost around $100 round trip, but it could have been cheaper if we had been willing to take the 6AM flight. 3-4 flights around the day, both ways. A solid hotel can be found for as little as $12 USD in the main tourist areas, but you can feel free to go to a higher end hotel nearby, which will cost $40+.

For a Hotel, I stayed and recommend the Green Bamboo (Tre Xanh) on Hung Vuong. It’s only $12 a night.

Attractions: I’ll be writing about some of these in this post, and more in the next few posts I do to keep the length for each article not too long. Hue is a UNESCO World Heritage Site, which seems to imply it’s something special. But the big places here are the various tombs of past emperors and the Thien Mu Pagoda. There are even some really nice beaches within driving distance, which I’ll discuss later in this post.

Nightlife: Pretty much non-existent

Hue: City and Food

Hue is pretty distinct for its food. It’s spicy and has a distinct (sharp?) taste that comes with the types of plants they use. I really like the food there, and it’s really hard to find the same food in TPHCM or Hanoi, no matter how authentic they claim to be. I’ve found that the taste outside of Hue is degraded for the local palate rather than trying to stick to the original formula.

Food is cheap here, with a big meal closer to 30K VND ($2 USD). A simple way of telling that Hue has not “progressed” as much as Hanoi and TPHCM is that there’s only 1 KFC here, and it’s not popular despite it’s central location. KFC is very very expensive compared to a normal meal in Hue, but in Hanoi, KFC is actually one of my cheaper meals now. After 2 years, KFC already has over 10 locations in Hanoi and keeps on growing. In TPHCM, KFC is almost like your neighborhood McDonalds.

(For whatever reason, Wordpress comes up with errors if I use accents/diacritics, so sorry)

Here are some meals to look for:

• Bun Bo Hue (I’m not even going to translate these into English, just go for it!)
  • Locations:
    • Quan Ba Hoa: Quan 11, Truong Dinh
    • Bun Bo Hue: 17 Ly Thuong Kiet (this one is fairly week known among locals)
• Banh Hue
  • Quan Ba Hoa: Quan 11, Truong Dinh
• Chao Bo 
  • 01 Nguyen Cong Tru (this place actually is in a tourist area)
• Com Hen
  • Quan Ba Hoa: Quan 11, Truong Dinh
• Bun Thit Nuong
  • Hoang Anh: 140 Kim Long (along the river, on the way to Thien Mu)
• Che Hue (this is actually a dessert)
  • Dong Ba Market
  • There’s also a place called Che Hue that’s been franchised throughout Vietnam, but I don’t have the street. If you ask around, I’m sure a taxi or xich lo driver can get you there easily.

As you might expect, try for local places, away from tourists. You’ll get much better pricing and more authentic food, that way. Just drive around and check out a place.

Hue is most distinctive for the Perfume River, Song Huong. The river runs all along the city, and in fact, if you go see the city’s sights, you can visit all the tombs and Thien Mu Pagoda solely by taking a riverboat. Hanoi is most distinctive for its lakes, Hue has Song Huong and the Perfume River Bridge.

Like I mentioned before, renting a motorbike (around 100K VND/$6 USD) to travel around is the way to go. Feel more free, and you pick your travel plans.

You can get around by the usual taxi or xich lo (which is basically a bicycle taxi, two people riding in a front carriage, driver pedaling in the back), but these actually are much more expensive than renting a motorbike.

Dong Ba Market:

Dong Ba Market is in the central area of Hue, next to the Perfume River Bridge. It’s probably the most famous market here, and still is super packed on an everyday basis. Especially for tourists, however, keep your backpack in front of you and wallets in your front pocket. Pickpockets are definitely around (I was told by someone there to watch out), so be careful. At night, people will set up food and che outside.

Perfume River Bridge:

The pictures below were taken at night, and the bride is a beautiful sight. The bridges flashes different colors during the night, and it’s very popular to set up cameras and take pictures, like I did. Also in the central area.

Thuan An:

Thuan An is maybe the best kept secret about Hue. At least, it was to me. I think even my friend H?ng, who is from Hue, hasn’t been there, even though he’s been to Lang Co, which is much farther away. Thuan An is about 15 KM away from Hue, and you can take a taxi or bus there, or just go by motorbike. When I came, it was completely empty, but that’s probably because I went on a weekday and came around noon (Vietnamese people don’t hang out on beaches around noon – 2PM unless they’re hoping to get heatstroke). It became more crowded by 4PM, but was not super crowded by any means. The beach is clean, super clear. The waves are friendly. You can eat on the beach if you like, but one thing to note is that the facilities are definitely low end, as in made for Vietnamese budgets.

I didn’t eat any meals here, but I had m?c m?t n?ng, which literally means squid that’s been drying in the sun for a little. This is completely different from kho muc, which is thin, dried squid. Muc mot nang is fresh squid that’s been out in the sun, still white and thick. Tastes delicious! I’ve never seen this anywhere else, and highly suggest getting it if you can. It’s not cheap, however, where dried squid is already somewhat expensive, . Muc mot nang will cost you $8 to 12 USD. Thuy and I had two.

Lang Co:

Lang Co is not super well known, but it’s another fantastic beach. If you like motorbiking, this is a good trip. It’s about 2 hours south from Hue, 75 KM. To get there, you’ll go through the countryside and travel through mountain roads. It’s a lot of fun, but it is really sunny out there, make sure you have serious protection from the sun. The Lang Co beach is another clear beach, very clean, just generally outstanding. The big difference between Lang Co and Thuan An are the waves. Lang Co has big time waves, not surfing waves, but much larger, more powerful waves. The waves and beach area also extend out far. You can see 3 layers of waves at a time, and you can walk a far distance into the water and you will still be at standing height.

I’m not sure if there is any public beach area, or if its all reserved by beach resorts, but we did share the beach with normal non-resort people.

The beach “resorts” themselves sucked. We spent a little more money (around $60 USD) to stay in a nicer room, and it felt like it was half completed. Crappy AC, bugs in the room. There was a jacuzzi tub in our room, which sounded great until we noticed that we didn’t have enough hot water to fill it up. Even before we decided to stay at that resort, the other ones were similarly too expensive in terms of value. Even the low end rooms at these places are $30, and those rooms suck. They’re worse than than the $12 rooms in Hue. Next time, I’d just stay at a hotel that’s across the street, without a private beach area, and walk in.

The food here also sucked. I’m sure somewhere, there’s someplace good, but it wasn’t obvious to me. Lang Co is almost pitch black at night; you can’t really just travel around and see where the locals eat. The hotel food was expensive and just blah.

I can’t even remember the exact name of the one we stayed at, but stay away from all “high-end” beach resorts in Lang Co.

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25-JUN-2008 Intellasia | Atimes
Jun 25, 2008 - 7:00:00 AM

http://www.intellasia.net/news/articles/economy/111245609.shtml

Over the past few weeks, the decline of Vietnam from its erstwhile status of an Asian “tiger” economy to being one of the first victims of a new regional crisis has been swift and perhaps, outside of the country, unlamented. At the heart of the escalating problems in the country are government actions aimed at preventing a loss of competitiveness on its exports, and therein hangs the tale for the rest of Asia.

Since then, the problems with Vietnam have only become worse, with the currency in free fall against the US dollar as foreigners are trying to get their investments out as quickly as possible. Averting this would require the authorities to increase interest rates sharply in order to maintain the attraction of the dong, but doing so will only increase bad debts at the local banks and in turn spark a surge in non-performing loans at state-controlled banks.

Even with its stock of foreign exchange reserves, the government cannot abide by the situation as the country desperately needs continued foreign investments to complete the various factory investments and infrastructure projects that lie at the heart of its rejuvenation. It is perhaps not too dramatic a statement to point out that the Vietnamese government has inadvertently launched itself into an economic death spiral.
In the inter-connected world economy of today though, the problems of Vietnam are hardly ever going to stop in the country itself. There are countries that will benefit from the situation, and others that will be hurt by it. Unfortunately for readers of this publication, most Asian countries fall in the second category namely the ones that will be hurt by the Vietnam situation.

Already, the cracks are visible in the case of the Philippines and Indonesia, two other countries in Southeast Asia that share many of the characteristics of Vietnam. Between rising imports of commodities and oil, as well as burgeoning investment needs that demand to be addressed, these countries have been running current account deficits. The funding for the deficit has come from foreign investments and remittances from nationals working abroad. Given the obvious parallels to the Vietnam story, it is highly possible that both countries will face rising outflows from foreigners as well as slowing remittances from their own nationals working abroad in the near future.

These problems though pale with those that are increasingly visible in the case of Asia’s growth engine, namely China. While the broad metrics of GDP size, foreign exchange reserves and population all put China in a different league to the Southeast Asian minnows above, there are also important similarities. In any event, the experience of Japan in the early 1990s should put an end to any notion that large Asian economies with trade surpluses cannot suffer from financial crises.

Cracks in the Great Wall

To be sure, making any quick comparison between Vietnam and China would prove perilous given that the latter runs a strong current account surplus besides boasting large foreign direct investment inflows, both of which provide adequate financing for its expanding economy.

Still, the similarities with Vietnam on another level are also astounding. Much like its southern communist neighbour, China has been anxious to control any rapid appreciation of its currency. Its attempts to sterilise the large inflows of short-term foreign capital have only been partly successful even if one goes by statistics released by the People’s Bank of China (PBoC). Indeed, M2 growth has been accelerating in recent times as the central bank finds it impossible to sterilise the combination of trade and investment inflows and banks find new ways of lending. (Note -the temptation to use graphs in this section was quite high for me, but I forswore the use of graphics in my articles a long time ago. Readers with more numerical minds can consult official statistics of China to bear out everything written in this article).

Additionally for the authorities, their main tool for preventing monetary expansion has been the use of suasion, that is telling banks not to lend to certain sectors, such as property, that could in turn create inflationary impacts elsewhere. Official statistics and anecdotal evidence both now show that money is being made available to a number of sectors that central authorities had forbidden a little while ago.

This is happening because banks are increasingly hamstrung in their efforts to make money as they bear the brunt of reserve increases that are designed to force them to buy more government originated bonds as against private investments. However, the authorities clean forgot that state-owned enterprises have almost unlimited authority to borrow from banks, and now appear to be using their borrowings to lend to Chinese companies in need, including in some of the forbidden sectors. As the state-owned companies are not controlled or overseen by the PBoC, they are free to do whatever they please even if the essential risk of their activities, that is bad loans, are still ultimately borne by the big commercial banks.

Secondly, various other kinds of semi-legal loans seem to be increasing. Temporary loans that are repaid before the end of every quarter are in particular proving quite popular for companies with large investment needs. As the PBoC only monitors loans “on” the balance sheet on quarter-end reporting dates, this has created a free market for short-term loans.

True, it is difficult for any large construction project to be funded by such loans, but the experience of Vietnam and previously the Asian financial crisis in the late ’90s shows that such methods can and do come about when policies make profitable lending difficult. In the case of various companies engaged in such projects, the changes are visible in their increased working capital needs, with one component, namely inventories, feeding into the GDP statistics.

Lastly, interest rates in China are still too low relative to the amount of inflation in the economy. This means that anyone who can borrow does so at rates that are far too low -what are referred to as negative real rates, when people pay costs lower than inflation. That is prime fodder for asset bubbles and this is exactly what is happening in many parts of China, often visible as joint projects between state-owned companies or local government bodies with “local” property companies.

At the top level, the following are becoming more apparent:

# More inflation in both producer and consumer products even if authorities attempt to exercise price controls in the latter category.

# Rising balance sheets of both banks and large state-owned companies as they circumvent current lending restrictions.

# An attendant rise in financial risks across the official banking system and more severely in the unofficial banking system.

# Falling construction standards as companies attempt to finish projects quickly in order to repay banks before quarter-ends (Note -this was certainly one factor seen in the latest earthquake casualties).

# Poor corporate governance at many banks and state-owned companies, where officials with access to loan facilitation may be misusing their privileges.

# Continued financial speculation by Chinese investors in markets as diverse as stocks, property and commodities.

# No let-up in the accumulation of short money aimed at benefiting from a quick change in the value of the Chinese currency.

For China, the dangers of avoiding a Vietnam situation would simply push it to a Japan imbroglio. As such, there are only a few market-based measures that work here: firstly to float the currency, secondly to boost interest rates in order to combat inflation and thirdly to improve supervision of the financial system.

Combined, all these suggest that existing policy efforts (which famously avoid all of the above three suggestions) at taming the financial markets have been a colossal failure in China. The situation described above is starkly similar to the one witnessed by Japan in the 1980s that eventually culminated in the Plaza accord, which in turn pushed the Bank of Japan to raise interest rates sharply even as the economy started slowing down. The result was calamitous, as the Japanese economy entered a permanent downward spiral.
While there are many, including me, who hope that such an eventuality doesn’t come to pass, China now risks being suspended in a policy vacuum that puts it right between the experience of Japan and Vietnam. The nomenclature of the Middle Kingdom could thus get an altogether new and ironic meaning if China fails to undertake urgent policy responses.

Well, I guess that’s one opinion. I believe the “ATimes” is the Asian Times, which I believe I have read in paper form, but there are way too many newspapers in Vietnam for me to tell.

Today, I got a note from AIG that they can’t pay my medical claim back in USD. Not sure if they’re lying, but they used to be able to do it before (a coworker told me), and maybe it’s another sign of the issues here.

It is very very difficult right now to buy USD, and you cannot buy USD at banks, even when the supposed exchange rate is 1 USD: 16.6K VND.

As far as actual life goes though, things don’t affect me that much, and I think for natives, well they never traded in VND anyway. Food prices are always a concern though. I read somewhere that Year on Year inflation is 24%.

One interesting I’ve learned form talking to coworkers is that a poor economy doesn’t scare them into believing they’ll lose their jobs. They feel like if they’re a poor performer, they could be in trouble, but hard workers don’t need to worry.

Oh, if only that were so, but maybe the Vietnamese economy is just so young, people have never seen that happen before. It’s a little like startups in VN. People don’t have that same kind of “oh crap, this could blow up! $$$$$$$$$$$$” mentality that someone from the Silicon Valley (hey, that’s like me!) might have.

Btw, Intellasia is a great site. Aggregates a ton of articles about Vietnam (even translating a lot) for English readers. Perfect for me, I’m not reading Vietnamese newspapers any time soon. Intellasia is actually banned by some ISPs in Vietnam and has run into trouble with the government here as well in the past.

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When there’s a big thunderstorm in Hanoi, it’s seriously time to watch out.

The sewage system here is such that after 15 minutes of heavy rain, you can go from one street that’s definitely wet and a little big submerged, and walk to another street and then see a car stopped because the street is 3 feet deep in water, no exaggeration.

Tonight was one such day, only it rained for 5 hours straight.

Actually, it’s still raining now, but at a more manageable level.

It started raining during the afternoon, when 6PM came, no one at the office wanted to go home, partly people prefer to wait the rain out if possible, and also, as it turned out, the street was submerged. If you drove your motorbike into the street, it’d simply die.

I, however, live 7 minutes walk away from the office and normally don’t drive to work, so walking home for me was no big deal.

IF, the way home wasn’t flooded.

Which of course it was. Knees kind of flooded form what I could tell. Did not want to jump in and find out, but let’s just say I didn’t see any motorbikes trying to come through either.

Thankfully, there was another way around, twice as long, but not so flooded, so I went home that way, with heaving raining pouring on my head and backpack (with expensive laptop inside).

When I got home, I noticed that the neighborhood seemed especially dark. I didn’t think much of it until I hit the switch.

Darkness. Pitch black. So I cussed a little bit, turned on the light to my cell phone, went upstairs to my room, lit up some candles and didn’t do too much for a couple of hours while the electricity was off.

I kind of wished I’d had my camera with me, and could have taken pictures during the day, definitely something somewhat commonplace here that would rarely happen in the US (California).

Now I’m kind of wondering, as this was suggested to me by a coworker because Hanoi has a ton of lakes and heavy flooding means a lake could become one with the sidewalk, what happens if you’re just walking along in flooded water along the sidewalk, and then you find yourself swimming in a lake suddenly?

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“Vietnam’s stock market, the world’s worst performer so far this year, fell to fresh 2-year lows on Wednesday as investors grappled with double-digit inflation and a liquidity crunch.”

“Stocks in Vietnam hit fresh two-year lows on Wednesday, as investors fretted about runaway inflation and Moody’s Investors Services cut its outlook on the country’s key ratings from positive to negative.”

“Vietnam’s five-year government bonds slumped, pushing yields up by the most in more than a year, after the central bank said it had no plans to raise interest rates to curb inflation at more than 25%.”

Those are quotes from the last few days of Vietnam RSS News Feed by Intellasia.net, a site that aggregates Vietnamese and English-language news of Vietnam. Incidentally, Intellasia is banned by some ISPs here, which, like in China, are all somewhat controlled by the government.

So, uh oh.

Here’s the current Dollar to VND conversion rate according to http://www.xe.com/

In Vietnamese, I’d say “con lau!”, which literally means “a long time” depending on the situation, but really means more like “yeah, right” or “you f*cking wish”.

Last weekend, I had to pull over $1,000 USD from my personal account for some work-related expenses. Banking rules here are kinda lousy in that even though my account is in USD, I can only pull from an ATM in VND. The only way to pull USD is from a teller, which also requires a fee.

That’s right, essentially a fee to pull money in the currency the account is in. (Keep in mind that I use a big-time bank in HSBC as well, not a local bank)

I needed USD on this occasion, however, so I had to pull money out in VND, roughly at the rate above. Unfortunately for me, this rate in Vietnam right now is a dirty lie. I had to go buy USD (at a reputable converter in Hanoi) at 17.3.

That means even if my company paid me back the amount I spent ($1000 USD), I would still have lost about 1,000,000 VND purely on the difference between what the bank gave for for my USD and its actual real value. 1M VND = $60 USD.

I had a friend ask me recently if I got paid in Euros. Hah. I wish.

Vietnam, the economic darling of APEC less than two years ago, already in some real trouble economically. Not so easy becoming a 2nd world nation is it?

On another note, there is a huge housing bubble here. Apartments that cost $40,000 to buy new 3 years ago are now worth over $100,000. People tell me if I want to get something, I better pony up $150,000 or more. That’s not even for a real regular house (called villas here because people just don’t live like that in the cities) with a yard. That’s just for a mid-level condo, nothing special. Nothing, not in a premium building, location is way far from downtown (and I do mean FAR). Build quality is nowhere near (for the money I mean, $150K in the US will get you better build quality than $150k in VN, and to me, that is not right when I think the VN should be getting higher value for your money) what it is in the US, so while $150,000 may sound cheap if you’re from California like I am, I don’t think it’s a good value, no matter what everyone else is paying. To all that, I call BS, I am not paying.

If I am going to spend that kind of money on something that doesn’t really reflect its value, I’d rather go to Iowa.

Edit: Just saw this from the Wall Street Journal:

There’s trouble brewing in Vietnam, judging by what’s happening to its currency.

The Vietnamese dong is effectively pegged to the dollar and only fluctuates within a very narrow band. However, investors can make bets on its impending direction using forwards, or contracts which allow buyers to purchase a currency at a set price at some future date.

On Tuesday the dollar-dong exchange rate implied by those contracts spiked by 11%, according to a note from Morgan Stanley — in other words, twelve months from now, investors expect the U.S. dollar to buy many more dong than it does today (over a third more, in fact). In effect, the contracts are pricing in a breaking of the peg and a drastic weakening of the dong.

That’s a major reversal from just months ago, when Vietnamese were racing to stockpile the local currency on the belief that it would strengthen. Since then, however, there has been a spate of bad news on inflation and trade.

On Monday, the government said that inflation jumped to 25.2% in May over a year earlier, raising fears that prices could spiral out of control. The trade deficit is also projected to expand to $14.4 billion in the first five months of the year as imports surge. Meanwhile, Vietnam’s stock market has plunged by more than 50% this year, making it the worst performer in Asia.

All this “was too much for the market to ignore, leading to a complete reassessment of macro balance and inflation risks at hand,” wrote Stewart Newnham, a currency strategist at Morgan Stanley. “When prices shift this much in emerging markets, it is rare that they recover,” he noted.

The bottom line: Mr. Newnham believes a currency crisis could be looming in which Vietnam is forced to defend the dong by selling dollars from its currency reserves.

(Edit, June 11: A coworker told me the rate is now at 1 USD = 18K VND. Holy crap! Also, read a headline that said housing (purchasing) in Hanoi has dropped a ton too. There also are worries government is not doing enough to curb inflation here.

Edit, June 23: Now there’s fear the currency may flat out die this yea. Rate is around 18.6 now, are some thoughts it may hit 20+)

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